Key investment points:
Market review: from February 21 to February 25, the media sector fell 4.41%, while the growth enterprise market index, Shanghai stock index and Shanghai Shenzhen 300 index rose and fell by 1.03%, – 1.13% and – 1.67% respectively in the same period. The media sector ranked 28th in the weekly rise and fall of CS first-class industry, and was in the tail position, ranking 16th lower than that of the previous period.
Investment advice and rating: affected by the conflict between Russia and Ukraine, the market risk appetite decreased and the risk aversion increased, while the overall risk aversion ability of the media sector was relatively weak, resulting in a large decline in the short term. If the international political situation gradually becomes clear and the market sentiment recovers, the media sector is expected to pick up. At the same time, the market rumors about the change of version number policy further exacerbated the risk aversion in the game sector, but according to the staff of the State Press and publication administration, they are still receiving the version number application of the game company normally. We believe that the issue of edition number is exerting an obvious suppression on the valuation of the game sector. After the normal issuance of edition number, it is expected that the valuation center of the game sector will improve and drive the performance elasticity of the game company’s game business in China.
According to the 49th statistical report on the development of China’s Internet, China’s Internet continues to maintain a steady development trend. By the end of 2021, the number of Internet users in China was 1.032 billion, an increase of 42.96 million year-on-year, and the Internet penetration rate reached 73%; The per capita online hours continued to grow. As of December 2021, the per capita weekly online hours of Chinese Internet users were 28.5 hours, an increase of 2.3 hours year-on-year; The number of rural Internet users was 284 million, and the Internet penetration rate was 57.6%. The difference in Internet penetration rate between urban and rural areas decreased by 0.2 percentage points compared with December 2020.
In terms of policy, from the “14th five year plan” China Film Co.Ltd(600977) development plan, the “14th five year plan” period development plan of publishing industry, the “14th five year plan” digital economy development plan, and the “14th five year plan” of copyright work The “14th five year plan for the development of Chinese TV dramas” and other policies have been issued one after another to clarify the development path and provide guidance for all fields of the media sector. Virtual reality, 8K HD video, interactive video, immersive video, cloud games, film and TV dramas, book publishing and other applications in the field of cultural consumption will achieve benign and standardized development in the medium and long term. From the perspective of valuation, as of February 25, 2022, the valuation of the media sector was 20.14 times (TTM, overall method, excluding negative values), 74% of the average p / E ratio of the past five years and 79% 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.
Suggestions and concerns: 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 on the top list is solidified. The edition number pressure will further test the long-term operation ability and sea going strategy of game manufacturers. Head game manufacturers have relatively strong content reserves and advantages in technology and operation. They are easier to be in the leading position in the long-term, diversified and sea going strategy of products, and relying on the stock game products can also provide support for the current performance when there are few new games online. In the future, the reissue of edition numbers will drive the recovery of new product supply and bring more flexibility to performance. 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. 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. However, the low efficiency of the cinema industry will continue to alleviate the pressure on the survival of the fittest in the market; On the content side, it is expected to provide more performance space for film and television companies by promoting that film and television companies prefer high-quality products when setting up projects. In addition, after the industry rectification, more explicit restrictive measures are taken for actors’ remuneration.
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’s recommended to focus on the head companies in the sub segments of the media sub panel, which are recommended and recommended to focus on the head companies in the sub segments of the media sub panel: the Xiamen Kingdomway Group Company(002626) 24\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\, Guomai Culture & Media Co.Ltd(301052) .
Risk warning: international political situation risk; The risk of repeated outbreaks and virus mutation; 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
