\u3000\u3 China Vanke Co.Ltd(000002) 624 Perfect World Co.Ltd(002624) )
In 2021, the company realized an operating revenue of 8.518 billion yuan, a year-on-year decrease of 16.69%; The net profit attributable to the parent company was 369 million yuan, a year-on-year decrease of 76.16%; The net profit attributable to the parent company after deduction was 102 million yuan, a year-on-year decrease of 90.26%; At the same time, a cash dividend of 12 yuan will be distributed for every 10 shares.
In the first quarter of 2022, the company realized an operating revenue of 2.128 billion yuan, a year-on-year decrease of 4.60%; The net profit attributable to the parent company was 840 million yuan, an increase of 80.99% year-on-year; The net profit attributable to the parent company after deducting non-profit was RMB 414 million, with a year-on-year increase of 30.15%.
Business transformation led to a decline in performance. In 2021, the company’s game business segment achieved an operating revenue of 7.42 billion yuan, a year-on-year decrease of 19.77%, and the net profit attributable to the parent company was 720 million yuan, a year-on-year decrease of 68.48%. The operating income of the company’s film and television business is 950 million yuan and the overall loss is 200 million yuan.
In terms of game business, due to the convergence of new and old games, the increase of R & D investment and the decline of operating profits of invested enterprises, the company has performance pressure in the transition period. From the perspective of specific products, old game products such as Perfect World Co.Ltd(002624) , “xinxiaoao Jianghu” and so on naturally decline with the extension of life cycle. At the same time, the water performance of Ares remains is lower than expected, which has an adverse impact on the performance; Magic tower went online in mid December 2021. Although it performed well after going online, the profit can not be reflected in 2021 due to the pre cost, and the statement level is still at a loss. In addition, the company actively explores new tracks, the number of research projects and R & D investment have increased significantly, and the adjustment of R & D personnel salary policy has led to a large increase in R & D expenses in 2021.
In terms of film and television business, the project income of the film list cooperated with universal pictures was lower than expected due to the epidemic and other reasons, resulting in an extraordinary loss of about 270 million yuan.
“Magic tower” and “dream new kill immortal” have performed well and are expected to provide performance in 2022. “Magic tower” has performed well since its launch. In the first month, it has added more than 10 million users, with a running water of nearly 500 million yuan. The product profit will be gradually released in 2022. According to Qimai data, after the recent launch of version 2.0 of magic tower, its IOS game bestseller ranking jumped to No. 11. In addition, dream new immortal was launched in mid-2021, with a cumulative flow of nearly 1.6 billion yuan by the end of 2021. The good performance of “magic tower” and “dream new kill immortal” is expected to continue to provide performance for the company.
The profit of 2022q1 increased significantly. The year-on-year decrease in operating revenue of 2022q1 company is mainly due to the sale of U.S. R & D studios and relevant local distribution teams in Europe and America, which will not be consolidated since February. If this part is excluded, the operating revenue of 2022q1 company increases by 2.34% year-on-year, of which the game business revenue is RMB 1.973 billion, a year-on-year increase of 23.01%, and the net profit is RMB billion, a year-on-year increase of 86410227%, and the net profit after deduction is RMB 446 million, a year-on-year increase of 34.52%.
The game and film and television business reserves are relatively abundant, providing guarantee for the scheduled launch. At present, the company has 14 projects such as perfect Shanghai New World Co.Ltd(600628) , one punch Superman: the world, Zhuxian 2, million King Arthur and Zhuxian world, which are in the process of preparation or research and development, covering many fields such as PC, mainframe, mobile game and native cloud game. In the film and television business, 12 projects such as “green mountains in the clouds are as light as a picture” and “biography of Yunxiang” are under preparation, shooting or post production. The rich project reserves provide a strong guarantee for the company’s future product scheduling.
The company will focus on the two dimensions of “Chinese products going to sea + overseas localization development”. In terms of Chinese products, the mobile game “magic tower” was launched on the overseas market on March 17, 2022. The mobile game “magic tower” has recently been tested in many overseas places and is expected to be launched on the overseas market within this year. The company’s current reserves of various game projects are more suitable for overseas markets than in the past. In the future, the company’s Chinese products will gradually transition from authorized third-party distribution to independent distribution. Overseas localization will be transferred to regions with more talents and policy advantages. At the same time, a more open younger team will be selected. The products will focus on stand-alone games and console games, which is more in line with the needs of overseas markets.
High proportion of dividend returns to shareholders. The company will pay a cash dividend of 12 yuan for every 10 shares, with a total dividend of 2.290 billion yuan. Calculated according to the closing price on the day of announcement of the dividend plan, the dividend rate will reach about 10%. High dividend yield can better feed back to investors and stabilize market confidence.
Profit forecast and investment rating: in 2021, the company is in the stage of transformation, and the superposition of multiple factors leads to a large decline in performance. However, the impact of some factors on the company has been significantly weakened, and the performance of 2022q1 company has recovered significantly. The company has abundant reserves of follow-up products. At the same time, the Chinese version number has begun to be reissued to provide guarantee for the company’s future launch of Chinese products. Overseas, “magic tower” and “dream new killing immortal” will be launched overseas to promote the growth of overseas market.
It is estimated that the company’s EPS from 2022 to 2023 will be 0.97 yuan and 1.09 yuan. According to the closing price of 13.15 yuan on April 16, the corresponding PE will be 13.52 times and 12.09 times, maintaining the “buy” rating.
Risk warning: the number and rhythm of version number distribution are uncertain; Industry competition intensifies; Stricter content supervision; Product launch progress and market performance are lower than expected; Brain drain risk
