This week’s market
This week (22.5.16-22.5.20), the Shanghai Composite Index, Shenzhen Component Index, gem index and media board index rose by 2.0%, 2.6%, 2.5% and 1.9% respectively.
The first three stocks in the sector rose this week Alpha Group(002292) (35.0%), Beijing Tensyn Digital Marketing Technology Joint Stock Company(300392) (28.3%), Shanghai New Culture Media Group Co.Ltd(300336) (22.4%), and the last three Citic Guoan Information Industry Co.Ltd(000839) (- 9.6%), Dasheng Times Cultural Investment Co.Ltd(600892) (- 9.0%), Beijing Gehua Catv Network Co.Ltd(600037) (- 6.8%).
This week, individual stocks in the overseas media sector rose by the first three bilibilibili SW (14.6%), China youzan (12.9%), baozun e-commerce (12.2%), the last three douyu (- 7.5%), straw bear Entertainment (- 6.1%), and robox (- 4.2%).
This week’s view
According to questmobile, the age structure of users in China’s game market is undergoing structural changes. As of March 2022, users over the age of 31 accounted for 51%, surpassing users under the age of 30. Among them, users over the age of 36 accounted for 36.6%, which also exceeded users under the age of 24. Compared with March 2019, users under the age of 30 accounted for 55.5%, and users over the age of 36 accounted for only 30.2%. We believe that with the age growth of the first generation of Chinese game users (end game users in 2000), the structure of Chinese game users is developing towards the whole age group, and the space for the improvement of Chinese game ARPU value is expected to be opened in the future. At the same time, it is suggested to pay attention to the change of China’s game market structure (reverse “hand to end”) and the boosting effect of the new trend of game going to sea on the scale growth of the game market.
\u3000\u30001. User scale: the year-on-year growth rate has slowed down significantly, but there is still room to improve the penetration rate. The future user increment depends on the natural growth of young game users, thus driving the passive change of the age structure of game users. According to the 2021 game industry report, the number of game users in China reached 666 million in 2021, a year-on-year increase of only 0.22%, but the penetration rate was only 47.6%.
\u3000\u30002. ARPU value: the main growth momentum of the game market in the future, and its growth logic depends on the change of the age structure of game users. There is still a big gap in ARPU value between Chinese and foreign game markets. We believe that it mainly depends on the difference in willingness to pay caused by the difference in the structure of Chinese and foreign game users. In 2020, players over 35 years old in Japan accounted for 55%, corresponding to ARPU of about 2230 yuan; In 2021, the average age of game users in the United States was 35, of which users over 34 accounted for 42%, corresponding to about 956 yuan ARPU. In contrast, the Chinese game ARPU in 2021 was only 445 yuan. At present, the main players of game payment are mostly post-80s, post-90s and other mature players, whose acceptance, payment ability and willingness to pay for the game are high. With the growth of the age of the new generation of game users, the age structure of Chinese game users will be further age-old. The improvement of payment willingness and payment ability caused by the change of age structure will become the main driving force for the growth of ARPU value in China.
Investment advice
(1) influenced by liquidity, China US game and strong regulatory expectations, Internet leaders continue to kill and have entered the oversold range. We continue to be optimistic about new opportunities in the future Internet 3.0 era. We recommend the community short video leader [Kwai-w], and pay attention to the falling Internet leaders [meituan-w] and [Tencent holdings].
(2) immersing in the Internet is the future development trend. Metauniverse is in the initial stage of development. Compared with the implementation of C-end applications (requiring the popularization of access terminals), we believe that g-end / b-end projects are expected to be implemented first. At present, various countries and local governments have gradually introduced relevant policies of the meta universe. City pavilions, exhibition halls, theme pavilions, enterprise pavilions and cultural tourism performance activities are expected to become the first application scenarios for virtual cultural and creative projects. Core recommendations include [ Shanghai Fengyuzhu Culture Technology Co.Ltd(603466) ], creative design leaders of cultural and tourism activities [ Beijing Fengshangshiji Culture Media Co.Ltd(300860) ], [ Silkroad Visual Technology Co.Ltd(300556) ], etc. In the near future, many first tier cities will hold the meta universe summit, which highlights the thematic opportunities of the meta universe sector (while considering the impact of changes in the external environment on risk appetite). It is suggested to pay attention to the NFT direction [ Visual China Group Co.Ltd(000681) ], [ Three’S Company Media Group Co.Ltd(605168) ], [ Inmyshow Digital Technology (Group) Co.Ltd(600556) ]; Direction of meta universe platform [ Beijing Quanshi World Online Network Information Co.Ltd(002995) ]; Virtual digital human direction [ Bluefocus Intelligent Communications Group Co.Ltd(300058) ], [ Hylink Digital Solution Co.Ltd(603825) ].
(3) we are optimistic about the fundamentals of the game industry for a long time, and the short-term policy disturbance is expected to promote the development of the game industry. At present, the share price of game companies has experienced a deep correction due to the suspension of edition numbers. After the reissue of edition numbers, the industry certainty has been established and has long-term investment value. It is suggested to focus on [ Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) ], which has strong operation ability, proven high-quality game R & D ability and sea distribution ability; [ Perfect World Co.Ltd(002624) ] with high-quality R & D ability and end-to-end tour of Zhuxian world; Focusing on research and development, small and beautiful [ G-Bits Network Technology(Xiamen)Co.Ltd(603444) ]; [netease-s] with rich product matrix and strong risk resistance; [bilibili-sw] and [heart company] which are greatly affected by the game version number.
Risk tips
The development progress of metauniverse is less than expected, the improvement of overseas liquidity is less than expected, the policy supervision is stricter than expected, the flow decline of game companies affected by the version number is more than expected, and the risk appetite is reduced due to changes in the external environment.
