Description of the event
The company released the 23rd annual report and the quarterly report for '24: operating revenue for the full year of '23 was 14.628 billion yuan, an increase of 4.66% year on year; net profit to mother was 3.556 billion yuan, an increase of 90.73% year on year. 24Q1 achieved operating income of 3.324 billion yuan, up 7.21% year on year; realized operating profit of 547 million yuan, up 3.69% year on year; net profit to mother of 472 million yuan, down 13.85% year on year, mainly due to the expiration of the corporate income tax exemption policy. The company plans to distribute a cash dividend of 1.8 yuan (tax included) for every 10 shares to all shareholders.
Incident comments
The membership business is growing at an accelerated pace, and advertising revenue is gradually picking up. 1) Mango TV's high-quality content and channels are working in both directions, and the number of members has reached a record high. By the end of 2023, the number of active members reached 66.53 million, up 12.46% year on year; membership revenue in 2023 reached 4.315 billion yuan, up 10.23% year on year, of which Q4 member revenue increased 35.64% year on year. 2) In 2023, advertising business revenue fell 11.57% year on year to 3.532 billion yuan, which is narrower than the decline in the first half of the year; among them, Q4 advertising revenue increased 15.95% year on year, and the year-on-year growth rate changed from negative to positive. 3) In 2023, the company's operator revenue increased 10.27% year-on-year to 2,767 billion yuan, with steady growth. 4) Give full play to the effects of “four platforms” business collaboration and resource integration to build a “1+1+1+N” superior ecosystem. The company completed the share acquisition of Golden Eagle Cartoon. Golden Eagle Cartoon achieved net profit of 63.4737 million yuan in 2023 and fulfilled its 2023 performance promise; Xiaomang E-commerce's GMV exceeded 10 billion yuan in 2023, maintaining rapid development.
2024Q1 “Comprehensive N Generation” continues to be renewed, and the series was well received by the market. 1) In terms of variety shows, in January-January, Mango TV ranked 5, 6, and 3 of the top 10 variety shows in terms of effective broadcast market share across the Internet. Among them, “Big Detective Season 9” was effectively broadcast over 330 million times, leading the online market with a market share of 10.5%; “Flowers and Youth: Silk Road Season” had over 10,889 hot searches on the Internet; and “Endless Sound: Family Years” was read by more than 22 billion people across the network. 2) In terms of series, “With Fengxing” was ranked TOP1 on Mango TV's Hot Content List, TV Series Hot Broadcast List, and Hot Topic List on the first day of its launch; “Asking the Pang Pang” was rated 8.9 on Douban, making it the highest scoring series on Douban Q1.
Build a highland for video creation and strengthen the supply of high-quality content. 1) According to Yunhe data, the effective broadcast volume of variety shows and series features on Mango TV's entire network in 2023 increased by 31% and 46%, respectively, and the growth rate was the highest in the long video industry. In 2023, Mango TV launched more than 100 variety shows, with 128 series including key movies and TV dramas and “The Big Man Project” short series. Of these, 3 series were selected for the “2023 Chinese Series Selection”. 2) In 2024, the company continues to work hard on major variety shows. IPs such as “Ride the Wind 2024” (launched on April 19), “Overcoming Thoroughness”, and “Chinese Restaurant” are ready to launch, and “Singer 2024” is expected to make a big comeback. In terms of series, the company reserves more than 80 movies and 100 short dramas in 2024, and the supply of high-quality content is expected to continue.
Closely following the main line of “integration of culture and technology”, AI promotes business format innovation. The company has launched more than 40 AI products, applying AI to scenarios such as media operations, advertising, and content production, which can help improve recommendation conversion effects, reduce costs and increase efficiency. In addition, the company explores the combination of AI and content, and AIGC audio dramas, AIGC copywriting, and AIGC posters have been widely used.
Profit forecast: We continue to be optimistic about the company's performance growth enabled by S-grade variety encryption, drama breakthroughs, forward-looking skit layout, and AI technology innovation. Considering the impact of income tax, the company is expected to achieve net profit of 2,017 billion yuan and 2,296 billion yuan in 24-25 years, corresponding to current PE of 21/18X, respectively, maintaining a “buy” rating.
Risk warning
1. Content supervision risks;
2. Variety shows and series broadcasts fall short of expectations.