In order to focus on the development of mobile phone games for female players in China, 06820.HK has successfully launched core products such as "floating Life for Qing Song", "Xi Fei Hui" and "Xi Fei Hui". In the first half of 2021, the average monthly ARPPU of 739.7 yuan (an annual increase of 27.2%) and 140 million consumer spending were achieved, but their income and profit fell by 20.7% and 20.1% respectively.
06820.HK 's profit warning index for the whole year of 2021 is expected to fall by about 40% to 50% in 2020, which means that profits in the second half of 2021 will fall by about 49.5% to 64.3% from the same period last year. The decline in revenue was mainly due to I) the decline in income received in recent years, ii) lack of new products, and iii) increased expenditure on research and development. However, the market has responded too much to the market's profit warning, and we believe that the current valuation I) partly reflects the weak performance performance in 2021, and ii) reflects the possibility of the market's business reaction in 2022.
The new models will be launched one after another: 06820.HK is developing a number of 2D and 3D models for female gamers, which will be launched in 2022 and 2023, some of which are focusing on revenue and offering new growth opportunities.
Long product life cycle: the product life life of 06820.HK 's products is generally long, among which the "Xi Fei Xia", which has been negotiated for 6 years, remains stable and is ready to be visited. 06820.HK generally attracts customers by introducing new features and prolongs the life of its products. Regular updating and content modification can effectively retain and prolong the product life cycle, so that the collection can improve the customer health value on the previous customer base.
The impact of the recent policy shift is relatively low: with regard to the issue of the success of the network of underage children, China has recently further accepted the relevant regulations on the contract agreement. In addition to the earlier ban on I) Internet surfing at 10 p.m., and ii) real-name authentication, China further stipulates that underage children are allowed to go from 8: 00 p.m. to 8: 00 p.m. on Friday, Saturday and Sunday. However, underage children are not the main users of 06820.HK, and women who can afford to pay between RMB 500 and RMB 750 per month are the main recipients of social networking, so their sensitivity to network regulation is relatively low in the near future.