\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 70 Guangdong South New Media Co.Ltd(300770) )
On April 28, the company disclosed the annual report of 2021 and the first quarterly report of 2022, and realized a revenue of 1.409 billion yuan (YoY + 15.43%) in 2021; Net profit attributable to parent company: 680 million yuan (YoY + 18.23%); Deduct the net profit of 625 million yuan (YoY + 17.72%); The net cash generated from operating activities is 1.045 billion yuan (YoY + 99.00%). Revenue of 388 million yuan (YoY + 19.26%) in the first quarter of 2022; Net profit attributable to parent company: 172 million yuan (YoY + 6.06%); Deduct 165 million yuan (YoY + 5.77%) of net profit not attributable to parent company.
Key investment points:
IPTV business: adhering to the strategic goal of “building a new audio-visual head platform for the Internet”, all businesses have achieved steady growth. 1) IPTV basic business: the company continued to maintain stable and good cooperation with Guangdong Mobile, Guangdong Telecom and Guangdong Unicom, continued to strengthen the operation of “Xiyue TV” content and products, and promoted the steady growth of user scale and income. In 21 years, the company achieved revenue of 735 million yuan (YoY + 4.77%), effective users reached 19.58 million (YoY + 6.41%), and the penetration rate of fixed broadband access users in Guangdong Province was 45.77%; 2) IPTV value-added service: the company opened content cooperation, strengthened the introduction of head video content from high-quality content providers such as Migu and Youku, and comprehensively focused on fine operation, subdivided high-quality vertical content such as children’s and e-sports, and accurately connected with user needs, so as to improve the stickiness and value contribution of platform members, promote the growth of member payment rate and ARPU, and achieve a revenue of 346 million yuan (YoY + 17.33%) in 21 years; 3) Private network business outside the province: the company continues to expand cooperation with high-quality content copyright owners, deeply plough the covered provinces, strengthen the development of new markets, expand the influence of “Xiyue TV” brand in the national IPTV market, and drive the growth of user scale and revenue.
Internet TV business: the company continues to strengthen the operation of cloud audio-visual series app products, and the user scale continues to expand. The number of effective users in China reached 246 million (YoY + 17.00%), and the revenue in 21 years was 191 million yuan (YoY + 21.39%). Key products performed well. Cloud audio-visual small TV integrated high-quality content that catered to the viewing preferences of the new generation, focused on vertical products such as “music and E-sports”, increased channel expansion, optimized interaction design, attracted rapid growth of users, and the effective users increased by nearly 50% year-on-year. According to the big screen monthly report of Aowei mutual entertainment, the company’s cloud audio-visual series occupies 4 seats and 3 seats respectively in the comprehensive ranking list of on-demand media and the ranking list of long video of on-demand media, and the user activity has increased steadily.
Content copyright business: the industrial chain has expanded to the supply side, and the business has achieved substantial growth. The company has completed the industrial chain layout from integrated broadcast control to production, investment, integration and distribution, extended its business from the demand side to the supply side, built a high-quality content resource library, strengthened the distribution of content through national and overseas channels, widely carried out cross-border cooperation, explored multi-dimensional realization modes such as IP authorization and derivative development to increase revenue, and achieved revenue of 118 million yuan (YoY + 116.60%) in 21 years.
Profit forecast and investment suggestions: it is estimated that the operating revenue from 2022 to 2024 will be RMB 1.646/19.29/2.294 billion, and the net profit attributable to the parent company will be RMB 808/9.09/1.045 billion respectively. Corresponding to the closing price on April 28, EPS will be RMB 3.50/3.93/4.52 respectively, and PE will be RMB 9.38x/8.35x/7.25x respectively, maintaining the “buy” rating.
Risk factors: the development of value-added business is less than expected, the content layout is less than expected, the number of members is less than expected, and the risk of advertising business development.
