Hylink Digital Solution Co.Ltd(603825) (603825)
The company is an old leading marketing company, fully benefiting from the growth wave in the Internet era. Customer resources + media resources + R & D strength help the company transform to brand operation According to the company's development history of more than 20 years, we divided the company's development process into four stages: 1) 1994-2001: focus on local marketing and polish the company's strength; 2) 2002-2009: transforming Internet advertising and accumulating media resources; 3) 2010-2020: invest and acquire upstream and downstream companies, integrate regional resources, layout overseas markets, and accumulate brand resources at home and abroad; 4) 2019 - present: Transformation of brand operation services, layout and implementation of virtual human business and tax-free business. Most of the company's customers are well-known leading enterprises in the industry, with stable structure and high loyalty. The sales of the top five customers accounted for 34.06% / 47.20% / 48.55% respectively in 2018 / 2019 / 2020, which has great advantages in the field of automobile and beauty. Since 2020, the company has officially regarded brand operation as the core business of the company, and began to develop vigorously. It has transformed from simply providing advertising marketing to supporting diversified and refined operation services at the back end, and carried out a number of new businesses such as live broadcasting and goods. In 2020, the company's brand operation revenue accounted for 6.4%.
New technologies continue to break through, and virtual image helps the development of marketing companies. According to toubao Research Institute, the market scale of China's virtual idols increased from 310 million yuan to 1.48 billion yuan in 2016-2020, and is expected to increase to 4.16 billion yuan in 2025. From the perspective of realization scenario, 30% - 35% of the revenue of virtual idols in 2020 comes from advertising endorsement. Compared with real people, the virtual digital image is not limited by space and time, with high marketing efficiency and good brand display effect. With the rapid development of meta universe industry and technological progress, the development potential of virtual human industry is huge.
Future highlights: actively carry out tax-free, new retail and other businesses, the business income of virtual human is expected to grow rapidly, and the cultural and Expo project is worth looking forward to. Tax exemption: the company has established a joint venture with overseas travel investment and Laox to lay out tax-free business, build online and offline tax-free business from the supply chain end, and build offline physical stores. At the end of December 2021, Hainan's first Laox select store opened in Sanya sea travel duty-free City, and the company's online live broadcasting of duty-free goods has also been successfully implemented. Virtual human: following the launch of the virtual image "Aimee" in 2020, Qianhong culture, a subsidiary of the company, has implemented the virtual image of zhongjingtian, angelababy and luotianyi in the Dior show in 2021. It is expected to carry out virtual business cooperation with more brands in the future to achieve rapid income growth. Culture and Expo: the company has signed strategic cooperation with the qinhuangling mausoleum and the Forbidden City. The "Jianjia on cloud" applet of the qinhuangling mausoleum and the "cloud class of the Forbidden City" app have been launched successively. The company attaches importance to cultural recovery and cultural inheritance, and arranges relevant cultural industries. It is expected to improve the display effect in collaboration with virtual business in the future.
Profit forecast: we estimate that the company's operating revenue from 2021 to 2023 will be RMB 9.293 billion / 10.477 billion / 12.290 billion respectively, with a year-on-year increase of 1.63% / 12.74% / 17.31%, and the net profit attributable to the parent company will be RMB 231 / 3.22/434 million respectively, with a year-on-year increase of 10.3% / 39.5% / 34.4%. Considering the continuous promotion and implementation of the company's growth, virtual human and tax-free business as a leading marketing company, it is estimated that the reasonable market value of the company in 2022 will be RMB 9.7 billion, corresponding to PE 30x in 2022, which will be covered for the first time and given a "buy" rating.
Risk tip: the development of virtual human technology is less than expected, the promotion of tax-free business is less than expected, and the competition pattern of brand marketing has changed
