\u3000\u3 Shengda Resources Co.Ltd(000603) 444 G-Bits Network Technology(Xiamen)Co.Ltd(603444) )
Harvest verification of R & D Strategy: focus on the track and run fast in small steps. The company focuses its product research and development on three categories: MMORPG, SLG and placement and hanging up. Adopt the R & D strategy of “small step and fast run” and combine the experience of independent operation platform to iteratively develop a number of high-quality mobile games with interest, playability and reasonable commercial design. In 2021, the company’s self-developed “Yinian Xiaoyao” ranked 11th on average in the best-selling list of app store games with excellent game production and operation performance, up to No. 5 in the list.
Familiar with the psychology of generation Z players: high-quality operation to stabilize the user ecosystem. At present, the company has successfully operated a number of games, such as “ask for a hand tour”, “a read of leisure”, “Moore Manor”, “ghost Valley eight wastelands (PC version)”, “underground castle 2: dark Awakening (Android version)”, “underground castle 3: soul poem”, “world ejection story”, “wonderful combatant”, “blade of the abyss”, “don’t think about maze” and so on. “Moore Manor” has gained popular release experience and brand recognition, and “Obi Island: dream country” focuses on making friends in the community, which is expected to verify the control ability of social track release.
Steadily build a product matrix: the basic market is stable, the agent reserve is rich, and the fund is expected to burst. The series of “asking questions” is steady, and the three services gather users periodically. “Yinian Xiaoyao” continues to contribute profits, which is expected to consolidate the basic market of the company. New high-quality products in the growth period, such as Moore Manor, eight wastelands of ghost Valley (PC version), underground castle 3: poem of the soul, have shown their track advantages, and the profit value needs to be released. Among the new product reserves, the agent Obi Island: dream country is expected to recreate the popular community game, and other rich reserves are also expected to continue to verify the company’s operational advantages.
Sea going strategy: self-developed products with extra weight have initially opened the market. The company started from transplanting mature online products in China and has initially opened the market. At present, except for some reserved IP products, other self-developed products can only be approved after positioning in the overseas market, and the company will continue to attract excellent producers and distribution teams with deep insights into overseas culture to quickly layout the overseas market. The company’s console game team is focusing on the research and development of Outpost (outpost) for overseas markets, which is expected to launch steam in 2022.
We expect the company to achieve an operating revenue of 5.34/6.06/7 billion yuan from 2022 to 2023, with a year-on-year increase of 15.64% / 13.41% / 15.6%, and a net profit attributable to the parent company of 1.85/21.8/2.69 billion yuan, with a year-on-year increase of 25.6% / 18.4% / 23.2%, corresponding to EPS of 25.8/30.4/37.5 yuan and PE of 13X / 11x / 9x. Since the release of Chinese game edition number was restarted on April 11, we believe that the reasonable PE of the company in 2022 should be between 20-25 times, and the corresponding target price is 516645 yuan, maintaining the “buy” rating.
