Briefly talk about Focus and the logic and mentality of this investment

This article was published on August 17. If you have a different opinion, you must be right.

The voice version of this article

Today, Tencent released its semi-annual report. I haven’t had time to look at it in detail. I took a cursory glance. It is basically expected that if the first half of the year is not good, it will not have much reaction. Today, let’s talk about the focus of the financial report last night. I will write Tencent again.

Last night, Focus released its first-half performance report. In the first half of the year, its operating income of 4.8 billion fell by 33%, and its net profit of 1.4 billion fell by 51%.

Since there have been performance forecasts before, and it is also a consensus that the advertising industry is more difficult this year, Focus is still rising today.


Focus has talked for many times, so let’s not start from the fundamentals and talk about two key data:

Terminal data:

There has not been much change, the second- and third-line terminals have decreased, and the first-line is basically stable

The total number of elevator TV media equipment is about 848,000 sets, of which about 802,000 sets are self-operated equipment (including about 103,000 sets of media equipment from overseas subsidiaries), covering 86 major cities in China, Hong Kong Special Administrative Region, South Korea, Thailand, Singapore, More than 50 cities and regions in Indonesia, Malaysia and other countries.

The company has a total of about 1.817 million elevator poster media equipment, including about 1.539 million self-operated equipment, covering 75 major cities in China, Hong Kong Special Administrative Region and major cities in Malaysia. The joint-stock company has about 278,000 elevator poster media equipment, covering 62 cities in China

Cinema media signed 1,812 contracts with 13,000 theaters, covering moviegoers in 278 cities in China.

Focus Media ranks No. 1 in the number of media spots, and also ranks No. 1 in both office and residential buildings, with a market share far ahead of 1.8 times the sum of its 2-5 competitors

When I sold Focus on the outlets last year, I also stated my opinion. There are only so many good outlets in China. Focus has also undergone a wave of expansion before and the effect was not good. Later, many of them were optimized.

Basically, I think Focus’s net profit in a healthy environment is 6 billion+, which will mainly benefit from overseas and gradual price increases in the future.

In terms of customer structure:

We can see that in fact, consumption has not declined much. The decline is mainly due to Internet customers. In the first half of last year, it was 2.2 billion. In the first half of this year, it was only 600 million.

In the first half of this year, the operating income dropped by 2.5 billion compared with last year, of which the Internet dropped by 1.6 billion, and the daily consumption dropped by 200 million. Business and services fell by nearly 200 million

Whether Focus can vote or not, the decline in Internet advertisers is temporary is the key.

I think there are several reasons for the decline in Internet advertising users:

In the second quarter, the epidemic situation was more serious, especially in the Yangtze River Delta, which is a developed e-commerce area, which made the e-commerce advertising efforts in the second quarter drop sharply. I don’t think this will be a long-term effect.

Secondly, it is true that the current Internet companies are shrinking, everyone has a difficult life, and advertising investment will naturally decline.

The third time I talked about Tencent a few days ago, it will be difficult to list on the US stock market in the future. Some emerging Internet companies burn money and then go public, and the way to cash out will not work. I think this part of customers is a permanent loss.

In my humble opinion, the impact will not be particularly huge, but there must be some impact. There is a high probability that it will improve in the third quarter, and the epidemic situation has been relatively stable so far in the second quarter.



Talk about the mentality of this investment

In fact, it is not difficult to see the data and the like. If you have time to read it in 2 hours, it is basically in Chinese. I don’t understand anything. I think the key point is whether we agree with Focus’s business model, and hold Focus with such a mentality. .

There is no company that must be bought. The investment that we can make money must match the logic and system very well.

Yesterday’s new share of Keg Precision Machinery was listed, and it made a profit of more than 20,000 yuan. After the sale, the new share capital was nearly 50,000 yuan. At 5.81, 7,600 shares were bought. Recently, there is no cash, only Doing this a little bit finally got stubborn.

Earnings from new shares have never been included in the firm offer, and this part of the purchase has not been included in the firm offer statistics.

This time, Focus dropped the spare money and bought it several times in succession below 7 yuan. The current cost is 3.1 yuan.




For Focus, the business model is relatively simple, that is, to create traffic through elevator terminals, and then realize the traffic.

Personally, I prefer this type of enterprise. Liquor, home appliances, Focus, Songcheng, and Hanlan. There is not much difference in understanding between ordinary people and professionals in these types of enterprises.

Although some emerging industries have great potential, the difficulty lies in the fact that there is a big difference in the cognition between us ordinary people and professionals, and the technology is updated relatively quickly, so we can learn very little first-hand information, and even many emerging industries themselves are feeling the stones. Crossing the river, it is difficult for the enterprise itself to accurately judge its development.

Of course, it doesn’t mean that this kind of business cannot be invested, but it just doesn’t fit my investment style.

I prefer to buy companies during difficult times. I can fully understand that the business model of Focus is relatively simple, and it is relatively easy to stick to it during the downturn.

For example, in Focus’s deal, I bought it from about 6 yuan in the second half of 2018 to more than 4 yuan in 2020, which is the lowest price in 2020, and the decline will be large over time. If it is an industry with complex products and huge changes, it will be difficult to fall. Do not doubt yourself, whether it is not enough knowledge or misunderstanding.

But for a company with a simple business model like Focus, it will be more confident.

My personal point of view is that there is no high or low level of investment methods, and it is most important to conform to oneself. Some people can make money when they follow the trend, and some people can build a batch of enterprises in three or five years. Being able to be logical and self-consistent is the key.

Stock selection and system must match. For me, because of my trading method, most of my positions are held for a long time, and I usually buy when the company is not favored by the public, so I try to choose a business as much as possible. Model a business where you and professionals won’t have much of a gap.

On the contrary, some people do trends, and emerging industries and hot industries are definitely the first choice. There’s nothing wrong with that, just a different way of thinking.

Of course, we are all good at persuading others. Value investors look down on trending people and think they don’t understand the true meaning of investing. Trend investors look down on value people and think they will die.

I can only say that no matter which one we choose, first of all, don’t lie to yourself, it is really suitable, not follow the trend, and secondly, don’t have a feeling that you are superior to others.

For Focus, I personally ushered in the second layout stage, the first from the second half of 2018 to the beginning of 2020.

I did some sales from the end of 2020 to the beginning of 2021. I searched for the sales records of last year. I have to say that Tencent’s back-end search is really not easy to use. He will list all the audience-related matters for you, you can only turn them over one by one, basically as follows:

On February 18, 2021, “Today’s Transaction and Brief Talk on Investment” announced that 2% of Focus will be sold on the same day. After the sale, Focus’s position remains 8%, and the selling price is 12.78 yuan.

January 14, 2021 “Bao Tuan, do you want to bring me one?” “In the article, it was announced that 1% of Focus’s positions were sold, and after selling, there were still about 10% of Focus’s positions, and the selling price was 11.14 yuan.

On January 11, 2021, it was announced in the article “Bought two deals today, minus a little bit” that Focus’s position was sold by 1%. After the sale, Focus’s position remained at about 11%, and the selling price was 11.68 yuan.

On January 5, 2020, “Simplify the Complexity | 2. Basic Knowledge of Fixed Investment” announced that it would sell 1% of Focus’s positions. After the sale, Focus still has about 12%, and the selling price is 10.05 yuan. On the same day, another transaction was made to sell 1% of Tencent for 614.5 yuan.

Going forward, the number of 9.8 has been reduced a few times, so I will not read the article. This search function of Tencent is too troublesome. Those who are interested can search for it by themselves. I have posted articles on the day of the transaction. Except for a few articles that involve sensitive words, I have not deleted any articles.

Can Focus Group be deployed again now? I think it’s useless to listen to anyone else. If you can’t sort it out yourself, you will definitely have doubts if you fall too much, so I think you need to think about the following when buying Focus.

Let’s talk about Focus’s business model first. Advertising terminals are placed in the elevator and at the elevator entrance, and traffic is generated by everyone taking the elevator, and then the traffic is realized.

This is essentially the same as the Internet content platform, as well as TV stations and radio, attracting people through content and then monetizing traffic. The difference is that the way to create traffic is different.

For advertising companies, the basic logic is that firstly, you can create enough traffic, and secondly, there is enough demand.

Let’s first consider the demand side. The current economic pressure is relatively high, and the overall advertising demand is relatively low. According to data from CTR Media Intelligence, the advertising market in the first half of 2022 will decrease by 11.8% year-on-year.

The difference is, do you think these ad markets will recover?

I believe that everyone is not too worried about this. When the economic pressure is high, consumption is relatively poor, the conversion rate is low, and the willingness of advertisers to place advertisements will decrease. Even if they continue to advertise, the price will be reduced because the effect is not as good as before. Natural industry Overall revenue will shrink.

At the same time, we have also seen the above data. In the first half of the year, the number of Internet advertisers declined a lot. Will the economy recover and whether Internet advertisers will recover? This is the first question we need to think about.

If you think that these effects are temporary, let’s think further.

Generate traffic through elevators, and then realize this business model, do you agree?

if you approve

Then think about whether you think the epidemic will have any impact on this business model.

My personal point of view is that our lives will always return to normal one day, and the mode of taking the elevator does not see any possibility of change for the time being.

If this item is also approved, then we have to consider the supply side.

In the future, the demand for advertising will resume growth, but it is no use for the position of the supply-side Focus to be seized by others.

At present, there is no major change in the elevator media landscape. Focus is still the undisputed leader, and there are no new strong competitors.

As long as the economy recovers, it is not a problem for Focus to return to the income of more than 6 billion yuan. According to 20PE, the market value is 120 billion yuan. As long as you buy and live, you will have at least 40% of the income.

How difficult the logic of this investment is, it’s really not that difficult. It’s just that under different cognitions, the answers to the above questions may be different, so the judgment of whether you can buy Focus is also different.

For friends who do not recognize it, there is nothing to worry about. There are more than 4,000 companies in this market, and it is not necessary to make money from which company.

For recognized friends, there is nothing to worry about. If you recognize this business model, no predicament will not give you this preferential price.

You enjoy this preferential purchase price, which means that there are more people who are selling than people who are buying, and you cannot get the support of public opinion.

We often lose money on investments for three reasons.

The first one is wrong. For example, I currently approve of Focus’s business model and choose to buy, but it turns out that my judgment was wrong afterwards. The economy has not recovered for three to five years, or the economy has recovered but the elevator advertisement is not there. was needed.

The second is to blindly watch the early stage people or a company that a certain big V is optimistic about falling too much and buy it, underestimate the difficulty of waiting, and can’t bear the torment to sell in the long wait.

The third type is that I want to buy after seeing a big rise, but I don’t want to admit that I’m a trend investor. I find a bunch of value-based reasons for buying, and then I die at the highest point. I actually see a lot on Focus. The little friend bought it for 9 yuan or even 10 yuan.

Some people earn millions per month casually, while others earn thousands per month through hard work. No matter what other people earn, we can only earn money within our ability.

The ability to grasp the current hot spots and make faster money is only the ability of others. Just choose what you can. Judging trends is an ability, and patience is also an ability. We can only do what we are good at.

Focus is at least logical for me, and I just need to wait for the economy to recover, and patience is a relatively strong advantage for me, so this is a good choice for me. We can only choose the best option within our capabilities.

As long as you don’t pay attention to other people’s dynamics, don’t speculate on other people’s thoughts, and don’t fantasize about things beyond your ability, your mind will be very calm. That’s all for today, see you next time

@Today’s topic $ Focus Media (SZ002027)$

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