\u3000\u3 China Vanke Co.Ltd(000002) 555 Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) )
Event: Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) april 29 released the first quarter report of 22 years. In 22q1, the company realized an operating revenue of 4.089 billion yuan, yoy + 7.11%, qoq-0.40%; The net profit attributable to the parent company is 760 million yuan, yoy + 550.80%, qoq-34.17%, which is within the forecast range (forecast 740 ~ 770 million); Deduct non net profit of 762 million yuan, yoy + 1977429%, qoq-31.21%. The company’s gross profit of 22q1 is 3.529 billion yuan, with a gross profit margin of 86.29%, yoy-0.11pcts, QoQ + 1.59pcts; The net interest rate is 18.41%, yoy + 15.45pcts, qoq-9.50pcts. The company’s net profit of 22q1 increased year-on-year, mainly due to the significant increase in sales expenses at the initial stage of the online promotion of 21q1 new games.
Sales expenses contracted year-on-year, and the early online games entered the payback period. In terms of expenses, the sales expenses of 22q1 company are 2.307 billion yuan, yoy-17.62%, QoQ + 24.51%; The sales expense rate is 56.41%, yoy-16.94pcts, which is mainly due to the launch of new games such as 21q1 China’s glory archangel, the Immortal King, Douluo mainland: the awakening of Wu soul and overseas Puzzles & survival. The sales expenses are high at the initial stage of promotion. The management fee is 108 million yuan, yoy + 4.85%, qoq-15.07%, and the management fee rate is 2.64%. The R & D cost is 276 million yuan, yoy-15.11%, QoQ + 6.55%, and the R & D cost rate is 6.74%. The financial expense is RMB -15 million, yoy-35.74%, QoQ + 30.16%, and the financial expense rate is -0.37%.
ESOP enhances business enthusiasm and demonstrates the confidence of the company. On April 26, the company issued the fourth phase of the employee stock ownership plan, with no more than 650 employees participating in the plan, including 7 Board of directors and senior executives. The current shareholding plan totals 16 million shares, accounting for 0.74% of the total share capital of the company, with a duration of 72 months. Based on the operating income and net profit in 2021, the performance evaluation index of the company from 2022 to 2024 is that the operating income is not less than 18648 / 202.7021892 billion yuan or the net profit is not less than 3307 / 35.953883 billion yuan.
Overseas business has maintained a high growth, and Q1 ranks among the top 6 manufacturers of mobile travel to the sea. 22q1 company’s overseas market revenue exceeded 1.4 billion yuan, with an increase of more than 45% at the same time, and the proportion of overseas revenue continued to increase. According to sensortower, the company ranked 6 / 4 / 4 in the global revenue ranking of Chinese mobile game publishers from January to March. “Douluo mainland: duel of soul masters”, “Puzzles & survival”, “call me the big shopkeeper” and “song of Cloud City” released for the global market have performed well, among which “Puzzles & survival” ranked No. 6 / 5 / 5 in the overseas revenue list of Chinese mobile games from January to March; “Song of cloud going to the city” ranked No. 23 / 16 / 14 and ranked among the top 5 best sellers of mobile games in South Korea. In mid February, the company launched the daily service version of the brave in the air.
China benefited from the recurrence of the edition number, and the follow-up reserves were gradually released. The company reserves MMO, SLG, cards, simulation operation and other multi category games, covering magic, immortal Xia, city, women and other types of themes. The diversified product matrix has begun to take shape. Among them, MMO mobile Tour “dream Voyage”, “dawn plan”, “handed down light”, card mobile Tour “the last primitive man” and “fortress of the air: sailing” have won Chinese version numbers.
Investment suggestion: thanks to the profit recovery period of online games in 21 years and the excellent performance of overseas products, the company’s 22q1 performance increased as scheduled. We look forward to the continuous contribution of the follow-up launch of Xinyou outside China. We maintain the original profit forecast. It is estimated that the company’s net profit for 22-24 years will be RMB 3.312/37.95/4.266 billion, with a year-on-year increase of 15.17% / 14.59% / 12.40%, corresponding to the valuation of 16x / 14x / 13X. Give 20xpe for 22 years, and the target price for 22 years is 29.8 yuan, maintaining the “buy” rating.
Risk tip: the running water does not meet expectations, the industry supervision is becoming stricter, and the distribution of version number is less than expected
