\u3000\u3 Shengda Resources Co.Ltd(000603) 444 G-Bits Network Technology(Xiamen)Co.Ltd(603444) )
Event: G-Bits Network Technology(Xiamen)Co.Ltd(603444) released the financial report for 2021. During the reporting period, the company achieved a total operating revenue of 4.619 billion, a year-on-year increase of 68.44%, a net profit attributable to the parent of 1.469 billion, a year-on-year increase of 40.34%, a net profit attributable to the parent after deduction of 1.226 billion, a year-on-year increase of 36.24%. In the fourth quarter, the company achieved a total operating revenue of 1.134 billion, a year-on-year increase of 63 million, a year-on-year increase of 4.48%, and a net profit attributable to the parent of 223 million, a year-on-year increase of 13.59%. In 2021, the net operating cash flow was 2.418 billion, with a year-on-year increase of 57.75%, which exceeded the net profit attributable to the parent company.
In 2021, the company expects the profit distribution amount to be 1.15 billion yuan, accounting for 78.3% of the annual net profit attributable to the parent company, and the dividend rate will reach 4.4% based on the current market value.
Comments:
The revenue increased significantly year-on-year, and Yinian Xiaoyao performed well. In February 2021, the company launched the self-developed mobile game “Yinian Xiaoyao” with the theme of Xiuxian placement, deeply explored the needs of users in the field of Xiuxian theme, combined with various promotion modes such as high-frequency content second innovation + IP linkage + community operation + channel purchase, and remained at the top 50 of IOS best-selling list after going online. It is one of the most successful popular mobile game products in 2021, and has more than 10 million registered users in China. “Yinian Xiaoyao” is another product that continues to contribute to high water after G-Bits Network Technology(Xiamen)Co.Ltd(603444) that is, the series of “asking questions”, which reflects G-Bits Network Technology(Xiamen)Co.Ltd(603444) strong user demand mining and long-term operation and maintenance ability of popular products, and promotes the company’s revenue to a new level. In 2021, the annual revenue reached 4.619 billion yuan, an increase of 68.44% year-on-year.
Moore Manor further verified the company’s strong distribution ability. The company’s agent product “Moore Manor” was launched in June 2021, with 30 million new users in the first month. Through brand publicity, community operation and other modes, it quickly broke the circle of Pan users, and the product ranked second in the best-selling list of IOS. The “thunder” brand of G-Bits Network Technology(Xiamen)Co.Ltd(603444) its brand has high recognition among players through long-term word-of-mouth operation and maintenance.
The substantial increase in the rate of sales expenses was caused by the increase in purchase volume and expenditure. In 2021, the company’s sales expense ratio reached 27.57%, a significant increase of 16.66 percentage points over 2020. The annual sales expense was 1.274 billion, a year-on-year increase of 326.1%. The significant increase was mainly due to the increase in the purchase expenditure of products such as “Yinian Xiaoyao”. As a product with higher arppu, Yinian Xiaoyao is suitable for the purchase mode. Compared with the products previously operated by the company in favor of brand, it also reflects the company’s in-process products Ability to switch between effective distribution modes. In addition, the management expense rate and R & D expense rate are relatively stable, basically synchronized with the growth of revenue.
Operating net cash flow increased significantly, and deferred income (contract liability account) doubled year-on-year. In 2021, the company’s annual operating net cash flow was 2.418 billion, with a year-on-year increase of 57.73%, indicating that the company’s cash earning ability was further improved. In terms of deferred income, it reached 585 million at the end of 2021, with a year-on-year increase of 109.7%, indicating that the company’s water flow is in a continuous growth trend.
Future product reserve: at present, the company’s agent products with version numbers include Obi Island: dream country, dawn elite, Hualuo Chang’an, lost territory, projectg (code) and ancient treasure. Those who have not obtained version numbers include shopheroes legends, projects (code), Fengshen fantasy world and rhythm track There are 5 models of Shendu kitchen king, with a total of 11 products; Self research projects include M66, SLG, etc. Among them, “Obi Island: dream country” is a page tour launched in 2008. Since its operation, the cumulative number of registered users has reached 300 million. It is another social cultivation game with a large IP user group represented by the company after “Moore Manor”. The developer is Baiao family interaction (2100. HK).
Profit forecast and Valuation: considering the delay in the issuance of game version numbers, the launch of the company’s products is expected to be delayed. We appropriately lowered the company’s performance forecast from 2022 to 2023. It is estimated that the company’s revenue from 2022 to 2023 will be 5.266 billion (original 5.598 billion) and 6.181 billion (original 6.463 billion), with a year-on-year increase of 14% and 17%, and the net profit attributable to the parent company will be 1.445 billion (original 1.742 billion) and 1.746 billion (original 2.071 billion), with a year-on-year increase of -2% and 21%. The current market value corresponds to 18x and 15x PE in 2022 and 2023. Continue to recommend key attention and maintain the “buy” rating.
Risk tips: 1) stricter version number supervision policy; 2) The online time of the game is not up to expectations; 3) The risk that the information and data used in the research report are not updated in time.
