Main points
The factors inhibiting the improvement of sector valuation are expected to be gradually eliminated.
As of December 17, the A-share media sector has fallen by 3.56% year to date, ranking 20 among 28 tier 1 industries, and the valuation of the sector is at an all-time low. Looking forward to 2022, the factors that suppress the improvement of industry valuation are expected to be gradually eliminated. On the online side, a number of regulatory policies such as Internet antitrust, protection of minors in the game industry and double reduction of education have been implemented one after another, and the marginal impact on the policy side is expected to be reduced; Yuancosmos is in its early stage and is expected to drive the virtual entertainment content industry to prosper in the long run. Offline, the impact of the epidemic is expected to be gradually eliminated, and offline entertainment consumption will return to normal.
Online: focus on high-quality tracks such as game going to sea, live broadcast of e-commerce and the rise of Guoman.
Game going to sea: in terms of policy, China’s supervision is becoming stricter and encourages “going out”; In terms of competition structure, the game going to sea is in the period of category expansion, and the market share continues to increase; In addition, the game industry is also one of the important scenes for the landing of the meta universe in the future. E-commerce live broadcasting: the short video platform adds code to e-commerce live broadcasting to build its own e-commerce system, and e-commerce live broadcasting service providers benefit from the rapid expansion of live broadcasting brands. Goma’s rise: after the implementation of the “trial before broadcasting” policy, Goma’s advantages on the supply side are expected to promote the improvement of market influence; At the same time, pay attention to the improvement of production level and capitalization progress of high-quality animation companies.
Offline: focus on the recovery of offline entertainment industry and new consumption of generation Z.
Cinemas: they are optimistic about the recovery of cinemas’ performance and the box office performance of key schedules after the impact of the epidemic subsides. Trendy play: generation Z, who is willing to pay for interest, has bred a number of 10 billion new offline entertainment markets, focusing on emerging tracks such as blind box / script killing / card machine. Sports: a number of competitions are approaching, which is expected to improve the market demand.
Investment advice
Maintain the “overweight” rating of the media industry in the next 12 months. It is recommended to pay attention to G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Wanda Film Holding Co.Ltd(002739) , Kingnet Network Co.Ltd(002517) , heart company, Beijing Enlight Media Co.Ltd(300251) , Guangzhou Wahlap Technology Corporation Limited(301011) , Beijing Zhidemai Technology Co.Ltd(300785) .
Risk statement
1. Industry policy supervision is further tightened; 2. The impact of the epidemic continues; 3. Intensified market competition; 4. The development of new technologies is lower than expected.
