Core ideas:
Generation operation: under the trend of e-commerce, brand service providers continue to benefit, marketing company customer resources and brand customer service experience are obvious. According to iResearch Consulting data, the overall size of the operation industry in 2019 is expected to be 215.1 billion yuan. Tmall officially announced at the 2019 Tmall Ecological Conference that the size of Tmall service providers will triple in the next three years, reaching 500 billion market size. with the main demand of the brand and increased support for the platform, the operation industry as a whole will show high growth in the next two years. We believe that the core of agent operation lies in the accumulation of operational experience and typical cases, teams and customer resources.
Participants in different industries work hard on behalf of operating business based on different advantages, advanced entrants in the industry accumulate based on their own advantages, scale effects gradually show, and constantly strengthen the advantages. Compared with other companies, marketing companies are involved in agent operation business and have the advantages of natural customer resources and brand service experience.
Huayang Lianzhong: the head marketing agency company continues to deepen marketing service capabilities, layout brand operation on behalf of the operation, is expected to become the second curve of revenue growth. The company is deeply engaged in marketing business and has accumulated rich resources of cross-industry advertisers. Years of major customer service experience, for the company's marketing business to do in-depth and detailed, as well as the horizontal extension of the business continues to empower. (1) from the perspective of marketing agency business, the company mainly carries out channel expansion, technology layout and IP creativity; (2) from the business extension point of view, the company mainly upgrades the original buyout operation business and extends upward to the product supply chain and downward to the sales link. The company has accumulated experience in agent operation through customers such as Philips, and began to upgrade its brand marketing business in 2019. Based on the company's massive high-quality customer resources at home and abroad, the company is expected to continue to land new service cases. at the same time, through the supply chain + brand agent operation mode to do deep business, bring higher added value to the brand and drive the continuous improvement of business gross profit margin.
Investment advice. We estimate that the company's revenue for 20-22 years will be 115.9 million plus 14.94 billion, with a growth rate of 10.3 percent, 14.2 percent, 12.8 percent, respectively, and the estimated 20-22 net profit for the company will be 2.88, 3.82, and 502 million, respectively, and EPS will be 1.24, 1.65, 2.17 yuan per share, respectively. Starting from the original marketing agency business, the company has achieved certain results based on its accumulated experience in brand main service and rich cross-industry customer resource pool, plus code generation operation business. Considering the growth rate of the future business base and the rapid growth of brand agent operation business, we give the company 30XPE in 2020, corresponding to a reasonable value of 37.35 yuan per share, covering for the first time and giving it a "buy" rating.
Risk hint. The marketing budget of advertisers is cut; the loss of large advertisers; the risk of lifting the ban.
