This report is read as follows:
The company's 2016Q3 performance is in line with our previous expectations, as the company continues to promote the transformation work, the continuous addition of new business will continue to improve the company's city service business system and promote the company's performance.
Main points of investment:
Raise the target price to 17.28 yuan and maintain the "overweight" rating. We maintain the company's forecast of EPS 0.29 pound 0.33 / 0.38 from 2016 to 2018. Due to the recent increase in the overall valuation of the publishing sector, we have raised the company's valuation to the industry average, the corresponding target price has been raised to 17.28 yuan, and the "overweight" rating has been maintained.
Performance description: the company's 2016Q3 realized main business income of 463 million yuan (+ 22.63%) and net profit of 75 million (+ 49.63%). In the first three quarters of 2016, it realized main business income of 1.152 billion (+ 11.44%) and net profit of 127 million (+ 4.78%).
The performance is in line with our expectations, and the results of the transformation have gradually emerged. The increase in revenue and net profit of 2016Q3 is mainly caused by the future performance of the vocational education company acquired at the beginning of the year; at the same time, the fast spread and classic Bowei of last year's extension mergers and acquisitions also maintained good growth, and the company has gradually begun to reap the results of transformation; during the reporting period, the traditional business remained stable under the macro background of the overall decline of the newspaper media.
The urban comprehensive service system is becoming more and more perfect, and the follow-up action is worth looking forward to. Since the backdoor listing, M & A companies have established a multi-level city service system covering mobile video, vocational education, cultural property rights transactions and other business based on their own media and local advantages. The company said in this announcement that it will continue to promote the work of private placement, demonstrating its firm determination to transform. In the future, the new capital operation, the further improvement of the city service system and the coordination of 116 million users in the company's business system are expected to bring more performance surprises.
Risk hint: the overall decline of the newspaper industry is a drag on performance, and the future growth of integrated service providers and secondary education is less than expected.