The company announced the 2016 annual report, and the performance was basically in line with expectations
The company announced its 2016 annual report, with annual operating income of 312 million yuan, an increase of 25.18% over the previous year; net profit attributable to shareholders of listed companies was 57 million yuan, an increase of 171.34% over the previous year.
A genuine enterprise SaaS service provider in China
Since 2004, it has accumulated hundreds of thousands of service enterprises. It is a pioneer in the domestic SaaS industry and one of the providers of software applications and services for the informatization construction of small and medium-sized enterprises. Its SaaS application ecosystem has changed from previous email to now a unified cloud office platform that includes IM, OA, and video conferencing. We believe that as the company further enhances the R&D and sales of cloud office application services (mainly 35PushOA and 35Pushmail), with its first-mover advantage, customer resources and technology accumulation, it will occupy an important market position in the enterprise SaaS field.
The popularity of cloud computing will improve the efficiency and cost of SaaS usage, free up the company's previously limited computing and storage resources, help the company's SaaS model expand on a large scale, and the industry is expected to grow at an accelerated pace. The company has joined hands with China Mobile to strategically cooperate to develop cloud services for small and medium-sized enterprises. It is the only listed company that provides a full range of services from cloud platform construction and SaaS applications to platform support. The company's subsidiary, Beijing 35 Telecom, is responsible for the entire operation of China Mobile's cloud services for small and medium-sized enterprises. It is expected that the new revenue will face room to grow several times, and the flexibility is huge. SaaS for enterprise-level services is the most valuable segment in the cloud computing field, with an overall market size of over 100 billion dollars.
Wholly-owned subsidiaries actively expand mobile game business and enhance market competitiveness
Daoxi Technology, a wholly-owned subsidiary of the company, is a high-quality partner of Tencent's online gaming platform and Facebook. Its main products are web games and mobile games. It has three business lines: strategy games (SLG), role-playing games (RPG), and social games (SNS). It has a game development team with rich experience and outstanding planning ability, market-known and stable quality game products, excellent management channels, and self-developed game development engines and technology. Dao Hee Technology's R&D team has designed a long life cycle in games and is actively expanding the mobile game business development. It is committed to enriching game products and quantity to enhance market competitiveness.
The company entered the online game industry through Daoxi Technology, further deepened the company's development strategy, and expanded the depth and breadth of integrated resources in the Internet field. The operating income for 2016 was 112 million yuan and net profit was 83.8928 million yuan; it is promised that the net profit for 2017 will not be less than 110 million yuan, respectively.
Profit prediction
We believe that the short-term focus is on the continuous development of the company's SaaS functions, and that Do-hee Technology is bound to the Tencent platform, and that its performance is growing rapidly and steadily; in the long term, the company focuses on enterprise-level service SaaS and Internet content layout, and the potential market space is broad. The company's EPS in 2017-2019 is expected to be 0.19 yuan, 0.23 yuan, and 0.27 yuan, covering the “increase in holdings” rating for the first time.
Risk warning: SaaS competition intensifies, mobile game business development falls short of expectations