Core view
Last week, the media industry (Shenwan) rose 5.03%, ranking fourth in the market, outperforming Shanghai and Shenzhen by 3 Zoje Resources Investment Co.Ltd(002021) . The volume of AR / VR head display increased by 92.1% year-on-year. We believe that the AR / VR head display equipment market broke out again after 2016, which is mainly driven by the concept of meta universe. The whole market has been greatly improved in terms of hardware equipment, technical level, content ecology, creative environment and other aspects. However, due to the lack of popular products at the content end, consumers’ continuous consumption power is insufficient, and consumers’ use preferences and payment habits at home and abroad are different, The overall market potential still needs to be tapped and developed. For the sustainable development of the Chinese market, we need to pay more attention to the portraits of local users, focus on the construction of content ecology, improve consumers’ willingness to buy and continue to spend in the app store after purchase. This year, the construction rhythm of major manufacturers has significantly accelerated, the market competition has significantly strengthened, and we are optimistic about the prospect of the sector.
Key investment points:
Game: 1) China Mobile Game announced its annual financial report for the year of 21, and its overseas revenue increased by 7260% year-on-year. In the past 21 years, the operating revenue of mobile games reached 3.957 billion yuan, a year-on-year increase of 3.6%; The adjusted net profit was 630 million yuan, a year-on-year decrease of 21.9%. The company said that this was mainly due to the failure of many mobile games such as “the legend of the new fairy sword and the legend of swordsman to ask for love” to obtain the version number products as scheduled and increase the R & D investment. 2) “Light encounter” IP is gradually moving towards various media forms, and the official publicity is animated.
Internet: 1) IDC released the AR / VR head display market report in 2021, and the shipment volume increased by 92.1% year-on-year. In 2021, the global AR / VR head display volume reached 11.23 million units, with a year-on-year increase of 92.1%, of which the VR head display volume reached 10.95 million units. It is expected that in 2022, the global VR head display will ship 15.73 million units, with a year-on-year increase of 43.6%. 2) The Ministry of culture and tourism plans to require the script to be recorded and add age-appropriate tips. Minors can only play on holidays. In terms of script content, business units should establish a “content self review system” and implement filing management; In terms of juvenile protection, the script used by the business unit shall be provided with age appropriate tips and indicate the age range. It shall not be provided to minors except national legal holidays, rest days and cold and summer holidays; In terms of safety responsibility, actively rectify and eliminate potential safety hazards such as fire fighting, and shall not engage in script entertainment business activities in residential buildings and below the first floor of buildings. 3) Tencent video upgrades the sharing rules of mini dramas. The formula for calculating the revenue of Tencent video mini series released this time is: total revenue = revenue of members + revenue of advertising + revenue of self investment promotion (if any). Among them, member split revenue = effective viewing time of member users × Effective viewing time and unit price of member users.
Box office of the festival: review of the box office of the Qingming Festival: as of 21:30 on April 5, under the condition of poor business conditions of cinemas across the country, the total box office of the Qingming Festival (4.3-4.5) in 2022 was 120 million, the lowest in the past decade (except 2020). The top three films at the box office are:
“Spirit Hotel 4: Adventure of transformation” 281727 million, the moon fell 243819 million, and “escape from the chamber of Secrets 2” 188716 million.
Investment suggestion: comply with the strict regulatory environment of the policy, promote industrial reform, and grasp the innovation needs brought by the post epidemic era and Z era. 1) Game: the epidemic dividend has faded. It is suggested to pay attention to the individual stocks in the product line that are developed for the new generation of users, have well-known IP, have high expectations and good test feedback; At the same time, driven by the concept of “meta universe”, it is expected that the ecological construction of VR content will become the focus of the market in 2022; 2) Film and television cinemas: focus on leading cinemas and individual stocks; 3) Film and television series: diversified theatres and mini dramas will be the focus of the development of the video industry. It is suggested to pay attention to individual stocks with strong content IP commercialization ability; 4) Advertising marketing: focus on individual stocks of ladder media.
Risk factors: stricter regulatory policies, delayed launch and less than expected performance of Xinyou, increased risk of overseas business, repeated epidemic risk and goodwill impairment risk.
