Investment Rating - The report gives a "Buy" rating for Lemon Media with a target price of HKD 4.71 [2] Core Views - Lemon Media is a leading producer of high-quality TV series, with a strong track record of producing top-tier content since its establishment in 2014 [2] - The company has diversified revenue streams, including licensing, content marketing, and IP derivatives, with 21 out of 23 series produced being copyright series [2] - Lemon Media is expanding its production capacity for high-quality series and is actively developing short-form content as a second growth curve [2] - The company has a strong presence in overseas markets, with 70%+ of its 2024 series planned for international distribution [2] Long-Form Series - Lemon Media has produced 23 long-form series by 1H24, with 21 being copyright series, and has maintained a stable output of 3-4 series annually over the past five years [2] - The company aims to increase its annual production from 200 episodes to 200 series over the next three years, focusing on high-quality content [2] - In 1H24, the company faced a net loss of RMB 50-55 million due to delayed series releases, but it expects to release 120 episodes in 2024, including "Half-Cooked Men and Women," "Midnight Return," and "Hunting Crime 2" in 2H24 [2] - Overseas revenue grew by 89.1% in 2023, driven by successful international releases like "A Journey to Love," and the company plans to continue expanding its overseas distribution [2] Short-Form Series - Lemon Media is focusing on short-form content as a second growth curve, leveraging its expertise in long-form series and partnerships with platforms and brands [2] - In 2023, the company saw a 12.4x increase in short-form revenue, driven by hits like "Twenty-Nine," and expects further growth in 2024 [2] - The company is positioning itself to produce high-quality short-form content, which is expected to be more profitable compared to short-form series reliant on advertising [2] Financial Projections - The report forecasts Lemon Media's net profit for 2024-2026 to be RMB 170 million, RMB 240 million, and RMB 300 million, respectively, with a PE ratio of 8.2x, 5.9x, and 4.6x [2] - Revenue is expected to grow from RMB 1.5 billion in 2024 to RMB 2.3 billion in 2026, driven by both long-form and short-form content [4] - The company's overseas and short-form businesses are expected to maintain high growth rates, contributing significantly to overall revenue [2] Industry Analysis - The long-form series industry is in a period of stock competition, with platforms focusing on cost control and high-quality content [24] - The short-form series market has seen explosive growth, with the market size increasing from RMB 940 million in 2020 to RMB 37.39 billion in 2023, but growth is expected to slow as the market matures [41] - Regulatory normalization and the trend towards high-quality content are expected to drive the short-form series market towards more premium productions [44]
柠萌影视：精品剧集产能扩张稳中求进，发力短剧打造第二增长曲线