Focus Media:Differentiated ad leader riding on new consumption growth(Revised)

类别:公司研究 机构:德意志银行 研究员:Tallan Zhou,Karen Tang 日期:2017-09-29

Growth correlated to the new economy

    We initiate coverage of Focus Media with a Buy rating and a target price ofRMB14, implying 35% upside potential. Focus Media has recently been includedin the MSCI-A and is a leading player in China’s ad industry with dominantmarket share in two channels of advertising:(1) inner building media (90%), and(2) cinema screens (pre-movie advertising). Compared to traditional channels ofadvertising, such as TV etc, these two channels achieve greater impact, given theyare in confined areas holding the captive attention of viewers. These channelsare favored by leading internet/FMCF clients, such as JD, Ali, Baidu, and P&Getc, which contribute approximately 50% of FM’s revenue. We view FM as wellpositionedto ride the growth of China’s new economy. We project a profit CAGRof 20% against peers' 10-15%.

    Inner building media, the only growing traditional advertisement channel

    While the growth of other traditional advertisement channels, such as TV/radio/newspapers, has dropped in the past few years, we have seen building mediagrowth remain robust. This is because, amid the intensifying competition fromgrowing internet advertising, building media is more effective in delivering themessage to targeted groups of consumers and raising overall brand awareness.Focus Media dominates the building media market, with market share of morethan 90%. We expect inner building segment revenue to generate a CAGR of16% in 2017-19E, driven by c.12% screen expansion and a 4% increase in ASP.We believe Focus Media's screens (both LCD and poster frame) will continue topenetrate into tier 2-3cities and the company can increase the utilization rate ofits screens.

    Cinema media, riding on China's movie screen growth

    Focus Media has 60% market share in theater advertisements (ads before themovie) in China. We have noticed robust growth in this segment in the past fewyears (65%/42%/51% yoy revenue growth in 2014-2016), thanks to significantgrowth in China's movie screens, which have doubled to more than 40,000+from only 20,000in 2014. As this segment is correlated with the movie screenexpansion, we estimate that cinema media revenue CAGR to be 13% in 2017-19E,in line with our estimate of overall movie screen growth.Revised by adding note on pg22that FocusMedia raised RMB 4.86bn in 2016tocomplete 100% of the backdoor listing

    Valuation and risks

    Our primary valuation method is based on DCF (9.8% WACC and 3% TGR). FocusMedia is currently trading at an ex-cash PER of 18x (the company has a net cashof RMB7.54bn as of 1H17) on our 2018E earnings estimate vs. its 20% three-yearearnings CAGR. We believe the risk-reward profile seems attractive. Key downsiderisks: 1) more theaters start their own advertisement businesses; 2) threats fromother advertising modes; 3) a slowdown in the China movie downstream industry;and 4) slowdown in the internet/FMCG sector growth.

股票代码 股票名称 最新价(元) 涨跌额(元) 涨跌幅(%) 成交额(万元) 成交量(手)
002027 @nn@ @n@ @c@ @cc@ @v@ @t@

数据推荐

投资评级

更多>>
股票名称最新评级目标价研报
云南白药 买入 84.36 研报
长安汽车 买入 10.74 研报
金溢科技 中性 -- 研报
汇纳科技 买入 -- 研报
齐翔腾达 持有 -- 研报
科大讯飞 持有 42.34 研报
贵州茅台 中性 -- 研报
中青旅 买入 -- 研报
元祖股份 中性 -- 研报
桃李面包 中性 -- 研报
绝味食品 中性 -- 研报

盈利预测

评级选股>>
股票名称11年EPS12年EPS研报
云南白药 1.75 2.18 研报
长安汽车 0.45 0.25 研报
金溢科技 0 0 研报
汇纳科技 0 0 研报
齐翔腾达 1.54 0.80 研报
科大讯飞 0.60 0.55 研报
中青旅 0.72 0.79 研报
绝味食品 0 0 研报
养元饮品 0 0 研报
桃李面包 0 0 研报
大北农 1.23 0.96 研报

股票关注度

更多>>
股票名称关注度平均评级最新评级
五粮液 35 持有 中性
万科A 31 买入 买入
泸州老窖 31 持有 中性
隆基股份 30 买入 买入
比亚迪 29 持有 持有
三一重工 28 持有 买入
长安汽车 28 买入 买入
伊利股份 27 持有 持有
中国国旅 27 持有 买入
宋城演艺 27 持有 买入
中信证券 26 持有 买入
万华化学 26 买入 买入
瀚蓝环境 26 持有 买入
格力电器 26 买入 买入
恒生电子 25 买入 买入
中国太保 25 持有 买入
亿纬锂能 25 持有 买入

行业关注度

更多>>
行业名称关注度关注股票数买入评级数
电子信息 492 84 280
汽车制造 357 36 186
建筑建材 346 45 183
电子器件 339 49 219
金融行业 296 26 141
机械行业 292 44 114
酿酒行业 247 16 134
化工行业 242 45 104
生物制药 242 44 153
交通运输 220 26 106
钢铁行业 213 28 110
房地产 200 28 131
食品行业 188 25 66
家电行业 185 14 117
煤炭行业 184 31 83
商业百货 170 33 97
酒店旅游 152 19 50