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【湘财证券】三五互联年报点评:向移动商务拓展的起飞之年

湘財證券 ·  Apr 10, 2011 00:00  · Researches

Key Investment Companies publish annual reports. In 2010, we achieved a total operating income of 173 million yuan, an increase of 35.9% over the previous year, and net profit attributable to shareholders of listed companies of 35.19 million yuan, an increase of 1.14% over the previous year, and diluted earnings per share of 0.44 yuan. The distribution plan is 4 yuan for 10 transfers of 10 transfers. The traditional business grew steadily, and the overall gross profit increased slightly. Website construction in the company's traditional business grew rapidly, with a year-on-year increase of 43.9%, and the revenue share increased to 26.2%; the domain name business reversed the downward trend in revenue over the past three years, and the email business continued to maintain steady growth of 17.6%; in October, China Post joined the merger, adding 14.29 million new software sales business, contributing 8.25 percent of revenue. The share of high-margin email, website construction, and new software sales increased, and the overall gross profit increased by 2.71 percentage points. Due to the relative maturity of traditional business technology and fierce competition, it is expected that steady growth will continue to be maintained in the future. The sharp increase in sales expenses and management expenses led to a slow increase in net profit. The company's sales expenses increased 79%, management expenses increased 128%, and the two expenses totaled 102 million yuan. The main reason for the increase in expenses is the increase in remuneration and rent costs due to scale expansion; secondly, the increase in consulting expenses due to management salary adjustments, advertising investment, and listing, which together led to a net profit increase of only 1.14 percentage points over the same period last year. We believe that the impact of company period expenses on net profit is temporary. 74% of the company's personnel structure is sales staff. In the future, remuneration expenses and revenue will continue to grow in the same proportion, while salary increases for managers and advertising investment are conducive to stabilizing the team, enhancing the company's brand value, and will benefit the company in the long term. The investment progress of traditional projects has been delayed, and the acquisition project is progressing smoothly due to the failure to select a suitable project location and the company due to careful considerations. The promised three fund-raising projects only invested 17.5 million yuan in 2010, which is 19.77% of the planned investment. The unused capital is scheduled to be invested in 2011. The two projects using overraised capital to invest are progressing smoothly. The acquisition of 70% of China Post's shares with 25.9 million yuan has already been transferred. According to the agreement, if China Post's net profit in 2011 exceeds 9 million yuan, the company may pay 29.7 million yuan to further acquire the remaining shares. The acquisition of 60% of shares in another project, Central Asia Internet, was approved at the beginning of the year. We believe that the acquisition of 100 million China Post expands the company's product line in the corporate post office business, expanding the company's customer base from small and medium-sized enterprises to large enterprises. The acquisition of Central Asia Connect will enable the company to rapidly shift its traditional business to mobile commerce, enhance product availability, and expand its potential customer base. The industrial chain was further extended to mobile terminal companies in their 2011 plans to launch new mobile terminal products and install the company's existing products on mobile terminals. Recently, the company held a new product launch conference for 35Phone phones and 35Pad tablets with the theme “Teng, Cloud, Driving, and Happy Business,” and officially announced the launch of its market strategy for cloud services and mobile terminals in the mobile Internet field. We believe that 2011 is a critical year for the company to expand from traditional Internet business to mobile commerce. The launch of mobile terminals is conducive to expanding the company's products and services, increasing the stickiness of existing customers, and further expanding the e-commerce market for small and medium-sized enterprises through cooperation with China Telecom, and increasing the company's revenue scale. However, the products launched by the company this time are mid-range products, and market competition is fierce. Bundled sales in cooperation with China Telecom require further observation, and the impact on net profit in 2011 is uncertain. The valuation and ratings expect that the company's traditional business will continue to grow steadily in 2011, and that China Post and China Connect will deliver net profit as promised. It is expected that sales of mobile terminal products will begin in the middle of the year, which will have a significant impact on the company's operating income and net profit. Since the company has not disclosed the details related to this, the company's performance forecasts and ratings will not be given for the time being.

The translation is provided by third-party software.


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