Summary of this issue:
On August 18, the fourth meeting of the Central leading Group for comprehensively deepening Reform examined and adopted the "guidance on promoting the Integrated Development of traditional Media and emerging Media." Xi Jinping stressed the need to build several new media groups with strong strength, communication power, credibility, and influence. We believe that the company is one of the listed companies in A shares at the national level and beginning to take shape of a new type of media group. This article is the second quarter of the in-depth analysis report of Huawen Media, which mainly analyzes the Internet TV business of Guoguang Oriental, a subsidiary of Huawen Media.
Guoguang Oriental and Huawen Media. In November 2006, Guoguang Oriental Network (Beijing) Co., Ltd. was established, and the controlling shareholder is Guoguang Global Media Holdings Co., Ltd. In August 2011, Huawen Media acquired a 44.18% stake in Guoguang Oriental through related party transactions. On July 8, 2014, Guoguang Holdings, Huawen Media and Guoguang Oriental signed a Strategic Investment Agreement with Oneness Information Technology (Beijing) Co., Ltd. (referred to as Oneness Information), which owns the actual management and ownership of Youku. Oneness Information increased 50 million yuan to Guoguang Oriental, held 16.6667% of Guoguang Oriental shares, and Huawen Media's shareholding decreased to 36.8171%. The proportion of shares held by Guoguang Holdings dropped to 46.5162%. Huawen Media is the only listing platform under Guoguang Holdings, and we believe that it is more likely that Guoguang Holdings will inject shares of the rest of Guoguang Oriental into listed companies.
The years of OTT TV. After nearly five years of development, the industry pattern of OTT box is constantly evolving. Competition, cooperation and innovation among Internet enterprises, operators, licensees, radio and television, and shanzhai legions continue to promote the development of the entire industry, while a series of actions by the State Administration of Radio, Film and Television in 2014 will be reshuffled. For the time being, the voice of the licensees has increased significantly, ushering in the spring of development.
Fang Shouzheng in Guangdong is amazing. From the perspective of strategy implementation, large TV screen is first of all the focus of home video and games, and the specific strategy determined by the company is OTT TV business + TV Game business + OTT TV overseas business. The company's layout in the Internet TV industry, including video (including mobile TV and other multi-screen interaction), value-added (games, e-commerce), channels (operators, Huawei), smart life, and so on. Although the family wealth is not rich, the whole management has an open mind, forges a good relationship, and borrows ships to go to sea, so as to integrate the resources of the industrial chain to achieve the greatest development. The entry of strategic partners such as Youku Tudou, Unity, Huawei and Tianmai will lay the foundation for Guoguang Oriental to gain a competitive advantage among the seven licensees.
The value of Guoguang Oriental. We estimate the value of Guoguang Oriental at 18 billion yuan from two angles. Huawen Media holds 37% of its shares and can share the market capitalization of nearly 7 billion yuan.
Profit forecast and valuation: Huawen Media's profit forecast please refer to "Huawen Media (000793) in-depth analysis of the first quarter: print media": community integration and content integration. After the segment valuation of each sub-business, we judge the base price of the stock price to be 13.96 yuan, which does not include the market capitalization estimate of Guoguang Oriental.
Stock price catalyst: early release of acquisition assets; mutual verification of business integration and performance; asset injection; smooth progress of OTT TV business and mobile video business.
Risk factors: the process of additional issuance and acquisition may be lower than expected; the company's business system is huge, and whether it can integrate many businesses and resources and eventually move towards the media group remains to be verified and uncertain; the company's newly acquired business performance is not up to promise.