\u3000\u3 China Vanke Co.Ltd(000002) 624 Perfect World Co.Ltd(002624) )
Event overview
Perfect World Co.Ltd(002624) 4 April 16 issued the annual performance express of 2021 and the performance forecast of the first quarter of 2022. In 2021, the company achieved a revenue of RMB 8.518 billion, a year-on-year decrease of 16.69%, and the net profit attributable to the parent company was RMB 371 million, a year-on-year decrease of 76.03%. The revenue of game business was 7.421 billion yuan, a year-on-year decrease of 19.77%; The revenue of film and television business was 952 million yuan, a year-on-year increase of 1.84%. In the first quarter of 2022, the profit attributable to the parent company is expected to be RMB 830 million-850 million, with a year-on-year increase of 79% – 83%; The game business is expected to realize a net profit of 850 million yuan to 870 million yuan, an increase of 98.95% – 103.63% over the same period last year.
During the transition period, the performance is under pressure, and the R & D investment has increased significantly
In 2021, the company’s game business was in the stage of convergence, transformation and iteration of new and old games. Affected by the increase of R & D investment, the natural decline of old games, the mismatch of cost and income of new games, the decline of profits of investment game enterprises and other factors, the company’s 2021q4 revenue was the lowest in a single quarter in two years, and the short-term performance was under pressure. The company’s annual R & D expenditure was about 2.21 billion yuan, a year-on-year increase of 39.13%; Q4 R & D expenditure is 850 million yuan, with a single quarter R & D expenditure rate of 48%. The increase in R & D investment is mainly due to the increase in the number of research projects and the improvement of the incentive mechanism for core R & D personnel in the transformation stage. It is expected to fall after the optimization of the talent team is completed.
Divestiture of assets, light loading, and simultaneous development of China’s IP going to sea and overseas localization
In 2021, the company shut down some game projects whose performance did not meet expectations and optimized relevant personnel. The sale of overseas R & D and distribution teams was completed in 2022q1. According to the Q1 performance forecast, the company is expected to realize a non recurring income of 400 million yuan. The company timely adjusts the layout of overseas games, and will focus on advantageous regions and categories in the future, and gradually transition to independent distribution. The mobile game “dream new kill immortal” was launched on the overseas market in March 2022, and “magic tower” is expected to be officially launched overseas within this year. The existing reserve themes are also focused on overseas distribution.
“Magic tower” contributes to the performance and accelerates the focus of the track. After the rhythm of the version number is restored, it is ready to go
According to the company’s announcement, at the end of 2021, the company’s young work “magic tower” was launched, with more than 10 million new users in the first month and nearly 500 million yuan in the first month, which verified the correctness of the company’s transformation strategy, thickened performance expectations, and was optimistic about the market performance of the new version to be launched on April 25. In the future, the company will increase the inclination of resources and focus more on R & D, with “MMO +”, “multi person opening” and “card +” as the main tracks, Reserve a variety of mobile games such as “black cat anecdote society”, “Tianlong Babu 2”, “Kingdom of morning and night”, “punch Superman: the world”, “million Arthur”, “Zhuxian 2”, “perfect Shanghai New World Co.Ltd(600628) “, “Shenmo mainland 2” and many end game products such as “Zhuxian world”, “perfectnewworld” and “haveanicedeath”. It is expected that the version number will be launched at home and abroad after the rhythm is restored.
Investment suggestion: maintain the “overweight” rating
Combined with the performance express and the forecast of the first quarter report, we adjusted the company’s forecast of revenue of RMB 9.570123.20/14.872 billion from 2021 to 2023 to RMB 8.518103.36/11.972 billion, adjusted the forecast of net profit attributable to parent company of RMB 13.46/23.32/28.01 from 2021 to 2023 to RMB 3.71/17.37/20.061 billion, and adjusted EPS 0.01 The forecast of 69 / 1.20/1.44 yuan is 0.19/0.90/1.06 yuan, corresponding to the closing price of 12.31 yuan / share on April 18, 2022, and PE is 64, 14 and 12 times respectively. The company is a game company with strong R & D strength with scarce a shares. At present, the stock price valuation level is at a historical low. With the re issuance of the version number, we are optimistic about the future rise space of the company’s stock price and maintain the “overweight” rating.
Risk tips
Game version number policy shrinkage risk; Xinyou test is less than expected risk; Risk of cancellation of preferential tax policies; Brain drain risk.
