Focus Media (002027): No signs of improvement in continued income trend
1H19 earnings are forecast to fall by 76.
82% of Focus Media released its 2019 annual results report: revenue 57.
1.7 billion, down 19 a year.
59%; net profit attributable to mother 7.
76 trillion, down 76 a year.
82%, the performance fell into 7 of the Air Force’s notice.
Within the 0 Gigabit segment, it basically met our expectations.
Focus on demand Demand is still flat, quarterly revenue has fallen for many years.
Operating income for the second quarter of 19 was 31.
06 million, down 25 every year.
16%, but increased by 18 due to unfavorable factors.
We believe that the company ‘s second-quarter revenue continued to overlap due to three reasons: weak demand in the advertising market and tightening of advertisers ‘overall budgets; substitution of investment and financing activities in the primary market; new economy advertisers’ investment significantly reduced, and traditional industry advertisingIt is still under development and its incremental contribution is limited. During the World Cup in the second quarter of last year, it was the peak season for advertising and brought a high base of revenue.
We expect the company’s revenue decline in the third quarter will narrow.
In addition, the company aims to tap traditional brands and has established “National KA Team” and “Focus 100 Team”.
We believe that this strategic adjustment is expected to gradually achieve success and help to regain revenue growth.
Operating costs are expected to remain flat month-on-month, but increase significantly each year.
The company achieved net profit 厦门夜网 attributable to its mother in the second quarter of 19th.
36 trillion, down 79 a year.
We expect the company’s terminal point value to remain stable and operating costs to be comparable to 1Q19, but at least the offset increase.
The rigidity of cost is still continuing, and the expansion to the profit side is greater than the income side.
The speed of customer repayments has slowed down, and the provision for bad debts is expected to increase.
The company stated that it reported a deterioration in the short-term aging structure and increased risks.
The company’s accounts receivable at the end of 1Q19 was 40.
We expect that the overall provision for bad debts will increase significantly from the earlier period, which will have a certain impact on profits.
Estimates and Proposed Estimates Macro and macro environmental pressures and the aftermath of expansion, the company’s performance is still at a low point.
However, we believe that the long-term trend of the elevator media distribution brand advertising market cake remains unchanged, the company’s business model and competitive advantages are solid, and in the face of the industry’s prospects, it has timely adopted countermeasures to seek for healthy sales growth.
It is recommended that investors closely track the inflection point of demand and seize the opportunity of long-term bottom layout.
Maintain the sustainable profit forecast and rating. It is expected that EPS for 2019-2020 will be 0.
22 yuan / 0.
30 yuan, corresponding to the current expected price-earnings ratio of 22.
3 times / 15.
Maintain Outperform rating and target price of 6.
80 yuan, 40 more than the current price.50% growth space, corresponding to 23 times the price-earnings ratio in 2020.
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.