Revenue in the first half of 2017 fell 25.5% year on year, and net profit fell 12.4% year on year:
The company released its 2017 semi-annual report. During the reporting period, due to fierce competition in the bill industry and the decline in sales in the invoicing market, the company's revenue fell 25.5% year on year to 718 million yuan. By product, ticket products achieved revenue of 222 million yuan, down 32.4% year on year; packaged office paper achieved revenue of 48.18 million yuan, up 10.37% year on year; revenue from other business contributions was 1981 million yuan, up 16.14% year on year.
Looking at revenue of 152 million yuan in the second quarter alone, a year-on-year decrease of 23.8%, the net profit of the mother was -4,899,900 yuan.
Gross margin fell 18.8 percentage points in the first half of 2017, and the cost rate for the period increased 1.7 percentage points year over year:
The company's consolidated gross margin for the first half of 2017 was 18.8%, down 11.1 percentage points from last year.
Among them, the gross margin of ticket products was 20.9%, down 12.5 percentage points from the same period last year; the gross margin of packaged office paper was 11.67%, up 8.7 percentage points from the previous year. The company's expenses rate for the first half of 2017 was 28.3%, down 1.7 percentage points from the previous year. Among them, the sales expenses rate was 10.5%, up 1.6 percentage points from the previous year, the management expenses rate was 16.8%, up 1.4 percentage points from the previous year, and the financial expenses rate was 1.1%, down 1.2 percentage points from the previous year.
The lottery business continues to advance, winning consecutive bids for projects in Fujian Province:
The company successively won bids for Fukai projects in Fujian Province in the first half of the year. Among them, the “Fujian Fukai Official WeChat Public Platform Construction and Maintenance and New Media Content Operation Project” in March included responsibility for the construction and maintenance of Fujian Fukai's official WeChat public platform and new media content and operation. This project is the first time that the company has won a bid for the construction and maintenance of a WeChat public platform, and the first time it has provided new media operation services for provincial lottery centers. The company has entered new service fields in the entire lottery industry chain, which is of great significance in improving the company's industrial layout. In April, it won the bid for the “Marketing Service Socialization” service provider project of the Ganzhou Welfare Lottery Distribution Center. The company will be responsible for expanding computer welfare lottery betting sites and instant billing sales outlets in the pilot region, while also being responsible for the sales management, logistics and distribution, marketing, site service and business training of its existing betting stations. This is the first time that the company has participated in the lottery “marketing service socialization” project, which is of positive significance for the company to accumulate experience in the operation and management of offline lottery business.
Shortlisted as Everbright Bank's card outsourcing service provider, the smart card business went to the next level:
The company won the bid for China Everbright Bank Co., Ltd. debit and credit card projects as the second successful candidate and the third successful candidate, respectively. We believe that winning the bid this time is an important step forward in the company's smart card business. Winning the bid for a national commercial bank financial card project raised the popularity of the company's financial IC card products in the industry and played a positive role in the development of the company's “fully automated smart label project” business.
Due to industry reasons, the company's performance was pressured and adjusted to the “increase in holdings” rating:
Due to fierce competition in the bill industry, the company's bill business revenue declined. The company entered the sports lottery or invoicing printing business through the acquisition of Zhongke Lottery in 2015, but sales in the billing industry declined markedly from the second half of 2016. Beijing Kexin Shengcai's operating revenue fell 58.71% compared to the same period last year, and net profit fell 113.91% from the same period last year. Considering that the Internet lottery has not yet opened, that is, the invoicing business has poor sales channels, faces obstacles such as high costs and low entertainment, short-term industry trends are difficult to reverse, and the company's performance is still under great pressure in the short term. We expect the company's 17-19 EPS to be 0.03, 0.04, and 0.05 yuan respectively, adjusted to an “increase in holdings” rating.
Risk warning: Internet lottery policies fall short of expectations, that is, the billing industry continues to decline