The decline in performance in the Martian era is a drag on performance by superimposed goodwill impairment.
On April 30, the company released its 2018 annual report, with revenue of 3.134 billion yuan in 2018 and net profit of 57.14 million yuan for YoY+30.89%;, which is higher than that of KuaiBao (30.88 million yuan).
The company plans to pay a cash dividend of 0.5 yuan (including tax) for every 10 shares. At the same time, the company released its quarterly report of 19 years, with a revenue of 552 million yuan in the first quarter and a net profit of 7.336 million yuan in YoY+9.05%, YoY-45.52%. The decline in performance in 2018 was mainly affected by the decline in performance in the Martian era and the impairment of goodwill.
It is estimated that the EPS of the company in 2019-21 is 0.55, 0.67, and 0.78 yuan. Maintain the "overweight" rating.
Education sector did not meet expectations, feed and aquatic processing sector revenue growth company education and training sector was adversely affected by the game, film and television industry environment, performance declined significantly. Revenue in the Martian era in 2018 was 547 million yuan, and YoY+10%; deducted 41.24 million yuan in net profit after returning to the mother (including Kaijie Vision, which had an 18-year net profit of 39.42 million yuan, and the Martian Age held an 80% stake in it, which has been listed since July). Martian era did not fulfill the performance commitment, listed companies therefore set aside goodwill impairment of about 222 million yuan, receivable performance commitment compensation of about 138 million yuan. Feed and aquatic processing plate benefited from the increase in production capacity release income, of which the feed sector achieved revenue of 1.48 billion yuan, YoY+26.36%; aquatic processing plate revenue of 934 million yuan, YoY+13.74%.
In the Martian era, enrollment was not ideal, and the increase in fees led to a decline in profitability.
In 2018, Baiyang shares had a gross profit margin of 20.85%, YoY+4.29pct; a net profit rate of 2.31%; and a period expense rate of 14.82% (including R & D expenses), YoY+ 3.60pct. The decline in net interest rate was mainly affected by the decline in performance and goodwill impairment in the Martian era. The recession in the game, film and television industry led to a decline in the growth rate of enrollment in the Martian era, while sales and management expenses increased rapidly. In the first quarter of 1919, the net interest rate of Baiyang shares was 1.51%, and the enrollment and profit situation of the Martian era has not improved significantly.
Martian era content advantage is still there, continue to carry out new models and new business development
We believe that although it is greatly influenced by industry factors, the Martian era still maintains the leading position of the industry and the advantage of content resources. In 2018, the Mars Age and Guangxi Institute of Information Technology jointly opened the School of Digital Art and began to explore a new mode of content output to vocational colleges. The annual report reveals that listed companies will take the Martian era as the core, open up new businesses such as online education, university cooperation, and art study abroad, and continue to lay out the field of art education through investment, mergers and acquisitions.
The leader of digital art vocational education, maintaining the rating of "increasing holdings"
The previous estimated net profit of Baiyang shares for 19-20 years is 270,000,000 yuan. Considering the recession in the game, film and television industry, we downgrade the Martian era performance forecast. It is estimated that the net profit of Baiyang shares in 2019-21 is 2.19pm 2.66pm 307 million yuan, EPS is 0.55Universe 0.78RMB. The average PE of comparable companies was 29.34 times in 2019. Considering the uncertainty of the recovery of the downstream industry, we believe that Baiyang shares can be given 15-18 times PE in 2019, corresponding to a reasonable share price of 8.25-9.9 yuan. Maintain the "overweight" rating.
Risk tips: the risk of unfulfilled promised performance in the Martian era; the risk of impairment of goodwill; the risk of acquisition integration; the risk of national education laws and policies; the risk of competition in the education and training industry; and the risk of depressed demand in the feed and aquatic processing industry.