The policy warmth is obvious in 2022, entering a new stage of "giving priority to support and supplemented by supervision". In 2021, the regulatory policies for the platform economy have been intensively introduced, and the regulatory requirements and development path of each subdivided industry of the Internet are gradually clear. Due to policy concerns and mood fluctuations, key companies in the sector fell by 30-80%, which has a certain cost performance compared with historical valuations and overseas companies. The company's frequent repurchase shows confidence. In 2022, the platform economy policy will completely shift from "strict management" to "care". It is expected that more measures conducive to the healthy development of the industry will be introduced soon.
Several major trends are predicted in the second half of 2022:
(I) reduce costs and increase efficiency, and change from pursuing high-speed growth to pursuing high-quality growth. Cost reduction and efficiency increase is the theme of the Internet industry in 2022. The main measures to reduce costs and increase efficiency include: orderly increase or decrease the number of employees through business adjustment and optimize labor costs; Reduce marketing expenses and focus on high-quality operation of user value and life cycle; Increase R & D investment and improve the ability of independent innovation.
(II) cultivate "internal skills" and find a steady and sustainable development path. The principle of "strengthening antitrust and preventing disorderly expansion of capital" will be maintained and continued in the future antitrust work. The head Internet platform began to deliberately shrink foreign investment and M & A, optimize and adjust business, and make strong efforts in emerging business.
(III) Commission drawing is not the main focus of commercialization in the short term, and there is more room for advertising realization. There is still room to improve the monetization rate of various e-commerce platforms in China, but it is difficult to significantly improve in the short term under the environment of Internet supervision. The increase of commission rate may need more structural optimization in the short term, such as increasing the proportion of categories with high gross profit margin and high commission rate; The space for the future increase of advertising rate may be greater than the commission rate. It is expected to be repaired after the structural optimization of advertisers and the recovery of macro-economy.
(IV) common prosperity, encourage Internet companies to strengthen social responsibility and empower the upstream and downstream of the industrial chain. In a benign regulatory environment, Internet companies will highlight their respective values. Under the epidemic situation in Shanghai in 2022, Internet companies give full play to their social responsibilities in terms of supply chain and logistics. Enabling the upstream and downstream of the industrial chain is an inseparable task for Internet companies in the future. In the short term, the profit cycle of the platform economy may be lengthened, but in the long run, the platform and society are a community of interests, and enabling society and industry can help the long-term development of the platform.
(V) pace of industry recovery in the post epidemic era: local life, e-commerce and advertising industries are expected to gradually benefit. The outbreak of the epidemic in some areas and the strict measures for epidemic prevention have had a phased impact on all aspects of the economy. We should pay attention to the rebound on the demand side and the recovery on the supply side. Local online consumption, strong demand, but there is a certain shortage of supply; For e-commerce consumption, demand can be replenished, but it is subject to logistics restrictions; The advertising industry is mainly affected by the economy, resulting in a downturn on the demand side.
E-commerce: short-term consumption rebound, differentiation and heavy operation are the competitive trend. In 2021, the e-commerce industry is facing a macro consumption downturn, and the internal volume of the industry is intensified. At the time of stock competition, reducing customer acquisition costs and investing in high-quality operation of infrastructure are the key to the long-term development of the industry. Live e-commerce, community group buying and real-time retail are expected to open up incremental space in the e-commerce industry: Live e-commerce improves consumers' purchase frequency by optimizing shopping experience. At present, the industry is in a tripartite pattern, and the sales of head anchor is not high. Supporting brand self broadcasting is the trend in the future; Community group buying opens up the online space of sinking market and fresh food categories. The market scale is expected to reach 500 billion in 2022. Maintaining the "3 + n" pattern of the industry remains unchanged. Reducing performance costs and realizing category expansion are the key to profitability; Real time retail meets the immediate needs of consumers and will coexist with various formats such as centralized e-commerce. The differentiation strategy of key categories is the growth opportunity of o2o.
Local life: the normalization of the epidemic does not change the rigid demand, and the recovery potential may be greater. Although the takeout industry is also impacted by the macro and epidemic situation, its rigid demand characteristics ensure that there is more room for rebound after the short-term impact, the competition pattern of the industry is stable, and the rider's social security policy and relief policy have limited impact on the profitability of meituan takeout orders; The competition trend of the store business industry is the focus of the industry. The store market has a huge space, which has created an incremental market. Meituan relies on the user mind of public comments, and the competition pattern will not change greatly in the short term.
Advertisement: it will continue to be depressed in the short term. In the medium term, it will be repaired after the epidemic, and the long-term potential space can be expected. There are three main reasons for the slowdown in the second half of 2021: weak macro consumption, stricter industry supervision and reduced budget for specific industries. For 2022, we expect that the consumption market is expected to pick up in the second half of the year, and the advertising market will lag behind the macroeconomic recovery in the same period; Although the personal information protection law will reduce the accuracy of precision marketing and personalized push, the overall impact is limited, and the advertiser's budget is expected to further tilt to the head platform; In the long run, advertising is still a high-quality marketing means. With the economic recovery, the advertising boom is expected to resonate with the economic boom, or slightly lag behind the economic boom, and more industries will have stronger advertising capacity.
Video: the rise of the world, short video; Medium and long-term video has made every effort to reduce losses and move forward in the exploration of commercialization. In 2021, the growth rate of users in the short video industry slowed down, but the user stickiness is still strong. In terms of user scale, the dau ceiling in the short video industry is still high, or about 1.1 billion. Tiktok and Kwai further expand the user scale through the speed version, and there is a large penetration space. In terms of competition pattern, while shaking up two parts of the world, video numbers are rising rapidly, and the scale of users has increased rapidly. In the process of commercialization, Tiktok and Kwai, which are relatively mature in the process of commercialization, will continue to be realized through live e-commerce and advertising; The video number in the early stage of commercialization will be realized mainly through advertising in the future. In 2022, China long video will spare no effort to reduce losses, adjust strategic positioning, control expenditure, reduce costs and increase efficiency. BiliBili may explore new monetization forms this year to reduce brand and game promotion costs. It is expected that sanfei and margin will be greatly improved.
Game: embrace the normalization of version number, and the game goes to sea is the core catalyst. With the disappearance of demographic dividend, the mobile game market is further saturated, and the supply side reform affects the supply of content, resulting in the slowdown of the industry growth; The globalization strategy has achieved remarkable results, and the game going to sea has become the main increment of the industry. For the sector, the bottom of the growth rate of the industry in which the edition number was stopped in 18 years just corresponds to the bottom of the previous valuation, and the growth rate is expected to pick up after the normalization of the edition number; For individual stocks, the valuation cycle is highly correlated with the product flow cycle. The core products are launched → revenue growth → net profit growth → valuation improvement is realized. Affected by the suspension of the edition number in August 21 and the 830 new deal, the valuation of the game industry has shown a downward trend in the past year, and the overall valuation is low. We reiterate our strong recommendation.
New consumption: pay attention to the recovery after the epidemic and be optimistic about subdivided tracks such as sports and national tide. The improvement of residents' consumption level and the government's support for the sports industry will continue to promote the growth of sports consumption demand. The four local leading brands of sports equipment Anta, Li Ning, Tebu, 361du and Shuhua Sports Co.Ltd(605299) of Chinese sports equipment companies are expected to catch up with international leading brands. Affected by the epidemic, the 22h1 performance of Focus Media Information Technology Co.Ltd(002027) , the media leader in the life circle, and the bubble mart, the leader of the tide game, is under pressure in the short term, and is optimistic about the performance repair in the post economic cycle.
Investment rating: we believe that the high-quality companies in the track will return to value in 2022 and maintain the "optimistic" rating of the industry:
Suggestions on the Internet: 1. Mesozoic consumer Internet companies with good performance growth and strong long-term competitiveness [meituan-w, JD group-sw]; 2. Short video platform [Kwai-w] with clear loss reduction expectation, superior business model and continuously suppressed valuation; 3. The performance and valuation are still at the bottom, waiting patiently for the industry leading companies on the right [Tencent holdings, Alibaba SW]; 4. Stable performance growth and profit margin, low PE quality company [netease-s, pinduoduo]; 5. Comply with the policy tone and layout [Baidu group SW] in the field of new technology.
The media should pay attention to: 1. The normalization of the game version number and the core catalysis of the game going to sea, and give priority to recommending the valuation anchor [Tencent holdings, netease-s], the flexibility of the 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, artificial intelligence, etc. [ Three'S Company Media Group Co.Ltd(605168) , Visual China Group Co.Ltd(000681) , Saturday Co.Ltd(002291) , Iflytek Co.Ltd(002230) , Bluefocus Intelligent Communications Group Co.Ltd(300058) , Kaiser (China) Culture Co.Ltd(002425) ]; 4. The medium and long-term video platform warms up [ Mango Excellent Media Co.Ltd(300413) , BiliBili - SW].
Suggestions on 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].
Risk factors: industry policy risk and stricter supervision; The epidemic situation is repeated and the control process is slow; Macroeconomic recovery is less than expected; The performance or online process of core games and new tours is less than expected, and the overseas market is less than expected; Core brain drain risk; Exchange rate fluctuations affect overseas income; The price of raw materials continues to rise.
