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The company released its 2016 results, KuaiBao, with an operating income of 394 million yuan, an increase of 103.32% over the same period last year, and a net profit of 78 million yuan, an increase of 509.67% over the same period last year. In this regard, our comments are as follows.
Comments:
The reversal of performance is in line with our prediction of listed companies. The net profit attributed to shareholders of listed companies in 2016 was 78.24 million yuan, turning losses into profits compared with the same period last year, and the business transformation has achieved initial results. During the reporting period, the company continued to deepen its upgrading, various business lines recovered, and operating income increased significantly; at the same time, the related operating costs and expenses were significantly reduced, resulting in a substantial increase in profitability. The company has recently issued a profit distribution plan to share the results of the transformation with investors, and at the same time help to enhance liquidity and serve the company's future strategic planning. Implement the equity incentive plan and bind the core team. The incentive covers a total of 72 core management, business and technical backbones of the company. The unlocking condition is that the 2018 net profit of the company is not less than RMB 7200, RMB 9360, RMB 12.168 million respectively, and the corresponding annual compound growth rate is not less than 30%. Will further strengthen the driving force of business development.
The game agent model is advancing steadily, and the number of imported models is expected to exceed 10. The company adheres to the leisure game mode of acting well-known foreign manufacturers, the game quality is guaranteed, superimposing the company's local distribution and operation capacity. The company has successfully introduced King, Rovio, EA and other products, is expected to continue to break through in 2017 in the introduction of quantity and timeliness, is expected to exceed 10. Full-flow operation, communications and information services are expected to accelerate growth. The company's WiFi resale time has accumulated more than 10 million hours, accounting for the largest share of third parties. The starting point of 3G/4G traffic operation is high, and the layout occupies the first-mover advantage, focusing on expanding Internet channels and customers in the financial industry. It is expected that traffic operation will continue to bring incremental income contribution. The company has been involved in enterprise short message business, and WiFi, traffic to form a synergistic effect, is expected to become a new performance growth point.
Set up a mobile Internet industry fund to expand the layout. The company signed an agreement with Ping an Caizhi, wonderful World and Ping an Wisdom to jointly set up a mobile Internet industry investment M & A fund with a total size of RMB 500 million, of which the company subscribed for 150 million yuan. The company participates in the establishment of industrial funds, and the transformation of mobile Internet is expected to speed up. The investment direction of the fund covers communication solutions, smart hardware, mobile Internet services, such as video lottery cloud platform, mobile games and other areas. With the orderly development of the epitaxial layout, the company's new strategic direction is expected to take shape step by step.
Risk factors: new business growth is not as expected, industrial fund investment risk.
Maintain the "buy" rating: the performance is in line with expectations, the development inflection point has been verified, equity incentives and major shareholders increase the momentum of development. It is expected that the company will continue to promote business upgrading and transformation on the basis of 2016, raising the company's forecast for 2016-2018 to 0.30, 0.43 and 0.55 yuan (from 0.29 to 0.41, 0.52), maintaining the target price of 26 yuan and a "buy" rating.