\u3000\u3000 Shanghai Yaoji Technology Co.Ltd(002605) (002605)
Event: on January 18, 2021, the company disclosed the performance forecast of 2021. In 2021, the net profit attributable to the parent company is expected to reach 540 ~ 600 million yuan, a year-on-year decrease of 45% ~ 51%; The net profit attributable to the parent company after deducting non profits reached 490-550 million yuan, a year-on-year decrease of 3% ~ 13%; The basic earnings per share is 1.35 ~ 1.51 yuan / share.
The increase in R & D investment + short-term disturbance factors resulted in a year-on-year decrease in net profit attributable to the parent company, which did not change the driving force of long-term performance growth. According to the forecast disclosure, the decline factors of net profit attributable to parent company in 21 years mainly include three aspects: 1) increased R & D expenses. The company increased R & D investment (expanded R & D personnel) to improve the comprehensive competitiveness of Internet mobile game business. 2) The price rise of playing cards raw materials has led to an increase in procurement costs. 3) Changes in accounting methods of the group. In 2021q1, the equity of Shanghai cell therapy group Co., Ltd. was changed from equity method accounting to financial assets measured at fair value and the change was included in the current profit and loss, forming a one-time large non recurring profit and loss (about 483 million difference). In addition, the slight year-on-year decline in net profit attributable to parent company after deduction of non recurring profit and loss is due to the government subsidy obtained by the company in 2021, which is expected to have an impact on net profit attributable to parent company of 45 million yuan to 55 million yuan. Overall, the net profit attributable to the parent company in 2021 is in line with expectations, the rise of raw materials and accounting changes are not sustainable, and the pattern of the company’s long-term development based on games and digital marketing has not changed.
Make efforts to overseas bingo games and other business layout, and technology support such as block chain in the meta universe era. The performance in 2022 is expected. The company’s “troika” of games, digital marketing and playing cards:
1) in 2021, the game R & D will be overweight, the new game will be launched in 22 years, and the profits will be realized simultaneously in the later stage. At present, the company’s game R & D focuses on three directions: establishing a data studio, expanding the product matrix and developing new products of sea games. At present, the performance of the core production team is linked to the output of the game, and the increase of R & D rate is a pre benign indicator. The company’s “Yaoji fishing 3D” was launched at the end of 21, and the product iteration extended the life cycle. In the future, the company’s new products in bingo, solitaire and other sectors will be launched one after another, opening up the growth space of overseas games.
2) in terms of Internet marketing, yao ji is expected to rapidly accumulate in external customers and achieve performance growth in 22 years with the young team’s professional and in-depth understanding of the marketing industry; In terms of traditional poker business, according to the company’s research activity table on November 1, the price of Q3 paper has decreased. At present, the price of raw materials has returned to normal, and the company’s poker production capacity has a steady expansion plan. The leading position of the company’s poker business is stable and its profitability is stable.
Investment suggestion: we predict that the company’s revenue from 2021 to 2023 will be RMB 3.935/5.244/6.504 billion respectively, with a year-on-year increase of 53.6% / 33.3% / 24%, and the net profit will be RMB 566 / 6.81/830 million respectively, with a year-on-year increase of – 48.2% / 20.3% / 21.9%. The corresponding closing price PE on January 18 was 22.7 / 18.9 / 15.5 respectively. Considering the company’s continuous growth and the possibility of the expansion of the company’s overseas business in China by emerging blockchain technologies in the meta universe era, if pe27 times is given in 2022, the corresponding market value of the company will be 18.5 billion yuan and the corresponding target price will be 45.8 yuan / share.
Risk warning: policy supervision risk; Risk of changes in cooperation policies of platform parties; Marketing development is less than expected; Core business cost risk; Multi domain layout management risk; Recent stock price changes; The performance forecast is the preliminary calculation result. Please refer to the annual report
