Digital display equipment: fully enjoy the high growth brought about by the outbreak of a small gap market. Domestic traditional LED shows that the overall growth of the market is relatively stable, while LED small spacing has entered an explosive period, driving the rapid growth of commercial display applications, which has become a new growth point in the LED display application industry, and with the continuous reduction of the cost of small spacing, the market scale of the industry is expected to continue to expand, which will drive the company's performance to grow continuously.
Digital marketing: go against the wind and grow with the industry. We judge that the industry can still maintain a high rate of growth in the next few years, combined with the relevant underlying fundamentals and the completion of bets, we believe that in the context of the rapid growth of the industry, the overall form of the company's digital marketing business is more optimistic.
Digital outdoor: old trees and new flowers, increase the share and seek development. In recent years, China's outdoor advertising market has continued a steady growth trend. The company has formed a trend of national layout through its own and cooperative modes, and the market share of media resources has gradually increased. We believe that under the background of the steady growth of the industry, the company will continue to integrate industry resources through the improvement of market share to bring about sustained growth in performance.
Collaborative development: 1: 1 > 2. From the perspective of the internal business relationship of the three sectors, business synergy is mainly reflected in two aspects: first, the company has bound more than 50, 000 outdoor media resources through self-possession and integration, while the LED display of outdoor media has the need to upgrade, transform and replace itself, which provides performance increment for the company's traditional digital display equipment business. And with the gradual expansion of the company's integrated outdoor media resources, the increasingly close binding and the continuous advance of time, the impetus to the company's traditional business will be gradually strengthened. Secondly, there is a natural collaborative relationship between digital marketing and digital outdoor. The digital marketing section can provide customers with all-round marketing solutions and effective marketing solutions covering brand public relations and Internet advertising, while the offline outdoor media resource system covering thousands of cities can provide customers with one-stop outdoor advertising solutions, and the LED screen itself has the gene of grafting into precision marketing, with the gradual maturity of technology and business model. The effective combination of the two can form a richer delivery environment and more delivery strategies, which will greatly enhance the company's customer acquisition capacity, especially for large customers with higher delivery channels and service requirements. From the perspective of company management, the company attaches great importance to the integration of companies with different platforms, and each business sector will gradually transition to the professional manager route, while the chairman will focus on coordination. At present, "one committee and four departments" have been set up to integrate subsidiary business. Through the integration of group resources to achieve the coordinated development of various subsidiaries.
Share buybacks show confidence in the company. At present, the company has completed two phases of the employee stock ownership plan by way of repurchase, accounting for 2.02% of the total share capital, with an average price of about 19.37 yuan per share. We believe that the repurchase of shares on the one hand reflects the company's confidence in its own development. In addition, it can also achieve incentives for employees and improve the stability of core employees, and provide protection for the sustained and stable development of the company.
Earnings forecast and investment rating: we expect the company's EPS from 2017 to 2019 to be 0.84,1.11 and 1.45 yuan respectively, and the corresponding dynamic price-to-earnings ratio (stock price 19.35 yuan) is 23,17 and 13 times respectively, giving the company "buy" investment rating for the first time.
Risk factors: 1, the management and control risks brought by the continuous expansion of scale; 2, the operational risks caused by poor integration in the later stage of acquisition; the summary of this issue: 3, the impairment risk of goodwill formed by corporate acquisitions.
