Performance review
The company announced on March 25 that its 21-year revenue was 920 million yuan, down 24% from the same period last year, with a net loss of 300 million yuan, and an adjusted net loss of 240 million yuan, from profit to loss compared with the same period last year.
Comment
Key games continue to be tuned and delayed, and 21-year performance is under short-term pressure. 1) at the revenue end, the 21-year revenue was 920 million yuan, down 24% from the same period last year. We believe that the launch time was delayed mainly due to the company's additional R & D investment and tuning to the games "Noah Heart" and "Code: Sigmar", which were originally scheduled to launch in 21 years. 2) on the expense side, the company's R & D expenditure in 21 years was 706 million yuan, an increase of 31% over the same period last year. We believe that it is mainly due to the company's continued increase in R & D investment in R & D personnel and fine arts. In addition, games such as "Noah's Heart", "Avatar: liquidation" and "in the name of Shining" are expected to be launched in 22 years, which are all based on UE4 engine development, with higher requirements for art and R & D personnel. We believe that with the further improvement of the R & D team structure and part of the game reserve has entered the production stage, R & D costs are expected to maintain a steady growth.
Focus on 22-24 company game reserves, focus on the launch of new games is expected to accelerate performance release. The company's 22-year game reserves that dominate the global market include the projected "Heart of Noah" (MMORPG), "Avatar: liquidation" (shooting + MMORPG), "in the name of shining" (female + UGC), code name: Sigmar (Western magic theme SLG), among which:
Heart of Noah: is based on the UE4 engine to create an open world MMO, spherical seamless map is its biggest innovation. The game has gone through 3 closed tests and 2 paid tests, and is expected to be launched in 2Q22, of which the domestic version has been obtained and issued by Tencent, and overseas is expected to release independently.
"in the name of shining": based on UE4 female mobile games + virtual image creation UGC platform, strong screen expression and rich play, become the fastest game on TapTap to break through millions of reserved players.
Investment suggestion
The launch of a number of new games in the company's 22-24 years is expected to promote continued revenue growth. New games that are affected by the version number and released independently in 22-23 years have been strengthened to promote, so we have lowered the net profit of the 2022Universe 2023 company by 48% and 25%. It is estimated that the net profit of the 202lash 2023 will be-3.0 pm 2.3 billion RMB, corresponding to the EPS of-0.37 pm 0.28 pm 0.53 yuan, maintaining the "Buy" rating.
Risk hint
Game launch is less than expected; game industry policy risk; R & D cost fluctuation risk