Dongxing Securities (Hong Kong) released a research report that expects Yaoshi GSMG.US 's revenue to grow by about 50% in 2021. Combining the company's own fundamentals and historical market valuation, comparable peer fundamentals and valuation, the company is given a 12-month target price-to-sales ratio of 2.21 times, corresponding to a target price of US $6.05 per share, and a reasonable expected valuation of about US $409 million. The company's current share price still has 168% room to rise above its target price.
Since its inception, Yaoshi Xinghui has focused on providing advertising and content production services, the report said. After the launch of pleasure Video App in 2018, the company is becoming one of the leading e-commerce platforms in China through the pleasure Mall platform, video content, live streaming and online games in App, combined with technology such as blockchain. According to GMV in the first half of 2020, the company has ranked among the top five video content e-commerce platforms and is one of the few profitable companies in the industry.
According to the data of the first quarter of 2021, the number of video App downloads of the company exceeded 192 million, the DAU reached 7.1 million, the number of SKU in the shopping mall reached 36887, and the GMV exceeded 432 million yuan. In May 2021, the company spun off the e-commerce business from the enjoyable video App and launched the pleasure Mall App separately to develop the content e-commerce business more specifically while maintaining the synergy between the businesses.
Dongxing Securities (Hong Kong) believes that as the company vigorously promotes the development of video content e-commerce, explores multi-dimensional ways of realization in the original cash business, and actively lays out the industrial ecology of the digital economy, the company's business will maintain rapid growth.
It is mentioned in the report that under the content enabling, the new consumption model has become a sharp tool for the company to realize cash. Yaoshi Xinghui has been laying out the consumer side under content enabling since 2018. Strengthen the interaction with consumers through live network programs, and take the lead in launching the first batch of domestic live network programs such as "chopped hand Genius". After the launch of Yue Hang Mall in 2019, the commercialization of Yaoshi Xinghui has entered an accelerated stage. Through cooperation with brand merchants, Yaoshi Xinghui has rapidly expanded the number of SKU in the mall with a light asset model. at the same time, the own brand "pleasure selection" of Yaoshi Mall continues to mature in the healthy competition.
At the same time, blockchain and NFT technology have become an important innovative business segment for the rapid growth of Yaoshi Xinghui performance. In addition, in addition to enabling the realization of new consumption of its own content, the company also cooperates in many fields to explore multi-dimensional ways of realization.
Dongxing Securities (Hong Kong) said that the company's advertising revenue grew 116% in 2020 compared with the same period last year, which is much faster than the growth rate of the entire online advertising market. It is expected that the company's advertising revenue growth in 2021 will still be significantly higher than the industry's year-on-year growth. In addition, the market expects the PGC video content e-commerce market to maintain a compound annual growth rate of 32.5% from 2020 to 2024. Considering that the company's e-commerce business has just started and has a low base, the company's e-commerce business is expected to maintain rapid growth of about 100% in 2021.
Based on the above judgment, Dongxing Securities (Hong Kong) expects the company's revenue to grow by about 50% in 2021, combining the company's own fundamentals and historical market valuation, comparable peer fundamentals and valuation. The company is given a target price-to-sales ratio of 2.21 times over a 12-month period, corresponding to a target price of $6.05 per share, and a reasonable expected valuation of about $409 million.