Incident: On May 4, Storm Technology held a new product launch conference and launched four new televisions, including the 43/50/55 inch superbody 2VR TV known as the “world's first VR TV” and the 40-inch superbody TV. At the same time, Storm also stated that it will promote the process of home internetization through the three aspects of price, products, and promotion. Currently, Storm TV has more than 2,000 high-definition VR resources, and will also join hands with 20th Century Fox Group, iQiyi, Aofei Entertainment, etc. to create a new content ecosystem platform and super IP.
Build a storm ecosystem, and Storm TV helps increase performance. At present, the company has completed the second phase of the global DT Entertainment strategy and completed VR, TV, shows, video, culture, film, television, games and overseas ecological business layout. Furthermore, with the continuous improvement of the “federal ecosystem” built by Storm TV and iQiyi and Aofei Entertainment, homemade content from Storm Pictures and Straw Bear Film and Television, as well as content from shareholders iQiyi and Aofei Entertainment, together formed Storm TV's never-exhaustible content resource library, greatly improving the cost performance ratio of Storm VIP Film and Television members. 2016Q1, the company achieved a total revenue of 190 million yuan, of which VIP users' value-added business revenue was 10.57 million yuan, an increase of 1134% over the previous year, and brand advertising revenue also reached 39.65 million yuan, an increase of 11% over the previous year.
The DT Entertainment platform strategy was launched, and multi-platform collaboration brought about performance growth. Relying on existing PC and mobile user video platforms, the company gradually built and perfected the VR platform “Storm Mirror”, the entertainment hardware platform “Storm Superbody TV”, and the online interactive live streaming platform “Storm Show”. Based on this, the company launched the “platform+content+data” DT Entertainment strategy. On the basis of various platforms, it extends to upstream content industries such as film, television, and games, and uses big data to connect platforms and content. On the one hand, it provides better services to users, and on the other hand, improves commercial monetization efficiency and forms an overall strategic advantage. In 2016, platform-side multi-business collaboration is expected to bring significant revenue growth to the company.
Maintain an “increase in holdings” investment rating. In 2016, the platform side built by Storm Video, VR, TV, and the show will collaborate with the content side of sports, film, television, and games to create a “4+3” pattern, which together will form multiple profit growth points in 2016. The company's 2016-2018 EPS is expected to be 0.51 yuan, 0.79 yuan, and 1.02 yuan, corresponding to 147 times, 94 times, and 73 times PE, maintaining an “increase in holdings” investment rating.
Risk warning. There is a risk that new business does not meet expectations, and competition in the industry increases the risk.