[Internet industry] last week, the NASDAQ index fell 3.86%, the MSCI China Index fell 1.66%, the Hang Seng Index fell 0.76%, and the Hang Seng technology index fell 2.24%. The top three components of Hang Seng technology index rose: ping an good doctor (+ 10.27%), JD health (+ 8.01%), ideal car-w (+ 2.73%); The top three declines: Wanguo data – SW (- 10.17%), Huahong semiconductor (- 7.21%), sunwoo Technology (- 6.43%). China concept Internet has reduced costs and increased efficiency with its left hand, ensured people’s livelihood with its right hand, and continued to move forward in difficulties.
[A shares] last week, the media sector index fell 4.12%, the Shanghai Composite Index fell 0.94%, the Shenzhen Component Index fell 2.20%, and the gem index fell 3.64%. The top three gainers of the sector: Fuchun Technology Co.Ltd(300299) (+ 6.18%), Shuhua Sports Co.Ltd(605299) (+ 4.20%), Three’S Company Media Group Co.Ltd(605168) (+ 3.03%); The top three declines in the sector: Hengxin Shambala Culture Co.Ltd(300081) (- 22.24%), Shunya International Martech (Beijing) Co.Ltd(300612) (- 15.87%), Col Digital Publishing Group Co.Ltd(300364) (- 11.99%).
Company news:
[meituan, Jingdong, hungry] and other enterprises will play a more important role in ensuring supply and people’s livelihood by logging in to the Shanghai epidemic release conference; [Tencent, jd.com, meituan] and other companies have successively reported large-scale layoffs, and the trend of cost reduction and efficiency increase in the Internet industry is becoming more and more obvious this year.
[ Three’S Company Media Group Co.Ltd(605168) ] released the annual report. In the 21 years, the company achieved a revenue of 3.571 billion yuan, a year-on-year increase of 27.18%, and a net profit attributable to the parent company of 505million yuan, a year-on-year increase of 39.18%, which is basically consistent with the express report and in line with expectations. We are optimistic about the certainty of the main business performance and the NFT platform.
[ G-Bits Network Technology(Xiamen)Co.Ltd(603444) ] according to the annual report, the company achieved a revenue of 4.619 billion yuan in 2021, with a year-on-year increase of 68.44%, net profit attributable to the parent company of 1.468 billion yuan, with a year-on-year increase of 40.34%, deducting 1.226 billion yuan not attributable to the parent company, with a year-on-year increase of 36.24%. The performance is slightly lower than expected, but it pays more attention to the growth of quality and high marks. We are optimistic about the flexibility of the company’s new tour landing and the reissue of the version number in 22 years.
[ Saturday Co.Ltd(002291) ] released the first quarterly forecast. The company expects a profit of RMB 80 ~ 120 million in 22q1, yoy + 752.71% ~ 117906%. 22q1 related live e-commerce realized a year-on-year increase of about 60% in Gmv. Since March, the related social e-commerce service business has been dragged down by the spread of the epidemic in a large area across the country and the difficulties in express delivery and receipt. The amortization expense corresponding to the equity incentive plan in the first quarter is about 19 million yuan.
According to the A-share media targets that have disclosed the annual report, the performance in the past 21 years is remarkable. Some targets [China stock market news, Zhewen Interactive Group Co.Ltd(600986) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Three’S Company Media Group Co.Ltd(605168) ] have performed well, and there is no need for excessive pessimism in the sector as a whole.
Viewpoint:
[overseas] last week, the overall market showed a trend of high opening and low going. Over the weekend, the CSRC revised the provisions on strengthening the confidentiality and archives management related to overseas securities issuance and listing, and solicited opinions from the public. The main contents of the revision include further relaxing the restrictions of Chinese companies on the submission of audit drafts by overseas regulators, and clarifying that overseas supervision should be carried out through the cross-border regulatory cooperation mechanism. Affected by the news, Hong Kong technology stocks rose sharply on Monday. However, in the following trading days, the peripheral markets experienced a correction due to the deterioration of the situation in Russia and Ukraine, the Fed’s clear guidance on reducing the table and raising interest rates, and the higher yield of US bonds; The development situation of the epidemic in China is also not optimistic. The continuous upgrading of prevention and control measures has led to the weakening of the market again.
We believe that with the revision of China’s laws and regulations, the hope of solving the problem of “delisting of zhonggai shares” will further increase, and the supervision direction of the Internet industry will also move towards normalization, marketization and legalization. However, the continuous epidemic sealing and control measures still have a serious impact on China’s consumption and supply chain, and also directly affect e-commerce, local life, Internet advertising and other industries. However, from the situation during the epidemic prevention and control period, we can see that meituan, jd.com, Alibaba, fresh e-commerce and other Internet enterprises with supply chain capability and “last mile” logistics capability are extremely important and irreplaceable for ensuring supply and people’s livelihood; In addition, the closure and control of the epidemic will further catalyze the penetration and mental cultivation of users in fresh e-commerce, catering and takeout industries. In the long run, we still pay strong attention to meituan, jd.com and other high-quality enterprises with unique performance and supply chain advantages and clear layout in the new retail field.
We recently released a 74 page meituan in-depth report: “meituan-w (3690. HK): the” search engine “of local life and” three curves “connecting the past and the future”, which makes an in-depth analysis of the growth space and profit prospects of meituan’s businesses, and briefly discusses the development trend of fresh e-commerce industry.
We still recommend that we grasp 5 main investment opportunities this year: 1, the -W company (3690.HK) and Jingdong -W (9618.HK) 2, which have good Kwai long growth and long term competitiveness, are expected to make a clear reduction in the value of their losses. The enterprises that are expected to be repaired at the valuation level are: fast -W (1024.HK), beep BEIR -W (9626.HK) 3, performance and valuation are still at the bottom, and patiently wait for the leading companies on the right side: Tencent (700.HK). Alibaba WS (9988. HK) 4 has stable performance growth and profit margin. High quality companies that are relatively cheap according to PE: Netease SW (9999. HK) and pinduoduo (PDD. US) 5. Companies with greater flexibility after the release of game version number: heart company (2400. HK) and bilibili-w (9626. HK).
[consumption of Hong Kong stocks] since January, we have clearly pointed out the theme opportunity of [sports sector / sports equipment]. In March, the performance disclosure of [Tebu, Li Ning, Anta, 361 degrees] continued to exceed market expectations. On March 22, Shanghai Stock Exchange reported that [ China Sports Industry Group Co.Ltd(600158) ] successively won the bid for stadiums and Gymnasiums in Tianjin, Yantai, Liyang, Xinyi and other sports projects, as the franchise service provider during the 2022 Winter Olympic Games and winter Paralympic Games in Beijing, China Sports Industry Group Co.Ltd(600158) undertook the game time franchise services of six venues (hotels / villages), including Beijing Winter Olympic Village / winter Paralympic Village, Olympic family hotel, national speed skating hall, Wukesong Sports Center, capital gymnasium and Shougang ski jump platform. At the same time, it paid attention to [ Shuhua Sports Co.Ltd(605299) ] announced on April 6 that the first phase of employee stock ownership plan raised 22 million yuan, and the transfer price was not less than 90% of the average repurchase price. Therefore, it is planned to repurchase shares, The repurchase price shall not exceed 19 yuan / share. The previous weekly report continued to suggest that [bubble Mart] was at a low valuation level, and had a certain recovery in the near future, with an increase of more than 13% in the past two weeks. During the period of industry integration, the leading performance was stable, and attention was paid to the long-term layout of Hong Kong stocks and consumer stocks.
[yuancosmos] the “global yuancosmos conference” hosted by China Mobile Communications Federation and co sponsored by Shanghai Communications Administration was originally scheduled to officially land in Shanghai on March 31. The latest news is that affected by the Shanghai epidemic, it was rescheduled to be held online on May 20. [NFT] on March 14, the finance minister of Singapore announced the Levy of NFT tax; In March, Xinhuanetco.Ltd(603888) and Shanghai Cultural Property Exchange jointly launched the “national copyright trading protection alliance chain”, which incorporated digital cultural creation into the national digital cultural creation normative governance ecological matrix and the digital cultural property rights registration and circulation system; The official account of Tencent in March 30th responded that according to the relevant laws and regulations of the state, in order to prevent the risk of speculation in virtual currency transactions, the WeChat public platform has recently standardized the public numbers and small procedures of the two hype and the sale of digital collections in recent days; and, in response to the relevant laws and regulations of WeChat, On April 8, the “2022 China Digital Collection self regulatory convention conference” led by the new generation AI industry technology innovation strategic alliance, Hongdong digital collection, dongyiyuandian, Lingjing collection and other sponsors was held in Beijing, and Chinese NFT participants began to launch the self regulatory convention.
NFT’s core target concerns: Three’S Company Media Group Co.Ltd(605168) (the annual report is in line with expectations, gold stocks rose by more than 10% in the past two weeks in April, and we released the first coverage report on March 20. In the short term, we look at the high growth of 22q1 revenue and NFT catalysis, and in the long term, we look at the certainty of serving the performance of state-owned enterprises), Visual China Group Co.Ltd(000681) (focus on the recent launch of NFT overseas platforms), etc. [VraR] after the investment, Pico’s expected shipment in 2022 will increase to 1.8 million units through marketing and other support. Focus on the core targets of VraR content: Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , Wuxi Boton Technology Co.Ltd(300031) (game version number flexibility, industrial Internet Catalysis), Fuchun Technology Co.Ltd(300299) , Kaiser (China) Culture Co.Ltd(002425) , etc. [counting from the east to the West] Zhejiang Century Huatong Group Co.Ltd(002602) (the mobile Tour “Celebrating the past years” was launched on March 25). [growth value] Focus Media Information Technology Co.Ltd(002027) (22q1 has performance pressure but is optimistic about the long term).
[game] according to our comments on February 22, March 16 and the recent weekly report, we don’t think we need to over interpret the impact of policy regulation at present. If the subsequent version number is released, some companies are expected to achieve 10 ~ 20% performance flexibility. Especially after the version number is restored, the industry valuation elasticity is expected to increase from 15x target valuation to 20x. After the bottom of Internet policy is built, the leading Tencent has returned to the 21x valuation position in 22 years, If considering the flexibility of game version number, give priority to [ Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , Perfect World Co.Ltd(002624) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) ], etc. The industry focuses on Tencent (one of the highlights of 21q4 game going to sea); Netease (Harry Potter goes online overseas, pay attention to Diablo Q2 goes online) Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) (the performance in 21 years was in line with the expectation, and the performance of Xinyou at sea in February 22 was brilliant. Douluo continent: duel between soul masters entered the payback period) G-Bits Network Technology(Xiamen)Co.Ltd(603444) (I read carefree and asked 22q1 performed brilliantly, acting as the online agent of OBI Island: dreamland for 22 years) Zhejiang Century Huatong Group Co.Ltd(002602) (“counting East and counting West” starts catalytic IDC, and game distribution cooperates with Tencent) Wuxi Boton Technology Co.Ltd(300031) (Industrial Internet, smart mine and other business flexibility, focusing on the implementation of the self-developed end front) Perfect World Co.Ltd(002624) (the new version of magic tower linked with spirit cage and launched overseas in 22 years); Heart company (flashparty’s overseas release has performed well, and T3 22q1’s overseas launch is expected) Shanghai Yaoji Technology Co.Ltd(002605) (Yaoji fishing 3D launched its new tour in December 21, and the star card track has become a new growth point); Baiao family interaction (Obi Island: dreamland launched in 22 years), etc.
[Q1 performance outlook] ① Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) : Douluo mainland has entered the performance contribution period. Since February, Xinyou has made a brilliant trip to the sea. The base number of 21q1 is low, and it is expected to achieve a year-on-year growth of more than 500% in a single quarter; ② G-Bits Network Technology(Xiamen)Co.Ltd(603444) : the annual report shows more qualitative growth, and the 22q1 data of “asking questions” and “Yinian Xiaoyao” are outstanding; The performance of other game stocks, such as our prompt from January, is under certain pressure due to the suspension of edition numbers and the reduction of new tours; ③ Three’S Company Media Group Co.Ltd(605168) : 22q1 is expected to achieve revenue growth of more than 40%. Integrated marketing has brought large increment to 21 year FMCG customers such as China Resources and customers in the automotive industry. We pay attention to the implementation of NFT platform of beiwen center and digital virtual human project; ④ Others: Beijing Yuanlong Yato Culture Dissemination Co.Ltd(002878) , Beijing Jetsen Technology Co.Ltd(300182) , Saturday Co.Ltd(002291) , etc.
