\u3000\u30003 Jiangsu Lanfeng Bio-Chemical Co.Ltd(002513) 00251)
Key investment points
Event: in 2021, the company realized a revenue of 1.2 billion yuan, flat year-on-year, and the net profit attributable to the parent company was - 300 million yuan, year-on-year - 207%. The conversion from profit to loss was mainly affected by the decrease of investment income and the increase of asset impairment loss. In 2022q1, the revenue was 400 million yuan, a year-on-year increase of + 84%, and the net profit attributable to the parent company was 70 million yuan, a year-on-year increase of - 62%.
The cost side of the short-term film industry is under pressure, and the diversification of the company's project types is expected to improve profitability.
In 2021, the company's film and derivative business realized a revenue of 914 million yuan, a year-on-year increase of - 2.86%. Gross profit margin decreased by 23.53 PCT to 36.34% year on year. We believe that the demand and cost of the film industry in the short term are greatly affected by the epidemic, but in the long term, the company's focus on projects with high return on investment is expected to promote the recovery of profitability. (1) The company focuses on low-cost film output. The box office of the released "sniper" and "love by year" exceeded 600 million yuan / 200 million yuan respectively, which promoted the significant increase of revenue in 2022q1, continued to verify the company's high success rate and high return on investment in low-cost and small and medium-sized films, and continued to improve the company's ability to obtain projects, judge projects and control project risks. (2) With the recognition of project revenue, the company's profit margin is expected to improve. The company has obvious advantages in the field of animated films. In the box office list of domestic animated films, the magic child of Nezha and Jiang Ziya produced and distributed by the company ranked first and second at the box office of more than 5 billion yuan and 1.6 billion yuan respectively. In 2022, the company expects to release 17 films (most of which are the main investment and control projects of the company), which is significantly higher than the 8 films in 2021. Among them, the number of animated films released may be the highest in previous years, and the revenue of this sector is expected to increase significantly in 2022.
The gross profit margin of TV drama business was optimized, and artist brokerage and other businesses maintained a good growth trend. In 2021, the company's TV drama business, brokerage business and other businesses realized revenue of 107 / 147 million yuan respectively, with a year-on-year increase of - 30.65% / + 129.75%; The proportion in revenue was 9.15% / 12.55% respectively, with a year-on-year increase of -4.15 PCT / 7.05 PCT. The gross profit margin was 37.03% / 51.28% respectively, with a year-on-year increase of + 17.66 PCT / + 17.86 PCT. For the TV drama business, in 2021, the company confirmed the investment income of projects such as "mountain and river Moonlight", "cloud top heavenly palace" and "can't look directly", and the profit increased year-on-year. In 2022, the company expects to produce and broadcast 17 TV dramas / online dramas. From 2021 to 2022, Q1 profits of artist brokerage and other businesses increased significantly year-on-year. Considering that artist assets can bring more resource opportunities such as film and television business and business cooperation to the company, we are optimistic that this business will produce more synergy with the main business of the company.
The company has better cost control and is optimistic that the operating efficiency will continue to improve in 2022. From 2021 to 2022q1, the company's expense rate narrowed overall. In 2021, the sales rate / management rate / R & D rate were 0.84% / 5.75% / 1.63% respectively, with a year-on-year increase of + 0.60 / - 4.50 / + 0.11pct; 2022q1 was 0.42% / 3.36% / 0.97% respectively, with a year-on-year increase of -0.25 / - 3.08 / - 0.72pct. In addition, affected by the capital market environment, the decrease of Q1 investment income in 2021 and 2022 has a great impact on the company's net profit. We believe that the project will return to the normal income range for a long time, with limited impact on the company's profitability.
Profit forecast and investment rating: considering the company's rich reserves of film projects in 2022 and the optimization trend of income structure, we expect the company's EPS to be 0.34/0.43/0.52 yuan from 2022 to 2024, with the corresponding PE of 21 / 17 / 14x, maintaining the "buy" rating.
Risk warning: macroeconomic fluctuation risk, stricter supervision risk, and new projects are less than expected risk
