\u3000\u3000 Ireader Technology Co.Ltd(603533) (603533)
Event: on January 14, Ireader Technology Co.Ltd(603533) released the 2021 digital reading report. The report shows that the stickiness of digital reading has increased significantly, and the per capita reading hours, listening hours and the longest reading hours have increased by 23.39%, 35.71% and 17.07% respectively compared with the previous year; In terms of digital reading going to sea, the proportion of new users of handheld ireader International Edition reached 28.07% in 2021, and the average daily online time of overseas users increased by 25.97% to 97 minutes compared with the previous year.
Comments: active users of paid reading business achieved contrarian growth. According to AI media consulting, the scale of China's digital reading market will grow to 41.6 billion yuan and 45.39 billion yuan in 2021 and 2022; According to trustdata, palm reading continued to lead the field of mobile reading in September 2021, with 154 million monthly live users, an increase of 7.82% month on month, realizing contrarian growth against the background of the overall decline of the head platform.
The reading sea market grew strongly and the industry leading position was further consolidated. The international edition of handheld ireader has covered more than 150 countries and regions around the world. Among them, one belt, one road and the African region has the most obvious user growth in 2021. The United States, Thailand, the United Kingdom, Australia and Canada ranked among the top five app store users.
Adhere to the principle of "long cycle, emphasis on infrastructure and deep excavation", and deeply layout the IP derivative industry chain. The company launched hundreds of micro drama shooting plans to create a short video content matrix MCN to create a new traffic position for IP value-added and publicity; The company drives high-quality IP value-added through the animation first strategy. The first and second seasons of the animation "Yuanlong" originally adapted by the company have achieved a total of 580 million broadcasts at station B by January 14, 2022; According to the announcement, more than 10 animation works adapted from the company's IP will be launched every year.
The "marriage" with byte is still in the "honeymoon period", and the commercial cooperation has entered the deep water area. The company continues to deepen cooperation with "pangolin alliance", enrich advertising sources, refine operation and promote commercialization. "Palm reading" app actively expands brand content marketing, and "Dejian" and other free novel apps can also improve the commercialization level of Zhongtai through access to commercialization. In the future, there is still much room for improvement based on the company's commercialized Zhongtai advertising source, strategic advantages and the characteristics of pre installed manufacturers' advertising alliance.
Profit forecast, valuation and rating: affected by the slowdown of the annual growth of the Internet advertising industry, the growth of the company's advertising business was lower than expected; 2021q3 company increased investment, personnel investment and R & D investment, resulting in a year-on-year decrease of 10.46% in net profit in the first three quarters; We lowered the net profit of 21-22 years to RMB 314 / 399 million (compared with the previous forecast of - 22.88% / - 34.32%), and increased the net profit of 23 years to RMB 514 million, corresponding to EPS of 0.72/0.91/1.17 yuan and PE of 33 / 26 / 20x in 21-23 years. At the same time, we are optimistic that in the future, the company will build an IP content matrix with the traffic advantage of the head platform, and the digital reading business will continue to expand its influence worldwide and maintain the "buy" rating.
Risk tips: regulatory risk, industry competition, digital content piracy and infringement, innovative business does not meet expectations
