中國在線媒體消費調(diào)查：在線媒體消費的增長點在那里

1、GlobalResearch22 January2019China Online Media Consumption Survey UBSEvidenceLabinside:Whereisthegrowthin online mediaconsumption?Growth concentrated in new user cohorts and short videoWhile overall growth in time spent on China internet platforms has slowed, UBS Evidence Labs second online media co

2、nsumption survey showed two key pocketsof growth. By cohort, we note more incremental users and time spent coming from late aer n tier-3 ad ter-4 cte, wo ted to e r ad ve er mean householdincomes(MHI)thanexistingusers.Byproduct,westillseemoretimeshifting to short video (usage frequency/week up 8% in

3、 the past six months), as well as long- formvideoandlivestreaming.Interestingly,readingbooks/articlesarealsosignificant uses of time. The results make us more positive on Tencent, Qutoutiao and Momo, wheregrowthisnotfullypricedin,andlesssoonWeiboandYY,wherecompetitionis pressuring growth more than e

4、xpected.The rise of the rest of Chinas mobile internet usersOverthepastcoupleofyears,usergrowthinChinahasincreasinglycomefromthelate adoptersdescribedabove,whichdrovetriple-digitgrowthfornewerservices,suchas Pinduoduo,Huya,andQutoutiao.Someexistingplatforms,suchasTaobaoandAlipay, have also invested

5、and found success in acquiring these users. We see more growth fromlateadopters,andtheUBSEvidenceLabsurveyshowedthattimespentonlineby the low MHI population had risen by more than 20% in the past six months, though theonlineleisuretimeofsuchadoptersisstill10-20%shorterthantheaverage.Video and readin

6、g to see the most incremental time spent in the near term Respondents to the UBS Evidence Lab survey planned to increase the time spent on social networks, short video, and reading books/articles the most in the next six months.Tencentremainsdominantinthesocialnetworkcategory,andscoresbetterin onlin

7、e video and live streaming (games and music). Of the smaller apps, Qutoutiaois well positioned with its exposure to lower-tier cities and older users, given its newly launchedreadingapp.Huyasawalargeuptickinusageofgame-streamingplatforms.Prefer Tencent, Qutoutiao, Momo; downgrade Weibo and YY to Neu

8、tralWehighlightTencent,QTT,andMOMOaskeybeneficiariesbasedontheUBSEvidence Labsurvey.WedowngradeWeiboandYYfromBuytoNeutralasthesurveysuggested less growth in usage. Weibo is also impacted by a weaker advertising market and intense competition. While Bigo should improve YYs growth, weaker live streami

9、ng spendinginChinaanddilutionfromBigoseemlikelytoweighonearningsgrowth.Figure 1: China internet media compsEquitiesChinaInternet ServicesJerry HYPERLINK mailto:jerry.liu EquitiesChinaInternet Services+852-29717493ZhijingLiu HYPERLINK mailto:zhijing.liu zhijing.liu+86-213-8668847Curtis AssociateAnaly

10、st HYPERLINK mailto:curtis.li +852-29715526CorrineHu HYPERLINK mailto:corrine.hu corrine.hu+86-213-8668875Angela Xu, CFA HYPERLINK mailto:angela.xu +852-37124671Navin Killa HYPERLINK mailto:navin.killa +852-29717594ShareMarket capShareMarket capPEP/sales18-20ECAGRPreviouspriceCompany nameTickerRatin

11、gRating(LC) PT (LC)downside %2018E 2019E 2020E 2018E 2019E 2020ESalesEarningsTencent0700.HKBuyBuy342.00 400.0017%404,28934.7x29.4x24.0 x8.5x6.7x5.3x26%20%MomoMOMO.OBuyBuy30.26 35.0016%5,98811.8x9.5x8.2x3.0 x2.5x2.1x19%20%QutoutiaoQTT.OBuyBuy8.48 11.0030%2,402n.m.n.m.13.6x5.2x2.1x1.2x112%n.m.WeiboWB.

12、OBuyNeutral60.80 65.007%13,29321.6x19.5x16.6x7.7x6.5x5.6x18%14%HuyaHUYA.NNeutralNeutral20.31 21.003%4,09377.5x45.0 x25.9x5.9x3.9x3.0 x39%73%YYYY.OBuyNeutral73.97 77.004%3,3516.9x6.4x5.8x1.4x1.2x1.1x15%9%iQiyi*IQ.ON.A.N.A.18.50N.A.13,388n.m.n.m.n.m.3.7x2.8x2.2x30%n.m.Bilibili*BILI.ON.A.N.A.16.71N.A.4

13、,653n.m.n.m.57.6x7.8x4.9x3.4x51%n.m.Ali Picture*1060.HKN.A.N.A.1.32N.A.4,290n.m.130.1x26.1x8.6x6.7x4.0 x47%n.m.China Literature*0772.HKN.A.N.A.38.50N.A.5,01925.2x19.0 x17.9x4.5x3.6x3.2x19%19%Avg.29.6x37.0 x21.7x5.6x4.1x3.1x38%26%(US$ m)Note:Pricingasof21January2019.*companiesnotcoveredbyUBS Source:

14、*Eikon, UBSestimates HYPERLINK /investmentresearch /investmentresearchThisreporthasbeenpreparedbyUBSSecuritiesAsiaLimited. ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURESBEGIN ONPAGE79. UBSdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbe aware that the firm may

15、 have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.ContentsOUR THESIS IN PICTURES4PIVOTAL QUESTIONS6 HYPERLINK l _TOC_250009 Q: Where is the growth in online media consumptio

16、ninChina?6 HYPERLINK l _TOC_250008 Q:Whoarethewinnersinonlinevideo(short,long,streaming,etc.)?14 HYPERLINK l _TOC_250007 Q: Who are the winners outside ofvideosegments?28WHATSPRICEDIN?37 HYPERLINK l _TOC_250006 Companypages38 HYPERLINK l _TOC_250005 Tencent Holdings39 HYPERLINK l _TOC_250004 Weibo C

17、orp45 HYPERLINK l _TOC_250003 Qutoutiao Inc53 HYPERLINK l _TOC_250002 Momo Inc.61 HYPERLINK l _TOC_250001 Huya Inc65 HYPERLINK l _TOC_250000 YY Inc.70Jerry HYPERLINK mailto:jerry.liu +852-29717493ZhijingLiu HYPERLINK mailto:zhijing.liu zhijing.liu+86-213-8668847Curtis AssociateAnalyst HYPERLINK mail

18、to:curtis.li +852-29715526CorrineHu HYPERLINK mailto:corrine.hu corrine.hu+86-213-8668875Angela Xu, CFA HYPERLINK mailto:angela.xu +852-37124671Navin Killa HYPERLINK mailto:navin.killa +852-29717594China Internet SectorUBS Research THESIS MAP a guide to our thinking and whats where in this report HY

19、PERLINK l _bookmark1 OURTHESISINPICTURESMOSTFAVOUREDLEAST FAVOUREDTencent, Momo, QutoutiaoWeibo, YY , HuyaPIVOTALQUESTIONSQ: Where is the growth in online media consumption in China?The late adopter cohort, who are older, are from lower-tier cities, or are lower income, have emergedasthegrowthdriver

20、s.Amongthecontentcategories,shortvideowasamajortime-share gainer over the past six months. Interestingly, we also see that other categories that had been pressured by short video, especially long-form video and live streaming, started to regain momentum. A major challenge is that many users are cutt

21、ing the number of media platforms they use,whichdoesnotbodewellfornewandsmallerplatforms. HYPERLINK l _bookmark2 Q: Who are the winners in online video (short, long, streaming, etc.)?Amongallthevideocontent,shortvideohasthehighestusagefrequency,aheadofdramaandlive streaming.TheUBSEvidenceLabsurveyin

22、dicatedthatTencentwasamarketleaderinlongform andlivestreaming.iQiyistillleadsthemarketinlongform,butTencentVideoiscatchinguponpaid subscriptions.Gamesandmusiclivestreaming,inwhichTencenthasmadelargeinvestments,were amongthecategorieswiththehighestusageoverthepastsixmonths. HYPERLINK l _bookmark3 Q:

23、Who are the winners outside of video segments?Usersintendtospendmoretimeinsocialnetworksandreading.ThisbenefitsTencentsWeChatin social networks and large news feed apps. Apart from the top participants, we also note that QutoutiaoandZhihureceivestrongerrecognitionamongtheirtargetpopulations. HYPERLI

24、NK l _bookmark4 UBSVIEWOnline media growth is mostly coming from the late adopter cohort, mainly older and lower- income users from tier-3 and tier-4 cities, as opposed to tier-1 and tier-2 city students and white collar workers in years past. Video continues to attract significant media consumption

25、 time, but shortvideospressureonlongformandlivestreamingmaylessen.Book/articlereadingremainsvery popular in China. We see Tencent as best positioned due to its leadership in multiple video and readingcategories.Ofthesmallerplatforms,weseeopportunitiesforQutoutiao,Huya,andMomo to grow, especially thr

26、ough exposure to the late adopter cohort. We downgrade YY from Buy to Neutralduetoitsweakershowinginthesurveyandincreasingconcernaboutgrowth.EVIDENCE1) Late adopter cohorts, such as the low median household income (MHI) population, added 0.2/0.6 online hour for working days and weekends, up almost 2

27、6%/23% from the preceding UBS EvidenceLabsurvey;2)usagefrequencyperweekforshortvideoincreased8%overthepastsix months; 3) respondents with subscriptions to the iQiyi platform dropped from 38% to 32% for this wave, while at the same time those for Tencent rose significantly, from 22% to 26%; 4) the to

28、p live-streaming platforms have mainly been game and music platforms, including Douyu, Bilibili, Huya,KGe,andKugou;5)64%ofrespondentsrecognizedWeChatastheirmajorplatform,while QQ and Weibo had only 12%/8% recognition; 6) Qutoutiao is popular among tier-3 and tier-4 city usersand35-44year-olds.Bycont

29、rast,usersfromtier-1citieswithhigherincomepreferredZhihu.WHATSPRICEDIN?China internet stocks have de-rated as investors are concerned by slowing market growth and intense competition. Investors have generally favoured the larger social and media platforms, as smallerplatformseitherhavelowergrowthand

30、/orlowornoprofitabilityduetoinvestmentsinuser acquisitionand,insomecases,high-qualitycontent. HYPERLINK l _bookmark5 Changeinonlineleisurehoursperday (Survey wave 2 vs.1)0.310.030.06-0.040.09-0.01-0.040.09-0.10-0.09Tier1Tier 2 Tier3/4 18-2425-3435-4445-54LowMidTotalCityAgeMid. House.IncomeOURTHESISI

31、NPICTURES HYPERLINK l _bookmark0 return Change of online leisure time per working day and weekend day vs. Wave 0.30.1 0.10.1 0.60.2Late mobile internet adopters from tier-3 and tier-40.0-0.3-0.10.0 0.00.0 0.0-0.3- .0-0.3cities, older users, and lower-median household incom

32、e are spending more time onlineTotal Tier 1 Tier 2 Tier 3/4 Male Female 18-24 25-34 35-44 45-54 High MHIday(hours)weekend / holiday (hours)Usage frequency per week by media type (Wave 2 vs. Wave 1)8.07.06.05.04.03.02.01.00.04.8 5.00.04.64.5 4.20.03.9 3.91.9 1.90.0Internet users are still in

33、creasing their short video usage in terms of frequency, but interestingly other impacted segments, such as online video and live streaming, saw some recovery in frequencyUsingWatch ing ReadingListening Reading Watch ing Watch ing PlayingWatch ing Watch ing Shoppingso cialshortvideo articlestombo dra

34、madigvarietymo online networkspostsnewsWave2-Nov2018strea ming gamesWave1-Apr2018sh ows100%47.9%80%47.9%36.5%36.0%34.8%33.9%30.9%30.2%29.4%27.6%27.5%60%36.5%36.0%34.8%33.9%30.9%30.2%29.4%27.6%27.5%0%DouyinWeChatWeishiBilibiliWeiboKuaishouXiguaMeipaiHuoshanTencents short video apps lag behind those o

35、f its main competitors in terms of expected usage frequency in the next six monthsDouyinWeChatWeishiBilibiliWeiboKuaishouXiguaMeipaiHuoshanJinri ToutiaoMuch moreoftenSlightlymoreoftenAbout the same SlightlylessoftenMuchlessoftenNet changeJinri ToutiaoRenew/new subscription in N6M (Wave 2 vs. Wave 1)

36、36%27%36%27%22%22%20%17%7%6%6%4%5%5%5%6%35%30%25%20%15%10%5%0%Tencent catching up to iQiyi in terms of long-form video users willingness to pay for subscriptionsiQiyiTencent VideoYouku Mango SohuVideo LeTVWave2Wave 1Note: *Net change = (% of those spend much/slightly more time)-(% of those spend muc

37、h/slightly less time)OURTHESISINPICTURES HYPERLINK l _bookmark0 return often used live streaming platform in P6M18%15%18%15%9%9%7% 8%10%9%7%6% 6%6%5%54% 44% 44% 44% 4%3%18%16%14%12%10%8%6%4%2%0%Game and music live streaming platforms increased in popularity compared with showroom platformsWave2WaveA

38、wareness of ads in WeChat MomentsDont remember, 10%No, I haventseen them, 14%Yes, I have seenthembutskipped without reading the contents,35%42% respondents were aware of Weixin/WeChat Moments advertisements, compared with 35% who did not look at themYes, I have seen them and have read the contents,

39、42%Most often used news-feed platform in P6MCityTier - Wave 2Gender - Wave2Age - Wave 2MHI- Wave 2TotalTier 1Tier 2Tier 3/4MaleFemale18-2425-3435-4445-54LowMidHighJinri Toutiao46%45%44%48%48%43%40%49%43%51%42%45%48%Tencent News40%43%39%38%39%41%35%43%41%40%39%43%39%Weibo30%33%33%21%25%34%29%36%23%26

40、%26%29%32%Baidu28%28%29%26%28%27%26% 32%29%21%23%26%32%Sina News24%28%22%20%26%22%22%23%23%26%22%24%24%Qutoutiao22%21%18%28%22%22%20%23%27%16%18%20%27%UC Browser20%20%18%23%22%18%19%22%21%17%19%21%21%Zhihu20%24%18%16%16%23%20%29%14%8%9%19%27%Sohu News17%18%16%18%17%17%12%14%26%18%14%17%19%12%10%12%1

41、3%14%9%5%11%14%19%13%9%13%Kuaibao12%14%10%11%12%12%7%14%13%11%10%10%13%Yidian Zixun9%9% 6%11%9%8%9%8%11%7%8%7%10%None3%5%3%2%2%4%2%3%2%5%3%4%3%Ali Pictures WeiboGroup B (QTT excl.) Ali Pictures WeiboGroup B (QTT excl.) y = 11.574xTencentGroupA(QTTincl.) y = 6.223xChinaLiteratureBilibiliHuyaiQiyiMomo

42、QTTYY6.0 x5.0 xP/S,P/S,2019E3.0 x2.0 x1.0 xQutoutiao and Zhihu are best positioned among their respective target populationsMarket still values growth at a premium, and generally values distribution over content0.0 x0%20%40%60%80%100%Revenue CAGR,2018-20ESources for exhibits above: UBS Evidence Lab,

43、 Eiko, UBS ResearchPIVOTALQUESTIONS HYPERLINK l _bookmark0 return Q: Where is the growth in online media consumption in China?UBS VIEWThe late adopter cohort, who are older, are from lower-tier cities, or are lower income, have emerged as the growth drivers. Among the content categories, short video

44、 was a major time-share gainer over the past six months. Interestingly, we also see that other categories that had been pressuredbyshortvideo,especiallylong-formvideoandlivestreaming,started to regain momentum. A major challenge is that many users are cutting the number of media platforms they use,

45、which does not bode well for new and smaller platforms.EVIDENCEThe late adopter cohorts online leisure time is 10-20% shorter than average, but their growth in time spent online in the past six months is noticeable. For example, the low MHI cohort increased the amount of online time spent by 0.2/0.6

46、 hours for work/weekend days, up by26%/23%;IntheUBSEvidenceLabsurvey,60%ofrespondentssaidthattheywould like to spend much or slightly more time online in the next six months, compared with 47% in the previous survey in April2018;Usagefrequencyperweekforshortvideoincreasedby8%andtimespent per day inc

47、reased by 20% to 0.6 hours over the past six months, a larger increasethaninallothercontentcategories.Thesurveyalsoshowedincreases inusagefrequencyforlivestreamingandmovies,andincreasesintimespent for live streaming and TV dramas;Social networks and reading books/articles saw a net 39-51% increase i

48、n time spent (the number of respondents increasing their online reading was morethanthosedecreasingit),thehighestamongallcontentcategories;Wenotedthat,overthepastsixmonths,mostusersdecreasedthenumber of media platforms they use, especially those who used many platforms.The only exception was the low

49、 MHI population;For most categories, 29-38% of users said they used an app because people around me recommend it or I saw it on social media, which speaks to the importance of referrals for useracquisition.WHATS PRICED IN?Investors value stocks with exposure to social networks, including Tencent and

50、Weibo,atapremiumtovideo-heavystocks,despitetheincreaseintime spent in the latter as investors worry about the scalability and margin profile of video-heavy stocks in the long term.Still some room to grow for late adopter cohortLate adopter cohort is spending more time onlineThe people who live in ti

51、er-1 and tier-2 cities, who tend to be younger and richer, aretypicalonlineuserswhohavedriventhegrowthofalmostallsub-sectorsofthe internet. According to UBS Evidence Lab, these cohorts are significant outperformers in terms of online leisure time, both for working days and for weekend days. People a

52、ged between 25-34 years old spend almost 36% more time online on weekend days than the average. The same thing also happens to other cohorts we identified above.We believe this is a key reason that many investors are worried about the fading population bonus, which was previously the major driver fo

53、r whole industry. UBS EvidenceLabdataalsoshowthatsomeoftheabovecohortssawtheirtimespent online dropping over the past six months.However, we find there is still room to grow for late adopters, such asconsumers from lower-tier cities, the older generation, and the lower-income population. Theironline

54、leisuretimeis10-20%shorterthanaverage.Andwefindthechange in the way that they are spending their time in the past six months is noticeable. Forexample,thelowMHIpopulationadded0.2/0.6onlinehoursforworkingdays and weekend days, up almost 26%/23%. The trend for users in tier-3 and tier-4 cities and 45-

55、54 year-old issimilar.According to Quest Mobile, Chinese users time spent per day on mobile internet increased from 231 minutes in Q117 to 291 minutes in Q318. The activation of previous dormant users might be one of the key reasons. From a more micro perspective, internet platforms Pinduoduo and Qu

56、toutiao increased theirmonthly averageusers(MAU)by2-3xintheprecedingtwoquarters.Thesearejustsome examples of the rise of the late adopters inChina.Although internet categories such as social media are used by a large part of Chinaspopulation,wethinkcertainareasofinterestforlateadoptershaveyetto be s

57、atisfied. This could be out of the comfort zone of current internet companies. But, given that tier-3 and tier-4 and below cities account for over 80% of Chinas population, the growth potential could be significant, in our view.1.01.01.21.01.03.02.01.00.0TotalTier1Tier2Tier3/4MaleFemale18-2425-3435-

58、4445-54 LowMHIMidMHIHighMHI Perworkingday(hours)Per weekend/holiday(hours)Source: UBS Evidence LabFigure 3: Change of online leisure time per working day and weekend day vs. Wave 1 survey in April 20180.00.2-0.30.1-0.00.00.10.1-0.30.1-0.10.00.0-0.3TotalTier1Tier2Tier3/4MaleFemale18

59、-2425-3435-4445-54 Low MHI Mid MHI HighMHI Per workingday(hours)Per weekend / holiday(hours)Source: UBS Evidence LabFigure4:Per-userdailytimespentonmobileinternethas continued to grow over the past two to threequartersFigure5:Chinaspopulationstructure:tier-3andtier-4 and below cities account for 82%

60、 of population (in m)350300250200150100Below & rural areas, 972.92, 70%Tier 1, 64.26,5%Tier 2,177.82, 13%Tier3&4,168,12%273.2289.7273.2289.7291230.8235.2229.8236.801Q172Q173Q174Q171Q182Q183Q18Source: QuestMobileSource: UBS EvidenceLabIn view of our discussions on late adopters, we find an overall po