Events:
In the six months to June 30, 2015, the company's total revenue reached 230 million yuan, down 23.6% from the same period last year. Net profit was 67.1 million, down 27.9% from a year earlier. The gross profit was 118 million yuan, down 16.3% from the same period last year, and the gross profit margin was 52.5%, an increase of about 5 percentage points, mainly due to the increase in gross profit from sports operations. Of this total, the income from the operation of Zhimei was 194 million yuan, an increase of 81.9 percent over the same period last year. The gross profit of the operation of Zhimei was 105 million yuan, an increase of 57.7 percent over the same period last year. The gross profit of the operation of Zhimei accounted for 89.3 percent, compared with 47.4 percent in the same period last year. As a result of business restructuring, Zhimei film and television programs were 30.6 million, down 83.7% from the same period last year.
Viewpoint:
In the first half of the year, we organized four marathon races and began to implement the marathon industry-wide development strategy. The company organized four marathons in the first half of the year, including 2016 Kunming Plateau International semi-Marathon, 2016 Hainan International Marathon, 2016 Dongguan Songshan Lake International Marathon, and 2016 Jilin City International Marathon, and cooperated to run the 2016 Tianjin Marathon. Since 2016, the company has fully implemented the industry-wide development strategy for the 2016-2019 marathon, focusing on international IP events, national IP events, city-level IP events and entertainment IP events. While running the marathon well in the first half of the year, the company launched the industrial strategy of implementing the marathon, which will help to consolidate the company's position in the marathon field and increase the derivative consumption of the marathon. The building of the IP event will lay a good foundation for the great development of the road race in the future.
The NBL basketball project was officially implemented in 2016. The company won the commercial operation right of the National Men's Basketball League (NBL League), one of the three major professional leagues of Chinese basketball from 2016 to 2019, and bought a stake in NBL League (Beijing Enbiou Sports Management Co., Ltd., with a 20% stake). The operation of the company's own games CBL and NBL shows that the company has actively arranged the group events and professional leagues in the basketball field, which is conducive to enhancing the company's popularity in the basketball field, while developing derivative products with the help of basketball.
The second half of the year is a critical period for the company's event operation. It is expected that the company will independently operate more than 15 marathons in the second half of 2016, including Shenyang Marathon, Changsha Marathon, Hangzhou Marathon, Guangzhou Marathon, Shenzhen International Marathon, Nanchang International Marathon, Changde Liuyehu International Marathon and Jiaxing Shaoshan International Marathon. According to the company's announcement, the Belt and Road Initiative Marathon Series will also be launched one after another.
The company is expected to continue to operate independent IP "four Seasons running" in the second half of the year. According to the company's announcement on basketball, the NBL all-Star Game and playoffs will also be held in the second half of the year, and basketball may generate revenue, while the company may lay out all areas of the basketball industry chain in a platform way, such as basketball academy, player economy, coach economy, derivative development, basketball international competitions, etc., which will lay the foundation for the company to diversify its basketball operating income.
Profit forecast and rating: according to the first-half results announced by the company, the company has basically completed the transformation and become a professional sports event operation company, while the company traditionally has a concentrated period of event operation in the second half of the year, so the mature marathon in the second half of the year will bring more revenue for the company. At the same time, the platform operation of NBL may also generate revenue, as the media business gradually fades out of the company's main line of business. The company's overall costs are likely to fall slightly or remain flat. We estimate that the income of 2016, 630 million and 2018 will be 550 million, 630 million and 756 million respectively, and that of EPS will be 0.1prime0.12 yuan, respectively, and corresponding PE will be 22.78,20 and 16.7 times respectively.