The film and licensing business is gradually developing, and we look forward to the consolidation of the mobile game business

The performance in 2013 was in line with expectations. The company achieved operating income of 1.55 billion in 13 years, a year-on-year increase of 20%. The net profit attributable to shareholders of listed companies was 230 million, a year-on-year increase of 27%. 1 Yuan. Among them, the Q4 single quarter achieved operating income of 500 million yuan, an increase of 2.7% year-on-year, and net profit of 84.98 million yuan, an increase of 9.6% year-on-year, which was lower than the annual growth rate, mainly due to the hot sales of the Battle King gyro in 12Q4 and a high base.　　 Trendy brands performed steadily, and toy sales grew steadily. In 2013, the company achieved revenue of 860 million in animation and toys business, an increase of 17% at the same time. It is understood that the revenues of the newly launched trendy products Yikong Zhiding and Shenpu in 2013 were both about 100 million yuan, and the promotion of the long-term brand Kaineng was lower than expected; and the top of the top in 12 years contributed about 300 million in revenue, with a relatively high base. In 2013, the revenue of non-anime toys was 330 million, a year-on-year increase of 16%.　　 Channel optimization has continued to increase gross profit margin significantly, and sales expense ratio has increased year-on-year. The company's promotion of channel flattening has shown its effect. In 2013, the comprehensive gross profit margin increased by 6 percentage points year-on-year to 44%, of which the gross profit margin of animation toys and non-anime toys increased by 7.7 and 5.8 percentage points, respectively. At the same time, due to the increase in overall marketing expenses at the company level due to flat channels, sales expenses reached 200 million in 2013, an increase of 58%, and the sales expense ratio increased by 3 percentage points year-on-year.　　 The film and licensing business is gradually developing, and we look forward to the consolidation of the mobile game business. In 2013, the revenue of animation, film and television business was 220 million, a year-on-year increase of 38%. The main driving force was the film and licensing business. At present, the company's leading IPs such as Baralla, Happy Baby and Pleasant Goat have all launched movies; at the beginning of 2014, 'Pleasant Goat 6' and 'Balala 2' had a combined box office of over 100 million, which led to the rapid growth of related licenses. At the same time, the company is advancing the acquisition process of Fangcun and Aileyou, which is expected to be consolidated at the end of May. Philharmonic Tour 'Thunder Fighter' currently has a daily peak of over 10 million on the WeChat platform, focusing on continuous performance.　　 Affected by the launch of animation projects, the growth rate of 14Q1 is expected to be around 15%-20%. As 13Q1 continues the top sales boom, and 14Q1 lacks similar explosive trend brands, it is expected that the performance growth rate in the first quarter will be around 15%-20%. With the implementation of animation projects and the consolidation of mobile games, the company's performance is expected to begin to explode in Q2. Development trend 1) Aofei Animation is launching cultural industrialization transformation, with IP as the core layout. It is expected that the revenue from new business (games, movies, parks, and new media) will exceed the original toy business in 3-5 years, and it will be fully developed' Hasbro + Disney' mode. 2) The company's participation in the establishment of an industrial fund is expected to help external expansion.　　Earnings forecast adjustment　　Considering the profitability brought by the mobile game business, the original profit forecast for 2014 is maintained, and the EPS is estimated to be 0.65 yuan and 0.85 yuan in 14-15, an increase of 80% and 30% year-on-year respectively.　　Valuation and recommendations　　The current stock price corresponds to the P/E of 51X and 39X in 14-15 years, and the rating of 'Prudent Recommendation' is maintained. Late-stage stock price catalysts: 1) mobile game turnover performance exceeded expectations; 2) extensional mergers and acquisitions continued to advance.