Events:
In 2018, the company's revenue was 546 million yuan, down 37.26% from the same period last year; the net profit was-841 million yuan, turning from profit to loss over the same period last year; Q1 company's revenue in 2019 was 87.5163 million yuan, down 48.09% from the same period last year; and its net profit was 26.0007 million yuan, an increase of 148.45% over the same period last year.
Main points of investment:
Business architecture: comprehensively sort out the business system, 19 young outfits
In the past 18 years, the company has continued to improve the comprehensive carding of the business sector, stripped off some of the inefficient assets of the advertising and game business, and prepared for the impairment of goodwill, so that the company's potential operational and management risks have been fully released, and 19 years have re-entered a healthy and efficient operation stage. At present, the business structure of the company is clear: the financial business of K12 education business + small loan of Borey has stable and sustainable growth ability, and has become the main source of performance growth of the company; at the same time, the optimized and adjusted roaming valley and DreamWorks game business have gradually increased their contribution to the company's performance. Therefore, on the whole, the company's 19-year operation will enter a new cycle of healthy operation, and the 19-year Q1 business performance has begun to confirm-especially the net cash flow of operating activities in the current period is 21.3859 million yuan, an increase of 132.57% over the same period last year, which has laid a solid foundation for further growth and development.
Specific business: education + small loan business continues to improve steadily, game business continues to optimize
In the past 18 years, the company's education business revenue was 129 million yuan, an increase of 9.33% over the same period last year. At the same time, the gross profit margin increased slightly, and the business growth was very steady; at the same time, the teaching quality was also steadily improving: the undergraduate admission rate of the college entrance examination of Shude Borey School in 18 years was 93.6%. The emphasis rate of the college entrance examination was 54.3%, and the key point rate of the high school entrance examination was 66%. The overall teaching performance was in the forefront of the southwest region, and the level of teaching and scientific research of the school has been continuously improved in the past 18 years. As Shudaburi continues to improve K12 educational products, absorb students and expand arts and sports training, we believe that the company's education business has strong resilience and room for expansion.
In terms of small loan business, Bo Rui small loan achieved revenue of 37.81 million yuan and net profit of 12.17 million yuan in 18 years, completing the matching development of performance growth and risk control. At present, the core products of small loan, "real estate loan" and "bid loan", have good growth, proper risk control, and can contribute profits to the company continuously and steadily.
In terms of game business, the company's game business achieved revenue of 85.47 million yuan in the past 18 years, down 12.78% from the same period last year, but the optimization effect of the business is obvious. In 18 years, wandering Valley accelerated the development of second-generation products, and the sequel to the boutique game "National Master 2" was officially launched on the Tencent platform at the end of 18 years. DreamWorks made every effort to promote the R & D and business work of the new mobile game "Hot Blood Chivalrous Road". By the end of 2018, the company has a total of 17 games in operation (including 8 PC games, 3 page games and 6 mobile games), and 2 new games have been launched throughout the year, and the subsequent contribution to the company's performance is expected to increase.
Plan a new layout: focus on regional flow and communication to enhance core competitiveness
The company's future business development strategy is: closely around the Chengdu municipal party committee and municipal government's goal of building a world-famous cultural city, vigorously develop the "modern communication, education and training, digital traffic new economy" three major industries. In terms of specific business, on the one hand, the company will continue to optimize the existing education, games and small loan business, on the other hand, it will continue to promote and fully complete the securitization of public transport advertisements, improve the company's share and bargaining power in regional market segments, strengthen and optimize the existing outdoor advertising plate, and gradually obtain public travel resources in central cities on the basis of Chengdu in terms of traffic and communication. The construction of urban public travel media network pattern will lay a solid foundation for building a regional leading urban public travel media supplier.
Investment rating and profit forecast
We believe that the action force of the company's reform and development is strong, the goal is clear, and all the staff are of one mind and one mind. After 17-18 years of continuous transformation and adjustment, the company has entered a new round of development cycle, and all the risk factors affecting performance growth have been eliminated. There are clear signs of continuous improvement in fundamentals. If the subsequent restructuring of outdoor advertising business can be landed, the company's strategy to build a southwest regional outdoor media operator will be an important support, profitability will be strongly improved. Therefore, on the whole, the company's business is healthy and clear at present, there is great potential for development in the future, and the business reversal trend has become a foregone conclusion. We give the company a "neutral" investment rating. Without considering the company's restructuring, we expect the company's EPS to be 0.04,0.05,0.05 yuan per share respectively from 2019 to 2021. Investors are advised to keep paying close attention to it.
Risk hint
Regulatory policy risks, the company's business development is not up to expectations, major changes have taken place in business, and the advertising and game industries remain in the doldrums.