\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 60 Beijing Fengshangshiji Culture Media Co.Ltd(300860) )
Event: the company disclosed its annual report and the first quarterly report on April 23, 2022, and achieved a revenue of 467 million yuan in 2021, a year-on-year decrease of 52.56%; The net profit attributable to the parent company was 92 million yuan, a year-on-year decrease of 64.62%; The net profit deducted from non return to parent was 24 million yuan, a year-on-year decrease of 89.68%, which was in line with the preliminary notice. 22q1 achieved a revenue of 138 million yuan, a year-on-year increase of 31.39%; The net profit attributable to the parent company was 89 million yuan, with a year-on-year increase of 212.03%; The net profit deducted from non return to parent was 02 million yuan, a year-on-year decrease of 84.75%. Non recurring gains and losses mainly come from foreign investment ( Xi’An Qujiang Cultural Tourism Co.Ltd(600706) fixed increase) and cash management.
The gross profit margin of the company in 2021 was 41.16%, with a year-on-year increase of 2.8pct. The net interest rate was 19.7%, a year-on-year decrease of 6.77pct. The decrease of the company’s net interest rate in 21 years was mainly due to the withdrawal of accounts receivable such as Evergrande, employee incentive and the increase of office rent. The gross profit margin in 2022q1 was 29.26%, down 10.06pct year-on-year. We believe that this is mainly because the Winter Olympics project is a key national project, the gross profit margin is lower than that of general commercial projects, and it is predicted that the subsequent gross profit margin will increase.
Large scale cultural and performing arts activities: Although 21 years is a small year, it still reflects the competitive advantages of national projects, and innovatively launches virtual interpretation online performance to create a new entertainment experience mode of “virtual + performance + Entertainment Interaction”. In 2021, the company achieved an operating revenue of 137 million yuan for large-scale cultural and performing arts activities, an increase of 11.61% year-on-year. The gross profit margin of the business was 27%, with a year-on-year increase of 1.34pct. In 2021, the company completed two national level projects, such as the large-scale situational epic “great journey” for the 100th anniversary of the founding of the party. In terms of commercial and cultural performances, the company participated in commercial projects including 20202021 Hunan Satellite TV New Year Concert, Jingdong 618 boiling night, 2021 brilliance Mars concert and so on. In addition, in terms of virtual performance, the company established a wholly-owned subsidiary Fengshang mutual entertainment, relying on virtual reality and mobile capture technology to create a new entertainment experience mode of “virtual + performance + Entertainment Interaction”. In January 2022, Fengshang mutual entertainment hosted the “light gathering night” to break the dimensional wall and create an Online Music Carnival.
Cultural tourism business: the time of order signing and revenue confirmation is mismatched. The revenue of the cultural tourism sector in 21 years has been significantly affected by the epidemic in 20 years, but the company has abundant orders on hand and the C-end business has been promoted rapidly, which is expected to stabilize and recover in the future. In 2021, the company realized an operating revenue of 174 million yuan from cultural tourism and performing arts, a year-on-year decrease of 73.94%. The gross profit margin of this business was 41.67%, with a year-on-year increase of 0.5pct. The period of cultural tourism performance from contract signing, sales collection, project production to project acceptance is 12-24 months. Therefore, the impact of covid-19 epidemic on the company’s profit statement in 2020 will lag about 12 months. Looking forward to the future, the company has abundant orders on hand, and 2C cultural tourism business is advancing steadily. As of December 31, 2021, the amount of orders in hand by the company was 814 million yuan. C terminal business, the Shanghai central project has been landing operation, Xi’an’s own “operation” is expected to officially operate in May.
Investment suggestion: the company has formed a good brand effect in the industry. There are Asian Games projects in the third quarter. TOC’s cultural tourism business has been promoted rapidly. The overlapping subsidiary Fengshang mutual entertainment explores cross dimensional online performance, which is expected to become the driving force for future growth. The company’s business is related to epidemic prevention and control, and continues to pay attention to the national epidemic situation. We estimate that the company’s operating revenue from 2022 to 2024 will be RMB 1.26/14.9/1.71 billion respectively, and the net profit attributable to the parent company will be RMB 3.0/4.0/460 billion respectively, maintaining the “buy” rating.
Risk warning: the repeated epidemic situation may cause the delay or cancellation of cultural and performing arts activities; Implementation risks of major national projects; Risk of project quality and cycle extension; The risk of cancellation or substantial reduction of individual large projects; There are great uncertainties in the implementation progress and profitability of virtual performers / artists
