Founded in 2007, the company is the industry's leading provider of mobile Internet products and services. The company through internal growth and external cooperation, multi-channel expansion of user access, continue to create a contact platform with a large number of users.
During the period of rapid growth of revenue, the gross profit margin maintained a high level. The company announced its results for the third quarter of 2016 on October 27th. The operating income in the first three quarters of 2016 was 872 million, an increase of 85.5% over the same period last year, and the gross profit margin was 51.98%. The net profit attributable to the owners of the parent company in the first three quarters was 263 million, an increase of 31.19% over the same period last year; basic earnings per share was 0.12 yuan, an increase of 9.09% over the same period last year. Of this total, 2016Q3's operating income was 282 million yuan, up 43.44% from the same period last year. The net profit attributable to listed shareholders was 69 million yuan, an increase of 14.32% over the same period last year.
Enter the field of smart hardware on a large scale. In recent years, the smart hardware market has developed rapidly. Since 2015, the company has made a lot of investment in the smart hardware field, taking the explosive growth of mobile interconnection as an opportunity to launch its own intelligent hardware "contact mini" and "Virtual reality Retinal Eye Glyph". At the same time, it has successfully raised funds, providing sufficient funds for the company to enter the field of smart hardware on a large scale.
It is proposed to acquire newegg to expand the cash channel and promotion platform. On September 28, 2016, the company issued a major asset acquisition plan to purchase a 55.7% stake in neweg in the form of cash. According to the announcement, with an annual operating income of 14.964 billion yuan, Newegg2015 is already one of the largest online retailers in the United States, and is currently the second largest pure e-commerce enterprise in the United States with IT/CE category, with strong IT/CE product sales ability and market influence. The company's acquisition of newegg will greatly broaden the realization channels and publicity platform.
Profit forecast and rating: we expect the return net profit from 2016 to 2018 to be 473 million, 700 million and 968 million respectively, the EPS is 0.22,0.32 and 0.44 yuan respectively, and the corresponding PE is 89,60,43 times respectively. The company has a large customer base with high stickiness, occupying the entrance of user traffic, strengthening and expanding the content side, hardware side and promotion platform, and practicing the strategic layout of "self-growth and cooperative ecosystem construction". The performance is good, we are optimistic about its future development and maintain the "recommended" rating.
Risk tips: 1) core brain drain; 2) product market boom is lower than expected; 3) the company's new product promotion progress is lower than expected.