Pay and active users are far lower than iqiyi’s market value but surpass the latter. How can mango ride the storm?

The market value of mango super media (300413. SZ) has been rising all the way since the launch of “sister riding the wind and waves”. Since June, the share price of mango super media (300413. SZ) has soared by 48.5% in a month, and the market value once reached 130 billion yuan. However, as the popularity of “sister riding the wind and breaking the waves” declined, its market value fell to 106.075 billion yuan as of August 20. But it is still higher than the market value of $13.815 billion (about RMB 97 billion) of video platform NASDAQ: IQ, which is listed in the US stock market. < / P > < p > there has been a long-standing discussion on whether the market value of mango hypermedia is overvalued, because the content volume and user scale of mango TV are far less than those of iqiyi and other three video platforms. In terms of user scale, according to questmobile’s mobile terminal data, by the end of the first quarter of 2020, mango TV and iqiyi had monthly live (MAU) of 168 million and 572 million respectively; the daily number of live (dau) was 29.7749 million and 102 million respectively; in terms of the number of paid users, iqiyi exceeded 100 million, while mango hypermedia was only 18 million. < p > < p > a securities analyst who did not want to be named told China Business Daily that the development of the Internet has brought a direct impact on TV stations, media convergence has become an industry trend, and the boundary between TV stations and new media platforms will become blurred in the future. Mango TV, as a new media broadcasting platform of Hunan TV station, is an inevitable choice for Hunan TV station to meet the demand of traditional channel users to watch Hunan TV online under the background of continuous loss of traditional cable TV channel users and slow progress of integration of radio and television network. < / P > < p > in September 2017, the company acquired 100% equity of happy sunshine, mango mutual entertainment, Tianyu media, mango film and television and mango entertainment with 9.530 billion yuan, 508 million yuan, 503 million yuan, 541 million yuan and 468 million yuan respectively. After the acquisition, the listed company was renamed mango super media. < p > < p > among them, happy sunshine’s main business is Internet video business, operator business, content operation, etc.; mango mutual Entertainment’s main business is game business, interactive marketing business, etc.; Tianyu media’s main business is artist brokerage, variety show, film and television drama, other wireless value-added business, etc.; mango Film & TV’s main business is investment, production and distribution of film and TV series Mango Entertainment’s main business is TV series, variety show business and artist brokerage business. < p > < p > happy sunshine mainly operates mango TV, and mango TV is the only new media video platform under Hunan TV and the most important profit source of mango hypermedia. At present, the video content of mango TV is mainly composed of Hunan TV and its self-made variety shows. < / P > < p > according to the annual report of mango super media in 2019, the operating revenue in 2019 was 12.5 billion yuan, with a year-on-year growth of 29.40%, and the net profit attributable to shareholders of listed companies was 1.156 billion yuan, with a year-on-year increase of 33.59%. The company’s performance forecast for the first half of 2020 released on July 10 shows that the company’s net profit attributable to shareholders of listed companies is expected to be 1.04-1.14 billion yuan, with a year-on-year growth of 29.42% – 41.86%. < / P > < p > “our understanding of mango metamedia may be different from that of the market. It is a state-owned enterprise in essence, and has no comparability with Youku, aiqiyi and Teng in market-oriented competition. ” The securities analysts, who did not want to be named, told reporters. < p > < p > mango hypermedia is positioned as a state-owned holding new mainstream media. It takes “Mango TV” as the main platform to build video entertainment ecology. Before and after the completion of the above acquisition, the actual controller of the company has not changed, which is Hunan TV. < / P > < p > according to public reports, as soon as mango TV was established, Hunan Satellite TV announced that the original program content would no longer be distributed on the Internet copyright, and would only be broadcast on its platform mango TV. Since then, a series of blockbuster variety shows, including flowers and teenagers, metamorphosis, where is Dad, I am a singer, and some classic programs of Hunan Satellite TV, such as happy camp and day up, have been broadcast on Mango TV alone, which has brought huge traffic to mango TV in a short period of time. < / P > < p > mango TV’s dependence on Hunan TV station is one of the focuses of doubt. Internet analyst Jiang Hao told reporters that the current valuation of mango hypermedia is too high, because from the user volume, it is far less than iqiyi and other platforms. He believes that in essence, mango hypermedia has not changed the content cost structure of the long video platform. It places the cost end on Hunan Satellite TV. Mango hypermedia mainly enjoys the profits brought by the content, but in fact does not pay the corresponding cost. In contrast, iqiyi has been paying for the high cost of copyright procurement in the past. According to iqiyi’s financial report, its content cost in 2017, 2018 and 2019 was 12.617 billion yuan, 21.1 billion yuan and 22.2 billion yuan respectively. < p > < p > in 2018 and 2019, the operating cost of mango hypermedia’s new media platform was 2.198 billion yuan and 3.399 billion yuan. In addition, according to the purchase agreement on the right to network transmission of TV program information disclosed in mango hypermedia backdoor transaction book, happy sunshine only needs 412 million yuan, 451 million yuan, 496.1 million yuan and 545.71 million yuan to purchase Hunan TV programs in 2017, 2018, 2019 and 2020, which is far lower than the purchase price of similar programs. < / P > < p > it is worth noting that the income obtained by mango hypermedia from distributing its new media end broadcast rights of video content to other video website platforms is also an important part of mango’s main business income. < p > < p > in 2018, mango TV’s membership / advertising / copyright distribution revenue accounted for 18%, 52% and 31% of the total revenue of the platform respectively, and the gross profit margin of the platform was about 35%; in the same period, the three businesses of iqiyi accounted for 43%, 37% and 9% respectively, and the platform gross profit rate was – 8.6%. The Research Report of Minsheng Securities pointed out that behind the difference in revenue structure and gross profit margin is the difference in business structure and “return on investment of content cost”: compared with iqiyi’s outsourcing dramas and variety shows accounting for more than 75% of the total broadcast volume, mango TV’s variety content accounts for about 50% of the platform’s traffic, and the variety shows self-made and purchased from Hunan TV account for more than 90%. < p > < p > happy sunshine and Hunan Satellite TV have signed a copyright assignment contract from 2018 to 2020, which will expire this year. After expiration, whether mango hypermedia’s mode of purchasing content at low price from Hunan TV station is sustainable has become another focus of market attention. However, the above securities analysts told reporters that in the future, in addition to the traditional cable TV channels, the content of Hunan Satellite TV needs to be further broadcast and realized on Mango TV, so as to maximize the publicity and realization effect of TV content. Hunan TV, as the absolute controlling shareholder of mango hypermedia, is fully benefited from this logic. As for the content resource allocation of Hunan Satellite TV, it will try its best to meet mango TV. From this perspective, in 2021 and beyond, the copyright cooperation between happy sunshine and Hunan Satellite TV will not be terminated, or the cooperation scale may be expanded to drive the company’s performance growth. The background of this judgment is that in 2016, SARFT initiated the media integration reform. Mango TV was born in 2014, when iqiyi, Youku and Tencent video had occupied the first echelon. During this period, Hunan Radio and television also built a dual core strategy of “Hunan Satellite TV + mango TV”, insisting on the road of independent broadcasting. In the view of the above analysts, mango hypermedia is a typical sample of domestic media convergence development. < / P > < p > although shareholders have given mango hypermedia support in content purchase price, some analysts also pointed out that this is related to the risk of related party transactions. In 2018, the total amount of related party transactions of the company was 2.478 billion yuan, accounting for 25.6% of the total revenue, which was higher than that of 20% in 2017. < / P > < p > among the top five customers of mango hypermedia in the annual report of 2019, the top three are related parties, the first is Hunan TV, with sales of 2.309 billion yuan; the second is Yunhong communication, a subsidiary of the related party TV and broadcasting media, with sales of 741 million yuan; the third is Migu culture, a wholly-owned subsidiary of China Mobile (China Mobile is the second largest shareholder of mango hypermedia), with sales of 5.10 100 million yuan. The sales volume of the three related parties totaled 3.560 billion yuan, accounting for 28.50% of the total sales. Kuang Yuqing, founder of lens research, a third-party research institution, told reporters that at present, the proportion of related party transactions is not too large, but in any case, related party transactions always make people have some scruples about price and quantity. The key is to see whether the pricing is market-oriented and reasonable. < / P > < p > “according to our judgment, the related party transactions of the company are due to the normal production and operation needs between the company and the related parties, and the transaction activities of goods and services are carried out according to the fair and reasonable transaction price and conditions. Mango TV is the representative of emerging media in media convergence. According to the conclusion that “the best way to transform traditional media is to integrate with emerging media”, Hunan TV, as a traditional media, will inevitably continue to have various business contacts and related transactions with mango TV. In addition, the content of the related party transactions between the company and Yunhong media is advertising, and the content of related party transactions with Migu culture is the income of operators. ” The above securities analysts told reporters. In addition, some analysis points out that mango hypermedia, which constantly creates popular content in self-made variety shows, still has a certain gap compared with other platforms in terms of blockbuster out of circle dramas. According to Yeen’s data, from January to August in 2020, mango super media, the top ten drama series, occupied three seats. From 2018 to 2019, there are few hot dramas on Mango media. In addition, Kuang Yuqing pointed out to reporters that mango’s growth model has certain flaws. They rely on the expansion of accounts receivable to maintain the growth of revenue. As a result, the book performance grows faster, but the corresponding cash is not recovered, and a large amount of accounts receivable are made. Mango super media’s long-term book net profit is far higher than its actual net operating cash flow, so the growth model requires the company to have a continuous flow of funds to advance to the content production link, which puts great pressure on the capital chain. Once the company’s capital chain or financing capacity is limited, the growth will become a problem.