Main points of investment:
"Internet +" Dongfeng helps the company big data marketing transformation, new business type layout future performance may be good. Zhejiang Furun was originally a traditional printing and dyeing and steel pipe processing enterprise in Zhejiang Province. In 2015, the company experimented with the Internet on a small scale through the establishment of industrial funds and equity participation, opening the road to the strategic transformation of traditional enterprises. On the evening of October 19, 2016, the company announced that the acquisition of a 100% equity stake in big data Marketing Company was approved unconditionally by the CSRC. After the completion of the acquisition, the company will form a "traditional industry + Internet" double main business layout. Tai Yi refers to the performance commitments of 55 million yuan, 85 million yuan and 122 million yuan for the period from 2016 to 2018, respectively. New business type's layout is expected to contribute stable profits to listed companies, and the company's performance is expected to improve in the future.
Big data marketing industry analysis: high growth of the industry, DSP advertising into the future tuyere. With the popularity of intelligent mobile terminals, data resources have been exploding. According to the 2015 White Paper on China big data Trading issued by Guiyang big data Exchange, China's big data market will exceed 800 billion yuan in 2020, with an average annual compound growth rate of 48.51 percent. In the era of big data, the marketing industry chain was reshaped, through DMP data analysis, to find out the target matching data, and then transmitted to DSP for advertising marketing mode has gradually become the mainstream. According to the report of iResearch Consulting, the market of DSP advertising in China will reach 47.19 billion yuan in 2018, and the compound growth rate of the industry will reach 54.24% in the next three years.
Tai Yi Shang: big data is the leader in the field of marketing. Taiyi refers to China's leading big data technology enterprises, the company can provide advertisers with Internet marketing and marketing data analysis, services. Internet marketing services account for more than 90% of the company's total revenue. Relying on its subsidiary Taiyi Media, the company carries out accurate product positioning, market evaluation, effect prediction and optimization through leading big data technology. At present, the business is mainly profitable in two modes: "interest margin" and "media rebate". In terms of marketing data analysis and services, the company mainly sells the above-mentioned DMP software to help customers achieve effective internal data management and promote internal data value mining. The company's revenue has grown rapidly in the past three years (+ 145.61%), the gross profit margin has increased steadily, and big data's marketing business has developed by leaps and bounds.
Profit forecast and valuation. With the introduction of Shaoxing printing and dyeing policy, printing and dyeing business orders will gradually focus on large printing and dyeing enterprises with higher environmental standards, and the company's traditional business is expected to achieve a higher growth rate in the future. It is expected that the company's traditional business will achieve a net profit of 40.01 million yuan and 60.62 million yuan respectively in 2017 and 2018, with a corresponding EPS of 0.17 yuan and 0.21 yuan respectively. If we take into account the acquisition and consolidation of Taiyi in 2017, the pro forma net profit in 2017 and 2018 is 126 million yuan and 182 million yuan respectively, and the fully diluted EPS corresponding to the latest equity is 0.24 yuan and 0.34 yuan respectively. With reference to the average valuation of companies in traditional printing and dyeing and big data industries, and considering the favorable policies of the company's traditional business and the high growth of M & A targets, we give the company a buy rating of 70 times the dynamic pe in 2017, corresponding to a target price of 16.80 yuan.
Risk hint. Taiyi refers to the risk that the performance growth rate is not as fast as expected; the downside risk of the company's traditional business.
