\u3000\u3 Bohai Water Industry Co.Ltd(000605) 168 Three'S Company Media Group Co.Ltd(605168) )
Event: Three'S Company Media Group Co.Ltd(605168) disclosed its annual report on April 9, and realized a revenue of 3.571 billion yuan in 2021, with a year-on-year increase of 27.18%; The net profit attributable to the parent company was 505 million yuan, a year-on-year increase of 39.18%; Net profit deducted from non parent company was 463 million yuan, with a year-on-year increase of 33.35%. Quarter by quarter, 21q4 achieved a revenue of 1.429 billion yuan, a year-on-year increase of 47.23%; The net profit attributable to the parent company was 244 million yuan, a year-on-year increase of 35.59%; Net profit deducted from non parent company was 225 million yuan, with a year-on-year increase of 30.79%.
The growth of operating revenue in 2021 is mainly due to 1) the company actively expands new head customers and adds fast-moving consumer goods customers such as Yibao, snowflake and Heineken under China Resources Group; 2) Increase in the amount of original key customers: combined with the company's advantages in Internet media, outdoor media and advertising of emerging China Central Television, help promote the scale effect of key customers' advertising and ensure the continuous improvement of the stickiness and satisfaction of original key customers. Deeply tap the incremental marketing budget of existing advertisers in consumer goods, telecom operators, finance, automobile and other head industries; 3) In 2021, overcome the impact of the epidemic, actively adjust strategies, and promote the company's relatively high gross profit campus media marketing business, scene activity marketing and other offline businesses to maintain a growth trend.
Profitability continues to improve, and brand advertising has obvious advantages. In 2021, the company achieved a revenue of 3.571 billion yuan, a year-on-year increase of 27.18%, a net profit attributable to the parent company of 505 million yuan, a year-on-year increase of 39.18%, a net profit deducted from non attributable to the parent company of 463 million yuan, a year-on-year increase of 33.35%, and a gross profit margin of 21.2% in 2021, a year-on-year increase of 1.66pct. The net profit attributable to the parent company was 505 million yuan, a year-on-year increase of 39.18%. The net interest rate was 14.14%, up 1.22pct year-on-year. We believe that the profitability of the company is significantly higher than that of its peers, which mainly benefits from 1) the business structure characteristics of its relatively high proportion of brand advertising; 2) The gross profit of campus media marketing business and scene business is relatively high.
The net cash flow has improved significantly, and the income of high-quality key customers accounts for a high proportion. In 2021, the net cash flow from the company's operating activities was 295 million yuan, up 154.98% year-on-year. Net operating income increased by 26.4% year on year. The sales of the top five customers were 2.485 billion yuan, accounting for 69.58% of the annual sales. We believe that the head customer has low performance risk and is favorable for payment collection.
Focus on long-term development and implement high dividends and equity incentives. The annual report of 2021 disclosed that the company plans to distribute a cash dividend of 3 yuan (including tax) per share. It is expected to distribute a total of 209 million yuan, with a dividend rate of 41.39%, a year-on-year decrease of 16.2pct. In addition, the company plans to increase 4.5 shares for every 10 shares to shareholders at the capital stock premium in the capital reserve. In January 2022, the company issued the draft of restricted stock incentive plan for 2022, which plans to grant 469000 restricted shares to 52 directors, senior executives, middle managers and business backbones of the company at the price of 96.33 yuan / share. The performance evaluation conditions for exposure to restricted sales in 20222024 are that the net profit is not less than 730 / 10 / 1.3 billion yuan respectively.
It is suggested to pay attention to the growth elasticity of new business. In 2021, the company actively arranged the integrated marketing activities of digital collections and virtual people to meet the new needs of advertisers for marketing forms. The company cooperates with magic enamel technology, a first-line manufacturer of Chinese virtual human, to build its own virtual human, which will further broaden the marketing scene. At the same time, the company cooperates with Beijing cultural property rights trading center to jointly establish a digital cultural and creative product trading platform and expand the company's platform business model.
Investment suggestion: our previous report emphasizes that the company has the advantages of core key customers and its profitability is gradually enhanced. This annual report is in line with expectations and also provides a basis for the momentum of sustainable development in 22 years. Although the macro-economy fluctuates, the company continues to strengthen the advantages of key customers and gradually develop into a leading Internet integrated marketer. We expect the net profit from 2022 to 2024 to be RMB 730 / 10.0 / 1.3 billion respectively, corresponding to the valuation of 16.9 / 12.4 / 9.7, maintaining the "buy" rating.
Risk warning: macroeconomic uncertainty; Policy supervision; The landing of digital product trading platform was less than expected
