Event: the company released its semi-annual report for 2017, with a total operating income of 363 million yuan, an increase of 51.75% over the same period last year, and a net profit of 110 million yuan attributed to the parent company, an increase of 52.40% over the same period last year. Of this total, the operating income of the game business reached 234 million yuan, an increase of 149.03% over the same period last year, while the operating income of the book business reached 129 million yuan, a decrease of 11.32% over the same period last year.
The game business continues to grow, and a number of games will be launched in the second half of the year. In the first half of 2017, the game business achieved 234 million yuan in revenue, accounting for 65% of the total revenue. The company has strong R & D and operation capabilities in the field of ARPG, SLG type and card type mobile online games. During the reporting period, the company operated a total of 31 game products, independent research and development and operation of "forgotten Immortals", "Crouching Tiger, Hidden Dragon", "Fengyun World OL" and other games maintain good sustainable profitability. At the same time, the company has increased the investment in product reserves and IP reserves, and nearly 10 games such as "Crouching Tiger, Hidden Dragon II", "the rise of the Empire of Da Qin" and "Fengshen Daji Biography" will be put into operation in the second half of the year. In addition, the company also reserves more than ten popular IP resources, such as Xianjian Inn, Dongli Jian Youji, Love Guangming, hundred Lianshengshen and so on. At present, some games with IP resources have been in the stage of research and development and online.
Game M & A plus, improve the layout of the game industry-wide chain. In June 2017, the company acquired 100% stake in Chuanmian Technology, which became a wholly-owned subsidiary of the company. On the basis of the acquisition of Youai Network to complete the full-type coverage of medium and heavy mobile games, this merger and acquisition will enhance the issuing strength of the company's mobile online games and achieve good coordination with the company's original high-quality R & D capabilities and complementary resources. Realize the layout of the company's whole industry chain from game research and development, distribution to operation, create new performance growth points, and constantly strengthen the company's leading position in the pan-entertainment industry. Accelerate to enter the first phalanx of China Mobile Limited Internet entertainment industry.
Give "overweight" investment rating. Through overseas investment and mergers and acquisitions, the company focuses on education, pan-entertainment and culture to accelerate industrial transformation and upgrading. Endogenesis and extension develop together, and the performance is expected to grow steadily in the future. The company is given a profit forecast of 0.60,0.77 and 0.93 yuan from 2017 to 2019, corresponding to 33 times, 26 times and 21 times PE.
Risk hint. Competition in the game industry aggravates the risk, and the performance falls short of the expected risk.