Main points of investment

Event: participate in Burson Interactive's annual results release meeting in 2015.

Our point of view: the company's revenue declined in 2015 compared with the same period last year, affected by the downward trend of the page gaming industry and the control of SMS payment channels. We believe that the downward trend of the domestic mobile game business has reached the bottom and will be relatively stable in the short term, while the overseas mobile game business did not perform very well in the fourth quarter, but the company still has the advantage of globalization, especially in Southeast Asia. the company is expected to continue to benefit from rising dividends from the popularity of local smartphones. The introduction of new games, the growth of the user base and the trend of structural changes are worthy of attention in the future.

Mobile game revenue has improved compared with the previous month, but user data is still declining: the increase in mobile game revenue is more driven by the increase in ARPPU value. The number of paid players in mobile game DAU/MAU/ has dropped by 9.9%, 8.6% and 16.8%, respectively, while the ARPPU values of the two star products, Texas hold'em and landlord mobile, have increased by 13.4% and 79.5%, respectively.

With plenty of cash, the company is still looking for suitable investments and acquisitions: the company completed three equity investments in 2015. at present, the company has 1.12 billion yuan in cash and has no plans to pay dividends. It is expected that the company is still looking for suitable acquisitions and investment targets.

Risk tips: 1) the competition in the mobile game industry may intensify; 2) the entry threshold of board games is low and the homogenization is serious.