Summary:

The target price of HK$7.02 was covered for the first time, giving a rating for increasing holdings. The 2017-2019 EPS is expected to be $0.34/0.43/0.55 respectively, giving the company a target price of HK$7.02. The first coverage gave an increase in holdings rating.

The live streaming industry is growing rapidly, and mobile live streaming has become a new growth point for the industry. The “mobile+PC” dual live streaming strategy ensures Tiange Group's leading market position. The “interactive+companion” entertainment experience launched by the company in third- and fourth-tier cities has maintained a high level of platform interactivity and user stickiness throughout the barbaric development of the industry.

Invest in Huajiao Live and join forces to build a leading mobile live streaming platform. Since its establishment, Huajiao Live has focused on targeting users in first-tier cities, and has strong media attributes and higher visibility. The combination of the two effectively filled Tiange's layout faults in the field of first-tier cities and high-quality content. The management capabilities and unique resources of Huajiao Live's live streaming team will help Tiange Interactive continue to further develop its mobile live streaming business and increase the group's market share.

Actively lay out gaming and internet finance, and build a “live streaming +” ecosystem. Since 2016, the company has begun to actively deploy in the fields of mobile games and internet finance, taking advantage of its own platform influence and user scale to achieve multi-platform distribution and give full play to synergies. With the development of the company's various business segments, driven by the “live streaming +” trend, it is expected that in the future, live streaming will be combined with gaming, medical care, travel and other fields to drive performance growth.

Risk warning: market competition risk, policy regulation risk.