Key investment points:
Market review: from February 28 to March 4, the media sector fell by 0.37%, while the Shanghai stock index, Shanghai and Shenzhen 300 index and gem index rose and fell by – 0.11%, – 1.68% and – 3.75% respectively in the same period. The media sector ranked 15th in the weekly rise and fall of CS primary industry, and was located in the middle, ranking 13th higher than the previous period.
Investment advice and rating: affected by the conflict between Russia and Ukraine, the market risk appetite has decreased and the risk aversion has increased. It is suggested to pay attention to the relatively stronger risk aversion sectors such as book publishing in the short term. Some book publishing listed companies have the defensive characteristics of steady performance growth, low goodwill, high dividend ratio, low debt pressure and high dividend rate. If the international political situation gradually becomes clear in the future and the market sentiment recovers, the media sector is expected to pick up. In the recent “two sessions”, it is expected that there will be more proposals on “digital economy”, “copyright protection”, “cultural power”, “meta universe” and other related fields. It is suggested to pay attention to the proposals related to cultural industry and Internet industry in the two sessions. From the published policies, from the “14th five year plan” China Film Co.Ltd(600977) development plan “, the” 14th five year plan “period development plan of publishing industry, the” 14th five year plan “digital economy development plan, and the” 14th five year plan “of copyright work The “14th five year plan for the development of Chinese TV dramas” and other policies have been issued one after another to clarify the development path and provide guidance for all fields of the media sector. Virtual reality, 8K HD video, interactive video, immersive video, cloud games, film and TV dramas, book publishing and other applications in the field of cultural consumption will achieve benign and standardized development in the medium and long term. From the perspective of valuation, as of March 4, 2022, the valuation of the media sector was 20.54 times (TTM, overall method, excluding negative values), 75% of the average p / E ratio of the past five years and 79% of the median, which was close to the valuation level of Q4 in 2018 and was still in a historically low position. Considering the continuous impact of external systemic risks, the rating of the media sector was lowered to the investment rating of “synchronous market”.
Suggestions and concerns: 1) the game sector is still under regulatory pressure. The suspension of edition number leads to a slight shortage of new tour product supply, and the product ranking on the top list is solidified. The edition number pressure will further test the long-term operation ability and sea going strategy of game manufacturers. Head game manufacturers have relatively strong content reserves and advantages in technology and operation. They are easier to be in the leading position in the long-term, diversified and sea going strategy of products, and relying on the stock game products can also provide support for the current performance when there are few new games online. In the future, the reissue of edition numbers will drive the recovery of new product supply and bring more flexibility to performance. It is suggested to pay attention to the top companies in China’s game industry and give full play to their competitive advantages in the process of supply side reform.
2) there are a large number of imported blockbusters in the near future. In March and April, blockbusters such as mysterious sea area, new Batman, spirit Hotel 4 and magical animal: the mystery of Dumbledore will be released in the mainland. It is expected to help achieve growth in March and April from a lower base in 2021, but we still need to be vigilant about the possible impact of repeated epidemics on the film industry. Combined with the weekly data of cat’s eye professional edition and lighthouse professional edition, the market share of Wanda cinema and Wanda film investment has continued to increase, reaching more than 20% at present. The improvement is obvious. It is suggested to continue to pay attention to the logic of channel leaders relying on the improvement of business advantage concentration. In the long run, in the post epidemic era, compared with raising the box office through price increases, the core of guiding the industry to develop more healthily and healthily is to drive the repair of film viewers through the continuous output of high-quality film content, so as to reshape the habit of audiences going to cinemas. The normalization of the epidemic situation may continue to have an impact on the China Film Co.Ltd(600977) industry, but the market self-regulation mechanism of survival of the fittest will accelerate the clearance of inefficient Cinemas at the cinema line end and alleviate the pressure of competition; On the content side, it is expected to provide more performance space for film and television companies by promoting that film and television companies prefer high-quality products when setting up projects. In addition, after the industry rectification, more explicit restrictive measures are taken for actors’ remuneration.
3) virtual human technology. After the new year’s Gala of many mainstream satellite TV channels in China, virtual human technology has been applied again in the programs of Beijing Satellite TV, Anhui Satellite TV and Jiangsu Satellite TV Spring Festival Gala. Although at present, virtual human technology is still mainly used in Pan entertainment fields such as virtual idol, e-commerce live broadcast, short video and news variety shows, in the future, the application scenario of virtual human technology may be further expanded to intelligent office, social networking, finance, education, medical treatment and other fields. As one of the underlying technologies of the meta universe, virtual human technology has relatively large application space. It’s recommended to focus on the head companies in the sub segments of the media sub panel, which are recommended and recommended to focus on the head companies in the sub segments of the media sub panel: the Xiamen Kingdomway Group Company(002626) 24\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\, Guomai Culture & Media Co.Ltd(301052) .
Risk warning: international political situation risk; The risk of repeated outbreaks and virus mutation; The tightening of regulatory policies exceeded expectations; Intensified market competition; Goodwill impairment risk; The quality of output content is lower than expected; The characteristics of project system lead to the fluctuation of the company’s performance
