Radio and television companies listed in 2017 half-year examination: flat performance

At present, the disclosure of semi-annual reports of listed companies has already come to an end. In the first half of 2017, the radio and television industry as a whole maintained its momentum of growth, but the growth rate slowed down. The industry remains optimistic about the outlook.

According to the statistics of Wind, the revenue of the media segment in the first half of 2017 increased by 15.88% year-on-year, and the overall growth rate of the sector slowed from 21.72% in the same period of 2016. In terms of segments, the main growth rate of the media segment in the first half of the year was from games (37%), technology value-added and services (29%), marketing (17.5%), and film and television animation (9.0%), but the overall growth rate of the sector was released. The slowdown was mainly due to the fact that all sub-sectors experienced a year-on-year decrease in growth rate, of which the growth rate of film and television animation segment fell by 22% and the gaming sector declined by 45%.

Film and television industry: slower growth, warmer period

In the first half of 2017, the revenue and net profit of the film and television industry reached 30 billion yuan and 5.1 billion yuan, respectively, an increase of 11% and 12% year-on-year, respectively, and the film and television industry maintained a growth trend. However, the growth rate has slowed down significantly from the previous two years. “Compared to the revenue growth rate in the first half of 2014-2016 (29%, 77%, 37%) and the growth rate of net profit in the first half of 2014-2016 (57%, 86%, 43%), the film and television industry 2017 The growth rate of revenue and net profit for the first half of the year showed a declining trend.” GF Securities analysts confided that this was mainly due to the fact that the market for the first half of 2017 and the big show confirmed relatively less and the performance growth was slower.

At the same time, the film and television companies began to maintain the stability of their profit levels by controlling their cost. In the first half of 2017, the net interest rate and gross profit margin of the film and television industry were 17.0% and 35.6%, respectively, maintaining a slight upward trend. The net profit rate increased from 13% in the first half of 2013 to 17%, and the gross profit margin increased from 28% in the first half of 2013 to 36%. According to quarterly data, the revenue and net profit of the film and television industry in the second quarter of 2017 reached 16.958 billion yuan and 3.122 billion yuan, respectively, compared to the first quarter revenue, net profit of 12.995 billion yuan and 1.983 billion yuan, and the second quarter of the film and television industry. Both revenue and profits showed an upward trend from the previous quarter.

From the perspective of the industry as a whole, of the 26 companies in the movie industry and film and television content, 19 companies achieved positive growth in their revenue in the first half of 2017 compared to the first half of 2016, and 16 companies had net profit in the first half of 2017. Positive growth was achieved compared to the first half of 2016.

From the perspective of the two fine-grained industries, film production companies such as Huayi Brothers, Ray Media and Wentou Holdings have a net profit growth of over 20% in the film industry. The movie line company, because of the dull movie box office in the first half of 2017, except for Wanda cinema, which maintained a net profit growth rate of 10%, the net profit of Happy Blue Ocean, Chinese movies, and Shanghai movies has declined to some extent. As for the proportion of businesses, the box office revenue of Wanda films accounted for 63.97% of the total revenue in the first half of 2017, a decrease of 3 percentage points from the 2016 annual revenue share. It has continued to decrease in recent years; Shanghai Films and Happiness Blue Ocean’s box office revenue accounted for more than 2016 At the end of the year there was a big increase. The video and TV content industry is more differentiated. The leading TV drama production company's performance in the first half of the year is relatively flat. In addition to the new culture, the "Xuanfujian" revenue and the investment in PADL's "Westward Volt" are better at the box office, and they are higher. In addition to investment income, the rising star of Meisheng Culture and South China Culture has a 100% profit growth.

Film and television industry in the first half of 2017

The semi-annual report also showed that the major movie companies began to differentiate their strategies. Film and TV companies, such as Huayi Brothers and Ray Media, which mainly produce film productions, accounted for a decrease in the revenue ratio of their film business since 2015. Huayi Brothers has strengthened its brand licensing and service business while light media has acquired Polytechnics deployed new media businesses such as the Internet live broadcasting; film and television companies, such as Huace Film and TV and Tangde Film and TV, whose main business was television drama shooting, strengthened their existing TV drama business, and their main business income continued to increase. “The demand of major video sites for premium TV dramas has led the TV drama industry to increase investment in filming, and the high risk of the film industry has prompted movie companies to diversify their business risks through diversification.” Liu Yanya, an analyst at BOC Securities, said.

Although the revenue growth of the film and television industry saw a significant year-on-year slowdown in revenue growth, it is expected that the performance of the company will be greatly improved as the film and TV dramas confirm the progress of income, the progress of Taiwanese net purchases, and the overall increase in ticket prices in the movie market. “Film and television content companies are in the midst of the film and television drama industry, subject to the strong market of TV stations, and generally have the characteristics of slow payment collection and long project settlement period. Many companies will focus on revenue recognition in the fourth quarter. The results of the mid-year report cannot fully reflect the TV drama company. Operating conditions, such as Ciwen Media did not confirm the premiere income of new dramas such as Chuchao Biography in the first half of the year. Therefore, the performance data of some film and television companies will be improved in the annual report.” Liu Yanya said that for movie theater companies In terms of national box office revenue from January to August, it is estimated that in 2017, the overall domestic box office will be between 55 billion and 60 billion yuan. If the proportion of network service fee is deducted by about 6%, it will be between 52 billion and 56 billion yuan. Compared with 45.7 billion in the total box office in 2016, the year-on-year increase was approximately 13.8% to 22.5%. Therefore, the performance of the cinema segment is expected to rebound in the second half of the year, and the annual results will be better than that of the first half of the year. In addition, Hengdian Film and TV and Jinyi have already met, and the future A-share market will continue to expand.

Wei Xuan, an analyst of open-source securities, also believes that “in the second half of the year, the film and television industry may suffer a performance inflection point in the first half of the year. At the current pace, the second half of the golden period will have more, including the National Day and the pre-Christmas period. It will be better than the first half of the year. Under normal circumstances, the performance in the second half of the year will increase by 10% to 20% from the first half of the year."

Wired Network: Net Profit Decline, Look Forward to Transformation

In the first half of 2017, the cable TV network segment experienced a negative growth for the first time in the context of a year-on-year increase in revenue but an overall decrease in gross profit margin – from RMB 3.66 billion in the first half of 2016 to RMB 3.46 billion. Lim said: "The main reason for this is that although the cost of wired networks is relatively fixed, the cable television users have experienced a decline in cable TV subscription fees since the first negative growth began in the fourth quarter of 2016."

According to the data, by the end of June 2017, the share of cable television in the household viewing pattern has continued to drop to 55.7%; the share of direct-view satellite TV has increased to 27.07%; IPTV has maintained rapid growth, and the share of viewership has increased to 23.04%; OTT TV's TV share has grown To 18.57%. As of the end of June 2017, China has a total of 250 million cable television subscribers, 209 million digital game subscribers, and a digitized rate of 83.59%, while cable digital TV subscribers account for less than 160 million subscribers and the payment rate drops to 76.56%.

The semi-annual report shows that in the first half of 2017, the sales rate and management fee rate of the cable TV network sector fluctuate little, but the gross profit margin has declined more. The companies with higher gross profit margins are mainly Gehua Cable (decrease in depreciation costs) and Tianwei Video (business) The cost drops slightly faster than operating revenue).

It is worth noting that the share of goodwill in the cable TV network sector for the first half of 2014-2016 has been at a relatively low level, but it has maintained a slow upward trend. “This is mainly due to the fact that cable network companies have also participated in some acquisitions in the past few years. As the monitoring of mergers and acquisitions became more stringent, cable TV network sector mergers and acquisitions also decreased. The proportion of goodwill in the first half of 2017 decreased and remained low. Level." Actually said.

Cable Network Industry's First Half 2017 Results

Wireline Network Industry 2014 - 2017 First Half Performance

Although the net profit of most cable network companies declined in the first half of 2017, Radio and TV Network, Guiguang Networks, Hubei Broadcasting and Huadian Media maintained positive growth. In fact, cable TV subscription fees are an important source of income for cable network companies. Under the background of a decrease in the total number of cable users, the positive growth of performance mainly comes from two aspects: First, accelerate the transformation and actively carry out value-added services and broadband services. For example, Huada Media’s performance in broadband services and interactive TV services has been growing at an early growth rate of 4%. Jishi Media's I-PON smart terminal products have been put into the market in volume, and cinema investment has opened eight studios. The second is that cable TV users have been affected by relatively small areas. People's attention has gradually shifted from traditional television. However, due to different degrees of economic development, there is a big difference in the degree of such transfer. Some traditional TVs in remote areas are still important. The viewing habits. For example, the impact of the Guangxi-Guangzhou network is relatively small. In the first quarter and the second quarter, the number of cable TV subscribers was 5.17 million and 5.27 million, respectively. Cable TV subscribers continued to grow, which in turn led to an increase in performance.

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