On March 5, 2022, the fifth session of the 13th National People’s Congress opened at the Great Hall of the people in Beijing. Premier Li Keqiang made a government work report. In his outlook for the work of the government in 2022, he mentioned a number of important contents related to the field of media and Internet, such as fair competition policy, digital economy development, promoting consumption recovery, deepening network ecological governance, strengthening intellectual property protection and so on.
Main comments and Prospects
Internet regulation is more accurate and effective, emphasizing key areas. In the expression of the requirements for government supervision in 2022, the words “preventing the disorderly expansion of capital” are changed to “Combating Unfair Competition”; Change “strengthen” to “strengthen”, and the overall tone is more relaxed. At the same time, it is proposed to “improve the regulatory rules and improve the accuracy and effectiveness of regulation”. In addition, three key areas of “strengthening network security, data security and personal information protection” have been added. We believe that the future direction of supervision in the Internet field has been relatively clear: by formulating clear rules and delimiting boundaries, the government plays a role in maintaining order and reducing the “one size fits all” generalized supervision. As the industry gradually understands the new regulatory framework and adjusts the business logic according to the new regulation, the policy impact is expected to decrease marginally.
Accelerate the digital transformation of industry and pay attention to the development of artificial intelligence. In 2022, more detailed field descriptions were added to the development guidance of digital economy, such as smart city, digital village and cultivating artificial intelligence digital industry. We expect that the construction of urban intelligent transportation will be accelerated, such as driverless, traffic congestion solutions, intelligent parking solutions, etc. Baidu’s Apollo and Intelligent Cloud business have accumulated strong strength in this area. In addition, the development of artificial intelligence industry will also accelerate the maturity of meta universe related applications. The cloud businesses of Baidu, Tencent and Alibaba will also benefit from the accelerated development of industrial Internet.
Promote the recovery of life service consumption, and it is expected that consumption will increase significantly in the second half of the year. In 2022, it was specially proposed to “promote the recovery of living service consumption”. We believe that, especially in the second half of the year, the recovery from consumption will be greater, which will significantly benefit advertising, life service platforms and e-commerce platforms. The video marketing chain will be the fastest and largest area to benefit from the recovery of advertising.
We will continue to improve the network ecology and strengthen the protection of intellectual property rights. In the field of culture, new contents such as “innovating Internet content construction”, “deepening network ecological governance” and “expanding the supply of high-quality cultural products and services” were proposed in 2022. We believe that the strict supervision of excessive entertainment content will continue, but we will continue to encourage the supply of high-quality cultural products. It is suggested to pay attention to being sensitive to the supervision of content policies Understand more in-depth high-quality content production platform. For intellectual property protection, the expression is changed from “strengthening” to “strengthening”, and the tone is more emphasized. This is also in line with the previous national plan for the protection and application of intellectual property rights in the “14th five year plan”. We believe that NFT and blockchain right confirmation technology will play a greater role in it.
Investment advice
We expect that in 2022, the media Internet industry will usher in a reversal of difficulties, the regulatory framework will be basically established, and the digital economy, cloud services, metauniverse, consumption recovery and other new growth opportunities will be brought. It is recommended that Baidu, Tencent and Kwai Head Companies in the video marketing industry chain should be concerned about: Baidu, Mango Excellent Media Co.Ltd(300413) , leading game companies: NetEase, Perfect World Co.Ltd(002624) , and so on.
Major risks
Macroeconomic growth is less than expected; The recovery of consumption is less than expected, resulting in low advertising; Content or platform policy supervision exceeds expectations; The progress of technology research and development is less than expected; Yuan universe investment bubble and so on.
