1H16's net profit soared by 180.3% compared with the same period last year. A8 New Media announced its results for the first half of 2016, with overall revenue up 36.4% year-on-year to 92.62 million yuan, of which digital entertainment / property investment income increased by 44.8% and 29.8% respectively, accounting for 70.2% and 29.8% respectively. The overall gross profit margin rose 6.6 percentage points year-on-year to 42.5%, driving gross profit up 61.7% year-on-year. Driven by economies of scale, net profit rose 180.3 per cent year-on-year to 16.35 million yuan, while net profit margin improved 9.6 percentage points to 17.7 per cent.

Create a high-quality game distribution platform, test the waters of IP cross-domain incubation. The company's Shenzhen Zhi you Fang Cun continues to distribute high-quality IP, and takes the lead in 1H16 to test the waters, such as HTML5 games, video games linkage and so on. In terms of game distribution business, in addition to continuing to operate the Android version of "Pat three Kingdoms", "close the door to release Lv Bu" and "I want to HTML5" and other online games, Zhi Fangcun has released a number of client games such as "blog annoyance" and a number of HTML5 games such as "hot blood ball HTML5" and "burning bar second brother HTML5". Zhi Fangcun plans to launch a series of games in 2H16, including "Sky Legend" and "the whole people". At the same time, it will rely on the established professional overseas distribution team to strengthen its overseas distribution business.

It is worth noting that the company's planned release of "ruthless Journey to the West" in 2H16 refers to Youfangcun's first attempt to incubate high-quality IP, going through the incubation process from comics to games. On the other hand, the company acquired a 35% stake in Beijing Zhangwen in May 2016, which is mainly engaged in the incubation and operation of high-quality IP. We believe that popular online literature works accumulate a large number of fans through the Internet platform and are expected to realize the cross-border value of movies, TV dramas, games and other fields in the future.

Actively lay out the music and entertainment industry chain. The company's offline music performance brand "A8Live" relies on the Live House Theatre on the skirt floor of the A8 Music Building, integrating music performances, creator cafes, professional recording studios, band rehearsal rooms and music education bases. A8Live plans to introduce well-known music education brands to set up a music training and exchange center in 2H16 to provide a platform for original musicians and grassroots musicians to learn, communicate and grow. At the same time, after training, outstanding students will develop into artists, producing their own songs, MV, micro-movies and other program content, and further tap the value of IP. On the other hand, the company's Beijing Domi is expected to complete the listing of the new third edition in 2H16. Dom Music successfully hatched Yingke, a mobile video live streaming platform, in 2015. QuestMobile reported that the MAU of Yingke Live reached 35.24 million at the end of June 2016, and currently ranks first in both iOS and Android. Domi Music will continue to strengthen its cooperation with China Mobile Limited (0941.HK) at 2H16, and carry out comprehensive cooperation with its Migu Music, Migu Performing Arts, Migu listening Book, Migu Video, Migu good running, etc., including launching joint members, creating and co-operating fan clubs, joint content operation and promotion. At the same time, Domi will further build the puppet platform into the largest music fan interaction platform in China at 2H16, cooperate deeply with stars and fans online and offline, complete the membership design of VIP system, optimize the fan fan management function and fan activity organization function, and form a multi-dimensional entertainment marketing system with multi-file network programs.

Valuation attracts. The total area of the A8 Music Building located in Nanshan, Shenzhen is about 40,000 square meters (excluding parking lots). The average selling price of the surrounding office floor is about 50,000 yuan per square meter, with a market value of about 2 billion yuan. In addition, the company held net cash of about 493 million yuan at the end of June 2016. The company's market capitalization is only HK $1.01 billion at the latest closing price, and the company's current valuation is at a deep discount, coupled with the uniqueness of the company's theme, investors are advised to pay attention to it.