Key investment points
Overall: the performance is in line with expectations, and the game sector performed well year-on-year. In 21q4 / 22q1, the media industry achieved a revenue of 145.7/117 billion yuan, with a year-on-year decrease of – 5% / – 3%. The decline is mainly due to the impact of the epidemic on content production, offline sales channels and advertising business to a certain extent. However, the revenue in 22q1 increased by 14% year-on-year in 19q1, and the market scale of the media industry still exceeds the pre epidemic level. In terms of industries, although the game sector is affected by policy factors, due to the limited early product reserves and the impact of the epidemic, the performance is relatively excellent. The advertising and marketing, film and television cinemas and digital media sectors are more affected by the epidemic, and the revenue fell year-on-year.
Game: entering the boutique driven stage, the policy landing valuation is attractive. The total revenue of 21q4 / 22q1 industry was 21.1 billion yuan / 21.7 billion yuan, with a year-on-year increase of + 15% / + 6% respectively. The gross profit margin remained stable, and the sales expense rate was slightly disturbed by the online rhythm of new products. The overall net profit margin of 22q1 industry was 18.3%, maintaining a strong profitability. The version number policy has brought some disturbance to the industry, but the high-quality games reserved in the early stage can still break through and achieve better flow performance. The industry’s production capacity has been gradually optimized, the market share has been concentrated in leading enterprises and high-quality products, and the R & D expense rate of leading enterprises has even further increased. Despite the suppression of policies, the performance growth is still bright in all industries, and the valuation is expected to be repaired after the release of the edition number is restarted. Recommended targets: Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) (with the help of self-developed boutiques and overseas distribution, the performance maintains optimistic growth), Perfect World Co.Ltd(002624) (magic tower continues to optimize, and the performance improvement in 2022 is expected), G-Bits Network Technology(Xiamen)Co.Ltd(603444) (the flow of old games is stable, and the relay of new products is worth looking forward to) Shanghai Yaoji Technology Co.Ltd(002605) (the performance improvement in the second quarter is expected, and the valuation advantage is obvious). Hong Kong stocks recommend game leader Tencent Holdings (high barrier undervalued value, continuous improvement of policy margin), heart company (high-quality channels and community assets), bilibili-sw, etc.
Marketing: due to the short-term disturbance of the epidemic, the leading valuation has become obviously attractive. 21q4 / 22q1 achieved revenue of 47.15/38.46 billion yuan, with a year-on-year increase of – 4% / – 10%. Due to the repeated epidemic and the reduction of advertising by education, games and Internet advertisers under the suppression of policies, the growth rate of industry revenue decreased. However, we can see that the relative advantages of head advertising companies in cost control and revenue growth are becoming more and more obvious. The optimization of industry pattern is conducive to the release of medium and long-term performance. With the effectiveness of epidemic prevention and control in Shanghai, it is expected that the follow-up advertising demand will gradually recover, and the profit and valuation elasticity are worth looking forward to. Recommend Focus Media Information Technology Co.Ltd(002027) (cost control exceeds expectations, the company actively adjusts the epidemic situation, and the impact is controllable), zhaoxun media (the leader in the fast-growing undervalued subdivision field), Bluefocus Intelligent Communications Group Co.Ltd(300058) , etc.
Digital media & film and television theaters: revenue has declined for two consecutive quarters, and pay attention to the subsequent progress of new content listing. Digital media industry 21q4 / 22q1 achieved revenue of 9.46/6.46 billion yuan, a year-on-year increase of – 10% / – 17%; film and television cinema industry 21q4 / 22q1 achieved revenue of 11.56/9.89 billion yuan, a year-on-year increase of – 8% / – 15%. At the same time, due to the greater leverage of the industry, there is a certain profit fluctuation. Follow up recommendations remain optimistic about the epidemic and actively pay attention to the progress of new content listing. Recommend Mango Excellent Media Co.Ltd(300413) (with rich content reserves in the head, the performance in the second quarter is worth looking forward to), Guangdong South New Media Co.Ltd(300770) (with steady and high growth, improved dividend rate and safety margin of valuation), Beijing Enlight Media Co.Ltd(300251) (looking forward to content reserves in 2022), Zhejiang Huace Film And Tv Co.Ltd(300133) (with stable leading position and continuous innovation of content), etc.
Traditional media: in 2021q4 / 2022q1, the publishing and newspaper industry achieved a revenue of 42.2 billion yuan / 30.8 billion yuan, with a year-on-year growth rate of – 5% / 10%. The gross profit margin and net profit margin of the industry basically remained stable. In terms of mass publishing, the supply chain and sales channels were affected by the epidemic, and the performance fluctuation was greater than that of educational publishing, Thinkingdom Media Group Ltd(603096) , Citic Press Corporation(300788) 22q1 revenue decreased by 4.56% / 12.91% year-on-year. It is suggested to pay attention to the leading publishing groups with low value and high dividends, as well as the performance repair opportunities of subsequent public publishing listed companies. The revenue of 21q4 / 22q1 in the radio and television industry was 14.26/9.66 billion yuan, with a year-on-year change of – 18% / 0% respectively, and the net profit attributable to the parent company was 1.01/360 billion respectively, with a year-on-year change of – 282% / 55% respectively.
Risk tips: policy supervision; Competition exceeds expectations; Product merchantability risk; Market systemic risk, etc.
