Events:
The company announced that it intends to contribute 100 million yuan to add 750 million yuan to Hangmei Media Group together with five other investors. After the capital increase is completed, the company will hold a 2.5% stake in Hangmei Media Group.
Main points of investment:
Hangmei Media is the leader in the domestic aviation media industry. Its main business is to provide customers with a full range of marketing and communication services by using LED screen, electronic screen brushing and traditional media advertising inside and outside the airport. At present, with 29 basic media resources and rich customer resources, Hangmei is the largest aviation media operator in China, with a significant competitive advantage. The revenue in 2015 was 1.36 billion yuan and the net profit was-100 million. The loss was mainly due to the large investment in advertising rights in airports and other areas, with operating income of 790 million yuan and net profit of 67.96 million yuan in the first half of 2016. The operating situation has improved significantly. The net profit commitment of HMC for 2017-2018 is 267 million and 315 million respectively. We believe that based on the existing business basis of Aero, the high-quality customer base facing the airport, and the overall good development trend of aviation media, it provides a certain guarantee for the realization of promised profits.
Increase capital and expand airport media business Jinqiao Information's main business is multimedia information system, the market pattern in this field is extremely scattered, and the endogenous growth of business is relatively slow. This capital increase will help the company to enter the airport field to carry out business and speed up the company's growth, and the expansion of airport business is expected to further enhance the company's profitability. At present, Mr. Ji Lianqiang, vice chairman of Jinqiao Information, is also the chairman of Hangmei Media Group, and the future cooperation between the two companies in the media advertising business is worthy of attention. We are optimistic about the company's integration and expansion around the upstream and downstream of the media industry.
Earnings forecast and investment rating: the capital increase has not been completed for the first time. Based on the principle of prudence, the company's EPS for 2016-2018 is expected to be 0.21,0.23,0.26 yuan respectively, and the current share price is valued at 150,136,122 times earnings ratio, respectively.
Risk hints: (1) the risk that the capital increase can not be completed successfully; (2) the risk that the promised profit can not be successfully completed after the capital increase; (3) the risk of intensified market competition.