On April 11, following the suspension of the issuance of the game version in July 2021, the domestic game version was restarted after an interval of 8 months. A total of 45 game titles were released on the official website of the state publication administration, including: Party star of Xinxin company, Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) dream voyage, sword net 3: origin, friendship time, relic No. 0, Yoozoo Interactive Co.Ltd(002174) chronicles of the Three Kingdoms: Pocket battle, Lilith’s life party, dream world, beware of fire and candle, Kingnet Network Co.Ltd(002517) legend of dragon G-Bits Network Technology(Xiamen)Co.Ltd(603444) subsidiary thunder network “tower Hunter”, “box fission”, etc.
Suggested game companies
Heart company: the release of the version number accelerates the launch of the company’s new tour, which is beneficial to the growth and Realization of taptap platform users. The company’s performance is highly flexible. The two self-developed Games “flashparty” and “T3” will enter the commercialization stage in H1 2022. Among them, “flashparty” has been released in Japan in February, and the free ranking remains high; T3 is planned to be launched in the European and American markets in May. The version number issued this time includes the Chinese version of “flashparty” and “party star”. The distribution of the version number will speed up the online process of the company’s self-developed games in China, so as to gradually contribute to the increment of performance. In addition, the release of the version number will also form a significant positive impact on the taptap platform. The increase in the number of new games will rapidly improve user activity and game advertising.
BiliBili: China’s leading Z generation game distribution channel, and the game business is expected to be repaired. The core users of BiliBili platform have a strong consumption tendency in mobile games. The company has operated more secondary or pan secondary games as an agent. The resumption of normal distribution of edition numbers will restore the growth of operating revenue of Bili as a channel. At the same time, the company is making efforts to develop its own games. In the future, the company’s game business will focus on the strategy of high-quality self-development and global distribution.
Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) : strong strength in self research and issuance, and continuous development of overseas markets. The company ranks first among A-share game companies in terms of its strength in sea going business. According to sensortower data, Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) ranks among the top 5 in the revenue of Chinese sea going game manufacturers for a long time. The sea business is less affected by the game version number, and the performance safety pad is better. The release of the edition number will increase the performance ceiling in 2022. The popular self-developed game Douluo mainland: duel of soul masters launched last August continues to perform well. According to the data of Qimai, it currently ranks No. 40-50 in the best-selling list of IOS games.
G-Bits Network Technology(Xiamen)Co.Ltd(603444) : strong long-term operation ability and rich reserves of proxy games. “Aoniandao” and “aoniandao” have made 5 million reservations, including “aoniandao” and “aoniandao”. The reissue of version number will accelerate the online rhythm of agent products.
Perfect World Co.Ltd(002624) : magic tower has entered the payback period, and the theme of new products is more extensive. Due to the product cycle, the Q1 performance base in 2021 is low. After the launch of magic tower at the end of 2021, the performance will be released gradually. It is expected that the Q1 performance growth in 2022 will be good. In 2022, the company has rich product reserves, and there are many IP products to be launched, such as “one punch Superman world”, “Tianlong Babu 2”, “million King Arthur”, and women’s game “black cat anecdote society”.
Investment advice
The valuation of the game industry has been at a historical low since the release of the version number was stopped in July last year. The release of the version number is expected to bring “Davis double click”, that is, improve the performance and valuation expectations at the same time. We suggest to pay attention to game companies with strong self-development, distribution ability and vertical user channel advantages: Netease, Tencent, Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Perfect World Co.Ltd(002624) , heart company, BiliBili. The release of the version number will focus on the subject of good profit and great performance flexibility: heart company.
Major risks
Macroeconomic downturn; Weak content consumption; Supervision exceeds expectations; The game didn’t perform as expected.
