Event:
On April 11, the State Press and Publication Administration issued a new batch of 45 domestic online game version numbers, which are the first batch of version numbers issued after the release of version numbers stopped in July 2021, mainly including thunder interactive box fission, tower hunter, Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) dream voyage, the right star of heart company, Chuang mengtiandi, beware of fire and candle, Yoozoo Interactive Co.Ltd(002174) chronicles of the Three Kingdoms: Pocket battle, friendship time, relic zero Xishanju, the origin of sword net 3, etc.
Comments:
Compared with the two suspension of game version numbers in 2018 and 2021, they forced the game industry to become high-quality and go to sea.
1) suspension of edition number distribution in March 2018 – resumption of edition number review in December 2018: the focus of this round is to restructure the order of the game industry, regulate the number of new games, and the policy guidance is to encourage high-quality games. As a result, the game industry has been largely cleared, entered the high-quality stage of paying attention to product quality, and the competition pattern of the industry is more concentrated.
2) from July 2021 to April 2022: this round focuses on implementing the protection of minors and strengthening the control of minors’ game duration (anti addiction) and content (Health). The regulatory level affirms the cultural value of high-quality games and encourages games to go to sea. During the suspension of edition number, going to sea became the standard self rescue action of Chinese small and medium-sized game manufacturers, and the overall income scale of domestic games going to sea increased rapidly.
The release of edition number is restarted, and the game sector is expected to welcome Davis double click.
1) valuation: the current valuation of the game sector is at the low level in the past 2-3 years. After the substantive suspension of the game version number in August 2021, it has been in the state of valuation repression. After the version number is restored, it is expected to start the first round of rebound and gradually repair the valuation level of the sector.
2) performance: after the release of version number is resumed, the online rhythm of new products of the game company will be accelerated, and the game industry is expected to usher in a new round of performance drive.
Investment suggestion: the head high-quality game company has rich product reserves, the release of version number is resumed, and the product expectation is further thickened. The current valuation of the game sector is cost-effective. Recommend Zhejiang Century Huatong Group Co.Ltd(002602) , Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Perfect World Co.Ltd(002624) , Xinxin company and NetEase.
Risk tip: Xinyou’s online business is less than expected, and its overseas business is less than expected.
