MD, Blue Lotus Research Institute

Gu Jun, CFA

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

●In our view, China’s newsfeeds online advertising sector will be generally driven up by Toutiao’s aggressive expansion in 2018. Altogether, we estimate that China’s newsfeeds online advertising sector will have 112%/81% YoY growth in 2017/2018.●China’s newsfeeds advertising is moving from being technology-driven (AI/algorithm) to content-focused. Most newsfeeds platforms launched subsidiary with plans to acquire high-quality content.●News platforms’ top content type is changing from social news to entertainment content because of increasingly strict regulations and Chinese people’s interest shifts.●Chinese users’ reading habits are changing to video content. Long video platforms are still burning cash for top copyright content. Short video platforms are quickly rising with casual entertainment content.

●In our view, China’s newsfeeds online advertising sector will be generally driven up by Toutiao’s aggressive expansion in 2018. Altogether, we estimate that China’s newsfeeds online advertising sector will have 112%/81% YoY growth in 2017/2018.●China’s newsfeeds advertising is moving from being technology-driven (AI/algorithm) to content-focused. Most newsfeeds platforms launched subsidiary with plans to acquire high-quality content.●News platforms’ top content type is changing from social news to entertainment content because of increasingly strict regulations and Chinese people’s interest shifts.●Chinese users’ reading habits are changing to video content. Long video platforms are still burning cash for top copyright content. Short video platforms are quickly rising with casual entertainment content.

China Newsfeeds Advertising: Catfish Agitates the Sector

Equity Bottom-Up

Focus Media Information Technology Co, Ltd. / Equity Bottom-Up

Focus Media Information Technology Co, Ltd.

Promising 2018, raise TP to RMB 14.3● China’s non-internet ads spending shows strong recoveries in 2H17, which in our view is the response to increasing expensive online user acquisition cost.● In 2018, Focus Media plans further to expand media coverages in low-tier cities, which is the next growth opportunity, raising TP to RMB 14.3● We estimate that 4Q17’s total revenue and net profit would reach RMB 3.2 bn/1.65 bn, respectively, in line with company’s guidance.Offline ads spending saw strong…

Promising 2018, raise TP to RMB 14.3● China’s non-internet ads spending shows strong recoveries in 2H17, which in our view is the response to increasing expensive online user acquisition cost.● In 2018, Focus Media plans further to expand media coverages in low-tier cities, which is the next growth opportunity, raising TP to RMB 14.3● We estimate that 4Q17’s total revenue and net profit would reach RMB 3.2 bn/1.65 bn, respectively, in line with company’s guidance.Offline ads spending saw strong…

Focus Media (SZSE:002027) Promising 2018, Raise TP to RMB 14.3

China

Focus Media Information Technology Co., Ltd. engages in media network for advertisements including within cinemas, posters and advertising displays in commercial offices or buildings.

Focus Media Information Technology Co, Ltd. (002027 CH)

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Focus Media Information Technology Co, Ltd. (002027 CH)

China Newsfeeds Advertising: Catfish Agitates the Sector

●In our view, China’s newsfeeds online advertising sector will be generally driven up by Toutiao’s aggressive expansion in 2018. Altogether, we...

Blue Lotus Research Institute

Focus Media (SZSE:002027) Promising 2018, Raise TP to RMB 14.3

Promising 2018, raise TP to RMB 14.3● China’s non-internet ads spending shows strong recoveries in 2H17, which in our view is the response to...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)