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米奥会展(300795):持续加筑壁垒 收入利润释放可期

Miao Exhibition (300795): Continued construction of barriers, revenue and profit can be expected to be released

華西證券 ·  May 22, 2024 16:00

The exhibition is a good business, with impressive profit margins and cash flow

The global exhibition leader Infoman brand has far-reaching influence, high product premium capacity, and good financial predictability:

1) Deepen specialization, incubate 450 sub-brands worldwide, and the annual revenue of leading exhibition brands exceeds 100 million US dollars;

2) Brand strength creates a strong premium. In 2017-2019, the operating profit margin of the Informa Market segment was above 30%;

3) The exhibition has strong monetization capacity. In addition to booth fees, visitors, sponsors, and advertisers all contribute revenue;

4) Financial predictability is high. Under the advance payment model, more than 40% of the annual revenue can be locked in at the beginning of the year.

Mio is a leader in overseas exhibitions and has established multiple competitive barriers

According to statistics on booth sales volume, exhibitors, and exhibition area, the company's market share in 2023 all ranked first in the industry. Although there is still a gap between profit margin and scale compared to leading companies, we believe that the company has established deep barriers in terms of 1) exhibition hall resources; 2) overseas buyer resources; and 3) brand power.

Specialization+large-scale development, expected to continue to release profits

1) 2023 is the first year of the company's professional development. The growth path of single-region expansion+regional replication is clear, helping the company's booth sales grow rapidly. In the long run, China's exhibition industry currently covers more than 40 industries, and the company is expected to expand the industry through cooperation in organizing exhibitions.

2) Online trade is an online matchmaking tool launched by the company on the basis of offline exhibitions. It began contributing revenue in 2017, and the penetration rate is expected to gradually increase as technology continues to iterate. According to our estimates, the revenue contribution of online trade products is expected to exceed 200 million yuan in the medium term.

3) The exhibition industry has a strong scale effect, and the gross margin of exhibitions of different sizes varies greatly. The company's average number of exhibition booths reached 765 in 2023, and the gross margin of self-hosted exhibitions was much higher than before the pandemic. The scale of the single exhibition is expected to expand further in 2024, and there is room for continuous improvement in gross margin.

Investment advice

We slightly adjusted our previous profit forecast. We expect the company to achieve revenue of 11.4/14.2/1.70 billion yuan respectively on 24-26 (original forecast was 11.5/14.2/1.66 billion yuan), net profit due to mother of 2.8/3.5/450 million yuan (original forecast was 2.8/3.5/4.4 billion yuan), and EPS was 1.21/1.53/1.94 yuan, respectively (original forecast was 1.82/2.30/2.84 yuan; increase in share capital greatly dilutes EPS). Referring to the closing price of 20.66 yuan/share on May 23, 2024, the corresponding latest PE was 17x/13x/11x, respectively, maintaining the company's “gain” rating.

Risk warning

(1) Risks such as entry and exit restrictions and exhibition extensions due to repeated epidemics; (2) Risk of impact on the economy and exhibitions of countries or regions such as the “Belt and Road” and RCEP; (3) Risk of declining export trade; (4) 2021

The company was issued a warning letter because the performance forecast did not match the final audit results.

The translation is provided by third-party software.


The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
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