Introduction to this report:
The company's media presence and brand communication advantages are obvious. It maintains a leading position in lifestyle media while actively expanding media resources in the sinking market. Empowered by big data and AI, it is expected to achieve higher advertising efficiency.
Key points of investment:
Brand marketing value is second to none, actively expand the sinking market, and maintain an “gain” rating.
Despite the challenges of the external environment in the first half of 2024, the company achieved steady growth in business performance. Furthermore, in long-term operation, media resources have covered more than 0.4 billion mainstream people in Chinese cities, and have continuously increased the coverage of the sinking market. At the same time, it has accumulated a large number of large-scale and high-quality customers, and established long-term and stable cooperative relationships. We keep our 2024-2026 EPS forecast unchanged at 0.40/0.45/0.50 yuan, maintain the target price of 8.73 yuan, and maintain the “gain” rating.
Incident: The company released its 2024 semi-annual report. In the first half of the year, it achieved operating income of 5.967 billion yuan, up 8.17% year on year, achieved net profit of 2.493 billion yuan, up 11.74% year on year, realized net profit after deduction of 2.197 billion yuan, up 11.43% year on year; achieved operating income of 3.238 billion yuan in the second quarter, up 10.05% year on year, and achieved net profit of 1.453 billion yuan year on year, up 12.65% year on year It achieved net profit of 1.252 billion yuan after deduction, an increase of 6.82% over the previous year.
The performance is in line with expectations. The media resources are large and the coverage is wide, and the share of consumer advertisers has further increased. As of July 31, 2024, the company's elevator TV media had about 1.097 million units, an increase of 9.05% compared with December 31, 2023. Among them, the third-tier cities had the most significant increase, with a change of 45.31%; the number of self-operated elevator posters was about 1.549 million, which is basically the same as at the end of 2023; 1,835 cooperative cinemas, with a total of 0.013 million cinemas, covering more than 270 cities. In terms of advertiser types, consumer goods advertisers account for nearly 64% of the total revenue of building media and cinema media, which is a significant increase compared to the 2023 mid-year and annual reports. The company's high-quality media point resources and advertiser resources have a leading market share in the outdoor advertising market, and have an absolute advantage in the field of lifestyle media.
Mid-term dividends gave back to shareholders, and operating cash flow rebounded markedly. The company announced the 2024 semi-annual profit distribution plan. It plans to distribute a cash dividend of 1.00 yuan for every 10 shares to all shareholders, for a total of 1.444 billion yuan in the proposed cash dividend, accounting for 57.92% of the net profit returned to mother for the 2024 half year. In addition, the company's operating cash flow in the second quarter was 1.701 billion yuan, a year-on-year increase of 25%, which is a significant improvement over the first quarter.
Risk warning: The advertising market demand is uncertain, and industry competition increases the risk.