\u3000\u3 China Vanke Co.Ltd(000002) 602 Zhejiang Century Huatong Group Co.Ltd(002602) )
Event:
According to the top 30 list of revenue of Chinese mobile game publishers in February 2022 released by sensortower, centurygames, a wholly-owned subsidiary of Zhejiang Century Huatong Group Co.Ltd(002602) became the only new manufacturer on the list, ranking 20th on the list.
Comments:
The strength of Diandian interactive self-study continued to improve, and the themes and categories were further expanded Diandian interactive, a wholly-owned subsidiary of Zhejiang Century Huatong Group Co.Ltd(002602) , is one of the first batch of game manufacturers to go to sea in China. It has occupied the top position of the category for a long time since it started its business simulation category “familyfarm” in 2011; In 2016 and 2017, he successfully represented SLG’s “king of Avalon” and “era of muskets”. So far, these two products are still the head products of SLG at sea. Since 2018, Diandian interactive has tried to broaden themes and categories, focusing on breaking through mild leisure games, such as business, game, placement, puzzle, etc., and medium and heavy games, such as SLG, RPG, etc. In 2021, livetopia (simulated RPG), familyfarmadventure (simulated operation + plot adventure), bingoaloha bingogamesstore (game category), mafiaworld: bloodywar (SLG + RPG) and valor Legends (card placement) were launched, which verified that Diandian interaction has the strength of cross theme and multi category research and development.
Family farm adventure shows the characteristics of long-term cycle, and valor legends has entered the channel of rapid growth. Family farm adventure has performed well since it was launched in April 2021, and has become the highest monthly revenue simulated mobile tour to sea (according to sensortower, the revenue in September 2021 was US $6 million, the revenue in October 2021 was US $10.7 million, and the revenue in February 2022 was US $7 million). Familyfarmadventure is a new work of “familyfarm” IP series, which has been in operation for more than 10 years and has a user base of more than 200 million. Based on multi-dimensional factors such as IP influence, user base, game category characteristics and long-term operation strategy, familyfarmadventure is expected to become another long-term main product. Valorlegend was launched in September 2021. With the increase of promotion efforts, it has entered the fast rising channel. According to sensortower, its IOS revenue reached the order of millions in February 2022. According to the product life cycle, valorlegend has not touched the ceiling, and its revenue is expected to rise further. Driven by “familyfarmadventure” and “valor Legends”, Diandian interactive airborne ranked 20th in the revenue of Chinese mobile game publishers in February, and its top three markets are the United States, Japan and Germany, accounting for 39.6%, 7.4% and 7.2% respectively.
Investment suggestion: maintain the “Buy-A” rating. Diandian interactive has self-research strength across multiple themes and categories and a global distribution network, which is expected to continue to increase the company’s sea revenue and profit. It is estimated that the operating revenue of the company from 2021 to 2023 will be 137.8/209.5/25.56 billion, the net profit attributable to the parent company will be 31.1/40.2/5.13 billion, and the corresponding EPS will be 0.42/0.54/0.69 yuan. Considering the valuation premium of the company’s A-share game leader, the corresponding 202218xpe valuation is given, corresponding to the 6-month target price of 9.72 yuan.
Risk warning: the performance of new products does not meet the expected risk; Game supervision is stronger than expected, resulting in the suspension of game launch or the suppression of sector valuation; The cooperative settlement of legendary copyright issues is slower than expected; Goodwill impairment risk.
