报告名称：Gehua CATV Network(600037)Restructuring symbolizes a new beginning for reform
报告类型：点评报告
报告日期：2016-01-22
研究机构：中信证券
股票名称：歌华有线
股票代码：600037
页数：3
简介：Event:
On 21 Jan, the Company announced that the parent company of its controlling shareholder, BAMC, will merge with CIM Group to form "Beijing Gehua Media Group". As such, the Company's de facto controller will change from BMN to the newly merged entity after the restructuring.
Comments:
Lifting curtain to Beijing's restructuring of cultural assets and accelerated reform for state-owned TV and broadcasting companies
A change in the Company's de facto controller from Beijing Media Network (BMN) to Beijing Gehua Media Group marks the beginning of reform for culture companies in Beijing. After Shanghai Media Group (SMG), Gehua is becoming another bellwether for SOE reform in the TV & broadcasting industry. Meanwhile, it is also solidifying its status as one of the key platforms for the consolidation of culture assets in Beijing.
As a large-scale group of culture companies under the Beijing Municipal Government and coordinating both domestic and overseas resources, CIM Group is striving to become a global behemoth in the cultural and creative fields. Currently, CIM Group's businesses are divided into three major segments of marketing, content production and finance & investments.
Gehua's previous controlling shareholder, BAMC, operates an extensive portfolio of businesses spanning across TV & films, newspapers & magazines, culture &education, sports & entertainment, internet and real estate, leveraging on the abundant resources of its parent company. Currently, BAMC already owns a number of subsidiaries engaged in mobile and digital TV, publishing and films productions.
We believe the change in Gehua's de facto controller will lift the curtain to Beijing's restructuring of cultural assets as well as institutional reform for the culture industry. Under the government' stance of integrated development of traditional and new media, as the mainstream media, TV and broadcasting companies are expected to accelerate their transformation into integrated media groups, throughout the latest round of reforms.
Industry trends: TV and broadcasting companies transforming into integrated media groups
Ramping up pace of transition, continues to take the lead in reform of state-owned culture companies
Gehua has continuously ramped up its efforts in transformation and pushing forward its business strategies since 2015. Thus far, it has (a) jointly launched a TV theatre service; (b) entered the smart TV field via cooperation with leading brown goods manufacturers, and (c) actively explored integrated new media services and delving deeper into "Internet+"through cooperation with internet giants such as Alibaba and Qihoo.
On the other hand, Gehua has expanded its market presence through providing contents, entertainment and public culture services, leveraging on its strong foothold in the Beijing-Tianjin-Hebei region. The Company will likely further expand the regional coverage of its services. Going forward, we expect Gehua to gain substantial development across different regions, networks and terminals, and gradually develop into an integrated media conglomerate as reform expectations become clearer and business strategies being pushed forward smoothly. Moreover, as a pacesetter of reform for the TV &broadcasting industry, Gehua is becoming the yardstick for institutional reform and business innovation of state-owned culture companies.
Risks:
(i) disappointing reform outcome; (ii) exacerbating competition.
Earnings forecast, valuation and investing rating:
We maintain its 2015-17E EPS forecast of 0.55/0.76/0.93. Its latest market price implies 2015-17E P/E of 28/20/17x. Taking into account current status of the TV & broadcasting industry, expectations of Gehua's transition into new media and motivation to increase its market cap, we reiterate the BUY rating.

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