The company's 3Q revenue was 619 million yuan, YOY increased by 28.64%, net profit was 297 million yuan, and YOY increased by 40%. New mobile games such as "Journey" and "Ball Battle" performed better, and their performance slightly exceeded expectations. The company intends to acquire all Class A common shares of Alpha by issuing shares and paying cash.
The main asset of the underlying company is Playtika, which is engaged in gambling games. Through this acquisition, we can enhance the proportion of the company's business in the field of mobile games and improve the company's performance.
The company forecasts a net profit of 1.015 billion yuan to 1.062 billion yuan for the whole year, an increase of 316.1% m ü 335.36%.
We expect the company to achieve net profit of 1.018 billion yuan, 1.211 billion yuan and 1.535 billion yuan from 2016 to 2018, with YOY growth of 205%, 18.9% and 27%. Based on the latest share capital, EPS per share is 0.60,0.72 and 0.91 yuan. After the completion of the acquisition of Playtika, earnings per share in 2016-2018 can be increased to 1.04,1.31 and 1.61 yuan, corresponding to 38 times and 31 times of PE in 17 and 18 years, respectively, maintaining the "buy" investment recommendation with a target price of 64 yuan.
3Q's performance exceeded expectations: in the first three quarters, the company achieved revenue of 1.669 billion yuan, YOY increased by 7.82%, net profit increased by 797 million yuan, and YOY increased by 258.19%. The performance was better than the upper limit of the pre-growth range of 754 million yuan. The substantial increase in performance was mainly due to higher fees paid by one-time shares during the privatization period last year, with net profit of 765 million yuan in the first three quarters, and YOY increased by 50.60%. In a single quarter, 3Q's revenue was 619 million yuan, YOY increased by 28.64%, net profit was 297 million yuan, and YOY increased by 40%. Mainly "Journey" mobile version and "Ball Battle" and other new games performed well. The company forecasts a full-year net profit of 1.015 billion yuan to 1.062 billion yuan, an increase of 316.1 percent over 244 million yuan in 2015.
Proposed acquisition of Playtika in 30.5 billion: the company intends to acquire all Class A common shares of Alpha at a consideration of 30.5 billion yuan, of which 25.504 billion yuan is paid for by issuing shares (648 million shares issued at an issue price of 39.34 yuan). In addition, the company will invest in the issuance of shares from Giant, the controlling shareholder, to raise 5 billion yuan in cash (115 million shares will be issued at an issue price of 43.66 yuan) to pay the remaining consideration. Alpha's main asset is a 100% stake in Playtika. Playtika's main games are gaming games such as Slotomania, and the company's business has grown rapidly in the past five years. Playtika's net profit after deduction in the last two years is 651 million yuan, 1.067 billion yuan and 733 million yuan respectively, and is expected to be 1.527 billion yuan, 1.994 billion yuan and 2.415 billion yuan respectively in 16-18 years. After the completion of this acquisition, earnings per share in 2016-2018 can be increased to 1.04,1.31 and 1.61 yuan, respectively, by 72%, 82% and 77%, respectively.
Profit forecast: we expect the company to achieve net profit of 1.018 billion yuan, 1.211 billion yuan and 1.535 billion yuan from 2016 to 2018, with YOY growth of 205%, 18.9% and 27%. Based on the latest equity, EPS per share is 0.60,0.72 and 0.91 yuan (before acquisition).