Main points of investment
Event description
In recent years, the company continues to promote the pace of M & A transformation, and the scope of business has changed from traditional RF optical fiber connectors to double-round development of information services and communication manufacturing. Recently, the company released its annual report for 2015 and its quarterly report for 2016. The announcement shows that the company achieved operating income of 1.501 billion yuan in 2015, an increase of 91.41% over the same period last year, and realized a net profit of 152 million yuan after being deducted by shareholders of listed companies, an increase of 198.49% over the same period last year. In the first quarter of 2016, the company totaled 465 million yuan, an increase of 64.42 percent over the same period last year, realizing a net profit of 40.544 million yuan after being deducted by shareholders of listed companies, an increase of 75.59 percent over the same period last year. We sort out the logic of the company's development as follows.
Event comment
The pace of mergers and acquisitions continues to advance, and the company has reshaped its growth pattern. The sustained growth of the company's performance in recent years is mainly due to the continuous and steady progress of the company's M & A transformation strategy. In 2012, 2013 and 2014, the company continued to incorporate wide-wing communications, national interconnection and public advertising, expanding the company's business layout from traditional optical fiber RF connectors to high-growth businesses such as wireless terminals, corporate text messages and Internet advertising.
The enterprise short message market continues to grow, and the growth of third-party manufacturers is expected. The National Capital Interconnection, the target of the company's merger and acquisition in 2013, is the leading SMS platform manufacturer of third-party enterprises in China. Benefiting from the development of mobile Internet, Internet finance, O2O and other business models show explosive growth, driving the rapid growth of the enterprise short message market. As the leading third-party SMS platform in China, the integration of the beneficiary industry has made great progress, and it is expected to continue to contribute to the growth of the parent company in the process of increasing the share of the third-party platform relative to operators in the future. The performance commitment has been well fulfilled in the early stage of Capital Interconnection, and the growth rate has been maintained at more than 20% from 2014 to 2015. In the context of the high prosperity of the enterprise text message market, it will be a high probability for the company to achieve its performance promise in 2016.
The Internet marketing space is huge, and the growth space of the scarce SSP platform is broad. The target of the company's merger and acquisition in 2014 is a domestic high-quality SSP manufacturer. SSP is Supply Side Platform (supplier platform), which provides advertiser docking services for advertising sites such as websites. At present, the company has established a stable cooperative relationship with industry-leading digital advertising platforms such as JD.com, Juxiao, Pinyou, iClick Interactive Asia Group Limited, Youyi Interchange, etc., and has expanded more than 80 new media downstream, with an average daily display volume of about 1 billion. With the continuous promotion of SSP business, on the one hand, Mutual Advertising will achieve sustained and rapid growth with the help of long-tail demand from small and medium-sized media partners, and on the other hand, it is expected to expand to Ad Exchange and other industries by virtue of technological advantages and profound industry accumulation, so as to achieve steady improvement of brand value and industry status.
Investment suggestion: under the circumstances that the company continues to expand its business layout, we are optimistic about the development of the company. It is estimated that the EPS from 2016 to 2018 will be 0.74,0.97,1.15, with a "overweight" rating.
Risk Tips:
1. Fierce competition in enterprise short message market
two。 The growth of digital marketing market is lower than expected.
3. The company's consolidation was lower than expected.
The above unexpected circumstances may make the actual situation of the company not in line with our expectations.