The core main business of Mango Super Media has grown steadily, and the "open source" growth video has broken through the road

On the 24th, Mango Super Media released its 2021 financial report, and the company achieved a total operating income of 15.356 billion yuan, an increase of 9.64% year-on-year; the net profit attributable to the shareholders of the listed company was 2.114 billion yuan, an increase of 6.66% year-on-year. The company's core main business, Mango TV Internet video business (advertising + membership + operator business), maintained steady growth, achieving operating income of 11.261 billion yuan, an increase of 24.29% year-on-year. The number of effective members of Mango Super Media reached 50.4 million at the end of 2021, an increase of 39.5% over the end of 2020.

While maintaining steady growth in the core main business of Internet video, Mango Super Media said that it will consolidate its self-made advantages and strengthen the value of content, with a view to extending the industrial chain and cultivating new growth poles in the future.

"Top Students" in the Media Industry

Considering the quarterly factors and the impact of the blockbuster variety show on the company's short-term performance, as well as the interruption of the rhythm of content production during the epidemic, the year-on-year growth of Mango Super Media's revenue and net profit in 2021 is invaluable, which is why it has always been ranked among the best stocks in the performance of media banks.

From the perspective of return on net assets, Mango Super Media is far ahead of its counterparts in the domestic local radio and television department, and mango Super Media's ROE in 2021 is 16.25%, which is a ride in the long video competition. The return on net assets is the percentage ratio of the company's after-tax profits divided by net assets, which has put aside the impact of assets and volume on profitability, as a ratio indicator, the higher the value, the stronger the ability of own capital to obtain net income.

This is due to the effective and efficient operation of the organizational structure.

Mango TV has 26 variety show production teams, builds a "program production center", and establishes a "variety show project committee" to standardize the whole process management of content production and effectively control the cost of programs; it also has 29 film and television production teams and 34 "New Mang Plan" strategic studios, and establishes a "film and television drama planning committee" to carry out overall management of episode planning, production and assessment, and effectively improve the yield rate of film and television dramas.

Judging from the number of blockbusters launched, Mango Super Media has performed outstandingly. In 2021, according to the statistics of Yien data, there are 215 newly launched online variety shows nationwide. Solo broadcasting has become the main broadcast mode of online variety shows, and "scale + playback performance" has formed a stepwise pattern of long videos. According to the statistics of the Prospective Industry Research Institute, Tencent Video has launched 69 solo variety shows, ranking first among various platforms. It was followed by iQiyi, with 53 files on the line, and Mango TV ranked third with 47 files.

It is worth mentioning that last year's Q1 explosive variety show "Sister Riding the Wind and Waves 2" was popular, which promoted a significant increase in advertising and membership income base. However, the eye-catching performance of the same period last year has put a lot of pressure on this year's Q1 performance. According to the first quarterly report of this year, Mango Super Media achieved revenue of 3.124 billion yuan and net profit of 507 million yuan in the first three months. This is also repeated with the epidemic situation in Q1 this year, resulting in the postponement of the recording of several key variety shows such as "Sound and Endless", which affects the rhythm of content scheduling. It is expected that in the follow-up Q2 and Q3 stages, ace IP such as "Brother", "Sister" and "Sound and Endless" will be launched one after another, and the "Monsoon Theater" episode schedule will be more abundant.

With the guarantee of high-quality content, there can be income revenue. The advertiser's delivery effect is product sales and brand premium, and brand empowerment can be achieved with the help of S-level variety shows. In 2021, self-made variety show advertising through the provision of one-stop marketing services, to promote the head variety show investment amount to a new high, "Sister Riding the Wind and Waves 2" investment amount hit the highest in the industry, comprehensive N generation high-quality IP project advertising volume steadily increased; customized variety show advertising using the "IP brand interaction" model, for 4 consecutive years to achieve leapfrog climbing.

In 2021, Mango Super Media developed 118 new advertisers, and its advertising business revenue exceeded the 5 billion yuan mark, an increase of 31.75% year-on-year. In contrast, in fiscal 2021, iQIYI's online advertising service revenue was 7.1 billion yuan, an increase of only 4% year-on-year; in 2021, Tencent's media advertising revenue fell by 7% to 13.3 billion yuan, mainly due to the decline in advertising revenue of media such as Tencent Video.

From the perspective of EPS (earnings per share), which investors are most concerned about, Mango Super Media also leads its peers, which is one of the indicators directly used to measure the profit level of common stocks. Jumping out of the circle of radio and television peers, in the field of long video, whether it is the B station with the distinctive characteristics of Generation Z or iQiyi, which is struggling in the quagmire of losses, it cannot be compared with Mango Super Media.

The reporter noted that in the past three years, the top ten shareholders of Mango Super Media are relatively stable. Since 2019, the top four shareholders such as Mango Media Co., Ltd., China Mobile Capital Holdings Co., Ltd., Hong Kong Securities Clearing Company Limited, and Xingquan Heyi Flexible Allocation Hybrid Securities Investment Fund (LOF) have held a total of about 65% of the equity, of which it can be seen that many funds under Cicise Global Fund Management Co., Ltd. have always had a strong interest in Mango Super Media. From 2021 to the first quarter of 2022, funds under Wells Fargo Fund Management Limited increased their holdings in Mango Super Media.

Being able to obtain long-term holding by the institution reflects the stability of Mango Super Media's operation and the expectation of the company's future development. Recently, 19 institutions such as Southwest Securities and Guohai Securities have also given ratings to Mango Super Media, including 17 buy ratings and 2 overweight ratings. The company is also newly included in the top ten heavyweight stocks of the new BLUE CHIP fund in Central Europe.

Value-added services open up the way

How to make a follow-up effort on the long video platform?

According to a report released by CNNIC in February this year, as of December 2021, the number of online video (including short videos) users in the mainland reached 975 million, an increase of 47.94 million over December 2020, accounting for 94.5% of the total internet users.

With the gradual peak of user penetration, since the number of iQiyi and Tencent Video members exceeded 100 million in 2019, the membership growth rate of both platforms has declined or even experienced negative growth. The competition between online video platforms has entered a stage of more efficiency from extensive and heavy purchase of copyrights to a more efficient stage, which is reflected in reshaping the membership pricing system, making up for the shortcomings of the content link, and refining user operations.

Simply fighting for traffic is not a sustainable development model, which is why after iQiyi's price increase at the end of last year, this year's multi-parent video platforms such as Mango TV, Migu Video, and Tencent Video began to follow up. When an increasing proportion of premium content is set as paid membership content, the growth of effective playback volume far exceeds that of ordinary content and further increases the payment rate. For Mango Super Media, the proportion of Mango TV's Internet video business has increased from 60% last year to 70%. From the perspective of the global online video platform membership operation model, the model of differentiated pricing according to the hierarchical operation of user needs is feasible. Netflix offers three pricing for members based on content clarity and the number of simultaneous screens.

Content still matters. In the past decade, the "Aiyouteng" three parent video platform has burned more than 100 billion yuan. Although various video platforms are clamoring to achieve results in content cost control, there are few people who can maintain profits.

Deriving a new profit model is already on the agenda. The one-time paid post-service method cannot allow users to be aroused by excellent content in the process of use. Compared with the online games that belong to the content industry, players have various payment points in the process of using the product to stimulate users' desire for instant consumption. Compared with the per capita user expenditure of mobile games in 2021 of 344 yuan, the current price increase of about 200 yuan for annual video members obviously has room for expansion, of course, corresponding to the matching value-added services.

Since China Mobile became the top ten shareholders of Mango Super Media, the cooperation between the two has opened up imagination space for future development. In November 2021, Mango TV, a wholly-owned subsidiary of Mango Super Media, signed an overall cooperation framework agreement with Migu Culture, a subsidiary of China Mobile, to carry out in-depth strategic cooperation around the big screen business and 5G innovation business in the next three years. This means: first, the output of large-screen content will cover a wider range of users across the country; second, license cooperation has become the focus. During the reporting period, the operator's business has achieved operating income of 2.12 billion yuan, an increase of 27.17% year-on-year.

In addition, Mango Super Media began to fully promote the "new wave of domestic content e-commerce platform" Xiaomang APP to accelerate development. The controlling shareholder, Mango Media Co., Ltd., invested 286 million yuan to increase the capital, accounting for 33.33% of the shares. After the capital increase and share expansion, Mango Super Media's shareholding in Xiaomang E-commerce decreased from 100% to 66.67%. The capital increase and share expansion funds will be used to supplement the liquidity of Xiaomang E-commerce, improve the construction of basic platforms such as logistics and technology, and support the implementation of strategic projects such as e-commerce content production.

By creating blockbuster evenings such as "Xiao Mang Seed Flower Night" and "Xiao Mang New Year Goods Festival", Xiao Mang e-commerce has realized the linkage of users from programs to Apps to verify the feasibility of the "Mang Platform", plus "Mang Brand", and "Community + Mall". Compared with vertical platforms such as Xiaohongshu and Dewu, the vertical positioning of the main national tide content e-commerce platform is expected to find new incisions. In the long run, it will also accelerate the construction of the company's "content + video + e-commerce" business closed loop, bringing new growth points to business development.

As offline scene entertainment is favored by young people, Mango Super Media is also actively laying out offline live entertainment tracks, relying on high-quality content such as "The Great Detective" and "The Great Escape room", based on Mango Super Media's multiple advantages in IP brand, dual-platform publicity, star artists, and clear user groups, extending IP from online to offline, creating a new brand M-CITY, committed to building an offline live entertainment complex, and establishing industry benchmarks from script creation and copyright protection, DM training, offline entity operations, etc. Output industry standards.

Who can see the future, who is the final winner in the industry.