\u3000\u3 Bohai Water Industry Co.Ltd(000605) 168 Three'S Company Media Group Co.Ltd(605168) )
Event: the company disclosed its 2021 annual report and achieved a revenue of 3.571 billion yuan, a year-on-year increase of 27.18%; The net profit attributable to the parent company was 505 million yuan, with a year-on-year growth rate of 39.18%; The year-on-year growth rate of net profit deducted from non parent company was 33.35%. In 2021q4, the revenue was 1.429 billion yuan, with a year-on-year growth rate of 47.23%; The net profit attributable to the parent company was 244 million yuan, with a year-on-year growth rate of 35.59%, and the performance scale in a single quarter hit a record high.
Increase the budget of brand customers and dig deep into the budget of existing customers, and continuously improve the profitability. In 2021, the company's business structure is digital marketing (89.9%), scene activity service (5.2%) and campus media marketing (0.8%); Among them, the revenue of digital marketing business continued to grow rapidly, with a year-on-year growth rate of 58.17%, 82.89% and 25.06% respectively in recent three years. The main reasons for maintaining high-speed growth in 2021 are as follows: 1) opening up new customers, adding FMCG customers such as Yibao, Xuehua and Foshan Haitian Flavouring And Food Company Ltd(603288) and medical beauty head customers such as Juzi biology, sports lottery management center of the State Administration of sports, Postal Savings Bank Of China Co.Ltd(601658) , China Minsheng Banking Corp.Ltd(600016) and other head financial customers, as well as high budget customers of national brands such as Dongfeng Honda and FAW Toyota. 2) Ensure the stickiness of existing customers, dig deep into the budgets of leading customers in the original consumer goods, telecommunications, finance, automobile and other industries, and ensure the continuous growth of performance. Stable customer relationship and strong marketing integration ability make the company have the profitability of leading industries. In 2021, the gross profit margin and net profit margin were 21.15% and 14.14% respectively, with a year-on-year increase of 1.66pct and 1.22pct respectively.
The new round of equity incentive plan raised performance conditions to demonstrate long-term growth confidence. In 2020, the company launched the restricted stock incentive plan for the first time, targeting a total of 2 people (director, deputy general manager Wang Chuan and quality and efficiency business line operation director Li Keke). The number of shares is 420000 shares and 191100 shares respectively. The performance condition is that the net profit from 2020 to 2022 will not be less than 350 million yuan, 500 million yuan and 700 million yuan respectively. In 2022, the company launched a new round of restricted stock incentive plan, which expanded to 52 personnel including directors, senior managers, middle managers and business backbones, with a total of 469400 shares. The performance condition is that the net profit from 2022 to 2024 will not be less than 730 million yuan, 1 billion yuan and 1.3 billion yuan respectively. In 2021, the company has reached the performance conditions. This time, the performance target for the next three years is raised again, which shows the company's emphasis on talents and confidence in long-term performance growth.
Virtual human, NFT and other meta universe businesses are expected to contribute the second growth point in the future. 1) NFT (i.e. digital rights confirmation and trading based on blockchain Technology). In January 2022, the company announced to cooperate with beiwen center to build a digital asset trading platform, which can make full use of its state-owned assets background advantages and its credibility and leadership in the field of cultural property rights trading in the national capital, highlighting the advantages of the platform. As the only construction operator of the platform, the company is expected to promote the rapid launch of the platform. 2) Virtual human. In January 2022, the company said that it was cooperating with China's leading virtual human technology company magic magic technology to build its own virtual human assets. At the same time, it was also actively exploring the landing scene of virtual human applications with customers. In the future, the company will customize virtual human products for customers in combination with their brand tone, brand strategy and brand characteristics. At present, the company has accumulated profound marketing resources in important industries of national economy such as consumer goods, automobile, communication and finance, and the virtual human business is expected to bring optimistic increment in the future.
Investment advice and profit forecast: the company was founded in 2003. At first, it focused on campus media marketing business, and accumulated head resources and integrated marketing service ability of China Mobile, China Telecom Corporation Limited(601728) and other industries; In 2014, we explored the transformation of Internet marketing and formed a media resource network covering Wuxi Online Offline Communication Information Technology Co.Ltd(300959) to meet customers' cross media and multi-channel marketing needs. Over the years, the company has accumulated stable and profound customer resources by virtue of the industry-leading marketing service ability, contributing to the steady growth of performance. It is estimated that the company's revenue in 2022 / 2023 / 2024 will be 4.964 billion yuan / 6.8 billion yuan / 8.636 billion yuan respectively, the net profit attributable to the parent company will be 738 million yuan / 1.014 billion yuan / 1.320 billion yuan respectively, the EPS will be 10.60 yuan / 14.55 yuan / 18.94 yuan respectively, and the corresponding PE will be 16.13 times / 11.75 times / 9.02 times. Based on 2022, the company will be given 18-20 times PE, with the corresponding price range of 190.80 yuan - 212.00 yuan. For the first time, give a "cautious recommendation" rating.
Risk warning: stricter policy supervision; Intensified market competition; Advertisers put in less than expected.
