The advertising business is a drag on the company's 19-year profit level, and 20Q1 is under pressure due to the epidemic affecting short-term performance.
China Television Media achieved revenue of 856 million yuan in 2019, an increase of 5.54% over the same period last year, and its net profit was 89.8924 million yuan, down 21.51% from the same period last year. Of this total, advertising revenue was 357 million yuan, down 7.53% from the same period last year, and gross profit was down 56.31% from the same period last year; film and television revenue was 257 million yuan, up 32.02% from the same period last year, and gross profit increased by 24.57% over the same period last year; tourism revenue was 239 million yuan, up 4.72% from the same period last year, and gross profit increased by 4.22% over the same period last year.
At the end of 2019, China Television Advertising won the right to contract and operate the advertising resources of the agricultural and rural channel in 2020, but due to the macroeconomic downturn, the increased impact of new media advertising and the increase in advertising agency costs, the company's advertising sales revenue declined in 19 years compared with the same period last year, and the gross profit margin declined 18.65pct compared with the same period last year.
After the 20Q1 COVID-19 epidemic, the company's tourism business and advertising business were affected. Wuxi Film and Television Base and Nanhai Film and Television City were closed periodically. It was more difficult for the advertising business to maintain existing orders and open up new customers. The company's Q1 revenue was 156 million yuan, down 25.32% from the same period last year, and its net profit was a loss of 32.84 million yuan.
Over the past 19 years, the integration of state-owned financial media, UHD and radio and television has been continuously promoted from top to bottom. CCTV Media is the platform under CCTV, and the subsidiary of CCTV Northern is deeply cultivated UHD business, which is in line with the direction of policy development.
In terms of financial media, in July 19, the General Manager Office of the Central Radio and Television General Station was established, proposing "building a new type of international first-class mainstream media", "industrial management ideas should be further innovated and developed", and "the construction of the main station management system." to realize the strategic blueprint of big culture, big capital and large operation "," strengthen the integrated allocation of resources, make full use of market-oriented means, expand and optimize the main station industry ", and" cultivate the ability of capital operation. Explore mixed operation and equity incentive reform, with "culture + finance" to make up for the shortcomings of development and other development ideas.
In terms of UHD, in March 2019, the Ministry of Industry and Information Technology issued the Action Plan for the Development of Ultra HD Video Industry (2019-2022), proposing that the overall scale of China's UHD video industry in 2022 exceeded 4 trillion yuan, the ecosystem of 4K industry was basically improved, and breakthroughs were made in the R & D and industrialization of 8K key technology products, forming a number of internationally competitive enterprises. On August 19, 1919, the State Administration of Radio, Film and Television issued the opinions on promoting the High-quality Development of Radio, Television and Internet Audio-visual Industry, once again strengthening and speeding up the construction of HD TV and 4K/8K ultra-high definition, and especially proposing to support listed enterprises to become stronger and bigger.
In terms of radio and television integration, the State Administration of Radio and Television held a teleconference in Beijing on March 2, 20, to launch the national cable television network integration and the integrated development of radio and television 5G construction.
Investment advice: due to the impact of the epidemic in the past 20 years, the company's business performance is expected to be affected, but it does not affect the company's long-term sustainable profitability, the company will fully implement the film and television, advertising and tourism business strategy.
Considering the epidemic situation and Q1 performance, we downgrade the company's performance and expect the net profit for 20-22 years to be 96 million / 133 million / 157 million yuan respectively (189 million / 218 million before 20-21, no previous value for 22 years). Since the beginning of the year, we have been optimistic about the logic of financial media, ultra high definition and radio and television integration. As a media listing platform under CCTV, CCTV is expected to get another development opportunity to continue to combine policy changes and maintain its buy rating.
Risk tips: the impact of the epidemic, the coordination of resources between the company and shareholders is not up to expectations, the impact of macroeconomic on advertising, the impact of new media and new technology competition, film and television project production and sales are not up to expectations.