Events:
The company plans to acquire 86.5% shares (610 million yuan) of Kid Technology shares and 90% shares (400 million) of Wuxi online and offline shares with a total of 1.01 billion cash plus equity, of which the equity consideration is 15.87 yuan per share for 40.04 million shares to pay 636 million and cash consideration for 373 million. At the same time, it is proposed to raise 400 million yuan in matching funds with a non-public offering of 25.22 million shares to the controlling shareholders Zhou Jianlin and Huaxia Life Insurance to pay the cash consideration and transaction taxes and fees of this transaction.
At the same time, Kid Technology Li Huaizhang + Liu Jing + Lin Lixian and Wuxi online and offline Wang Kun promised to increase their holdings in the company by 60.55 million yuan and 40.32 million yuan respectively through the secondary market within 12 months after receiving the initial equity transfer, with a lock-up period of six months. Zhou Jianlin, the company's controlling shareholder, has made an additional commitment to lock up its 165 million shares for 12 months from the listing of the newly subscribed shares in this matching financing.
Core ideas:
First, the company has comprehensively transformed the field of big data + mobile marketing, and in recent years, through the way of "vertical and horizontal combination, participation and control", the company has built a more comprehensive big data mobile marketing territory, with the goal of establishing a global leading precision marketing platform. The company has spun off its original power surge business, and after the completion of this acquisition, it will form a "five-control and multi-reference" layout, with five wholly-owned subsidiaries, including Jinyuan interaction, Micro-profit interaction, Cloud time and Space, Kid Technology, Wuxi online and offline.
Second, the digital marketing market continues to expand, and programmed purchase has attracted much attention. In 2015, China's overall online advertising market was 209.37 billion yuan, an increase of 36.0 percent over the same period last year, of which the mobile advertising market was 90.13 billion yuan, an increase of 178.3 percent over the same period last year.
Third, this acquisition will help to further improve the company's digital marketing business chain, add new business areas, facilitate the linkage of various business sectors, and facilitate business coordination among subsidiaries. Prior to the acquisition, it already held a 13.5% stake in Kid Technology and a 10% stake in Wuxi online and offline. Kid Technology: it has the ability of fine data analysis and the design and construction of mobile Internet advertising programming platform, including online alliance promotion, boutique promotion and programmed delivery and other mainstream mobile advertising delivery modes. Wuxi online and offline: professional mobile information service providers mainly use their own enterprise credit service platform to provide mobile SMS services for e-commerce, small and medium-sized enterprises' business activities, including CAPTCHA, notification, member reminder and so on.
Fourth, maintain the "buy" rating. It is predicted that the actual net profit in 2016 is 208 million yuan, EPS is 0.30 yuan, corresponding to PE is 51 times. Taking into account the performance of Kid Technology and Wuxi's online and offline commitment, it is predicted that the net profit from 2016 to 2018 will be 293 million, 362 million and 448 million, respectively. Based on the total share capital of 703 million shares after the completion of the IPO, the corresponding EPS will be 0.42,0.52,0.64 yuan respectively. The current share price of 15.03 yuan per share corresponds to 36 times, 29 times and 24 times of the PE of the 18-year IPO. After the completion of the IPO, the total market capitalization of the company is 10.6 billion.
Fifth, risk hints: the development of mobile marketing industry is not as expected, and the risk of M & An integration