\u3000\u3 China Vanke Co.Ltd(000002) 624 Perfect World Co.Ltd(002624) )
Event: Perfect World Co.Ltd(002624) released the performance express of 2021 and the performance forecast of the first quarter of 2022
1) performance express in 2021: during the reporting period, the company is expected to achieve a total operating revenue of 8.518 billion, a year-on-year increase of – 16.7%, a net profit attributable to the parent company of 371 million, a year-on-year increase of – 76.03%, and a net profit attributable to the parent company of 104 million after deduction, a year-on-year increase of – 90.07%. In the fourth quarter, the total operating revenue was 1.78 billion yuan, a year-on-year increase of -17.7%, the net profit attributable to the parent was -428million yuan, and the net profit attributable to the parent was -457million yuan after deducting non profits. The main reasons for the sharp decline in the single quarter profit in the fourth quarter were: 1) Universal Pictures’ single investment loss of 170190 million yuan; 2) The online income of magic tower is deferred, and the loss caused by the current recognition of expenses; 3) The R & D expenses brought by employee optimization + salary increase increased significantly. The R & D expense rate of the company reached 47.9% in a single quarter in the fourth quarter, which was significantly higher than the R & D expense rate of 20.1% in the previous three quarters.
2) forecast for the first quarter of 2022: during the reporting period, the company expects to realize the net profit attributable to the parent company in the range of (830 ~ 850 million), with a year-on-year increase of (78.79% ~ 83.09%), and the net profit range after deduction is (400 ~ 420 million), with a year-on-year increase of (25.71% ~ 31.99%). The main reasons for the sharp increase in profits are: 1) the performance contribution of magic tower mobile game; 2) The sale of U.S. R & D studios completed the delivery of relevant local issuance teams in Europe and the United States in 2022q1, and about 400 million non economic gains were recognized.
Further clean up the problems left over by history and go to battle with light equipment. In 2021, the company shut down some overseas game projects whose performance did not meet expectations, optimized relevant project personnel, sold relevant R & D studios in North America, focused on the two dimensions of “Chinese products going to sea + overseas localization development”, optimized the number of personnel, reduced costs, estimated and settled the investment losses of Universal Pictures in the film and television business, and accrued losses. So far, the company’s reporting pressure has been further reduced and more focused on the core business of the game.
The brand promotion effect of magic tower is outstanding. “Magic tower” was launched in the public beta on December 16, 2021. The company adopts the brand promotion mode to form topic fermentation in the community. In the first month, the flow is close to 500 million, and more than 10 million users are added. It is expected to be introduced to the overseas market in 2022.
Future product reserve: at present, the company reserves mobile game products such as black cat anecdote society, Tianlong Babu 2, the kingdom of morning and night, one punch Superman: the world, million King Arthur, Zhuxian 2, perfect Shanghai New World Co.Ltd(600628) , Shenmo continent 2, and end game products such as Zhuxian world, perfect new world and have a nice death.
Profit forecast and Valuation: considering the delayed release of game version number, the launch of the company’s products is expected to be delayed. In addition, the company’s sales of North American game studio will reduce the revenue of host game business in 2022. We appropriately reduce the company’s performance forecast from 2022 to 2023. The company’s revenue from 2022 to 2023 is expected to be 9.301 billion (formerly 12.598 billion) and 10.817 billion (formerly 14.154 billion), with a year-on-year increase of 9% and 16%, The net profit attributable to the parent company was 1.995 billion (original 2.150 billion) and 2.180 billion (original 2.621 billion), with a year-on-year increase of 437% and 9%. The current market value corresponds to 12x and 11x PE in 2022 and 2023, maintaining the “buy” rating.
Risk tips: 1) stricter version number supervision policy; 2) The online time of the game is not up to expectations; 3) Risk that the information and data used in the research report are not updated in time
