Focus Media (002027): Demand outlook is dull but supply has also stopped expanding. Current progress in strategic cooperation with Alibaba.
The company’s recent situation We recently visited the company’s leaders to communicate the company’s current operating conditions and business outlook for the second half of the year.
The core points are as follows: Commentary The demand-side outlook is still dull, but has improved from the previous quarter.
The company said that overall advertiser demand is still flat.
March-April is the period of the highest downturn, but the follow-up has improved.
The growth trend in the second half depends on changes in macroeconomic indicators.
However, 佛山桑拿网 considering that the high base factor will be digested last year, we expect the revenue side to resume growth.
With regard to the structure of advertisers, some Internet listed companies have expanded the launch of media for the sake of cost savings, which has put pressure on the company’s revenue growth.
In addition, the budgets of some advertisers expanding on PE / VC financing also deviate significantly.
Facing this situation, the company adopted regional sinking, expanding direct sales, and other methods to actively develop new customers, focusing on mining traditional consumer goods, food and beverage, and education services such as traditional industry advertising.
The supply side is no longer expanding and rental costs are beginning to be contained.
The current publication rate of the company’s advertising sites 苏州夜网论坛 is lower than last year.
The company stated that this year’s focus will be on improving operating efficiency and digesting stocks, so it is not expected to increase during the year.
The company also said that since the beginning of the year, the increase in point rents has increased moderately, and the rental costs have been controlled to a certain extent.
Cooperation with Alibaba has entered the stage of resource docking and test tuning.
According to the company, during the “618” e-commerce event, the Focus Smart Screen has received Ali Mama’s global marketing platform, and online advertisers (mainly Tmall store brands) can choose to deliver to the Focus terminal through Ali Mom.
Although the release of the cooperative settlement model still adopts the traditional model of pricing in terms of time, the exposure / dissemination / sales data from Ali will lead the advertisers to quantitatively evaluate the effect of the launch of the Focus Terminal. This data system will also open up the future of FocusNew advertisers have a positive impact.
The company said that the current cooperation is still in the period of partial testing and adjustment and optimization, and it is expected to further expand to elevator horizontal screen LCD terminals when mature.
It is estimated that the proposed macroeconomic downturn in operating companies in the first half of the year reduced the demand for advertising more than we expected.
We accordingly lower our 2019/2020 operating income forecast13.
0% / 11.
6% to 13.1 billion / 157 trillion, lowered the net profit forecast for mothers in 2019/202026.
3% / 21.
0% to 31.
88 ppm / 44.
Maintain the recommended level, but lower the target price by 17% to 6.
8 yuan, corresponding to 22 times in 2020, corresponding to 20% growth space.
Although the short-term demand is suppressed, the trend of elevator media distribution brand advertising market cake remains unchanged.
The company has a solid business model and a deep moat, and the competitive landscape has recently shown an improvement trend.
It is recommended that investors closely track the inflection point of demand and seize the opportunity of long-term bottom layout.
Risks The macroeconomic downturn has dragged down advertising expectations, media point cost growth has exceeded expectations, competition in the elevator media industry has intensified, and Alibaba’s cooperation has fallen short of expectations.