Performance continues to grow rapidly. In 2015, the company achieved revenue of 676 million yuan, an increase of 109.72% over the previous year. Performance growth was strong. Among them, application distribution revenue increased 121.98%, merchant cloud search revenue increased 105.92%, and realized net profit attributable to the parent company was 316 million yuan, an increase of 91.06%.
The communication OS occupies the traffic entrance, and the market share continues to increase. In 2015, Connect OS added 140 million new active users, an increase of 68.67%. By the end of 2015, the cumulative number of users of the company's products had reached 659 million. Stable sales channels and a solid market base have been established in both domestic and foreign markets, and the market share has increased dramatically.
Funding for the 4.8 billion fixed increase project has been completed, and smart hardware will develop rapidly this year. An investment of 4.8 billion dollars in smart hardware was completed, which greatly strengthened capital strength, relied on reaching out to the huge and highly sticky user base of the OS, providing channels for importing customer resources for the implementation of smart hardware projects, gradually spreading the product line from mobile phones to other smart hardware, enabling the interconnection of users, devices, content and platforms, enhancing the user experience, and building the popularity of the “Connect” brand.
Platform+user traffic+intelligent hardware+content+VR to create an own and cooperative ecosystem. The company participated in AvegantGrop, a world-renowned VR manufacturer, and jointly released Glyph, the world's first virtual reality retinal glasses. The world's top gaming peripherals brand Razer is strategically investing $75 million. Its broad channels and fans and brand influence will open up a “blue ocean” of VR and smart hardware
Profit forecast and valuation: We expect the 2015-2017 EPS to be 0.63, 1.03, and 1.59 yuan respectively, and the corresponding PE is 73, 45, and 29 times respectively. The company has a huge high-sticking user base, which accounts for user traffic entrances. The content side, overseas channels, and hardware side continue to gain strength, and participate in well-known VR manufacturers. We are optimistic about the company's future development and give a “recommended” rating.
Risk warning: technical risk, market competition risk, risk of new business development falling short of expectations.