\u3000\u3 Shengda Resources Co.Ltd(000603) 258 Hangzhou Electronic Soul Network Technology Co.Ltd(603258) )
Event overview
On March 31, the company released its annual report for 2021. During the reporting period, the company realized an operating revenue of 996 million yuan, a year-on-year decrease of 2.70%; The net profit was 357 million yuan, a year-on-year decrease of 13.27%; The net profit attributable to the shareholders of the listed company was 339 million yuan, a year-on-year decrease of 14.19%, and the net profit attributable to the parent company after deduction was 281 million yuan, a year-on-year decrease of 13.7%; In 2021, the accumulated repurchase amount of the company reached 100 million yuan, and it is planned to distribute a cash dividend of 8.25 yuan for every 10 shares to all shareholders.
Overseas business growth is bright, and the subsidiary mobile network has the first mover advantage.
In 2021, the growth rate of the company's revenue and net profit was under pressure, mainly due to the slowdown of industry growth and the high base of last year. The company has actively expanded overseas markets. Previously, it has invested and established subsidiaries in Singapore and Japan. The existing reserves Qiling notes and silentmist are focused on the international market. During the reporting period, the overseas business revenue increased by 40.36% year-on-year, which will become an important growth driver. The subsidiary mobile network entered overseas in 2017, and its products have repeatedly entered the top 20 of Google Apple's double list in Hong Kong, Macao, Taiwan, Japan, Vietnam, Indonesia and other regions. The follow-up "dream Three Kingdoms 2" E-sports competition is expected to reproduce its successful experience.
The core end Tour "dream of Three Kingdoms 2" entered Asia, and the national wind power competition system was upgraded again
The operation cycle of the company's core game IP "dream Three Kingdoms" has exceeded ten years. During the reporting period, the revenue of the end game "dream Three Kingdoms 2" exceeded 500 million yuan, accounting for 55% of the revenue. It has formed the first domestic E-sports league system and has been successfully selected into the e-sports events of the Hangzhou Asian Games, which is expected to further expand its influence at home and abroad. Taking advantage of the opportunity of "dream of Three Kingdoms 2" entering Asia, the company launched digital collections with the same theme, upgraded the national wind power competition system, became the chief partner with jd.com, invested in 7 E-sports enterprises with the help of incubators, expanded market space around the upstream and downstream links of the industrial chain such as event home, E-sports venues and event IP, and made efforts in the fields of talent training, brand cooperation and online and offline tourism.
Self research investment improves the product end, and the incubator expands the extension of the ecological chain.
The company's main self-developed products, such as "dream of Three Kingdoms" end game and mobile game and "my Xiake", have a steady flow, rich reserve games, optimized cost structure and increased self-research investment. During the reporting period, the sales expenses decreased by 26.29% year-on-year, and the R & D expenses increased by 26.77% year-on-year. The distributed server architecture technology, engine technology and RTS synchronization technology have reached the leading level in China; In 2021, its intelligent creativity incubator was rated as a provincial science and technology business incubator. It mainly invests in the fields of e-sports, games and intelligent creativity. Now it has attracted upstream and downstream enterprises in the industry to incubate, and will further improve the company's business ecology in cooperation with the main outside industry.
Investment suggestion: maintain the "overweight" rating
According to the annual report data, we adjusted the company's revenue from 1.186/13.36 / (unpredicted) billion yuan to 1.164/13.341476 billion yuan in 20222024, adjusted the company's net profit attributable to the parent company from 4.28/4.82 / (unpredicted) million yuan to 4.16/4.85/545 million yuan in 20222024, and adjusted the corresponding EPS from 1.73/1.95 / (unpredicted) yuan to 1.69/1.97/2.21 yuan, corresponding to the closing price of 25.96 yuan / share on April 8, 2022. PE was 15, 13 and 12 times respectively, Maintain the "overweight" rating.
Risk tips
The performance contribution of Xinyou is less than the expected risk; Industry regulatory risks; Risk of cancellation of preferential tax policies.
