Main points of investment:
The quarterly reports for 2017 and 2018 are operating steadily. The company's overall revenue in 2017 was 4.187 billion yuan, an increase of 9.6% over the same period last year; the net profit returned to the home was 231 million yuan, an increase of 63.3% over the same period last year; and the non-return net profit was 216 million yuan, an increase of 67.3% over the same period last year. In the first quarter of 2018, the overall revenue was 1.401 billion yuan, an increase of 99.1% over the same period last year; the net profit returned to the mother was 97.205 million yuan, up 82.7% over the same period last year; and the non-return net profit was 91.776 million yuan, an increase of 99.1% over the same period last year. On February 1, 2017, the remaining 20% of Keyi Culture, 100% of Zhangwei Technology and 60% of Zhihai Yangtao; on March 1, 2017, Quan Da Film and Television merged.
The company is mainly engaged in three main businesses, key content marketing. The company focuses on content and content marketing business, Internet advertising and traditional advertising three main businesses. In 2017, the overall revenue of content and content marketing was 904 million yuan, down 19.97% from the same period last year, and the gross profit margin was 30.9%, an increase of 19 percentage points. In 2017, the company completed the acquisition and merger of the remaining equity of Keyi Culture, Zhangwei Technology and Quan Da Film and Television, and improved the business structure of "IP- content production-content Marketing". At the same time, the company launched the self-made variety "True Star words and Adventures" and participated in the TV series "my first half of my Life" and "Road meets Youth from Tonight". With "Voice of Dreams", "Chinese New Song", "Challenger Alliance", "running Bar", "Comedy Story 2" and other well-known variety shows to form a title, sponsorship, implant marketing and other ways to speed up the development of endogenous multi-category marketing business.
In 2017, Keyi Culture, Palm Technology and Quan Da Film and Television made net profits of 42.42 million yuan, 54.57 million yuan and 82.14 million yuan respectively, with a commitment of 40.2 million yuan, 44 million yuan and 8060 million yuan in 2017.
The acquisition of Aide Kangsai, the effective development of Internet advertising business; traditional advertising and wisdom Hai Yangtao, the overall maintenance of stability. In 2017, the overall revenue of Internet advertising was 1.933 billion yuan, an increase of 53.21% over the same period last year, and the gross profit was 8.14%, down nearly 1 percentage point from the same period last year. Among them, the acquisition company Aide Kangsai achieved a net profit of 28.36 million yuan in 2017 (35.1 million yuan was promised to deduct the non-return net profit in 2017). In 2017, the overall revenue of traditional advertising (TV advertising, brand management, outdoor advertising and other advertising) was 1.35 billion yuan, down 5.6% from the same period last year, and the gross profit of the traditional sector as a whole was 8.1%, down nearly 1 percentage point from the same period last year. The acquisition of 60% stake in Zhihai Yangtao achieved a net profit of 17 million yuan in 2017 (15.6 million yuan was promised to deduct non-homing net profit in 2017).
Profit forecast. We are optimistic that the company's "content marketing + digital marketing" will be carried out steadily in the future. it is estimated that the company's overall revenue from 2018 to 2020 will be 5.003 billion yuan, 5.758 billion yuan and 6.611 billion yuan respectively, with year-on-year increases of 19.5%, 15.1% and 14.8% respectively, and corresponding EPS of 0.82,0.94 yuan and 1.06 yuan respectively. Compared with the average valuation of companies in the same industry in 2018, combined with the development of the company's business, give the company a valuation of 25 times, corresponding to the target price of 20.5 yuan, increase the rating.
Risk hint: the acquisition company's performance bet is not up to expectations, goodwill impairment risk.