Incident: China Digital Media (000156.sz) held an investor exchange meeting in Hangzhou on March 25. Hong Fanglei, vice president and board secretary of the company, and Jiang Liwen, representative of securities affairs, attended the meeting.
Comment:
The company actively pays attention to development opportunities in AI and other related industries, explores industrial opportunities combined with the company's main business, expands the media resource library, and strengthens the diversified content cooperation system. The company has built a program content cooperation system with many high-quality program content suppliers within and outside the United Nations. It has a million-hour digital program content media resource library, covering topics such as film and television, variety, children, e-sports, records, fitness, finance, etc., and continues to enrich content resources through procurement and aggregation.
Huashu Group, the controlling shareholder of the company, promised to inject cable TV assets and actively expand the investment sector. Huashu Group, the controlling shareholder of the company, has promised that in order to avoid potential peer competition between cable network assets such as CGK Cable and Xinchang Huashu and listed companies, the relevant cable TV network assets and business holdings will be placed in the listed company in an appropriate manner on the premise of complying with national policies. The specific transaction method will be determined by the listed company and the specific circumstances of the assets placed at that time, and the company will proceed with related mergers and acquisitions in due course according to the actual situation. At the same time, the company has been actively investing in high-quality upstream and downstream related companies in the industrial chain. In the future, it will continue to actively expand and investigate investment projects in the fields of digital technology, smart cities, culture and creativity, adhere to steady investment principles, and invest in industries with high certainty, good growth, and high degree of relevance.
The company promotes business growth and market expansion, and its performance continues to grow. Since its listing in 2012, the company's operating income and net profit to mother have increased from 1.51 billion yuan and 170 million yuan respectively in 2012 to 9.39 billion yuan and 790 million yuan in 2022, with cumulative dividends exceeding 2.8 billion yuan. According to the performance forecast disclosed by the company, in 2023, the company is expected to achieve operating income of 95-9.8 billion yuan, net profit of 68—74 billion yuan, and cash on accounts of 5 billion yuan, corresponding to PE <15x (valuation after deducting cash) and PB<1x in 2023. The company is mainly engaged in the three major sectors of smart home, technology, and new media: smart home business, the company will focus on large-scale new scenarios, promote intelligent recommended channels, fully aggregate Internet video content, and strengthen the construction of local specialty content. In terms of smart city digital business, enhance the operation and service capabilities of various digital platforms and comprehensively enhance provincial business development capabilities. In terms of new media business, we will strengthen strategic market development and investment in core content products, innovate new models of **** network cooperation, and create a unique urban integrated media platform. The increase in revenue was mainly due to the growth of the smart city digital business. The company's smart city digital business revenue for the whole year was about 3.6 billion yuan, an increase of about 13% over the previous year. 658 digital projects worth more than one million won, with a total amount of 2.98 billion yuan, an increase of about 12% over the previous year.
2024 is a critical year and an aggressive year for state-owned enterprises to reform and deepen their upgrading actions. The market value management of listed companies will be included in the assessment of those responsible. On January 29, the State Council's State-owned Assets Administration Commission proposed at the 2024 Central Enterprise and Local State-owned Assets Administration Commission Assessment and Distribution Work Conference to comprehensively implement market value management assessments for listed companies. Currently, state-owned enterprises and local state-owned enterprises are making every effort to push forward the new round of state-owned enterprise reform, speeding up the layout of strategic emerging industries, stepping up efforts to promote restructuring and integration, and further promoting value creation as key tasks of the reform. The company said it will continue to pay attention to policy requirements related to market value assessments. We believe that as the incremental policy continues to increase, undervalued state-owned enterprises are expected to face valuation repairs.
Investment advice: As a listed company in Zhejiang Radio and Television, Huashu Media is the country's leading integrated digital content operator and integrated service provider for interactive TV, mobile TV, Internet TV, etc. In the context of AI industry trends and central state-owned enterprise reforms, the company is expected to rely on a rich content media resource library to enhance core competitiveness and achieve value revaluation.
Risk factors: Policies such as market value management of central state-owned enterprises fall short of expectations, the impact of new technology, increased competition, and declining market risk appetite.