Summary of content:
As a first-class advertising company in China, Simei Media is a comprehensive advertising service provider. Recently, we have conducted a field survey of the company and formed the following main investment viewpoints:
Content and content marketing business is expected to continue to improve the quality of the company. The company actively develops content and content marketing business, participates in movies and TV dramas and Internet movies, and customizes variety shows for customers. On the one hand, the company's content marketing is more targeted, and the initiative is further enhanced; on the other hand, through getting involved in the content industry, the company's business scope is expanded and the company's performance is significantly thickened. As of the third quarter of 2017, the company's consolidated post-balance sheet profit increased by 54.2%. The content ecological closed loop formed by Simei and Palm Technology, Quan Da Film and Television and Keyi Communication will become an important focus of the company in the future.
Digital marketing has a high growth, and the business sector adapts to market changes. According to advertising data from CTR, the traditional advertising market has declined narrowly in the past two years and picked up in 2017.
But at the same time, Internet advertising has maintained a high growth rate, which is expected to be more than 20%. On the one hand, the impact of new media on the living habits of the public is deepening; on the other hand, the scale of Internet audience is still expanding and the utilization rate is very high. According to CTR's "Internet search Market Competition pattern inventory (third quarter of 2017)", the number of search engine users in China reached 609 million as of June 2017, an increase of 6.4 percent over last year, with a usage rate of more than 80 percent. Simei Media forward-looking attention to the changes in the market, active layout, has acquired search engine marketing (SEM) business Ed Consai and automobile integrated marketer Zhi Hai Yangtao. With the completion of the consolidation, the company's net profit has increased significantly, and the business layout has been further expanded.
Trinity integrated marketing pattern to speed up the optimization and upgrading of the company. At present, the business layout of the company has been basically completed. From the perspective of advertising business itself, through continuous optimization and upgrading, it has shown a trinity integrated marketing pattern of "TV advertising + content + digital".
On the pan-content side, the company has laid out the film and television team in Simi Ben, as well as actively involved in the field of content production and content marketing through Kanda Film and Television. We believe that the company already has relatively sufficient content and marketing resources, and the follow-up integration and collaborative efficiency will be the key to improve the company's management quality in the next few years.
Risk tips: traditional media agency business decline, acquisition target performance is lower than promised, company performance is lower than expected, macroeconomic impact on the advertising industry, related policy change risk, domestic and foreign secondary market systemic risk.