Key investment points
Market review: this week, the media sector performed well, rising 3.23%, outperforming the gem by about 8.82 percentage points (the gem index fell 5.59%); Outperformed the market by about 2.41 percentage points (CSI 300 rose 0.82%). Industry segments: (1) the game index outperformed the market: CITIC game index (ci005577) rose 1.29%, 0.47% higher than CSI 300 index. (2) The advertising index outperformed the market: the CITIC advertising index (ci005847) rose 4.83%, up 4.01% relative to the CSI 300 index. (3) The sports index outperformed the market: the CSI sports index (399804) rose 2.13%, 1.31% higher than the CSI 300 index. (4) A-share education companies outperformed CSI 300 and Hong Kong stock education companies outperformed Hang Seng Index. CITIC education index (ci005816) rose 1.27%, outperforming CSI 300 index by 0.45%. The Hong Kong stock education index (887671) rose 8.15%, outperforming the Hang Seng Index by 6.8%.
Film and television: (1) 2021 China Film Co.Ltd(600977) market data report was released, and more than 90% of new films released in China. In 2021, 572 new films were released, and domestic films accounted for 92.48%. The annual box office was 47.258 billion yuan (2) the notice of the State Administration of radio, film and television on printing and distributing the development plan of Chinese TV dramas in the 14th five year plan, promoting the production of high-quality TV dramas in the new era, guiding the orderly competition of platform economy and preventing excessive capital expansion.
Game: (1) Nintendo will face a strong lineup, 2022 is worth looking forward to. Nintendo large-scale face-to-face conference announced more than 30 game contents planned to be released in 2022. (2) Yuan universe exhibition company hikky received additional financing of 500 million yen, and the total amount of round a reached 7 billion yen. Hikky will mainly use this fund for VR related services centered on internally developed smart phones and VR content development engine “vket cloud” running on PC browsers.
Sports: (1) the Chinese women’s basketball team won Mali in the world preliminaries and locked the World Cup ticket. On February 11, they beat Mali 84-64 in the 2022 FIBA women’s World Cup qualifier in Belgrade, the capital of Serbia. (2) Adema released its 2021q4 financial report, with revenue exceeding expectations and net profit falling by 40%. Adema Q4 revenue increased by 9% year-on-year to US $1.53 billion, better than the market expectation (US $1.47 billion); The net profit was US $110 million, down 40% from US $184 million in the same period last year.
Education: (1) the Ministry of education has comprehensively strengthened the administrative law enforcement of out of school training, accelerated the establishment of a law enforcement system with clear rights and responsibilities, standardized management, smooth operation, strong guarantee and in place supervision, comprehensively improved the quality and efficiency of administrative law enforcement of out of school training supervision, strictly investigated and dealt with illegal acts of out of school training according to law, and ensured the solid and effective work of “double reduction”. (2) Excellent education: a loss of 200-300 million yuan in fiscal year 2021. The estimated net loss for the fiscal year ended December 31, 2021 is about RMB 200 million to RMB 300 million. The main reasons for the loss in fiscal year 2021 are: the compensation for dismissal of employees, liquidated damages for site rent withdrawal, decoration expenses invested in the early stage and the provision for impairment of some long-term assets made by the company due to the closure of offline counseling center based on business adjustment.
Key investment points: it is recommended to pay attention to Mango Excellent Media Co.Ltd(300413) (300413), Wuhan Ddmc Culture & Sports Co.Ltd(600136) (600136).
Risk tip: media policy tightening risk; Risk of business integration or less than expected; New business development is less than expected risk; Content response is less than expected risk
