Sitting on the scarce Internet TV integrated broadcast control license, the current value has not been fully tapped.
Huawen Media owns one of the seven broadcast control licenses. Guoguang Oriental, a joint venture with shareholders, is the only authorized operator of the Internet TV license of Radio International. The other six licenses issued by the State Administration of Radio, Film and Television (SARFT) are awarded to CNTV, China Central people's Radio, Broadcasting, Huasu Media, Southern Media and Hunan TV Station. In July this year, SARFT said at the third China Internet TV Industry Forum that the license for Internet TV integrated service is no longer issued, and the value of the license resources owned by the company is more prominent. From the PE point of view, compared with licensed blockbuster and Huasu Media, its valuation is much higher than Huawen Media. From the number of users, Huasu Media currently has 3 million users, and after completing the provincial network integration, it will achieve 15 million users, with a current market capitalization of 33 billion. Guoguang Oriental's 14-year user scale target is 4 million, and next year's 15 million user target, and the International Radio is a central unit, its omni-directional license has greater potential for cross-regional expansion.
The tightening of the policy of the General Administration is beneficial to the development of the company and enhance the ability of platform integration of the company. SARFT's regulation of the Internet TV industry, small and medium-sized brand terminals want to survive in the market, they need to cooperate with the license side, which also strengthens the company's platform integration advantage. At present, the development stage of the industry is still in the early stage of circle users, and more and more resources are integrated by the license side, which is expected to form a situation that the strong are always strong. According to media reports, the State Administration of Radio, Film and Television is expected to continue to strengthen its supervision of the Internet TV industry in the past 15 years, and is expected to introduce management rules that further rely on license providers as the management entrance.
The rigid demand of the market is not reduced, and the market space of family interactive entertainment is large. The market share of OTT TV set-top boxes increased significantly in 2013, from 4.7 per cent to 15.1 per cent. If this trend continues in 2014, annual shipments of OTT TV terminals are expected to reach 20 million, and user demand is being released. However, the handling of illegal terminals in July temporarily curbed part of the market demand. Before the rectification, small and medium-sized brand terminals had no technical threshold, no copyright, no operational pressure, so the price was low, the market acceptance was high, and accounted for 80% of the shipments. After the rectification, the license plate will quickly fill the demand of the market.
The home Internet side is the last unoccupied screen after the mobile screen and the PC screen. At present, it is still a screen with great influence, and it is also a screen with large room for development and can carry many value-added services. One of the highlights of its future is that it is expected to attract the post-80s and post-90s back to the TV from PC; second, the industry pattern has not yet been formed, and companies with first-mover advantages are expected to grow rapidly.
Strong alliance, build family entertainment alliance. Guoguang Oriental, a subsidiary of Huawen Media, has established a "Smart Home Entertainment Alliance" (referred to as TEA). On the content side, Guoguang Oriental has a deep alliance with Youku. Last year, Guoguang Oriental introduced strategic investor in-one information (with the actual management right and ownership of "Youku"), which is expected to form a strong alliance. Guoguang Oriental will enhance the competitiveness of Internet TV with the help of Youku's huge content resources. On the content side, Guoguang Oriental is expected to cooperate with Unity,15, the world's top game engine developer, to strengthen its video game business.
On the hardware side, the company cooperates deeply with Huawei, from hardware terminals to video and game content.
Give a "recommended" rating. It is estimated that the net profit attributed to the parent company from 2014 to 2016 is 1.065 billion, 1.344 billion and 1.515 billion, respectively, and the EPS is 0.52,0.66 and 0.74 yuan respectively, corresponding to the February 4 closing price PE of 27.9,21.3 and 19.0 times. Considering the prominent value of the company's all-media platform and broad future space, the company is given a "recommended" rating.
Risk factors: (1) the implementation of the company's development strategy is not as expected, and the company's all-media platform fails to play a role. (2) the risk of decline in the original business; (3) the risk that the liberalization of the company's monopoly media license resources leads to the weakening of the company's advantage in the industry.