Main points of investment
The company achieved revenue of 2.15 billion in 2019, an increase of 26.95% over the same period last year, maintaining a stable trend. The net profit of deducting non-return was 275 million yuan, an increase of 41% over the same period last year, and the overall gross profit margin increased to 50.76% from 44.69% in 18 years. This is mainly due to the rapid growth of revenue from information services and mobile value-added services and the substantial increase in gross profit margin. 1Q20's operating income was 321 million yuan, an increase of 2.44% over the same period last year, deducting non-return net profit of-25 million yuan, down 5.14% from the same period last year.
The information service industry chain has been improved, and the gross profit margin has increased rapidly. In 19 years, the income of information services was 603 million yuan (+ yoy 35.82%), and the gross profit margin was 43.68%, an increase of 14.33% over the same period last year, mainly because the company had the right to collect and edit news independently, which was formed by "news gathering and editing-information release-information service".
Complete operation model, through copyright sales, public opinion analysis and big data and other value-added services, to provide customers with the operation of websites and platforms to achieve profitability, the current domestic mainstream media platforms are corporate customers.
With the vigorous development of Internet creative content, the demand for content risk control is increasing rapidly. Relying on its advantages in the field of news, the company has made great efforts to develop the third-party content audit business and made a breakthrough in performance. In 19 years, the revenue of mobile value-added services was 365 million yuan, an increase of 16.4% over the same period last year, and the gross profit margin increased from 43.07% in 18 years to 51.32%. The increase in gross profit margin is mainly due to the improvement of the company's technical capacity and improving the cost structure, which is expected to remain stable in the future.
The rapid development of original content will further promote the rapid development of third-party audit service business, the company audit business covers a wide range of types, including graphics and text, music, network literature, animation, audio, video and so on. (1) in terms of market size, the total size of the entire original content market is conservatively estimated to exceed 100 billion, and e-commerce such as short video and live streaming are in a period of rapid development, and the demand for Internet content demand review will be further opened in the future. (2) from the user's point of view, the daily usage time of mobile Internet users has increased steadily, from 341.2 minutes of 18Q4 to 360min of 19Q3, according to Questmobile statistics. With the advent of the 5G era, the penetration rate of Internet users will continue to increase. (3) in terms of content, the number of online creators is growing rapidly. For example, the number of creators of Baijia has increased from 900000 in 2017 to 2 million in 2019, and the number of original content creators of Bilibili Inc. 19Q4 has increased by 80% to 1 million compared with the same period last year, with an average monthly contribution of 2.8 million.
The traditional advertising business remains stable and the company's brand image is good. 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 Wechat 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: the company's 20-22 operating income is expected to reach 25.91max / 3.595 billion, an increase of 20.5%, 18.6%, 17%, and an estimated net profit of 4.23, 5.09 / 596 million, 25.5%, 20.5%, 17%, corresponding to EPS 0.38, 0.46, 0.54, and PE, 56-47-40, maintaining the "Buy" rating.
Risk hints: macroeconomic risks, intensified competition in the industry, stricter policy supervision.
