Film and television, variety, sports continue to make efforts, the fourth quarter results can be expected. In the first three quarters, the company achieved revenue of 1.87 billion yuan (+ 27.46%) and net profit of 180 million yuan (- 6.50%). Some of the boutique projects developed by the company's film and television and variety sectors did not have the confirmation conditions in the third quarter, and the profits declined in the third quarter. according to the company's third quarterly report, high-quality works such as "my New clothes" and "late Night Canteen" are likely to be able to confirm revenue in the fourth quarter, and the performance will usher in a centralized release period.
The reserve of high-quality film and television projects is rich, and the process of networking and rejuvenation is accelerating. The company's film and television sector is strong, the industry is rich in resources, talent has six directors such as Wang Jun, and the IP project is rich in reserves. the TV dramas that have been confirmed for 16 years include "City of wrestling", "long live Love", "Crouching Tiger", "gone with the Wind", "Hunter", etc., directed by Cai Yuexun and starring Huang Lei, the boutique IP drama "late Night Canteen" has been released well, creating a price record for a single episode of the company's TV series. It will be broadcast on Zhejiang and Beijing Satellite TV in 17 years. In the future, there are as many as 13 projects planned to be produced, among which high-quality projects such as "Meng Qingluo" and "Legend of Liji" are expected to become popular styles. From the perspective of the company's works, the networking and rejuvenation strategy of the film and television sector has been promoted in an all-round way, and it is expected to emerge from last year's trough with accumulated strength and return to the leader of the TV series industry.
The word of mouth of variety continues to ferment, and the leading position of variety appears. The innovation ability and program development and operation ability of the company's variety business is leading in the industry, and the variety performance is eye-catching. In 2016, the company mainly launched variety shows such as "filial son of the whirlwind" (the first season), "Crossing King of songs" (formerly "the most Beautiful Harmony"), "my New clothes" (the original "New clothes of the Goddess"), "come on, just do it" (schedule postponed) and other variety shows, achieving a good harvest of both word-of-mouth and viewing. In 2017, the company plans to have seven major projects spanning four quarters of 2017, and expand into online variety shows to launch two top web ensembles, while excellent production companies in the United Nations promote a total of three CCTV variety shows. In the future, the company will be based on this territory, give full play to the accumulation of experience and business resources in the variety industry, and is expected to achieve explosive development in the variety industry.
The scale of the sports plate is developing rapidly, and there is a huge space for imagination in the future. The company entered the sports industry in June 2015, and the revenue scale has developed by leaps and bounds so far. The company's sports sector's revenue in the first three quarters is 231 million yuan, which has greatly exceeded last year's annual revenue of 58 million yuan, and is expected to become a new profit growth point for the company.
Profit forecast and valuation. We estimate that the company's 2016 / 2017 return net profit is 448 million yuan and 602 million yuan, respectively, and the corresponding EPS is 0.63 yuan and 0.85 yuan, respectively. With reference to the valuation level of the content industry and the marketing industry, the company is slightly higher than the industry average of 43 times PE in 16 years, with a target price of 27 yuan. in view of the company's recent pullback, the stock price is at an all-time low, and the performance in the fourth quarter is good, the rating is raised to "buy".
Risk hint. Film and television business development is not as expected, policy risk.