\u3000\u3 Bohai Water Industry Co.Ltd(000605) 168 Three'S Company Media Group Co.Ltd(605168) )
The company has stable cooperation with existing head customers and continues to expand head customers in many industries, laying the foundation for future performance growth Three'S Company Media Group Co.Ltd(605168) was founded in 2003. Initially, it focused on expanding campus media resources. After transforming the field of Internet marketing in 2014, it continued to expand head customers in various industries. At present, it has covered head customers in telecom operators, finance, Internet, FMCG, automobile and other industries, and continuously expanded new head customers to inject continuous vitality into long-term growth.
The company's performance has grown steadily and its profitability is leading the industry. From 2018 to 2020, the company achieved revenue of RMB 1.100/1.631/2.808 billion respectively, with a corresponding year-on-year growth rate of 45.0% / 48.4% / 72.1%, and the net profit attributable to the parent company was RMB 124 / 194 / 363 million respectively, with a corresponding year-on-year growth of 26.9% / 56.1% / 87.4%. The 2021 annual performance express predicts that the company's operating revenue will be 3.571 billion yuan in 2021, with a year-on-year increase of 27.18%, and the net profit attributable to the parent company will be 506 million yuan, with a year-on-year increase of 39.42%. It is expected that the compound growth rate of net profit from 2018 to 2021 will reach 59.8%. The company's main business has strong profitability. The gross profit margin and net profit margin in the first three quarters of 2020 / 2021 were 19.5% / 19.8% and 12.9% / 12.2% respectively, which is the leading level in the industry.
The equity incentive will be extended to demonstrate the company's confidence in long-term development. The company issued the latest draft of restricted stock incentive plan in January 22, which is essentially the extension of the equity incentive plan issued for the first time in 2020, corresponding to the net profit target of RMB 730 / 10 / 1.3 billion in 22-24 years (the net profit target of the previous 20-22 years was RMB 350 / 5 / 7 billion). The new incentive plan shows the long-term confidence of the company's leadership and will fully mobilize the enthusiasm of employees.
NFT and virtual human business will further catalyze the company's performance. The company signed a strategic cooperation agreement with beiwen center in January 22 to jointly establish a trading platform for digital cultural and creative products and enter the field of NFT. The platform is expected to land this year and become the second growth curve of the company. At the same time, the company actively arranges the field of virtual human, which will bring more performance increment to the company in the future.
Investment suggestions: Three'S Company Media Group Co.Ltd(605168) has stable head customers in many industries, including head state-owned enterprises such as Yili, three operators and four banks. It will update and develop new customers in many industries such as China Resources Group, FAW Volkswagen, Dongfeng Honda and FAW Toyota in 21 years, and there may be investment income elasticity in the next 2-3 years. We expect the net profit from 2021 to 2023 to be 507 / 777 / 1071 million yuan, corresponding to the valuation of 22x / 14x / 10x. According to the 22-year 23x P / E target valuation given by the comparable company, the target price is 256.68 yuan / share. Considering that the company benefits from the growth trend of continuous marketing and promotion investment of core state-owned enterprises and the catalysis expected to be formed by the layout of NFT and digital virtual human, the "buy" rating is given for the first time.
Risk factors: increased market competition, decline in operating interest rates, changes in industrial policies and other risks
