Gehua: Basic business expect the policy to gradually clear
HC TV Network : Core point: we judge's Digital The entire transfer will be made steady progress, so as to avoid excessive pressure on capital spending and depreciation, HD Business policy support will become clearer and better support for worth the wait; basic subscription price increases have gradually with the conditions, barriers are being gradually eliminate, price increases can be achieved if the results will form an important support; value-added business conditions gradually charges mature, the potential value of user resources will be constantly digging, to look forward to explosive growth; capital expenditure depreciation pressure gradually slowed down, and the future the company will gradually move towards large-scale, comprehensive entertainment group direction forward, significant long-term investment value.
Whole digital turn steadily, and the policy will become more clear tone.
The company's current digital transfer rate of the whole has more than 50%, due to be completed during the first half of this year's figure of 260,000 users to switch the entire work, to reach the level of 700,000 last year has some difficulties; we believe that the entire company's digital switch work in the basic subscription price increase did not achieve the case, will maintain a moderate level to avoid excessive pressure on capital expenditures and depreciation; high-definition interactive users now have more than 70,000 households by the end goal is to scale up to 30 million users high definition interactive distributed free of charge STB Higher costs, the Government's industrial policy and support to much to expect, taking into account the strategic significance of the development of high-definition, we believe that the government of supporting policies will tend to clear quickly, thereby promoting high-definition large-scale operations effectively.
Basic subscription price increase is expected.
Beijing and other parts of the country has not the same as in public infrastructure, public welfare more, so price increases difficult, but the country has completed the digital conversion of the city have been achieved price increases, other public infrastructure in Beijing facilities have the premise of price increases, the difficulty of the basic subscription price increase is gradually reduced, increasing the probability of price increases. We passed the measure, if the basic subscription from 18 yuan to 25 yuan, the EPS impact of the 10-11 years were 0.21,0.24 yuan, the company's performance will form the substantive support and improvement.
Value-added services will gradually contribute to profits.
The current proportion of value-added services is very small share of revenue was mainly due to Pay TV And interactive TV services do not charge on a large scale; but large-scale corporate users, has considerable resources, the company has Cable television More than 3.97 million users, Digital TV More than 2.16 million users, broadband subscribers more than 88,000 individuals; with the switch to digital television throughout the further advancement of the growing digital TV users will carry out value-added services companies provide a strong foundation and safeguard the company's pay-channels have been broadcast free of charge more than two years, interactive business has a free trial for six months, effective training of the user's viewing habits, we believe that the fees pay channels can effectively enhance the company's profitability, while interaction with the user-scale expansion of high-definition, interactive services will charges next year, however, may not be high priced, interactive business can effectively enhance the company's profitability, value-added services to look forward to explosive growth, the potential value of user resources will be continually excavated.
We maintain the company's 09-11 per-year EPS were 0.37,0.44,0.51, corresponding to the current stock price times the PE were 37.7,31.0,27.0, EV / EB IT DA were 17.6,14.6,12.8, we believe that with the gradual normalization of capital spending, cable digital TV business made steady progress, the realization of the basic subscription price increase value-added services along with a huge market space, the future of the company's growth is to look forward to keeping the company a "buy" investment rating, 6-12-month target price of 18 yuan.
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