Revenue rebounded and profits fell below expectations: 000504.SZ released an interim report in 2007 that its main business income in the first half of the year was 115.5166 million yuan, an increase of 18.67% over the same period last year, with operating profit of 3.0153 million yuan and net profit of 2.0387 million yuan, down 42.40% and 36.09% respectively from the same period last year. The realization of earnings per share was 0.0065 yuan, slightly lower than we expected, and the main reason why the profit was lower than we expected was that we underestimated the increase in the cost of achieving revenue growth in the company's "1100 N" media development strategy. Gross profit margin dropped nearly 18 percentage points to 21.32% from 38.99% in the same period last year, resulting in a certain profit deviation.

The strategic adjustment of media business has achieved initial results, and there is a large investment in business expansion: after the comprehensive intervention of the new management, Sadie Media and its group have gradually formed a "1N1" media development strategy with China computer Daily as the main body. The "digital era" in which consumer electronic products are the main advertisers is determined as a new development direction, in order to adapt to the changes in the situation that electronic products pay more attention to mass consumers. At the same time, using the group's idle issue number resources to invest in the operation of the non-IT consumer media "Snow Journey" magazine on the Qinghai-Tibet Railway train, and involved in the media operation characterized by the distribution of franchise channels, from the perspective of the change in income, the strategic adjustment of the company's media business has achieved initial results, but the cost input brought about by business expansion has increased too fast, resulting in a sharp decline in gross profit margin. If the original accounting statement is shown in the "profit statement" There will be a loss on operating profit.

Investment income has become the "protagonist" of the company's profits here: since the end of 2005, the continuous bull market in the domestic capital market has made the "short-term investment" projects of listed companies that have been silent for many years active again, and the company's newly added stock investment income in the first half of the year is 10.213 million yuan. According to the new accounting standards, the equity investment difference that originally needs to be amortized every year (5.011 million yuan) does not need to be listed, one increase and one decrease. This led to a difference of 13.332 million yuan in the amount of investment income in the current period compared with the same period last year, which became the "protagonist" of the company's profits in the first half of the year.

It remains to be seen whether the main business of the media can significantly improve its business performance. It is given a "neutral-B" rating for the first time: after the completion of the share reform, it rose by more than 250% from 5.53 yuan after the share reform was resumed on January 15. in the July adjustment, the lowest price fell to less than 8 yuan, and the company's share price almost completed a "heaven and earth" rise and fall. Apart from a trademark replacement with the group, the company has basically not carried out any substantive business and asset integration. We learned at the beginning of the year that some projects have not been effectively implemented. Although the strategic adjustment of the company's core media business has initially seen some results, it remains to be seen whether it can significantly improve its business performance. Based on Anxin Securities's macro and strategic judgment on the domestic capital market, we gave Sadie Media a "neutral-B" rating for the first time, with a 12-month target price of 15 yuan.