occurrences
The company announced that in the first half of 2024, the company achieved revenue of 5.967 billion (yoy +8.17%), achieved net profit of 2.493 billion (yoy +11.74%), and achieved net profit of 2.197 billion (yoy +11.43%) after deduction.
Among them, 24Q2 achieved revenue of 3.238 billion (yoy +10.0%), realized net profit of 1.453 billion (yoy +12.6%), and realized net profit of 1.252 billion (yoy +6.8%) after deduction.
Demand side: 24H1 outdoor advertising demand has been significantly restored
According to CTR data, the overall advertising market rose 2.7% year over year in the first half of '24. Among them, advertising spending on elevator LCD increased 22.9% year on year in the first half of '24; advertising spending on elevator posters increased 16.8% year on year; and advertising cost on cinema videos decreased 4.5% year on year.
Judging from the situation of leading advertisers, the top 5 outdoor advertising campaigns in the first half of '24 were Little Monkey, Eli, Blue Moon, Tmall, and Deyou, all of which were popular customers; judging from the structure of the advertiser industry, industries such as cleaning products, cosmetics/bathroom supplies, and alcoholic beverages increased significantly in the first half of '24.
Supply side: The number of elevator TVs in the sinking market continues to increase, accelerating overseas market layout1) Elevator TV media: By the end of July '24, the company had a total of 1.181 million units (up 25.11% year on year), including 1.097 million self-operated media devices (up 22.98% year on year). The domestic self-operated equipment location structure has been continuously optimized, with 0.268 million points in first-tier cities (up 19.11% year on year), 0.58 million in second-tier cities (up 17.89% year on year), 0.093 million in third-tier cities and below (up 69.09% year on year), and 0.156 million points overseas (up 30.00% year on year).
2) Elevator poster media: As of the end of July '24, the company had a total of 1.952 million units (up 3.94% year on year), including 1.549 million self-operated media devices (up 0.1% year on year).
The number of points in first-tier cities is 0.429 million (up 1.90% year on year), 0.908 million in second-tier cities (down 1.30% year on year), 0.193 million in third-tier cities and below (down 3.50% year on year), and 0.019 million points overseas (up 216.67% year on year).
3) Cinema media: By the end of July '24, the company had cooperated with 1,835 cinemas (an increase of 0.44% over the previous year), about 0.013 million cinemas, covering moviegoers in more than 270 cities in China.
Dividends: High-frequency dividends give back to shareholders, demonstrating confidence in the company's future development. Based on a total share capital of 14.442 billion shares, a cash dividend of 1.00 yuan was distributed to all shareholders for every 10 shares. In total, a cash dividend of RMB 1.444 billion was distributed, accounting for about 57.92% of the company's 24H1 net profit. The company aims to provide investors with more timely cash flow returns by increasing the frequency of dividends, and further enhance investors' confidence in the company's long-term business development.
In December 2023, the company disclosed its dividend plan for the next three years, and cash dividends will be distributed every year according to not less than 80% of net profit attributable to shareholders of the listed company for the current year after deducting non-recurring profit and loss.
Optimistic about sinking urban demand and actively cooperate with Meituan
The company said it is actively exploring ways to cooperate with Meituan, hoping to open up online and offline marketing channels by leveraging their respective advantages, thereby increasing their penetration rate in low-tier cities.
Currently, the two sides have selected some cities as pilot projects, and will adjust or confirm further cooperation models and promotion coverage in the future depending on the pilot situation.
Investment advice
The company's 24E-26E revenue is estimated to be 13.008/14.156/15.094 billion yuan respectively (15.795/17.734 billion yuan 24-25 years ago), and net profit to mother is 5.163/5.66/6.037 billion yuan (6.779/7.733 billion 24-25 years ago), respectively, maintaining the “buy” rating.
Risk warning
Macroeconomic pressure continues; advertising demand recovery falls short of expectations; industry competition intensifies