\u3000\u3000 Kingnet Network Co.Ltd(002517) (002517)
Company dynamics
The company announced the annual performance forecast for 2021. The company expects to realize a net profit attributable to the parent company of 550-650 million yuan, with a year-on-year increase of 209% – 265%.
Event comments
New and old games performed well and their business performance improved significantly
In 2021, the company expects to realize a net profit of 430-560 million yuan after deducting non profits, with a year-on-year increase of 457% – 625%. The substantial growth in performance is due to the outstanding performance of the company’s three business segments of R & D, distribution and investment + IP. From the product side, old games such as original legend, legend of the king and high-energy hand run group will continue to maintain good revenue and profit contribution in 2021. At the same time, the new online hot blood attack “Swordsman in Black: trump card” and “Legend of demon heroes” performed well as a whole. The company expects that the impact of non recurring profit and loss on the net profit attributable to the shareholders of the listed company in 2021 will be about 90-120 million yuan.
The product reserve is more and more abundant, and a variety of heavy products are ready to go
Looking forward to 2022, the company’s reserve of high-quality games will be richer and richer. In mid January, the company launched a new miracle MMO mobile game “battle of angels”, which is self-developed and self operated. One week after its launch, the game ranked 24th in the IOS best seller list; The open World RPG mobile game “Xuanzhong Ji” represented by Tencent is expected to go online in the near future; The Guofeng card RPG “monster 2”, developed by the company’s digital raccoon and issued by the company’s exclusive agent, has a high degree of completion and is expected to log in to the game market outside China within this year. Other game products reserved by the company also include the legend of fairy sword and chivalry – a new beginning, the journey to the west of the eight dragon gods, the story of relying on heaven to kill the dragon, the stone age, tomb robbing notes, Douluo continent, as well as the original IP products with edition numbers, such as the dream of floating in the mountains and seas, the land of the Holy Spirit, etc.
Profit forecast
The company always adheres to “focusing on the main business of games” as the core strategic direction of the company’s development, and the continuous enrichment of product reserves is expected to promote the sustained and rapid growth of the company’s performance. The company’s profit forecast is raised. It is estimated that the attributable net profit of the company from 2021 to 2023 will be 604 / 727 / 868 million yuan respectively, the corresponding EPS will be 0.28/0.34/0.40 yuan / share respectively, and the corresponding PE will be 18.36/15.25/12.77 times. Maintain the “buy” rating.
Risk tips
Intensified competition in the game industry, policy risks, the risk that the performance of new games is less than expected, the risk of changing the actual controller, and legendary copyright disputes
