Forecast the net profit of Non-IFRS in 2022 is 182 million yuan.
We expect the company's revenue in 2022 to be 940 million yuan, a year-on-year decrease of 24.7%, and a decrease of 41.6% over the same period last year. The company is expected to announce its annual results in March 2023.
Pay attention to the main points
The copyright drama business may be affected by the broadcast cycle, and the content marketing business may be disturbed by the epidemic. In terms of copyright dramas, we judge that the works broadcast by the company in 2022 mainly include "beyond", "Hunting Chart Book", "cowards" and "Twenty No doubts 2", with excellent content quality and outstanding performance. among them, the suspense series "Hunt Chart" ranks second in the list of 30-day effective broadcasts on the new series in 2022 (according to Yunhe data). As the company's first short play, it reflects the positive effect of category expansion. The female growth series "Twenty without doubt 2" won the first place in the simultaneous ratings of provincial satellite TV on the first day of its broadcast, which verified the serial output ability of high-quality IP. However, considering that the total number of episodes has declined as a result of the increase in the proportion of short plays, and some of the reserve content could not be broadcast within the year due to the content cycle, we expect the revenue of copyright dramas to fall by 16.2% to 881 million yuan compared with the same period last year. In terms of content marketing, we judge that the proportion of short plays has increased or led to a decrease in the number of advertisements, and emerging businesses such as e-commerce may be affected by the epidemic, and revenue is expected to decline by 49.0% to 56 million yuan.
The rich reserve series is expected to boost performance in 2023 compared with the same period last year. Looking forward to the follow-up, the company's reserve list of the urban emotional drama "Love only" has obtained a distribution license, and the urban medical emotional drama "the Heart of a Child" and the ancient costume legendary drama "Yinanguanshan" have been successful. we judge that under the background of normalized content, they are expected to be broadcast in 2023 and achieve better broadcast performance as key dramas on various platforms, and we expect that the number of episodes and collective average income of the company's copyright dramas will be improved together in 2023. Promote full-year performance growth. In addition, the company also has a rich reserve of content such as "you are what you are today". We suggest paying attention to the pace of follow-up shooting and broadcasting.
Content marketing, sailing, skits and other businesses continue to layout, pay attention to the follow-up commercialization potential. In terms of content marketing, the company is exploring new areas such as external drama placement, integrated marketing and e-commerce generation operation. we expect that with the launch of high-quality dramas, the improvement of the macro environment and the increased willingness of advertisers in 2023, content marketing is expected to contribute more increments. In terms of going out to sea, the company has established a close cooperative relationship with Disney+, HBO Max, Netflix and other platforms. We judge that the company's content will continue to upgrade, and more attempts will be made for IP overseas remake and overseas production and distribution. In terms of skits, the company's skits "from divorce" and "29" have been online on Douyin platform, with a total of 250 million views so far, the top ranking platform, and the account "good ability" followers approaching 3.9 million. We judge that the company's ability to create high-quality content is expected to establish a competitive advantage, and the space for commercialization of skits is expected to be gradually released.
Profit forecast and valuation
Taking into account the delay in the launch of the content, the net profit forecast of Non-IFRS in 2022-2024 is reduced by 36.9%, 31.7%, 19.1% to 1.63, 356, 580 million yuan. The current price corresponds to 10.5 times the 2023 Non-IFRS pound E for the 17.5 pound in 2024. Maintain the outperform industry rating, as the industry valuation center moves upwards to maintain the target price of HK $26.2, corresponding to 2023 Non-IFRS 13.9 times of 2024, 29.7% upside space.
Risk
Uncertainty of content launch time and performance, intensified competition in the industry, impact of changes in fair value, liquidity risk, risk of lifting the ban on restricted shares.