The streaming media strategy is promoted to maintain the "overweight" rating.
The company's Q1-Q3 realized revenue of 7.628 billion yuan,-10.85% of the same period last year; net profit of 1.307 billion yuan, an increase of 1.01%; and net profit of 948 million yuan, 2.2% of the same period last year. Q3 realized revenue / return net profit / deducted non-return net profit of RMB 1.728 million respectively in a single quarter, compared with-39.39%, 30.29% and 19.24%, respectively. Deduction of non-net profit continues to be affected by the epidemic (including film and television, literature and tourism, etc.).
We maintain our profit forecast and estimate that the net profit for 2020-22 will be 15.84x17.65 / 2.005 billion yuan for homing, and 0.550.59 for EPS 0.46max. Comparable company's 20-year Wind consensus forecast average PE 30X, there is a radio and television integration premium, the company's business diversification, which should be a discount compared to the industry average valuation, giving the company a 20-year 22x PE valuation, corresponding to the target price of 10.12 yuan, maintaining the "overweight" rating.
Q3 revenue and gross profit margin fluctuated significantly compared with the same period last year, mainly due to changes in accounting standards. Q3 achieved revenue of 1.728 billion yuan in a single quarter, a sharp drop of 39.39% compared with the same period last year. Q3 gross profit margin increased by 35.89% over the same period last year, mainly due to the impact of accounting standards changes. According to the company's 2019 annual report, since 2020, the recognition of the company's income from goods and services has gradually changed from the full method to the net method, which has significantly affected the company's Oriental shopping revenue and profit margin during the Q3 period. driving the overall revenue growth and gross profit margin to fluctuate significantly.
The expense rate during the Q3 period after the consolidation of Oriental Cable increased, and the investment income increased the net interest rate during the 20Q3 period by 14.02pct to 26.17% compared with the same period last year, of which the sales / management / R & D / financial expense rate was 10.13%, 14.07%, 3.23% and 1.25%, respectively, and + 4.03pct/+7.42pct/+1.61pct/+0.96pct. The rate of sales expenses and management expenses increased significantly, mainly due to the company's 19Q4 and Oriental Cable, which increased the overall expense rate of the company compared with the same period last year. In addition, 20Q3 achieved an investment income of 182 million yuan (a loss of 23 million yuan for 19Q3), which made a significant contribution to the improvement of the net profit margin. The company's Q3 net profit margin increased by 7.74pct to 17.19% compared with the same period last year.
Continue to develop BesTV+ streaming media strategy, comply with the trend of media convergence and Radio and Television 5G Construction Company jointly with Shanghai Radio and Television Station and Shanghai Media Group (SMG) held a 2020 streaming media strategy conference on September 3 to officially release BesTV+ streaming media products.
The company will provide users with multi-content, multi-service, multi-scene, cross-terminal converged media services around the BesTV+ platform. By the end of June 2020, the company's BesTV converged channel platform served 58.23 million IPTV business users, with 45.66 million OTT business users and 18 million interactive VOD users.
In addition, the company's BesTV+ streaming platform was approved as the "Radio and Television 5G Application platform (Shanghai pilot)" of China Radio and Television Network Co., Ltd. on September 18 to explore the preliminary business of the Radio and Television 5G platform.
The streaming media strategy is promoted to maintain the "overweight" rating.
The company complies with the trend of financial media and radio and television 5G construction, and continues to develop BesTV+ streaming media strategy. We maintain the profit forecast and estimate that the net profit from 2020 to 2022 will be 1.584 billion yuan for 17.65 yuan, and the corresponding EPS will be 0.46 yuan for 0.52 yuan. Comparable company in 2020 industry average PE level of 30X, there is a valuation premium of radio and television reform, the company's business diversification, which should be discounted compared to the industry average valuation, giving the company a 20-year 22x PE valuation (the previous value 25X Q3 performance fluctuates obviously, film, television, cultural and tourism business is still under pressure), adjust the target price to 10.12 yuan (the previous value is 11.50 yuan), and maintain the "overweight" rating.
Risk tips: a decline in the number of pay-TV users, a decline in revenue from video shopping, and so on.
