2015 results largely in line

2015 revenue +433.04% YoY to Rmb901mn; net profit +1,250.15% YoY to Rmb55.3376mn. MIG proposes Rmb0.18cash dividend for every 10 shares. It expects earnings to grow 1,126.92%~1,491.53% YoY to Rmb42.4~55mn in 1Q16.

Trends to watch

Strong 2015 results; consolidation of financial statements of Jinyuan significantly increased earnings. In2015, the mobile marketing segment’s revenue increased 102.0% YoY to Rmb802mn and net profit rose 73.8% YoY toRmb54.4015mn thanks to the consolidation of the financial statements of Jinyuan. The recurring net profit came in atRmb58.384mn, 46.0% higher than the promised figure. Net profit increased 98.4% YoY to Rmb74.2163mn for YingmobInteraction and 74.7% YoY to Rmb31.1316mn for Cloud Space-Time in 2015. The consolidation of the financialstatements of these two companies will further increase earnings of MIG in 2016, positive to organic growth.

Supply chain presence improving further; internal integration to create significant synergy. MIG has 100%equity stakes in Jinyuan Technology, Yingmob Interaction and Cloud Space-Time, and some equity stakes in more than10 companies (including Xiaozi Technology). MIG has established solid presence at the mobile marketing value chain,and the management team attaches great importance to business integration in an effort to create significant synergy.

Visible inorganic growth strategy to solidify its leading position in the mobile marketing industry. Thecompany established Jiupai MIG Industry Fund to improve investment strength and has acquired equity stakes in morethan 10 mobile internet companies to enter mobile marketing, human resources, online games, e-commerce and socialmedia markets. Going forward, MIG will continue to focus on mobile marketing and leverage capital and platformadvantages to further expand both vertically and horizontally.

Earnings forecast

Maintain 2016/17e earnings of Rmb222mn/294mn (+301.3%/+32.5% YoY).

Valuation and recommendation

Lift TP by 6.38% to Rmb40 (57x 2016e P/E) and maintain BUY given its leading position in the mobilemarketing industry, strong organic growth, visible inorganic growth strategy, and huge market cap growth potential.

Risks: fiercer market competition; disappointing business integration; goodwill impairments.