Aveneu Park, Starling, Australia

Focus Media (002027) 2019 Q1 performance newsletter review: macro and expansion factors make short-term performance under pressure to continue to cultivate internal strength and try to get out of the bottom of the long cycle

Focus Media (002027) 2019 Q1 performance newsletter review: macro and expansion factors make short-term performance under pressure to continue to cultivate internal strength and try to get out of the bottom of the long cycle

Event: Focus Media released the 2019 first quarter performance forecast: the net profit of mother and mother is expected to be 75% to 65%, that is, the net profit of mother and mother in the first quarter of 2019 is 3.

02 billion-4.

2.3 billion.

The performance exceeded the expectations, and the macroeconomic and expansion factors were the main causes, which led to a significant increase in cost growth over revenue growth.

The company ‘s growth in the first quarter of 2019 was finally 1) Affected by the macro economy, the growth of the advertising market began to weaken in the fourth quarter of 2018. We believe that it is mainly due to the cold winter in capital and the advertising budget of the Internet industry has declined sharply since 2018Company advertising revenue 21.

92%), while accounting for a larger proportion of consumer goods (23%).

4%), cars (14%杭州桑拿).

84%), communications (14%).

20%) and other growth is highly stable; 2) Expansion of elevator media resources led to a significant increase in media resource rents, equipment depreciation, labor costs, and operation and maintenance costs in 2019Q1. Until the end of 2018, the company’s number of locations reached 2.6 million+, Ranked 151 at the end of 2017.

50,000 has increased by nearly 72%, and the point is expected to increase in 2019 but be relatively flat.

Continued effectual transformation, channel sinking and media iteration, and the process of building the bottom of the director cycle.

The company actively cooperates with Ali in the “U public plan” to carry out the intelligent transformation of elevator media to make it more effective; at the same time, it arranges vertical screens and projections to respond to 成都桑拿网 competition and enrich the form of advertising display; and continues to sink points and coverMore points connect more types of audiences and advertisers.

In the long run, the company’s transformation efforts will help the company gain more market share under the rebound in consumption. At present, the company is still in the process of building a long-term bottom.

Earnings forecast and grade: We temporarily lower the company’s earnings forecast for the period from 2018 to 2020, and the net profit attributable to the parent is 58.

28/41.

66/54.

700,000 yuan, the corresponding EPS is 0.

40/0.

28/0.

37 yuan, corresponding to the closing price of PE on March 28 were 16 respectively.

7/23.

3/17.

8 times, maintaining the company’s “prudent overweight” rating.

Tips from Fenglian Insurance Network: Macroeconomics is less than expected risks; Industry competition risks; Advertising industry recovery is less than expected risks; Important advertisers ‘advertising budget adjustment risks; Share lifting risk;