Focus Media (002027): Revenue and gross profit margins are expected to rebound, focusing on consumer product issuance growth
Core point of view: Focus Media ROE dismantling: Revenue and profitability are the main influencing factors. The recovery of ROE will bring investment opportunities.
From 杭州桑拿网 the perspective of product categories, the increased demand from advertisers for expansion will increase the publication rate of LCD publications. The demand for small and medium advertisers will increase the publication rate of frames and smart screens. The current publication rate of Focus MediaAt historical lows, increasing space length.
In the case of average cost stability, the increase in the publication rate will directly bring back the level of gross profit margin.
From the perspective of advertisers, this year, due to the downward impact of macroeconomic growth, advertisers’ demand is weak, especially in the new Internet economy.
However, we believe that 5G is expected to promote the next round of new models of mobile Internet innovation. Focus Media ‘s Internet new economy advertisers ‘demand will pick up, and the speed of recovery will directly change the recovery of the primary market.
In the short term, Focus Media’s revenue growth is mainly driven by consumer goods advertisers.
With the increase in the proportion of daily consumer goods, we believe that the sensitivity of Focus Media’s revenue to the economic cycle will also decline.
Gross profit margin: The industry format and competition pattern determine the high gross profit margin level of Focus Media.
Comparing different race tracks, the gross profit level of building advertising media is higher than that of subway and airport advertising and television advertising, mainly because the city share and industry scope of Focus Media in building intermediation are much higher than those of other diversified leaders in their fields.Industry market share.
As the leader of trapezoidal media, before 2018, the overall gross profit level of the company was around 70%, the gross profit level of other players in the industry such as City Vertical and Vertical was about 50%, and the gross profit level of Chinese media was about 40%.
The industry format and the industry level of Focus Group determine that Focus Media can enjoy higher gross profit margins than other media and industry average levels. Although the average point quality and cost increase make it difficult for the Group ‘s gross profit level to return to 70% + in the short term, butThe recovery in demand will still drive the continuous improvement of the segment’s gross profit margin in the future.
Investment suggestion: From the perspective of business model, we are optimistic about the value of building media for a long time. As a leading media player, Focus Media brings first-mover advantages that are difficult to shake (quantity and quality).
Taking into account the recovery of the company’s Internet advertisers and the progress of point optimization, we slightly 杭州桑拿网 adjusted the company’s profit forecast. It is expected that Focus Media will realize its net profit attributable to mothers in 19-21.
300 million yuan, EPS is 0.
29 yuan / share, the current expected corresponding PE is 47/29 / 22X, considering the absolute valuation and relative estimates, we believe that the reasonable value of Focus Media is 7.
30 yuan / share, maintain “Buy” rating.
Risk reminders: (1) Macroeconomic downturn; (2) Intensified industry competition; (3) Online media shock