Affected by the regulation and the suspension of version number, the growth of mobile game market revenue has decreased. In 2021, the actual sales revenue of China’s game market was 296513 billion yuan, yoy + 6%, of which the revenue of mobile game market was 225.5 billion yuan, yoy + 8%, which fell below the double digits for the first time. In the second half of the year, due to the impact of supervision, the number of new games decreased and the correction of head stock Games was obvious. Affected by the 830 new deal and the suspension of the distribution of edition numbers, the revenue of 21q4 mobile games was 55.3 billion yoy-2%, with a record low quarterly growth rate. The impact of 22q1 continues. The purchase volume of mobile games and the launch of products are 20% lower than that of the same period last year. The industry is suffering from a cold winter.
The overall revenue growth of the game sector slowed down in 21 years, and the impact in 22 years is expected to be eliminated. After the supply side reform, more attention is paid to R & D and long-term operation. In 2021, the online game revenue of nine Hong Kong stock game companies totaled 257.2 billion yuan (including going to sea), yoy + 11.24%, and the overall gross profit margin was 53%. Under the background of supply side reform, many Hong Kong stock companies have significantly reduced their net profit due to the impact of the 830 new deal, the delay of new tours after the suspension of edition numbers, and the increase of R & D and promotion expenses. The profit elasticity will be released after the normalization of edition number approval. The business income of Tencent and Netease mobile games accounts for 64% of the domestic and foreign market income of China’s mobile games, and the impact of the 830 new deal 22h2 is expected to be basically eliminated. A shares have been disclosed. Among the companies, the performance in G-Bits Network Technology(Xiamen)Co.Ltd(603444) 21 was excellent, and the revenue increased by 68% to 4.6 billion yuan year-on-year. Xinyou “Yinian Xiaoyao” contributed the main increment in 21 years, and the net profit margin of the company reached 38% Perfect World Co.Ltd(002624) 22q1 performance forecast: the new tour of “magic tower” brings performance increment, and the net profit deducted from the game business is about 440 ~ 460 million yuan, yoy + 32.84% ~ 38.87%. We are optimistic that the performance of Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , Perfect World Co.Ltd(002624) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) and other companies will stabilize in 22 years, and the recovery of edition number and the flexibility of game going to sea will be provided.
Domestic games have become popular at sea, and the globalization strategy has achieved remarkable results. In 2021, the actual sales revenue of China’s independently developed games in overseas markets reached US $16.09 billion, yoy + 21.8%. Chinese game manufacturers have made remarkable achievements in going out to sea, and their multi category development performance is brilliant. The overseas market of 42 mobile games exceeds US $100 million, and the new tour of Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) “Sanxiao + SLG” Puzzles & survival has reached a new high. The proportion of overseas revenue of game companies represented by Tencent, Netease, Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) etc. continues to rise, and fine operation has become the key. Among the top 100 global publishers, more than 30 Chinese companies are on the list. Tencent and NetEase have many years of experience in going to sea, and Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) xinlijun is rising, ranking firmly among the top 5 global mobile game publishers in China. data. AI released the list of the world’s top 52 publishers in 2022, with 17 Chinese publishers surpassing the United States for the first time.
The vast world has great prospects, and the United States, Japan and South Korea will be a place for soldiers. In the post epidemic era, the overseas mobile game market has not fallen, and the sales revenue of mobile game markets in the United States, Japan, South Korea and Southeast Asia still increased by more than 6% year-on-year. Under the 20-year high base, the revenue of China’s mobile games in the United States increased by more than 50% year-on-year in 2021. The United States once again became the largest overseas market. At the same time, with more than 20% market share, China became the largest importer of the U.S. mobile game market. In addition, in the past 21 years, China’s mobile games have also achieved about 30% year-on-year growth in the UK, Germany, Hong Kong, Macao and Taiwan, accounting for more than 20% of the top 100 revenue in Japan and South Korea, and more than 50% of the top 100 revenue in the Southeast Asian market. China’s mobile games, including Netease’s wilderness action, Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) “song of going to the city”, “Puzzles & survival”, Alibaba’s Lingxi mutual entertainment “chronicles of the Three Kingdoms · strategic edition”, continue to refresh the revenue list of overseas regions Download list, growth list, etc.
The release of version number is resumed, and the high-quality products are guided. The head company has rich reserves to be released. On the evening of April 11, the State Press and Publication Administration announced the approval information of domestic online games in April, with a total of 45 games. In terms of quantity, it is lower than that before the suspension in August (80 + models per month), and the tightening of the supply side is still the trend. The regulators aim to guide the development of high-quality products in the industry through total amount control, while the types and themes of game products are diverse, and the distribution of manufacturers is normal Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , Perfect World Co.Ltd(002624) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) , heart and other companies have plenty of game reserves, and the resumption of edition number is expected to bring great benefits.
Investment suggestion: the game industry is in the post demographic dividend cycle, the supply side reform is more intense, the growth rate of the industry slows down, and the game going to sea has become the main increment of the industry. Affected by the suspension of edition numbers in August 21 and the 830 new deal, the valuation of the game industry showed a downward trend in the past year, and the overall valuation was low. We analyzed the stock price cycle of game companies. The bottom of the growth rate of the industry that stopped issuing the version number in 18 years just corresponds to the bottom of the industry valuation. At the same time, the valuation cycle of the company is highly correlated with the product flow cycle. It is expected to achieve double-click after the normalization of the version number. We believe that the reasonable valuation level of the game industry should be: (1) the game leaders [Tencent (22x in 22 years) and Netease (20x in 22 years)] can return to the steady-state valuation of more than 25X for a long time; (2) Take Tencent, Netease and the leading A-share companies Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , G-Bits Network Technology(Xiamen)Co.Ltd(603444) historical valuations as the valuation anchor points, and give the valuation central target of A-share sector 22 years 20x, and the valuation central target of other targets of Hong Kong shares 22 years 10 ~ 15x; (3) Follow up attention will be paid to who can get the version number, who can push the game online as soon as possible, create new performance flexibility, and launch the head product.
We suggest that we focus our attention on the normalization of genre numbers, big elasticity + the big elastic + the game ” ” ” ” ”’Big big big + the game ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ”s big elastic + the game’ ” ” ” ” ” ” ” ” ” ” ” ”s subject of the game’ ” ” ” ” ” ”’s beneficiary subject of the [ Hongda Xingye Co.Ltd(002002) 5555 ” ” ”s \ , Giant Network Group Co.Ltd(002558) , Kunlun Tech Co.Ltd(300418) , Hubei Century Network Technology Inc(300494) , Hangzhou Shunwang Technology Co.Ltd(300113) , Shenzhen Bingchuan Network Co.Ltd(300533) ] Hong Kong stocks [China Mobile Games, Baiao family interaction, ZuLong entertainment, celadon games, dreamworld, Netdragon], etc.
Risk factors: industry policy risk, the performance or online process of core games and new games is less than expected, the overseas market is less than expected, the risk of core brain drain, the risk of overseas revenue performance of games caused by exchange rate fluctuations, etc.
