Industry core view:
Media industry last week (Shen Wan) fell 0.24%, ranking 15th in the market, outperforming Shanghai and Shenzhen 300. Mango TV announced a member price increase immediately after iqiyi. We think this measure can effectively stimulate a new round of member renewal in a short term and improve its financial situation. Due to the formation of consumer consumption habits, long video enterprises have the initiative and pricing power at the present stage, with a platform led meeting Although member price increase will not lead to the loss of a large number of users, it needs to be considered to improve user acceptance by increasing member rights and interests and improving output level. Otherwise, blindly raising prices is likely to be counterproductive. Perfect World Co.Ltd(002624) adjust the overseas layout by transferring the shares of overseas game companies in a loss state. In the future, we will focus on the two dimensions of “Chinese products going to sea + overseas localization development”, so as to realize “global production, global distribution and global partners” and create high-quality game products for the global market.
Key investment points:
Games: 1) sensortower released a report on the medium and heavy mobile game market in 2021. Q3’s revenue reached US $13 billion, and adventure became the most attractive game theme. In the first three quarters of 2021, the global medium and heavy mobile games contributed more than 60% of the in app purchase revenue of the whole mobile game market. In Q3 of 2021, the total revenue of global medium and heavy mobile games has reached US $13 billion. Due to the global success of MIHA tour original God, the revenue of adventure mobile games reached US $8.9 billion in the same period, and anti super arena mobile games (US $8.8 billion) became the theme with the highest revenue. 2) NetEase investment in the “bubble winter scene” game developers cat days, B station shareholding ratio dropped to 16%. On December 22, Hangzhou Netease Leihuo Technology Co., Ltd., a subsidiary of Netease, added an investment in Chengdu maozhiri Network Technology Co., Ltd. 3) Perfect World Co.Ltd(002624) it is proposed to sell overseas PC distribution companies for us $125 million, and game developer embracer takes over the offer. On the evening of December 21, Perfect World Co.Ltd(002624) announced that the company’s subsidiary pweb 5. Sign the equity purchase agreement with embracer. Embracer intends to purchase pweb for a consideration of US $125 million 5. Pwna and pwpb 5. 100% equity of each. The transaction is expected to be completed in 2022, generating an investment income of RMB 380 million.
Internet applications: 1) mango TV announced a price increase for its members. On December 22, following the price increase of iqiyi members, mango TV also announced the price increase of members. The price of continuous monthly package will be increased by 1 yuan, the price of continuous quarterly package will be increased by 5 yuan, the price of continuous annual package will be increased by 10 yuan, and the price of annual card will be increased by 20 yuan. The price increase time starts from 0:00 on January 2, 2022.
Investment suggestions: 1) game field: H1 most manufacturers’ revenue declined due to the high base last year. It is suggested to pay attention to the individual stocks in the product line that are developed for new generation users, have well-known IP, high expectation and good test feedback. 2) Film and television theaters: focus on stocks with strong content IP commercialization ability. Diversified high-quality theaters may be the focus of the development of film and television drama and video industry.
Risk factors: stricter regulatory policies, delayed launch and performance of Xinyou less than expected, increased risk of overseas business, less than expected integration of State Grid, repeated epidemic risk and goodwill impairment risk
