[ChinaLink] last week, the NASDAQ index rose 0.65%, mscichina index rose 3.41%, Hang Seng Index rose 2.97% and Hang Seng technology index rose 3.31%. The top three components of Hang Seng technology index rose: JD health (+ 19.22%), meituan-w (our key tips in last week’s weekly report, + 15.19%), Ali health (+ 9.23%); The top three declines: Baidu group – SW (- 4.79%), Xiaomi group – w (- 4.44%) and Byd Company Limited(002594) Electronics (- 3.07%).
Company:
The Kwai’s 21Q4 performance was released, earning 24 billion 430 million yuan, up 35% over the same period last year, exceeding expectations. The non GAAP net profit attributable to the parent company was -3.57 billion yuan, with a year-on-year increase of + 406.6%, and the loss was better than the market expectation. The average Mau of 21q4 is 578 million and the average dau is 323 million. The average daily use time of a single dau is 118.9 minutes.
The company released its annual performance for 21 years and achieved a revenue of 2.703 billion yuan, a year-on-year decrease of 5.09%; The net profit attributable to the parent company was -917 million yuan, falling into the profit warning loss range of 870930 million yuan, which was generally in line with the consensus expectation. Game revenue decreased by 13.77% year-on-year to 2.011 billion yuan, of which online game revenue was 1.784 billion yuan, down 16.95% year-on-year; Online game Mau decreased by 33.7% year-on-year, while MPU increased by 6.5% year-on-year; The revenue of paid Games was 204 million yuan, a year-on-year increase of 41.67%. In 21 years, the number of taptap Chinese Mau was 31.57 million, with a year-on-year increase of 22.8%; Taptap international Mau was 12.242 million, with a year-on-year increase of 154.3%.
Viewpoint:
Last week, the market continued to rise and fall under the joint action of the company’s fundamentals and external news. On Monday and Tuesday, meituan-w (3690. HK) rose 11.56% and 5.78% respectively, led by the Internet sector, stimulated by better than expected performance and guidance; Jingdong -W (9618.HK), Tencent (700.HK), Kwai Fu (1024.HK) and other stocks also have a good performance. Kwai -W was affected by the reports of live media supervision on Wednesday, and the fast hand -W showed a high and low trend, eventually falling down by -6.24%. There was a correction in the market on Thursday. There was a report of the State Administration of market supervision on “strengthening the top-level design and policy supply of the platform economy”, and later Baidu (9888. HK), futu (futu. US), iqiyi (IQ. US) and other enterprises were added to the “provisional list” (although they had long been expected), which made the market sentiment turn pessimistic again. However, on Friday night, Bloomberg reported that “China is considering giving the United States full permission to obtain the audit drafts of most listed companies in the United States”, which once again strengthened the market’s confidence in the negotiated settlement of the China stock concept problem, and the stock concept rebounded sharply on Friday night.
We believe that at present, the market is still dominated by the two main lines of “China concept stock delisting” and “Internet regulatory policy”, but the fundamental factors have begun to play a role gradually, and the stock prices of companies with stable fundamentals such as meituan and JD have begun to rebound. We are still confident in the solution of the problem of China’s share ownership, and believe that after experiencing better top-level design and policy supply, the supervision of the Internet industry will pay more attention to “paying equal attention to development vitality and order” and move towards the direction of normalization, marketization and legalization. We continue to suggest that investors return to the fundamentals of high-quality Internet enterprises and look for investment targets with definite long-term growth space, good competition pattern, continuous enhancement of profitability, undervalued or reasonable valuation.
We suggest that China’s interconnected Internet company will grasp 5 main investment opportunities this year: 1, the -W company (3690.HK) and Jingdong -W (9618.HK) 2, which have good performance and good long-term competitiveness, are expected to be restored by Kwai Tat -W (1024.HK), beep Li -W (9626.HK) 3, performance and valuation are still at the bottom, and patience to wait for the leading companies on the right side: Tencent (700.HK), Alibaba WS (9988. HK) 4 has stable performance growth and profit margin. High quality companies that are relatively cheap according to PE: Netease SW (9999. HK) and pinduoduo (PDD. US) 5. Companies with greater flexibility after the release of game version number: heart company (2400. HK) and bilibili-w.
[A shares] last week, the media sector index rose 4.97%, the Shanghai Composite Index rose 2.19%, the Shenzhen Component Index rose 1.29%, and the gem index rose 1.10%. The top three gainers in the sector: Fuchun Technology Co.Ltd(300299) (+ 23.18%), Visual China Group Co.Ltd(000681) (+ 17.47%), Shunya International Martech (Beijing) Co.Ltd(300612) (+ 16.04%); The top three declines in the sector: Guangzhou Wahlap Technology Corporation Limited(301011) (- 3.07%), Hangzhou Anysoft Information Technology Co.Ltd(300571) (- 2.74%), Shuhua Sports Co.Ltd(605299) (- 0.88%). Our weekly report last week suggested that gold stocks Three’S Company Media Group Co.Ltd(605168) (+ 7.66%) and NFT target Visual China Group Co.Ltd(000681) (+ 17.47%) rose higher in April, as well as game sectors Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) (+ 11.31%) and G-Bits Network Technology(Xiamen)Co.Ltd(603444) (+ 10.59%).
[game] we commented on February 22, March 16 and the key tips of the recent weekly report. We believe that there is no need to over interpret the impact of policy regulation. If the subsequent version numbers are released, some companies are expected to achieve 10 ~ 20% performance flexibility. Especially after the version numbers are restored, the industry valuation flexibility is expected to increase from 15x target valuation to 20x. After the bottom of Internet policy is built, the leading Tencent has returned to the 21x valuation position in 22 years, If considering the flexibility of game version number, give priority to [Panax notoginseng, perfection, heart, G-Bits Network Technology(Xiamen)Co.Ltd(603444) ]. The industry focuses on Tencent (one of the highlights of 21q4 game going to sea); Netease (Harry Potter goes online overseas and pays attention to Diablo) Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) (the performance in 21 years was in line with the expectation, and the performance of Xinyou at sea in February 22 was brilliant. Douluo continent: duel between soul masters entered the payback period) G-Bits Network Technology(Xiamen)Co.Ltd(603444) (I read carefree and asked 22q1 performed brilliantly, acting as the online agent of OBI Island: dreamland for 22 years) Zhejiang Century Huatong Group Co.Ltd(002602) (“counting East and counting West” starts catalytic IDC, and game distribution cooperates with Tencent) Wuxi Boton Technology Co.Ltd(300031) (Industrial Internet, smart mine and other business flexibility, pay attention to the implementation of self-developed final front) Perfect World Co.Ltd(002624) (the new version of magic tower linked with spirit cage and launched overseas in 22 years); Xinxin company (flashparty’s overseas release performance is brilliant, and T3 22q1’s overseas launch is expected; Shanghai Yaoji Technology Co.Ltd(002605) (Yaoji fishing 3D’s new tour was launched in December 21, and the star card track has become a new growth point); Baiao family interaction (Obi Island: dreamland launched in 22 years), etc.
[sports] since January, we have clearly pointed out the theme opportunities of the sports sector. In the near future, according to the order of performance disclosure, the performance of [Tebu, Li Ning, Anta and 361 degrees] has exceeded the market expectations. On March 22, Shanghai Securities News China Sports Industry Group Co.Ltd(600158) successively won the bid for stadiums and Gymnasiums in Tianjin, Yantai, Liyang and Xinyi. As a franchise service provider during the 2022 Winter Olympic Games and winter Paralympic Games in Beijing, China Sports Industry Group Co.Ltd(600158) undertook the following tasks, including Beijing Winter Olympic Village / winter Paralympic Village Olympic family hotel, national speed skating hall, Wukesong Sports Center, capital stadium and Shougang ski jump platform.
Recently [ China Sports Industry Group Co.Ltd(600158) , Shuhua Sports Co.Ltd(605299) ] also had good stock price performance. It is also suggested that [bubble Mart] with a market value of less than 50 billion is at a low valuation, the leading performance in the period of industry integration is stable, and attention is paid to the long-term layout. Hong Kong consumer stocks rose 6.21% last week.
[NFT] in March 14th, Singapore’s finance minister announced the NFT tax. In March 30th, Tencent WeChat responded that according to relevant laws and regulations, the public platform of WeChat recently standardized the official account and the small program of the two digital collection, in order to prevent the risk of speculation in virtual currency transactions. In March, the popularity of overseas NFT market decreased, but the trading volume remained at a high level. The monthly trading volume of opensea platform was US $2.049 billion (mom-33.5%), and the trading volume was 1.9335 million times (mom-17.9%); The monthly trading volume of looksrare platform is 314 million US dollars (mom-83.4%), and the trading volume is 39000 times (mom-36.6%). At the same time, in March, the sales of Chinese digital collection platforms whale exploration and meta vision increased significantly, with a month on month increase of 110.68% and 239.3% respectively. It is suggested to pay attention to [ Three’S Company Media Group Co.Ltd(605168) ] (we released the first coverage report on March 20, and the key tips of gold stocks in April, focusing on the catalysis of Q1 performance in the short term and the certainty of serving the performance of state-owned enterprises in the long term), [ Visual China Group Co.Ltd(000681) ] (pay attention to the recent launch of NFT overseas platform), etc.
[industrial Internet] Wuxi Boton Technology Co.Ltd(300031) (game version number flexibility, industrial Internet Catalysis). [counting from the east to the West] Zhejiang Century Huatong Group Co.Ltd(002602) (the mobile Tour “Celebrating the past years” was launched on March 25). [growth value] Focus Media Information Technology Co.Ltd(002027) (22q1 has performance pressure but is optimistic about the long term).
