This report is read as follows:
The company successfully completed the bond payment and greatly eliminated the uncertainty. since 2019, the company has returned to the main film and television industry, and the reserve of important film and television projects such as "eight hundred" and "Antiquities Bureau 2" has been reorganized, and the real scene entertainment business has moved forward steadily.
Main points of investment:
Lower the target price to 8.99 yuan to maintain the overweight rating. The company paid relevant bonds on schedule to eliminate market concerns about the company's liquidity, senior executives returned to the main film and television business, deepened cooperation with giants to further strengthen the company's film and television content production strength, and the follow-up product line was rich. at the same time, the company's real-life entertainment projects are progressing smoothly, the passenger flow of the opened projects continues to grow, and the project reserves are reorganized. Taking into account the actual situation of the company's project progress, we downgrade the company's EPS in 2019-2020 to 0.19 yuan (- 0.22) / 0.23 yuan (- 0.23). We expect to reduce the target price to 8.99 yuan (- 31.6%) in 2021, corresponding to 47.31 times PE in 2019.
The impairment of goodwill squeezes out the assets and cooperates with the giants to achieve a strong alliance. In 2018, the impairment of goodwill was 973 million yuan, and the performance of the film and television content superimposed on the line was lower than expected, resulting in a substantial loss in the company's annual performance in 2018. In 2019, the company adjusted its business strategy and returned its focus to the film and television business, storing many concerned projects such as "eight hundred" and "Bureau 2 of the Antiques Bureau". At the same time, the company deepened cooperation with giants such as Tencent Ali to realize the docking of its own high-quality content production capabilities with Tencent BABA's financial strength and flow resources, and further strengthened the company's core competitiveness in the field of content production. To lay a solid foundation for the follow-up return of the company's main business to steady growth.
The real scene entertainment project advances steadily, and the operational efficiency of the opened project continues to improve. By May 2019, the company has opened three projects in Haikou, Suzhou and Nanchang. Relying on the understanding of the content of IP and the ability to continuously create high-quality IP, the company continues to create characteristic activities to attract tourists, and the operational efficiency continues to improve. At the same time, it is expected that 2-3 new live entertainment projects will be opened in 2019, and the follow-up project reserve is sufficient, which is expected to open a new business space for the company in addition to film and television content production. Realize the leap of the company from film and television content production to IP whole industry chain operation.
Risk hint: policy supervision and market competition bring some uncertainty