Main points of investment
The company achieved revenue of 1.694 billion yuan in 2018, an increase of 20.9% over the same period last year, successfully reversing the downward trend of revenue. Since 2017, the company has adjusted its strategy in time and launched a "deeply integrated copyright + channel business model". The revenue from information services has increased steadily, and the revenue has increased by 16.49% in 17 years.
Over the past 18 years, while ensuring PC revenue, we have actively deployed mobile social, video and vertical content platforms to achieve growth in advertising business and content review services, and the company will further expand the content audit market in the future.
Relying on the advantages of its own state-owned background, the company has made great efforts to develop the third-party content audit business and made a breakthrough in performance. With the increase of Internet content and categories, the company has increased its market expansion and user development for mobile content risk control business. In 2018, the company's third-party content audit business developed rapidly, with revenue increasing by 166% over the same period last year. With its unique advantages in the content field, the business scope covers graphics and text, music, online literature, animation, audio, video and so on.
The rapid development of the third-party content review market is mainly driven by the vigorous development of the Internet creative content market, the total size of the entire original content market is conservatively estimated to exceed 100 billion, and the scale of the original content market such as short videos and its derivative industry chain such as MCN are in a period of rapid development, and it is expected that the demand for Internet content demand review will be further opened in the future.
(1) from the perspective of users, with the rapid development of various content platforms (short videos, long videos, news, reading, etc.) in recent years, the daily usage time of mobile Internet users has increased steadily, according to Questmobile statistics, it has increased from 341.2 minutes of 18Q4 to 360minutes of 19Q3; in terms of the number of users, with the popularization of infrastructure, the penetration rate of domestic Internet users will continue to increase.
(2) in terms of content, the number of online creators is growing rapidly. For example, the number of creators on Baijia has increased from 900000 in 2017 to 2 million in 2019. Video site Bilibili Inc. 19Q3 has an average monthly active UP of 1.1 million, an increase of 93% over the same period last year, and its contribution volume is 3.1 million, an increase of 83%.
People's Daily online has set up accounts on a number of public platforms to establish a good image and attract a large number of fans. In 2018, the total number of followers of people's Daily online Weibo Corp was 61.88 million, ranking first in online media; the number of official account subscriptions exceeded 6.61 million; and the total number of followers of people's Daily online accounts on major short video platforms such as Douyin exceeded 8.45 million.
Profit forecast and investment rating: in the future, with the vigorous development of the online content market (reading, video, short video, news, etc.), the demand for third-party content review will continue to expand, and the company is expected to rely on its unique advantages to achieve success in this field and drive rapid growth. We estimate that the company's operating income in 19-21 will reach 2.106 billion yuan, an increase of 24.3%, 20.5% and 18.6% over the same period last year. It is estimated that the net profit of return to the home will reach RMB 2.89 million, an increase of 35%, 23%, 24% over the same period last year, corresponding to EPS 0.26, 0.32, 0.4, and PE, times 76-62-50. At present, the company's valuation is at a historically low level, covering it for the first time and giving it a "buy" rating.
Risk hints: macroeconomic risks, intensified competition in the industry, stricter policy supervision.
