Event: the company announced the 2016 performance forecast, the net profit of returning to the mother increased by 75% from 104.97% to 12.4521 million yuan to 14.69 million yuan, and the net profit after deducting non-profit increased by 60.3% from 145.3% to 4.2221 million yuan to 6.46 million yuan.
Comments: 1. Achieve rapid growth in net profit for the whole year, mainly benefiting from the contribution of software system products and system integration business.
The company made a net loss of 13.5 million in the first three quarters of 2016. according to the annual performance forecast, we speculate that the net profit in the fourth quarter will be 25.9521 million yuan to 28.19 million yuan. The rapid growth in performance for the whole year is mainly due to: 1) the revenue and gross profit of software system products and system integration increased significantly compared with the same period last year; 2) the acquisition of 100% equity interest in Shaanxi Province in December 2016. it is promised that the net profit after deduction in 2016-19 will not be less than 9 million yuan, 12 million yuan, 14.4 million yuan and 17.3 million yuan respectively. 3) the cooperation between the company and radio and television operators officially entered the operation period through pre-running-in, and began to generate revenue; 4) the "run-education" business model was recognized by the market one by one, and gradually formed revenue in 2016.
2. The landing of VR content is worth looking forward to.
Through cooperation with Fang Qiang in technology development, the company will actively integrate capital, technology, patents, talents and other advantageous resources, and take the lead in broadcasting virtual reality content in the form of VR video, panoramic video and other new media through the radio and television network, so as to provide a new audio-visual viewing experience to a large number of home TV users. The company actively invests in the construction of VR content, and the further landing of the content is worth looking forward to, which will open up a new growth space for the company's business.
3. Integrate the high-quality resources of the industry chain, and strengthen cooperation with radio and television operators in the future.
Invest 4.7% of China's leading interactive TV operation service provider Youpengpu to carry out all-round cooperation in the fields of content, operation and technology. The acquisition of Shaanxi Dianteng Interactive, a leading domestic video game developer, extends the industrial chain layout of the radio and television broadcast control system. Will package and share content, adopt a mutually beneficial business model such as revenue sharing to integrate resources, and provide radio and television operators with "integrated" services including terminals, content and technology platforms.
4. Set up industrial merger and acquisition fund to accelerate the industrialization process of "virtual reality + radio and television".
The company has carried out industrial operation cooperation of "virtual reality + radio and television" with Tianwei Video, Hubei Radio and Television, Jilin TV Media and other radio and television enterprises based on their own advantages. It will also jointly set up a virtual reality broadcasting center with radio and television operators to actively promote the opening of a number of live channels that support virtual reality content broadcasting to achieve virtual reality content broadcasting. In addition, the company and Qianhai Indus jointly launched the Jiachuang Indus Fund to invest in radio and television, VR, cultural and media content, online education, online games and other related areas.
Profit forecast and investment advice
We maintain our profit forecast for 2016-18 with net profits of $14 million, $35 million and $73 million respectively. Considering the clamping advantage of the company in the virtual reality industry, there are potential M & An expectations through the establishment of industrial funds. Acquire Shaanxi Dianteng Interactive, a leading domestic video game developer, invest in China's leading interactive TV operation service provider Youpengpule, integrate high-quality resources of the interactive TV industry chain, and be optimistic about the specific landing of the company "VR+ Radio and Television". The current market capitalization of the company is only 4.16 billion yuan, which is strongly recommended.
Risk hint: a-share systemic risk, the company's project promotion effect is not as expected.