\u3000\u3 China Vanke Co.Ltd(000002) 624 Perfect World Co.Ltd(002624) )
21q4 labor cost fluctuates greatly at one time, resulting in performance pain
The company’s main revenue and cost indicators declined significantly in 21q4, which was mainly caused by the fluctuation of various labor costs. Some costs were one-time, which only caused pain to the performance of the current quarter. Specifically, 21q4 company achieved a revenue of 1.78 billion (YoY – 17.8%, QoQ – 29.8%), a gross profit margin of 69.1% (YoY + 8.26pct, QoQ + 2.98pct), and a net profit attributable to the parent company of – 431 million (YoY + 67.0%, QoQ loss). From the cost side, the sales cost is 554 million (YoY + 21.9%, QoQ + 4.73%), and the cost rate is 31.1% (YoY + 10.1pct, QoQ + 10.3pct); The management fee is 225 million (YoY – 13.8%, QoQ + 38.8%), and the expense rate is 12.6% (YoY + 0.57pct, QoQ + 6.24pct); The R & D cost is 853 million (YoY + 109.6%, QoQ + 65.3%), and the cost rate is 48.0% (YoY + 29.2pct, QoQ + 27.6pct).
It can be seen from the above indicators that the expense side of 21q4 company has increased rapidly, mainly due to labor costs: 1) some streamlined teams have incurred one-time costs; 2) Online bonus of the new public beta game; 3) Centralized adjustment of bonus and salary policies. At the same time, “magic tower” went online at the end of the 21st year, with a significant increase in sales expenses, but there was a deferred income and a mismatch between income and cost, which also lowered the overall performance. The above two reasons led to a sharp decline in 21q4 performance.
22q1’s performance improved significantly, and the first month of magic tower ran nearly 500 million
22q1 company’s profitability has improved significantly, which is due to the gradual release of revenue and the return to normal level of cost side of magic tower. Specifically, 22q1 company achieved revenue of 2.13 billion (YoY – 4.60%, QoQ + 19.7%); Gross profit margin 68.7% (YoY + 12.1pct, QoQ -0.46pct); The net profit attributable to the parent company is 840 million (YoY + 81.0%, QoQ turnaround); From the cost side, the sales cost is 278 million (YoY – 9.46%, QoQ – 49.9%), and the cost rate is 13.1% (YoY – 0.70pct, QoQ – 18.1pct); The management fee is 194 million (YoY + 1.70%, QoQ – 13.9%), and the expense rate is 9.10% (YoY + 0.56pct, QoQ – 3.54pct); The R & D cost is 564 million (YoY + 36.0%, QoQ – 33.9%), and the cost rate is 26.5% (YoY + 7.90pct, QoQ – 21.5pct). At the end of the year, the public beta of “magic tower” added more than 10 million users in the first month and nearly 500 million users in the first month, driving the revenue to increase by 19.7% year-on-year, the net profit attributable to the parent company to increase by 81.1% year-on-year and turn around the loss month on month. As mentioned above, 21q4 has generated a number of one-time fees, and the three fees of 22q1 have returned to the normal level, with a significant decrease month on month.
The new overseas team went to the battle light and focused on the independent issuance of high-quality products
The company timely adjusted its overseas strategy, focused on the independent issuance of advantageous categories, and its overseas revenue is expected to grow rapidly in the future. In the 21st year, the company adjusted its overseas strategy, shut down some overseas projects whose performance did not meet expectations, and optimized relevant personnel. The new overseas distribution team has been adjusted in place, and the overseas distribution will gradually transition from authorized third-party distribution to independent distribution. We believe that this is conducive to the company’s focus on objectives, focusing on advantageous markets and categories, and overseas development is expected to enter a new stage. The first batch of products to implement the new strategy are “dream new killing immortal” and “magic tower”. They are excellent products of the company, and the monthly flow has reached the level of 500 million. They have been launched or tested in some overseas countries and regions. We believe that these two games will promote the rapid growth of overseas revenue in 22 years.
Investment advice
We believe that the company has bid farewell to the painful period of performance and is optimistic that the company’s overseas business will move towards a new stage of development. At present, the company has established a new strategy of “Chinese products going to sea + overseas localization development”. We believe that high-quality MMORPG / ARPG games such as Perfect World Co.Ltd(002624) , magic tower and so on have a certain prospect of going to sea. It is estimated that the company’s revenue in 22-24 years will be 10.3/121/13.7 billion yuan, with a year-on-year increase of 20.8% / 18.0% / 12.9%; The net profit attributable to the parent company was 1.90/22.5/2.5 billion yuan, with a year-on-year increase of 416% / 18.0% / 11.4%, the corresponding EPS was 0.95/1.12/1.24 respectively, and the corresponding P / E of the current stock price was 13.9/11.8/10.6 times respectively. We give a valuation of 15 times in 22 years, corresponding to the target price of 14.7 yuan, 12.0% more room than the current share price, and maintain the “buy” rating.
Risk tips
The risk that the version number policy is lower than expected, such as the number of version numbers granted each year is lower than expected, and the limitation of version number category is lower than expected; Geopolitics brings business risks to the sea, such as the game being taken off the shelf as a whole; Risk of failure of potential popular products, etc.
