In 2010, the company achieved operating income of 80 million yuan, an increase of 1.17% over the previous year; realized net profit attributable to shareholders of listed companies of 36 million yuan, a year-on-year decrease of -13.65%; equivalent to earnings of 0.27 yuan per share. Since the company has previously published performance reports, the performance is basically in line with market judgment. The company's profit distribution plan is to pay 2 yuan for every 10 shares.
The main reasons for the decline in the company's 10-year net profit include 6.5094 million yuan of publicity fees, roadshow fees and other related expenses incurred during the listing process; in 2010, the company only launched a new large-scale game “Light Sword”. Most of the new products are still in the investment period and will generate revenue after 2011; the company laid out multiple holding subsidiaries and introduced a large number of talents during the reporting period. Currently, various subsidiaries have not generated revenue, but related operating expenses have increased.
The company is currently developing new products including “The New Song Dynasty”, “Three Kingdoms Ranger”, “Dream East Journey”, “Hip Hop Hall”, “Baowang Game Center”, etc. The first three of these are all MMORPG games. In 2010, the company invested 60.19 million yuan in R&D, accounting for 75.62% of the current operating income. Coupled with “Tianchao”, which was officially commercialized at the end of 2010, it is expected that in the next two years, the company's performance is expected to break out of the trough.
The company's core competitiveness mainly lies in its “national team” background and full license operating qualifications. The main risk facing the company is the declining growth rate and increased competition in the online game industry.
The company's earnings per share in 2011-2013 are expected to be 0.40, 0.54, and 0.68 yuan respectively. Compared with the current price-earnings ratio of 48 times, 36 times, and 28 times, respectively, the company maintains a careful recommendation rating.
