China Television Media achieved revenue of 283 million yuan in the first half of 2020, a year-on-year decrease of 25.96%; Guimu's net profit was 557.9913 million yuan, a year-on-year decrease of 187.77%; net profit after deduction was 62,56553 million yuan, a year-on-year decrease of 206.88%.

In terms of gross margin, the company's 20H1 gross margin was -19.53%, down 53.17pct from the previous year, and the net profit margin was -21.61%, down 39.33pct from the previous year. The 20H1 company's sales expenses were 9.4303 million yuan, a year-on-year decrease of 38.38%, a year-on-year decrease of 38.38%, a year-on-year decrease of 3.34%, a year-on-year decrease of 0.67 pct, management expenses of 26.4522 million yuan, a year-on-year decrease of 3.71%, a year-on-year increase of 2.16pct, financial expenses -3,394,900 yuan, a year-on-year increase of 1.31%, and a year-on-year decrease of 0.30pct.

By business, the 20H1 company's advertising revenue was 167 million yuan, down 13.40% from the same period last year; the film and television business revenue was 86.05 million yuan, an increase of 39.87% over the same period last year; and the travel business revenue was 28.71 million yuan, down 77.27% from the same period last year.

In terms of advertising business, the company continues to strengthen in-depth cooperation with General Station. The subsidiary China Television Advertising has contracted advertising resources for the Science and Education Channel of the General Station and the Agriculture and Rural Channel. In terms of the new media business, China Television Advertising has pioneered new short video production and production business. Many of the videos produced have been posted on platforms such as CCTV and Douyin. In terms of film and television, the company continues to strictly control investment projects and investment scale for movies and TV dramas; in terms of programs and program production business, the company continues to cooperate closely with the General Station; in terms of the film and television technology service business, the subsidiary China Television North completed the packaging and production of various TV series broadcast and publication of various TV series for the general station's integrated channel and TV drama channel, and completed the production and technical service work of various programs such as the Science and Education Channel, the Chinese International Channel, the Music Channel, the National Defense Military Channel, and the Variety Channel. In terms of tourism business, after the outbreak of the epidemic at the beginning of the year, the two branches were temporarily closed in accordance with local government requirements, the Wuxi branch was closed for nearly a month, and the Nanhai branch was closed for 77 days.

Since 19, the integration of state-owned media, UHD and radio and television has continued to advance from the top down. CITIC Media is a platform owned by CCTV, and the subsidiary CITIC North is deeply involved in the UHD business, which is in line with the policy development direction.

In the direction of integrated media, in July 19, China Central Radio and Television General Manager's Office was established, proposing development ideas such as “building a new type of world-class mainstream media”, “further innovating and developing”, “building a central station management system to achieve a strategic blueprint for big culture, big capital, and big business”, “strengthen resource integration and allocation, make full use of market-based means to expand and improve the general station industry”, “cultivate capital operation capabilities, explore mixed management and equity incentive reform efforts, and supplement development shortcomings with “culture+finance”.

Investment advice: Due to the impact of the epidemic in 2020, the company's travel and advertising business was impacted to a certain extent. According to the company's forecast, there will still be losses in the first three quarters of 2020. Considering the impact of the epidemic, we lowered the company's 20-year performance to 18 million yuan (previous value: 96 million), and estimated net profit for 21-22 was 133 million/156 million yuan respectively. In the general direction of the industry, we are optimistic about integrated media, ultra-high definition, and radio and television integration logic, and continue to pay attention to policy changes to maintain the buying rating.

Risk warning: The impact of the epidemic, resource coordination between the company and shareholders fell short of expectations, the impact of macroeconomics on advertising, the impact of competition in new media and technology, and production and sales of film and television projects fell short of expectations.