\u3000\u3 Shengda Resources Co.Ltd(000603) 444 G-Bits Network Technology(Xiamen)Co.Ltd(603444) )
Key investment points:
Event: the company disclosed in its 2021 annual report: the annual revenue was 4.619 billion yuan, a year-on-year increase of 68.44%; The net profit attributable to the parent company was 1.468 billion yuan, with a year-on-year growth rate of 40.34%, and the year-on-year growth rate after deducting the net profit not attributable to the parent company was 36.24%; The net cash flows from operating activities in 2021 and Q4 were 2.418 billion yuan and 687 million yuan respectively, both higher than the profit level of the current period. The company plans to distribute cash dividends of 160.00 yuan (including tax) for every 10 shares, with a dividend rate of 78.30% and a dividend rate of 4.28% (calculated according to the closing price on April 7), further highlighting the investment value of the company.
The flow of core products has increased steadily, providing a guarantee for the revenue in 2022. The main reason for the growth of the company’s revenue is the simultaneous development of new and old products. Among them, Yinian Xiaoyao (mainland version) contributed the main increment, and the revenue and profit of “asking questions” and “asking questions hand tour” increased slightly year-on-year. Moore Manor / underground castle 3: Poetry of the soul / story of the world’s catapult / Yinian Xiaoyao (Hong Kong, Macao and Taiwan version) and other products are affected by the investment and production allocation of props amortization, R & D sharing, early promotion and so on. At present, the accounting profit has not been recognized. With the early issuance and purchase investment, the new products launched last year are expected to gradually recover profits in 2022. By the end of 2021, the company’s unamortized balance of recharge and props was 726 million yuan, an increase of 404 million yuan over the end of the previous year, including 307 million yuan of consumable props and recharge balance and 97 million yuan of permanent props. It is expected to gradually recognize revenue in the future.
The launch of new products has reduced the overall profit margin and increased the sales expense rate. As the R & D expenses are amortized in the current period, the profit margin of previous years is high, which is dominated by the long life cycle products of “asking questions”. However, new products such as Yinian Xiaoyao (mainland version) have large early-stage marketing and promotion expenses, and the overall profit margin of the products is low. The sales expense rate in 2021 is 27.57%, an increase of 16.66pct compared with 2020. At the same time, with the tightening of the Chinese version number, the company increased its investment in going to sea. The early-stage investment of Yinian Xiaoyao (Hong Kong, Macao and Taiwan version), which was launched in October 2021, reached 38.69% in 2021q4, with a year-on-year and month on month increase of 25.68pct and 12.78pct respectively. We believe that as the new products enter the flow recovery period, the overall sales expense rate will tend to be stable.
Rich product reserves, and more attention will be paid to global project approval in the future. At present, the company reserves 6 products with version numbers, among which “Obi Island: dream country” is a classic page tour IP Product of big dau. At present, the reservation volume of users on the whole platform has reached 5 million; 5 products without version number, including traditional advantageous themes such as simulated operation, rouglike and national style theme RPG. The company has actively expanded its overseas business and started from transplanting mature online products in China. It has initially opened the overseas market and will pay more attention to global project approval in the future. During the reporting period, the eight wastes of ghost Valley (PC version) / Yinian Xiaoyao (Hong Kong, Macao and Taiwan version) have been successfully launched overseas, and a number of overseas products such as Yinian Xiaoyao / underground castle 3 / wonderful combatant / Kingdom inheritance have been reserved.
Investment advice and profit forecast: we believe that the company adheres to the accumulation of “differentiation” (excellent quality) and “commercialization” (recognized by players) on the road of playing games, and the company’s high-quality and differentiated R & D strength has been verified by asking for mobile games / Yinian Xiaoyao, etc. It is estimated that the company’s revenue in 2022 / 2023 / 2024 will be 5.266 billion yuan / 6.003 billion yuan / 6.723 billion yuan respectively, the net profit attributable to the parent company will be 1.705 billion yuan / 1.935 billion yuan / 2.156 billion yuan respectively, the EPS will be 23.73 yuan / 26.92 yuan / 30.00 yuan respectively, and the corresponding PE will be 15.74 times / 13.88 times / 12.45 times. Based on 2022, the company will be given 18-21 times PE, with the corresponding price range of 427.14 yuan – 498.33 yuan. Maintain a “recommended” rating.
Risk warning: stricter policy supervision; Product launch delay; The current performance was less than expected.
