Perfect World Co.Ltd(002624) (002624)
Event: on December 21, 2021, the company announced that its wholly-owned subsidiary pweb 5. An equity purchase agreement was signed with embracer. Embracer, a global R & D and distribution company, plans to purchase pweb for a consideration of US $125 million 5. Pwna and pwpb 5. 100% equity of each. The company expects that the settlement of this transaction will be completed in 2022, which will generate an investment income of RMB 380 million (before tax), and the relevant income will be recognized at the completion of the settlement.
The overseas layout is further optimized, and we are optimistic about the steady progress of globalization strategy after product focus. The company continues to optimize overseas resource allocation, refine overseas local teams, focus more on Canada and other regions with more talent advantages and policy advantages, and focus on the more advantageous stand-alone games of overseas teams and mobile games with more potential in overseas markets. The two subsidiaries pwna and pwpb sold this time 5. Its main business is the R & D and distribution of PC and console games in Europe and America. Pwna owns products such as “night without winter”, “Star Trek” and “light of the torch”. In 2020, the net profit attributable to the parent company was 73 million yuan, and the unaudited net loss attributable to the parent company in the first three quarters of 2021 was 108 million yuan, It was mainly due to the closure of some game projects that did not perform as expected, resulting in a total operating loss of about 210 million yuan. We believe that after the completion of product focus, the overseas development path of the company has been gradually clarified, and the efficiency of resource allocation is expected to be improved. We are optimistic that the company’s overseas business will continue to focus on the two dimensions of “Chinese products going to sea + overseas localization development”.
Magic tower has broad prospects for going to sea and long-term operation can be expected. The company opened the world mobile game “magic tower” for pre download on December 14, 2021, and occupied the top of the free list of IOS games for five consecutive days on December 19. On the day of the public beta on December 16, it won the main recommendation of Appstore, and jumped to the third place in the best-selling list of IOS games the next day. According to the data disclosed by the company, the flow exceeded 50 million on the first day, We expect that in the next 1-2 years, “MMO + open world + secondary element” track will hardly have competitive products, and the products are expected to enjoy the track dividend. At the same time, the overseas market of waste soil light science fiction theme is broad, and we are optimistic about the overseas market performance of the products. From the public beta situation, we believe that magic tower has excellent quality, strong game explorability and restrained payment settings, and is expected to achieve dau breakthrough in MMO category. With the commercialization of limited weapons and other open, we believe that dau breakthrough + strong user stickiness will continue to increase the flow of water, and we are optimistic about the long-term contribution of products to performance increment.
Category breakthroughs have been continuously promoted, and there are rich reserves of younger and innovative categories. The company has abundant new tour reserves, covering MMO, ARPG, Biyuan, card and other tracks, Among them, Perfect World Co.Ltd(002624) : the battle of the gods (2021m10 second test), one punch Superman: the world (2021m11 first test), Tianlong Babu 2, black cat anecdote society and million King Arthur will be launched one after another. We are optimistic that the new products will be launched online and release performance increment. We think that the picture quality and playing method of magic tower have been greatly improved after four tests, and the middle office department and Publicity Department of the company are in the market The experience accumulated in the R & D process of magic tower and the mode of players’ joint research can be reused in subsequent projects, which is expected to improve the R & D success rate of subsequent projects.
Profit forecast and investment rating: considering the excellent performance and long-term operation potential of magic tower and the investment income brought by overseas business adjustment, we raised the profit forecast for 2022-2023, It is estimated that the EPS from 2021 to 2023 will be 0.70/1.46/1.68 yuan respectively (previously 0.70/1.17/1.40 yuan), corresponding to the current share price PE of 30 / 14 / 12x respectively. We continue to be optimistic about the company’s high-quality, diversified and young strategic practice and maintain the “buy” rating.
Risk tip: Xinyou online delay risk, industry supervision risk and systemic risk.
