Focus on the national professional CG vision service provider. Silk Road Vision is one of the earliest enterprises in China to engage in digital vision services, deeply combining CG technology and artistic creativity, taking architectural design and real estate industry as the business starting point and foundation, continuously expanding the emerging sports and entertainment markets such as animation, games, film and television, and forming three kinds of comprehensive business: "traditional application field + new form commerce and exhibition application field + cultural creative entertainment industry". The company is based on CG static vision, CG dynamic vision, CG visual scene integrated services and other traditional CG business, strategic cooperation with BABA, layout "cloud rendering". In the first three quarters of 2016, the company achieved revenue of 273 million, an increase of 28.97% over the same period last year, and a net profit of 11.633 million.
Film and television special effects benefit from the continuous growth of the film and television market, and the scale of market investment continues to rise. In 2015, the annual output of films was stable between 600,700, 15000 TV dramas, 42 anime (26% annual growth rate), and 353 online dramas. The huge number and scale of the film and television market and the growing demand for special effects are good for the film and television later stage and special effects market. The target companies in the film and television special effects market will benefit for a long time.
Raise funds to add CG technology to enhance the company's brand and competitiveness. According to the company's prospectus, the company issued 27.8 million shares, with a net fund-raising of 115 million. The funds raised will be invested in the construction of digital vision production base, R & D center, information technology platform and supplementary liquidity. In the next three years, we will focus on promoting advanced technologies such as holographic imaging and virtual / augmented / hybrid reality technology, multimedia digital sand table technology, multi-touch and wireless control (near field) technology, so as to improve the production capacity and quality of the company's CG business and further enhance the company's core competitiveness.
Investment suggestion: the company is the leading enterprise in CG industry, forming three kinds of comprehensive business: "traditional application field + new form commerce and exhibition application field + cultural creative entertainment industry". We expect the company's 16-18-year net profit to be 31.28 million yuan, 37.2 million yuan and 50.26 million yuan respectively, corresponding to 0.28,0.33 yuan and 0.45 yuan per share respectively. The 6-month target price is 56.72 yuan, with a rating of "increasing holdings-A". It is recommended to focus on the company's ability to add film and television special effects based on CG technology and rich experience.
Risk hints: the risk of recession in the real estate industry; the risk that the development of the CG industry is not as expected; the risk of intensified competition.