Incidents:

Television, radio and media issued the “Indicative Notice Concerning the Free Transfer of Shares Held by Controlling Shareholders” on December 13. The company received a notice from Hunan Radio, Film and Television Group Co., Ltd., the indirect controlling shareholder of the company, that it intends to transfer 236,141,980 shares of television, radio and media (accounting for 16.66% of the company's total share capital) held by the Network Control Group to Mango Media free of charge. Mango Media is a wholly-owned subsidiary of Hunan Radio, Film and Television Group Co., Ltd. After the transfer is completed, the controlling shareholder of the company will change from Network Control Group to Mango Media, and the actual controller of the company will remain the Hunan Provincial State-owned Cultural Assets Supervision and Administration Commission.

We believe that after the transfer of state-owned shares is completed, it will help enhance the business synergy between television and radio media and Mango Supermedia, and help the company's business develop with high quality:

Mango Media became the controlling shareholder of TV and Radio Media and previously transferred 100% of Golden Eagle Cartoon's shares.

On July 26, 2023, Mango Supermedia issued an announcement stating that it plans to use its own capital of 835 million yuan in cash to acquire 100% of the shares of Hunan Golden Eagle Cartoon Media Co., Ltd. held by Mango Media Co., Ltd. On October 24, 2023, Mango Supermedia paid an equity transfer of 835 million yuan to Mango Media, and Golden Eagle Cartoon Company completed the business change registration procedure for this transaction. We believe that Mango Media has plenty of capital on hand. As a contributor to this share transfer, it is expected to help the continuous development of the television and radio media business.

The unification of controlling shareholders between Radio and Television Media and Mango Supermedia is expected to enhance the subsequent synergy between the two businesses and enhance the integration of Mango IP's online and offline monetization channels.

Mango Media is a wholly-owned subsidiary of Hunan Radio and Television. It holds 1,049 million shares of Mango Supermedia, with a shareholding ratio of 56.09%, making it the largest shareholder of Mango Supermedia. After this transfer, Mango Media's shareholding ratio for TV and radio media will change to 16.66%. We believe that this free share transfer will unify the controlling shareholders of TV and Radio Media and Mango Supermedia, and we are optimistic that TV and Radio Media will continue to build a series of cultural tourism product matrices with Hunan characteristics using Mango IP as the core. Taking Mango's “Super” IP series as an example, the first episode of the “Super Old Voice” program was indirectly the first Golden Week after the opening of Chenzhou 711 Time Town, a project owned by television, radio and media, attracted 200,000 visitors during the first Golden Week; when the “Super Old Voice” rematch landed at the Mango Youth Wharf in Wanlou, Xiangtan, the total number of visitors on Saturday and Sunday was 55,000, up more than 30% from the average weekend traffic. We believe that this free share transfer is expected to help television and radio media to better rely on Mango's brand influence and ecological chain and promote the high-quality development of new cultural tourism and other business sectors.

Investment advice: The company's “cultural tourism+games+venture capital” business layout is diversified and stable, and performance is expected to recover as the macroeconomic performance improves. We adjusted the company's 2023/2024/2025 revenue to 42.63/4758/5.22 billion yuan, respectively, and net profit attributable to the parent company to 2.02/3.04/417 million yuan, maintaining the company's “buy” rating.

Risk warning: macroeconomic risk; risk of increased industry competition; risk of failure of free transfer; risk of regulatory policy changes; risk of decline in traditional advertising business; risk of poor performance of new games; risk of poor performance of investment projects; risk of poor performance of investment projects; risk of poor performance of investment projects; risk of poor business coordination than expected.