Shulou(Shulou.com)06/03 Report--

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Mango Supermedia released a semi-annual performance forecast for 2020 on the evening of July 10. During the reporting period, Mango Supermedia is expected to achieve a net profit of 1.04 billion yuan to 1.14 billion yuan attributed to shareholders of listed companies, an increase of 29.42% Murray 41.86% over the same period last year. No matter in terms of the growth rate of net profit or the level of profit, the performance of Mango Supermedia is commendable, and its market value has also maintained the rising trend after the broadcast of its popular variety show "Sisters through the Wind and waves" (hereinafter referred to as: Lang Jie).

It is worth mentioning that Mango Supermedia is currently the only profitable long video platform, domestic long video platforms such as "Youai Teng", mostly in a loss state. So why can mango supermedia be profitable?

Generally speaking, due to Hunan Radio and Television, the content cost of mango TV is much lower than that of Tencent and iqiyi, which makes mango TV achieve a good profit with only iqiyi and Tencent Video paying users. In addition to the low cost of content, Mango also has unique views on content production.

However, mango is not without problems. For example, as mango's homemade content increases, its former cost advantage is gradually diminishing; in addition, the "upside-down" model of low revenue and unusually high market capitalization makes people question whether it can be sustainable.

Heterogeneity in long video platform

The predecessor of Mango Supermedia is the happy shopping business of Hunan Radio and Television, which is mainly responsible for the TV shopping business of Hunan TV Station. Since 2018, five subsidiaries of Hunan Radio and Television package Happy Sunshine, Mango Mutual Entertainment, Tian Entertainment Media, Mango Film and Television, Mango Entertainment, buy Happy A-shares through backdoor purchase, and renamed "Mango Supermedia".

According to the public information checked by the enterprise, Hunan Radio and Television holds a 100% stake in Mango Media Co., Ltd., and Mango Media holds a 64.20% stake in Mango Supermedia Co., Ltd. (the main listed body of Mango). In other words, Hunan Radio and Television Station is the controlling shareholder of Mango Supermedia.

After the integration of Hunan radio and television, the business of mango supermedia has gradually expanded from TV shopping to long video, entertainment brokerage, film and television production, game distribution and other fields, becoming a super media content platform.

In mid-July 2018, the renamed Mango supermedium landed on the domestic capital market and closed up 6.24%. Since then, its share price has been tepid; until last October, the share price soared, and by the broadcast of "Sister Lang" last month, its share price had reached more than 70 yuan per share, more than tripling its offering price, and its market capitalization exceeded 100 billion in one fell swoop.

It is worth mentioning that as a parent video platform, Mango TV has only 18.37 million paying members by the end of 2019, which is less than iqiyi and Tencent Video's 1SCR 5. In terms of revenue, Mango Supermedia's annual revenue in 2019 is 12.5 billion yuan, less than half of iqiyi's annual revenue (29 billion yuan). But in terms of profitability, it is far better than the latter two.

In 2019, Mango Supermedia achieved a net profit of 1.156 billion yuan, an increase of 33% over the same period the previous year, and its net interest rate could reach 9.25%. In the same period last year, iqiyi lost as much as 10.3 billion yuan and Tencent lost nearly 3 billion yuan. Mango TV has become one of the few profitable companies in long video sites, or even an "outlier" in long video platforms. To a large extent, it should be attributed to the big tree of Hunan Radio and Television.

Lean against a big tree to enjoy the cool

Mango Taiwan "Lang Jie" fire, as the parent company of Mango supermedia, its market value is also rising all the way up. In fact, it was "Sister Lang" that put it on the hot search, but it was Hunan Radio and Television that really gave it a chance to sit on a market capitalization of hundreds of billions of dollars.

Mango TV back to Hunan Radio and Television this "big tree", the development is naturally with the wind and water. Specifically, using the resources of Hunan radio and television, mango TV can have four advantages:

First, content resources with a higher premium can be obtained with lower content costs. According to the relevant data of Mango TV, in terms of cost, the content cost and distribution content copyright carry-over cost of Mango TV's Happy Sunshine Internet video business total 1.235 billion, accounting for about 36.5% of the current revenue, while iqiyi's content cost is close to 80% of its total revenue, and the content cost of Mango TV is only half of iqiyi's content cost.

This is also the reason why Mango can take the lead in making a profit. After all, long video losses in China are largely attributed to the high cost of content.

Second, mango TV has a license advantage. Backed by Hunan Radio and Television, Mango TV holds both IPTV and OTT licenses of Hunan Radio and Television Station, which is the actual operator of these two licenses and the only market competitor in the Internet video industry with two operator business licenses at the same time.

With these two licenses on its back, Mango TV has a different revenue model from Youai Teng, that is, the channel fee income of the license. But in this national scope is very rare, the IPTV license country only has 12, the OTT license country only has 9. As one of them, mango naturally has an advantage. as long as someone wants to get involved in on-screen video playback, they need to cooperate with the mango station and pay the drainage fee.

Third, mango TV users are mostly achieved through pre-installation, and the pre-installation cost is not high. Relying on the relationship of Hunan radio and television, Mango has achieved user growth by pre-installing mango TV into operators' mobile phones or smart screens to promote the APP of mango TV to many potential users while getting involved in communication business.

Fourth, radio and television can bring it stable customers. For example, the first major customer is a subsidiary of Hunan Satellite TV, accounting for 18.48% of its total revenue, and the first few related customers bring nearly 30% of the revenue to Mango.

With the support of these aspects, Mango Satellite TV naturally increases its wings. Although Hunan radio and television is blessed, it is not possible without "hard skills" in content production. In fact, the "ability" of mango TV in content production is not to be underestimated.

Advantages of homemade content

In the business revenue structure of mango hypermedia, the new media interactive entertainment content business accounts for about 30% of the total revenue, second only to the Internet video business.

In terms of content production, mango supermedia is particularly willing to make efforts. It is understood that its free content production team of more than 1500 people, under the jurisdiction of dozens of content studios, continue to create high-quality popular style content.

Among them, Mango TV has 16 variety self-made teams, Happy Sunshine, Mango Film and Television and Mango Entertainment all hold TV series production licenses (Class A), which is the leading producer of movies and TV dramas in the market.

Mango TV inherits Hunan Satellite TV's emphasis on "variety" style and makes its debut as "variety coffee". So far, mango has launched a number of popular styles of self-made variety content, all of which have received a good response.

For example, mango TV launched more than 33 variety shows in 2019, covering all aspects. Such as "wife's romantic trip", "daughters' love", the live declassification experience show "Chamber of Secrets escape", weight loss life observation Reality Show "oops! "good figure" and so on. The latest release of "Sisters through the Wind and waves" has become a popular variety show. Mango launched more than 30 homemade dramas in 2019.

However, according to outside investors, "homemade drama also has its drawbacks, that is, the homemade model, and its scale is naturally limited." For example, "it is more difficult to multiply." However, this does not seem to affect the outside world's optimism about the company. Driven by the popularity of "Sister Lang", the market value of mango has soared directly to the level of hundreds of billions.

New problems after hundreds of billions of dollars

Mango's soaring market value, like its self-made popular variety show "Lang Jie", is unstoppable and unstoppable. But judging from the current situation of Mango, it needs to answer at least the following two questions.

First of all, there is the upside-down link between revenue and market capitalization. Take iqiyi, iqiyi's revenue in 2019 is more than double that of mango, but according to the current market value, iqiyi's market value is only 117.6 billion yuan, while the market value of mango supermedia is more than 129.7 billion, which is 12.1 billion higher than iqiyi's market capitalization. It is debatable whether mango's commercial potential can afford hundreds of billions of dollars.

Secondly, with the increasing investment of mango supermedia in homemade dramas, the cost of its content is gradually increasing, and it is not known whether mango supermedia can continue to maintain such high gross margins in the future.

Overall, it remains to be seen whether mango can go any further on the basis of a market capitalization of hundreds of billions of dollars. But what is clear is that Mango needs to be prepared to fight an uphill battle if it is to continue to stand out in the long video competition in the future.

(official account of Liu Kuang / tr. by Phil Newell) ID:liukuang110

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