Events:

The company announced on the evening of September 23 that the State Forestry Administration and the people's Government of Jilin Province jointly signed and decided to jointly implement the Strategic Cooperation Agreement on promoting the Provincial demonstration Project of the Modernization of State-owned Forest Management. Ji TV Media has been formally established as the general contractor of the provincial joint construction demonstration project of Jilin State-owned Forest Management Modernization Bureau, and is responsible for project construction and follow-up operation services as a whole. According to the announcement, the "Internet +" declared by the State Forestry Administration

Major forestry projects with a total investment of 1.78 billion yuan. The project undertaken by Jishi Media is a demonstration project, with a total investment of 864 million yuan. The content of this project mainly includes three aspects:

1) to build a horizontally extended wide-area resources supervision "forestry space Internet" and a longitudinally extended three-dimensional resource perception "forestry Internet of things" to realize the multi-dimensional perception of the basic data and dynamic change data of state-owned forest resources; 2) to establish "Northeast Forestry big data Cloud Center", "Provincial Forestry Comprehensive Management and dispatching Command Center" and "Forestry Digital Earth".

3) construct the monitoring, evaluation and early warning platform of forestry resources, realize the comprehensive perception of forestry ecology, controllable risk early warning, dynamic supervision of woodland, real-time protection of species, and build new business type of forestry ecological resources management.

The Jilin provincial government has previously organized the Forestry Department to sign the Strategic Cooperation Framework Agreement on launching exclusive Forestry satellites and the Strategic Cooperation Agreement on Intelligent Forestry Construction with Changguang Satellite and Jilin TV Media respectively. It can be expected that the Jilin provincial government will provide financial support for the purchase of services for Jilin TV Media during the project period.

Comments:

1. Low-frequency wireless communication is a necessary means for the construction of intelligent forestry, and the rich spectrum resources of radio and television to strongly support the construction of "forestry space Internet" and "forestry Internet of things" is the bearing foundation of the whole intelligent forestry information ecosystem. It is necessary to establish a unified wide coverage wireless network. The natural forests of Jilin, Heilongjiang, Inner Mongolia and other key forestry provinces involved in the project cover a wide area of more than 36 million hectares, and have high requirements for the penetration of the communication system. The low-frequency wireless communication below 1GHz has the characteristics of strong penetration and wide coverage, which can significantly reduce the cost of building a network (under the same coverage, the cost of building a 700Mhz network is about 20% of that of 2.6Ghz), so low-frequency wireless communication will be a necessary means for intelligent forestry construction from the point of view of cost and effectiveness.

At present, the frequency bands used by radio and television systems in China include (48.5MHz-223MHz) VHF and (470MHz-806MHz) UHF, which occupy the low-frequency spectrum resources of near 500MHz. With the digitization of radio and television, radio and television will save the digital dividend band of UHF, which is expected to be used in wireless system construction. At the same time, the industry private network application with public welfare nature is also in line with one of the main directions of radio and television development wireless system. Therefore, we judge that the UHF band of radio and television in the future is very likely to be used in the ground wireless communication of intelligent forestry projects, and the rich low-frequency spectrum resources also provide strong support for the expansion of the company's private network in the future.

2. Guangzhou Electric Power's promotion of NGB-W brings important development opportunities, and the huge value of high-quality spectrum resources needs to be evaluated.

At present, a number of listed radio and television companies, including radio and television networks and Hubei radio and television, have carried out the substantive construction of wired and wireless integrated networks, and actively laid the foundation for the evolution to the next generation radio and television wireless system (NGB-W).

At the recent promotion meeting of the State Administration of Radio, Film and Television, Radio, Film and Television said that NGB-W is one of the key tasks in the 13th five-year Plan. This technology combines the advantages of radio and television wireless transmission technology and wireless broadband communication technology, its essence is a media network, and the goal is to achieve the vision that high-quality content is available everywhere, personalized content is flexibly available, and common content is low-cost accessible. According to the plan, substantial progress should be made in the construction of radio and television NGB-W during the 13th five-year Plan period, full coverage of wireless two-way television NGB-W should be realized in conditional areas throughout the country, and a new wireless two-way service model should be initially formed.

At the same time, with the gradual development of wireless network construction and operation services by radio and television cables in various provinces, the operation right of high-quality low-frequency spectrum (estimated to reach 100 trillion) is expected to be distributed to various provinces, compared with the international market price of spectrum auctions. this part of the spectrum is worth at least 10 billion yuan.

3. Radio and television has entered the wireless era, opening the application space of industry private network and public network.

Radio and television network is a public welfare service network, which can be said to be the mouthpiece for the party and the government to carry out positive propaganda. The development of radio and television from wired to wireless is in line with the policy guidance of the state to establish a mainstream ideological position in new media. In addition, in the context of the increasing scarcity of spectrum and gradually becoming a national strategic resource, radio and television, which has a large number of high-quality low-frequency spectrum resources, also shoulders the important responsibility of contributing benefits to the society. Therefore, from these two angles, the determination and intensity of radio and television power in the wireless field should be very great. Under this impetus, the radio and television business field will move from the fixed end to the mobile end, and then open up the industry private network and public network market space of more than 10 billion yuan. The overall value of the industry is facing a huge increase.

In the field of private network, radio and television has rich low-frequency resources, which can be used for low-cost and high-performance transmission of images and videos. This state-owned forest project verifies the unique advantages and landing ability of radio and television wireless system in industry private network application. In the future, the system is expected to further expand in forestry, environmental protection, safety supervision, land and other industries, with a market space of more than 10 billion yuan. In the field of public network, the radio and television wireless system focuses on the converged media service of radio and television, which will promote the expansion of radio and television media business from TV to mobile terminals, doubling the number of users (at present, 430 million mobile video users in China, twice the number of cable TV users, and still maintaining a rapid growth rate of more than 20%). It is technically compatible with 3GPP, supported by Huawei, Samsung, Apple Inc and other terminals, and the industry chain has a certain foundation. In the future, it is expected to open up a new growth space for mobile video by virtue of its unique advantages such as low cost and content broadcast control.

4. High-quality enterprises in the radio and television department, from 10 gigabit chips to information technology, will be given a "highly recommended-A" rating.

The company's business is concentrated in Jilin Province, where the economy is relatively backward, but in recent years, the company has been in the forefront of the industry in terms of cable TV user scale, digitization, two-way transformation, as well as revenue and profit levels.

In terms of endogenous business layout, the company's "10 Gigabit network chip" has been successfully developed, filling the domestic gap and will comprehensively promote the company's strategic layout of "fiber to the home". At the same time, the company's "I-PON standard" has been identified as one of the important standards of the national "Cable TV Network Fiber to the Home (C-FTTH) technical specification", which is expected to be quickly promoted in the whole industry. In addition, in terms of educational informatization, Jilin TV Media formally signed the "Jilin Provincial Educational Informatization Strategic Cooperation Agreement" with the Jilin Provincial Department of Education in July last year, relying on its own network technological advantages and rich network resources. creatively opened up new forms of business such as "Internet + 's educational content" and intelligent education, improved the company's industrial layout, and is expected to enter the project harvest period in the future.

We expect that in the future, as radio and television vigorously develop wireless systems, the industry value is expected to change significantly. At the same time, as a very high-quality enterprise in the radio and television department, the company has been the next city in the field of intelligent forestry, and there is huge room for expansion in private and public networks in the future. We estimate that the company's EPS in 16 and 17 years will be 0.13 yuan and 0.19 yuan, and the corresponding stock price PE will be 33x and 23.8x. Give a "highly recommended-A" rating.

5 、 PE-PB Band

6. Risk hint

1. The risk that the demonstration project will make progress as expected.

2. The promotion speed of radio and television wireless business is affected by the policy, and there is uncertainty.