Zhejiang Digital Culture (600633): Focusing on the construction of media platform and content review
Event: The company released the 2018 annual report: operating income in 201819.
100 million, an increase of 17%; net profit attributable to mother 4.
7.8 billion yuan, down 71%.
If the pro forma financial data excluding the sale of news and media assets is used as the accounting base: the company’s operating income in 2018 increased by 64%, net profit attributable to mothers increased by 2%, and net profit attributable to non-parents increased by 41%.
Opinion: Bianfeng Network achieved net profit in 18 years4.
910,000 yuan, an increase of 28% in ten years.
1) Bianfeng Network adheres to the self-research strategy, increased investment in research and development, and developed a large number of highly targeted mobile casual games. It has become the number one published game product in Zhejiang Province for the second consecutive year.
At present, the mobile online leisure games of Bianfeng Network cover more than 20 provinces across the country, with more than 600 products released. The number of registered mobile users exceeds 100 million and the number of monthly active users is thousands. At the same time, the monthly average monthly flow of the self-developed mobile game “Xia Ke Feng Yun Chuan OL” reported by Bianfeng NetworkOver 50 million, outstanding performance.
2) Bianfeng Network continued to follow up with more than ten M & A projects including Shenzhen Tiantianai, Lewan Huyu, Beijing Mengqi, Suzhou Fengyou, etc. The revenues were in line with expectations.
The Fuchun Cloud Internet Data Center had a slight loss of 2 million yuan in 18 years, which was basically due to the prior period fixed asset expenditure and amortization.
We estimate that the company’s IDC business has generated a certain amount of revenue in 18 years; the continuous release of production capacity in 19 years is expected to achieve profitable growth.
On March 25, 19, the company announced that Fuchun Cloud and China Telecom’s remote 12MW power scale cabinet IDC hosting service agreement (the end user is Alibaba). We estimate that the number of cabinets used is 2,000.
The contract is signed for 6 years and can be renewed for 2 years.
On the whole, the 4,300 cabinets currently completed have been basically leased out (1000 Netease, 2,000 locked by Ali, and the remaining 1,000 are high-end customers, ranging from 100-200 each).
According to the company’s public research information, it is expected that by the end of 2019, all 6,900 cabinets of the Fuchun Cloud Project will be completed and used successively.
Started the construction of “Rong Media Cloud Platform” as one of content production, review and distribution.
In the annual report, the company disclosed that in the future, it will be based on Internet production and review platforms such as Battle Flag Live, Taimeng Technology, etc. Based on the short video business, it will start the construction of a “converged media cloud platform” that integrates content production, review, and distribution.
Aggregate content resources through advanced video content production tools to create a central media fee library: 1) Improve ex-ante and ex-post review mechanisms and provide high-quality content review services; 2) Open large-volume output channels to form a unified content output mechanism; 3) Assist high-qualityFind the right method to change the scene.
Finally, we will build a new business model with market competitiveness and profitability, and vigorously serve the national media integration development strategy.
At present, the company has participated in the research and development of a number of digital government enabling businesses, including the national key project “Duzhou Municipal Government Information System Integration and Public Service Data Sharing Application Demonstration Project”, the “City Brain” project in Hangzhou, etc.The platform construction has accumulated temporary technical strength and service capabilities.
Investment suggestion: The company accelerates the construction of the 武汉夜网论坛 digital industry ecosystem around the three business segments of digital entertainment, digital sports, and big data industry, which has begun to appear; based on the company’s outstanding traditional media resource endowment and strong resource integration capabilities, we are optimistic about the company’s future inLong-term development in the field of melting media cloud platforms.
The company is expected to have a net profit of 5 in 2019-2021.
7 billion, 6.
4.5 billion, 7.
42 trillion, EPS is 0.
44 yuan, 0.
50 yuan, 0.
57 yuan, given a 28X estimate for 2019, corresponding to a 6-month target price of 12.
3 yuan, maintaining the “Buy-A” level.
Risk warning: The policy supervision is becoming severe, the construction progress of big data center projects gradually exceeds expectations, and the construction progress of the Rong media cloud platform gradually exceeds expectations.