\u3000\u3 Shengda Resources Co.Ltd(000603) 444 G-Bits Network Technology(Xiamen)Co.Ltd(603444) )
Key investment points
Event: in 2022q1, the company achieved operating revenue of 1.229 billion yuan, yoy + 9.98%, QoQ + 8.42%, net profit attributable to parent company of 350 million yuan, yoy-4.27%, QoQ + 32.95%, net profit not attributable to parent company of 333 million yuan deducted, yoy-6.14%, QoQ + 49.15%, and the performance met our expectations.
“Yinian Xiaoyao” consolidated the basic market of water, and the decrease of investment income put pressure on the year-on-year growth of profits. The revenue of 2022q1 company increased by 9.98% year-on-year, mainly due to the launch of “Yinian Xiaoyao” in February 2021. The contribution time of 2022q1 revenue was one month longer than that in the same period in 2021. In addition, the incremental revenue contributed by Xinyou “Yinian Xiaoyao (Hong Kong, Macao and Taiwan version)”, “world catapult story”, “underground castle 3: Soul poem” and “Moore Manor” offset the decline in the revenue of “eight wastelands of ghost Valley (PC version)”. The net profit attributable to the parent company and deducting non attributable to the parent company decreased year-on-year in 2022q1, mainly due to the increase of about 270 employees year-on-year, the corresponding increase of salary and the decrease of investment income. The investment income of associated enterprises in 2022q1 decreased by 54.418 million yuan compared with the same period last year; The high increase on a month on month basis is mainly due to the significant improvement of the sales expense rate on a month on month basis. We expect that the purchase volume of “Yinian Xiaoyao (Hong Kong, Macao and Taiwan version)” in 2022q1 will slow down. In 2022q1, the gross profit margin of the company was 90.63% (YoY + 7.43pct, qoq-0.52pct), which increased year-on-year, mainly due to the decrease in the share of “ghost Valley eight wastelands (PC version)”; The net interest rate is 91.88% (pcot-792.8 pcyoq); Sales expense ratio 25.69% (YoY + 2.11pct, qoq-13.00pct); The management fee rate is 7.41% (YoY + 1.80pct, QoQ + 0.70pct); The R & D expense rate is 13.85% (YoY + 0.71 PCT, QoQ + 2.28 PCT); The financial expense rate is 0.54% (YoY + 1.72 PCT, qoq-1.85 PCT). As of 2022q1, the company’s contractual liabilities were 640 million yuan, an increase of 55 million yuan over the end of 2021, mainly due to the increase in the balance of prepaid recharge and props, and other non current liabilities were 199 million yuan, a decrease of 14 million yuan over the end of 2021. We believe that it is mainly due to the gradual amortization of permanent props in Moore Manor.
The long-term operation ability has been continuously verified, and the ranking of stock game bestsellers has been steadily improved. In 2022q1, the average ranking of IOS game best-selling lists of “ask for a hand tour” and “Yinian Xiaoyao” were 20 and 10 respectively, compared with 22 and 10 respectively in the same period last year. The flow is basically stable. In addition, the 6th anniversary service of “ask for a mobile game” was launched on April 22, 2022, and the ranking of IOS game best sellers jumped to No. 6 on that day; “Yinian” will open the animation linkage activity of “the legend of mortal cultivation of immortals” on April 29, 2022, adding the play method of “red forbidden area”. With a score of 9.7 at station B, the broadcast volume reached 680 million. We believe that the mortal animation is consistent with the connotation of Yinian. We are optimistic that this linkage will bring new users to Yinian, and we are optimistic about the long-term operation performance of Yinian’s short-frequency update and superimposed purchase promotion.
Obi island is well tested and has a rich reserve of new products. The agent product “Obi Island: dream country” will start the second round of Android Omni channel test and the first round of IOS test on April 28, 2022. As of April 22, 2022, its taptap score is 8.2. We look forward to the online performance of the product. In addition, in the steady progress of the company’s self-developed products, the agent product reserves include “dawn elite”, “ancient treasures”, “Hualuo Chang’an” (all with version numbers), covering advantageous categories such as roguelike.
Profit forecast and investment rating: we maintain the previous profit forecast. It is estimated that the company’s EPS from 2022 to 2024 will be 25.02/30.30/34.30 yuan respectively, corresponding to the current share price PE of 14 / 11 / 10x respectively. We are optimistic about the company’s high-quality strategic practice and maintain the “buy” rating.
Risk tip: the long-term operation of the product is less than expected, the connection of new tours is weak, and the industry supervision is becoming stricter.
