Market review: from January 24 to January 28, the media sector fell 9.69%, underperforming the weekly rise and fall (- 4.51%) of the Shanghai and Shenzhen 300 index by 5.18pct; Underperformed the Shanghai Composite Index by 5.12pct in a single week (- 4.57%); Underperformed the growth enterprise market index, which rose or fell (- 4.14%) by 5.55pct in a single week, ranking the 30th in the weekly rise or fall of CS level I industry and at the tail position, ranking 10 lower than that in the previous period.
Investment suggestion and rating: Based on the first-class industry classification statistics of CITIC, 98 of the 153 listed companies in the media sector have disclosed the performance forecast for 2021, of which 41 have suffered losses, with the largest loss reaching 1.4-2 billion yuan. The impairment of goodwill is still having a significant impact on the performance of listed companies in the media sector, In addition, the performance of leading companies in some segments in 2021 was lower than expected, coupled with the obvious short-term shock of A-Shares as a whole, and the superposition of multiple factors jointly led to greater suppression of the media sector.
In terms of policies, the successive introduction of policies such as the "14th five year plan" China Film Co.Ltd(600977) development plan ", the" 14th five year plan "period development plan of the publishing industry, the" 14th five year plan "digital economy development plan and the" 14th five year plan "of copyright work have clarified the development path and provided guidance for all fields of the media sector. Among them, the 14th five year plan for the development of digital economy focuses on accelerating the construction and application of 5g network, accelerating the integration of digital technology and various industries, and the added value of core industries of digital economy should account for 10% of China's GDP (7.8% in 2020). Specific development goals such as virtual reality, 8K high-definition video, interactive video, immersive video and cloud games should be developed. In the medium and long term, there is a large space for digital transformation of various industries in China, and the media sub field represented by landing application scenarios may continue to benefit. From the perspective of valuation, as of January 28, 2022, the valuation of the media sector was 20.16 times (TTM, overall method, excluding negative values), 72% of the average p / E ratio of the past five years and 76% of the median, which was close to the valuation level of Q4 in 2018 and was still in a historically low position. Therefore, the investment rating of "stronger than the market" is maintained.
It is recommended to pay attention to:
1) the game sector is still under regulatory pressure. The suspension of edition number leads to a slight shortage of new tour product supply, and the product ranking of the head list is solidified. The edition number problem will further test the game manufacturers' long-term operation and ability to go to sea. The head game manufacturers have relatively strong content reserves, technology and operation advantages It has more advantages in diversification and sea going strategy. In the future, the reissue of edition numbers will restore the supply of new products and bring more flexibility to performance. Following Microsoft's acquisition of Activision Blizzard, Sony also announced its acquisition of Bungie, the developer of halo and destiny series games, for us $3.6 billion. We believe that global game giants are beginning to pay more attention to the reserve of content and seek more high-quality game R & D teams. It is suggested to pay attention to the top companies in China's game industry and give full play to their competitive advantages in the process of supply side reform.
2) according to the performance forecast disclosed by Listed Companies in film and television theaters, although it is better than that in 2020, the China Film Co.Ltd(600977) industry will continue to be under pressure in 2021. The box office performance of the Spring Festival was lower than expected, and the decline of film viewers was more obvious. Overall, the epidemic situation, high ticket prices and lower than expected content quality have all had an impact on the Spring Festival. In the post epidemic era, compared with raising the box office through price increases, the core of guiding the industry to develop more healthily and healthily is to drive the repair of film viewers by continuously outputting high-quality film content and reshape the habit of audiences going to cinemas. The normalization of the epidemic may continue to have an impact on the China Film Co.Ltd(600977) industry, but the market self-regulation mechanism of survival of the fittest will make film and television companies more inclined to high-quality content when setting up projects. In addition, the decline in actor costs after industry rectification is also expected to provide more performance space for film and television companies.
3) virtual human technology. After the new year's Gala of many mainstream satellite TV channels in China, virtual human technology has been applied again in the programs of Beijing Satellite TV, Anhui Satellite TV and Jiangsu Satellite TV Spring Festival Gala. Although at present, virtual human technology is still mainly used in Pan entertainment fields such as virtual idol, e-commerce live broadcast, short video and news variety shows, in the future, the application scenario of virtual human technology may be further expanded to intelligent office, social networking, finance, education, medical treatment and other fields. As one of the underlying technologies of the meta universe, virtual human technology has relatively large application space.
It is recommended to pay attention to the head companies in the subdivided field of the media sub section: Perfect World Co.Ltd(002624) , Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Wanda Film Holding Co.Ltd(002739) , Beijing Enlight Media Co.Ltd(300251) , Focus Media Information Technology Co.Ltd(002027) , Mango Excellent Media Co.Ltd(300413) , Beijing Zhidemai Technology Co.Ltd(300785) , Citic Press Corporation(300788) , Guomai Culture & Media Co.Ltd(301052) .
Risk warning: repeated epidemic situation and virus mutation risk; The tightening of regulatory policies exceeded expectations; Intensified market competition; Goodwill impairment risk; The quality of output content is lower than expected; The characteristics of project system lead to the fluctuation of the company's performance
