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浙文互联(600986):混改落地国资控股提升 助力亚运会线上推广

Zhejiang Literature Internet (600986): Mixed Reform and State-owned Holdings Upgraded to Help Promote the Asian Games Online

華西證券 ·  Sep 3, 2023 00:00

Incident Overview

On the evening of August 30, 2023, Zhejiang Internet disclosed its semi-annual report. The company achieved revenue of 5.722 billion yuan in the first half of 2023, down 26.09% from the same period last year; net profit attributable to shareholders of listed companies was 71.155 million yuan, an increase of 10.73% over the same period last year.

The gross margin increased significantly, and the expense ratio increased slightly

In Q2, the company achieved revenue of 2,926 billion yuan in a single quarter, a year-on-year decrease of 20.03%; realized net profit of 32.78891 million yuan, a year-on-year decrease of 13.56%. In terms of gross margin, in the first half of 2023, the company's overall gross margin was 5.71%, up 1.32 pct from the same period last year. In terms of cost rate, the sales expense ratio was 1.58%, up 0.24 pct from the same period last year, and the management fee rate was 2.19%, up 0.59 pct from the same period last year. The increase was mainly due to the addition of office housing leases in this period. The R&D expenses rate was 0.30%, up 0.06 pct over the same period last year, and the financial expense ratio was 0.09%, down 0.09 pct from the same period last year, mainly due to the company's enhanced capital management and reduced loan and interest expenses.

Breaking through new customers such as new energy, state-owned enterprises, and central enterprises, AIGC applications reduced costs and increased efficiency. In the first half of 2023, Zhejiang Internet deepened its layout of leading customers. The brand marketing business continued its leading market share position in the automotive industry segment, focusing on breaking through many NEV customers, while also accelerating brand customer service in the non-automotive sector, further expanding among state-owned enterprises and state-owned enterprise customers, and reaching cooperation with many high-quality customers. The company actively explores the application of AIGC's new technology. In the performance marketing business, AIGC technology is used to achieve technical output in scripting, video layout, video rendering optimization, and AI virtual person video content production. Preliminary assessment is that empowering advertising and creative production capacity per capita through technology can be increased by more than 100%; exploring batch tool applications, optimized for basic advertising infrastructure, editing operations, etc. with low technical content, high operation frequency, and high manpower consumption through tools. It can increase advertising production capacity per capita by 300% to improve quality and efficiency.

The holding ratio of state-owned shareholders increased to help promote the Hangzhou Asian Games online. On August 29, 2023, the company disclosed the “Notice on Issuance of Shares to Specific Targets”. It completed targeted increases and raised 800 million yuan in capital, marking the implementation of the company's mixed reforms. Zhejiang Cultural Investment, the company's controlling shareholding ratio in listed companies increased to 16.47%. After the fixed increase is completed, the company's capital strength will be strengthened, and Zhejiang Cultural Investment's industrial resources will also fully achieve industry-finance interaction with Zhejiang Cultural Investment, further opening up new growth space, helping the company continue to anchor “AI+”, deepen development in the field of digital culture and technology, and enhance market competitiveness. Furthermore, the company is the official online brand promotion service provider for the 19th Asian Games in Hangzhou 2022 and the 4th Asian Paralympic Games in Hangzhou 2022 (postponed to September 23, 2023). The company will use cutting-edge metaverse technologies such as digital virtual people, digital twins, and AIGC to give full play to the company's digital marketing enterprise advantages and fully contribute to the Asian Games.

Investment advice: maintain an “increase holdings” rating

According to the latest financial report, we maintain our profit forecast for the company: the revenue forecast for 2023-2025 is 154.74/167.12/17.715 billion yuan, net profit for homologation is 248/2.99/340 million yuan, and EPS is 0.17/0.20/0.23 yuan. Corresponding to the closing price of 6.14 yuan/share on September 1, 2023, PE is 36, 30, and 26 times, respectively. The implementation of the mixed reform has laid the institutional foundation for the development of the company's digital culture technology, and maintains the “increase in holdings” rating.

Risk warning

Risk of impairment of goodwill; risk of market competition; risk of loss of core technical talent.

The translation is provided by third-party software.


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