Event: the company released its annual report for 2017, with an operating income of 2.768 billion yuan, an increase of 18.73% over the same period last year, and a net profit of 372 million yuan, an increase of 84.47% over the same period last year. Diluted earnings per share was 0.63 yuan. Cash dividend of 1.3 yuan (including tax) shall be distributed to all shareholders for every 10 shares.
The company released its quarterly report for 2018, with an operating income of 585 million yuan, an increase of 44.84% over the same period last year, and a net profit of 28.62 million yuan, an increase of 22.95% over the same period last year. Diluted earnings per share was 0.05 yuan.
Acquire Shanghai Investment Company to improve the layout of digital marketing industry chain. During the reporting period, the company acquired a 50.1% stake in Shanghai Investment Network Technology Company, with performance commitments of 98 million, 122.5 million and 155 million for 2017-2019, respectively. Shanghai Venture Investment has formed major business sectors such as self-media IP content marketing, brand advertising public relations marketing, film and television variety video production, and is expected to form a synergistic and complementary effect in marketing business and customer resources with three other companies acquired by the company in the future, namely, Shanghai Jituang (Internet advertising), Shanghai Xinhe (full-case service focusing on content marketing) and Shanghai Linyou (public relations communication). Further improve the layout of the company in digital marketing.
In 2017, all four subsidiaries exceeded their performance commitments. The gross profit margin of the company's digital marketing section continued to rise steadily, increasing 2.77pct to 26.65% compared with last year. In the future, the company will focus on high net worth people to create a new media value system based on "community ecology". The digital marketing section will be driven by tradition, digital, platform and investment to promote the extension of business to culture and content.
The steady development of new materials business, the combination of industry-university-research to explore new products. During the reporting period, the company's traditional main chemical industry continued to develop steadily, achieving revenue of 424 million, an increase of 55.29% over the same period last year, and gross profit margin increased to 9.65%, mainly because the company gradually spun off its low gross margin business and focused on products with core technology. At present, it can serve the application of polyurethane in refrigerator, automobile, plate, plumbing, solar energy and other industries. In the future, the company will continue to further develop customers around the application of polyurethane, through cooperation with first-class universities to find the advantages of green, energy saving, environmental protection, safety and independent intellectual property rights, and timely promote the landing of the project.
Profit forecast: with the steady growth of the digital marketing industry, assuming that the company's business continues to progress steadily, it is estimated that the EPS in 18-20 years will be 0.79,0.99,1.23 yuan respectively.
Risk hint: acquisition integration risk, industry competition aggravates the risk.