In 2021, the external environment such as repeated epidemic and policy supervision formed a short-term suppression on the industry's stock price. At the same time, macroeconomic downward pressure and other factors also delayed the pace of the recovery of the industry's performance. However, we generally believe that the short-term adjustment is still a phased disturbance, the policy risks have been effectively digested, and the new application scenario represented by metauniverse is expected to be gradually implemented in the later stage, Drive industry growth. Looking forward to 2022, we focus on the following directions:
1. Metauniverse: focus on the underlying computing power / algorithm platform, VR / AR hardware entry and application, 5g communication and games, etc. We believe that the development of metauniverse is a long-term process. With the continuous development of computing power, algorithm, XR, communication and blockchain technology, it is suggested to focus on the following dimensions from the perspective of investment opportunities: 1) NVIDIA, Qualcomm and AMD provide computing power foundation; 2) Algorithms related include NVIDIA, unity, roblox, meta, etc; 3) VR / AR hardware targets include meta, Goertek Inc(002241) , sunny optical technology, etc.; VR / ar software and application scenarios targets include Guangzhou Wahlap Technology Corporation Limited(301011) , Wuxi Boton Technology Co.Ltd(300031) , Shanghai Fengyuzhu Culture Technology Co.Ltd(603466) , Inmyshow Digital Technology (Group) Co.Ltd(600556) , Shenzhen Zqgame Co.Ltd(300052) , Hengxin Shambala Culture Co.Ltd(300081) ; 4) 5g communication is related to Qualcomm, MediaTek, cloud computing target Hangzhou Shunwang Technology Co.Ltd(300113) , etc; 5) As the primary application scenario, the game is considered to be the initial entrance of the meta universe, which is expected to usher in the opportunity of valuation improvement.
2. Internet policy boots are landing one after another. We expect the actual impact to be limited and grasp the opportunity at the bottom of the plate. We believe that the supervision of Internet policies is to protect competition, encourage enterprises to improve efficiency and prevent disorderly capital expansion. Regulation may have an impact on the short-term costs of Alibaba, meituan and other companies, and affect the future investment direction of Internet giants. However, referring to the past overseas and industry experience, as long as its business model is not damaged, it will not affect its long-term value. The valuation of the Internet sector is at an all-time low. We suggest to seize the bottom opportunity after the policy boots are landed, and recommend targets: meituan-w, Tencent holdings, Alibaba, etc.
3. Game: after the version number policy is implemented, the valuation and performance are expected to be repaired. In August 2021, the release of the version number was suspended. We judged that it was mainly to promote the implementation of the juvenile addiction prevention system. We expect that the duration and impact of the suspension of the release of the version number will be less than that in 2018. Under optimistic circumstances, the release of the version number is expected to be restarted in 2021. The valuation of the sector is at a historically low level. Companies with R & D strength and sea going advantages and rich product reserves are recommended: Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Perfect World Co.Ltd(002624) ; Recommend the company as a high-quality distribution channel, optimistic about the growth of its platform users and the development of realization potential.
4. Short video: Live e-commerce and overseas still have dividends. We expect Kwai tiktok GMV to exceed 900 billion yuan in 2022, up by 50%, and 2022 GMV is expected to grow 70%-80% compared with the same period. Tiktok's growth and branding trend, the promotion of Kwai Ying's direct seeding user penetration and the promotion of the standard product ratio will all drive the industry growth. We hope that the interior modulation bonus of Kwai Chung will continue to release. Advertising monetization and the ratio of commission will continue to improve in the future, and maintain the company's "buy" rating. At the same time, it is suggested to pay attention to the progress of overseas short video industry in 2022. Commercialization is expected to accelerate and drive industrial chain opportunities.
5. Other targets: Focus Media Information Technology Co.Ltd(002027) , bubble mart, BiliBili, Mango Excellent Media Co.Ltd(300413) etc.
6. Risk warning: policy supervision risk; The impact of the epidemic exceeded expectations: macroeconomic downside risks exceeded expectations: market systemic risks, etc.
