Weekly report of media industry: after 263 days, the game version number is reissued, and offline cinemas continue to be affected by the epidemic

Key investment points:

Market review: from March 28 to April 1, the media sector rose 4.98%, while the CSI 300 index, Shanghai Composite Index and gem index rose or fell by 2.43%, 2.19% and 1.10% respectively in the same period. The media sector ranked sixth in the weekly rise and fall of CS first-class industry classification, which was in the top range, and the ranking increased by 1 compared with the previous period.

Investment advice and rating:

Up to now, the operating rate of cinemas across the country has dropped to 44.13%. In the past month, the operating rate of cinemas across the country has continued to be lower than 50%, and the national box office is less than 100 million yuan a week. The operating pressure of cinemas and content companies is huge, and the film supply is scarce. If the national epidemic does not worsen, the current impact is expected to continue until mid and late May. In the process of Shanghai's anti epidemic, it has repeatedly reiterated that it will unswervingly implement the "dynamic clearing" policy. It is expected that in the short term, more strict policies will be used to supervise offline entertainment consumption scenes such as cinemas. Under the huge operating pressure, it may accelerate the elimination rhythm of inefficient cinemas in China. The leading cinemas and film investment companies with business advantages and capital advantages have stronger anti risk ability, and the market share may be further improved.

On April 11, the game version number was issued again. The suspension lasted 263 days, which was the same as that in 2018. The number of version numbers issued was only 45, which decreased significantly compared with the average number in 20182021. At present, on the supply side, the regulatory department is strictly controlling the quality, hoping to guide the formal development of the industry in the form of reduction and quality improvement, reduce disorderly competition, and the development orientation of high-quality products has not changed, Mainstream game companies have strong product R & D ability and compliance awareness, and can better adapt to the current regulatory framework. Therefore, the regulatory impact may be relatively small. Under the dilemma of edition number, the accelerated pace of Chinese game companies going to sea will not change. Referring to the trend of the game sector after the release of the version number was stopped in 2018 and resumed in 2019, the core of promoting the market in a more medium and long-term stage is that the game companies that need to obtain the version number will convert their products into actual water and profits. It will take some time to confirm the improvement of the fundamentals.

According to the data released by IDC, the global VR head display volume was 11.23 million units in 2021, with a year-on-year increase of 92.1%. It is expected to reach 15.73 million units in 2022, with a year-on-year increase of 43.6%. At present, 5g network is entering a key stage of rapid development. The advantages of low delay, high speed and large capacity help VR / AR devices improve picture resolution, reduce Caton delay and dizziness, and experience more natural and comfortable, so that VR / AR can adapt to more application scenarios. At the same time, cloud computing can also help VR / AR terminals develop in the direction of lightweight, reduce hardware cost and further accelerate the penetration of VR / AR terminals. In the short term, the current VR and AR application scenarios have high certainty, fast landing speed and high degree of commercialization. The game field is still large-scale. At present, large-scale games and small and medium-sized games coexist in the field of VR games, and the competition pattern is uncertain. Even small and medium-sized game developers can break the game through differentiated and innovative products. Based on the core development logic that the content of the game industry is king, it is suggested to pay attention to game companies that have layout in the VR field through investment or self-research.

In terms of valuation, based on the closing calculation on April 15, 2022, the valuation of the media sector is 19.02 times (TTM, overall method, excluding negative values), which is about 5% of the historical quantile of valuation since January 1, 2017, 68.5% of the average p / E ratio and 72.7% of the median in the same period, which is at a historically low position and maintains the investment rating of "stronger than the big market" of the media sector.

It is recommended to pay attention to the leading companies in the sub segment of the media sub segment: Perfect World Co.Ltd(002624) , Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Wanda Film Holding Co.Ltd(002739) , Mango Excellent Media Co.Ltd(300413) , Guomai Culture & Media Co.Ltd(301052) .

Risk warning: international political situation risk; The risk of repeated outbreaks and virus mutation; The tightening of regulatory policies exceeded expectations; Intensified market competition; Goodwill impairment risk; The quality of output content is lower than expected; The characteristics of project system lead to the fluctuation of the company's performance

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