Main points of investment
Event: Jixiang shares issued a performance forecast for the first half of 2018, which is expected to achieve a net profit range of 170 million yuan to 250 million yuan, a year-on-year growth range of 179% Murray 311%. The net profit of returning home in the second quarter ranges from 128 million yuan to 208 million yuan, with a year-on-year growth range of 116.95% Mi 252.54%.
The performance growth mainly comes from three aspects: 1, the company's film and television business plate TV series "return" and "Daming Princess" all completed the income and profit confirmation in the first half of the year; 2, the company's molybdenum business plate is subject to the periodic recovery of downstream industries. Molybdenum ore demand rebounded, prices slightly increased. 3. In the first half of the year, the company received the profit compensation made by the original shareholders of Xishadegai to the performance commitment of the listed company.
The transformation of culture and entertainment has achieved remarkable results, and the profit has increased significantly. The company has a rich reserve of film and television projects in 2018, with "positive energy" and "theme" as the main theme.
1) in terms of films, the company adheres to the project matrix of rejuvenation, industrialization and globalization. the projects expected to be released in 2018 are Animal World (June 29) and Asura. The reserve projects also include "Weather pre-explosion", "dare to ask where the way is", "Weather Diary" and so on. The Hollywood film Battleship Greyhound, which is also involved in the investment, has been launched.
2) in terms of TV series, the company adheres to the combination of "independent development and IP optimization" to create high-quality content, focusing on realism, chronology and other themes. At present, "return to return" has been premiered on Oriental Satellite TV and Beijing Satellite TV. Youku, iQIYI, Inc., Tencent video and mango TV have been jointly broadcast, and the ratings are good. The reserve items mainly include "Old Chinese Medicine", "Brave Heart 2", "Niangdao", "so you are still here", "Daming imperial concubine" and so on, of which "Daming imperial concubine" confirmed its income in the second quarter. Recently invested in 201 Lu (51% of the shares), the reserve projects include "Uncle and Youth", "Juvenile Pi" and so on.
Investment suggestion: the company's cultural and entertainment transformation has progressed smoothly, and its performance has achieved remarkable results. according to the company's current film and television content reserve, it is estimated that the company's operating income from 2018 to 2019 will be 2.305 billion yuan and 2.486 billion yuan respectively, with year-on-year growth of 4.84% and 7.85% respectively. The net profit belonging to the parent company was 501 million and 569 million respectively, an increase of 128.30% and 13.43% respectively over the same period last year. The company's current share price is 17 times the 2018 earnings forecast and continues to be rated as "overweight".
Risk hints: 1) Management risk: most of the company's senior executives are in the entertainment industry, and they are not familiar with the traditional business, and the traditional molybdenum industry has the risk of continuing to decline; 2) Film and television business risk: project launch is not as expected risk, policy regulatory risk.