\u3000\u3 China Vanke Co.Ltd(000002) 555 Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) )
The performance of 21 years exceeded the upper limit of the notice, and a new round of employee stock ownership plan was launched. The company released the annual report of 2021 and the performance forecast of 22q1. In 2021, the revenue increased by 12.6% year-on-year to RMB 16.22 billion, the net profit attributable to the parent increased by 4.2% year-on-year to RMB 2.88 billion, and the net profit excluding non attributable to the parent increased by 9.8% year-on-year to RMB 2.63 billion, exceeding the upper limit of the previous forecast, in which the net interest rate of 21q4 increased by 9.3/9.1pct to 27.9% year-on-year. The company expects that the net profit attributable to the parent company in 22q1 increased by 534% ~ 559% year-on-year to 740 ~ 770 million yuan, and the net profit excluding non attributable to the parent company increased by 19202% ~ 19985% year-on-year to 740 ~ 770 million yuan. At the same time, the company launched a new phase of employee stock ownership plan, with a target of net profit attributable to the parent company of no less than 33.07/35.95/3.883 billion yuan in 22 / 23 / 24, with a year-on-year growth rate of 15.0% / 8.7% / 8.0%.
Significant breakthroughs have been made in the strategic layout of globalization. In 2021, the company’s overseas business revenue was 4.78 billion yuan, a year-on-year increase of 122.9%, accounting for 14.6pct to 29.5%. The highest monthly flow overseas exceeded 700 million, with more than 55 million new registered users and more than 8.5 million Maus. As of December 2021, the cumulative flow of Puzzles & survival has exceeded 2.5 billion yuan, which is still stable at the top 20 of the best seller list in the United States and Japan. According to mobileindex data, the revenue of “song of Cloud City” in South Korea exceeded 100 million yuan in February 2022, which promoted the company to become the highest paid Chinese game manufacturer in South Korea. At present, it is still stable at about the 10th place in the best-selling list. The new SLG products with the theme of the Three Kingdoms have been launched in South Korea at the end of March 2022 and are currently stable at the top 50 of the best-selling list. There are 16 subsequent overseas products in reserve, of which Chrono Legacy (code C6, self-propelled chess card) and ant legend (ant theme SLG) are tested in overseas regions. It is recommended to continue to pay attention to the subsequent online progress.
The flow of China’s core products is steady. In China, the company’s heavy self-developed battle strategy card mobile game Douluo mainland: duel between soul masters was launched in July 2021 and is still stable at about the 30th place in the best-selling list of IOS games. In addition to continuously contributing to the company’s performance, the product unifies the company’s R & D process and underlying logic in the next generation field in the R & D process, forming a set of inheritable and iterative system, which has laid a solid foundation for subsequent product R & D. At present, the company has 20 products in China (7 of which are self-developed). We expect that the company’s “China + overseas” double line development and “dual core + diversified” category expansion are expected to open up the company’s long-term space and drive the future performance trend to continue to rise.
Profit forecast. We expect the company’s EPS from 2022 to 2024 to be 1.51 yuan, 1.76 yuan and 2.05 yuan respectively. Referring to the unanimous expectations of comparable companies in the same industry and considering the leading position of the company’s game distribution operation, we have built the core competitive advantage of “integrating research and operation” by continuously increasing R & D investment and distribution operation. 1) we give the company 22 times the target PE in 22 years, with the corresponding target price of 33.20 yuan; 2) Give the company 4 times PS in 2022, and the corresponding target price is 34.23 yuan; To sum up, we gave the company a target price of 33.20 yuan (up 0.12%), maintaining the rating of “better than the market”.
Risk warning. The performance of new mobile games is less than expected; The flow of old products is declining rapidly; Overseas market risk.
