One week market review: last week, the media (Shenwan) index fell by 0.39% as a whole, while the CSI 300 index fell by 1.68% in the same period. The sector outperformed the CSI 300 index by 1.29%, ranking 14th among all sectors. As of Friday, the average price earnings ratio of media was 186300, which was lower than the historical average of 2015; Compared with the current media (Shenwan) sector, the valuation premium rate of CSI 300 is 104.17%, which is lower than the average value of historical valuation premium rate of 233%.
Industry events: 1) Mango Excellent Media Co.Ltd(300413) 2021 operating revenue of 15.35 billion, a year-on-year increase of + 9.6%. 2) BiliBili had a revenue of 5.78 billion yuan and a net loss of 2.1 billion yuan in the fourth quarter of 2021. 3) The company expects to turn from profit to loss in fiscal year 2021. 4) Iqiyi’s revenue in the fourth quarter of 2021 was 7.39 billion yuan, of which member revenue was 4.1 billion yuan. 5) Meituan takeout released a number of support measures for small and medium-sized merchants, and the Commission of difficult small and medium-sized merchants was capped at 5%. 6) tiktok will be transferred to VR business. 7) The total revenue of “call of duty mobile game” jointly launched by Activision Blizzard and Tencent Tianmei studio exceeded US $1.5 billion.
Investment perspective: metauniverse is still one of the most noteworthy main lines in the media sector in 22 years, focusing on the implementation of virtual human and NFT related concepts. After the regulatory year of 2021, the share price of the Internet sector has significantly corrected. At present, the main companies basically fall back to the reasonable valuation range, and the business model of the Internet still has the potential for rapid growth. It is expected that the Internet regulatory rules are expected to be clear in the first half of this year, the growth rate of financial data in the second half of this year is expected to gradually recover, and the Internet sector is expected to provide investment opportunities this year. Optimistic about the long-term value of offline advertising traffic entrance, recommend Focus Media Information Technology Co.Ltd(002027) ; Kwai Fu is optimistic about the high growth Internet content platform, and recommends fast hand, Mango Excellent Media Co.Ltd(300413) and Tencent holdings. Value the stickiness of local users and pay attention to meituan; Optimistic about the perfect ecosystem, improve the comprehensive service capacity, and pay attention to Alibaba.
Industry view: Game: at present, the game industry is still in the regulatory cycle, and the overall performance is suppressed to a certain extent; Under the background of tightening the version number, the number and time of new games online have been greatly affected. Companies with strong operation and outstanding sea going strength may have better performance in the medium and short term; If the game version number is restored, it is expected to bring performance flexibility. Hong Kong stocks recommend Netease (new products are expected to continue to drive performance growth, and overseas expansion is expected), Tencent holdings. A-share recommendation Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) (rapid development of sea business), G-Bits Network Technology(Xiamen)Co.Ltd(603444) (strong game continuity), Perfect World Co.Ltd(002624) (new product 22q1 will release more performance).
Content Internet: the overall valuation logic of content Internet companies has changed greatly, from focusing on user growth to profit, and from PS and single user valuation to long-term steady-state profit. In terms of segments: long video is affected by policy supervision and inter industry competition, and there will be some pressure on the growth of members and advertising in the future; Short video users and time growth gradually slowed down, but there is still great potential for future short video content and various payment scenarios. Besides the traffic advertising business, the exploration of the scene such as electricity providers and local life is worth focusing on, and recommends Kwai Fu (21Q3 starts to lose continuously improve).
E-commerce and local life: under the macroeconomic impact, the competitive environment of e-commerce industry is relatively fierce, and the competitive advantage has shifted from the pursuit of quantity (number of active users, consumption, etc.) to the pursuit of quality (retention rate, customer unit price, etc.).
The long-term growth space is expected to be opened through live e-commerce, sinking market and cross-border e-commerce; The competition pattern will not change significantly in the short term. The head e-commerce platform focuses on consumer service, supply chain and logistics performance management, and its advantages are still obvious. Local life still has a broad market. At present, the competitive environment is better than that of e-commerce. Meituan, as a leading player, has strong enough ground promotion, organization and management ability. It is difficult for competitors to seize market share through subsidies and other measures in the short term. It is suggested to pay attention to meituan, Alibaba, jd.com and pinduoduo.
Education: the current 22-year valuation of the higher education sector has generally fallen below 10 times PE. Even worried about the reduction of M & a willingness and possible policy risks caused by the inversion of primary and secondary prices, considering only endogenous growth, the overall value of the higher education sector has also been underestimated. It is suggested to pay attention to China Education Holdings and people’s livelihood education.
Risk tip: the uncertainty of the epidemic situation has increased, the policy supervision of media, education and Internet has become stricter, the performance of some companies is lower than expected, and the game version number is limited.
