Industry core view:
Media industry last week (Shen Wan) rose 6.3%, ranking second in the market, outperforming Shanghai and Shenzhen 300. Iqiyi announced the adjustment of member prices. We believe that the main reason is that iqiyi’s losses expanded. With the year-on-year growth of price increase revenue, the number of member users began to decline, pointing to the long-term growth and pressure of income. Raising prices again may continue to increase member income, but it also increases the risk of decline in the number of members A double-edged sword. Baidu launched the meta universe xirang, and the content ecological construction needs to be improved. We believe that xirang is still in the testing stage, the character model and scene construction are still in the polishing stage, and there is no real open free space.
Key investment points:
Games: 1) Gamma data released the 2021 game annual report, with market revenue of 296.5 billion, an increase of 6.4% and overseas growth of 16.6%. In 2021, the actual sales revenue of China’s game market was 296.513 billion yuan, an increase of 17.826 billion yuan over 2020, a year-on-year increase of 6.40%. Although the actual sales revenue still maintained a growth trend, the growth rate decreased by nearly 15% compared with the same period last year. The main reason is that the stimulating effect of housing economy gradually weakened under the covid-19 epidemic last year; The number of annual explosive funds decreased year-on-year; The cost of game R & D, operation and distribution continues to increase. 2) Sensortower announced the top 10 list of global popular mobile game downloads in November 2021, and pubg: new state ranked first. According to the data, krafton’s pubg: new state ranked first in the global mobile game download list in November with 32 million downloads. In November 2021, the number of downloads of global mobile games in app store and Google play was 4.4 billion, the same as that in the same period last year. India ranked first with 743 million downloads, accounting for 17% of the total downloads in the world.
Internet applications: 1) iqiyi announced the adjustment of member prices. Iqiyi microblog said that the subscription price of gold VIP members will be updated from 0:00 on December 16. Iqiyi responded to this: “the subscription price of members of the video platform has been low, which has affected the healthy development of the industry. In order to establish a more benign industrial ecology, let excellent content producers return, and finally provide members with more and better content, we decided to adjust the member price.” 2) Baidu launched yuanuniverse “Xi soil”, and the content ecological construction needs to be improved. On December 10, baidu announced that it would release the meta universe product xirang on December 27, and would take this opportunity to hold Baidu AI developer conference in xirang app. At present, on the official website of xirang, the beta version of xirang app has been opened on the mobile terminal and VR all-in-one terminal. 3) After a-soul, Lehua announced the virtual men’s League plan. At present, the first explosion PV has been released on major platforms, which is also Lehua’s second virtual idol project after a-soul.
New media: Aowei mutual entertainment released the large screen user behavior report in November 2021. The daily operating scale of Ott was 105.83 million units, down 0.9% month on month. The average daily startup rate of Ott terminal was 33.2%, down 0.6% month on month. Guangdong South New Media Co.Ltd(300770) cloud audio-visual series occupies 4 and 3 seats respectively in the comprehensive ranking list of on-demand media and the ranking list of long video of on-demand media.
Investment suggestions: 1) game field: H1 most manufacturers’ revenue declined due to the high base last year. It is suggested to pay attention to the individual stocks in the product line that are developed for new generation users, have well-known IP, high expectation and good test feedback. 2) Film and television theaters: focus on stocks with strong content IP commercialization ability. Diversified high-quality theaters may be the focus of the development of film and television drama and video industry.
Risk factors: stricter regulatory policies, delayed launch and performance of Xinyou less than expected, increased risk of overseas business, less than expected integration of State Grid, repeated epidemic risk and goodwill impairment risk.
