This report is the second in-depth report on the video industry, which mainly studies the short video and live broadcast industries, as well as the industrial ecology of MCN and content marketing around their development; And study in detail the business situation, competitive advantage, profit forecast and valuation of the relevant top listed companies: Kwai, Inmyshow Digital Technology (Group) Co.Ltd(600556) lexiang group and Weibo.
Key points of rating support
Short video precipitates huge traffic, and the “two strong” pattern is established. The fragmented and decentralized communication characteristics of short video meet the diversified needs of users for content entertainment and social networking. According to the data of CNNIC, the number of short video users reached 3.4 billion, accounting for 9.0% of the total number of users in 2021. Tiktok and Kwai apps account for the vast majority of short video user traffic, and the industry duopoly pattern has been established. Relying on huge traffic and social sharing links with acquaintances, wechat video number is an important extension of wechat content ecology and commercial realization.
Short video business has broad prospects, and advertising and live e-commerce are the key drivers. Short videos are mainly realized by live broadcasting, advertising and e-commerce. With its traffic advantages, diversified marketing and excellent algorithm efficiency, the scale of advertising revenue continues to grow. Among the Internet media advertising revenue in 2021, the growth rate of short video advertising reached 31.5%, far ahead. Live e-commerce has upgraded the display mode of goods, especially accelerating the quality efficiency transformation of non-standard goods; Optimizing the supply system is expected to snatch up semi deterministic consumer demand. Airy consulting estimates that the market scale of live broadcast e-commerce is expected to be close to 5 trillion in 2023.
The category of content live broadcast is rich, and the content marketing industry tends to be mature. The live broadcast of games / shows / knowledge and other contents continues to be rich, but the incremental realization space is limited. The content marketing industry developed around short videos and social platforms is becoming mature. The management and Realization of MCN are becoming more professional and refined; Matching agent platform improves the efficiency of market matching; The value of we media DTC marketing service is prominent. Key recommendation
Kwai Technology (1024.hk): Kwai is the world’s leading short video platform. Under the inclusive traffic distribution mechanism, the ecological value of the private domain is highlighted, the closed-loop realization of advertising and e-commerce is basically improved, and the commercialization process is accelerated. Using segment valuation and PS valuation, the reasonable market value of the company in 2022 is estimated to be HK $440.45 billion. First coverage, give buy rating.
Inmyshow Digital Technology (Group) Co.Ltd(600556) ( Inmyshow Digital Technology (Group) Co.Ltd(600556) . SH): Inmyshow Digital Technology (Group) Co.Ltd(600556) help brands and celebrities solve the problem of inefficient matching; Realize the full link coverage of celebrity marketing, and have scale advantages and efficient linkage in industrial resources. Using PE valuation, the reasonable valuation of the company in 2022 is expected to be 19.45 billion yuan. First coverage, give buy rating.
Lexiang group (6988.hk): the company is a leading effect we media marketing service provider in China. Following the development trend of short video, it has in-depth cooperation with Tiktok /tiktok to promote live broadcast e-commerce business at home and abroad. Focus on strengthening the cultivation of self owned flow and opening the profit ceiling. Using PE valuation, the reasonable valuation of the company in 2022 is expected to be HK $8.67 billion. First coverage, give buy rating.
Microblog (9898. HK): microblog is the social media platform with the largest number of monthly live users and the largest topic influence in China. It has diversified content forms such as graphic, short video and live broadcast and various types of vertical topic circles; The main income is realized from advertising. Using PE valuation, the reasonable valuation of the company in 2022 is expected to be US $5.78 billion, equivalent to HK $45.1 billion. Coverage for the first time, giving overweight rating.
Main risks of rating
Macroeconomic downturn; Advertisers’ willingness to put down; The decline of residents’ Consumption Willingness and ability; Industry competition intensifies; User growth is less than expected; Content and advertising regulatory risks.
