Ed Weisuan: China's leading pan-fashion data interactive marketing group. Founded in 2013, the company is China's leading pan-fashion brand data interactive marketing group, covering experiential marketing services, digital new marketing services and IP expansion. It has maintained cooperative relations with international top brands such as CHANEL, DIOR and LV for more than 12 years, covering more than 500 brands. According to the cautionary report, the company is the largest provider of experiential marketing services in Greater China in 2020, with a market share of 7%.

According to the company announcement, 2021H1 achieved an operating income of 390 million yuan / + 436.5%, a net profit of 35.5 million yuan, and a net profit margin of 10.0% after the epidemic.

Marketing solution trillion market: luxury brand emphasis on experiential marketing, digital marketing diversified transformation; Volkswagen brand marketing demand steady growth. The marketing solution provider is located in the second link of the market value chain. According to Zhuangshi Consulting, the market size of marketing solutions in Greater China in 2018 was 890.6 billion yuan, compared with 9.3% of CAGR in the previous four years, of which digital marketing and experiential marketing accounted for 43.5% and 4.0% respectively, which are important components. In terms of current subdivision: 1) High luxury brands benefit from the upgrading of consumption, the strong purchasing power of Generation Z & millennials, the high return of consumption to the overall market and the high investment in brand marketing, and their marketing expenditure reached 28.5 billion yuan in 2019. Experiential marketing is an important part (accounting for 36.5% of the luxury marketing market), and the pattern is more concentrated than other marketing models. With the diversified transformation of digital marketing models, new channels and methods such as Douyin and KOL are very popular, and the capacity is expanded online and offline. 2) the demand for mass consumer marketing is also growing steadily. By 2018, the scale of domestic brand marketing solutions such as Volkswagen's digital marketing / experiential marketing / public relations is 378.4 billion / 27.8 billion / 31.1 billion yuan respectively, compared with 27.2% 12.3% 12.8% CAGR in the previous four years.

Company: creativity, team, experience leading, card position high luxury customers, online and offline integration and expansion, the main business scale is expected to grow steadily. 1) the team structure is stable. A number of senior executives have been engaged in the industry for many years, using the partnership system to stimulate the vitality of the team. 2) customer stickiness is high. Deep ploughing industry, has a multi-person creative team and accumulated many years of industry experience and has an online and offline one-stop integrated marketing layout, and reached a stable cooperative relationship with a number of high-end brands. 3) fully integrated marketing highlights its advantages. As a small number of marketing service providers that can provide online and offline fully integrated marketing, through front-line publicity, offline activities to reach consumers, online secondary fermentation after the event to form secondary communication, the effect of integrated marketing is outstanding. The trend of luxury plus national trend is on the rise. We predict that the marketing investment of high luxury and national tide is expected to reach 100 billion in 2021-2023. As a leader in high-end brand marketing services, the company's marketing revenue is expected to grow steadily.

Comply with the trend, with the help of advantages, explore multiple marketing layout; new business layout continues to expand, IP business is expected to recover after the epidemic, contribution increment. In line with the market trend, the company has set up a joint venture with leading MCN institutions to jointly take charge of live e-commerce business, and newly signed a number of artists to expand Douyin live e-commerce territory. The establishment of pan-fashion MCN business brand Avant Plus, focusing on star talent business brokerage and social platform operation, cooperation with Hong Kong Land, Fosun Fashion, layout meta-universe business, constantly tap new business growth points, empower business closed loop. In addition, the IP business is expected to recover and contribute to the increase after the epidemic.

Investment suggestion: as a leading pan-fashion data interactive marketing company in China, the company has rich team experience, solid customer base, online and offline fully integrated advantages; its extravagant experiential marketing business has advantages over its peers, and with the accumulation of original brands and personnel, it conforms to the trend of online and diversified marketing, all-channel integration and continuous increase, and the performance is expected to grow steadily. And carry on the meta-universe layout, constantly tap new business growth points, is expected to empower the commercial closed loop. We expect the company to achieve a net profit of 86.34 million yuan / 120 million yuan / 150 million yuan respectively from 2021 to 2023, which is + 268.7%, 34.2% and 27.5% respectively compared with the same period last year. It is estimated that the EPS will be 0.15,0.20 yuan per share in 2022-2023, and the current share price will be 7 times that of PE. Since the company's subsequent growth center remains at about 30%, the target price will be HK $2.80 for 2022 and 15 times PE for 2022, covering the "buy" rating for the first time.

Risk tips: customer loss due to irresistible factors; repeated epidemic situation, hindering the development of offline activities; industry competition intensified.