Mango Excellent Media Co.Ltd(300413) (300413)
Specific events. Happy sunshine and Migu culture, the wholly-owned subsidiaries of the company, intend to sign the overall cooperation framework agreement between Migu culture and mango TV for 2021-2023 to carry out in-depth cooperation in large screen business, 5g innovation business, equity business and derivative e-commerce. The cooperation period is until January 2024, and the cooperation amount is not less than 3.5 billion yuan (including the estimated cooperation amount of trial operation in 2021).
Mango and Migu have previously established a deep cooperative relationship, and the scale of cooperation has increased year by year. 1) In May 2019, China Mobile took shares in Mango Excellent Media Co.Ltd(300413) by participating in the initial non-public offering. At present, China mobile capital holds 7% equity of the company and is the second largest shareholder of the company. 2) In mid June 2019, Migu, the platform of China Mobile, signed the strategic cooperation agreement with mango to conduct comprehensive strategic cooperation in the fields of basic telecom services, high-quality copyright content and so on. Related party transactions between Migu and the company mainly include: (1) the company purchases bandwidth and copyright content from Migu; (2) Migu contributes operator and advertising revenue to the company. The total amount of cross-linking transactions in 2019 / 2020 / 2021 was 528 / 897 / 1345 million yuan respectively, and the scale of cooperation continued to increase.
The new framework to be signed this time is an extension of the depth and breadth of bilateral cooperation. 1) In terms of strategy, the company proposes to build a meta universe platform based on 5g. In this cooperation, the two sides will explore new Internet video formats under the background of 5g, including VR production and broadcasting, ultra-high definition content production and production. The two sides are expected to cooperate in depth in technology and content. 2) In terms of content, at present, Migu video has the copyright of mango high-quality content. In the future, the two sides will expand the scope of joint production. It is expected that mango TV is expected to receive financial support from Migu, and Migu's advantages in sports content are expected to fill the shortage of such content in mango. 3) In terms of large screen business, the large screen business cooperated with China Mobile has been upgraded from the traditional provincial cooperation mode to the national unified aggregation and one-point distribution mode, which is conducive to the accelerated landing of the company's large screen business in the national market. 4) In terms of e-commerce business, Migu has opened a Migu derivatives zone in Xiaomang app, which has broadened the categories of platform products, and Xiaomang is also expected to obtain traffic support from the mobile system and continue to improve its penetration. Overall, the new cooperation framework has positive synergy significance for the new business of the company's strategic layout and the current basic business.
Investment suggestion: the company has outstanding advantages of state-owned media, low valuation level at the current time point, and has long-term allocation value. Mango TV has rich content reserves in 2022, including self-made variety shows such as "sound without rest" (the responsibility system of Hongxiao studio) with high attention. The theme and content richness of monsoon theater are improved. It is expected that high-quality content will significantly drive dau and the number of members. We expect the company's net profit attributable to the parent company to be RMB 2.37/2.9 billion from 2021 to 2022, with a year-on-year increase of 19.6% / 22.5%. We maintain the "buy" rating.
Risk tip: industry competition intensifies, user growth is less than expected, and advertising revenue is less than expected.
