Industry status
In February 2022, the A-share media sector fell by 1.39%, underperforming the Shanghai Composite Index by 4.39 ppt Among them, the sectors of TV broadcasting / publishing / advertising marketing / digital media / Games / film and television cinemas rose by 5.33% / 3.03% / 2.32% / 1.68% / 3.89% / 6.72% respectively.
Commentary
Online games: the pattern of head manufacturers is stable, and high-quality products are competitive. In the global market, according to sensortower data, in February, 36 Chinese manufacturers were shortlisted as the global mobile game publisher Top100 (an increase of 2 on a month on month basis), with a total revenue of nearly US $2 billion (accounting for 37.9%). The top 5 global revenue of Chinese game manufacturers is: Tencent / Netease / MIHA tour / Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) / funplus Among them, Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) benefited from the performance of "song of Cloud City" (ranking among the top five best sellers of mobile games in South Korea in February) and "Puzzles & survival" to improve the ranking; Friendship time benefited from the new tour "lingyunnuo" (launched in January) to enter the top 30 list. We believe that the overall pattern of leading manufacturers is stable, the company actively optimizes its internal governance structure, and high-quality products continue to drive new industrial increments and promote high-quality development.
Cinema Video: the accelerated filing of imported films is expected to improve the elasticity of the box office throughout the year, but the repeated epidemic may bring short-term uncertainty. According to the data of Yien, the national film box office (including service fee) reached 10.364 billion yuan in February, a decrease of 15.5% / 6.7% compared with the same period in 2021 / 2019. "New Batman", "falling moon"
"Spirit Hotel 4: the adventure of transformation" and "magical animals: the mystery of Dumbledore" are scheduled for March 18 / 25 / April 3 / 8 respectively. We believe that with the normalization of overseas epidemic management and smooth communication between China and foreign countries, the introduction of imported films is expected to enter normal. However, in the short term, the recent national epidemic has been repeated in many places. According to the lighthouse professional edition, the total number of operating cinemas in China on March 15 was 7471, about 63.2% of the normal at the beginning of February. Shanghai, Shenzhen, Jilin Province and other areas with severe epidemic situation are close to being fully closed. According to the statistics of top, as of 11:00 on March 14, the number of cinemas suspended accounted for 29.8% of the number of cinemas in China, and the box office share was 29.4%. We believe that the repeated epidemic has brought uncertainty to the operation of cinemas in some areas and may affect the recovery of normal operation. It is suggested to continue to pay attention to the impact of the epidemic and the potential changes in the pattern of cinemas.
Marketing Advertising: the advertising market is slightly under pressure in the short term, but the resilience of ladder media is prominent, the recovery of macroeconomic data is better than expected, and the advertising demand may gradually resume growth. In January, the cost of all media advertising increased by 1.9% and decreased by 13.2%; According to the media, the cost of elevator LCD / Elevator poster publishing increased by 30.7% / 25.2% in January, maintaining a high prosperity level. In terms of macro environment, according to the data of the Bureau of statistics, the national economy recovered better than expected from January to February, the service industry continued to recover, and the sales of consumption upgrading commodities were active. We believe that the advertising demand may gradually resume growth, and the medium and long-term investment robustness of advertisers is expected to be further strengthened.
Valuation and recommendations
We suggest to pay attention to: 1) digital media: Mango Excellent Media Co.Ltd(300413) / Tencent music / cloud music / BiliBili / Yuewen group; 2) Marketing advertisement: Focus Media Information Technology Co.Ltd(002027) / Inmyshow Digital Technology (Group) Co.Ltd(600556) ; 3) Online games: Perfect World Co.Ltd(002624) / Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) / Netease / heart company / ZuLong entertainment / friendship time; 4) Cinema: Wanda Film Holding Co.Ltd(002739) / cat's eye entertainment / Beijing Enlight Media Co.Ltd(300251) / Zhejiang Huace Film And Tv Co.Ltd(300133) ; 5) Book publishing: China South Publishing & Media Group Co.Ltd(601098) / Jiangsu Phoenix Publishing & Media Corporation Limited(601928) ; 6) Cable radio and television: Guangdong South New Media Co.Ltd(300770) .
Risk
Covid-19 epidemic has been repeated, the macroeconomic boom has declined, and the industrial regulatory policies have become stricter.
