Vision China (000681): Non-core business substitution and suspension of services disrupt Q2 performance and focus on subsequent growth and repair

Vision China (000681): Non-core business substitution and suspension of services disrupt Q2 performance and focus on subsequent growth and repair
Investment Highlights The company disclosed its 2019 Interim Report.2019H1 achieved revenue of RMB 420.14 million, a decrease of 16 from the same period in 2018.49%, net profit attributable to shareholders of the parent company was 132.56 million yuan, a decrease of 3 from the same period in 2018.1%.The core main business visual content and services realized an operating income of 398.35 million yuan, an annual increase of 0.1%. We estimate that Q2 visual content and service business income will replace 10% -20%.The company’s revenue decline in the first half of the year was also affected by the extension of the Thunderbolt asset group at the end of 2018, which resulted in changes in the scope of the consolidated statement and the suspension of services for four to five months.Excluding the impact of asset replacement, the company’s Q2 visual content and service business revenue growth rate was between -10% and -20%.The core business’s gross profit margin in the first half of the year was 63.33%, basically flat for one year. The number of directly contracted customers will increase by 30% each year, and marketing will be strengthened in the second half of the year.In 2018, the number of customers directly contracted with the company exceeded 14,000, with an increase of 90% at the same time. The growth rate of 2019H1 was affected by the suspension of the service, but overall it still increased.In the second half of 2019, the company will strengthen its investment in marketing, open up key industries in a targeted manner, focus on large customers, Internet platforms, and gain business growth through “content + technology” quality services. Centralized repayment of long-term and short-term debt, and financial costs fell significantly.In the first half of 2019, the company’s financial expenses were 10.41 million yuan, a decrease of 35 each year.64%, mainly because the company repaid more expenses, the corresponding expenses reduced the expenses, the termination of the end of the H1 period in 2019, and the company’s long-term expenses decreased by 4.160,000 yuan, the proportion of short-term borrowings at the end of the same period last year decreased by 1.4 billion. Non-core main operations remained stable overall.In the first half of 2019, an increase in R & D investment of 500px resulted in slight defects (313.560,000 yuan), singing tour company is also in the participation period, interrupted 610 in the first half.At 980,000 yuan, Hubei Sima Yan and Yijiao Youpei operated steadily and achieved net profit of 3,535 in the first half of the year.07 million yuan, 928.210,000 yuan. The overall market competitiveness continues to improve.Content content. In the first half of 2019, the company continued to expand the design material, video, music, font business expansion, and continued to integrate high-quality 武汉夜网论坛 content to meet user content needs.At the end of the termination period, the company added nearly 1,000 video contributors and signed exclusive agency agreements with nearly 10 video, music, design, and font companies.At the technical level, the company’s technical department was reorganized into an independent system, which strengthened basic data processing capabilities, front-end customer service capabilities, and improved the efficiency of content supervision and review. Profit forecast and investment grade: It is estimated that the net profit attributable to the mother in 2019/2020/2021 will be 3 respectively.50/4.30/4.950,000 yuan, the corresponding EPS is 0.50/0.61/0.71 yuan.In the long run, the company’s role and value as the infrastructure of the visual industry continue to increase. Through compliance, content, 南京夜网 and technology improvements, the company’s growth in the second half of the year will gradually recover, maintaining a “buy” rating. Risk reminders: copyright protection risks, management risks, risks of performance commitments of subsidiaries, etc.