\u3000\u3 Shengda Resources Co.Ltd(000603) 444 G-Bits Network Technology(Xiamen)Co.Ltd(603444) )
Key investment points
The online marketing pressure of 22q1 products is small, driving a significant increase in profits month on month
22q1 company's revenue increased by single digits year-on-year and month on month, mainly due to the continued enrichment of product lines; The main reason for the sharp increase in profits on a month on month basis is the large decline in marketing expenses on a month on month basis. 22q1 company achieved a revenue of 1.23 billion yuan, an increase of 9.98% and 8.38% respectively; The net profit attributable to the parent company was 350 million yuan, with a decrease of 4.27% and a ring increase of 33.1%; The net profit attributable to the parent company after non deduction was 333 million yuan, a decrease of 6.20% and a ring increase of 49.3%. From the perspective of revenue, according to the company's announcement, the main reasons for the year-on-year growth of the company's revenue are: 1) the operation time of Yinian Xiaoyao has increased year-on-year, contributing more water; 2) 22q1 product line is richer than 21q1 product line. From the perspective of profit, we believe that the main reason for the significant increase in the net profit attributable to the parent company in 22q1 is that there are three online games in 21q4, namely "Yinian Xiaoyao (Hong Kong, Macao and Taiwan version)", "the story of the catapult of the world" and "underground castle 3: Poetry of the soul", which have generated large marketing expenses, resulting in a low profit level in 21q4 and no major marketing expenses in 22q1, so the profit has increased significantly month on month.
The increase in the number of employees leads to the rapid growth of management and R & D expenses, but it is generally controllable
From the cost side, marketing expenses decreased more month on month, and personnel expenses increased. Specifically, the gross profit of 22q1 company reached 1.11 billion yuan, an increase of 19.8% and a ring increase of 7.74%; The gross profit margin was 90.6%, increased by 7.46 PCT and decreased by 0.54 PCT. The sales cost was 316 million yuan, an increase of 19.7% and a decrease of 28.0%, and the cost rate was 25.7%, an increase of 2.10 PCT and a decrease of 13.0 PCT; The management cost was 91 million yuan, with a same increase of 44.4%, a ring increase of 19.7%, a cost rate of 7.40%, a same increase of 1.77 PCT and a ring increase of 0.70 PCT; The R & D cost was 170 million yuan, with a same increase of 15.7%, a ring increase of 29.8%, a cost rate of 13.8%, a same increase of 0.68 PCT and a ring increase of 2.28 PCT. The main reason for the large month on month decrease in the sales expense rate is that the number of new games released in 22q1 is lower than that in 21q4, and the publicity expenses in the early stage are lower; The main reason for the year-on-year and month on month increases in the rates of administrative expenses and R & D expenses is that the company has more new recruits, with a year-on-year increase of 270 (751 employees at the end of 20).
Since this year, production capacity has expanded rapidly
We have observed that the company's personnel expansion has accelerated recently. Three batches of formal recruitment have been launched during the year, and the summer internship program has been launched. The company's latest "April Recruitment" also recruits core positions such as producer, game planning, art and so on. In the marketing posts, the company has displayed overseas placement posts (Japan and South Korea) for three consecutive months, or will involve relevant national businesses. We believe that the number of employees (especially R & D personnel) of the company will continue to rise in the next two to three quarters, and the cost side may continue to rise. Considering the increase of the company's current product line, we believe that the increase of expenses will be generally consistent with the growth of the company's revenue and profit.
Investment advice
We are optimistic that the company will contribute to the stable flow of water in the future with the mature games of "ask questions" and "a read is carefree". The omni channel test of OBI island will be launched on April 28. We believe that Obi island may be popular and is expected to replicate the "out of circle" of Moore Manor. The initial flow may be lower than that of Moore Manor, but it may be retained or slightly stronger in the future. At the same time, the company's "fast running in small steps" strategy has achieved remarkable results. In the past two years, the company has harvested small products with good reputation, such as "eight wasteland in ghost Valley". We expect the company's revenue from 2022 to 2024 to be 5.37/62.2/7.14 billion yuan respectively, the net profit attributable to the parent company to be 1.60/18.9/2.2 billion yuan respectively, and the corresponding P / E of the current stock price to be 15.4/13.0/11.2 respectively, giving a "buy" rating.
Risk tips
The number or progress of version number distribution is lower than expected, and the online time or quality of Xinyou is lower than expected.
