Focus Media(002027) 海通证券·2024-07-21 13:01Investment Rating - The report assigns an "Outperform" rating for the company [1]. Core Views - The company, Focus Media, has established the largest urban lifestyle media network in China, with a resilient performance and strong growth potential driven by technology [4][12]. - The company's total revenue is positively correlated with GDP but exhibits greater resilience, with significant growth in advertising spending from daily consumer goods, transportation, and telecommunications sectors [4][28]. - The company is expanding its overseas media resources in response to the "Belt and Road" initiative, establishing a second growth curve [4][12]. Summary by Sections Company Overview - Focus Media operates the largest urban lifestyle media network in China, with 2.623 million self-operated elevator media resources covering 99 major cities in China and 95 cities in other countries [4][12]. - The company has a strategic partnership with Alibaba, which holds an 8.88% stake [12]. Financial Performance - In 2023, the company reported total revenue of 11.904 billion yuan, a year-on-year increase of 26.3%, and a net profit of 4.827 billion yuan, up 73% [4][31]. - The company has a high dividend payout ratio of 98.8%, distributing 4.77 billion yuan in cash dividends [4]. Advertising Spending Trends - The advertising spending in 2023 showed strong growth in daily consumer goods (29%), internet (26%), transportation (44%), entertainment (30%), and telecommunications (148%) [4][28]. - Daily consumer goods became the largest advertising spending sector, accounting for 56.2% of total revenue in 2023 [4][28]. Business Segments - The elevator media business is the largest segment, with a revenue share of 93.4% in 2023, showing a quick recovery post-pandemic [4][18]. - The cinema media business is closely tied to national box office performance, with a significant increase in revenue per screen in 2023 [4][25]. Future Outlook - The company expects a slight increase in domestic elevator media resources in 2024, with overseas resources projected to grow significantly [4][22]. - The earnings per share (EPS) forecast for 2024-2026 is projected to be 0.37 yuan, 0.41 yuan, and 0.46 yuan respectively, with a target price range of 8.88 to 10.36 yuan per share based on a 24-28 times PE valuation [4][31].