Main points of investment:
The traditional main business dropped slightly, new business type continued to layout. In 2016, the company achieved an operating income of 2.215 billion yuan, an increase of 1.79% over the same period last year, and a net profit of 366 million yuan belonging to shareholders of listed companies, a decrease of 11.02% over the same period last year. In the first quarter of 2017, the company realized operating income of 476 million yuan (- 5.59%) and net profit of 63 million yuan (- 39.76%). Under the downward background of traditional cable TV channels, the company actively seeks a new performance growth point through the layout of educational informationization, film and television content, such as new business type.
Cable TV network business: the growth rate of the cable TV industry has slowed down and the construction of broadband network has accelerated. The company traditionally specializes in providing value-added services such as HD, UHD digital TV program live broadcast, VOD video-on-demand, data broadcasting expansion and various Internet platform applications for 5.52 million radio and television users in Jilin Province. Restricted by the rise of new media, the overall growth of cable TV channels slowed down, and the company's cable TV business achieved revenue of 1.243 billion yuan, slightly lower than the same period last year (- 7.14%). In terms of broadband services, in recent years, the company's broadband construction and coverage capacity has been continuously improved. in 2016, the company built 2675 kilometers of network trunk lines and 246400 optical fiber households in new residential areas. At the same time, the company has actively developed new radio and television network technology products with the help of national policies such as "triple play". In April 2017, the 10-gigabit fiber-to-the-home I-PON technology program developed by Gigi Huitong, a subsidiary of Gigabit media, was formally adopted and incorporated into the "Cable TV Network Fiber-to-the-Home (C-FTTH) technical specifications" and became a national standard. In 2016, the company's network broadband business achieved revenue of 125 million yuan, an increase of 30.59% over the same period last year. We believe that the cable TV network business is expected to become a bright spot for the company's future growth.
Relying on government educational resources, we will strengthen the construction and coverage of educational specialized networks. In the construction of educational informatization, the company relies on its own background resources of state-owned enterprises, and the cooperation of educational informatization is accelerated. In 2016, the company completed the testing and training of the special network access and video conference system of more than 90 schools and educational institutions directly under the Changchun Education Bureau, and was officially put into use. The construction of interactive classes in more than 30 schools of the Education Bureau of Erdao District of Changchun has been completed and put into use. More than 100 national standardized examination room monitoring lines of Changchun Education Bureau have been completed and officially put into use. At present, the company's education network covers 685 schools and 16749 classes, and the company's education information business is expected to provide it with stable income.
Layout of the film and television industry chain to enhance the core competitiveness of radio and television content products. In order to cope with the risk of slowing down the growth of the traditional cable TV industry, the company has also actively laid out the film and television industry chain to enhance the core competitiveness of content products. In May 2016, the company established a strategic cooperation relationship with Guohua Film and Television Company to enter the upper reaches of the film and television industry chain. in the future, the two sides will carry out in-depth all-round strategic cooperation in the fields of equity investment, fund investment, film and television business and resources. In the construction of downstream cinemas, Jilin TV Media has successfully operated 5 single cinemas of "Jilin TV Cinema" in Jilin Province and Wulanhot, Inner Mongolia. During the reporting period, Centrino Plaza in Changchun
The flagship store of Jilin TV Cinema has repeatedly achieved the excellent results of the first one-day cinema attendance in China, the first one-day box office in the country, the first one-day attendance rate in Jilin Province, and the first one-day e-commerce alliance marketing data in the province.
Profit forecast. In the future, the company will comprehensively consolidate the radio and television network operation as the main body, and by marching into the film and television industry chain, create excellent content products, enhance the core competitiveness of radio and television channels, and at the same time make full use of the advantages of its own government resources to speed up the business layout such as educational informatization. We estimate that the EPS of the company from 2017 to 2019 is 0.13,0.14 and 0.16 yuan respectively. Referring to the same industry, the PE of Tianwei Video, Wasu Media and Radio and Television Network in 2017 is expected to be 24, 31 and 43 times, respectively. We give the company 31 times the dynamic PE in 2017, corresponding to the target price of 4.03 yuan, maintaining the overweight rating.
Risk hint: the decline risk of traditional cable television transmission business, the development of value-added services is less than the expected risk.