\u3000\u3 China Vanke Co.Ltd(000002) 624 Perfect World Co.Ltd(002624) )
Event: Perfect World Co.Ltd(002624) released the annual report of 2021 and the first quarterly report of 2022
Annual report of 2021: during the reporting period, the company achieved a total operating revenue of 8.518 billion, a year-on-year decrease of 16.69%, a net profit attributable to the parent of 369 million, a year-on-year decrease of 76.16%, a net profit attributable to the parent of 102 million after deduction, a year-on-year decrease of 90.26%, a total operating revenue of 1.779 billion in a single quarter in the fourth quarter, a year-on-year decrease of 17.77%, a month-on-month decrease of 30%, a net profit attributable to the parent of -431 million and a net profit attributable to the parent of -460 million after deduction. The company plans to distribute a cash dividend of 12 yuan (including tax) for every 10 shares to all shareholders, with a dividend amount of 2.29 billion.
The first quarterly report of 2022: during the reporting period, the company achieved a total operating revenue of 2.128 billion, a year-on-year decrease of 4.6%, a net profit attributable to the parent of 840 million, a year-on-year increase of 80.99%, and a net profit attributable to the parent of 414 million after deduction, a year-on-year increase of 30.15%.
Comments:
The 2021 annual report and the first quarterly report of 2022 are in line with expectations. In 2021, the company launched new games “dream new kill immortal” and “magic tower”. From June 2021 to the end of the year, the cumulative water flow of “dream new kill immortal” was nearly 1.6 billion yuan. The public beta of “magic tower” was conducted on December 16, 2021, with more than 10 million new users and nearly 500 million water in the first month. The two products are the diversified and innovative attempts of the company on the traditional track and the new track, and have achieved good results. However, from the perspective of performance, the performance was poor in 2021 due to the impact of lower than expected overseas game business, loss of fair value of Universal Pictures film sheet and substantial increase in R & D expenses driven by the overall improvement of personnel welfare.
In the first quarter report of 2022, the company’s business gradually returned to the right track. Products such as magic tower and dream new kill immortal promoted the company’s gross profit margin. The overall gross profit margin of the company in the first quarter of 2022 was 68.65%, an increase of 12 percentage points over the same period last year.
In 2021, the company’s expense rate increased significantly. In the fourth quarter of 2021, the company improved the overall salary level of employees. The annual R & D expense rate of the company reached 25.96%, an increase of more than 10 percentage points over last year, and the management expense rate reached 8.6%, an increase of 1.2 percentage points over the same period last year. In terms of sales expense rate, due to the company’s “integration of quality and efficiency”, the annual sales expense rate was 23.32%, an increase of 5.4 percentage points over the same period last year. In the first quarter of 2022, the company continued the high level of 2021 in terms of R & D expense rate and management expense rate, and the sales expense rate decreased slightly month on month, reaching 13.05% in the first quarter of 2022.
Product reserve: the company’s game business experienced transformation and structural adjustment in 2021. At present, it has identified two core tracks of “MMO +” and “card +”. The reserved mobile game products include “black cat anecdote society”, “Tianlong Babu 2”, “the kingdom of morning and night”, “one punch Superman: the world”, “King Arthur million”, “Zhuxian 2”, “perfect Shanghai New World Co.Ltd(600628) ,” Shenmo mainland 2 “and the end game product” Zhuxian world ” Perfect new world, haveanicedeath, etc; The film and television business reserves include “green mountains in the moon are as light as a picture”, “biography of Yunxiang”, “let your years be quiet”, “stars fall into sugar”, “rock and roll crazy flower”, “special agent mission”, “brilliant! Brilliant!” “What you wish for”, “warm and sweet”, “only this Jianghu dream” and so on are in the process of production and distribution.
Profit forecast and Valuation: due to the excellent performance of the company’s products in the first quarter of 2022 and the approval and opening of the industry version number, we appropriately raised the company’s performance forecast from 2022 to 2023. It is estimated that the company’s revenue from 2022 to 2023 will be 10.282 billion (original 9.301 billion) and 11.479 billion (original 10.817 billion), with a year-on-year increase of 21% and 12%, and the net profit attributable to the parent company will be 2.01 billion (original 1.995 billion) and 2.184 billion (original 2.18 billion), with a year-on-year increase of 445% and 9%. The current market value corresponds to 13X and 12x PE in 2022 and 2023. It is recommended to continue to focus on and maintain the “buy” rating.
Risk tips: 1) stricter version number supervision policy; 2) The online time of the game is not up to expectations; 3) The risk that the information and data used in the research report are not updated in time.
