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Text | Jia Qi
Source: Caijing Qiguan
The capital market has been very dissatisfied with station B recently.
On September 9, the day after the Q2 financial report of Station B was issued, the stock price in the U.S. stock market plummeted by more than 15% and closed at $20.07, hitting a new low for the stock price in the past three months.
A number of internationally renowned investment institutions have also lowered their target prices for Station B:
Furui lowered its target price from HK$378 to HK$215; Daiwa lowered its target price from US$45 to US$38; BOCOM International lowered its target price from HK$268 to HK$192.
The reasons were mostly higher-than-expected losses and weaker-than-expected third-quarter guidance.
Don’t talk about the story, don’t talk about the vision, don’t talk about the growth, it seems that only the revenue and cash flow are hard.
very realistic.
01 Ups and downs
Before the text begins, we must first distinguish a concept.
The stock price of Station B and the prospect value of the company at Station B are two completely different things.
To borrow a familiar metaphor, the dog walking theory.
The stock price is the dog, and the company value is the dog walker.
People are more calm, dogs (price) are more active.
When walking a dog, people usually move forward slowly, while the dog swerved from left to right, just as the volatility of stock prices is often far greater than the volatility of fundamentals.
Generally, the focus of this theory tends to be on “value investing,” giving long-term investors plenty of confidence and encouraging them to pay more attention to dog walkers, the value itself.
But what we want to focus on here is that the length of the “dog leash” is different for different companies.
Combining the market conditions in the past two years and referring to the history, we found that mining, banking, traditional industries and other types of companies with heavy assets, clear expectations, and highly clear business models tend to have relatively low price-earnings ratios and relatively stable stock price fluctuations. shorter.
As for the media, high-tech, new consumption, Internet and other light-asset enterprises, large space for hype, high brand premium, and more ambitious future blueprints, they show a huge number of industry characteristics in the primary market, which are rapidly growing and dying. In the secondary market, there will also be great volatility in a relatively long period, and the “dog leash” is very long.
Back to station B.
In just two years, the stock price has soared from the initial ten-dollar to $157, and then turned around and fell back to the current ten-dollar, and the downward trend is still difficult to describe.
If there is a super lucky person who has accurately stepped on the two key nodes of up and down, then theoretically around the single project of station B, he can turn 100,000 yuan into 100,000,000 in two years. Ten million.
One up and down, the wave of money with an 800% increase and an 85% decrease is shocking.
This is beyond the scope of value investing.
Therefore, we believe that compared with the business situation of Station B itself, it is more important to clarify the macro environment and the current ecological position of the company – at least at this point in time.
02 is not good
Let’s look at the macro situation first.
The essence of the economy is the sum of the confidence of the relevant population in the future.
Of course, this confidence will be affected by various factors, such as technology, policy, climate, war, etc., but in the end, it is confidence that is comprehensively manifested and directly affects the economic environment.
Specifically, U.S. dollar interest rate hikes and regional conflicts are the two most direct influencing factors since 2022. The former will continue to reduce the liquidity of the global market, and the latter will further exacerbate the shortage of upstream raw materials and commodities (energy).
Specific to the capital market, the role of the two is completely different.
Before the epidemic, the balance sheet of the United States was 4.2 trillion US dollars. In the two years after the epidemic, a large number of money printing began, and by the beginning of June this year, it increased to 9 trillion US dollars. The amount of money printed is equal to the sum of the previous 40 years.
The result is the irrational overheating of the capital market after 2020. The market value of many companies such as Apple, Microsoft, and Amazon have skyrocketed, quickly crossing the market value threshold of one trillion or even two trillion US dollars, and the market value of station B is also In this wave, he was also carried into the sky.
However, starting in March this year, the Fed began to test interest rate hikes, first by 25 basis points, 50 basis points, and finally 75 basis points. %. At the same time, Cleveland Fed President Mester said that the federal funds rate will be above 4% next year and will not cut interest rates for the next year.
The reduction in liquidity directly increases the value of cash, which is not conducive to the value of assets. Due to the globalization of the monetary system and the centrality of the U.S. dollar, the scope of this move is naturally unlimited.
In general terms, due to the above actions, global assets have entered an era of great depreciation.
The derivative effects of regional conflicts determine the impact on different ecological locations is also very different.
In a very short period of time, the unconventional release of water and interest rate hikes has greatly shaken the already unstable economic fluctuations.
On the asset side, it is like an unprecedented dose of stimulant into the body of the “dog” (asset price).
Among them, the non-essential assets with “longer dog leash” play the leading role, because they have a stronger ability to accommodate bubbles, respond more quickly to market confidence, and bring more amazing wealth waves.
Correspondingly, the core assets with “shorter dog leash” are more passive. Since the total liquidity of the market at a certain time is always limited, it will objectively show a trend of trade-offs with the former.
The current stage is a period of rapid ebb. Under the panic and clear expectations, more sensitive non-essential assets tend to show oversold conditions. In contrast, core assets that have been in the low valuation range for a long time will show a certain robustness.
If we anthropomorphize assets, we can also say this:
When the uncertainty in the future increases, people are more inclined to consume and even hoard just-needed products, such as food, electricity, gas and other indiscriminate resources.
In contrast, people will selectively downgrade or replace relatively necessary consumer goods such as electronic equipment, housing, travel methods, and clothing.
At the same time, the market for lower-level non-essential goods such as movies, travel, knowledge payment, and luxury goods will usher in a huge shrinkage.
Conversely, when future expectations are highly optimistic, the premiums of the above assets will show a state of gradual increase.
Judging from the financial report, Station B has shown a clear two-carriage pattern, with advertising business and value-added services keeping pace.
Among them, the customer base of advertisements mainly comes from the expectations of brands in the B-end market for future growth. If Huawei has shouted “to pass the cold air to everyone”, then it is conceivable that other companies have expectations for the future. of.
At the same time, practical experience also tells us that when a business encounters setbacks, the first budget cut is often the marketing department.
Value-added services (members) are content-based consumption that charges directly to the C-side, and its shrinking logic has been clearly stated before.
However, specific to station B, there are still two pieces of information that need to be supplemented.
On the one hand, the user group of station B is relatively young, and their perception of the economy is relatively insensitive. Many of them belong to the group of students who “have someone to carry the burden for you”.
On the other hand, the membership fee of the content platform is relatively cheap among other self-pleasant consumer products, which will trigger the “lipstick effect” to a certain extent.
The two will ease the pain of recession to a certain extent, but the general trend of recession cannot be stopped.
03 Tencent cannot be copied
In the early days of Station B’s growth, Chairman Chen Rui often told such a story to the capital market.
Very early, he once asked Sina’s friends, “Can Tencent do it?”
Sina replied, “Of course not, QQ is only used by children.”
But in the end, Tencent grew into a pole of China’s Internet.
Reflecting on this many years later, Chen Rui said that Sina ignored an important issue: children will grow up.
It only took three years from when everyone started using QQ to when everyone started using QQ. All popular products start out as niche products.
The implication is that although station B is equally niche and has a young audience, as long as it can firmly hold young people in their hands, station B is a “friend of time”. As long as the ecology is valuable, the so-called explosion of commercialization, then Just a matter of time.
Today, the young friends of station B have gradually grown into the most influential people in the consumer market, and the people that brands want to please the most.
At the same time, after years of hard work, Station B has also successfully emerged from the circle. It has a piece of its own power in the Internet domain, and continues to radiate its own cultural influence.
Two or three years ago, the analysis manuscripts of station B were very different from other Internet companies.
Every now and then, there are various metaphysical contents such as “culture”, “group conflict” and “ecology”. No one is in a hurry to talk about commercialization.
Based on past experience, media veterans have indeed seen that familiar shadow at station B.
Even today, I still feel that no one is more like Tencent than Station B. The business logic, starting method, value standard, and strategic highland of the two are very similar.
However, the incompatibility of strength (traffic highland) and commercial performance is objectively there.
Even the most obtuse people should wake up. Station B can’t do Tencent, and the historical environment is very different.
Twenty years ago, the entire Internet industry was barren.
Today’s Bilibili is 13 years old, and Tencent had already fought the “3Q war” when he was 13 years old. At that time, it was looting with its new user group, copying whoever died, and showing domineering.
At present, after years of development, there is no longer an obvious “no man’s land” in the industry.
The game requires super self-research ability and huge cash investment. In addition, Tencent and ByteDance are waving banknotes in this field and rolling in wildly, which has also raised the value of the content side again and again.
To put it bluntly, in the field of games, Station B has entered a “three noes” situation where no talent can be tapped, no outstanding producers can be acquired, and no fist companies can cooperate.
Other growth directions are equally difficult.
E-commerce needs a team that can withstand pressure, refined operational capabilities and supply chain management technology.
Advertising needs conversion rate, and in the content field, UGC short videos and PGC long videos are also dividing up users’ time.
The traffic entrance is no longer the nuclear weapon-level kill that could be finalized in the past.
Regarding the future, Chen Rui said in this conference call:
“I think the first is video and growth, and growth includes user growth and revenue growth. I spent resources and money on these core tasks in the first half of this year.”
“Although the overall external environment is very challenging, I still emphasize internally that growth is still the most important work of station B.”
From this point of view, the future of station B is not in its own hands.
It must be right to always stand with users, but the dilemma and quagmire of commercialization can only wait for the drastic changes in the external environment.
What did that sentence say?
The fate of an enterprise, of course, depends on self-struggle, but also takes into account the historical process.
Station B is always unpredictable.
(Disclaimer: This article only represents the author’s point of view and does not represent the position of Sina.com.)
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