Yuanlong Yatu (002878) in-depth analysis: Promotional product leader cuts into new media marketing to promote release of performance elasticity

    Yuanlong Yatu (002878) in-depth analysis: Promotional product leader cuts into new media marketing to promote release of performance elasticity

    The scale of the promotion industry exceeds 300 billion yuan, and the scale of competition is highly fragmented.

    Promotion and advertising are two of the brand’s most valuable marketing methods. In contrast to advertising, promotion directly affects sales conversion, with shorter conversion paths and more direct effects.

    With the increase of brand owners’ requirements for promotion, the promotion of promotional products has replaced the direct reduction method, and has the ability of both promotion and brand promotion to be favored by advertisers.

    According to statistics, the size of the domestic promotional products market reached 336 billion in 2018, and the market space is huge.

    As of 2019, there are more than 100,000 gift companies across the country, and the market structure is highly fragmented.

    Deeply cultivated the promotion industry for more than two decades, with solid fundamentals and continuous growth.

    The company was founded in 1998 and is the first listed company in the promotion industry.

    The company has strong planning and design and data capabilities, and can provide brand owners with a one-stop service for connecting and going offline, covering procurement, design and storage.

    It has more than 1,000 suppliers in the upstream and has a mature management system. In the downstream, it has formed long-term stable cooperative relationships with Fortune 500 companies in multiple industries such as Procter & Gamble and Nestle. In the long run, the company has become an integrated platform and integrated industryEndowment of resources.

    In the short term, in 2018, the company newly opened up customers in the financial industry and obtained the franchise business of the Winter Olympics in 2022, which has been the fundamental of steady growth.

    The acquisition of Qianma Network cuts into new media, or benefits from the development of new business formats to improve performance flexibility.

    The company acquired Qianma Network in 2018, cut into the advertising field from the promotion business, and opened the border of marketing services.

    Qianma Network started early in the field of new media. Through external cooperation and self-built MCN, it has rich KOL resources. Each of them has three big data platforms to help it accurately launch from the media. It has more than 100 companies including Tmall International and Red Star Macalline.The brand has established a cooperative relationship, integrated certain resource capabilities in the field of new media marketing, has a first-mover advantage, or benefits from the development of new media ecology and internal performance to release pressure on gambling pressure.

    Investment suggestion: The industry attribute of promotional items is “supply determines demand”, which more closely matches MCN’s operating logic. Considering that the company’s acquisition of Qianma can more effectively collaborate with online and future business, the business growth potential brought by it, we give 2020Estimated 30 times a year, given “overweight-A” rating.

    Risk Warning: The risk of MCN content supervision becoming severe, the risk of worsening 四川耍耍网 competition in the industry, and the expected effects of new media marketing.

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