Main points of investment:
Maintain the "overweight" rating. Without considering asset restructuring and share issuance, we estimate that in 2016-17, we will invest EPS0.13 0.18 yuan, and consider issuing shares into OMG Singapore with a matching capital of 2016-17 EPS 0.70,0.87 yuan, maintaining the target price of 38.85 yuan and maintaining the "overweight" rating.
Set up Anworth, the main body of domestic business, and straighten out the business structure. Anworth was established in Qianhai, Shenzhen on April 5, 2016 as a wholly owned subsidiary of OMG Singapore. In the future, it will be the main body of OMG Singapore's business in China and straighten out its business structure.
The invested assets increased sharply in 2015, with a net profit of 116 million yuan. OMG Singapore audited revenue and net profit of RMB 150 million and RMB 116 million respectively in 2015, up 180 per cent and 231 per cent year-on-year, better than expected. The net profit promised in 2016-18 is 2.80,3.11 and 343 million yuan, and we judge that the certainty of realizing the profit commitment in 2016-17 has been enhanced. According to the valuation of OMG Singapore in 2016, it was only 10.7 times (33 times that of Netcom Technology), which greatly increased the performance.
The domestic order has been landed and signed the intention of cooperation with a number of companies. OMG disclosed the current orders, with the overseas portion totaling US $6080 by the end of 2015 (RMB 169 million has been confirmed). The proportion of the largest customers has declined, and the customer diversification has increased. Anworth, a wholly owned subsidiary of OMG in Singapore, has signed a "technical service procurement contract" with Shenzhen Huiange Technology to provide CDN network maintenance and technical support for southern new media; in addition, Anworth has signed a "mobile TV content distribution platform procurement contract" with Beijing Youpengpu Media Development. OMG Singapore has signed cooperation intentions with five companies, including Shanghai Kerry and Shenzhen Home TV Network, and we believe that domestic business has been launched and is expected to expand rapidly.
Risk tips: restructuring failed, OMG new performance failed to meet commitments, and so on.