\u3000\u3 China Vanke Co.Ltd(000002) 624 Perfect World Co.Ltd(002624) )
Event:
The company issued reports for the first quarter of 2021 and 2022. 1) the annual operating revenue in 2021 was 8.518 billion yuan, a year-on-year decrease of 16.69%, and the net profit attributable to the parent company was 369 million yuan, a year-on-year decrease of 76.16%; 2) The net profit attributable to the parent company in the first quarter was RMB 1.48 billion, a year-on-year increase of RMB 3.08 billion, with a year-on-year net profit attributable to the parent company of 202499%. Among them, the non recurring profit and loss is 426 million yuan, mainly due to the equity disposal income of overseas subsidiaries and current government subsidies.
Comments:
The game business was under short-term pressure, and the loss of film and television business narrowed. In 2021, the revenue of game business was 7.42 billion yuan, a year-on-year decrease of 19.77%. The net profit attributable to the parent company of game business was 720 million yuan, a year-on-year decrease of 68.48%, mainly due to 1) the performance of some new games was lower than expected and the natural decline of old Games; 2) In order to optimize overseas business, some overseas game projects that did not perform as expected were shut down, resulting in a one-time loss of 270 million yuan. In 2021, the revenue of film and television business was 950 million yuan, with a year-on-year increase of 1.84%. The net loss attributable to the parent company of film and television business was 200 million yuan, which was 58.83% lower than that of the previous year, mainly due to the loss of fair value change caused by the single investment of Universal Pictures. In terms of expenses, the company’s R & D expenses in 2021 were 2.211 billion yuan, a year-on-year increase of 39.13%; The sales expense was 1.986 billion yuan, a year-on-year increase of 8.46%.
“Magic tower” and “dream new kill immortal” contribute 22q1 main increment, and are expected to maintain steady performance throughout the year. The company’s net profit attributable to the parent company increased by 80.99% in 22q1, of which the sale of North American studios and R & D teams generated a one-time income of 430 million yuan. The net profit attributable to the parent company after excluding non deduction increased by 30.15%, mainly due to the contribution increment of “magic tower” and “dream new kill immortal”. “Magic tower” launched in December 2021 and “dream new killing immortal” launched in June 2021, both products have a running water of 500 million yuan in the first month, marking the company’s double breakthrough in IP value and product reputation at MMORPG track.
The sea going strategy will be reorganized and the future will focus on the two dimensions of “Chinese products going to sea + overseas localization”. On the one hand, the company has strengthened its mature products to the sea. The mobile game “dream new kill immortal” was launched simultaneously in the overseas market in March 2022. The mobile game “magic tower” has been tested in many overseas places and is expected to be launched within 22 years. On the other hand, the company’s existing reserve products are more suitable for overseas markets than previous products, and will gradually transition from authorized third parties to independent issuance in the future.
The product reserve is abundant, and the application for version number is advancing normally. The reserved products normally submit the version number application, among which “black cat anecdote society”, “Tianlong Babu 2”, “the kingdom of morning and night” are in the optimization stage, the game version numbers of “one punch Superman: the world” and “million Arthur” need to be imported are expected to be slightly slow, and the mobile games such as “Zhuxian 2”, “perfect Shanghai New World Co.Ltd(600628) “, “Shenmo mainland 2” and “Zhuxian world” are actively promoted.
Investment suggestion: maintain the “overweight-a” rating. The company has rich product / IP reserves, focusing on MMO + X, card + X and other tracks, which can be expanded to the young. It is estimated that the operating revenue of the company from 2022 to 2024 will be 10.22/120.6/13.27 billion yuan, and the net profit attributable to the parent company will be 1.85/20.5/2.38 billion yuan, corresponding to EPS of 0.95/1.06/1.23 yuan. Considering the valuation premium of the company’s A-share game leader, 20xpe is valued in 2022, corresponding to the six-month target price of 19.0 yuan.
Risk tip: Xinyou online is less than expected, the sea business is less than expected, and the film and television business is less than expected.
