Key investment points:
As of December 31, 2021, the media sector rose by 6.58% in 2021, ranking 17th in the annual rise and fall of CS industry, ranking in the middle of the whole industry. During the year, the growth of the media was basically the same as that of the Shanghai stock index. We believe that the media sector has gradually stabilized after experiencing multiple rounds of impact of factors such as goodwill storm, epidemic impact and tightening of regulatory policies. At present, the goodwill risk in the sector has been significantly released after a large amount of goodwill impairment reserves have been accrued for three consecutive years. The listed companies in various media sub fields have been able to better adapt to the current relatively strict supervision rhythm. At the same time, it is expected that the space and probability of further strict supervision in the future will be reduced, The market concerns and influence brought by policy supervision will also be further weakened. The media industry is expected to return to the growth track.
As of December 31, 2021, the valuation of the sector is 23.97 times (TTM, overall method, excluding negative values), 85% of the average p / E ratio of the past five years and 90% of the median, which is close to the Q4 valuation level in 2018 and still at a low level.
Recent recommendations focus on:
1) Game section. According to Gamma data, the scale of China’s game market will be 296.5 billion yuan in 2021, continuing to maintain steady growth; The growth of game going to sea is good, with a year-on-year increase of 16.6%, which is expected to become a new source of performance growth for Chinese game companies. Yang Fang, deputy director of the Publishing Bureau of the Publicity Department of the CPC Central Committee, stated at the 2021 annual meeting of China’s game industry that she would continue to adhere to the pace of games going to sea, continue to strengthen the prevention of minors’ addiction, and follow up the development of new formats such as yuancosmos. However, the latest news of the unpublished version number still needs to wait. For the game sector, it is recommended to grasp the main lines such as sea going strategy, cloud games, VR / AR, game product launch cycle and market performance. The leading manufacturers have strong competitive advantages in expanding overseas markets, product R & D capabilities, coping with regulatory policies and new technology accumulation. It is mainly recommended to recommend R & D providers with strong R & D capabilities and high-quality game output capabilities.
2) Film section. Up to now, the total box office of new year’s Day is about 1 billion yuan, which is lower than that of new year’s day in 2021. In addition to the fluctuation of film content quality, we believe that the repeated epidemic in some areas may also have a negative impact. The Spring Festival is coming soon after January. At present, the films scheduled for the Spring Festival include 12 films such as super family, miracle, four seas, the killer is not calm, bear haunt · return to the earth and sniper. The content is relatively rich, and the themes are mostly comedy themes and family fun types, which is expected to drive the viewing demand during the Spring Festival.
3) Virtual human technology. In the new year’s concert of Jiangsu Satellite TV, the virtual human technology was used to highly reproduce Teng Lijun’s image and voice, and sang with singer Zhou Shen. In addition, Luo Tianyi and other virtual idols performed on the same stage with girl group hard candy girl 303; Hunan Satellite TV’s new program “Hello Saturday Co.Ltd(002291) ” also selects digital hosts; At the new year’s Eve Party of Oriental satellite TV, Huang Minghao performed on the same stage with his virtual human image. At present, virtual human technology has been tested in large-scale programs on mainstream media platforms. As one of the bottom technologies of the meta universe, virtual human technology is expected to enter a rapid development track.
4) Intellectual property protection. On December 24, the National Copyright Administration issued the 14th five year plan for copyright work, which puts forward 26 key tasks from six aspects, aiming to comprehensively strengthen copyright protection, accelerate the development of copyright industry, promote high-quality development, and build an innovative country, a cultural power and a strong intellectual property country. It focuses on the development and application of new technologies such as big data, artificial intelligence and blockchain to improve copyright protection.
It is recommended to pay attention to the head companies in the subdivided field of the media sub section: Perfect World Co.Ltd(002624) , Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Wanda Film Holding Co.Ltd(002739) , Beijing Enlight Media Co.Ltd(300251) , Focus Media Information Technology Co.Ltd(002027) , Mango Excellent Media Co.Ltd(300413) , Beijing Zhidemai Technology Co.Ltd(300785) , Citic Press Corporation(300788) , etc.
Risk tips: repeated epidemic situation and virus mutation risk; 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
