Focus Media(002027) 东方证券·2024-11-04 10:10Investment Rating - The report maintains a "Buy" rating for the company with a target price of 7.60 CNY per share, based on a 21x PE for 2024 [2][3]. Core Views - The company reported a Q3 2024 revenue of 3.294 billion CNY, a year-over-year increase of 4.30%, and a net profit of 1.475 billion CNY, up 7.59% year-over-year. Year-to-date revenue reached 9.261 billion CNY, reflecting a 6.76% increase, while net profit was 3.968 billion CNY, up 10.16% year-over-year [1][2]. - The revenue growth in Q3 has slowed compared to previous quarters, but remains resilient, particularly in consumer goods advertising. The company benefits from advertising effects related to major events like the Olympics and the Mid-Autumn Festival [1]. - Investment income has contributed to profit growth, but there is a need to monitor accounts receivable, which increased to 2.571 billion CNY as of September 30, 2024, from 1.821 billion CNY at the end of 2023. The company recorded a credit impairment loss of 89 million CNY in Q3, approximately 2.69% of total revenue [1][2]. - The company is expected to leverage its core competitiveness in the media sector and expand into overseas and lower-tier markets, with anticipated advertising peaks during major shopping events [1][2]. Financial Summary - The company’s projected net profits for 2024-2026 are 5.229 billion CNY, 5.664 billion CNY, and 6.041 billion CNY respectively, with corresponding EPS of 0.36 CNY, 0.39 CNY, and 0.42 CNY [2]. - The gross margin for Q3 2024 was 68.19%, consistent with the previous year, while the sales expense ratio increased by 1.24 percentage points to 18.99% [1]. - The company’s financial metrics indicate a net profit margin of 40.6% for 2023, projected to rise to 41.0% in 2024 [2].