Perfect World Co.Ltd(002624) (002624)
Investment logic
Deep cultivation of engine technology and outstanding R & D strength: 1) the company has set up a number of game project teams to be responsible for different themes and types of game projects; 2) The company focuses on game research and development, and has established a complete R & D division system for producers, planners, programs and art teams; 3) The company attaches importance to the game R & D capability, and the R & D investment has increased steadily. More than 30 diversified new products were released at the Perfect World Co.Ltd(002624) Game Strategy Conference in 2021; 4) Deeply ploughing UE4 technology, the picture quality is competitive. The UE4 and ue5 engines under the illusory engine are famous for their high picture expressiveness. The company has deeply cultivated UE4 technology and has developed games such as ares relic, dream new killing immortal and illusory tower through UE4. At the same time, there are game reserves developed by UE engines such as perfect Shanghai New World Co.Ltd(600628) and killing immortal 2.
Holding a number of longevity IP series, we actively create new IP such as magic tower and broaden the user group: 1) Perfect World Co.Ltd(002624) and Zhuxian core IP continue to contribute to the stable flow of water. Since its launch in 2019, Perfect World Co.Ltd(002624) mobile game has been stable at about 40 in the best-selling list of IOS games; In Q2 of 21, dreamy new immortal was stable at about 20-40. The company has the exclusive right to adapt IP games, and there are two IP reserves of Zhu Xian in the future. 2) Martial arts IP, the company has formed Jinyong martial arts IP game matrix, and the mobile game “Tianlong Babu 2” has further improved the product matrix; The cooperation with Wen Ruian is expected to strengthen the advantages of martial arts IP games. Wen Ruian’s four famous catches novels have a huge user group. 3) In terms of new IP, Xianjian Qixia has a huge world outlook, and the game is expected to attract more IP users; The company has obtained the adaptation right of China’s well-known animation IP mobile games. At present, there are 7 reserves, which is expected to expand the user circle; In the original IP, the magic tower game performs well. At present, it is stable at about 7 in the best-selling list of IOS games. According to the data disclosed by the company, the flow on the first day has exceeded 50 million, which is expected to bring new performance increment to the company.
Destocking and fine management have become the main direction of film and television business. The company has 3 stock dramas to be broadcast, 8 dramas to be broadcast or production stage, and many high-quality projects are under preparation. Sufficient reserves.
Profit forecast & Valuation
The company’s Q3 revenue has recovered significantly month on month. It is expected that the core games will still contribute to stable water flow, and the magic tower Q4 is expected to contribute to water flow increment. It is expected that the company’s net profit attributable to the parent company in 21 / 22 / 23 will be 1.2/26/27 billion yuan respectively, and the corresponding EPS will be 0.63/1.34/1.40 yuan. Using the PE relative valuation method, the company is given 20 times PE for 22 years, corresponding to the target price of 26.80 yuan, and a buy rating is given for the first coverage.
Risk statement
The online progress of the new game is less than expected; The flow of core IP games is declining; Industry policy risk; The release progress of film and television dramas was less than expected.
