Deep ploughing Journey, Ball Battle two core IP, focus on the track to do longevity games. The company's core business strategy is to focus on being good at the track, to concentrate resources on continuous investment, and to do longevity games. At present, the company's main leading product lines are "Journey" series and "Ball Battle", which have been operated for more than 15 years and 7 years respectively to maintain the vitality of the ultra-long line. The company works meticulously around the two core IP, on the one hand, high-frequency updates continue to iterate to meet user needs, on the other hand, through e-sports events, cultural and creative linkage and other ways to expand the influence of IP. From the financial point of view, the longevity game helps to smooth performance fluctuations; from 2018 to 2021, the company's performance remained basically stable with the support of mature products. It is expected that the journey, ball operations will continue to be sound, for the company to build a solid revenue and profit base.
The core track gains phased results, and the new products are expected to contribute more flexibility. According to the company's announcement, it is expected that the three products of "Super Sus", "primitive Journey" and "Dragon and the end of the World" will be launched in 2023, which is expected to usher in the product year. At the same time, three products have important strategic significance: 1) "Super Sus" make-up ball battle has become another masterpiece of the leisure competitive track, and will also be in the vanguard of the company's global layout; 2) "primitive Journey", as the flagship product of the "Journey" series that has been lost for three years, will further consolidate the company's lead in the national war MMO track. 3) with high expectations, "Dragon and the end of the World" is expected to be a milestone product for the company to enter the placement track and the two-dimensional circle.
Investment advice: give a "buy-A" rating. The company has completed a round of younger management and R & D mechanism reform, straightened out the product cycle, and is expected to launch a new product on the national war MMO, leisure competition and placement track in 2023. We estimate that the net profit of the company from 2022 to 2024 is 9.12000.13 billion yuan, respectively, and the corresponding EPS is 0.46According to 0.600.66 yuan. Using the PE estimation method, the corresponding 2023 times PE is given, and the corresponding target price is 13.8 yuan.
Risk tips: changes in industry regulatory policies, the progress of new product research and development is not up to expectations, the effect of overseas market promotion is not as expected, and the risk of shareholder reduction.