The company's recent situation
Recently, Ning Meng's film and TV series “One Mind Guanshan” was a hit on iQiyi. According to Yunhe data, its maximum broadcast market share in a single day reached 9.9%, once again verifying Ning Meng's ability to produce premium TV series. The company also recently released the 2024 series list, focusing on the five major tracks of “Reality,” “Suspense,” “Urban Romance,” “Costume Master System,” and “Innovation ∞,” further expanding the categories.
reviews
The content reserve is rich, and various tracks go hand in hand. In 2023, the company's 3 series, “Just Love,” “Ask Your Heart,” and “One Mind Guanshan,” have been broadcast one after another, but the number is slightly lower than we expected. Looking ahead to 2024, “Urban Romance”, “You Have Today Too”, and “Handicapped Men and Women” will all die in August 2023. The company plans to promote the “Costume Collection” category “The Return of the Night”, the “Suspense World” category, “Crime Hunting Guide 2,” and the suspense drama “Call at the Entrance” in 2024. The company has extensive reserves of series on various topics. The company expects “Moonlight and a Thousand Leagues,” “Scrolling,” “Baoqingli,” “Book Scrolls and Dreams,” “Clash,” “Little Three Homes,” “Thirty and Only 2,” and “Today Is the Sun and Rain”, which is also expected to be launched in 2024. The company plans to upgrade from 100 to 150 episodes per year in the next 3 years from producing 200 episodes per year to broadcasting 200 episodes per year. We believe that Ning Meng has outstanding production capabilities for premium series, the series planning and layout are perfect, and the content is expected to continue to innovate and iterate.
Continuing to push for dramas to go overseas, the first trailer for the Thai version of “Just Thirty” has been released. On December 7, Ling Meng International also released the 2024 international film list at the Singapore Asia TV Forum Festival. At the same time, the cast of the Thai version of “Just Thirty” was announced for the first time, and the first trailer for the Thai version of “Just Thirty” was released. The company is also planning to adapt the Thai edition of the “Illustrated Guide to Crime Hunting”, which is currently under development. We recommend continuing to pay attention to the potential of Ning Meng's movies and TV series to go overseas.
Extend the advantages of content production and open up new growth points for short dramas. According to the company's announcement, at the beginning of 2023, the company's short drama “29” led the spring festival of short dramas. The original video was viewed more than 800 million times on the Douyin platform, averaging more than 40 million times, and the total number of broadcasts on related topics reached 1.45 billion times across the site. Immediately after the second season of “29” went live, it was on the TOP1 list of the most popular short dramas; “Behind the Traffic” reached 170 million viewers, and the highest number of single episode views exceeded 280 million times, and occupied the TOP1 of the most popular short dramas for 4 consecutive weeks. Looking ahead to 2024, we expect the company to launch short dramas with more themes. We recommend focusing on the increase in production capacity release for subsequent short dramas.
Profit forecasting and valuation
Considering the uncertainty of content launch and cost rigidity, the 2023/2024 non-IFRS net profit was reduced by 25.5%/44.9% to 2.41/300 million yuan. Maintaining an outperforming industry rating, taking into account the decline in profit forecasts and the upward shift in the industry valuation center, the target price was lowered by 24.2% to HK$10, corresponding 13.5/10.9 times 2023/2024 non-IFRS P/E, with potential for 27.1% upward space. The current price is 10.6/8.6 times the 2023/2024 Non-IFRS P/E.
risks
Uncertainty about content launch time and performance, increased industry competition, liquidity risk