Industry core view:
Last week, the media industry (Shenwan) fell 4.14%, ranking 12th in the market, outperforming Shanghai and Shenzhen 300. The conflict between Russia and Ukraine continues to deepen, and the Russian Internet field is deeply affected. We believe that with the deepening of financial sanctions imposed on Russia by the United States and the European Union, many Chinese game companies will also be affected, especially mobile game companies. According to IDC data, the annual revenue of Chinese manufacturers in the Russian market is about 3-4 billion yuan. Under the background of the regulation, with the closure of the payment system, users can not recharge the game, Chinese mobile games operating in Russia will also suffer certain economic losses.
Game: 1) data AI announced the top 30 list of Chinese game manufacturers and application revenue at sea in February 2022, with MIHA tour at the top of the list. The ranking of the top three remained unchanged, and Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) rose by 1 place. 2) Sensortower released the global revenue ranking of Chinese mobile game publishers in February 2022, and Tencent ranked first. In February, it attracted nearly US $2 billion in total, accounting for nearly 37.9% of the revenue of the world’s top 100 mobile game publishers. 3) Steam2021 review: player consumption increased by 27% year-on-year, and the overseas income of Chinese developers increased by three times. In 2021, the total game time of players on steam platform reached 38 billion hours, with a year-on-year increase of 21%; The consumption amount of players increased by 27% year-on-year, and steam welcomes 2.6 million players who buy games for the first time every month. In terms of VR games, the growth rate of new VR users in 2021 was 11%. 4) The conflict between Russia and Ukraine continues to deepen, and the Russian Internet field is deeply affected. Activision Blizzard announced on its official website that it had stopped all game sales and in-game micro transactions in Russia. Epic also recently tweeted that it had stopped selling its own games in Russia, but did not restrict Russia’s right to access accounts. As of March 7, manufacturers including EA, cdpr, Microsoft, Ubisoft, untiy, Activision Blizzard and epic have successively announced that they will not sell relevant games and services in Russia. For the network service market, on March 10, Google announced that it would suspend the payment of Google play users in Russia. At the same time, multinational payment systems such as MasterCard and visa also suspended their operation in Russia on March 10. At present, apple, Google, Samsung and other payment systems are no longer available in Russia. 5) World of Warcraft enters the mobile game market and will be launched in May. Blizzard will release the new expansion of hearthstone legend on March 15, open E-sports on March 18, release the new expansion of world of Warcraft on April 19, and finally release the new mobile game works of Warcraft in May. 6) NFT game maker immutable raised $200 million, and Tencent launched NFT games for the first time. On March 8, immutable, an Australian NFT company, completed a round C financing of US $200 million led by Singapore Temasek and invested by Tencent.
Investment suggestion: comply with the strict regulatory environment of the policy, promote industrial reform, and grasp the innovation needs brought by the post epidemic era and Z era. 1) Game: the epidemic dividend has faded. It is suggested to pay attention to the individual stocks in the product line that are developed for the new generation of users, have well-known IP, have high expectations and good test feedback; At the same time, driven by the concept of “meta universe”, it is expected that the ecological construction of VR content will become the focus of the market in 2022; 2) Film and television cinemas: focus on leading cinemas and individual stocks; 3) Film and television series: diversified theatres and mini dramas will be the focus of the development of the video industry. It is suggested to pay attention to individual stocks with strong content IP commercialization ability; 4) Advertising marketing: focus on individual stocks of ladder media.
Risk factors: stricter regulatory policies, delayed launch and less than expected performance of Xinyou, increased risk of overseas business, repeated epidemic risk and goodwill impairment risk.
