\u3000\u3000 Three'S Company Media Group Co.Ltd(605168) (605168)
Event: the company issued an announcement on January 10, 2022, announcing the signing of the strategic cooperation framework agreement with Beijing Cultural Property Rights Trading Center Co., Ltd. ("beiwen center") to jointly establish a digital cultural and creative trading platform.
Beiwen center, which is controlled by state-owned assets and participated by many central enterprises, is the only authorized institution in Beijing engaged in the transaction of property rights, equity and physical assets of state-owned enterprises and institutions. It integrates the property rights, equity and physical assets trading system, capital settlement, etc. custody and legal risk control of state-owned cultural enterprises and institutions. We believe that the national / central background of beiwen center and its role as the only authorized institution for asset trading in Beijing contribute to the landing of the digital cultural and creative product trading platform for cooperation between the two sides, with natural authority.
Digital product trading platform is mainly composed of digital transformation, trading platform and forum. The digital transformation platform helps creators transform cultural and creative products into the only recognized assets on the blockchain through encryption technology, distributed storage, consensus mechanism and smart contract; The trading platform is a platform for the display and sales of cultural and creative products that have been confirmed in the chain. At the initial stage of its establishment, the main way of trading is listing and one-time pricing sale; The forum provides communication space for user creators.
The ways to monetize the platform are as follows: 1) digital right confirmation and uplink costs; 2) Transaction service charge of trading platform. Including monetization and the transaction price between buyers and sellers, the settlement methods of digital products trading platform are settled by online legal Renminbi law, including WeChat, Alipay, online banking, digital Renminbi wallet, etc., and have long room for growth.
In terms of performance, Three'S Company Media Group Co.Ltd(605168) in the first three quarters of 2021, the revenue was RMB 2.142 billion, a year-on-year increase of 16.59%, and the net profit attributable to the parent was RMB 261 million, a year-on-year increase of 42.72%. Deduct 238 million yuan of non parent company, with a year-on-year increase of 35.87%. We believe that with the fluctuation of effect advertising affected by policy supervision, the company will benefit from its business structure characteristics of high proportion of brand advertising and maintain profitability.
We believe that with the company's original core customer advantages and the gradual enhancement of superimposed profitability, the company is expected to achieve the performance evaluation target of 500 million equity incentive in 2021 announced by the end of 2020. Investment suggestion: Although the macro-economy fluctuates, the company retains the advantages of key customers such as core state-owned enterprises and gradually develops into an Internet integrated marketer. We estimate that the net profit from 2021 to 2023 will be RMB 517 / 741 / 933 million respectively, corresponding to the valuation of 27.1x/18.9x/15.0x. We selected Bluefocus Intelligent Communications Group Co.Ltd(300058) and Zhewen Interactive Group Co.Ltd(600986) as comparable companies. According to the consistent expected mean of wind of comparable companies, we superimposed the company's performance growth, and gave the company a 22-year 35x P / E target valuation, with a target price of 372.4 yuan / share, maintaining the "buy" rating.
Risk tip: the willingness of advertisers to launch is uncertain, the landing of digital product trading platform is less than expected, the policy supervision is stricter, and the promotion, implementation and progress of specific businesses under the strategic cooperation framework agreement are uncertain
