Core conclusions:
\u3000\u30001. The CSI media index closely tracks the development of listed media companies. CSI media selects 50 stocks with large total market value and active transactions in the A-share media segmentation direction as constituent stocks, covering mainstream media fields such as games, film and television, advertising and so on, which can systematically reflect the overall picture of high-quality companies in China’s media industry, and the small cap style is remarkable.
\u3000\u30002. Horizontally, the profitability of CSI media index is better than similar media index and growth style index, and the lower valuation provides a certain margin of safety. Behind the relatively superior profitability of the CSI media index is a strong leading effect. The total weight of the top ten constituent stocks accounts for 48.26%, which is significantly higher than that of similar media and TMT indexes. Leading companies are more likely to increase their market share in the changes of industrial policies and stock market competition, and have stronger anti risk ability, resulting in a higher level of roe.
\u3000\u30003. In 2016, the media industry has changed from the era of Internet dividend to the era of strong regulation. Until 2021, the industry regulatory policies have further spread, which is the main reason for the poor performance of the media industry in recent years. We believe that the weak situation of excess return in the media industry is expected to be reversed within the year, and the industry may usher in:
1) in the performance dimension, the regulatory margin is eased, and the industry performance is expected to achieve high growth with dilemma reversal. During the year, there was great economic pressure, and the senior management frequently stated that “prudent introduction of contractive policies”, and the media industry suffering from policy repression may usher in a breathing window for performance.
2) valuation dimension, meta universe empowerment, and the industry valuation level is expected to be revised as a whole. 5g industry is close to the inflection point where hardware equipment penetrates into the application end. Metauniverse is an important part of 5g application end, and the media fields such as games and social networking are the best landing scenes of metauniverse. With the active layout of leaders outside China, the industry valuation logic is expected to be reshaped.
\u3000\u30003. Specifically, at the level of weighted industries, film, television and games have explored the second growth pole in the stock market under the requirements of regulatory standardization, which is expected to lead the media industry to reverse the dilemma of performance:
1) in the film and television industry, the slowdown of user growth and the standardization of push mechanism have restricted the growth of traditional advertising revenue. The platform has transformed the content payment mode. At present, the paying users have increased steadily and the growth of member income has taken over steadily;
2) in the game industry, the disturbance of China’s regulatory policies and the penetration of users are close to the natural saturation level, which restricts the sustainability of the growth of the game market. However, metauniverse has opened a new field of game development, and domestic games are still in a period of rapid development, opening the second and third growth curves of the industry.
\u3000\u30004. GF China Securities media ETF (code 512980) closely tracks the China Securities media index and also issues OTC feeder funds (a share: 004752; C share: 004753). As of December 31, 2021, the market scale is 4.8 billion, 1.9 billion and 1 billion respectively, with outstanding liquidity advantages. It provides investors with a tool for one key layout of the media sector. It is recommended to pay attention.
Risk tip: the risk of tightening regulatory policies, the risk of performance falling short of expectations, and the risk of geopolitical friction diffusion.
