2020 performance meets the forecast
Company announcement 2020Annual report: the realized income was 700 million yuan, down 60.74% from the same period last year, and the net loss was 1.926 billion yuan (1.05 yuan in the same period last year), falling into the range of 1.550-1.95 billion yuan in the forecast net loss.
Development trend
The epidemic caused the sports and film and television business to fall into a low ebb, and the rigid cost expenditure formed a loss in the main business. Affected by the epidemic in 2020, the company's two main businesses are at a loss. In terms of sports business, due to the postponement or empty holding of major international events around the world due to the epidemic, sports revenue fell by 57.21% to 660 million yuan, and the growth rate of each sub-sector decreased to varying degrees, of which sports copyright revenue dropped 53.27% to 535 million yuan compared with the same period last year. We expect it to be mainly from La Liga copyright revenue. On the cost side, although the European Cup originally scheduled to be held in 2020 was postponed, the company still had to pay the relevant fees in accordance with the contract, so the sports sector made a gross loss of 141 million yuan, of which the sports copyright business lost 153 million yuan. In the film and television business, revenue fell 83.42% to 39.85 million yuan compared with the same period last year, mainly due to: 1) the epidemic delayed the declaration / release of public TV dramas, and three episodes were delayed, so the contribution of new dramas was limited; 2) only confirmed in 2020, "Maple Leaf Red", "Love me, don't think too much"
And "if the years can turn back" and other film and television revenue, and the previously recognized revenue of "if the years can turn back" reduced the number of episodes and unit price, rushed back to the 2020 income of 149 million yuan; 2) the suspension of business of the company's cinemas affected profits during the epidemic. In addition, due to the cost of some of the series that the company started in 2020, the film and television business lost-15.83 million yuan.
Financial expenses are high, and asset and credit impairment are a drag on profits. In 2020, the financial cost of foreign loans and bonds payable was 690 million yuan, which was a great drag on the performance. At the same time, considering the impact of the epidemic on business, the company has set aside 298 million yuan for inventory decline (we expect it to be mainly for the impairment of inventory related to movies and TV dramas), 306 million yuan for impairment of goodwill (mainly for the impairment of goodwill in the sports sector), and 136 million yuan for bad debts of accounts receivable (we expect to be mainly bad debts related to film and television). We believe that although the provision of asset and credit impairment losses is a drag on the performance in 2020, it will also help to release operational risks and improve asset quality.
The gradual resumption of sports events is expected to help the sports business hit bottom and rebound, new dramas have been broadcast one after another, and long-term growth is expected. Looking ahead to 2021, we think the company has come out of the most difficult period.
In the sports business, with the holding of the European Cup and the continued promotion of Asian Cup equity sales in 2023, we expect to gradually bottom out and rebound. In terms of film and television business, Zheng Xiaolong directed "Happiness to Wanjia" (the company participates in 20%) and plans to launch at the end of 2021.
It is planned to premiere in September, while the company continues to strengthen inventory clearance and reduce the film scale on the premise of the security of return on investment. We expect film and television to recover gradually. In the long run, the company has scarce copyright resources for top international events such as AFC, UEFA and La Liga, and we are optimistic about the profit space that will be released when the company's sports resources return to normal pace.
Profit forecast and valuation
Taking into account the uncertainty of the impact of the epidemic, the 22-year net profit of 21Unix was reduced by 18.5% of net profit by 28.1% to 193 million yuan / 221 million yuan. The current share price corresponds to 18.8 times 21-year earnings. Maintain a neutral rating and a target price of 6.88 yuan (20.8 times the upside of 21-year PE), 10.8%.
Risk
The impact of the global epidemic exceeded expectations, the European Cup was postponed, the film and television inventory was impaired, and the progress of the new film and television start-up project was slower than expected.
