Events
On the evening of April 12, the State Press and Publication Administration announced the approval information of domestic online games in April 2022, and a total of 45 domestic games obtained version numbers.
Key investment points
After eight months of suspension, China's game edition was approved for the first time this year, and the wind direction of industry policy is getting warmer. Following the suspension of the issuance of new domestic online game version numbers after July 2021 and the formal implementation of the minor game time limit policy on September 1, 2021, the approval of the domestic game version number is the first time that the Chinese government has relaxed the policy on the game industry, greatly reduced the policy uncertainty and ushered in the marginal improvement of the policy.
The number of game version numbers is still low, and the scarcity will become more and more obvious in the future. In terms of the number of game edition numbers issued, affected by the suspension of Chinese game edition numbers since July 2021, the cumulative number of Chinese game edition numbers issued in 2021 was only 755, 48% and 54% of the total number of game edition numbers issued in 2019 and 2020 respectively. However, there were 45 game edition numbers approved this time, which was only 51.72% of that in July last year compared with the 87 game edition numbers approved in July 2021, which was in line with the industry expectation, It is expected that the scarcity effect of game version numbers will become more and more obvious in the future.
The approval of sector game version numbers will be released, and the game distribution of industry companies will gradually return to normal. From the perspective of listed companies involved, the companies involved in the approved game version number include G-Bits Network Technology(Xiamen)Co.Ltd(603444) , Xinxin network, Yoozoo Interactive Co.Ltd(002174) , chuangmengtiandi, Lilith, 4399, Xishanju, Baidu and other enterprises, while the industry leading enterprises Netease and Tencent have no information on the approved version number. However, with the normal approval of the game version number, it is expected that the release of new games by the industry leading enterprises will gradually return to normal.
Investment suggestion: affected by the hype of the yuan universe sector, the game sector has rebounded since September 2021, with the largest increase of the industry index as high as 50.88%. However, after the yuan universe sector cooled significantly after, the maximum correction of the game industry compared with the high point in January is 35.84%. At present, the industry Pt (TTM) is 32.16 times, which is 36.63% in the last five years. With the marginal improvement of the industry policy, it is suggested to pay attention to the dilemma reversal logic of the game sector, In the direction, we can pay long-term attention to the subdivided fields such as game going to sea, metauniverse and VR / AR games.
Risk factors: downstream demand is less than expected; Impact of changes in industrial policies; Game development and going to sea were less than expected.
