Core ideas:
1. Sky Pigeon Interactive is one of the largest real-time social video platforms in China, and its main business is a real-time social video community for PC and mobile. Included in the Shenzhen-Hong Kong Stock Connect in December 2016.
Second, the company has the largest real-time social video platform in China, with the total number of registered users exceeding 310 million as of September 30, 2016. In the third quarter of 2016, the average number of monthly active users reached 20.67 million, the number of active payers was about 1.22 million, and the ARPU value of users was 180yuan.
The seamless docking of PC mobile LVB platforms produces synergy: it operates the most diversified user-generated content portfolio in the industry, with a total of 9 unique platforms (4 mobile LVB platforms and 5 social video communities on PC), and has international anchors with wide and diversified content coverage. The company takes the video business as the core and constructs the business matrix of games, e-commerce, advertising, finance and so on.
Live video service on PC: as the leader of live video platform on PC, Sky Pigeon Interactive is different from its competitors in a unique many-to-many mode. It has many-to-many community 9158 video community, Sina Show, a pair of community Sina Show and other real-time social video community Happy Bar, Heart Bar and other products.
Mobile video live streaming service: Sky Pigeon interacts with a variety of mobile live streaming products, covering different user groups. 1. Crystal LVB: multi-functional "many-to-many" mobile LVB platform to create a first-level UGC mobile platform. 2. Meow: the new "many-to-many" mobile live broadcast platform, the Thai version of Meow has successfully entered the popular list of Google Play in Thailand, and the Taiwan version of Meow has successfully opened up the traditional Chinese market. 3. Happy LVB: seamless docking with PC platform, with strong gaming characteristics. 4. Go viral: intercommunicate with PC. Through technology upgrading, LVB has excellent fluency. VR technology will be developed in the future.
Third, online interactive entertainment services are the main source of income, and mobile live broadcasting is developing rapidly, leading to performance growth in the third quarter. The proportion of revenue from mobile online entertainment services has increased steadily. Mobile revenue accounted for 54.3% of total online interactive entertainment revenue in the third quarter of 2016, up from 47.6% in the second quarter of 2016 and 15.1% in the same period last year.
Fourth, give a "buy" rating for the first time. On December 30, 2016, the company closed at HK $4.80 per share, equivalent to about RMB4.38 per share (at HK $1 = 0.9119 RMB). The EPS for 16-17 years is expected to be RMB0.17,0.24, corresponding to a valuation of 26 times and 18 times for PE.
Fifth, risk hints: the competition in the mobile live broadcast industry has intensified; the layout of new business is not up to expectations; A shares are different from the Hong Kong stock market environment, the Hong Kong stock market systemic risk; RMB against the Hong Kong dollar exchange rate risk
