Party newspaper group backdoor listing, endogenesis + extension to create a large media territory. Huazhi Holdings, the predecessor of the company, is mainly engaged in the production and sales of power meters. In December 2014, the company implemented a major asset restructuring, and Hangbao Group injected its operating assets to achieve the overall listing of high-quality media assets. In the face of the declining situation of the newspaper industry since listing, the company has strengthened endogenous growth, realized revenue diversification by creating new media, and actively extended layout, cutting into tuyere industries such as mobile video, IP industry, big data and so on, with continuous expansion of performance foundation and continuous improvement of large media territory. The 16-year acquisition of the vocational education group Zhongjiao Future is a key step in the company's extension, which is expected to create a new engine of long-term growth.
Media + city service dual platform tamps the foundation of endogenous growth. The company takes the construction of modern media cluster main platform and urban life service sub-platform as the core strategy. Among them, the media main platform is the company's user flow platform and the main source of profit. Centering on "Internet +" and "diversification", on the one hand, it strengthens the new media business and forms an all-media product system that covers various terminals and aggregates a large number of users; on the other hand, it independently creates diversified information, social networking and service platforms such as Hangzhou Network, 19th floor and Express Room Network. By strengthening the strength of online media, the company further expands the scale of users, and the coordinated efforts of its media in advertising, exhibition, planning and other areas also help the company hedge against the shrinking impact of the newspaper industry and consolidate its profit base. The city service sub-platform includes printing, distribution and outdoor advertising, which are based on the steady expansion of the regional market and strive to achieve a more diversified revenue pattern while serving the main platform.
Repeated epitaxy to improve the pattern of the industrial chain. Strengthen endogenesis while the company actively extends the development of new business, through acquisitions, new establishment and other means of continuous introduction of business, performance double increment. Since the listing, the company has accelerated the pace of extension, and has now laid out mobile video (fast transmission, Chinese media), IP industry (classic Bowei), big data (Huatai one media) and other fields, with accurate track selection and good growth. while the new business thickens its performance, it also forms a good interaction with the existing media plate, realizing the resonance amplification of the effectiveness of internal resources.
The acquisition of secondary education will open up the transformation of education in the future and create a new growth pole of performance. The business of secondary education is diversified in the future, and it has formed five parts with vocational education as the core, including international education, IT education, art education and online education. In the future, secondary education will mainly operate in the light asset mode of school-enterprise cooperation and exporting educational services, with large expansion flexibility, good risk control, and long-term growth space. This acquisition promises profits of 58 million yuan, 68 million yuan and 79 million yuan in 16-18 years, which will effectively enhance the company's performance, while the company, as the government, social resources and massive users accumulated by the party newspaper group, will also provide strong support for the accelerated expansion and brand building of secondary education in the future.
Investment suggestions: endogenous, the company's new media business development, platform traffic increases, advertising revenue will increase steadily, while its platforms actively carry out exhibition planning, integrated marketing, driving the overall advertising planning revenue to grow continuously. In terms of extension, quick dissemination and classic Bowei are highly likely to complete the bet; Zhongjiao has outstanding advantages in the light asset expansion model in the future, with strong replicability of its vocational education, IT education, online education and other sectors, good growth prospects, and operation is expected to exceed expectations, which will jointly promote the performance of the company. It is estimated that the net profit from 2016 to 2018 is 275 million yuan, 314 million yuan and 351 million yuan respectively, and that of EPS is 0.27,0.31,0.34 yuan respectively. With the help of the regional extension of vocational education and outstanding growth, the company gives the 17-year target PE 45 times, corresponding to the target price of 13.95 yuan, and gives it a "buy-A" rating.
Risk hint: the downside risk of the print media industry, the future expansion of secondary education projects is not as expected.
