Many people believe that the decline in Focus Media’s performance is due to the recent bad economic conditions, and they believe that Focus Media’s performance will recover after the economic situation improves. I think this is obviously a lack of in-depth understanding of Focus Media, which leads to attribution errors. I will explain my point of view in detail below.
I think the Internet winter is the main reason for Focus Media’s performance plummet.
Of course, the economic situation has an impact on Focus Media’s performance, but the Internet winter is the main reason for the decline in Focus Media’s performance. Let’s take a closer look at Focus Media’s semi-annual report:
It is true that during the economic downturn, the revenue of all walks of life will be affected, but the decline in demand in other industries cannot have such a big impact as the Internet winter. In the first half of this year, Focus earned 2.474 billion less than the same period last year, of which revenue from the Internet industry fell by 1.677 billion, revenue from the consumer goods industry fell by 300 million, and revenue from all other industries fell by 500 million. At least 67% of Focus Media’s revenue decline was caused by the cold winter of the Internet.
(This is my guess.) If the impact of the overall decline in the unit price of advertisements caused by the decline in demand in the Internet industry is considered, then the impact of the Internet winter on minute performance is even greater. Because the sales model of advertisements is similar to auctions, there are only a limited number of suitable advertising spaces, and the price of advertising spaces will be affected by changes in the number of customers. This is easy to understand. For a rare lot, there may be a 30% price difference between three people bidding and four people bidding.
At the same time, the holes left by the Internet winter are not so easy to be filled by the growth of other industries. From 2016 to 2021, the revenue of Focus Media from other industries has only increased by 3.2 billion in five years, and the annualized growth rate is (104/75)^(1/5)-1=7.36%. The revenue of the Internet industry will also decrease by 2.5 billion (1.677 billion in the first half of the year), and this 2.5 billion will require at least three years of steady growth in other industries to make up. There are not so many customers on the Internet who are not bad for money.
Therefore, you can go to the screen of Focus Media to see, if someday Meituan is hungry, Guazi used car, Uxin used car, Pinduoduo, Shenzhou Car Rental, Renrendai, and these companies buy advertisements on Focus Media, then Focus may soon be The valuation will be repaired and the value will return.
The comment area welcomes different opinions, and the clash of opinions can collide with the spark of truth.
$Focus Media(SZ002027)$ $Yanghe Shares(SZ002304)$ #唐朝#
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