Results for the third quarter of 2017:
In the first three quarters, the company achieved operating income of 684 million yuan, an increase of 54.89% over the same period last year, and a net profit of 302 million yuan, an increase of 101.17% over the same period last year. In the third quarter, the operating income was 333 million yuan, up 33.39% from the same period last year, and the net profit was 207 million yuan, an increase of 97.98% over the same period last year. The company expects to achieve a net profit of 342 million-437 million yuan in 2017, an increase of 80% over the same period last year.
The income of IP derivatives increases + the real interest network shows that the effect should continue to be effective, and the income should maintain a high growth trend.
In the first three quarters, the company's revenue soared by 54.89% compared with the same period last year, mainly due to the increase in derivatives revenue and the continued effectiveness of the real fun network. With the arrival of western traditional festivals, the overseas seasonal demand for Walt Disney Company, Marvel and Nintendo derivatives has increased. The development of the domestic secondary market and the holding of comic book exhibition have led to the development of Niman IP derivatives, and the company IP derivatives revenue continues to maintain rapid growth.
The results in the first three quarters were in line with expectations, and the investment income contributed to a significant improvement in profitability.
The company's homing net profit increased by 101.17% in the first three quarters, mainly due to the enhanced profits of the company's main business of IP derivatives and investment income. The company achieved an investment income of 187 million yuan in the first three quarters, of which 140 million yuan was achieved in the Q3 quarter, which was caused by the income from financial products and the sale of equity by its subsidiaries, which led to the growth of the company's performance to a large extent.
The IP cultural ecosystem is beginning to take shape, and its future performance is expected to grow at a high speed.
The company is constantly strengthening and consolidating its position as a leading enterprise in domestic IP derivatives, acquiring True interest Network to improve the layout of the game platform, and 2017H1 investing in the American derivatives giant JAKKS to get 19.5% of the shares, strengthening the derivatives focus on developing upstream and downstream businesses, and improving the industrial chain. Completed the construction of the cultural ecosystem of "own IP+ content production + content distribution and operation + new media operation + derivatives development and design + online and offline retail channels", which is expected to become the leading enterprise of international IP derivatives in the future.
Profit forecast and rating:
We expect the company's net profit from 2017 to 2019 to be 416 million yuan, 512 million yuan and 615 million yuan respectively. The corresponding PE from 2017 to 2019 is 41 times, 33 times and 28 times, respectively. Considering the overall layout of the company in the upstream and downstream of the IP derivatives industry and the future prospects of the derivatives market, we are optimistic about the company's sustainable profitability in the future and maintain a "recommended" rating.
Risk tips: the performance of foreign investment companies is lower than expected, IP authorization stops and the risk of lack of innovation.