\u3000\u3000 Guangzhou Wahlap Technology Corporation Limited(301011) (301011)
Event: the company issued a performance forecast for 2021. The company expects to realize a net profit attributable to the parent company of 50-58 million yuan in 2021, with a year-on-year increase of 8.56% – 25.93%; It is expected to realize a net profit of 47 million yuan to 55 million yuan after non deduction, with a year-on-year increase of – 7.07% – 8.75%. In the single quarter of 2021q4, the net profit attributable to the parent company is expected to be 4.42-12.42 million yuan, down 49.7% – 82.1% year-on-year and 13.8% – 69.3% month on month.
The 2021h2 epidemic is repeated, and the exhibition and other activities increase the promotion expenses and affect the performance of the company. The reasons why the company’s performance was lower than expected in the second half of 2021 mainly include 1) the second half of 2021 included important holidays such as summer vacation and national day. This was a high-speed outbreak period of animation derivatives, but due to the repeated impact of the epidemic on offline consumption, the relevant businesses of the company were greatly affected; 2) In order to strengthen brand publicity, hold national E-sports competitions and live broadcasting activities, and participate in many industry exhibitions such as games, animation and commercial real estate, the relevant promotion expenses have increased; 3) The company is the entertainment equipment supplier of the downstream entertainment hall. As offline consumption is generally affected by the epidemic, the entertainment hall is expected to have great pressure on operating cash flow, and the provision for impairment of accounts receivable is not excluded.
The animation derivatives business maintained high growth, and the sales channels were widened outside the traditional entertainment hall. As of June 2021, the company’s animation and cartoon equipment has been put into more than 1000 stores, with 8000 sets of equipment. It is expected that by the end of 2021, there will be about 2500 popular IP baokemeng card machines. In 2022, the IP card machines are expected to continue to expand rapidly, and the number of such models is expected to reach 4000 by the end of the year. In addition to the traditional entertainment hall as a stable cooperation channel, the company’s animation card machine channel has been extended to the atrium of shopping malls, some stationery stores and other channels to fully reach potential consumers and further open the consumption scene.
Cooperate with Microsoft Xbox to launch the new IP “my world underground city”. The company joined hands with Microsoft Xbox and cooperated with my world developers mojangstudios, rawthrillers and playmechanix to jointly launch the first “my world underground arcade” card game in January 2022. At present, there are the first batch of cooperative stores in Guangzhou, Shanghai, Shenzhen and other regions. Different from the previous stand-alone card game, this game can have up to four players fighting online. It is a cooperative family game. The fast-paced game playing method launched by the new IP and 60 exclusive cards that can be collected are expected to bring performance increment.
Profit forecast and valuation. The company is still optimistic about the broad space of the company’s animation IP derivatives business and the company’s core competitiveness for a long time. However, in view of the impact of the epidemic on offline consumption, the company’s profit forecast is lowered. It is estimated that the net profit attributable to the parent company will be 52 million yuan / 103 million yuan / 137 million yuan from 2021 to 2023, with a corresponding growth rate of 12.7% / 98.6% / 33.1%. The current share price corresponds to 41 times PE in 2022, maintaining the “buy” rating.
Risk warning: the impact of the epidemic exceeds expectations, the risk of tightening policies, and the risk that the upstream copyright party cannot renew the contract.
