The sale of thumb play shares of the participating company will be unconditionally, which will lead to an increase in the certainty of investment income.
Huawei Culture announcement on September 27, learned from the participating subsidiary thumb play that Tianrun entertainment issued shares and paid cash to buy assets and raise supporting funds and related transactions were unconditionally approved by the CSRC. Thumb play is one of the targets of this acquisition. Huawei Culture holds a 30 per cent stake in thumb play, with a consideration of 227 million yuan. After the transaction is completed, Huawei Culture will no longer hold a stake in thumb play and will hold 1044.06 million shares of Tianrun Entertainment. And get 90.8333 million yuan cash consideration (before tax).
According to the transaction plan, the cash payment will be carried out in three phases, and within 20 working days after the transaction is approved by the CSRC and the ownership of thumb play is transferred to Tian run several Entertainment, Huawei Culture will receive the first cash consideration of 45.4167 million yuan; within 20 working days from the date of the special audit reports of thumb play 2017 and 2018, the second and third tranches of cash consideration will be obtained respectively. After the acquisition, the certainty of this part of the investment income is enhanced, which is expected to increase the company's investment income and better support the development of the main business.
Centering on the layout of film and television entertainment in Xingsheng Park, the second season of "that Starry Sky and that Sea" will be launched on Hunan Satellite TV in October.
The second season of the company's Dream Star Park boutique drama "the Starry Sky and the Sea" will be launched at Hunan Satellite TV Youth Theatre on October 2, starring Feng Shaofeng and Guo Biting. The TV station's sales revenue has been confirmed in the first half of the year, and according to the broadcast time, the new media platform part is expected to be confirmed in 17Q3. Fantasy Star Park invested 200 million yuan in Dongyang Mandala in July to acquire a 10% equity stake, which continues to focus on plus TOP film and television entertainment content, and is expected to cooperate in film and television projects and artists in the future.
Actively promote refinancing to lay a financial foundation for follow-up business and project layout.
In the early stage, the company disclosed a non-public offering plan to raise 1.2 billion yuan for TV dramas and online dramas to provide financial support for Xingsheng Park boutique dramas, which has been formally accepted by the CSRC; in addition, the company plans to issue 900 million bonds to lay the foundation for continuous layout.
Investment suggestion: from January to September 2017, the company is expected to achieve a net profit of 210 million yuan to 290 million yuan, an increase of 35% Mur85% over the same period last year. We expect the company's net profit for 17-19 years to be 331 million yuan / 409 million yuan / 496 million yuan, respectively, corresponding to 0.38 EPS 0.48 shock 0.58, and corresponding PE to 23.1X/18.7x/15.4x.
The management of the company completed the plan to increase its holdings on September 15, with an average transaction price of 9.01 yuan per share, and an average price of 10.04 yuan per share in June (the controlling shareholder promised 10% income). The current stock price is 8.89 yuan, all upside down. We believe that Xingsheng Park acquisition will continue to exceed the performance of gambling, different from the general transformation companies, the follow-up is expected to build film and television game integration around IP, maintain the buy rating, the target price is 11.62 yuan.
Risk tips: TV series project sales do not meet expectations, game flow does not meet expectations, M & An integration risk