Focus Media(002027) 华创证券·2024-08-11 14:02Investment Rating - The report maintains a "Recommend" rating for Focus Media (002027) with a target price of 7.33 RMB [1] Core Views - Q2 2024 revenue met expectations, with gross profit margin improvement and higher investment income leading to better-than-expected profits [1] - Mid-term dividend payout ratio reached 58%, significantly rewarding shareholders [1] - Point-of-sale (POS) growth driven by expansion in lower-tier cities and overseas markets [1] - Media revenue breakdown shows steady growth in elevator media and high-quality recovery in cinema media [1] - Daily consumer goods industry remains a key source of operational resilience [1] Financial Performance - Q2 2024 revenue: 3.24 billion RMB, YoY +10%, QoQ +19% [1] - Q2 2024 gross profit: 2.2 billion RMB, YoY +14%, QoQ +31% [1] - Q2 2024 net profit attributable to shareholders: 1.45 billion RMB, YoY +13%, QoQ +40% [1] - H1 2024 cash dividend: 1.44 billion RMB, representing 58% of net profit attributable to shareholders [1] Media and Industry Breakdown - Elevator TV: 1.18 million units as of July 31, 2024, YTD +12%, driven by lower-tier cities (YTD +45.3%), overseas markets (YTD +14.7%), and franchising (YTD +64.7%) [1] - Elevator posters: 1.95 million units as of July 31, 2024, YTD flat, with growth in overseas markets (YTD +18.8%) and joint ventures (YTD +2.3%) offsetting declines in lower-tier cities [1] - Elevator media revenue: 5.5 billion RMB, YoY +7% [1] - Cinema media revenue: 450 million RMB, YoY +21%, with a gross margin of 76% [1] - Top three industries by revenue: daily consumer goods (3.8 billion RMB, 64% of total, YoY +14%), internet (520 million RMB, 9% of total, YoY -16%), and automotive (480 million RMB, 8% of total, YoY +2%) [1] Forecast and Valuation - Revenue forecast for 2024-2026: 13/14/15 billion RMB, YoY +9%/8%/7% [1] - Net profit attributable to shareholders forecast for 2024-2026: 5.3/5.7/6.1 billion RMB, YoY +10%/8%/7% [1] - Target valuation: 20x PE for 2024, corresponding to a target market cap of 105.9 billion RMB and a target price of 7.33 RMB [1] Market Performance - Current price: 5.78 RMB [2] - 12-month high/low: 7.76/5.58 RMB [3] - Market performance over the past 12 months: -23% [4]