UBS severely cut the investment rating of TV Radio (00511-HK) (hereinafter referred to as TVB) and downgraded it from neutral to sell-by, with a target price of 45 yuan.

The reason UBS discouraged TVB is that the rise of smart TVs will permanently change the entire competitive situation. Many TV manufacturers have launched smart TVs with internet access, such as the Xiaomi TV 2, which has a 49-inch 4K panel, and is priced at only 3,999 yuan.

UBS believes that this kind of smart TV will encourage users to spend more time choosing their favorite programs, so TVB's local ratings and overseas subscribers will be structurally impacted. though

TVB introduced the Carry-On Set-Top Box, but the price in Europe was as high as HK$1,000, while the enhanced version of the Xiaomi Box was only 399 yuan. I believe management will re-examine the pricing strategy for the Carry-On Set-Top Box.

However, UBS said that TVB is still one of the most popular platforms for advertisers in the medium term because even if new technology changes rapidly, advertisers need time to adjust.