I. Overview of events
On November 17, the company issued a preliminary plan for the public offering of shares in 2017: no more than 3 shares for every 10 shares placed to all shareholders, with a total amount of no more than 1.2448 billion yuan.
II. Analysis and judgment
The acquisition of 49% stake in Shanghai Mobile will significantly increase its performance in the future.
1, the rights issue financing plans to invest in three major directions: 1, to acquire 49% of the shares held by major shareholders of Shanghai Mobile for a long time with 800 million yuan to make it a wholly-owned subsidiary; 2, to pay 244.8 million yuan for the second phase of the acquisition of 51% equity in Shanghai Mobile; 3, to supplement the working capital with 200 million yuan.
2. Shanghai Mobile is a leading professional mobile information application solution provider in China. It has established a long-term cooperative relationship with China Mobile Limited and other three basic telecom operators to provide traditional enterprises and telecom operators with Android,IOS-based B2B2C mode. Windows, Java/K-Java, SMS/MMS, WAP (WAP Push) and other advanced technologies of mobile / wireless business management, multimedia interaction, e-commerce system applications and other overall solutions. Shanghai Mobile promised that the consolidated net profit after tax from 2016 to 2018 would not be less than 80 million yuan, 104 million yuan and 135 million yuan respectively, that is, the total amount of three years should not be less than 319 million yuan. Among them, 91.1639 million was achieved in 2016, with a performance achievement rate of 114%. In the first three quarters of 2017, the net profit was 75.4895 million yuan, a completion of 73%. If the process goes well, Shanghai Mobile is expected to become a wholly-owned subsidiary next year, leading to a substantial increase in net profit and enhance the overall profit level.
The integration of communication plate is expected to be enhanced, and the development of extension pays more attention to endogenous promotion.
In July 2017, the company established its Digital Communication Co., Ltd., which plans to build it into an integrated and coordinated development platform for digital communication business. it is expected that the process of resource integration in this sector will be accelerated. and form coordination with the original business in the aspects of business, service capacity, customer resources and brand promotion, and enhance the endogenous attribute in the extension development.
Effectively release the financial pressure and be optimistic about the annual performance.
1. The proposed use of 244.8 million yuan to pay the second phase of consideration can effectively improve the company's financial structure, avoid continuously raising the company's asset-liability ratio by way of debt financing, enhance the safety of the company's capital chain, and supplement 200 million yuan of working capital. effectively release financial pressure.
2, and express Ruiyi constant moving and Shanghai Mobile, optimistic about the fulfillment of the annual performance promise. (1) the profit of Yiqilian in the first three quarters was 51.09 million yuan, an increase of 46% over the same period last year. Accounting for 60.6% of the annual performance commitment 84.3 million, the achievement rates of 2014-2016 were 87.85%, 100.57% and 98.08%, respectively. (1) Ruiyi constant dynamic factors are obvious in the first three quarters (August 2016), and the 2016 achievement rate is 104.5%. The annual performance commitment for 2017 is 19.5 million. (2) the net profit of Shanghai Mobile in the first three quarters is good, with an annual performance commitment of 104 million in 2017. According to the analysis of past performance, it is optimistic that the annual performance will meet expectations.
Third, profit forecast and investment suggestions
Assuming that the company acquired a 49% stake in Shanghai Mobile with 10 shares in 2018, the company's EPS (diluted) in 2017-2019 is expected to be 0.50,0.54 and 0.83 yuan respectively, and the current share price corresponds to 25x, 23x and 15x, respectively. Based on the strong stickiness of government and enterprise customers such as finance and transportation, the smooth development of the intelligent court business, and the huge room for the growth of the integrated digital communication business, the company was given 30-35 times PE in 2017 and a reasonable valuation of 15,017.5 yuan in the next six months, maintaining the company's "highly recommended" rating.
Fourth, risk tips:
Policy promotion is not as expected; the speed of technology research and development is not as expected; business integration is not ideal.