With the acquisition of Decheng International, profits have maintained high growth. In the first half of 2021, the company realized HK $497 million in revenue, an increase of 58.1% over the same period last year, and its profit was HK $273 million, an increase of 28.4% over the same period last year.
The profit growth mainly comes from the company's acquisition of a 100% stake in Decheng International in February 2021. Decheng International is an authorized operator for the company, and the distribution company independently develops a variety of game works.
The performance of the old game is stable and the game reserve is sufficient. Many of the company's best-selling games remained stable. "fishing in chaos" was launched for three years, with revenue of HK $266 million in the first half of the year, accounting for 53.5% of the total revenue. "snack fighting" was launched for four years, with revenue of HK $54 million in the first half, accounting for 10.9% of the total revenue. As of June 31, the company has a reserve of nine independent research and development games, including "intellectual marbles", "the demons of the East China Sea" and "the Wulin Leader of the Wind" are all expected to be launched this year.
Actively explore the combination of blockchain and games. The company launched the "reward points platform Test" in Thailand, which aims to connect the company's Thai games, where game users can earn bonus points through arithmetic and interactive activities, which can be used in exchange for NFT props or Thai phone cards (similar to Octopus), which has attracted more than 200,000 players. The combination of NFT and points can play the following roles: 1) reward points to improve users' online time; 2) drainage incentives, points can be circulated in a variety of games, through a certain incentive mechanism to achieve drainage within different game groups, so as to achieve low-cost customers; 3) enrich the use of scenes, points can also be extended to real scenes outside the game, playing a similar "credit card" function.
[investment advice]
We estimate that the operating income of the company in 2021-2023 is 833 Universe 1.408 billion, the net profit of return to the parent is 450,000,000, and the net profit of the parent is 584 million. The EPS corresponds to 0.12 cusp 0.15max 0.20 yuan per share, and the PE is respectively times that of 16-13-10. Coverage for the first time, giving a "overweight" rating.
[risk Tip]
Industry competition aggravates risks
Overseas expansion is not as expected.
