Key investment points
In January, the media sector adjusted significantly. We believe that the performance forecast period and the performance of some companies did not meet expectations, which deepened the market’s concern about the performance of the sector and affected the continuous fermentation of the theme of metauniverse. Due to the general performance of comedy family fun films, high ticket price and the impact of the epidemic on film viewing mood, the performance of the Spring Festival is lower than our expectations. The overall box office of the films released in the Spring Festival is expected to decline by about 20% year-on-year in 2021. We remain cautiously optimistic about whether the cinema industry is expected to reverse in 2022. In addition, it is suggested to continue to pay attention to the game sector, mainly because of two points: first, the M & A and integration of high-quality content manufacturers in the game industry is still continuing. In addition to Microsoft’s acquisition of Activision Blizzard and take two’s acquisition of Zynga, Sony’s acquisition of Bungie, the developer of halo and destiny, for us $3.6 billion. We believe that high-quality content is a trend of cross platform and cloud games, The bargaining power of high-quality content R & D capability will be further improved in the future; Second, People.Cn Co.Ltd(603000) released people’s financial review: there is also “digital productivity” in games, which gives a relatively positive evaluation to the game industry. The article mentioned that the game engine, 3D modeling and real-time rendering used in game research and development are important technologies to support the development of the meta universe. Game engine has become the core tool to promote the integration of digital and real industries and build digital twins, It has been applied to civil aviation, automobile manufacturing and other industrial fields, and has also played an active role in intelligent virtual simulation, digital twinning and automation, digital cultural protection and other fields. We are optimistic about the development opportunities brought by metauniverse and the next generation Internet to the media industry. Based on this, we give the industry a “recommended” rating.
Looking ahead to 2022, focus on the following opportunities:
1) high quality content companies, mainly including game and video sectors. At present, the overall valuation of the game sector is low, and we pay attention to the reissue of the version number and the sailing of the game. Key recommendations Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Perfect World Co.Ltd(002624) . The video sector pays attention to price increase and controllable factor cost in the medium and long term, and pays attention to the increment of copyright distribution value brought by short video channels in the short term. Focus on the platform with leading self-control ability. Pay attention to the changes of industry structure. Focus on Mango Excellent Media Co.Ltd(300413) .
2) new content and new consumption companies with private domain traffic. Tide play is one of the sectors with the highest growth rate in the pan entertainment sector. The field of tide play is expected to produce toy giants and even pan entertainment giants. The key recommendation is bubble Mart. The operation data of 2021q3 is excellent, the number of members surged to 18 million, the number of paying users arppu increased by 30%, the growth of private platform box extractors is strong, the same store is expected to remain stable, and the non blind box product lines such as Mega and derivatives verify the core logic of IP operation.
3) companies benefiting from the increase of flow price. Key recommendation Focus Media Information Technology Co.Ltd(002027) , the company’s medium-term logic remains unchanged, and the scarce brand media value highlights under the background of rising traffic prices. The core focus is on the price increase and final implementation in 2022 on the basis of a good publication listing rate in 2021.
4) meta universe theme, mainly copyright and IP related owners and application related (exhibition hall, virtual human, digital collection). Focus on Mango Excellent Media Co.Ltd(300413) , Visual China Group Co.Ltd(000681) , Shanghai Fengyuzhu Culture Technology Co.Ltd(603466) , Bluefocus Intelligent Communications Group Co.Ltd(300058) , Zhejiang Huace Film And Tv Co.Ltd(300133) , Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , Perfect World Co.Ltd(002624) , etc.
In the education sector, it is suggested to continue to pay attention to the reform of vocational education system, including opportunities related to secondary vocational education, vocational undergraduate education and quality education, with emphasis on Jiangsu Chuanzhiboke Education Technology Co.Ltd(003032) , China Oriental Education and higher education.
Risk tips: stricter policy supervision, less than expected launch progress and market performance of key products, less than expected performance of recommended companies, intensified market competition, risk of lifting the ban and reducing holdings, corporate governance risk, market style switching, relevant data are for reference only, etc.
