Main points of investment
1. National C G Vision Service Leader
Silk Road Vision was founded in 2000 and listed on the gem in November 2016. the company's business mainly includes three integrated services of CG static, CG dynamic and CG visual scene, including almost all products and services in the field of CG, such as two-dimensional / three-dimensional, static / dynamic, picture / animation, etc. Since its establishment more than ten years ago, the company has successively undertaken the related projects of large enterprises and institutions, such as Nansha, CNOOC, China Merchants Shekou, National Museum of China, Yiyatong and other large enterprises and institutions, with business in Nanjing, Beijing, Qingdao, Shanghai, Wuhan, Xiamen, Chengdu and other places, gradually becoming the domestic CG vision service leader.
2.CG service has a wide range of downstream applications, the domestic CG industry is welcoming a new round of development period from 1960 to now, CG technology has been widely used in architectural visualization, exhibition, film and television, animation, advertising, games and other artistic creation activities involved in today's computer era, the downstream application is very broad. Since 1995, the domestic CG industry has experienced three waves led by downstream architectural design, exhibition, animation and entertainment industry. Since 2010, benefiting from the rapid development of animation, film and television, games and other entertainment industry, the domestic CG service industry has ushered in a new round of development.
3. The company's CG visual scene business, CG visual dynamic business twin-engine growth prospects in the first half of 2016, the company achieved revenue of 223 million yuan, an increase of 28.97% over the same period last year. Among them, CG visual scene business and CG visual dynamic business account for 40.22% and 32.40% of revenue respectively, which are the twin engines of the company's performance growth. Among them, the company's CG Visual scene Business Department occupies a leading position in the industry, which is also where the company's core competitiveness lies. At present, the annual increment of the number of domestic professional pavilions is about 10-20, the annual increment of the number of museums is between 150,300, and the annual increment of exhibition is about 200. the annual income of the exhibition industry is about 25 billion, with an annual growth rate of about 30%, and the company is in a period of rapid development. The company's CG visual scene business has a bright future. CG's visual dynamic business, benefiting from hundreds of billions of dollars in animation and advertising (growing at more than 10 per cent a year) and the fast-growing film industry (48.7 per cent in 2015), is expected to maintain long-term growth.
4. New business "rendering cloud" and new technology "VR\ AR" create new performance. In 2011, the company's wholly-owned subsidiary Shengqi Cloud Network acquired a 36.72% stake in Ruiyun Technology for 2.295 million yuan. Ruiyun Technology's "self-service cloud rendering" platform is based on cloud computing and moderately localized to provide users with convenient and fast cloud rendering services. June 2016 BABA invested 1.25 million yuan to gain a 20% equity share in Ruiyun Technology. Relying on Aliyun, the largest cloud service platform in China, the company is expected to quickly open the downstream customer market. In addition, the company actively embraces new technologies such as VR/AR, and the technology integration of VR/AR+CG has a lot of room for imagination.
5. Investment suggestion
We expect the company to achieve a net profit of 0.36,0.48 and 60 million yuan in 16-18 years, corresponding to the current market value of PE of 159,122,97 times, with a high valuation, and give a "recommended" rating considering the scarcity and development prospects of the company's business.
6. Risk hint
CG visual scene business is lack of competitiveness, and the development of new business and new technology is lower than expected.
