Main points of investment:
We will continue to promote the "four horizontal and one vertical" development strategy and increase our market share. On the basis of traditional MMORPG PC games, the company actively expands mobile games, page games and other game segments, "four horizontal and one vertical" development strategy, and constantly enhance the company's market share in the game market. In 2015, the company's operating income was 343.09 million yuan, down 29.91% from the same period last year, and the total profit was 87.52 million yuan, an increase of 818.21% over the same period last year. The net profit belonging to ordinary shareholders of listed companies was 65.2 million yuan, an increase of 395.89% over the same period last year. The increase in net profit was mainly due to: 1) investment income from the sale of leapfrog technology shares in associated companies; 2) exemption of unpaid investment and targeted dividends caused by termination of acquisitions.
Strengthen fine operation, game business revenue is expected to usher in an inflection point. The company actively carries out the strategy of fine product research and development and fine operation, insists on solid and steady development, and strives to improve the quality of the game in many aspects, enhance user stickiness, and build the company's core competitiveness. During the reporting period, the PC game boutique games "Bing Wang 2", "the Last Cannon" and the mobile game "Legend of the Night" have all achieved good operational performance and have been well received by the media and players. With the continuous expansion of the user base brought about by the word-of-mouth effect, the future game business revenue is expected to enter a period of rapid growth.
Set up a mobile Internet investment fund to improve the layout of the industrial chain. The company invested 10 million yuan to set up a mobile Internet investment fund to provide financial support for the company's M & A growth. We believe that through the advance layout of mobile Internet areas such as mobile social communication and mobile advertising, the company is actively implementing the pan-entertainment platform strategy for the development of the whole industry chain of culture and entertainment, constantly improving the layout of the industrial chain and industrial expansion, and achieving coordinated development in multiple directions, which will reduce the company's operational risks and promote the company's healthy and rapid growth.
Overseas business to enhance the company's popularity. In 2015, the company set up branches in Los Angeles and other places to continue to increase its overseas operations. The company has released a number of games in Taiwan, Russia, North America and other places, and "Celestia:Broken Sky" has been recommended by Google Play when logging into North America. The Russian version of "Celestia: Broken Sky" was recommended by Yandex, the largest search engine in Russia, for the first week. It is deeply recognized by overseas markets and further reflects the company's strong R & D strength. In the future, the company is expected to rely on the experience of overseas markets to create more games in line with the international trend and promote the vertical development of the company.
Profit forecast and investment advice. In recent years, the company has been ploughing deeply into the layout, and on the basis of continuously promoting the strategy of "four horizontal and one vertical", combined with the major opportunities of the current economic restructuring and industrial upgrading, put forward the strategy of pan-entertainment platform, strive to achieve coordination between mobile Internet and games, film and television and other entertainment methods, and is expected to achieve superior advantages in the market competition in the future. It is estimated that the EPS of the company from 2016 to 2018 is 0.22,0.24 and 0.33 yuan respectively. In view of the fact that the company's business upgrading and strategy implementation still need to be observed, the company will not be rated for the first time.
The main uncertain factors. The game release operation is lower than expected; the strategic development of pan-entertainment platform is lower than expected; integrated M & A risk; macroeconomic downside risk.
