20180903-广发证券_香港_-Interim_results_in_line_with_our_forecasts__visibility_and_profitability_diverging_2页_359kb

A-Share Media Sector Summary

Core Content

The A-Share media sector is currently experiencing a period of market calm following the release of interim earnings, with few companies significantly exceeding or falling short of expectations. The sector remains unclear in terms of future outlook, with a growing emphasis on asset and earnings quality. Companies with consistent long-term rationales continue to receive premiums, while subsectors such as marketing, games, and film and television are showing divergence in asset quality. Traditional media companies are still in a down-cycle.

Main Points

• Market Outlook: The media sector is in a state of uncertainty, with investors focusing on asset and earnings quality rather than short-term performance.
• Subsector Performance:
  • Marketing, Games, Film & Television: These subsectors are showing growth, but there is a divergence in asset quality.
  • Traditional Media: These companies are still in a down-cycle, indicating continued challenges.
• Regulatory Impact:
  • Recent negative news on DiDi has sparked discussions about internet monopolies.
  • Regulators have opened a temporary green channel for game developers, which may alleviate product shortages and improve policy supervision.
• Box Office Performance:
  • Summer-holiday movie demand has exceeded pessimistic expectations, with strong performance from films such as Ant-Man and the Wasp and Mission: Impossible - Fallout.
  • As of August 25, the box office growth for July and August was 18% YoY, surpassing the $10%$ forecast.
• Recommendation:
  • Focus on companies with strong interim earnings growth, as they are likely to outperform the market.

Key Information

• Rating Definitions:

  • Company Ratings:
    • Buy: Expected to outperform the benchmark by more than 15%
    • Accumulate: Expected to outperform the benchmark by more than 5% but not more than 15%
    • Hold: Expected relative performance ranges between -5% and 5%
    • Underperform: Expected to underperform the benchmark by more than 5%
  • Sector Ratings:
    • Positive: Expected to outperform the benchmark by more than 10%
    • Neutral: Expected relative performance ranges between -10% and 10%
    • Cautious: Expected to underperform the benchmark by more than 10%

• Risks:

  • Systemic risks for the media sector.
  • Tougher regulations may impact the sector.
  • Intensifying market competition in film and television.
  • Technological risks for game developers.

Analyst Certification

The analysts responsible for this report certify that:

1. All views expressed accurately reflect their personal opinions.
2. No part of their remuneration is directly or indirectly related to the specific recommendations or views in the report.

Disclosure of Interests

1. GF Securities (Hong Kong) and its affiliates do not hold any shares of the securities mentioned in the report.
2. No investment banking relationship exists with the companies mentioned in the past 12 months.
3. The analysts and their associates are not officers of the companies discussed and have no financial interests in the securities.

Disclaimer

This report is for informational purposes only and does not constitute an offer to buy or sell securities. It is intended solely for GF Securities (Hong Kong) clients. The report may not be available in certain jurisdictions. GF Securities (Hong Kong) accepts no liability for losses arising from the use of this report. Investments involve risks, and past performance does not guarantee future results. The report should not replace professional advice.

Copyright

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