\u3000\u3 China Vanke Co.Ltd(000002) 624 Perfect World Co.Ltd(002624) )
Event:
The company announced 2021 performance express and 2022q1 performance forecast:
1. In 2021, the operating income will be RMB 8.52 billion, yoy-16.7%, and the net profit attributable to the parent company will be RMB 370 million, yoy-76%, deducting non net profit of RMB 100 million, yoy-90.1%.
2. In 2022q1, the net profit attributable to the parent company is expected to be 830 ~ 850 million yuan, yoy + 78.8% ~ 83.1%. Deduct non net profit of RMB 400 ~ 420 million, yoy + 25.7% ~ 32%.
Key investment points:
The upgrading of game business strategy resulted in a phased decline in profits in 2021q4. The profits of “magic tower” and “Mengzhu” in 2022q1 were released, and the net profit deducted from the game increased by more than 30%. The net profit attributable to the parent company of 2021q4 was – 410 million yuan, yoy-58.8%, which was mainly caused by the decline of old products, organization adjustment and personnel reduction, investment loss and asset impairment. In 2022q1, the company’s net profit attributable to the parent company is 830 ~ 850 million yuan, with non net profit deducted from 440 ~ 420 million yuan, of which the non net profit deducted from the game business is 440 ~ 460 million yuan, yoy + 32.8% ~ 38.9%, mainly from the old games such as magic tower and dream new killing immortal launched in December 2021; Non recurring income mainly came from the sale of R & D studios in the United States and corresponding local distribution teams in Europe and America in the first quarter (400 million yuan).
In terms of going to sea, we will focus on the two dimensions of “Chinese products going to sea + overseas localization development”. Mengzhu was launched overseas in March 2022. It is mainly distributed independently by the company and has important strategic significance. “Magic tower” is expected to be tested in many places (the United States, Canada, Japan, the United Kingdom and Germany) in the near future. Most overseas regions are represented by Tencent’s overseas distribution brand levelinfinite, which will be officially launched in the overseas market within the year.
Three new mobile games are expected to be launched within the year, and the well-known IP mobile games will continue to be developed. ① Reserve of game products: mobile game “black cat anecdote society”, “dragon eight Part 2”, “Kingdom of morning and night”, “one punch Superman: the world”, “million King Arthur”, “killing immortals 2”, “perfect Shanghai New World Co.Ltd(600628) ,” demon continent 2 “, end game” killing immortals world “,” perfect NewWorld “,” havea nice eat “, etc. well-known IP products such as spirit cage and God sealing series are also under development. ② Film and television product reserve: the green mountains in the moon are as light as a picture, the biography of Yunxiang, let your years be quiet, the stars condense into sugar, rock and roll crazy flower, special agent mission, brilliant! Brilliant “What you want”, “warm and sweet”, “just a Jianghu dream”, etc.
Profit forecast and investment rating: according to the latest performance forecast of the company, we adjusted the profit forecast of the company from 2022 to 2023 to RMB 1.78/2.04 billion, corresponding to PE of 13 / 11x. The company has strong R & D strength and is currently at the key node of transformation. The products represented by magic tower have laid the foundation for the company’s high-quality, diversified and international strategy. It is suggested to pay attention to the overseas independent issuance, the overseas performance of magic tower and the overseas test performance of new products, the performance of magic tower 2.0 and the subsequent issuance of game version number. Based on the above reasons, maintain the “buy” rating.
Risk tips: stricter policy supervision, less progress in obtaining version number than expected, intensified market competition, less progress and performance of new products, higher flow cost, less life cycle of old products than expected, loss of core talents, change of player preference, less than expected technological development, corporate governance / asset impairment / lifting and reducing risks, market style switching, downward trend of Industry Valuation center, etc.
