\u3000\u3000 Perfect World Co.Ltd(002624) (002624)
Event:
The company announced 2021 performance forecast: the net profit attributable to the parent company was 350-390 million yuan, yoy-77.4% - 74.8%; Deduct non net profit of RMB 100-120 million, yoy-90.4% - 88.5%.
Key investment points:
1. Factors such as product performance, organizational adjustment, investment loss and asset impairment caused Q4 performance to decline month on month
The company expects to realize a net profit attributable to the parent company of 350 ~ 390 million yuan in 2021, with a deduction of non net profit of about 100 ~ 120 million yuan, corresponding to a deduction of non net profit of - 460 ~ - 440 million yuan in 2021q4, yoy-26.5% ~ - 29.7%, qoq-188.2 ~ 184.4%. The non recurring profit and loss in 2021 is about 250-270 million yuan, mainly 240 million yuan in 2021q1-q3 (including the disposal income of some equity of subsidiaries and associated enterprises, as well as conventional government subsidies, financial management income, etc.).
By business: (1) the company expects the profit of game business to be 670-690 million yuan (yoy-70.7% - 69.8%) in 2021. According to the announcement and public teleconference, the main reasons for the decline of the company's game business in the whole year, especially the obvious decline in Q4 month on month are as follows:
① product level: in terms of old games, the performance of "dream new kill immortal" launched in June 2021 is commendable, achieving a cumulative flow of nearly 1.6 billion and a profit of 500 ~ 600 million, but the flow of Q4 is lower than Q3 (2021q3 ranks 12th on average in the best-selling list of IOS games, and 2021q4 drops to 31); The performance of Ares relic launched in 2021h1 was lower than expected, resulting in losses; The performance of old games operated for a long time is relatively stable. 2021q4 mobile game Perfect World Co.Ltd(002624) ranked 42nd in the best-selling list of IOS games (down 1 place from 2021q3), 2021q4 mobile game "xinzhuxian" ranked 48th (up 5 places from 2021q3), and 2021q4 mobile game "xinxiaoao Jianghu" ranked 86th (down 1 place from 2021q3). In terms of new games, magic tower performed well in the public beta on December 16, achieving the results of running water of 50 million + on the first day, adding more than 10 million users and running water of nearly 500 million in the first month. 2021q4 ranked fifth on average in the best-selling list of IOS games and currently ranked 42nd. However, its public beta day is close to the end of the reporting period, which is due to the mismatch of early investment and income recognition.
② at the organizational level: the optimization and streamlining of redundant personnel + the strengthening of incentives for core backbones in parallel, resulting in the centralized embodiment of one-time labor costs and related expenses in 2021q4.
③ foreign investment: the operating profit of foreign investment projects decreased in 2021, resulting in a decrease in investment income.
(2) the company estimates that the profit of film and television business in 2021 will be - 170 ~ - 190 million yuan, mainly from the loss of changes in fair value caused by the single investment of Universal Pictures. In 2016, the company's fund signed a single film investment and strategic cooperation agreement with Universal Pictures. Due to the repeated overseas epidemic and other factors, the income of some film projects was lower than expected. According to the proportion of the company's share in the fund, the net profit attributable to the parent company decreased by 260 million yuan, which was included in non recurring losses. If the impairment effect is not considered, the profit of film and television business is about 70 ~ 90 million yuan.
2. Looking forward to 2022: in terms of game business, magic tower and dream new kill immortal constitute the basic profit sector, and overseas magic tower plans to realize the synchronous distribution of global mobile + PC + host end in the middle of 2022; January 26 "magic tower" × The linked version "white moon Breaking Dawn" of "spirit cage" is about to open, which is expected to increase the number of flowing water and active users (the animation works jointly produced by "spirit cage" for art painting Kaitian and BiliBili have similar doomsday settings with "magic tower", with a total playback volume of 470 million on BiliBili and a Douban score of 8.3); The follow-up plan of "magic tower" is to update the version at the rhythm of a small version in 2 weeks and a large version in 16 weeks. At present, it reserves the mobile games of "Tianlong Babu 2", "one punch Superman: the world", "million King Arthur", "the kingdom of morning and night", "Zhu Xian 2", " Perfect World Co.Ltd(002624) " and the end game of "Zhu Xian world" (version number has been obtained).
In terms of film and television, the company continues to digest its inventory, including "glazed tiles in the past", "picturesque green mountains in the moon", "biography of Yunxiang", "let your years be quiet", "stars condense into sugar", "rock and roll crazy flowers", "special agent mission" and "brilliant! Brilliant!" Film and television works such as "wish comes true" are being produced and distributed.
3. Profit forecast and investment rating: we expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 3.6/18.1/2.5 billion, corresponding to PE of 78.1/15.7/1.4x. The company has strong R & D strength and is currently at the key node of transformation. The products represented by magic tower have laid the foundation for the company's high-quality, diversified and international strategy. It is suggested to pay attention to the long-term operation of products, performance at sea, distribution of edition numbers and maintain the "buy" rating.
Risk tips: stricter policy supervision, less progress in obtaining version number than expected, intensified market competition, less progress and performance of new products, higher flow cost, less life cycle of old products than expected, loss of core talents, change of player preference, less than expected technological development, corporate governance / asset impairment / risk of lifting prohibition and reduction, market style switching Downward trend of Industry Valuation center, etc.
