Ping An Securities: The country's favorable policy supports and motivates the media industry to continue to recover upward

Zhitongcaijing · 01/20 12:09

The Zhitong Finance App learned that Ping An Securities released a research report saying that due to the support and incentives of favorable national policies, the supply side of the culture and entertainment industry will show diversified growth trends, and the media industry will continue to recover upward. Based on the steady repair logic of optional consumption, media industry segments may usher in upward opportunities. It is recommended to lay out industry leaders with strong performance certainty, high dividend rates, and stable dividend rates. Ping An Securities suggests focusing on Bubble Mart (09992), FanZhong Media (002027.SZ), Mango Supermedia (300413.SZ), and Optical Media (300251.SZ).

Ping An Securities's main views are as follows:

Due to the support and incentives of favorable national policies, the supply side of the culture and entertainment industry will show diversified growth trends, and the media industry will continue to recover and improve. Based on the steady repair logic of optional consumption, media industry segments may usher in upward opportunities. It is recommended to lay out industry leaders with strong performance certainty, high dividend rates, and stable dividend rates.

Let's take a closer look:

1) Gaming and IP: Due to the support of the national policy to encourage entertainment consumption, the gaming sector may usher in a new round of product cycles. At the same time, with the support of technology such as AIGC, game companies are expected to reduce costs and increase efficiency. We are optimistic about the operating performance of leading game companies in the industry. We recommend focusing on 37 Entertainment, Perfect World, Gigabit, etc.

2) Film and television line: The supply side of the industry is gradually recovering, and the number of films is showing a good growth trend. After continuous restoration and adjustment, the performance of leading companies has gradually recovered. We believe that continued support from the policy side and the country's encouragement of entertainment consumption will help the cinema industry to prosper. Furthermore, the film and television cinema industry is relatively cost-effective. We are optimistic about the steady recovery of the performance of leading theaters and production companies. We recommend that you pay attention to: Wanda Film and Light Media.

3) Advertising and marketing: Since marketing advertising is slightly behind the overall economic recovery cycle, advertising and marketing campaigns will still take time to recover. Elevator and train station sales have recovered rapidly, while sales in other channels have been slow to recover, causing the performance of various enterprises in the industry to diverge. We believe that leading companies in the industry with excellent customer structures, strong channel resource attributes, and room for improvement in profit margins will take the lead in recovering. We are optimistic about the broad “moat” of leading advertising and marketing companies, especially Hakuba stocks, where profits are expected to improve or increase. We recommend focusing on mass media and blue cursors.

4) Digital media and publishing: On the one hand, judging from the digital media sector, long videos have entered the stock era and are stable in scale. Leading companies have a high market share and there is still room for improvement. It is recommended to focus on leaders in the digital media industry, especially large companies with new business development. It is recommended to focus on Mango Supermedia. On the other hand, looking at the publishing sector, in terms of book retail sales performance, culture, education, and children's categories have achieved positive growth. It is recommended to focus on publishing companies related to the education sector.

This week's rise and fall

This week in review

The media sector was +6.16% last week, and the Shanghai and Shenzhen 300 Index was +2.14% during the same period; in Shenwan's Tier 1 industry, all sectors rose, none fell, and the media industry ranked 2nd among the 31 Tier 1 industries.

Focus on the company

The industry focuses on companies:

Bubble Mart: a leading enterprise in the IP trendy game industry in China. In the medium to long term, the company's brand strength continues to improve, and there is room for further increase in market share. In the short term, the company continues to iteratively upgrade its IP, which is conducive to the continuous growth of the company's performance. Furthermore, the company's overseas business is growing rapidly, and the performance level of individual stores is outstanding. At the same time, self-developed games in the new business format are improving the IP content ecosystem and are expected to provide online promotion channels. It is recommended to focus on its synergy with physical product sales.

Audience Media: Ladder Media has a stable leading position and a scale advantage. The company occupies a large number of resources in the industry and has a high penetration rate in high-tier cities. Its main business includes building media and cinema media. On the revenue side, elevator media contributed the vast majority of revenue, which was complemented by pre-screening advertisements in theaters. From the cost side, company costs are relatively rigid, and gross margin is affected by the scale of revenue. From the cost side, the company's management expenses and R&D expenses are relatively rigid, while sales expenses are more flexible, and the sales expense ratio is relatively stable.

Mango Supermedia: The business is centered on the Internet video business, continuously developing the layout of the entire industry chain. The company relies on state-owned qualifications. Its main business includes Mango TV's Internet video business, new media interactive entertainment content fund plus content e-commerce business, etc. From a long-term perspective, the long-term video circuit pattern is stable. The company is in the top tier, and the production content is of high quality, and the profitability of the company's long video business will improve steadily. Looking at the short term, the company will open up a new growth curve through the development of skits and new media content, which will bring a certain amount of additional volume to performance.

Light Media: A leading company in the domestic film and television industry, and a leading animated film company. The company's main business segments include film and television business, animation business, content production and industrial investment business. Among them, the film business is the core of the company, and the advantages of animated films are prominent. The company's overall gross margin is highly correlated with fluctuations in revenue from various businesses.