The company announced its 2016 results on April 24. During the reporting period, the company achieved operating income of 2.574864 billion yuan, an increase of 36.61% over the same period last year. The net profit of owners belonging to the parent company was 378.4578 million yuan, an increase of 41.8% over the same period last year. The company intends to distribute a cash dividend of 1.00 yuan (including tax) to all shareholders for every 10 shares.
Event comment
The four major business sectors lead to high performance growth and good cost-cost control. 1) during the reporting period, the company's marketing, variety, film and television and sports business sectors developed well, with revenues of 933 million, 823 million, 549 million and 264 million yuan respectively, up 29.05%, 14.56%, 44.83% and 350.72% over the same period last year, accounting for 36.25%, 31.98%, 21.3% and 10.24%, respectively. Among them, the sports sector continued to achieve results, the performance increased year-on-year, and the proportion of income increased by 7.14 percentage points. 2) the company's costs and expenses were well controlled, with a gross profit margin of 27.04% in 2016, an increase of 1.31 percentage points over the same period last year, while the gross profit margin of the film and television business increased rapidly, rising nearly 19 percentage points to 43.1%.
The company's sales, management and financial expense rates are 3.08% (- 0.96), 2.61% (- 0.48) and 0.73% (- 0.08), respectively.
Based on high-quality content, to create a diversified content matrix. In 2016, the company still focuses on boutique content. 1) the film and television content is becoming younger and networked. Projects such as "the Workplace is a Technical Job", "long live Love", "Crouching Tiger", "gone with the Wind" and "the Hunter" are released to determine income; IP dramas "late Night Canteen" and "Legend of Liji" will be broadcast in June and August, respectively, and several projects such as "Marriage Mystery" are expected to begin filming. 2) the variety show takes the content as the core, creating an integrated business model of production and operation to form a competitive advantage. "Cross-border Song King" and "whirlwind filial son" are expected to be launched in the second season in 17 years. And take "come on Brothers", "sonorous Rose" and other five projects as reserves. 3) Sports marketing business continues to deepen, based on the European Basketball, La Liga and other top sports content, to create a sports marketing-event operation platform, which is expected to become a new engine to promote the company's performance growth in the future.
Innovative business has been successfully landed, and refinancing has been completed to ensure adequate funds. 1) during the reporting period, the company set up the VR Industry Division, which cut into the market with VR content production, and realized the transformation of VR content and live broadcast of events and concerts by virtue of the company's high-quality and rich film and television, variety and sports content resources.
Make use of the immersive experience of VR technology to enhance the production capacity and upgrade of the company's content products. 2) during the reporting period, the company completed a non-public offering with a supplementary capital of 2.172 billion yuan. Abundant funds can not only effectively support the rapid growth of the company's existing business sector, but also provide a good guarantee for the company's epitaxial investment and expansion.
Profit forecast and investment suggestion
It is estimated that the company's EPS from 2017 to 2019 will be 0.64,0.79,0.93,20.02 yuan, respectively, with a 2017PE-2019PE of 31 times, 26 times and 21 times respectively, maintaining the "overweight" rating.
There are risks
The risk of policy change; the intensification of market competition; the risk of work review; the income uncertainty of cultural products.
