In February 2022, the media (CITIC) index fell by 1.37%, and the market was relatively flat. After a major adjustment in January, the theme of the yuan universe has not yet regained its popularity. In addition, in February, due to market rumors, some leading companies in the industry still made significant adjustments against the background that the annual report performance exceeded expectations, reflecting the market’s concern about supervision and lack of confidence. In March, we focused on going to sea and policy developments before and after the two sessions. All sectors of media are stepping up efforts to go to sea, including games, video, marketing, online text and other fields. It is suggested to pay attention to industrial trends and related opportunities. The two sessions will be held in early March. It is suggested to pay attention to the media education related issues and policy trends of the two sessions. From March to April, it gradually entered the intensive period of annual report and first quarter report, focusing on high performing companies. Although the recent performance of the meta universe theme at the secondary market level is flat, the industry level is still active, and Tencent, byte, meta, Google and MIHA tour are all in continuous layout. We are optimistic about the development opportunities brought by metauniverse and the next generation Internet to the media industry. Based on this, we give the industry a “recommended” rating.
Looking ahead to 2022, focus on the following opportunities:
1) high quality content companies, mainly including game and video sectors. At present, the valuation of the game sector is lower than 15x, so we pay attention to the dynamics of going to sea and version number. Highlight Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Perfect World Co.Ltd(002624) .
The video sector pays attention to the impact of price increase and controllable factor cost on performance in the medium and long term. Focus on the platform with leading self-control ability. Pay attention to the changes of industry structure. Focus on Mango Excellent Media Co.Ltd(300413) .
2) new content and new consumption companies with private domain traffic. Tide play is one of the sectors with the highest growth rate in the pan entertainment sector. The field of tide play is expected to produce toy giants and even pan entertainment giants. Bubble mart is highly recommended.
3) companies benefiting from the increase of flow price. Highlight Focus Media Information Technology Co.Ltd(002027) , the company’s medium-term logic remains unchanged, and the scarce brand media value highlights under the background of rising traffic prices. On the basis of 2021 and 2022, the final price increase rate is better.
4) meta universe theme, mainly copyright and IP related owners and application related (exhibition hall, virtual human, digital collection). Focus on Visual China Group Co.Ltd(000681) , Shanghai Fengyuzhu Culture Technology Co.Ltd(603466) , Bluefocus Intelligent Communications Group Co.Ltd(300058) , Three’S Company Media Group Co.Ltd(605168) , etc.
In the education sector, it is suggested to continue to pay attention to the reform of vocational education system, including opportunities related to secondary vocational education, vocational undergraduate education and quality education, with emphasis on Jiangsu Chuanzhiboke Education Technology Co.Ltd(003032) , China Oriental Education and higher education.
Risk tips: stricter policy supervision, less than expected launch progress and market performance of key products, less than expected performance of key companies, intensified market competition, risk of lifting the ban and reducing holdings, corporate governance risk, market style switching, relevant data are for reference only, etc.
