Events:
Recently, at the invitation of the Secret Office of China Television Media, we attended the 2013 shareholders' meeting held at the Beijing Media Center. We exchanged views with management on major issues such as the future strategic development direction of the company, the design of the company's incentive mechanism and the operation of the capital market.
Main points of investment:
Adhere to the concept of "culture-led tourism" to promote the transformation of integrated strategy: at present, tourism business is the company's business with the smallest share of revenue and the greatest contribution to profits. With the improvement of China's consumption level, the focus of social consumption has gradually shifted from the material field to the spiritual field, the tourism industry is in a golden period of development, and sightseeing tourism to cultural tourism is the inevitable law of industrial development. The company conforms to the general trend of the development of the industry, adheres to the management concept of "culture-dominated tourism", and actively promotes the strategic transformation of tourism business to a comprehensive cultural industry integrated with theme cultural tourism, entertainment and leisure, film and television industry. to explore a new growth model of tourism business. We expect the company's tourism business to continue to grow steadily.
The advertising business agency model has changed, and the gross profit margin is expected to increase: due to the reform of CCTV advertising management policy, the regional agency system has been implemented for the advertising resources of science and education channels. In 2014, the agency mode of CCTV International, the company's holding subsidiary, has been changed from exclusive agent to regional general agent, granting exclusive agency rights to regional agents and charging regional general agency fees, which is expected to improve the company's gross profit margin. However, due to the expiration of the advertising contract of Xinjiang bingtuan Satellite TV developed by the company last year and the failure to sign a new agreement, it may affect the overall advertising revenue this year. From the perspective of the company's revenue structure in recent years, the company's development direction is changing from advertising business to film and television business.
After 2011, CCTV adjusted its TV drama procurement policy, shifting from outsourcing to supporting "homemade dramas." China Television Media launched the "departure Plan" and signed contracts with five famous domestic directors. began the strategic transformation of the film and television drama business to home-made dramas and boutique dramas. In 2013, Zhao's Orphan case, the opening work of the departure Plan, won the best TV series gold award and best screenwriter award for Magnolia at the 19th Shanghai TV Festival, and was selected into the 2013 selection of Chinese excellent TV dramas by the State Administration of Press, publication, Radio, Film and Television. Under the company's business strategy of "relying on CCTV", it is expected to become an important content production base in the policy transformation of CCTV "homemade drama" in the future. Since 2013, the company is actively exploring new media channels other than traditional TV, such as network-on-demand and IPTV, to digest inventory dramas and open up new marketing ideas. Positive new changes have taken place in film and television business.
Capital operation strategy unchanged system reform dividend period: in 2013, the company's board of directors launched a major asset restructuring in order to achieve great-leap-forward development. it is proposed to acquire the shares held by all the shareholders of Beijing Jinyingma Film and Television Culture Co., Ltd by issuing shares and paying cash. Although the board of directors finally terminated the reorganization, the intention of the management of the company to use the capital market operation to develop and strengthen the main business of the company has not changed. In addition, the company is currently studying and studying institutional reform issues, including market capitalization management, and studying various schemes and possibilities, which will be launched one after another when the time is ripe. In the past two years, the media industry is surging, mergers and acquisitions are changing the traditional competition pattern, and the market structure of the strong is taking shape. We believe that although the time point is still uncertain, the general direction of the company's management to become bigger and stronger through capital operation is very certain. this is also the only way for the company to realize the development strategic plan of "building a leading enterprise of domestic media listed companies".
Earnings forecast and investment advice: if we do not take into account the possible extension growth factors, we estimate that the company's EPS from 2014 to 2015 will be 0.23 yuan and 0.27 yuan respectively, corresponding to the current share price earnings ratio of 62 and 53 times, respectively, and will be rated as "overweight" for the first time.
Risk factors: the endogenous growth rate is not as expected, and the capital operation time lags behind.
