\u3000\u3 China Vanke Co.Ltd(000002) 555 Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) )
On April 25, the company announced the annual report of 21 years and the forecast of the first quarter of 22 years.
1. In 2021, the company realized operating revenue, net profit attributable to parent company and net profit deducted from non attributable to parent company of 16.22 billion yuan (YoY + 12.62%), 2.876 billion yuan (YoY + 4.15%) and 2.627 billion yuan (YoY + 9.82%). Realize eps1 31 yuan. At the same time, the company plans to distribute a cash dividend of 3.7 yuan for 10 shares, with a total dividend of 820 million yuan. The operating revenue of mobile game business and web game business was 15.364 billion yuan (YoY + 15.55%) and 829 million yuan (yoy-23.24%) respectively. 2. In the first quarter of 2022, the company expects to realize a net profit attributable to the parent company of 740 million yuan to 770 million yuan (YoY + 533.7% - 559.4%).
Comments
Q4 performance exceeded expectations and reached a record high in a single quarter. There are bright products both at home and abroad.
4q21 company achieved operating revenue and net profit attributable to parent company of 4.106 billion yuan (YoY + 32.0%, qoq-10.2%) and 1.154 billion yuan (YoY + 130.5%, QoQ + 33.1%), exceeding the forecast caliber of previous annual report (1.079 billion yuan - 1.129 billion yuan). We believe that the main reasons are:
1. China: the two new tours continued to develop, and the cost side decreased year-on-year. (1) Revenue side: Douluo mainland: duel between soul masters and call me big shopkeeper are all launched in 3q21, and Q4 games are expected to enter the power period. Among them, "Douluo mainland: duel between soul masters" broke through 700 million yuan in August of 21. According to the data of Qimai, the ranking of IOS game bestsellers in recent 30 days has been stable at 15-40; (2) Expense side: affected by the suspension of edition number, the new game 4q21 without large marketing expenses was launched and the R & D investment was relatively reduced, resulting in the year-on-year growth of Q4 net profit higher than that of revenue. 4q21 sales expense ratio and R & D expense ratio are 45.1% (yoy-3.9pct) and 6.3% (yoy-2pct) respectively. We expect that Douluo continent: duel between soul masters and call me shopkeeper will have a long life cycle and is still at the peak of water flow. It is expected that the performance will continue to be excellent in 22 years. (3) The company has rich reserves of games in China. At present, it has a total of 20 games, including 7 self-developed products and 13 agent products. Among them, self-developed products include code magic m, code C6, code ancient style, code 3D WTB, code Three Kingdoms by, code AOE and code cy. After the restart of the Chinese game edition, the company's Chinese game distribution will be on track. In the future, under the dual efforts of China and overseas, it is expected that the performance flexibility will be high.
2. Overseas: the revenue from going to sea has increased significantly in the past 21 years, realizing an operating revenue of 4.777 billion yuan (YoY + 122.94%). It is mainly contributed by "Puzzles & survival", "song of yunshangcheng" (South Korea) and "Douluo continent: duel between soul masters".
The company has made remarkable achievements in its overseas business and has become an important source of performance.
Since 12 years ago, the company has begun to layout overseas markets and continuously promote the globalization strategy. After nearly 10 years of experience accumulation, the company has made remarkable achievements in its overseas business in 21 years. The maximum monthly flow of the company's sea games exceeded 700 million, with a total of more than 55 million new registered users and a maximum of more than 8.5 million monthly active users. According to sensor tower, the company ranks among the top 10 in the global revenue list of Chinese mobile game publishers, with the highest ranking at No. 4; According to data AI, one of the top 30 Chinese game manufacturers in 2022 (global but not including Chinese Mainland) ranked second, second only to MIHA tour. The company has excellent performance in a variety of mobile tours to the sea, including (1) Puzzles & survival, which has become a phenomenal product of "Sanxiao + SLG", with outstanding performance in Europe, America, Japan, South Korea and other regions. As of December 21, "Puzzles & survival" has accumulated more than 2.5 billion yuan, successfully ranking fourth in the global mobile game revenue growth list in 2021 according to sensor tower. (2) After the MMORPG mobile game "song of cloud going to the city" with adventure theme of different worlds was launched in the Korean market, it successfully entered the top 5 of the best-selling list in Korea and ranked the top 20 of the overseas revenue list of domestic mobile games. (3) Since the card brand mobile game "Douluo mainland: duel between soul masters" was launched in the overseas market in 2021, it has quickly won the first place in the overseas best-selling list and free list of apple and Google. In the future, the product will be released in Japan, South Korea and other places. (4) After its launch in South Korea, Japan, Vietnam and other countries, call me the big shopkeeper has been firmly at the top of the best-selling list for a long time. The company reserves a total of 16 games issued overseas, including 8 self-developed products and 8 agent products. The company's overseas business performance in the future is worth looking forward to. Embrace the future and speed up the layout of the meta universe.
In March 22, under the guidance of Guangzhou municipal Party committee and Guangzhou Science and Technology Bureau, the company joined hands with chenjing technology, the invested enterprise space intelligent technology company, and launched Guangzhou yuanuniverse innovation alliance with Netease intelligent enterprise, jiudi digital and other units; In April 22, the company reached strategic cooperation with Genimous Technology Co.Ltd(000676) , zhidu universe on the co construction of new scenes of meta universe, and launched the country's first meta universe Game Art Museum to deepen the exploration of innovative playing methods in the field of digital collections and meta universe social networking. At present, the main layout directions of the company are as follows:
1. Investment focuses on the high-quality targets at the upstream and downstream of yuanuniverse. Based on the early investment in VR / AR content, the company continues to extend. Through investment, it cuts into the fields involved in the bottom of the multi-element universe, such as computing power, semiconductor, optics, display, complete machine, application and bottom technology, and invests in a number of high-quality enterprises, including optical modules, optical display, AR glasses, VR content, cloud play, space intelligent technology and semiconductor materials, so as to integrate technology and high-quality content. At present, the metauniverse related enterprises invested by the company include archiact (Canadian VR content developer), wave optics (British optical module supplier of AR headset based on SRG surface relief grating optical waveguide), raxium (American leading technology developer of micro LED), digilens (American innovator of headset holographic display and waveguide technology), chenjing Technology (Chinese developer of space intelligence leading technology) JingZhan semiconductor (the only Chinese manufacturer in the world that can supply 300mm silicon-based gallium nitride epitaxial products), others include yingmu technology, Guangzhou semiconductor, fast disk cloud game, etc.
2. Technology overweight to explore the meta universe immersive UGC ecology. The company internally carries out technical research on using AI algorithm to realize high-precision and high-performance motion capture, and explores the immersive UGC ecology of the combination of players' independent content creation and virtual game image. AI motion capture technology can be widely used in digital human driving, VR experience, film and television animation production, 3A game production and so on.
Investment advice
From page games to mobile games, from China to overseas, from cloud games to metauniverse, the company continues to transform, iterate and upgrade. The company's overseas business has become an important growth engine. At the same time, after the release of China's version number, the flexibility and certainty of China's game business performance have gradually improved. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 3.388 billion yuan (YoY + 17.8%), 4.183 billion yuan (YoY + 23.5%) and 5.16 billion yuan (YoY + 23.3%) respectively, corresponding to EPS of 1.53 yuan, 1.89 yuan and 2.33 yuan respectively. The current stock price corresponding to PE is 12.89 times, 10.44 times and 8.47 times respectively, maintaining the "buy" rating.
Risk tips
The competition in the game industry has intensified beyond expectations, the supervision of the game industry has become stricter than expectations, the issuance of game version numbers has occurred repeatedly, the overseas competition has intensified beyond expectations, the overseas game issuance progress and flow are less than expected, and the Chinese game issuance progress and flow are less than expected.
