Profit: revenue in the third quarter increased by 48%, but losses caused by higher costs increased the company's operating income of 58.8796 million yuan in the first three quarters of 16 years, an increase of 5.45% over the same period last year. The net profit loss attributed to the parent company was 51.7627 million yuan, compared with 20.741 million yuan in the same period last year, a decrease of 349.57% over the same period last year, mainly due to a profit of 79.0119 million yuan from the disposal of Nanjing Yishang Tianyuan equity in the same period last year. The non-return net profit lost 51.3159 million yuan in the first three quarters, compared with 43.4341 million yuan in the same period last year, an increase of 18.15 percent. The company realized earnings per share of-0.11 yuan in the first three quarters. Of this total, the operating income in the third quarter was 15.6774 million, up 48% from the same period last year, and the net profit was-18.8876 million, down 1.24% from the loss in the same period last year.

In terms of profitability, the company achieved a gross profit margin of 75.9% in the first three quarters, down 11.06 percentage points from the same period last year. The gross profit margin in the third quarter was 49.8%, down 30.6 percentage points from the same period last year. The expense rate during the first three quarters was 155.4%, down 5.3% from the same period last year, mainly due to a 35.74% reduction in operating tax from "operating to increasing" compared with the same period last year. Among them, the management expense rate, sales expense rate and financial expense rate decreased by 3.2%, 6.0% and 8.1% respectively compared with the same period last year.

What to see in the future: Internet marketing, e-sports industry, sports and entertainment spend 400 million yuan to buy 100% stake in new line, cut into the game Internet marketing industry: the company issued an announcement on July 12, proposed to issue shares and pay cash to buy 100% stake in new line, the transaction price is 400 million yuan, including cash consideration of 180 million yuan, share consideration of 220 million yuan At the same time, no more than 193 million yuan will be raised to pay the cash consideration, and the price of the issued shares is 10.97 yuan per share. The net profit promised by the new line in 16-18 is not less than 36 million yuan, 47 million yuan and 61 million yuan respectively. After the completion of the merger and acquisition, the company is expected to greatly improve the company's profit and realize another key measure to cut into the entertainment market from traditional tourism. Help the company into a sound industrial extension layout. On August 12, the Japanese transaction was examined and approved by the general meeting of shareholders of the company, which is currently subject to the approval of the CSRC.

Set foot in the third-party events of e-sports industry and build the brand of E-Competition: the company signed the "letter of intent for Cooperation in China E-Sports Carnival" with the Sports Information Center of the State General Administration of Sports and Shanghai Xiaoshang Culture Communication Co., Ltd. The three parties agreed to build the China e-Sports Carnival brand through friendly cooperation, and the company won the right to co-host for 16 to 18 years. The profit distribution proportion of the company in the e-sports carnival project is 60%, which is distributed after the end of the e-carnival project every year. By the end of this report period, the company has invested 6 million yuan in working capital into the project in accordance with the relevant agreement.

Actively transform and upgrade to the sports and entertainment industry, and gradually accelerate the pace of investment integration: the company formulated the strategic development direction of outdoor sports and entertainment in 16 years, and further accelerated the pace of transformation, with the help of all kinds of investment, constantly improve the layout of culture, entertainment and sports, and set up a number of industrial M & A funds to create new profit models, such as investing in Suzhou CITS United Sports Investment Center. Invest in Rong Zhi Xunda layout VR camera field, contribute 20 million yuan to participate in the establishment of online education industry fund and so on.

The main business is in the doldrums and is in urgent need of transformation, and the layout of the cultural and entertainment industry is worth looking forward to. The revenue of the rating companies that "cautiously increase their holdings" grew steadily in the first three quarters of 16 years, while deducting a non-net profit loss of 51.3159 million yuan, an increase of 18% over the same period last year, and the main business remains in the doldrums. It is urgent to make a turnaround. The company recently announced that it intends to acquire the new line of China Television, and at the same time cut into e-sports industry, and invest in equity projects through industrial M & A funds to comprehensively lay out the cultural, sports and entertainment industry. It is estimated that the company's EPS in 16-18 will be-0.09yuan,-0.01yuan and 0.04yuan respectively, maintaining a "prudent overweight" rating.

Risk hint: the progress of the new line of M & An is lower than expected, the performance of the original Yishang Hot Spring Hotel continues to be under pressure, the progress of transformation is lower than expected, and the lower-than-expected operation and profit of sports and entertainment business may lead to continued losses.