Event: the company disclosed its 2016 annual report that operating income was 232 million yuan, up 59% from the same period last year; operating profit was-2.58 million yuan, up 72% from the same period last year; and net profit belonging to the owner of the parent company was 13.64 million yuan, up 90% from the same period last year.
The performance is stable above the break-even line, and the cultivation of profit growth has yet to blossom. Although the company's performance has increased, but the deduction of non-net profit is only 3.25 million yuan, an increase of 23% over the same period last year. The cooperative operation business between the company and Henan Network officially carried out large-scale operation cooperation in 2016, with terminal product revenue of 20.13 million yuan, bringing new revenue and profit growth points to the company. At the same time, because Vision Technology Company and fingertip City Company are still in the stage of large-scale investment, the company's operation and management expenses have increased a lot, resulting in negative operating profit.
Lay out cultural media, online games, VR videos and online education to cultivate new growth points.
The company carried out a series of extension layouts in 2016: 1) 100 million yuan of its own capital to set up VR subsidiary vision technology, laying out the field of VR content production; 2) 100 million yuan of its own capital invested in 4.7% equity of Beijing Youpengpu Technology, involved in interactive TV services; 3) 150 million yuan to buy 100% equity of Teng Teng Interactive, layout of video games 4) increase capital in fingertip cities and enter the Internet service of talent examination.
Investment suggestion: based on the radio and television industry, the company is engaged in the promotion of end-to-end overall solutions and product research and development in the radio and television industry, with profound technical reserves and rich industry experience.
At the same time, the company actively carries out research and development of technology products such as virtual reality technology, online education platform, big data analysis technology, intelligent terminal software, multi-screen interactive system, cloud games, cloud distribution technology and related cloud business solutions. With the end of the company's business development period, the performance is expected to enter the track of rapid growth. It is estimated that the company's net profit growth rate in 2017-2019 is 27%,-2% and 43% respectively, and the pencil EPS is 0.04,0.04 and 0.06 yuan respectively. Coverage for the first time, giving a "overweight" rating.
Risk Tip: failed to nurture new business.
