Main points of investment.
Event: the company released its three quarterly reports for 2016.
Comments:
16Q3 performance maintained steady growth. 1) the company's 2016Q3 realized operating income of 222 million yuan, an increase of 189% over the same period last year; net profit of 6.25 million yuan, an increase of 1055% over the same period last year; revenue of 629 million yuan from January to September 2016, an increase of 190% over the same period last year, and a net profit of 42.16 million yuan, an increase of 27.79% over the same period last year, in line with market expectations (the company expects a net profit of 3629-42.89 million yuan from January to September). 2) in the first three quarters of 2016, the cost increased significantly due to the substantial increase in cloud costs, personnel fees and marketing activity fees for the whole course; as the company's core business is still in the promotion period, the cost increase is inevitable.
EdSaaS business and home-school interaction upgrade business development effect is remarkable. 1) the company's EdSaaS business has entered a period of scale promotion from strategic layout, and the coverage area and user base have been further expanded, resulting in a substantial increase in EdSaaS business revenue in the first three quarters of 2016, reaching 234 million yuan, an increase of 231% over the same period last year, accounting for 37% of revenue, and a month-on-month increase of about 1%. The advantages of both content and import continue to be consolidated. 2) due to the superposition of products and the coordination of self-operated and post-investment channels, the business income of home-school interactive upgrading business reached 196 million yuan in the first three quarters of 2016, an increase of about 43% over the same period last year.
Profit forecast and rating. It is estimated that the annual net profit of the company in 2016-17-18 is 1.20max 1.51 / 192 million yuan and EPS is 0.19Unix 0.24exp 0.30, respectively. The current share price corresponds to the corresponding PE of 140Universe 111max 87 times over the same period. The company has formed a full-service operation system with EdSaaS business as the core, home-school interaction and upgrading business, discipline promotion business and continuing education business, and is expected to continue to build a domestic first-class online education platform through product optimization and upgrading and maintenance of traffic entrance in the future. Maintain the "overweight" rating.
Risk tips: accounts receivable further increased; industry competition further intensified.
