[ChinaLink] last week, NASDAQ index fell 3.93%, MSCI China Index rose 5.09%, Hang Seng Index rose 2.18% and Hang Seng technology index rose 11.76%. The top three components of Hang Seng technology index rose: JD group SW (+ 27.45%), meituan w (+ 21.64%), BiliBili SW (+ 19.84%); The top three declines: chuangmengtiandi (- 6.86%), Ping'an good doctor (- 1.10%), Lenovo Group (- 0.90%).
[A shares] last week, the media sector index fell 2.49%, the Shanghai Composite Index fell 1.29%, the Shenzhen Component Index fell 0.27%, and the gem index rose 0.98%. The top three gainers of the sector: Mango Excellent Media Co.Ltd(300413) (+ 26.37%), Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) (+ 14.24%), Perfect World Co.Ltd(002624) (+ 12.40%). The overall performance is in line with our weekly report and in-depth report last week, suggesting that "the bottom of the game industry has been found", reiterating our firm recommendation; The top three declines in the sector: Guangzhou Wahlap Technology Corporation Limited(301011) (- 15.13%), Zhewen Pictures Group Co.Ltd(601599) (- 13.87%), Alpha Group(002292) (- 13.46%).
[the Political Bureau meeting pays attention to the bottom of the platform economic policy] the Political Bureau of the CPC Central Committee held a meeting on April 29. On the platform economy, the meeting pointed out that it is necessary to promote the healthy development of the platform economy, complete the special rectification of the platform economy, implement normalized supervision, and introduce specific measures to support the standardized and healthy development of the platform economy. On April 29, Bloomberg reported that China and the United States are reportedly discussing matters such as on-site inspection of audit drafts to avoid delisting of China concept shares. According to people familiar with the matter, the consultation includes details such as whether isolation arrangements are needed for the entry of the United States, and the on-site inspection will take the first step towards restarting the listing of Chinese enterprises in the United States in the future.
Viewpoint: on Monday, the A-share and Hong Kong stock markets plunged under the influence of comprehensive factors, but after Tuesday, with the good news such as the replacement of CFO, the performance of Hang Seng technology began to stabilize; After the release of the communique of the meeting of the Political Bureau of the CPC Central Committee at noon on Friday, the market believed that the regulatory attitude of the Internet industry had changed fundamentally, and there was a collective surge in the China concept Internet sector.
We believe that Friday's meeting marks a complete shift in the policy of platform economic supervision. In the future, the supervision of the Internet industry will enter a new stage of "giving priority to support and supplemented by supervision" (see our industry review "zhonggai Internet: the end of industry policy has come"). At the same time, Bloomberg report means that the settlement of the China concept stock issue has entered the stage of substantive consultation and is expected to see significant progress in the near future. Our report "zhonggai Internet: the more depressed, the more patient" on March 16 pointed out that the core contradiction affecting the performance of zhonggai shares lies in China's industry supervision and the delisting of zhonggai shares. Today's events show that these two contradictions have changed or will change substantially, and the internal and external pressure on zhonggai Internet market is expected to be fundamentally relieved since July 2021. We believe that the "policy bottom" of the industry has been confirmed, there will be a continuous rebound in the future, the industry valuation is expected to be repaired to a reasonable level, and the allocation attitude of foreign investors to this sector will become more positive. In the long run, the investment logic of Internet companies will still return to the fundamental performance of the industry and the company.
We recently released a 74 page meituan in-depth report: "meituan-w (3690. HK): the" search engine "of local life and" three curves "connecting the past and the future", which makes an in-depth analysis of the growth space and profit prospects of meituan's businesses, and briefly discusses the development trend of fresh e-commerce industry. On May 1, we recently released the 58 page Kwai in-depth report: Kwai -w (1024.hk) in-depth report: a distinctive short video leader, and continued to build a super commercial complex. We analyzed in detail the broad space of the short video track where Kwai is located and the unique competitive advantages of Kwai, and gave our valuation methods and investment suggestions. Investors are welcome to make an appointment for the in-depth report roadshow.
We suggest that investors grasp the significant opportunity of bottom reversal and actively layout high-quality Internet leading enterprises. Focus on the Internet: 1. The Mesozoic consumer Internet company [meituan-w], with good performance growth and strong long-term competitiveness, has been selected as our [top ten gold stocks in May]; 2. The short video platform [Kwai-w], with clear loss reduction expectation, superior business model and continuously suppressed valuation, has been selected as [gold stock in May]. Suggestions: 1. E-commerce giant [JD group SW] with unique barriers, resilient growth and expected significant improvement in profit margin; 2. The performance and valuation are still at the bottom, waiting patiently for the industry leading companies on the right [Tencent, Alibaba SW]; 3. Stable performance growth and profit margin, low PE quality company [netease-s, pinduoduo]; 4. Comply with the policy tone and layout [Baidu group SW] in the field of new technology.
In terms of media: 1. The normalization of game version number and the core catalysis of game going to sea. It is suggested to pay attention to the valuation anchor [Tencent, netease-s], the flexibility of version number and the leading company going to sea [ Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , Perfect World Co.Ltd(002624) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , heart company] and β Flexibility [ Wuxi Boton Technology Co.Ltd(300031) , Shanghai Yaoji Technology Co.Ltd(002605) , Zhejiang Century Huatong Group Co.Ltd(002602) , BiliBili SW, China Mobile Games, Baiao family interaction], etc; 2. The recovery of 22h2 affected digestion [ Focus Media Information Technology Co.Ltd(002027) , Saturday Co.Ltd(002291) , Three'S Company Media Group Co.Ltd(605168) , Visual China Group Co.Ltd(000681) ]; 3. Yuancosmos is optimistic about VraR industrial chain, NFT, digital virtual human and artificial intelligence [ Three'S Company Media Group Co.Ltd(605168) , Visual China Group Co.Ltd(000681) , Saturday Co.Ltd(002291) , Iflytek Co.Ltd(002230) , Zhewen Interactive Group Co.Ltd(600986) , Bluefocus Intelligent Communications Group Co.Ltd(300058) , Hylink Digital Solution Co.Ltd(603825) , Kaiser (China) Culture Co.Ltd(002425) ]
Etc; 4. The medium and long-term video platform warms up [ Mango Excellent Media Co.Ltd(300413) , BiliBili - SW]. New consumption: 1. Post economic cycle and consumption resonance [ Focus Media Information Technology Co.Ltd(002027) ]; 2. Influenced by the new year of sports events and policy support, sports pay attention to [Anta sports, Li Ning, Tebu international, 361du, keep, Shuhua Sports Co.Ltd(605299) , China Sports Industry Group Co.Ltd(600158) , Shanghai Yaoji Technology Co.Ltd(002605) ]; 3. Recovery after the outbreak of tide play leader and IP going to sea [bubble Mart].
A-share media Internet performance review:
On April 30, A-share media Internet has completed the performance disclosure of the annual report and the first quarterly report. We combed the performance of 73 A-share media Internet self selected stocks (including game, film and television, marketing, publishing, cable and other subdivided fields) with the overall method.
The media sector performed well in the past 21 years. The overall revenue increased by 12.39% compared with the previous 20 years, and the overall net profit increased by 9.63% compared with the previous 20 years. We believe that it is mainly due to the low overall base affected by the epidemic in the past 20 years, which has recovered in the next 21 years, such as marketing leader Focus Media Information Technology Co.Ltd(002027) , film and television leader Wanda Film Holding Co.Ltd(002739) , China Film Co.Ltd(600977) and so on.
The performance of 22q1 media sector is under pressure due to the impact of regulation (the suspension of game version number) and epidemic outbreak (marketing, film and television, etc.), the overall revenue is 2.41% lower than that of 21q1, and the overall net profit is 27.40% lower than that of 21q1. Among them, the targets with better performance of 22q1 include Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , Perfect World Co.Ltd(002624) , Saturday Co.Ltd(002291) , which has basically completed the stripping of traditional footwear industry, and G-Bits Network Technology(Xiamen)Co.Ltd(603444) Three'S Company Media Group Co.Ltd(605168) etc. Due to the epidemic situation in China since 22q1, especially in mega cities such as Shenzhen and Shanghai, the performance of some companies in 22q1 and 22q2 has been affected. We pay attention to the bottom investment opportunities of media leaders such as Mango Excellent Media Co.Ltd(300413) , Focus Media Information Technology Co.Ltd(002027) and so on.
Key recommendations and concerns:
[ Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) ] the main games in China and overseas markets have maintained good performance. The company's overseas brand 37games has covered many countries and regions. The highest monthly flow of mobile games issued by the company overseas exceeds 500 million, of which "Puzzles & survival" is the most prominent, with a maximum monthly flow of more than 200 million yuan, ranking among the top 10 IOS best sellers in 52 regions. Overseas head products "Puzzles & survival" and "song of Cloud City" are expected to increase the overall net interest rate with the recovery of initial cost investment. The company has abundant reserves of new games, the Chinese market version number has been released again, Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) dream voyage has been approved, and self-developed products such as light handed down (version number has been obtained in 21 years), code magic m, code Three Kingdoms by, code C6, code AOE and code women to CY have been reserved, laying a solid foundation for performance growth in 23-24 years. The company's performance in the whole year of 21 and 22q1 exceeded expectations, the performance of new travel and performance in the whole year of 22 was expected, and employee motivation showed confidence. According to the latest appraisal target of the employee stock ownership plan released by the company on April 26, the growth rate of operating revenue in 22 / 23 / 24 years is not less than 15% / 25% / 35% (the operating revenue is not less than 186.48/202.7021892 billion yuan), or the growth rate of net profit is not less than 15% / 25% / 35% (the net profit is not less than 33.07/35.953883 billion yuan). It is suggested to focus on it.
[ Perfect World Co.Ltd(002624) ] in 2021, the company was in the stage of transformation, and the performance was lower than expected due to the superposition of multiple factors. The company's products will focus on youth and long-term development. The product ideas will focus on the two tracks of "MMO +" and "card +", and the globalization process will continue to advance. "Magic tower" launched a major update to the 2.0 "villa" version, which is expected to drive the improvement of the game flow. In addition, "magic tower" has opened overseas release test in Japan, Europe and the United States and other mainstream regions in April. The iteration of Chinese version and overseas market have effectively extended the full life cycle value of leading products. The company has abundant game reserves. Product versions such as Tianlong Babu 2, the country of morning and night and black cat news agency have been prepared. At present, they are waiting for the release of version numbers. The overseas market is expected to go online within this year to contribute incremental performance to the company. On April 11, the release of the game version number was resumed, the version number was normalized and the content supply was stable, and the game went to sea to form a new increment. As a leading R & D manufacturer, Perfect World Co.Ltd(002624) it is recommended to pay special attention to it.
[ G-Bits Network Technology(Xiamen)Co.Ltd(603444) ] the company lays out a diversified product matrix, covering game categories such as placement and cultivation, simulation operation, roguelike and SLG, and adheres to "high-quality" and long-term operation. The stock games such as "ask for a hand tour" and "one read carefree" have a stable performance, and the game version numbers that can be issued in 22 years are abundant. The long-term operation of "ask for a hand tour" is stable, and the long-term flow continues to maintain a good trend. The 6th anniversary service was opened on April 22, which is expected to further improve the flow; "Yinian Xiaoyao" has maintained its buying volume since it was launched on February 1, 2001. Now it has become a leader in Xiuxian's category; The 22-year-old thunder agency Obi Island: dream country will open the omni-channel payment test on April 28, and its performance is worth looking forward to. The company also reserves a variety of games such as "dawn elite", "flowers fall in Chang'an", "lost territory", "store legend", "family story (M66)" and so on, laying the foundation for 23-24 years of performance.
[ Mango Excellent Media Co.Ltd(300413) ] as a party media and state-owned enterprise, the company complies with the development trend of deep integration of media, and continuously strengthens the guidance of media value and independent innovation of content. The company takes the content of high threshold and long video platform as the king, takes the needs of the times, social emotions and people's attention as the main direction of content innovation, continues to build a high-quality, benign and sustainable content ecology, and has made steady progress and improved the quality of various businesses in the past 21 years. In the next 22 years, the company will continue to give full play to the advantages of dual platforms, innovate the in-depth development of media integration, increase the investment of strategic resources, and promote the steady development of emerging businesses, including Xiaomang e-commerce and live entertainment.
[ Three'S Company Media Group Co.Ltd(605168) ] Three'S Company Media Group Co.Ltd(605168) has stable head customers in many industries, including head state-owned enterprises such as Yili, three operators and four banks. It will update and develop new customers in many industries such as China Resources Group, FAW Volkswagen, Dongfeng Honda and FAW Toyota in 21 years, and there may be investment income elasticity in the next 2-3 years. In the future, the company will continue to benefit from the growth trend of continuous marketing and promotion investment of core state-owned enterprises, and the layout of NFT and digital virtual human is expected to bring new incremental performance.
[ Saturday Co.Ltd(002291) ] the company will divest its footwear business in 22 years and focus on the development of mobile internet marketing business, and its performance will be greatly reversed. The development of the subsidiary's remote network is becoming more and more mature, and the field of short video and live broadcast e-commerce has been relatively leading. The company's performance is highly deterministic, and the new non-standard field is expected to bring large increment. In addition, the company attaches great importance to the development of digital asset business, which is another core competitiveness in the long run.
Risk factors: delisting of zhonggai shares, Internet supervision, increased market volatility and other risks.
