Main points of investment

The combined table effect highlights the slight increase in gross profit margin: the company released its third-quarter report in 2014, with operating income of 2.659 billion yuan from January to September, an increase of 1.13% over the same period last year, and a negative growth rate over the same period last year. The net profit attributed to shareholders of listed companies was 809 million yuan, an increase of 85.18% over the same period last year, mainly due to the consolidation effect of restructuring and mergers and acquisitions; basic earnings per share were 0.44 yuan. The company's gross profit margin was 44.48%, an increase of nearly 4 percentage points over the same period last year.

With frequent mergers and acquisitions in the field of new media, new business type's layout is in full swing: this year, the company has acquired a 100% stake in Guoshi Shanghai, and plans to buy 100% equity in Zhangzhang Yitong, 60% equity in Fine Vision Culture, 100% equity in Bond Software, and 85.61% equity in Manyou Culture and raise supporting funds by issuing non-public shares and paying cash to specific targets. This series of acquisitions will introduce mobile Internet video, building advertising, public opinion monitoring, animation and other new business into the company's new media ecosystem. The company's acquisition targets are in an industry-leading position, which will help the company's layout of new business type.

The market underperforms the industry and is bullish in the long run: in the past year, the company's shares have fallen by-0.17%, while the publishing industry has risen by 10.04%. The transformation of the company is active in mergers and acquisitions, and the layout of new media is open. First coverage, no rating for the time being.

Risk hint: the risk of shortage of talents in the transformation of new media; the management risk of diversified business; the risk of M & An adaptation.