Oriental Pearl (600637) Semi-annual Report of 1919: Performance Meets Expectations, Data Enables Embrace 5G and Follows New Logic Progress of the Company
Event: On August 27, the company announced its 19th half-year report. In the first half of 2019, it realized operating income, net profit attributable to mothers, and net profit attributable to non-mothers57.
0.6 billion, 10.
7.1 billion, 7.
2.4 billion, respectively increased by -5.
Opinions: 1. Optimize business structure and stabilize fundamentals.
The company continuously optimizes and adjusts its structure, focuses on the main business to improve the industrial chain layout, gradually integrates the 14 major business groups into 4 major industrial sectors (media, content, video shopping, cultural travel consumption), and the business is gradually stable.
(1) The advantages of the media network segment have been enhanced, and the release of performance still needs time.
In the first half of 2019, it achieved operating income14.
31 trillion, with a decrease of 7.
68%, gross margin is 28.
25%, the same reduction of 3.
97pct, mainly due to changes in the IPTV business ledger model and adjustment of the Internet business sales model.
The company continues to promote the media integration strategy around BesTV and looks forward to expanding channel value in the 夜来香体验网 future.
In the first half of 2019, the company’s IPTV and OTT users reached 51.24 million and 34.26 million, respectively, an increase of 11 respectively.
Cable TV has steadily increased, according to which the number of effective TV users has remained at 60 million; the number of interactive on-demand cooperation platforms has reached 40, and the number of users has reached 16.5 million, an increase of 17.
At the same time, the company integrates large-scale offline traffic screens in 12 cities, Shanghai airport / subway, and dozens of movie theaters in provincial capitals across the country, forming a reach of more than 200 million people. The monetization ability of the company’s traffic in the future is worthlook forward to.
(2) The film and television entertainment sector adheres to the 苏州桑拿网 boutique line, and the company’s marginal benefits under severe supervision.
Realized operating income in the first half of 20193.
7.6 billion, a decrease of 19.
88%, gross margin is 18.
8%, same minus 0.
In terms of film and television, the company adheres to the main theme line. The TV drama “Hello, the Opponent’s Friend” produced by the subsidiary has been viewed 500 million times in 33 days on Mango TV and has been highly recognized by mainstream media.
In terms of games, the company actively responded to the cultural overseas policy and formed a “host + mobile game” dual-channel overseas model. At the same time, it entered into e-sports and responded to the construction of Shanghai’s “e-sports capital”.
(3) Marginal strengthening of the video shopping sector’s capabilities, building an all-media three-dimensional sales platform outside of TV shopping around “cross-border new retail”.
In the first half of 2019, operating income was 29.
11 trillion, with an increase of 0.
2%, gross margin of 17.
(4) The cultural tourism consumer sector has gradually developed an online and offline channel and traffic integration strategy.
In the first half of 2019, it achieved operating income9.
12 trillion, the same minus 8.56%, gross margin 46.
38%, same as minus 1.
The company adheres to the “smart broadcasting, entertainment and entertainment +” strategy, creating offline cultural industry clusters, and realizing a full path monetization model from offline to online and from content to monetization.
2. Build OPG cloud platform, actively embrace 5G construction, build large, medium and large Taiwanese service output capabilities, and look forward to the company’s new logic landing.
The company strives to build an OPG cloud, a smart operation platform for future growth.
We believe that the benefits of the two major business monetization angles from C to B can be improved: (1) to C: Opening the content database and user data, realizing the integrated entertainment consumption experience of users and the accurate promotion of content, effectively slowing down large-screen usersLoss or even reversal.
We firmly believe that the future “big screen ecology” is not a “television ecology”. In the 5G era, the user’s large-screen demand scenes set functional movie viewing needs to shift to a comprehensive demand scene that integrates entertainment consumption, social needs, life and education., That is, demand upgrading (similar to the replacement of smart phones with feature phones).
The company’s C business is expected to benefit in two ways: improving the ability to monetize content (such as monetization of members and e-commerce) and developing new content monetization scenarios (such as cloud games and e-sports).
(2) To B: It can be divided into two major scene changes.
The first is the realization of advertising based on the To C business, that is, the improvement of the ability to monetize traffic. The company’s user center has now gathered 60 million user data to form 16 categories with 500 + user avatar tags, and add buses, airports, subways, etcThe new flow of channel media and the further implementation of the logic of advertising monetization are the focus of the future.
The second is to conduct smart radio and television services based on big data capabilities (such as smart cities to G services).
At present, the company’s smart city Internet of Things business has been launched in Yangpu, Hongkou and Putuo three districts. Over 200,000 IoT sensor terminals have been built, covering 45 application categories, with a coverage rate of 95%.
The company plans to continue to expand its Shanghai market share in the next three years and gradually expand to the Yangtze River Delta.
The company is backed by government resources, the logic is reasonable and quite smooth, and it expects the substantial landing of performance.
Investment suggestion: After three years of business integration and logical combing, the company’s current thinking has gradually become clear.
In the future, the logic of full closed loop of content realization under the advantage of media channels will be broken. It is expected that the company will build the OPG cloud intelligent operation platform to open up the advantages of massive data assets and resources. Based on big data, connect media and content.Liquidation opportunities are merged logically for B / C.
We expect that 19 years will still be a stable point for performance improvement, and new logic in 20 and 21 attempts to gradually advance and land.
We estimate that the company’s net profit attributable to its parent in 2019-2021 will be 20 respectively.
3.9 billion, 22.
0.6 billion, 26.
6.9 billion, because the company’s strategic logic is smooth and realizing potential potential, a higher valuation (20 times) is given, corresponding to a 19-year target price of 11.
87 yuan, the first rating given “Buy-A” rating.
Risk reminder: Large-screen users continue to decline, OPG’s strategy advances less than expected, and the risks of smart broadcasting business’s contribution to the company’s performance are less than expected.