Warsaw Bainer released its 2016 annual report: the company's operating income in 2016 was 2.575 billion yuan, an increase of 36.61 percent over the same period last year; the total profit was 390 million yuan, an increase of 41.33 percent over the same period last year; and the net profit belonging to the owner of the parent company was 378 million yuan, up 41.8 percent from the same period last year. The income per share is 0.52 yuan per share, and the dividend plan is 1.00 yuan for every 10 shares (including tax). The company also released a report for the first quarter of 2017 that Q1 realized revenue of 384 million yuan in 2017, down 25.26 percent from the same period last year, and the net profit attributed to the parent company was 64 million yuan, an increase of 60.08 percent over the same period last year.
Each business segment performed well: in 2016, the company achieved operating income of 2.575 billion yuan, an increase of 36.61% over the same period last year. Of this total, the revenue of the film and television business was 549 million yuan, up 53.86% over the same period last year; the revenue of the variety business was 823 million yuan, up 23.38% over the same period last year; and the revenue of the marketing business was 933 million yuan, an increase of 29.05% over the same period last year. The company's sports business expanded rapidly on the basis of a good start in 2015, with revenue of 264 million yuan in 2016, an increase of 350.72% over the same period last year, and a comprehensive gross profit margin of 1.32%. The decline in 2017Q1 revenue is mainly due to the change of "whirlwind filial son", while the increase in net profit is mainly due to the good issuance of the company's projects. 2017Q1 investment income increased significantly compared with the same period last year, mainly because the company will idle raise funds to purchase bank wealth management income; the sharp reduction in asset impairment loss is mainly due to the good recovery of accounts receivable and changes in accounting estimates.
Multi-wheel drive of film and television, variety show and sports: the company's film and television business adheres to the boutique line, and its income mainly comes from projects such as "the workplace is a technical activity", "long live Love", "gone with the Wind" and other projects. Adapted from the Japanese Man Super IP's "late Night Canteen" and the ancient costume martial arts drama "Liji Zhuan" adapted from "the Legend of the Ming Moon in Qin Dynasty", it is a benchmark for the company's film and TV series to transform into a young and networked drama. It is unanimously approved by the market and will be broadcast this year. The company's variety income mainly comes from "whirlwind filial son", "Cross-border Song King", "my new clothes" and so on. Among them, projects such as "filial son of whirlwind" and "Crossing King" achieved great success in the first quarter, laying a good foundation for the operation of the second quarter. The company continues to deepen the layout of sports marketing business, promote the comprehensive integration of European basketball and Chinese basketball, and successfully hold UEFA Champions League Basketball Tour in Chengdu and Shenzhen. By teaming up with Beijing star TV to broadcast live La Liga, the company has successfully set a precedent for live broadcast of Europe's top sports competitions on Beijing star TV, and China's leading sports marketing and event operation platform is beginning to take shape.
The success of fund-raising contributed to the rapid growth of the company: 2.172 billion yuan was successfully reraised in 2016, and abundant financial resources can effectively support the rapid growth of the company's existing business segment and provide a good guarantee for the company's extension investment and expansion. The company has basically established a strategic layout with media entertainment content as the core and multi-plate coordinated development.
Profit forecast: we expect the company's operating income in 2017-2019 will reach 38.8,53.9 and 7.18 billion yuan respectively, EPS is 0.60,0.78 and 1.00 yuan respectively, calculated according to the pre-suspension price of 20.02 yuan, corresponding to the 2017-2019 dynamic PE is 34X, 26X and 20X respectively, optimistic about the future development of the company and maintain the "recommended" investment rating.
Risk hints: (1) market competition risk; (2) policy supervision risk.
