Summary of the report:
1. Successfully transform the film and television culture and open up a new pattern of development
The company's main business has gradually transformed from tourist scenic spots to film and television culture business. In 2017, the company's film and television business achieved an operating income of 1.232 billion yuan, and the tourism business achieved an operating income of 89 million yuan. From the perspective of revenue share, the film and television culture business has been the core main business of the company, and the company has developed into a cultural group covering films, TV dramas, artist agents, variety, new media and tourism culture.
two。 Based on high-quality content, promote the industrialization of film and television projects and the industrialization of film and television projects. From 2013 to 2018, the company realized film and television projects from zero to one, and achieved a pattern of both quality and quantity, producing "deskmate", "Love at the same time", "Master", "I am not Pan Jinlian", "Wolf Warriors Ⅱ", "No problem", "Fanghua", "I am not a god of medicine", "nobody" and other high-quality works, the number of movies and TV dramas produced every year is also increasing year by year. Based on high-quality content, we will gradually promote the industrialization and industrialization of film and television projects.
3. The reserve of film and TV drama projects is rich, and "wandering the Earth" is scheduled for the 2019 Spring Festival. According to the company's three quarterly reports in 2018, the company currently reserves more than 20 film projects, of which 7 are expected to be released in 2019. TV series, online drama project reserve project more than 20. The film "wandering the Earth" produced by the company is scheduled for the 2019 Spring Festival, adapted from the work of the famous Chinese science fiction writer Liu Cixin of the same name, directed by Guo Fan and starring Wu Jing, which is worth looking forward to at the box office.
Company profit forecast and investment rating. We estimate that the company's net profit from 2018 to 2020 will be 398 million yuan, 457 million yuan and 515 million yuan respectively, and the corresponding PE will be 19x, 17x and 15x respectively. Based on the fact that the company has the attribute of continuous investment and promotion of popular movies, we are optimistic about the development potential of the company, so we give the company a 20-fold PE valuation in 2019 and a "highly recommended" rating corresponding to the target price of 12.77 yuan.
Risk tips: the film industry growth rate is lower than expected, film and television policy supervision and other risks.