After two restructuring and two acquisitions, Bai Holdings has become the core bearing platform for the operation of Internet media and content products under China Telecom Corporation, and has been successfully transformed into an intelligent entertainment enterprise with both operator characteristics and Internet characteristics. In the 5G period, the company will focus on the core layout of cloud games, cloud VR and ultra-high-definition video applications, and cooperate with the whole industry chain to build 5G application ecology around content self-production, content operation and content cooperation.
China Telecom Corporation A-share only listing platform, carrying telecom audio-visual game pan-entertainment services. The company is China Telecom Corporation's only A-share listing platform, and through mergers and acquisitions in the later stage of 4G, it has absorbed four companies of Telecom, namely Tianyi Video, colorful interaction, Tianyi Reading and Love Animation, corresponding to the business of high-definition video, online games, online reading and animation, which has become the core carrier platform of China Telecom Corporation pan-entertainment content. With more than 330 million mobile subscribers and 150 million broadband subscribers, the company has a huge potential subscriber base.
The 5G period revolves around the layout of "three main lines", empowers each other with China Telecom Corporation, and the business model is clear. During the 5G period, the company will focus on the three main lines of ultra-high-definition video, cloud games and cloud VR, and enhance the competitiveness of the platform through homemade and cooperative content. Compared with the traditional Internet giants, the company's application platform is mainly for Tianyi users, with the advantages of traffic-free, high bandwidth and low delay, and is expected to be the first to speak at the beginning of 5G. At the same time, the company will earn revenue from providing application rights for telecom 5G users, and the high-speed penetration of Tianyi 5G users will also bring greater flexibility to the company's future performance.
Introduce strategic investors and retain a controlling stake in telecom or a better solution for the company. In 2020, the reform of state-owned enterprises will enter the "deep water zone". As the only A-share listing platform under China Telecom Corporation, the company has strong expectations of mixed reform. Through the asset restructuring in 2016, the company's main business has gradually shifted to the field of Internet entertainment, standing on the same track as the Internet giant. The company is expected to introduce more Internet-thinking power through mixed changes, and reallocate the resources of its subsidiaries, which will help the company achieve a successful transformation in the 5G cycle in terms of revenue and efficiency.
Investment suggestion: the company has both operator characteristics and Internet characteristics, and is the core target of 5G downstream applications. Through the introduction of China Telecom Corporation 5G traffic, the company has taken the lead in the areas of cloud games, ultra-high-definition video and cloud VR to achieve further business transformation. Relying on China Telecom Corporation, the company has the advantages of solid users and network foundation, and is expected to achieve greater performance flexibility by providing application rights and interests for telecom 5G users. It is estimated that the net profit of homing from 2019 to 2021 is 298 million yuan, 414 million yuan and 724 million yuan respectively, corresponding to 46.7,33.6 and 19.2 times of PE from 2019 to 2021 respectively.
Risk tips: 5G promotion is less than expected, market competition intensifies, mixed reform expectations fail, performance is lower than expected.
