The company relies on the full license of cable network and new media operation to create an OTT large-screen content distributor in the ultra-high definition era. The company is one of the seven Internet TV licensees in China, providing broadcast control or content services to national operators and IPTV based on scarce licenses, with scarce license resources at the big screen end. By the end of 2019, the company has covered more than 100 million Internet TV business terminals and activated more than 80 million on-demand users. The company makes use of the content aggregation platform to create scarce video content distributors, and deepen giant cooperation, new media content is increasingly rich. By 2022, the overall scale of China's UHD video industry will exceed 4 trillion yuan. The company is expected to benefit from the development trend of ultra-high-definition video and promote the return of large screen value.
Join hands with the headlines to promote the OTT large screen scene in depth. Watermelon Video, as an independent short video App under Jinri Toutiao, has accumulated more than 300 million users in the two years since its establishment, with an average daily use time of more than 70 minutes. It is one of the largest PUGC short video platforms in China. Jinri Toutiao aimed at the rapid development of OTT screen, launched the watermelon video TV version of "Huasu fresh time", which is specially aimed at large screen users. Watermelon video TV version is mainly focused on food, parent-child, games, funny, tourism and other categories of video, forming a high-quality life production, promotion, fan aggregation of PGC content ecosystem, more suitable for family large-screen consumption scenarios. The company is responsible for three-level content audit and content security by providing a broadcast control license on the big screen for watermelon video. During the Spring Festival, "Huasu fresh time" has also become a big-screen broadcast platform for "embarrassing Mom".
Serve the "urban brain" and build a new cultural and educational model of "TV + campus". During the novel coronavirus epidemic in 2020, the company provided an education platform (campus TV station) relying on cable TV terminals for Hangzhou county education bureaus and schools in a short time to support education bureaus and schools to carry out long-distance online teaching. Hangzhou already has Xiaoshan, Lin'an, and many other district and county education bureaus to cooperate with the Vasukai learning program, and hundreds of thousands of students can attend classes through the Huasu TV education platform. The interactive TV love learning education platform provides more than 30,000 episodes of educational video programs with a total duration of 6000 hours, covering all-age audiences including kindergartens, primary and secondary schools and adults. Comprehensive New concept English, Super classroom, NetEase, Inc 100 points, Learning Education, Hangzhou Education Bureau "Masters Open course" and other domestic well-known quality education brands And exclusively cooperate to introduce world-famous popular science education brands such as "Quest" Records and BBC Records, covering more than 6700 high-quality interest development courses such as scientific records, art classes, Sinology dramas and so on.
Investment suggestion: we expect the company's return net profit from 2019 to 2021 to be 6.45,6.85 and 723 million yuan respectively. Considering that the company, as the licensee of new media business such as OTT, will benefit from the industry trend of UHD video in the future, as well as the cooperation with byte jump in the field of OTT, we believe that the reasonable market capitalization of the company in 2020 is 26 billion yuan, corresponding to 38 times PE, corresponding to the target price of 18.16 yuan.
Risk hints: the risk of changes in license policy and authorization, the risk of changes in industry regulation and competition, and the risk of continuous loss of cable TV users.