Main points of investment:
The company's performance has achieved substantial growth and deepened the layout of the transformation. In the first quarter of 2016, the company achieved operating income of 104 million yuan, an increase of 356.75% over the same period last year, and the net profit attributed to shareholders of listed companies was 8.39 million yuan, an increase of 304.29% over the same period last year. The company continues to accelerate the product layout of "mobile + video + community + intelligence" and continues to transform into an Internet company in an all-round way. In July 2016, LIVE Live, a subsidiary of bus online, became the exclusive cooperative live broadcast platform for "China New Song", which will enhance brand awareness and attract a large number of users.
The mobile live broadcast market space is big, the company intervenes actively to become the network live broadcast new dark horse. Compared with the traditional PC live broadcast, mobile live broadcast has the characteristics of anytime, anywhere live broadcast, rich and diverse content, "national" anchor and so on. According to data from iResearch Consulting, as of February 2016, the number of daily active users of the national live broadcast app was 9.8 million and the number of monthly active users was 52.7 million. The number of mobile Internet users in China has reached 620 million, and we expect mobile live broadcast revenue to account for about 35% of the overall live broadcast market revenue in 2018. Under the background of the rapid growth of the mobile live broadcast market, LIVE live broadcast platform LIVE live broadcast users have been found in 32 provinces across the country, as well as users in the United States, Britain, Australia, Japan and other places, which will bring new growth points for the company's live broadcast business.
Several advantages of LIVE Live contribute to the growth of brands. 1) content advantage: build PUGC content production model, rely on its own resources such as Chinese bus Music list, broadcast "China New Song" and special variety shows in cooperation with quality IP, and develop original content at the same time. 2) system advantage: it has the license of live broadcast, online text and other related licenses. 3) user advantage: "Zero threshold" live broadcast, each user can be transformed into an anchor to perform live under the topic of "China New Song" and join the new song LIVE Live selection of team 5. In addition, LIVE Live has joined hands with more than 3000 colleges and universities to attract a large number of student anchors through the "most campus" series of activities. 4) Interactive advantage: compared with traditional video websites, LIVE LVB is more interactive. When watching LVB, users can chat with each other, like each other, give gifts and so on. New song students and other guests will also interact with netizens in special programs. 5) profit advantage: broaden the profit channels by incubating campus group IP and variety IP, and by means of reward, copyright distribution, IP advertising sponsorship and so on.
The "Live + Variety" model provides a blue ocean market driven by a two-way content platform. On the one hand, "China New Song" provides professional high-quality content for the LIVE live broadcast platform, helping the live broadcast platform to increase the viscosity of users, on the other hand, the interactive and timely nature of mobile live streaming has injected new elements into the traditional variety shows. Although it is still in the experimental stage, the "Live + Variety" mode can change the visual fatigue caused by online celebrities and game live streaming, make live broadcast users more extensive and diverse, and solve the "ceiling" problem faced by variety shows at the same time. Enhance users' leading rights to content production, live broadcast business will also become a new performance growth point of the company in the future.
Profit forecast: we expect the EPS of the company from 2016 to 2018 to be 0.52,0.68 and 0.82 yuan respectively. Refer to the same industry, Huayi Jiaxin, Northlatitude Communications and other 2016 PE are expected to be 34-88 times, we give the company a valuation of 75 times in 2016, corresponding to the target price of 39 yuan. Give a buy rating.
Risk hint: live broadcast platform profit risk, policy risk, fierce market competition, systemic risk.