Summary of the report:
Jiangsu Cable is mainly engaged in the construction and operation of radio and television networks in Jiangsu Province, the development and operation of radio and television program transmission, data broadband services and digital television value-added services, and realizes the connection of radio and television networks at the provincial, municipal and county levels into a "one network". As of December 31, 2014, the number of cable network users in Jiangsu has reached 17.72 million, including 7.48 million direct users and 10.24 million indirect users.
The overall subscriber size of the cable TV industry is still growing. By the end of 2013, the number of cable radio and television subscribers in China reached 229 million, an increase of 6.44 percent over 2012, and the number of digital TV subscribers reached 172 million, an increase of 19.97 percent over 2012. Digital TV users account for 74.95% of cable TV users.
With the advancement of technological progress and triple play, the monopoly of traditional cable companies in the field of television communication has been gradually broken, and new television transmission methods such as IPTV and OTTTV have developed rapidly. Telecom operators, Internet enterprises, hardware manufacturers, content providers and so on are all involved in the TV business to varying degrees. The loss of subscribers has been one of the biggest risks faced by traditional cable TV operators, including Jiangsu Cable. On the other hand, triple play also opens the ceiling for the development of the television industry, and the vast market for value-added services provides a huge space for the company's future business development.
The company plans to issue no more than 597 million shares and intends to raise 3.122 billion yuan to invest in four projects, all around the company's main business. The company's net profit in 2014 was 778 million yuan. We expect the company's profit growth in 2015 to be about 30%. We expect the company's 2015 net profit to be about 1.011 billion yuan, or 0.34 yuan per share according to the total share capital after the issue. With reference to the media industry's current dynamic valuation level of 60-70 times earnings, Jiangsu Cable can expect a price range of 20.40-23.80 yuan after listing.
Risk Tip: massive loss of users.