Incident: Mango Supermedia 2024H1 achieved revenue of 6.96 billion yuan, +2.46% year over year, realized net profit of 1.065 billion yuan, -15.45% year over year, and realized net profit of 0.912 billion yuan after deduction of non-return to mother, -22.96% year over year. Among them, 2024Q2 achieved revenue of 3.636 billion yuan, +0.07% year-on-year, realized net profit of 0.593 billion yuan, or -16.04% year-on-year, and realized net profit without deduction of 0.445 billion yuan, or -31.98% year-on-year.
Comment: Actively increase investment in content and improve the short content ecosystem. 2024H1 launched a total of 56 variety shows, an increase of 17 over the same period last year. According to Yunhe data, 7 programs, including “Detective 9,” “Ride the Wind 2024,” and “Flowers and Youth: Silk Road Season” entered the top 20 online variety shows in the first half of 2024, and launched 17 movies and TV dramas. The company actively increased its content investment and reserved more than 80 movies and TV series, such as “National Color Fanghua”, “People in the Alley”, and “Water Dragon Song”, etc., which have the potential to be a hit. “Drama” vertical screen short drama channel, with a total number of vertical screen launches There are more than 150 short dramas, and no less than 300 high-quality vertical screen skits are expected to be launched throughout the year, improving the Mango content ecosystem.
Membership growth is impressive, and operators are under pressure in the short term due to policies. 2024H1's member business revenue was 2.486 billion yuan, +27% year over year, becoming the core driver of the company's performance growth now and for some time to come. The growth is mainly due to the continuous improvement of content-side competitiveness and the improvement of the equity system; 2024H1 advertising business revenue of 1.721 billion yuan, -4% year over year, which is still mainly affected by relatively weak industry recovery; 2024H1's operator business revenue is 0.75 billion yuan, -46% year over year, mainly continued by industry authorities Influenced by governance, the company comprehensively optimizes services related to large TV screens, such as “billing packages,” “single point of payment content,” and “subscription process,” but we believe that in the long run, the company, as the only market player with both IPTV and OTT licenses, will still benefit from the high-quality development of the industry.
Give full play to the advantages of ecological synergy to create a “1+1+1+1+N” mango ecosystem with richer content. 1) The company's Golden Eagle Cartoon continues to lead parent-child content ratings, and 2024H1's total profit increased by about 15% year on year; 2) Content e-commerce maintained a high growth rate. The GMV of 2024H1 Xiaomang e-commerce reached 6.65 billion yuan, an increase of nearly 50% over the previous year. Xiaomang e-commerce continued to expand its core circle, driving the proportion of male users to 30% through special products such as Guofeng Mecha and customized content; and batch reproduced variety shows to create an “IP program+live broadcast room” interactive live broadcast form.
Investment advice: The company is expected to achieve operating income of 15.242/16.822/18.013 billion yuan in 2024-2026, a year-on-year change of +4.20%/+10.37%/+7.08%, and a net profit to mother of 1.945/2.18/2.392 billion yuan, a year-on-year change of -45.30%/+12.07%/+9.73%. The corresponding PE is 18x/16x/14x, maintaining a “buy” rating.
Risk warning: content performance falls short of expectations, strengthened policy supervision, risk of piracy and infringement