\u3000\u3000 Perfect World Co.Ltd(002624) (002624)
Event: the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will reach 350-390 million yuan in 2021, a year-on-year decrease of 77.40% - 74.81%; The net profit after non deduction was RMB 100-120 million, a year-on-year decrease of 90.42% - 88.50%. Based on this calculation, the company's net loss attributable to the parent company in Q4 in a single quarter was 410-450 million yuan, and the net loss after deduction was 440-460 million yuan.
The performance of game business in the transition period is under pressure. The company expects the net profit of game business to be 670-690 million yuan in 2021, with a year-on-year decrease of 70.68% - 69.81%. The performance is lower than expected mainly due to: (1) team adjustment: the company focuses on core products and strengthens core competitiveness, and streamlines and optimizes teams that do not meet the strategic planning, resulting in one-time optimization expenses. In addition, in order to consolidate the stability of the team, the company increased the proportion of basic wages of core employees, resulting in an increase in labor costs in Q4 in a single quarter. (2) Product performance: it is expected that the flow of end-to-end travel will remain stable, and the flow of old travel such as Perfect World Co.Ltd(002624) , Zhuxian mobile travel and xinxiaoao Jianghu will decline slightly; In terms of new tour, the performance of Ares remains is not as expected. The launch of magic tower in December will generate some front-end expenses. It is expected that the profit will be gradually released in 2022. (3) Investment: the performance of some invested enterprises has declined due to factors such as product structure and equity incentive, and the investment income of the company has been affected.
The destocking of film and television business continues to be promoted, focusing on customized dramas with strong certainty, and the impairment of global film orders has an impact on short-term performance. The company expects a loss of 170-190 million yuan in the film and television business, of which the impairment impact of universal film order is 260 million yuan. In 2016, the company's fund signed a global film list cooperation agreement with Universal Pictures. Affected by the epidemic, the income of some films was lower than expected. It is expected that the risk will be further cleared after the impairment is accrued.
Focus on MMO + and card + track, and the global release of core products can be expected. 2021 is an important transition period. With team optimization, product strategy upgrading and innovation iteration, the company will focus on the global release of MMO + and card + category games in the future. At present, the overseas team structure has been adjusted in place, and "fantasy tower" is expected to be released globally in 2022. In 2021, the water flow of "dream new kill immortal" (launched on June 25) was nearly 1.6 billion yuan, and in the first month of the launch of "magic tower" (launched on December 16), the water flow was nearly 500 million yuan. The overseas increment is worth looking forward to. Other reserved products of the company include "Tianlong Babu 2", "one punch Superman: the world", "million King Arthur", "the kingdom of morning and night", "Zhuxian 2", "perfect Shanghai New World Co.Ltd(600628) " mobile game, and end game "Zhuxian world" (version No.).
Investment suggestions: considering 1) the postponement of game products; 2) Due to the impact of team adjustment and other factors during the transition period, we lowered the company's profit expectation. From 2021 to 2023, the company is expected to achieve revenue of 9.212 billion yuan, 10.451 billion yuan and 12.282 billion yuan respectively, and net profit attributable to the parent company of 375 million yuan, 2.018 billion yuan and 2.120 billion yuan, corresponding to PE of 71.7x, 13.3x and 12.7x, maintaining the "buy" rating.
Risk warning: policy supervision risk; The product performance is not as expected; Industry competition risk
