Judgment in 2016-delays in projects have put pressure on performance:
"come on, just do it." the delay affects fourth-quarter results, which are expected to be under pressure for the whole of 2016. Warsaw Bainer achieved operating income of 1.868 billion yuan in the first three quarters and a net profit of 179 million yuan. Most of the revenue of "my New clothes" was confirmed to be delayed, resulting in lower-than-expected results in the first three quarters. Currently, we expect revenue items such as "my New clothes", "late-night canteen" and New year's parties in Jiangsu and Hunan to be recognized in the fourth quarter of 2016. The delay of "come on, just do it" will have an impact on the fourth quarter and 2016 results, and the company's 2016 results are expected to be under pressure.
Forecast for 2017-the variety show will be harvested and the film and television will be rejuvenated:
Variety: the blockbuster project has been postponed to 2017, "filial son of the whirlwind" and "Cross-border Song King" have entered the second quarter, and the company's variety business growth in 2017 is worth looking forward to. As the high-quality variety show enters the second season, the investment promotion link will be more smooth. Public data show that Crossing King has received 200 million OPPO naming fees in the second quarter, while the exclusive naming fee in the first quarter was 150 million, an increase of more than 30 percent over the same period last year. The blockbuster project "come on, just do it" will be postponed to 2017, "filial son of the whirlwind" and "Cross-border Song King" enter the second season, "my New clothes" creates a new model of variety T2O, and the company also plans to break into the three platforms of CCTV. Continue to expand the audience of variety shows. We believe that Warsaw Bainer has gradually established brand recognition in the field of variety, coupled with the strong investment and production ability of Blue Flame, and the growth of variety business in 2017 is worth looking forward to.
TV series: there are "late Night Canteen" in front, "Legend of Liji" and "Mangqingluo" later, and the TV series business is expected to maintain stable development. The company's TV series business encountered a bottleneck in 2015, and the inventory project digestion and younger transformation led to a sharp decline in performance. after a year of adjustment, the company's TV series business has gradually become formal, judging from the gross profit margin of the 2016 semi-annual report. has returned to 2014 levels. "late Night Canteen" is the highest selling price for a single album in the company's history, which is expected to be reflected in the 2016 report, and the company has projects such as "Legend of Liji" and "Mangqinglou" in 2017. According to the company's existing shooting projects, we believe that 2017 will continue to maintain steady growth.
Sports: the initial stage, the future can be expected. The company strives to promote the comprehensive integration between European basketball and Chinese basketball, and successfully set a precedent for leading satellite TV in live broadcasting European top sports competitions by joining hands with Beijing Satellite TV to broadcast live La Liga. In the future, internationalization will become the new focus of the strategic layout of the company's sports section, and it is estimated that the annual sports sector revenue in 2016 is expected to exceed 300 million yuan. However, it is undeniable that the company's sports business is still in its infancy, making a large contribution to revenue, but a small contribution to profit. It is expected that the revenue of sports business will continue to grow steadily in 2017, but a substantial contribution to profit will still have to wait.
In 2017, the company will make simultaneous efforts in TV series, TV variety and network variety. The company plans to add two more online variety shows on the basis of the original four variety shows in 2017, jointly with the excellent domestic production companies to promote a total of three CCTV programs. TV series jointly with excellent directors to achieve the simultaneous promotion of high-quality dramas and young online dramas, including the IP drama "Mengmenqingluo", "the Legend of the Moon in the Qin Dynasty" and so on are in the shooting or preparation stage. At the same time, the pre-fixed increase funds are in place, there is plenty of cash, and the implementation of the project in the later stage is fully guaranteed.
According to the latest situation of the company, we appropriately adjust our previous profit forecasts. It is estimated that the revenue of the company from 2016 to 2018 will be 2.259 billion yuan, 2.987 billion yuan and 3.95 billion yuan respectively, an increase of 19.84%, 32.22% and 32.25% respectively over the same period last year. The net profits attributed to the parent company were 358 million yuan, 474 million yuan and 581 million yuan respectively, up 34.12%, 32.52% and 22.42% respectively over the same period last year. The corresponding EPS is 0.44,0.58 and 0.71 yuan respectively. The current price is 22.44 yuan per share, corresponding to the 2016-2018 PE on 51-39-32. The above forecasts are based on the company's endogenous growth and do not take into account the extension. At present, the company has completed its growth, and there is plenty of cash on the account. Maintain the company's target price of 28.5 yuan, "buy" rating.
Risk tips: 1) Variety, film and television production progress, audience effect is not up to expectations; 2) brain drain risk