Perfect World (002624) Comments: Short-term performance is under pressure, expecting follow-up new products to contribute performance
Category: Company organization: China Merchants Securities Co., Ltd. Researcher: Gu Jia/Xie Xiaoyan Date: 2021-09- 01
Event: The company released 21H1 results, achieving revenue of 4.207 billion, a year-on-year decrease of 18.22%; achieving net profit attributable to the parent of 258 million, a year-on-year decrease of 79.72%; non-net profit attributable to the parent deduction of 38 million, a year-on-year decrease of 96.68%.
Comments:
Q2 saw a large decline in a single quarter, mainly due to the closure of overseas projects that did not meet expectations and the company's game business during the transitional phase of brand upgrades and product innovation iterations. In the first half of the year, the game business achieved revenue of 3.409 billion yuan, a year-on-year decrease of 21.75%, and realized a profit of 223 million yuan, a year-on-year decrease of 80.71%. In Q2, the net profit attributable to the parent company lost 207 million yuan in a single quarter. The main reasons are as follows: 1) The company incurred a one-time loss of approximately 270 million yuan in order to optimize the overseas layout and shut down projects that did not meet expectations; "Span2span" and "Fantasy New Zhuxian" are marketed in the early stage of launch, and the cost is included in the current period at one time, but the revenue recognition is deferred in the later period; 3) Old games will experience flow fluctuations based on expansions and activity schedules, and in the first half of last year Affected by the epidemic, the game business has formed a relatively high base. During the reporting period, the company's main game flow has naturally fallen compared to the same period last year.
The non-recurring gains and losses in the first half of the year were about 220 million yuan, mainly composed of asset disposal income, government subsidies included in current gains and losses, and entrusted others to invest or manage.
In the short term, " Dream New Zhu Xian " has been launched with a turnover of 500 million in 30 days and 750 million in 50 days. The best-selling list is now stable at around 10, which is expected to contribute higher profits in the second half of the year. Xinyou went live on June 25th,It ranked first on the domestic iOS game free list the day after it was launched, and it entered the top 5 domestic iOS game bestsellers on the third day. Previously, the number of appointments on the official website exceeded 1200w. Based on the classic turn-based gameplay, the game has completed 15 world maps, created 18 original scenes and a 45 million square meters fairy world. It uses real-time light rendering technology and PBR2.0 physical rendering technology to create high-quality image performance. , And a younger art style, both turn-based strategy and quality experience improvement, and perfect combination of quality and efficiency, more mature, combined with the steady purchase of products for marketing, superimposed on Zhuxian IP blessing, it is expected to be realized Steady long-term operation contributes to the increase.
In the long run, a new round of the company's product cycle has begun. Basically all heavyweight products have obtained version numbers. Multiple rounds of testing have also been steadily advanced, and product certainty has gradually increased. "Phantom Tower" (pan-two-dimensional open world MMO) suppressor increase test (using Android limited number deletion billing test) has been completed, and it is expected to be available for public testing in the fourth quarter. The number of reservations on the official website has exceeded 937w; there are other "One Punch Man" : World" (ARPG), " Tianlong Babu 2 " and other diversified products have abundant reserves.
announced 24 new products at the 2021 game strategy conference, 95% of which are self-developed products. At the same time, the company cooperated with Guangguang Caitiaowu to obtain the three major IPs of "Nezha", " Return of the Great Sage " and " Jiang Ziya ", and cooperated with Bilibili and Yihua Kaitian to build the "Ling Cage" IP. From the perspective of product reserves, while maintaining the core advantages of the existing MMORPG, we will continue to increase research and development of new products and market segmentation of games.
In terms of film and television, the risk of impairment of inventory and goodwill has been released. The company adapts to the changes in the market environment, combines prudent investment with active inventory, accelerates the issuance and scheduling of inventory projects, and adopts a more focused strategy in the establishment and start-up of new projects. During the reporting period, the company produced " Shangyang Fu", "The Eye of the Storm", "Love Under the Stars", "Tomorrow we will have a good time", "Little Girl Dresses", " Ideal Shines in China", "Warm Taste", " Glorious" And dreams", "High Aspirations"
and many other high-quality TV series have been broadcasted,Achieved a good market reputation. In addition, the company reserves ", who is it to me"
" glazed tiles", " moonlit green hills and picturesque ", "peace boat", " mountains, rivers and mountains" and other film and television works In the process of production and distribution.
Earnings forecasts and investment recommendations: Considering the single-quarter loss in Q2 and the subsequent product cycle, the company is expected to achieve net profits of 1.586 billion, 2.631 billion and 3.143 billion yuan, respectively, corresponding to 18 times, 10.9 times and 9.1 times in 2021-2023. The price-earnings ratio maintains a strongly recommended-A rating.
Risk warning: the launch of new games and their performance below expectations, the launch time of film and television business is not as expected, the risk of asset impairment, and intensified market competition.
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