\u3000\u30003 Jiangsu Lanfeng Bio-Chemical Co.Ltd(002513) 00251)
The company issued the annual report of 2021 and the first quarter report of 2022. In 2021, the company's operating revenue was 1.168 billion yuan, a year-on-year increase of 0.74%; The net profit attributable to the parent company was -312 million yuan, a year-on-year decrease of 207.09%; The net profit attributable to the parent company after deducting non-profit was -445 million yuan, a year-on-year decrease of 289.04%. In the first quarter of 2022, the company's operating revenue was 441 million yuan, a year-on-year increase of 83.94%, and the net profit attributable to the parent company was 745894 million yuan, a year-on-year decrease of 62.41%; The net profit attributable to the parent company after deduction was 428941 million yuan, a year-on-year decrease of 77.82%.
Key investment points:
The loss in 2021 is mainly due to the adjustment of the calculation method of the partnership, and the main business operation is still stable. The loss refers to the company's investment in two partnerships. Since January 1, 2021, the company has fully implemented new financial instruments and other standards, adjusted the accounting method of its investment projects, measured the investment projects of the partnership at fair value and included their changes in profit and loss, resulting in the company's net profit attributable to the parent company of -312 million yuan in 2021. This adjustment has nothing to do with the company's main film and television business. Excluding the impact of changes in the fair value of the partnership, the net profit attributable to the parent company in 2021 was 673 million yuan (excluding impairment provision), and the operating cash flow increased significantly by 385632%.
In terms of film business, the total box office of films invested and distributed by the company and included in 2021 was 2.815 billion yuan, including 760 million yuan for the spring festival film "surging crowds" and 800 million yuan for the May 1st film "your wedding", which verified that the company has certain mature experience and control advantages in low cost and high return films. In terms of TV dramas / online dramas, the company has confirmed the investment income of projects such as Yunding heavenly palace, mountain and river bright moon and can't look directly, and the profit of TV dramas / online dramas has increased compared with 2020.
In 2022q1, the revenue increased rapidly, but the rising film cost and investment income dragged down the net profit. The films that have been released by 2022q1 include "sniper" (box office: 601 million yuan), "one product in ten years, Wen Ruyan" (box office: 167 million yuan), and "love by year" (released on December 31, 2021, box office: 231 million yuan), all of which are the main investment and distribution films of the company. Better film performance promoted the company's operating revenue in 2022q1 to increase by 83.94%, but the film cost also increased correspondingly, with an increase of 96.17%, resulting in a year-on-year decline in the company's gross profit margin of 4.65pct to 25.38%. In addition, the change in the fair value of the partnership invested by the company resulted in a schedule investment income of - 34.4 million yuan, compared with 138 million yuan in 2021q1.
Many films have been put on file, and there are still many films in the process of promoting production. In terms of films to be released, "I really hate long distance love" has been set for May Day, becoming one of the few films that still stick to May Day; "We look like a lot of love" is scheduled for the summer vacation on August 4, and the film "new order" is scheduled for July 8. Among the unsettled films, the main investment + distribution film "out of the earth" has been completed. In addition, various main investment or participation films such as "firm as a rock", "sweeping away the black cloud and seeing the sun", "I pass through the storm" and "China table tennis" are being produced
TV drama business. "Mountain and river pillow", "spring feast", "brush jade saddle" and other dramas have reached cooperation with video platforms. At the same time, projects such as "her little pear vortex", "my date list" and "if one day I die alone" are progressing normally.
The number of animated films released during the year is expected to reach an all-time high. The company's main investment + release animated films "deep sea" and "tea ah No. 2 middle school" have been submitted for approval and are expected to be released within this year. In addition, animated films such as "out of the earth" (main investment + distribution) and "heavy rain" (investment + distribution) are also expected to be released within this year, and the number of animated films is likely to be the highest in history. In addition, a number of animated films such as Nezha 2, Jiang Ziya 2, Phoenix, big fish Begonia 2, journey to the West: the great sage makes trouble in heaven, and the last Quebec are being planned or produced in the early stage.
The artist brokerage business has developed well and nurtured the company's core business. The company's artist brokerage and other businesses continued to maintain a good momentum of development. In 2021, the company achieved an operating revenue of 714 million yuan, with a year-on-year increase of 68.13%, and the profit also increased significantly year-on-year, with a gross profit margin of 51.28% and a year-on-year increase of 17.86pct. The popularity and commercial value of many potential artists cultivated by the company have continued to improve, "I really hate long distance love", "we look like love" and other films to be released in the near future. The protagonists and directors of the main investment + release films are all contracted personnel of the company, which can ensure a more reasonable production cost and contribute more profits to the company.
Investment advice and profit forecast: at present, the production progress and release progress of the industry as a whole are affected to varying degrees due to the persistence of the epidemic, and the scarcity of high-quality content supply is more prominent. As the head company of Chinese film and television content, the company has a rich amount of film and television content storage, and several types of films with low cost and high return verify the competitive advantage of the company's film content. After the epidemic situation in China recovers, the supply of high-quality films will gradually recover, and the supply of high-quality films will be driven by the recovery of the epidemic situation in China. It is estimated that the company's EPS from 2022 to 2023 will be 0.22 yuan and 0.29 yuan. According to the closing price of 6.56 yuan on April 28, the corresponding PE will be 29.57 times and 22.50 times, maintaining the "overweight" rating.
Risk warning: repeated epidemic situation and virus mutation risk; Content review risk; The filing progress and market performance of film and television works are not as expected; Video website purchase price down
