\u3000\u3 China Vanke Co.Ltd(000002) 605 Shanghai Yaoji Technology Co.Ltd(002605) )
The company entered the star card market and invested in card trading & issuing platform cardhobby, with a shareholding ratio of about 38% Shanghai Yaoji Technology Co.Ltd(002605) takes advantage of its main business advantages and will conduct in-depth cooperation with cardhobby in card production, R & D and channel marketing. In the next five years, the investment and exploration of the card industry will become one of the key development directions of the company, and the field of China’s sports IP collection card is also expected to make a big step forward.
2022 is the year of sports, with abundant sports events, solid mass base and strong policy support. 2022 is rich in sports events, including the Winter Olympic Games in February, the Paralympic Games in March, the Hangzhou Asian Games in September and the Qatar world cup in November. The national sports fitness mood is rising and the demand for sports consumption is increasing. At the level of regulation and Internet publicity, the sports industry is the core support direction of the policy in 2022. The Chinese government has successively issued a number of policies to support the development of the sports industry, such as the guiding opinions on accelerating the development of the fitness and leisure industry and the national fitness plan (20212025). Under the leadership of the central government, local governments will also formulate supporting policies in combination with the characteristics of the local sports industry, such as the sports development plan of Heilongjiang Province in the 14th five year plan. China sports has a large number of users and a large group of Chinese fans. The core of the company’s choice of star card as the entry point is that there will be an outbreak in the Chinese market in the next 3-5 years. As a derivative of sports industry, star card has great development potential and high investment and collection value. It is the main way to realize sports IP.
The company has a solid main business and continues to vigorously develop games, advertising, short video marketing and other businesses. The company released the annual performance forecast for 2021 on January 19. It is expected to realize the net profit attributable to the parent company of 540 ~ 600 million yuan, a year-on-year decrease of 45% ~ 51%, and the net profit attributable to the parent company after deduction of non-profit reached 490 ~ 550 million yuan, a year-on-year decrease of 3% ~ 13%. Among them: (1) poker business: the sales volume ranks first in the world, and the market share in China is about 25%. We expect the poker profit to be about 100 million yuan in 2021, and it is expected to maintain a compound growth rate of about 10% in the future. (2) Game: China fishing track is one of the top teams in China. The overseas bingo subdivision category has won the second place in the world. The company’s Yaoji fishing 3D game has been launched at the end of 2021. In the future, the game will make breakthroughs in the subdivision category, such as using 3D technology to complete the collection of chess and card games such as landlords’ mahjong. (3) Advertising side: Luming technology company acquired by the company promises to achieve net profits of no less than 35 million / 40 million / 45 million respectively in 21-23 years. In the future, it will continue to invest in Internet marketing. China covers core customers through short videos and obtains market share in the field of overseas tiktok commercialization.
On March 17, the company announced that the board of directors reviewed and approved the adjustment of the scheme for issuing convertible bonds. After the adjustment, the total amount of funds raised by the company for issuing convertible bonds shall not exceed RMB 583 million, and the number of issued bonds shall not exceed 5831273 million. After deducting the issuance expenses, it is mainly used for the construction project of the production base with an annual output of 600 million poker cards, and the supplementary working capital project and its raised investment amount of 240 million are deleted.
Investment suggestion: in the future, we are optimistic about the two new growth curves of the company’s star card + short video marketing. The traditional business of game + poker is growing steadily. The future market space of China’s star card is huge. According to the unanimous expectation of wind, the current net profit in 21-23 years is 587 / 748 / 899 million yuan, and the corresponding valuation is 13X / 11x / 9x. It is recommended to pay close attention.
Risk factors: policy supervision risk of card industry; The development of marketing business is less than expected; Team management is less than expected.
