Phoenix Nirvana! Can the media sector leading the spring market still be admitted?
In December last year, the Shenwan Media Index rose 11.80%, ranking third among the 28 first-tier industries in Shenwan, and it has not shown signs of fatigue since 2020. In just five trading days at the beginning of the year, the increase reached 7.97%. Among the gains in this industry, it was second only to the defense industry and ranked second, and the CSI media index rose 8.98%.
Why can the media sector lead the spring market?
I. Policy-driven: 5G Catalytic Trend On January 3, the Ministry of Industry and Information Technology's official website released news. Recently, the Ministry of Industry and Information Technology issued a 4.9GHz band 5G test frequency license to China Radio and Television Network Co., Ltd. (hereinafter referred to as China Radio and Television) in accordance with the application. 5G networks are deployed in 16 cities including Beijing.
Earlier, China Radio and Television had obtained the 5G commercial license issued by the Ministry of Industry and Information Technology, becoming the fourth 5G basic telecommunications operator in China after China Telecom, China Mobile and China Unicom . This test frequency license marks that China Radio and Television has officially obtained the right to use 5G frequencies in relevant regions, which will help further promote its 5G network construction and industry application development.
In this way, 5G networks are expected to cover all prefecture-level cities across the country in 2020, catalyzing the landing of 5G applications such as cloud gaming, VR / AR, and ultra-high-definition video.
The advancement of information technology itself will reduce the cost of content access, promote the flattening of media and a more violent platform generation evolution, amplify the commercial value of high-quality content, and enhance the status of the industrial chain. Now 5G, cloud computing, AI, VR / AR, etc. The maturity of new technologies will further strengthen this trend, and the feature of "content is king" will be further highlighted, regardless of the game or film and television, variety shows, music and even media content industries will continue to benefit.
2. Profit-driven: The media sector's performance rebounds + the Spring Festival is approaching, and the media sector leader may have deterministic performance. <br /> From the external environment, the economic boom cycle is expected to bottom out, and advertisers are marketing under the expected stable situation. Expenditure will also resume. Judging from the structure of advertisers, the budget of the New Economy Internet + + advertisers is nearing the end, and traditional brand advertisers are gradually adding weight, which is expected to drive revenue growth. According to the calculation of CICC, from the beginning of 1Q20, the revenue will resume the positive growth year-on-year, and the profit is expected to increase by 30 +%.
In addition, as the Spring Festival is approaching, the media sector is also poised for growth. This year's Spring Festival, 1) the number of films has increased compared to last year; 2) the types of films are rich, and the audience ’s viewing preferences are wide; 3) the quality and expectations of the films are high The overall performance of domestic movies in 2019 is bright, and the creative team is becoming more mature and recognized by the market; 4) The audience ’s Spring Festival movie watching habits are developed, and the number of movie watchers in the Spring Festival is rising year after year.
Based on the box office dismantling method, CICC estimates that the box office of the Spring Festival in 2020 in the neutral situation is expected to reach 6.90 billion yuan, an increase of 17.0%.
3. New business model driven: mature online live delivery, MCN industry chain, etc. The live broadcast delivery volume has shown strong explosiveness, and the media sector has ushered in new performance growth points.
As of 2019, the total number of MCN institutions in China has reached more than 6,500, the market size has exceeded 10 billion, and advertising marketing is the main monetization (accounting for 80.6%), followed by platform subsidies (48.4%) and content e-commerce (35.5%). .
MCN relies on a professional service system and high-efficiency distribution channels to ensure the effective realization of high-quality content. Live streaming is an important direction for future development. In 2018, the proportion of brands in the food and beauty industries using KOL increased significantly, with usage rates reaching 92% and 81%, respectively. The high success rate and high ROI of live streaming will attract more brands and e-commerce platforms to invest in budget. In terms of MCN, it means that a new and huge liquidation channel appears.
4. Fundamentals and valuation bottoms <br /> After the spring of the content industry in 2013, the accelerated growth of M & A transformation in 2014-2016, and the "Internet +" in 2015, the A-share media industry has begun to withstand the multiple tests of the industry's downward cycle and policies and capital markets Fundamentals and valuations continue to kill, and the current market value is only equivalent to 30% of the highest historical market value (based on the total market capitalization of individual stocks, excluding LeTV , Imprint Media, and Storm Group ).
In the same period, the size of the game and movie market has increased by nearly two times. Driven by factors such as the weakening of short-term policy disturbances, the continuous release of terminal demand, the superimposed channel changes, the introduction of new technologies, and the evolution of business models (such as online celebrity MCN), With lower market value and valuation level, the content section is expected to usher in a long snow slope.
In the case of multi-core driving, the media sector has become a rare valuation depression in the current market, with high allocation value opportunities. In the medium and long term, the media sector has high allocation value, and the profitability and valuation of both repairs are expected to continue.
Institutions are optimistic about the opportunities in the media sector in 2020. BOC International said that in 2020, the media sector is still more driven by performance in the context of valuation improvement, and it is recommended to increase the allocation of game leaders whose performance is still deterministic and accelerate destocking. Driven by the cost side, leading film and television leading companies whose performance is expected to show significant marginal improvements, as well as leading copyright operation and sports marketing that benefit from the sports year and have greater flexibility in performance.
Compared with purely thematic opportunities, BOC International believes that the clearer the logic from expectation to performance cashing, and the shorter the cashing cycle of a sector or company, the higher the margin of security for valuation. In the short term, in January, listed companies will successively release performance forecasts and performance reports, entering the full-year performance of 2019. Therefore, based on the full-year and short-term investment dimensions of 2020, it is recommended to firmly embrace games, movies and television with more deterministic performance. Leading companies in the sports sector.
Tianfeng Securities recommends that the game version be restored to the fourth quarter of film and television release. After nearly four years of decline and sharpening, the inflection point in the performance of the media sector has arrived. The strategy is optimistic about the performance of the media in the next three years. Mobile phone shipments have entered a period of rapid growth, and cloud gaming, VR, and AR product innovation has accelerated, providing solid support for the development of applications in 2021.
New Times Securities pointed out that optimistic about the media industry view in 2020, the overall is greater than the structure. The current policy supports cultural self-confidence, technology brings new momentum, goodwill has eased, and fundamentals have gradually improved. (Tiantian Fund Network)