\u3000\u3 China Vanke Co.Ltd(000002) 555 Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) )
Event:
The company released the first quarterly report of 2022.
Comments:
In the first quarter, the performance increased rapidly, and the overseas revenue increased by more than 45% year-on-year
In the first quarter of 2022, the company achieved an operating revenue of 4.089 billion yuan, a year-on-year increase of 7.11%; The net profit attributable to the parent company was 760 million yuan, a year-on-year increase of 550.8%; The net profit attributable to the parent company after deducting non profits was 762 million yuan, a sharp rise year-on-year. The gross profit margin was 86.29%, a year-on-year decrease of 0.11pct. The sales expense rate / management expense rate / R & D expense rate were 56.41% / 2.64% / 6.74% respectively, with a year-on-year rate of -16.94 / -0.06 / -1.77pct. The company further optimized the expense control. Among them, the sharp decline in sales expenses is mainly due to the increase in the number of new products launched in the same period last year, and the centralized launch of sales expenses, which has a short-term impact on the performance. The company has strengthened the refined operation of products, lengthened the life cycle of stock products, and products such as glory archangel and Douluo continent: Awakening of Wu soul have entered the growth period, contributing to stable performance.
Overseas business development accelerated, and Q1 revenue increased by more than 45% year-on-year
The company’s overseas business grew rapidly, with an overseas revenue of more than 1.4 billion yuan in the first quarter, a year-on-year increase of more than 45%, accounting for more than 34% of the revenue. According to dataai data, the company ranked among the top five in terms of revenue of overseas manufacturers in the first quarter. In terms of key products, “Puzzles & survival” currently ranks 15th in the best-selling list in the United States. “Douluo mainland: duel between soul masters” 21q3 will be launched overseas, with a monthly peak of more than 700 million yuan. It will be launched in Vietnam, Thailand, Japan, South Korea and Europe and the United States. MMORPG mobile game “song of Cloud City” entered the top 5 of the best seller list and the top 20 of the overseas revenue list of domestic mobile games after it was launched in South Korea. Products such as Chrono legacy, SLG ant Legion and Three Kingdoms: glory of heroes have been tested overseas. The company is deeply engaged in MMO, SLG, card and simulated operation of four major tracks, and has more than 30 funds in reserve, including self-developed products such as code magic m, code ancient style, code 3D WTB, code AOE, code Three Kingdoms by, code C6, code women to cy and a variety of agency products.
Investment advice and profit forecast
The company has increased its own research on the core advantages of traffic operation, carried out category innovation iteration, deeply cultivated the four major tracks of MMO, SLG, card and simulated operation, and achieved breakthrough growth in overseas layout. We expect that the company’s EPS will be 1.46/1.71/1.93 yuan / share from 2022 to 2024, and the corresponding PE will be 17x / 14x / 13X respectively. Maintain the “buy” rating.
Risk tips
The launch of new games is less than expected, the flow of old games in the head is declining rapidly, and the industry policy risk.
