Incidents:
The company announced that since traditional assets are about to be divested, the company's management will be adjusted according to the needs of new business development, and Mr. Jiang Yougui (chairman of the wholly-owned subsidiary Taiyi Zhishang and chairman of Zhejiang Furun Digital Chain Technology) will be appointed as the company's general manager. At the same time, the company plans to change the company name to “Zhejiang Furun Digital Technology Co., Ltd.”. This name has been pre-approved by the Zhejiang Provincial Market Supervision Bureau.
Our review is as follows:
Management is further sorting to accelerate the development of emerging businesses and improve internal management efficiency. Changes in the company name and business scope more accurately reflect the actual situation of business transformation and enhance market awareness.
The company plans to divest traditional businesses and focus comprehensively on emerging businesses such as 2B MCN. This time, it has hired Mr. Jiang Yougui, chairman of Taiyi Zhishang, the main management team of the emerging business, as the company's general manager, which is expected to optimize the internal management system, improve the efficiency of emerging business development, and facilitate the company's long-term growth. The company's name and business scope have been changed to increase and highlight Internet services and the digital economy, accurately reflect the actual situation of the company's business, which is more conducive to future business development of the company and enhance market awareness.
Non-net profit of 91.82 million yuan was deducted in a single quarter in the second quarter, a record quarterly high. New business transformation is already on the right track. 2B MCN reached cooperation with brands and platforms such as Douyin, Kuaishou, Taobao Live, etc., and the 2BMCN business model entered the stage of accelerated implementation.
Overall net profit deducted by listed companies increased positively in the first half of 2020. Non-net profit deducted 91.82 million yuan in a single quarter in the second quarter, a record quarterly high. The company plans to divest assets related to traditional businesses, and the transformation results of a comprehensive focus on emerging businesses such as 2B MCN have begun to be reflected.
Taiyi Zhishang, a wholly-owned subsidiary, has reached network-wide partnerships with Binfen Olay (Zhejiang), Hangzhou Niumeng Communications, and Suzhou Hualitang Apparel, including Douyin, Kuaishou, and Taobao Live. Among them, Binfen Olay obtained authorization from Ningbo Romon, agreeing to sell “Romon” and “ROMON” brand clothing; Niu Meng Communications obtained exclusive authorization from “Muji” on the Internet and e-commerce channels; and Hualitang obtained the “Daphne” brand's clothing category live streaming agency license. The company's 2B MCN transformation strategy is being implemented step by step, and we look forward to the continued release of future results.
Investment advice and profit forecasting
The company focuses on core technology platforms such as 5G, big data, and blockchain, and focuses on promoting new 2B MCN services, in-depth cooperation with leading customers in the industry, carrying out accurate online marketing, and building business barriers around digital identity. It is expected to solve bottlenecks such as excessive bargaining power of leading influencers, personnel turnover problems, and limited credibility and insufficient delivery capacity of lower-back influencers. The company's management team has further sorted out and changed the name to highlight the company's new development direction. The transformation has been implemented step by step, and we look forward to long-term growth in the company's performance. The company's net operating profit for 2020-2022 (not taking into account changes in fair value and investment income such as holding shares in Shangfeng Cement) is estimated to be 304, 453, and 653 million yuan respectively. Corresponding to price-earnings ratios of 23 times in 20 and 15 times in 21, the “buy” rating was reiterated.
Risk warning: New business implementation progress is slower than expected, industry competition exceeds expectations, and traditional business divestments are progressing slower than expected
