Key points of investment:

Mango Supermedia relies on Hunan Radio and Television. The content has been accumulated for more than 30 years, and the number one advantage of variety shows has continued to expand. The series is on the second curve. As of September this year, Mango TV's MAU exceeded 0.25 billion, ranking third in the industry (according to Questmobile data), and the growth trend is better than that of its peers.

Increased investment in content has paid off, and the share of variety shows has increased. Since 23H2, the company has increased its content investment, and the new copyright value of 23H2/24H1 film and television increased by 39%/8% year-on-year, respectively. Variety has expanded its leading edge. According to Yunhe data, as of 11.5, Mango's effective broadcast market share of full-network variety shows was 31%, an increase of 4 pcts over the previous year, surpassing 6 pcts in second place. 5 of the top 10 online shows were exclusive Mango broadcasts. The series outperformed the market in the second half of the year. According to Yunhe data, as of 11.5, the average daily effective broadcast of 24H2 series on the Changvideo platform fell 15% month-on-month, while Mango increased 24% month-on-month. Among new dramas, the share of Yunhe rated S+ and S series increased 11pct to 36% month-on-month.

24Q4-2025 ushered in a content release period. (1) The 24Q4 variety shows and series had outstanding performances. Variety: “Goodbye Lover 4” is highly topical; “Endless Sound: Hong Kong Music Season 2” is already in production. Episode: “People in the Alley” (produced by Noon Sunshine) went live on 10.28. As of 11.12, it had won the 14th place in the TV series popularity list. Follow-up reserves for the major dramas “The Lucky Family,” “National Color, Fanghua,” and “Five Blessings Arrive at the Door.” (2) The number of subsequent films is richer, and the types are more diverse. I am optimistic that the product cycle will continue to improve. Judging from the information disclosed by Mango Merchants Fair, there are over 100 variety shows, including “Sister,” “Brother,” “Singer,” and “Endless Life,” and “Continuing to Live!”, and introduced leading IP derivative variety shows such as “Detective's Vacation,” and new variety shows such as “Log in to Kauai.” Episodes: Over 100, including costumes, modernity, suspense, and other genres, collaborating with famous film and television producers such as Gao Qunshu. In addition, it also includes over 120 mini-series, as well as evening parties, documentaries, etc.

The inflection point for short-term operations is imminent. The pressure on advertising and operator business was fully released; the advertising business in 22-24 was pressured by macroeconomic influences. If consumption recovered, the advertising business was more flexible; the operator business was affected by large-screen governance, and 24H1 revenue fell 46% year over year.

The increase in the income tax rate from 0% to 15% has already been reflected in the first three quarters of 2024. The higher growth rate of members since 23Q4 (of which 24H1 revenue increased 27% year over year) reflects the strength of content.

Globalization is expected to open up membership revenue and content distribution space. According to the Mango Merchants Fair, the Mango TV international app has covered 195 countries and regions, with a total download of 0.229 billion. The content model is also being exported. “The Sister Who Rides the Waves Vietnam Edition” won the ratings for 15 consecutive weeks, with 33 sponsors setting a record. Mango is a model for state-owned media giants to seize opportunities in technological innovation (Mango TV was founded in 2013 to seize mobile video), and is actively experimenting with AI and MR innovations.

Maintain profit forecasts and maintain buying ratings. Maintain the company's 24-26 net profit forecast of 1.725/1.965/2.259 billion yuan. Maintaining the buy rating, the corresponding 24-26 PE was 31/28/24x.

Risk warning: Variety show performance fell short of expectations, advertising recovery fell short of expectations, and content e-commerce losses fell short of expectations.