Main points of investment
On the evening of July 25, the company released the "three-year Plan for Deep Integration and Development (outline)", which put forward the guiding ideology, development strategy, planning goals and key tasks for the all-media construction of the people's Daily. Our comments are as follows:
In the all-media era, the importance of the people's Network "Party Network" was highlighted: on January 25, 2019, when General Secretary Xi Jinping led the political Bureau of the CPC Central Committee to the people's Daily to hold the 12th collective study on "the era of full media and the development of media integration", it was stressed that "it is necessary to speed up the development of media integration so that the mainstream media have strong communication, guidance, influence and credibility," and "the competent departments should fulfill their regulatory responsibilities. Strengthen the management of emerging media in accordance with the law, and "party committees and governments at all levels should increase their support for the development of media integration in terms of policies, funds, talents, and so on." This "Plan" is the implementation of the spirit of the General Secretary's speech on January 25.
The rapid development of mobile Internet has given birth to a large number of new media platforms, which leads to many drawbacks of inadequate information censorship and supervision while obtaining information more quickly. in the era of information explosion, the leading role of the mainstream public opinion of official media is prominent.
People's Daily, as a party media, its political value, communication value, brand value, platform value and capital value will be further highlighted.
Content-oriented, large room for realization of the value of the platform: relying on policy sensitivity, talent and other advantages, the company has a strong original ability in opinion comments, in-depth investigation, authoritative interpretation and policy suggestions. in the future, it will continue to consolidate its "leading" position of the central key news website and become the provider of the best quality original content. Content-based, platform value is expected to achieve multi-channel realization: ① content risk control: one of the goals of this "plan" is to constantly strengthen the Internet content risk control "leading" position. The company intends to participate in Renmin Zhongke (Shandong) Intelligent Technology Co., Ltd., which closely combines the artificial intelligence technology of the Institute of Automation of the Chinese Academy of Sciences with the content risk control capability of Renmin. It focuses on providing technical services for content security management and information security management in Internet space. According to the people's Daily on July 24, the people's Daily has issued 67 "Internet content wind control (junior) certificates" to the public. The company has made a preliminary exploration on standard formulation and personnel training, and will further give full play to the advantages of party media in the future. to provide content risk control consulting services for Internet subjects. ② content operation and distribution: people's Network horizontally connects governments, enterprises, social organizations, academic institutions and other main bodies, and vertically connects dignitaries around the world and the general public. Social accounts (Weibo Corp, Wechat official account, Douyin, etc.) cover more than 280 million people every day, and the communication value is prominent. The company is expected to achieve greater revenue and profit scale through communication in the future, including providing services such as creative guidance, grade certification, promotion operation and market operation for high-quality creators / creative institutions, and providing content producers, disseminators and users throughout the network with services such as copyright trading, operation training, IP incubation, creative marketing, content e-commerce, advertising agencies, etc.
2019Q1 maintained steady growth in revenue and narrowed its losses compared with the same period last year: 2019Q1 achieved an operating income of 313 million yuan (+ 17.20%) and a net profit of-23.3625 million yuan (- 57.8741 million yuan in the same period last year). Revenue growth was mainly due to a large year-on-year increase in revenue from subsidiaries people's Video Culture Co., Ltd., and people's Health Network Co., Ltd.
Investment suggestion: people's Daily, as an official media, plays an important role in propaganda and ideological work. We are optimistic that the company will set up a network based on content and realize its cash space through multiple channels such as content risk control, operation and aggregation. We maintain the company's profit forecasts of 0.30,0.41 and 0.55 yuan per share from 2019 to 2021, and the closing price on July 26 corresponds to PE of 57.9x, 42.2x and 31.1x, respectively.
Risk tips: the content expansion is not as expected, the policy is not as expected, and the downside risk of macroeconomic growth