Event: the company issued a performance forecast for 2021, which is expected to achieve a return net profit of 3500-52 million yuan for the whole year, down 66% from 153 million yuan in the same period in 2010. this is mainly due to the loss on the performance of some participating companies and the company's proposed provision for impairment of long-term equity investment for some participating companies; it is expected to deduct the non-parent net profit loss of 1.82-199 million yuan, which is 91.85% lower than the same period last year. Non-recurrent profit and loss is about 234 million yuan, mainly due to the company's transfer of 93.5% stake in Beijing Fantasy Yueyou, which is expected to affect the company's net profit of about 130 million yuan.
Create a virtual human production platform and broaden the virtual human application scene. In 2021, the company established Beijing Yuanjing Digital Technology Co., Ltd as a joint venture with Beijing Zhijing Future Technology Co., Ltd., which aims to build an industrial virtual human production line and reduce the production cycle and various costs of virtual human. With the accumulation of existing resources in e-sports, marketing and other fields, the virtual human of Yuanjing Technology will be applied to games AI, star virtual image, live marketing and other scenes in the future; it can not only make its own virtual human, but also carry out virtual human research and development based on the production platform. Benefiting from the cost advantage of industrial production, the company may extend the virtual human business to daily life and realize the expansion of the virtual human to C-end business.
Develop digital marketing, promote the ability of traffic delivery and distribution. The company has completed the construction of domestic accurate digital marketing business teams headquartered in Beijing with Chongqing, Zhengzhou and Taiyuan as branches, and set up technology research and development, operation optimization and creative material production teams in Chongqing, Zhengzhou and Taiyuan to meet the needs of creative video shooting of various styles in real time. Up to now, the discharge scale of Shanxi data flow Ecological Park is more than 1.2 billion yuan, which has become an ecological service platform covering a variety of contents. In the first half of 2021, the total number of users of the company's Internet super traffic portal Ice Assistant reached 247 million, and the total number of products reached 7428. During the reporting period, the number of new users was about 14.9 million, and the number of monthly active users was about 20 million, forming a strong traffic distribution capacity.
Continue to optimize the layout of the game business, expand the concept of "e-sports empowerment". In 2021, the company's Japanese Texas hold'em competitive product "Sunvy Poker" added 220000 users, with a total registration of more than 1.2 million, ahead of similar products. At the same time, the company will fully integrate its board game products into WCAA Cloud e-sports platform, innovate to create a "chess and card + e-sports" business model, and lead board games to return to the origin of entertainment and competition through electronic competition; in addition, the company will gradually expand the concept of "e-sports empowerment" and continue to explore the growth potential of the leisure game market.
Profit forecast and investment advice. According to the company's latest 2021 performance forecast, the net profit from 2021 to 2023 is expected to be 47 million yuan, 192 million yuan and 295 million yuan, corresponding to 161,40 and 26 times PE respectively. In view of the rapid growth of the company's data traffic business and the strategic layout of the virtual human track, we maintain our "hold" investment rating on God Entertainment.
Risk hint: the risk that the development of the industry is less than expected, the risk of change in industry policy, and the risk aggravated by market competition.
