Focus Media (002027) Annual and Quarterly Commentary: Surge in Resource Costs, Pressure on Performance, Expansion Recommendations in 19Q1, Suggestions on Marginal Change

Focus Media (002027) Annual and Quarterly Commentary: Surge in Resource Costs, Pressure on Performance, Expansion Recommendations in 19Q1, Suggestions on Marginal Change

Events: 1. The company announced an 18-year report with revenue of 145.

500 million, a year-on-year increase of +21.

12%, net profit attributable to mother 58.

200 million, YOY-3.

03%, deducting non-net profit 50.

2.6 billion, a year-on-year increase of +3.

58%.

The company plans to distribute a cash dividend of RMB 1 (including tax) for every 10 shares.

2. 19Q1 revenue was 26.

110,000 yuan, 11 year on year.

78%, net profit attributable to mother 3.

40,000 yuan, YOY-71.

81%, net of non-attributed net profit1.

160,000 yuan, YOY-89.

17%.

3. It is foreseen that the net profit range for mothers in 19H1 is 7.

4-11.

0 million yuan, YOY-77.

88% to -67.

12 %% 4, the company plans to use its own idle funds for venture capital, the maximum amount of overdue accumulated up to 3 billion yuan.

Opinions: 1. Macroeconomic indicators affect 19Q1 revenue increase of at least 12%; 18Q1 has not yet entered the rapid expansion period cost base replacement, resulting in a 19% decrease in 19Q1 net profit: 18 year revenue 145.

500 million, a year-on-year increase of +21.

12%, net profit attributable to mother 58.

230,000 yuan, -3 compared with the same period last year.

03%, deducting non-net profit of 50%.

2.6 billion, a year-on-year increase of +3.

58%, due to the expected impact of the macro economy, and the rapid increase in costs caused by the rapid expansion of resources in 18Q2, 18Q3 began to achieve significant results.

Expense rate for 19 years is 19.

8%, basically the same as the previous year; relative to the 17-year distribution income, the 18-year distribution income replaced.

Net cash of operating 杭州桑拿網 activities for 18 years 37.

Over 8.3 billion US dollars, the growth exceeded and decreased sequentially, mainly due to the rapid growth of receivables and asset impairment losses, the core customer repayment cycle generally changed, resulting in slower growth in operating cash growth than revenue growth.

2. 18Q2 entered a period of rapid expansion, and the scale of 19Q1 resources expanded: Since 18Q2, the company has expanded the media resources of TV and elevator posters.

As of the end of 2018, a media network of living circles covering about 300 cities nationwide has been formed. While deepening the core areas of first- and second-tier cities, it has actively expanded to the surrounding areas of first- and second-tier cities, and has accelerated the sinking of third- and fourth-tier cities.Exploiting overseas markets 北京夜網 in Korea, Indonesia, and Singapore. At the end of 18 years, the company’s self-operated elevator media totaled about 266.

20,000 pieces, with an expected addition of 1.21 million pieces; until 19Q1 it was 275.

50,000 yuan, an increase of 9 in a single quarter.

30,000 yuan, the relative growth rate.

At the end of 18, more than 1,900 cinemas were signed and more than 12,700 screens were on display. Blockbusters such as “Reunion 4” are expected to boost the 19Q2 box office.

3. Reliance on Internet customers and single customers has decreased, and the customer structure has improved: In 18 years, the company’s consumer goods industry customers contributed revenue34.10,000 yuan, a year-on-year increase of +43.

8%, revenue accounted for 23.

5%, has surpassed the Internet industry to become the advertising industry with the largest revenue contribution.

The relatively stable investment in the consumer goods industry and the increase in the proportion of the consumer goods industry is an improvement on the company’s overall customer structure.

Five of the top 18 customers 18 years ago.

8 ‰, accounting for 19% of the total budget.

8%, a decrease of 2.
.

3 units.

4. Profit forecast and investment grade: We predict that the company’s net profit for 19-21 will be 33.

4/39.

4/49 billion, EPS is 0.

23/0.

27/0.

33 yuan, corresponding to 18-20 years PE is 30.

89/26.

18/21.

06X.

We are optimistic about the media in the life circle for a long time and maintain the “recommended” level.

Risk reminders: changes in the macroeconomic cycle, the downturn in the advertising industry, intensified competition in the industry, loss of core talents, less than expected performance, increased rental costs, increased labor costs, less-than-expected compensation, receivables recovery, bad debt losses, lifting of bansRisks, such as holding down the center