The net profit of the mother doubled year-on-year in the first half of the year, maintaining the “buy” rating. On August 30, 2021, the company released its 2021 semi-annual report. 2021H1, the company achieved operating income of 1,318 million yuan, an increase of 21.10% over the previous year; the net profit returned to the mother was 5.18 million yuan, an increase of 110.37% over the previous year. 2021Q2, the company achieved operating income of 645 million yuan, an increase of 9.24% over the previous year and a decrease of 4.09%; the net profit returned to the mother was 22.11 million yuan, down 107.56% year on year and 181.03% month on month; mainly due to rising labor costs, export shipping costs, etc., and the impact of the “Super Flying Man” public opinion incident, which led to a slowdown in performance growth in the second quarter. Based on the 2021 H1 results, we keep our profit forecast unchanged. We expect net profit to the mother for 2021-2023 to be 128/213/308 million yuan respectively, and the corresponding EPS is 0.09/0.16/0.23 yuan respectively. The current stock price corresponding to PE is 57.7/34.7/24.0 times respectively, maintaining the “buy” rating.
The three major businesses of film, television, toys, and babies have developed steadily. The Super Flying Man theme park performed excellently (1) Film and Television: “Super Flying Man”, “Happy Goat and Big Wolf” and many other IPs have been broadcast one after another, with good on-demand ratings data; among them, “Happy Goat and Big Wolf Sports Heroes: Victory Out of the Box” won 24 titles in 15 days after its premiere on January 22. (2) Toys: The company has successively launched Onmyoji Q blind box products and superimposed blind box products with its own IPs such as Happy Yang Yang and Big Wolf. At the same time, it has reached cooperative relationships with many Tencent, NetEase, and Station B IP. An IP matrix for the Chaoyangwan category was gradually established, driving a 37.40% year-on-year increase in revenue in the first half of the year. (3) Babies: Sales of popular new products such as strollers grew steadily, with sales of new products accounting for 30%. (4) Theme Park: The Super Flying Man theme park opened in May 2021. According to operator data, eight indicators including the number of visitors to the park, ticket revenue, and annual pass revenue in the first month of opening all reached new highs.
High-quality big movies and blind box products will be launched one after another, and the pan-entertainment ecosystem will gradually improve. In July 2021, movies such as “Super Flying Man 10” and “Becken Bear 2: Gold Medal Agent” have been screened, and big movies such as “Super Flying Man 11” and “Goat's Fun Adventure 2” will also be launched one after another. The company will cooperate with the broadcast of the 10th season of “Super Flying Man” to launch the Super Flying Man Where to Go Blind Box, and plans to launch series such as the fourth and fifth installments of Onmyoji Q and the Blind Box with Scenes, or increase revenue from the toy business. At present, the company has spread to various business formats such as toys, movies, and theme parks. The “IP+ industry” ecosystem is gradually taking shape, and a continuous reversal in performance can be expected.
Risk warning: risk of impairment of goodwill, sales of blind box products falling short of expectations, repeated effects of the epidemic, etc.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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