Main points of investment:

The customer structure of the channel operation business may be adjusted and it will take time to recover:

As China began to severely restrict the consumption of the "three public" this year, it has had a very significant impact on the tourism industry and the liquor industry. From the interim reports of some domestic tourism and liquor listed companies, there has been a serious decline in income and net profit. According to the data released by the company in mid-2013, tourism customers accounted for 58% of the company's first-half revenue, while consumer customers accounted for 22% of the company's first-half revenue. Therefore, we expect that as tourism and liquor customers reduce their advertising spending, it will have a certain impact on the company's advertising business and annual performance this year, and it will take some time to negotiate and sign contracts to find new alternative customers. However, with the company's popularity and market position, it is believed that the company will be able to enter the rising space again in the second half of 2014.

With the conclusion of CCTV's bidding, the company's market share of agency business has further increased:

The total amount of pre-sales signed on behalf of customers in the 2014 CCTV tender increased by nearly 20% compared with the same period last year, setting a new bidding record for the group over the years, and further expanding its market share. The company represents a substantial increase in the number of customers, in addition to the original insurance, finance, wine, health products customers, including Tencent, SUNING cloud merchants, Letu Travel, China Petroleum & Chemical Corp and other Internet, home appliances, e-commerce, oil industry customers, so that the company's customer structure in this area of business has been further optimized. It is believed that the advertising agency business will maintain a good growth trend in the future.

Lower the target price to HK $7.34. Rating recommendations:

The current price of China Television Jinqiao corresponds to the forecast EPS of 7.82x PE in 2013, and the historical average PE level is 7.71x. We have lowered the company's full-year net profit forecast for 2013, and expect that it will take some time for business adjustment and better growth in the second half of 2014, so we now give the company 7.7x PE in 2014, with a target price of HK $7.34, which is 17% higher than the current price.