Key investment points:
Market review: from January 10 to January 14, the media sector fell 2.70%, underperforming the growth enterprise market index by 3.43pct in a single week (0.73%); Underperformed the weekly rise and fall (- 1.63%) of the Shanghai Composite Index by 1.07pct; Outperformed the CSI 300 index by 0.72 PCT (- 1.98%) in a single week, ranking 22nd in the weekly rise and fall of CITIC’s first-class industry and in the back of the middle, ranking 10 lower than that of the previous period.
As of January 14, 2022, the valuation of the sector is 23.13 times (TTM, overall method, excluding negative values), 83% of the average p / E ratio of the past five years and 87% of the median, which is close to the Q4 valuation level in 2018 and still at a low level.
Investment rating: from the “14th five year plan” China Film Co.Ltd(600977) development plan “, the” 14th five year plan “period development plan of the publishing industry, the” 14th five year plan “digital economy development plan, the” 14th five year plan “of copyright work and other policies have been successively issued to clarify the development path and provide guidance for all fields of the media sector. Among them, the 14th five year plan for the development of digital economy focuses on accelerating the construction and application of 5g network, accelerating the integration of digital technology and various industries, and the added value of core industries of digital economy should account for 10% of China’s GDP (7.8% in 2020). Specific development goals such as virtual reality, 8K high-definition video, interactive video, immersive video and cloud games should be developed. In the medium and long term, there is a large space for digital transformation of various industries in China, and the media sub field represented by landing application scenarios may continue to benefit. Maintain the investment rating of “stronger than the market”.
Recent recommendations focus on:
1) for the game sector, it is recommended to grasp the main investment lines such as sea going strategy, cloud games, VR / AR, game product launch cycle and market performance. Tencent, byte beat and other Chinese Internet companies accelerate the layout of VR / AR field in the form of hardware + software, and virtual reality may usher in rapid development after 2022. As the distribution of Chinese version numbers has been stopped for nearly half a year, Chinese game manufacturers may increase investment in overseas incremental markets while developing the Chinese game market. It is suggested to pay attention to the head game companies with R & D technology advantages, which have strong competitiveness in expanding overseas markets, product R & D and dealing with supervision. As the product form closest to the concept of meta universe, the game R & D technologies accumulated in the R & D process can be reused in the construction of meta universe platform in the future.
2) the film sector is about to usher in the Spring Festival. On the first day of the new year, as a derivative sequel of the highest box office film in China, the release of “shuimen bridge of Changjin Lake” is expected to further boost the demand for film viewing during the holidays. In addition to shuimen bridge of Changjin lake, the spring festival film market also has films covering various themes, such as miracle stupid child, four seas, the killer is not too calm, sniper, and the “bear haunt” series animation films that can create good box office results over the years. Referring to the trend of “Celebrating the new year on the spot” in 2021, the Spring Festival has reached a record high. We believe that the “Celebrating the new year on the spot” mode continued in 2022 is also expected to create better box office results, but the repeated epidemic situation in some parts of China may have a certain negative impact.
3) virtual human technology. At present, virtual human technology has been tested in large-scale programs on mainstream media platforms. Although at present, virtual human technology is still mainly used in Pan entertainment fields such as virtual idol, e-commerce live broadcast, short video and news variety shows, in the future, the application scenario of virtual human technology may be further expanded to intelligent office, social networking, finance, education, medical treatment and other fields. As one of the underlying technologies of the meta universe, virtual human technology has relatively large application space.
It is recommended to pay attention to the head companies in the subdivided field of the media sub section: Perfect World Co.Ltd(002624) , Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Wanda Film Holding Co.Ltd(002739) , Beijing Enlight Media Co.Ltd(300251) , Focus Media Information Technology Co.Ltd(002027) , Mango Excellent Media Co.Ltd(300413) , Beijing Zhidemai Technology Co.Ltd(300785) , Citic Press Corporation(300788) , etc.
Risk warning: repeated epidemic situation and virus mutation risk; The tightening of regulatory policies exceeded expectations; Intensified market competition; Goodwill impairment risk; The quality of output content is lower than expected; The characteristics of project system lead to the fluctuation of the company’s performance
