Events:
20H1's revenue rose 3.41% year-on-year to 5.9 billion yuan; net profit deducted from non-return increased 5.02% to 750 million yuan; and cash flow from operating activities increased 171.61% to 940 million yuan.
Comments:
20H1 deducted non-net profit increased by 5.02% compared with the same period last year. 1) Film and television revenue fell 42.86% to 122 million yuan compared with the same period last year; after returning to work and production, the company invested in a series of plays, and the project resource reserve was stable; 2) the game business income was 122 million yuan, an increase of 52.47% over the same period last year; key mobile games were well marked, "radiation Sanctuary OL" ranked at the top of the list of multi-regional free games, and "Convex World" ranked at the top of the list of free games in the first week of launch. The only generation of "the contract of the Magic Beast" and "the Star of Mithra" has won the edition.
The revenue of the media network business is 2.485 billion yuan, excluding the influence of the combined factors of Oriental Cable, the business decreased by 18.86% compared with the same period last year. The company continues to promote the building of BesTV+ converged media platform, and will carry out strategic upgrading and transformation in the future. Positioning and radio and television 5G platform operators and service providers. 1) IPTV revenue reached 796 million yuan, a year-on-year decline of 58.23 million 18.62%:BesTV IPTV users and 29 resident sites nationwide, continuing to maintain the leading position in the operator channel market; Internet TV users continued to increase, reaching 45.66 million users; and 2) cable digital pay TV revenue totaled 126 million yuan, down 14.99 percent from the same period last year.
Video shopping business and literature and travel consumption income are affected by the one-time impact of the epidemic and changes on the demand side. 1) Video shopping revenue totaled 1.205 billion yuan, down 58.61% from the same period last year; the company made extensive use of new media channels to promote "MCN webcast" and explore innovative modes of video shopping through successful cooperation with foreign giants such as Tmall, JD.com, XIAOMI, etc. 2) the consumption income of culture and tourism is 1.872 billion yuan, an increase of 105.25% over the same period last year. Under the epidemic, the business of literature and tourism consumption has been affected to a certain extent. With the weakening of the impact of the epidemic in the future, we expect the consumer demand of culture and tourism to recover.
Profit forecast, investment rating and valuation: with the launch of the company's BestTV+ converged media platform and strategic upgrade, the company's media network platform will usher in a transformation opportunity. After the one-time impact of the epidemic, the cultural and travel business may usher in a recovery. Slightly lowered the company's 20-21 EPS forecast to 0.59 EPS 0.72 yuan, an additional 22-year forecast of 0.75 yuan, the current price corresponding to the PE of 18G 15max 14x, the valuation is still low, maintaining the "buy" rating.
Risk tips: loss of large screen users, intensified competition in film and television business, and decline in TV shopping.
