Main points of investment
Event: the company and its three subsidiaries signed equity transfer agreements with Lan Hai Investment. it is agreed to transfer the shares of 14 sub-companies, including wholly-owned, holding and shareholding, to Lanhai Investment, a wholly-owned subsidiary of the company's actual controller, with a total transfer price of 320 million yuan, which is expected to increase the company's profit by 88 million yuan in 2018.
The equity of 14 subsidiary companies was returned to the parent company, and the company's asset structure was further optimized. On July 26, 2018, the company announced that it planned to transfer the shares of 26 subordinate companies at all levels to the indirect controlling shareholder Media Group and subordinate companies of Borey Media. On November 13, 2018, the company decided to transfer the transferable 14 subordinate companies, including Beijing BoreShengde Venture Capital, Chengdu Borey Advertising, Sichuan Borui Bookstore Culture, to Lan Hai Investment, a wholly-owned subsidiary of the company's actual controller, which became another divestiture after the company divested its printing and distribution delivery business at the end of 2017. after this transaction, the company will further divest advertising, property management consulting, book retail and other businesses. Continue to promote the pace of transformation, upgrading and sustainable development.
Increase revenue and reduce expenditure, the game business performance is outstanding. Since 2018, the overall pressure on the game industry has intensified. In terms of cost-saving, from January to September 2018, the company abolished the game studio and diverted more than 200 people (more than 50 in the first half of 2018), saving about 20 million yuan. In terms of open source, on October 9, 2018, the mobile game "National Master 2" operated by Tencent game agent was launched and ranked first on the APP Store game download list within 24 hours, and the company's game business is expected to achieve improvement.
Outdoor advertising, education, online games and other businesses developed as scheduled. At present, the company's main business includes outdoor advertising, education (school), games, etc. In the first three quarters of 2018, due to the active divestiture of traditional business, the company achieved revenue of 450 million yuan, down 28% from the same period last year, and achieved a net profit of 23.4 million yuan. There has been a significant improvement over the loss in the same period in 2017. With the continuous progress of the reform, the company's performance is expected to improve gradually.
Profit forecast and investment advice. It is estimated that the EPS from 2018 to 2020 will be 0.11 + 0.03 + 0.04 yuan respectively, and the corresponding PE will be 112 times that of 37 + We believe that the core focus of Bouri Communication lies in the future asset integration and the reform of state-owned enterprises, we should pay attention to the future reform trend of the company, and do not make investment rating suggestions to Bouri Communication for the time being.
Risk hint: the promotion of reform is not as strong as expected risk, and the progress of M & An is not as good as expected risk.