[JinRongJie] Zhaoxun Media’s Share Price hits a Record High, with its Market Value expected to rise Constantly

Buoyed by good news such as economic recovery, consumption rebound and passenger flow recovery, “China’s No. 1 high-speed rail digital media agency” Zhaoxun Media (301102.sz) had its share price hit a record high. On January 9th, Zhaoxun Media’s share price rose in a fluctuating way after opening quotation and then rose rapidly, hitting a record high, RMB 41.97 yuan.

 

According to the market analysis, Zhaoxun Media’s first and second growth curve businesses go up side by side at present, with high-speed rail digital media continuing to lead the industry and big urban commercial screen continuing to exert its strength. In the context of economic recovery, its investment value is more prominent while its market value is expected to increase further.

 

As China’s first high-speed rail digital media to operate in digital and intelligent manner, Zhaoxun Media keeps on exploiting media resources and marketing channels. Its self-built high-speed rail digital media resource network has covered 30 provincial administrative regions across China, reaching more than 1 billion passengers annually.

 

Benefiting from the recovery of passenger flow, Zhaoxun Media’s first curve business, high-speed rail digital media, will achieve sustained development. The Spring Festival travel rush officially started last weekend. According to the passenger flow data of the first day, 6.271 million passengers went on a tour by railway, period-on-period growth of 18%. The total passenger flow is expected to reach 2.095 billion during the Spring Festival travel rush, up 99.5% from the same period last year, accounting for 70.3% of the same period of 2019.

 

At present, economic resurgence has started in the key economic cities in multiple developed economic regions covered by the media resources of Zhaoxun Media, including the Yangtze River Delta region, Pearl River Delta region, Circum-Bohai-Sea region, and coastal southeast China, making advertisers obviously willing to advertise for their own brands. Zhaoxun Media’s first-mover advantage is continuously transformed into driving forces for performance growth.

 

Meanwhile, Zhaoxun Media’s second growth curve business, i.e., big urban commercial screen business, has opened up a new development space for it. At present, Zhaoxun Media has successively started business in some core urban business circles such as the Tianhe Road Business Circle, Guangzhou, and Qinxian Street, Taiyuan, successfully attracting many high-end and high-quality advertisers. On the first day of 2023, Zhaoxun Media made a good start with its 1536-square-meter new huge HD screen opening in the CBD of Guiyang. The “Guizhou Screen King” received high attention from the market immediately.

 

Financial institutions point out that Zhaoxun Media is gradually relieving the pressure on its valuation from the short-term COVID-19 pandemic, so that its first and second growth curve businesses are both expected to rebound greatly in 2023. The continuous fundamental upturn will drive high-quality customers to increase their investment, thereby resulting in huge growth in the Company’s overall performance.

 

Zheshang Securities points out that as the epidemic prevention policy is adjusted, there will be a significant recovery of passenger flow in the urban business circles; accordingly, the Company’s naked-eye 3D big screen business will develop steadily as its second growth curve. At the same time, brand owners are increasingly willing to advertise for their own brands as there is a recovery of the high-speed railway passenger flow. So, optimistically, the Company will continue to arrange digital media resources at high-speed rail stations, with a view to bringing about an increase in both volume and price of high-speed rail advertising business in the future.

 

According to Guosen Securities’ analysis, as the epidemic prevention policy is adjusted, the recovery of high-speed rail passenger flow is expected to raise the revenue from high-speed rail media operations. The quality of advertisers in cooperation with Zhaoxun Media has been greatly improved, while the structure of advertisers has been significantly optimized. Also, due to consumption recovery, the Company is achieving high growth. In the medium and long term, the concentration of high-speed rail media is expected to increase further, while there is big room for price increase in CPM. Zhaoxun Media’s naked-eye 3D business based in urban business circles serves as a new growth pole of the Company. Moreover, it set up a big screen in Guiyang on January 1st, 2023. In 2023 and 2024, Zhaoxun Media may accelerate its big screen construction in urban business circles.

 

A number of policies released recently will also vigorously drive the development of Zhaoxun Media. According to The Outline of the Strategic Plan for expanding Domestic Demand (2022-2035), it is imperative to continue expediting the construction of national railway network, including “eight longitudinal and eight transverse” high-speed railways, and offer support to key urban agglomerations in building an intercity railway network as quickly as possible. China Railway predicts that more than 3,000 kilometers of new railway lines will be opened to traffic by 2023, including 2,500 kilometers of high-speed rails. This means that, benefiting from the national railway network and intelligent transportation construction, Zhaoxun Media’s high-speed rail digital media resources will be further expanded and continue to maintain its leading position in the industry.

 

In addition, The 14th Five-Year Plan for the Development of Advertising Industry proposes to further promote the smooth flow of commodity resources on a wider scale, speed up the construction of a unified national market, continue to build Chinese brands, and cultivate more world-famous Chinese brands. This plan will accelerate Zhaoxun Media’s construction of its brand service capacity. With its nationwide communication network advantage, Zhaoxun Media will help to promote the growth and communication of more Chinese brands.