In March 2019, China Radio and Television signed strategic cooperation with CITIC Group and BABA to jointly promote the national cable television network to the "national one network". In 2019, China Radio and Television obtained a 5G commercial license issued by the Ministry of Industry and Information Technology. The radio and television network is accelerating from "one province, one network" to "one network for the whole country". After a lapse of 10 months, the company restarted the asset injection transaction of Huasu Group again. This plan injects 91.3% of Huasu in Zhejiang Province and 100% in Ningbo Huasu to further deepen the integration of Huasu Media's radio and television network. The company will continue to benefit from the integration of radio and television network and the promotion of radio and television 5G business.
Multi-services go hand in hand, and continue to promote the integrated development of intelligent radio, television and media.
After nearly 25 years of development, the company has gradually carried out interactive TV, mobile TV, Internet TV and Internet audio-visual program services, gradually reducing its dependence on traditional radio and television business, and the revenue share of traditional radio and television business continued to drop to 33% in 2018. The company has IPTV, mobile TV, Internet TV integrated operation license, continue to strengthen the construction of digital content, the advantages of the platform are gradually highlighted. At the same time, the company actively joins hands with partners to seize the opportunity of 5G, develop smart radio and television, create a product application matrix, and transform and upgrade from traditional radio and television to "intelligent radio and television + operators and service providers". In addition, the company continues to enhance the construction of intelligent infrastructure and further promote the development of media convergence.
The revenue grows steadily, and the dividend rate has a lot of room to improve.
In the past five years, the company's revenue has grown steadily, with an average annual compound growth rate of 13.79%. In 2018, the company's revenue reached 3.436 billion yuan, an increase of 7.06% over the same period last year, an increase of 2.9pct over 2017. During the past five years, the expense rate has declined steadily, and the profit margin has remained stable. Cash flow is abundant, and monetary funds have gradually rebounded since 2017. In addition, compared with the listed companies in the same industry, there is still much room for improvement in the dividend rate.
Profit forecast and investment advice
We estimate that from 2019 to 2021, the company will achieve revenue of 3.522 billion yuan, 3.762 billion yuan and 4.095 billion yuan respectively, an increase of 2.53%, 6.8% and 8.84% over the same period last year, and its net profit will be 685 million yuan, 746 million yuan and 811 million yuan respectively, an increase of 6.45%, 8.8% and 8.71% respectively. The corresponding PE are 21.74x, 19.98x and 18.38x, respectively. Consider that the company, as a leader in the radio and television industry, will continue to benefit from the landing of radio and television 5G and national network integration, covering for the first time and giving a "overweight" rating.
Risk hint
The risk of industry policy change, the promotion of national network integration is not as expected, the speed of asset injection is not as expected, the risk of industry competition is intensified, and so on.