Main points of investment:
The "inflection point" of the traditional cable TV industry has emerged, and the company has obvious advantages in layout. In recent years, the cable TV industry continues to face fierce competition from telecom, Internet and other emerging industries, the growth rate of cable basic viewing fees has slowed down, and the "inflection point" of the industry has emerged. In the face of the severe competitive ecology of the industry, the company has three major advantages:
The first is the "broadcast-grade" intelligent network with high bandwidth and high stability; the second is the leading IDC hub center and various cloud service platforms in the industry; and the third is the diversified investment layout represented by "Jishi Huitong" and financial investment. In the future, the company will give full play to the above advantages and carry out "strategic emerging industries + financial investment platform".
The industrial upgrading.
"10 gigabit network chips" are mass-produced, and technological innovation drives industrial upgrading. Huitong Science and Technology Project has successfully developed a "10 Gigabit network chip" of intelligent access gateway based on "I-PON standard", and the mass production standard has been improved year by year. We expect the order volume of Huitong technology products to be about 450000 units in 2016, 400000 units at the main end and 50, 000 units at the secondary terminal. Shipments are expected to exceed 2 million units in 2017 and 6 million units in 2018. The company's main end pricing may be about 600 yuan per unit, the secondary end is about 480 yuan per unit, and the sales profit margin is about 15%.
In the follow-up, the company will rely on the landing of "10 Gigabit Network Chip" and the mass production layout of a series of products such as "Optical Fiber-to-Home Integrated Intelligent access Gateway". Comprehensively enhance the company's strategic transformation in the fields of government information, education information, home intelligence and smart city.
The "financial industry chain" continues to grow, countering the weak growth of the main industry. The company's "financial investment plate" involves and covers commercial banks, private equity funds, Internet finance, supply chain finance, venture capital, asset management and many other financial investment fields. At present, the company has invested in five and three city merchant banks, with an overall investment scale of 850 million yuan, an annual investment rate of 10%, and a rolling investment of about 50 million yuan per year according to the investment period. As a limited partner, the company has invested 200 million yuan in the Oriental Xinghui M & A Fund with an annualized return of 25%. Initiated and set up the "Jilin Provincial Cultural and Creative Industry Investment guidance Fund", with an investment of 100 million yuan and an annual rate of return of 20%. At the same time, it also initiated the establishment of the "Guohua JiTV Film and Television Culture Investment Fund" to enter the field of "Internet finance" and "supply chain finance" in an all-round way.
Enter the education information industry, the future profit model is gradually clear. Company's "Jilin Province Education Informatization Project"
According to the construction needs of the Education Department of Jilin Province, there are 6500 10-gigabit special networks for schools and teaching points, 105 synchronous live classroom channels, and 46, 32 and 27 exclusive subject channels for primary, middle and senior high schools respectively.
For the profit model of the project, we judge: (1) there are 6500 schools and 500 administrative access points in the province, and the financial special fund for each access point is about 0.7-12,000 yuan per year according to the size of the school; (2) the collection and broadcasting service and sharing of high-quality educational resources (3) charging through live, on-demand and interactive classes: the access scale of about 50,000 classes in the province, and the annual service fee income of about 600 yuan for each class. (4) the annual stock of mobile students in the province is about 2.7 million. According to the annual conversion rate of about 30%, the on-demand service fee for each student family is about 600 yuan per year.
Profit forecast. We estimate that the EPS of the company from 2016 to 2018 is 0.14,0.15 and 0.16 yuan respectively. In the same industry, the PE of Huasu Media, Radio and Television Network and CITIC Guoan are expected to be 44 times, 51 times and 58 times respectively in 2016. We value the company 37 times in 2016, corresponding to the target price of 5.18 yuan. Give an overweight rating.
Risk hint. The systemic risk of the market; the less-than-expected risk of corporate transformation.
