The traditional radio and television business is of good quality and actively arranges ultra-high definition construction. In 2019, Gehua Cable realized business income of 2.759 billion yuan, an increase of 1.12%, making it one of the few companies with positive growth in performance in the radio and television sector. at the same time, the number of 2019Q4 and 2020Q1 cable TV users maintained positive growth. The company continues to make efforts in the field of ultra-high definition, actively promoting the replacement of 4K ultra-clear equipment and the construction of high-quality content of the high-definition interactive platform, making every effort to build a financial media technology platform, improving the service quality of the platform, and at the same time ploughing special areas for education, life and pension services. strengthen cooperation with head resources. Under the background of promoting the development of financial media, the construction of radio and television 5G and the acceleration of national network integration, the company is expected to usher in a new era of development.
In initiating the establishment of a network integration company, or for the main body of listing in the future, in the announcement that local radio and television listed companies disclose their participation in the establishment of a network integration company, only Gehua Cable clearly disclosed that the controlling stake of Beiguang Media, the controlling shareholder, initiated the establishment of a network integration company, while other companies currently participate only in cash. Gehua Cable has a higher degree of participation in the process of establishing a network integration company, and its role card (with the right to nominate directors) has more advantages than other listed companies. We infer that if a network integration company enters the capital market in the future, Gehua Cable may be the main body of its listing.
5G license enables the development of radio and television, hand-in-hand mobile to speed up the business process, the cooperation between China Radio and Television and China Mobile Limited has realized the complementary advantages of both sides and raised our expectations for the development of the radio and television industry. First, the two sides previously belonged to different systems of ecology, including business systems and party and government systems, this cooperation can be regarded as a cross-border alliance, with the prospect of "1-1 > 2" cooperation. Second, there are obvious complementary advantages in the sharing of business resources between the two sides. The 700m prime band held by radio and television is co-built and shared with China Mobile, while the coverage progress of mobile 5G base stations is far ahead among the three major operators. Sharing 5G base stations with mobile will greatly enhance the development process of radio and television 5G business.
Profit forecast
It is estimated that from 2020 to 2022, the company will achieve operating income of 28.76,30.97 and 3.534 billion yuan respectively, net profit of 6.17,6.65 and 739 million yuan respectively, EPS of 0.44,0.48,0.53 yuan respectively, and PE of the corresponding stock price of 23,22,19 times respectively. Coverage for the first time, giving a "overweight" rating.
Risk hint
The development of the 5G industry is not as expected; the progress of the integration of the "national network" is not as expected; the willingness of radio and television users to pay is not as expected; and the progress of the new infrastructure of radio and television is not as expected.
