Main points of investment

Event: the company issues the 2016 annual report and the first quarter 2017 performance forecast; 2) the company issues the 2016 annual profit distribution plan, paying a cash dividend of 0.20 yuan for every 10 shares to all shareholders.

Comments:

The performance was in line with expectations, and revenue and profits increased significantly compared with the same period last year. 1) the company's operating income in 2016 was 232 million yuan, an increase of 59.01% over the same period last year, and the net profit attributed to shareholders of listed companies was 13.6446 million yuan, an increase of 90.38% over the same period last year, in line with expectations; 2) the estimated loss in the first quarter of 2017 was 809.22-9.9597 million yuan, down 30% and 60% from the same period last year.

In the field of radio and television, the content side relies on the rapid layout of endogenesis and epitaxy. 1) focus on the promotion of end-to-end overall solutions and product development in the radio and television industry: software system products, system integration and terminal products in the main business grew by 26%, 46% and 396% year-on-year, and profitability continued to improve. 2) Endogenous + epitaxial layout content side: invest in Beijing Youpengpu through transfer and capital increase, complete the 100% equity acquisition of Shaanxi Dianteng Interactive, use its own capital of 100 million yuan to layout VR business, and continue to increase investment in Shenzhen fingertip cities to promote the layout in the fields of video, games, VR and education. 3) We believe that with the technical advantages of the radio and television industry, the company extends the layout to the content end on the basis of radio and television channels, and the synergy is obvious, and the growth rate is expected in the future.

Profit forecast: we expect the company's EPS for 17-18-19 to be 0.04 pound 0.04 pound 0.05 yuan, while the current share price corresponding to the corresponding PE for the same period is 292 pound 256 pound 230 times. Although the company's current valuation is relatively high, it continues to be optimistic about the synergy of the company's "channel + content" and is expected to quickly release its performance and maintain its "overweight" rating.

Risk hint. 1) the competition in the industry intensifies; 2) the development speed of the VR industry is not up to expectations.