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米奥会展(300795):上半年业绩承压 看好外展龙头长期成长

Miao Exhibition (300795): Performance in the first half of the year is under pressure, and I am optimistic about the long-term growth of leading outreach companies

華西證券 ·  Aug 5, 2024 16:00

Incident Overview

The company released its financial report for the first half of 2024. In the first half of 2024, the company achieved operating income of 0.26 billion yuan, -26.39% year-on-year, and realized net profit of 0.041 billion yuan to mother, a year-on-year decrease of 46.56%. The Q2 Company achieved operating income of 0.184 billion yuan, or -35.57% year-on-year, and realized net profit to mother of 0.036 billion yuan, or -52.2% year-on-year.

Analytical judgment:

Revenue in the first half of the year was under pressure due to scheduling factors, gross margin increased due to scale effects, and net interest rate declined due to cost-side rigidity:

According to the performance forecast previously released by the company, exhibitions in the four countries of Mexico, Brazil, Germany, and Poland held in the first half of 2023 were adjusted to be held in the second half of '24. Due to scheduling factors (9 events in the first half of '23, and 6 in the first half of 24), the company's revenue declined year-on-year. 24H1 gross profit margin was 54.18%, up 2.4 pct year on year. Q2 company's gross profit margin was 54.08%, up 3.8 pct year on year. We believe that the increase in gross margin was mainly due to the scale effect brought about by the increase in the scale of individual exhibitions. 24H1's net profit margin was 17.60%, down 5.24pct year on year, mainly due to the fact that the exhibition is a labor-intensive industry, and the cost side is relatively rigid: 24H1 sales expenses ratio reached 25.6%, up 7.61% year on year, and 24H1 management expenses ratio was 8.54%, up 1.49 pcts year on year.

Specialized reforms continue to be implemented, and the repurchase rate of VIP customers has increased:

The company continued to push forward specialized reforms during the reporting period. According to the company's financial report for the first half of '24, after the company's 8 major industry exhibitions were held at the same time in 2023, the company further deepened the implementation of professional exhibitions, and expanded to 11 major industry professional exhibitions in the first half of 2024. According to the company announcement, the June 2024 Indonesia exhibition covered 10 industries, and the Dubai exhibition covered 6 industries. We believe that as specialized reforms advance, various specialized exhibitions are expected to achieve more regional replication. The service model of the exhibition was upgraded and innovated simultaneously during the reporting period. Exhibitors, categories of exhibits, buyer invitations and visitors were all matched according to various industry categories to ensure the effectiveness of professional exhibition visits and exchanges, and improve the efficiency of exhibition transactions. According to the company's announcement, the overall repurchase rate of VIP customers reached 35% in 2023, while the proportion of VIP independent companies in the first half of the 2024 exhibition repurchased nearly 60% of the exhibition projects in the second half of the year.

Cooperation in organizing exhibitions and continuing promotion of internationalization:

In the first half of 2024, the company cooperated to host 4 exhibition projects, namely TIN Indonesia Industrial Equipment and Components (Joint) Exhibition, CIE China International Education Equipment (Indonesia) Exhibition, MTM Metal World Expo, and ISS Indonesia Sporting Goods Exhibition. According to the company's announcement, the 2024 China Sports Fair (Indonesia) Exhibition, co-hosted by the China International Sporting Goods Fair Organizing Committee, Zhejiang Miolante Business Exhibition Co., Ltd., and China Sports Federation (Beijing) Sports Industry Development Co., Ltd., is scheduled to be held on November 27-30, 2024 during the China (Indonesia) Trade Fair.

In terms of internationalization, the company has set up branches in key regions such as Dubai and Osaka, and set up subsidiaries in places such as Singapore and Indonesia, with more than 100 overseas employees. At the AFF exhibition in Japan in the first half of 2024 and the exhibitions held in Indonesia and Dubai, local exhibitors from Japan, Indonesia, and the United Arab Emirates have already appeared. We believe that international exhibitors are expected to gradually contribute more as the company establishes its exhibition brand image.

Implement a high percentage of semi-annual dividends, and the dividend returns are impressive:

According to the company's 2024 semi-annual profit distribution plan, the company plans to distribute a cash dividend of 67.78 million yuan, accounting for 96% of the total distributable profit. The company's annualized dividend (23 year dividend+24 semi-annual dividend) reached 0.144 billion yuan. The current stock price corresponds to a dividend rate of 4%, and the return is relatively impressive.

The company has deep barriers, an excellent business model, and a medium- to long-term high-growth exhibition. We believe that the company will continue to enjoy racetrack dividends. At the same time, the company has outstanding resources, flexible management strategies, and high growth in the medium to long term. 1) The company is a leader in outreach and has deep operating barriers. According to the company's annual report, the company's overseas exhibition area, number of exhibitors, number of booths, etc. all accounted for more than 50% of the parameters of the overseas exhibition project approved and implemented in 2023, ranking first among domestic exhibitors organizing overseas exhibitions. The first-mover advantage in IP, pavilion resources, and overseas layout is remarkable. 2) Continued promotion of specialization and internationalization to help long-term growth. The specialized layout is gradually taking shape, organizing industry forums, empowering Chinese manufacturers and Chinese brands to go global, serve more suppliers on the basis of deep industry cultivation, expand the scale of professional exhibitions, and attract more professional buyers to participate in the company's professional exhibitions, forming a virtuous circle. The company invested in the establishment of a wholly-owned subsidiary in Singapore and set up a company in Indonesia to help develop the RCEP national exhibition business. The exhibitors are expected to gradually expand to overseas foreign trade enterprises. 3) Digital construction enables exhibition upgrades. According to the company's annual report, the company has achieved widespread use of AI in data matching, content generation, and video production, and has gradually created a data-driven digital professional exhibition to accurately connect the entire link of digital exhibition, digital exhibition, and digital exhibition viewing.

Investment advice

In view of the uncertainty brought about by factors such as geopolitics and global macroeconomics, and that the company is still in the early stages of specialized reform, we lowered our previous profit forecast. We expect the company to achieve revenue of 1.08, 1.36, and 1.64 billion yuan respectively on 24-26 (the original forecast was 1.14/1.42/1.7 billion yuan), and net profit due to mother was 0.25, 0.33, and 0.41 billion yuan, respectively (the original forecast was 0.28/0.35/0.45) billion yuan), EPS was 1.09/1.42/1.78 yuan, respectively (original forecast was 1.21/1.53/1.94 yuan). Referring to the closing price of 15.85 yuan/share on August 6, 2024, the corresponding latest PE was 15x/11x/9x, respectively, maintaining the company's “gain” rating.

Risk warning

(1) Risks such as entry and exit restrictions and exhibition delays caused by repeated epidemics; (2) the risk of international political conflicts impacting the economies and exhibitions of countries or regions such as the “Belt and Road” and RCEP; (3) the risk of declining export trade.

The translation is provided by third-party software.


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