Events:
In the first half of 2017, the company's revenue was 636 million yuan, an increase of 54.08% over the same period last year, and the net profit was 133 million yuan, an increase of 191.2% over the same period last year. Net profit after deducting non-profit was 130 million yuan, an increase of 206.96%, or 0.16 yuan per share, compared with 0.06 yuan in the same period last year.
Comments on the text:
1. Consolidation led to performance growth. In August / September 2016, the merger and acquisition of Vancouver Interactive and Beijing Xinhua Pioneer were completed respectively, and the merger of Shanghai Aurora Mobile Limited network was realized in April 2017. the table directly led to the rapid growth of H1 performance in 2017. The new merger company belongs to the cultural sector business and is the direction of the company's transformation. Compared with the same period last year, the revenue from the new consolidated business was 247 million yuan.
2. The new merged watch business has led to an increase in gross profit margin, with greater potential for development. Value Interactive starts from the promotion of stand-alone games, has certain advantages in online game operation and distribution, and has set up its own R & D team and SDK advertising operation team. Shanghai Aurora Mobile Limited Network is a well-known page game research and development company, the company has developed "chaos God of War", "Zhen Meng", "Wu Shen Zhao Zilong", "Journey to the West" and other well-known page games, which are well-known in the industry. Value still and Shanghai Aurora Mobile Limited network together constitute the game sector business of Zhongnan Culture, the game business has high gross profit margin and good benefit. In the first half of 2017, the gross profit margin of the company's page game income is as high as 99.19%, and the gross profit margin of game promotion is 56.47%. Beijing Xinhua Pioneer is a copyright operator with a gross profit margin of 70.3% in 2017. With the consolidation of the new business, the company's gross profit margin immediately increased. The gross profit margin of H1 in 2017 was 44.8%, compared with 38.32% in the same period last year.
3, the cultural sector continues to strengthen, the company takes boutique entertainment content as the core, TV series, movies, IP, artists, games, music derivatives seven major business coordinated development, TV series business Datang brilliant, film business Zhongnan Film, artist brokerage business Qianyi Zhicheng, copyright operation business Xinhua Pioneer, game business value interaction and Shanghai Aurora Mobile Limited, music company Zhongnan Music. To achieve the transformation from traditional manufacturing to entertainment, the traditional business is uniformly managed by the subsidiary Zhongnan heavy Industry, and the division of labor is clear.
4. Lay out the high-quality film and television content, take creating "phenomenal" film and television works as the goal, and strengthen the layout of the film and television industry. In the first half of the year, the company invested in filming key dramas such as "Farewell to Las Vegas", "Police Dog coming", "out-of-stock Man on Orange Street", "Old Boys", "idiots are all here", "days related to Youth" and "Lovers in Hell". It is promoting the development of key projects such as "touching Golden Farewell", "Snow covering Sand", "Jungle King", "son-in-law driving to" and "late return at strangers" and other key projects.
5. Performance forecast for the period from January to September 2017: the net profit ranges from 199 million to 265 million yuan, with an increase of 50% RMB100%. This is mainly due to the combined performance promotion and investment income growth.
Profit forecast and valuation
The company's business transformation route is clear, the new amalgamation business will directly bring rapid performance growth this year, optimistic about the company's development prospects. It is estimated that the company's EPS in 2017 and 2018 will be 0.64 yuan and 0.79 yuan, corresponding to the current stock price PE is 22 times and 19 times respectively, with a "buy" rating.
Risk hint
The performance commitment of the subsidiary is not up to standard, and the development of new business is not as expected.
