\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 13 Mango Excellent Media Co.Ltd(300413) )
Key elements of the report:
On April 25, the company disclosed the annual report of 2021 and the first quarterly report of 2022, and realized a revenue of 15.356 billion yuan (YoY + 9.64%) in 2021; The net profit attributable to the parent company is 2.114 billion yuan (YoY + 6.66%); Deduct the net profit not attributable to the parent company of RMB 2.060 billion (YoY + 11.57%). In the first quarter of 2022, the revenue was 3.124 billion yuan (yoy-22.08%); Net profit attributable to parent company: 507 million yuan (yoy-34.39%); Deduct 474 million yuan (yoy-38.49%) of net profit not attributable to parent company.
Key investment points:
In 2021, the Internet video business grew steadily, and the advertising revenue increased significantly driven by the popularity of head variety shows. From the perspective of core business, mango TV Internet video business (advertising + member + operator business) maintained steady growth and achieved an operating revenue of 11.261 billion yuan (YoY + 24.29%). 1) In terms of advertising, the revenue was 5.453 billion yuan (YoY + 31.75%), which was mainly due to the fact that self-made variety advertising promoted the investment amount of head variety through providing one-stop marketing services, and the investment amount of Langjie 2 was the highest in the industry. At the same time, the comprehensive n generation played a stable role, the investment volume increased steadily, and 118 new advertisers were opened up throughout the year; 2) In terms of members, the number of members increased to 50.4 million (YoY + 39.5%), realizing a revenue of 3.688 billion yuan (YoY + 13.3%), mango TV channel cooperation has been gradually strengthened, and the member conversion rate and user penetration have increased significantly; 3) In terms of operators’ business, the revenue reached 2.12 billion yuan (YoY + 27.17%), carried out in-depth strategic cooperation with China Mobile Migu culture around large screen business and 5g innovation business, strengthened business expansion in all provinces and achieved business growth.
Variety shows and dramas continue to make efforts, adhere to the strategy of “content is king” and maintain performance growth. 1) In terms of variety shows, the company has 26 variety show production teams, producing more than 40 variety shows in 2021. Brother, sister Lang 2 and star detective 6 are hot; 2) In terms of dramas, the company has 29 film and television production teams and 34 “new mans plan” strategic studios, which make two-way efforts in film and television dramas and micro short dramas. Monsoon theater, launched in 2021, focuses on high-quality dramas and creates many well-known dramas such as “I’m good in a foreign land” from multiple angles and themes; The “damang plan” continues to explore the micro short drama market. The annual popular micro short drama “the attacking Queen” series has gained a good reputation and has been broadcast more than 500 million times.
The organizational structure has been continuously optimized and the core competitiveness has been gradually strengthened. The company optimized the organizational structure and adjusted the three subsidiaries of mango film and television, mango entertainment and mango mutual entertainment into the subsidiaries of mango TV, focusing on the self-made monsoon theater, the innovation of variety content and the operation of live entertainment respectively. The company’s internal businesses cooperate effectively, strengthen the construction of high-quality dramas and the innovation of variety content, and improve its core competitiveness in the long video platform market.
In 2022, the recurrence of the epidemic dragged down the progress of content production, and we are optimistic about the follow-up reserves to drive the recovery of performance. The popularity of “Langjie 2” in the same period last year promoted a significant increase in the base of advertising and member income last year. This year, due to the recurrence of covid-19 epidemic, the production speed of the company’s content was affected, and the overall plan was postponed. The broadcast of the key variety “Shengsheng Buxi” originally planned to be broadcast in the first quarter was postponed to the second quarter, resulting in a decline in the overall revenue and parent net profit in the first quarter; In the follow-up Q2 and Q3 company’s variety show to be broadcast, the trump IP of “brother” and “sister Lang” will be launched one after another. At the same time, there are abundant reserves of “small and fine” monsoon theater in the drama series, and the “big production” historical drama “long river in the world” will be launched soon. Relying on its ability to highlight innovation in the variety field and self-made high-quality drama content, the company enriches the content reserve of the platform, and the smooth scheduling of popular content is expected to drive the gradual recovery of performance.
Profit forecast and investment suggestions: it is estimated that the operating revenue from 2022 to 2024 will be RMB 182.21/213.9824837 billion, and the net profit attributable to the parent company will be RMB 24.81/29.033191 million respectively. Corresponding to the closing price on April 25, EPS will be RMB 1.33/1.55/1.71 respectively, and PE will be RMB 21.81x/18.63x/16.96x respectively, maintaining the rating of “increased holding”.
Risk factors: uncertainty in policy supervision, slow growth of members, less than expected content performance, less than expected new business expansion, brain drain and other risks.
