This report is read as follows:
The company released the 2017 quarterly report, the industry boom plus a large amount of capital investment, the company's agency business continues to bring revenue and performance growth are higher than expected, superimposed by the peak season factors in the fourth quarter, the annual performance is expected to significantly exceed the commitment.
Main points of investment:
The company released the three-quarter report of 2017, with operating income of 4.43 billion yuan in the first three quarters of 2017, + 120.0% year-on-year, and net profit of 330 million yuan, + 119.8% year-on-year, corresponding to EPS0.34 yuan; revenue of 1.88 billion yuan in the third quarter, + 128.9% of the same period last year, and net profit of 112 million yuan, + 76.2% of the same period last year. The company's agency business continued to break out, resulting in much higher-than-expected revenue growth, and although gross profit margin continued to decline, its performance still exceeded expectations. Taking into account the peak season of the fourth quarter, the full-year results are expected to significantly exceed commitments. We raised the company's EPS in 2017-2019 to 0.53 (+ 0.02) / 0.71 (+ 0.03) / 0.90 (+ 0.04) yuan, maintaining the target price of 20.58 yuan and "overweight" rating.
The industry is booming, and the outbreak of agency business has brought higher-than-expected growth in revenue performance. After the non-public offering supporting fund-raising is in place, the company will change the fund-raising project to Falcon Network (750 million) and Yi Fu Information (900 million) as the main body to purchase mobile media resources to develop agency business. Benefiting from the high prosperity of the industry and a large amount of capital investment, the company's agency business continues to break out, bringing a substantial increase in revenue, although the gross profit margin of the agency business is low, which leads to the decline of the company's overall gross profit margin. However, the growth rate in the third quarter is still close to the forecast upper limit and higher than expected. At present, 76.9% of the cumulative promised profits have been completed in the first three quarters, and the fourth quarter is the peak season for Internet and mobile Internet marketing, and the annual performance is expected to significantly exceed the commitment.
Major shareholders help to create the layout of the global mobile Internet industry chain. Major shareholders promise that 91iOS, an external high-quality mobile Internet traffic asset, will be injected into listed companies after operating profits.
At the same time, Yunji Inc, the industrial capital of the major shareholder LP, and the major shareholder have rich experience in capital operation and overseas mergers and acquisitions, which is expected to continue to help the company's layout in the global mobile Internet field.
Catalyst: the expected promotion of the injection of major shareholders' external assets; the promotion of the expectation of overseas mergers and acquisitions.
Core risk: the provision of goodwill is relatively high, and the substandard follow-up performance commitment leads to asset impairment.