Events:
1. The performance in 2016 was in line with expectations. The company achieved an operating income of 2.575 billion yuan, an increase of 36.61% over the same period last year; a total profit of 390 million yuan, an increase of 41.33% over the same period last year; and a net profit of 378 million yuan belonging to the owner of the parent company, an increase of 41.8% over the same period last year.
2. During the reporting period, the company successfully completed a non-public offering, with a net refinancing of 2.1721092 billion yuan.
3. Profit distribution plan: a cash dividend of 1.00 yuan (including tax) shall be distributed to all shareholders for every 10 shares on the basis of 812461176 shares.
Text:
1. Film and television section: successful transition to youth and networking
The film and television income during the reporting period mainly came from the first round of releases of projects such as "the workplace is a technical activity" and "long live Love", as well as the second round of previous plays.
"late Night Canteen" and "Legend of Liji", which were broadcast this year, have attracted a great deal of attention from the market at the beginning of filming as the benchmark of the company's film and television drama transformation to a younger network. Urban emotional drama "late Night Canteen" is adapted from Niman Super IP, starring Huang Lei, and will be broadcast on Beijing Satellite TV, iQIYI, Inc. and other platforms in June 2017; costume martial arts drama "Legend of Liji" based on the author Wen Shiren's book "the Legend of the Moon before Qin Shi Yue", starring Dili Reba, will hit Zhejiang Satellite TV, Youku and other platforms in August 2017.
2. Variety section: the advantages of innovative business model and operational integration gradually reflect that the company's variety income during the reporting period mainly comes from "whirlwind filial son", "cross-border song king", "my new clothes" and so on.
"whirlwind filial son", as the first variety program separated from production and broadcasting by Hunan Satellite TV, has become the best new variety show in the whole market in the first quarter. The average audience rating of CSM35 City Network is 1.53%, and the second season is currently in preparation. "Crossing King" continues the advantages of the company's music programs, with an overall upward trend. The average audience rating of CSM35 City Network is 1.51%, and the final rating is 1.9%, ranking first among all provincial satellite TV stations, setting a new high for the whole season. Kuyun's share of real-time data is better than 12%, setting a new record for Beijing Satellite TV programs. Since the launch of the broadcast, it has always maintained a high popularity, with Weibo Corp Variety list No. 1 and Crazy Variety season No. 1 for 13 weeks in a row, Baidu, Inc. Index ranked first in 11 periods of the same period, and Weibo Corp TV Index TOP1 in the finals of "Crossing King".
3. Sports sector: continue to deepen the layout of sports marketing business. During the reporting period, the company's sports business is committed to promoting the comprehensive integration of European basketball and Chinese basketball, successfully holding UEFA Champions League basketball tournaments in Chengdu and Shenzhen, and successfully broadcasting La Liga in conjunction with Beijing Satellite TV, creating a precedent for leading satellite TV to broadcast live Europe's top sports competitions. Competitive sports marketing and event operation platform is beginning to take shape.
4. Innovative business: set up VR Industry Division to fully integrate VR content production with its own IP during the reporting period, the company set up VR Industry Division, using domestic market-leading industrial VR shooting technology and video editing and live streaming solutions to achieve VR live streaming for sports events and large concerts, as well as the production of high-quality VR content for its variety shows such as "Crossing King" Form the leading VR content production capability in China. In the future, the company will continue to integrate high-quality content resources while continuously improving the level of VR solutions, and strive to become China's leading industrial VR content manufacturer and VR content integration operator.
Earnings forecast and valuation: we estimate that the company's EPS for 2017-2018 is 0.62 EPS 0.75 yuan respectively, giving a "buy" rating.
Risk hint: film and television business development is not as expected, policy risk, sports business expansion is not up to expectations