Affected by the epidemic, business performance declined sharply in 2020. The company's income in 2020 was 700 million yuan, down 61% from the same period last year, and the net profit was-1.926 billion yuan, down 193.3% from the same period last year. The company's operating performance declined sharply in 2020, mainly affected by the epidemic situation of COVID-19. The European Cup 2020, originally scheduled to be held from June to July in 2020, was postponed to June to July in 2021, resulting in the postponement of the revenue that should be recognized in the current period to 2021. The relevant fees paid by the company in the previous period will be confirmed within the corresponding rights and interests period in accordance with the contract. At the same time, the epidemic also caused the company and its related sports marketing business can not be carried out normally. Its business income has declined significantly compared with the same period. In 2020, the company calculated credit impairment loss of 180 million yuan, asset impairment loss of 600 million yuan, and investment loss of 160 million yuan. The impairment of assets such as inventory and bad debts has a great impact on the company's current net profit. In 2020, the company achieved operating cash flow of 480 million, an increase of 35% over the same period last year, and the overall operation is still relatively stable.
Sports: with the gathering of competitions in the next three years, the sports business is expected to bottom out and rebound. The company has a rich copyright reserve for sports events, and currently owns: 1) the global exclusive commercial rights (including sponsorship and copyright) for all AFC (AFC) related events from 2021 to 2028; 2) the new media exclusive copyright for the Uefa (UEFA) national team series (including Euro 2020) from January 1, 2018 to November 30, 2022, as well as the global sponsor rights (including sponsorship and copyright) for the above events. 3) all-media copyright of 2019 Universe 2020 to 2028 Universe 2029 Spanish Football League. Affected by the epidemic, most of the major sports events in 2020 have been postponed to 2021, and the density of events will be greatly increased in the next three years. We believe that the company's sports rights distribution and marketing business is expected to hit bottom and rebound.
TV series: a number of theme dramas are expected to be broadcast in 2021. In the field of film and television drama, the company adheres to the concept of "winning by quality". 2021 is the 100th anniversary of the founding of the Communist Party of China. "meritorious deeds" and "Happiness to Wanjia", which are produced to celebrate the 100th anniversary of the founding of the Communist Party of China, were launched one after another in September 2020. at present, "meritorious deeds" (except Zhong Nanshan unit) has been killed, "Happiness to Wanjia" has been killed in early February 2021, both dramas have entered a tense later stage. The company expects "merit" to be broadcast for the first time on three networks and four satellite TV platforms in September 2021, and "Happiness to Wanjia" will be available at the end of 2021.
Profit forecast and valuation analysis. Euro 2021, Tokyo Olympic Games and other competitions gathered, we think the company's overall business is expected to hit bottom and rebound. We estimate that the EPS of the company in 2021-2023 is 0.42,0.44 and 0.58. refer to the companies in the same industry: 1) We give the company 18-20 times dynamic PE valuation in 2021, and the corresponding reasonable value range is 7.56-8.40 yuan. 2) We give the company a dynamic PS, of 1.6-1.8 times in 2021, which corresponds to a reasonable value range of 7.84-8.82 yuan per share. To sum up, we give the company a reasonable value range of 7.84-8.40 yuan in 2021, which is better than that of the big market.
Risk tips. The global epidemic has repeatedly led to the postponement of sports events and the uncertainty of film and television regulation.