\u3000\u3 Shengda Resources Co.Ltd(000603) 825 Hylink Digital Solution Co.Ltd(603825) )
Key investment points
Event: the company released the annual report of 2021 and the report of the first quarter of 2022. In 2021, the company achieved a revenue of 13.21 billion yuan, a year-on-year increase of 44.5%; The net profit attributable to the parent company was 230 million yuan, a year-on-year increase of 9.3%. In 2022q1, the company achieved a revenue of 2.68 billion yuan, a year-on-year increase of 11.9%; The net profit attributable to the parent company was RMB 20 million, with a year-on-year increase of 28.8%.
The advantages of marketing resources are prominent, and “data + customers + media” constructs a moat. 1) Data resources: over the years, the company has planned and implemented a large number of marketing activities for customers, and accumulated rich consumer characteristics, behavior and feedback data; 2) Customer resources: the company has about 100 large and medium-sized customers. The long-term cooperative customers include Estee Lauder, oppo, Dongfeng Nissan, Mengniu, jd.com, yum group, general mill, etc. the amount of cooperation between these customers and the company has maintained a stable growth every year, laying a good foundation for the sustainable and rapid development of the company; 3) Media resources: the Internet media cooperated by the company include all well-known Chinese Internet enterprises, such as Tencent, Baidu, Sina, Netease, etc. the cooperation time between the two sides is long and stable, and the cooperation amount is large. Marketing resources build the moat for the development of the company, and the brand marketing business may continue to contribute to stable income.
Actively carry out new retail business and create a new performance growth pole. The company focuses on the vertical integration of resources in automobile, duty-free and other subdivided industries: 1) expand the new automobile retail system: the company opens up the automobile full link service system for BAIC bj90 model, and customizes the new automobile retail solution driven by both technology and content; 2) Explore new online duty-free retail scenarios: the company established a joint venture of Hainan Tesco to assist Hainan tourism investment in the comprehensive layout of online duty-free service system while importing, distributing and retailing duty-free goods. The new retail business has a large development space, or will become a new profit growth point.
Explore the meta universe and enable the infinite possibility of “meta universe + marketing”. 1) In terms of underlying technology reserve, it has established a joint venture with fuel wheat technology and joy entertainment to explore the production and construction of meta universe digital content; 2) In terms of application scenarios, the digital collection “Jianjia chaotuan of the Terra Cotta Warriors of the Qin Dynasty” reached the top of the app’s best-selling list after its launch; 3) In the field of marketing and business realization, develop the virtual image “sweet Xiaotian” for Dior; 4) In terms of transaction links, it signed a cooperation agreement with Industrial And Commercial Bank Of China Limited(601398) to jointly carry out the digital RMB closed test. Relying on the existing advantages of brand marketing business, the company continues to explore a new mode of integration of meta universe and marketing, and its future development is worthy of attention.
Profit forecast and investment suggestions. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 300 million yuan, 430 million yuan and 490 million yuan respectively, and the CAGR of the net profit attributable to the parent company is 28%. As a well-known Internet advertising and marketing enterprise, the company has obvious advantages in its main business. “Yuanuniverse + marketing” helps virtual human IP business realization and application scenario expansion, and is expected to become a new growth point of potential performance. To sum up, we give the company a 20 times valuation in 2022, corresponding to the target price of 23.4 yuan. It is covered for the first time and given a “buy” rating.
Risk tips: increased market competition risk, new retail business development less than expected risk, industry policy risk.
