This report is read as follows:
The company's losses narrowed sharply in the first half of the year, and it is expected that the performance of the main business will be released in the second half of the year; the acquisition of snow carp layout of mobile Internet operations, plus military communications involved in national defense information, will become a new engine of follow-up performance growth.
Main points of investment:
Maintain the "overweight" rating and adjust the target price to 20 yuan. The company's losses narrowed sharply in the first half of the year, and its performance continued to improve. The release of the performance of the net excellent industry in the second half of the year will be good for the company's main business. The company enters the field of mobile Internet operation through the acquisition of snow carp and military communications into the national defense information industry, which is expected to become a new engine of performance growth. In 2015-17, the EPS is maintained at 0.19, 0.23, and 0.27 yuan (if the snow carp merge table is completed, the EPS is 0.33, 0.42, 0.52), taking into account the sharp decline in the market valuation center, adjust the target price to 20 yuan, and maintain the "overweight" rating.
Losses have narrowed sharply, and the results of the main business are expected to be released in the second half of the year. The company's revenue in the first half of the year was 97 million yuan, down 15% from the same period last year, with a net loss of 9 million yuan, which was significantly narrowed by 46% compared with the same period last year (equivalent to Q2 revenue up 21% year-on-year and net loss narrowed by 59%). The performance continued to improve, in line with expectations. The reason for the sharp decrease in Q1 revenue is the delay in the acquisition of optimal sets in the operator network. With the continuous promotion of operator traffic management strategy, 4G network construction and "speed-up and fee reduction", we judge that the excellent demeanor of the network will be greatly improved in the second half of the year, and the performance is expected to be released quickly. In addition, by streamlining the organization and strengthening management, the company has significantly reduced management and financial costs (- 35% UniMel 58%), effectively improving losses.
Mobile Internet + military industrial communications, performance growth added wings. The company entered the mobile Internet game platform business by acquiring snow carp, the target of the scarce mobile game platform, and accumulated huge user data by providing application release, agent payment and other services to CP, laying a solid foundation for game distribution and precision marketing business in the future. The company also cooperated fully with a military academy, was shortlisted as a material supplier of a military region, and won the first military industrial order, and its efforts to open up the military industrial communications market have achieved initial results, and will become a new performance growth point. In the next few years, the informationization of national defense will become an important tuyere of the communications industry, and the military communication system will play an important role in the future battlefield. As a scarce military qualification communications high-tech enterprise in the three northeastern provinces, the company is expected to become a key local support enterprise.
Catalyst: carry out military projects in cooperation with military academies; strengthen mobile Internet and industrial communications.
Risk hints: the competition in the main business network market is intensified, and the pension business is a drag on performance.