Sheng Schindler: a leading developer of stand-alone mobile games, vigorously layout the game operation business. Sheng Schindler is engaged in the development, sales and operation of mobile games. Its main business is concentrated in the field of stand-alone mobile games. Mobile game development is divided into entrusted development and software licensing. Game operation mainly relies on its own cross-platform games, and the sales model includes its own platform and intermodal transport platform. The company landed in the capital market on June 24, 2016, issuing 23.34 million new shares and raising a net capital of 460 million yuan, all of which were used for mobile terminal game product development projects and cross-platform game product development and operation projects. At present, relying on its R & D advantages in mobile stand-alone games, with the "R & D + operation" two-wheel drive mode, the company has gradually built a game service platform including mobile phone stand-alone game development, web game development and operation and mobile game operation.
Game development: combined with superior resources, seize the development market of stand-alone mobile games.
In terms of industry, the market concentration of stand-alone mobile games in China is significantly lower than that of mobile games as a whole. with the accelerated access to capital of major stand-alone mobile games companies, the growth rate of the industry continues to slow down, we believe that the stand-alone game industry will enter the stage of accelerated concentration in the future. According to iResearch, the market size of mobile games in China was 56.22 billion in 2015, and stand-alone games accounted for 79% of the total number of mobile games, but the continuous cash realization ability of single-machine mobile games was poor, and the main head mobile games were concentrated in online mobile games. At present, the market size of single-machine mobile games in China is between 10% and 15%, and the corresponding market size is 91.2-13.69 billion yuan in 2016. China's mobile game R & D market is highly concentrated, but the stand-alone game market is scattered. We calculate that the income of the seven single-machine mobile game manufacturers that have been listed or announced their income is about 1.69 billion yuan, accounting for about 14.71% of the stand-alone game market share.
As for the company, it has a R & D team of nearly 400 people, develops and authorizes more than 200 games every year, and has the R & D capability of large-scale stand-alone mobile games, mainly serving B-end customers, forming differentiated competitiveness. At present, the main customers of the company's game development business are mobile terminal manufacturers and game publishers. we can find that under the existing mode, the growth of the company's game development revenue is mainly determined by the number of annual game developments. according to the company's fund-raising projects, it is estimated that the annual game production volume of the company will reach 360 / year by the end of 2018, accompanied by a continuous decline in the unit price of single mobile games. We believe that the company's game development revenue will increase by about 30% to 240 million yuan by 2018 compared with 2015. Game operation: relying on the basis of research and development, vigorously expand the game operation business. The company began a comprehensive transformation of layout game operation in 2014, taking web games as a breakthrough, and is currently actively promoting mobile game operation business. The company's game operation platform mainly includes web game operation platform 17188 and mobile game operation platform Ji Youshi, with 17188 as its main source of income. online games on the platform include self-research page games, fairy tales, god will record and combined transport page games thorn shadow legend, the emperor, Tianmen legend and seven kills, the company will release the self-research game white-haired witch in the second half of the year The operation of mobile games includes many kinds of mobile games, such as the Annals of the three Kingdoms and the Great Emperor, and will be online in the second half of the year. At present, China's web game market has entered a mature period, and the market growth will slow down in the future. it is expected to reach 23.77 billion yuan by 2018, an increase of only 17.96% over 2015. under the background of the disappearance of the industry demographic dividend and intensified competition, we believe that having core R & D capabilities and high-quality IP will become the core competitiveness of future R & D and operation companies. On the one hand, Sheng Xunda already has large-scale game development capabilities. On the other hand, the company is actively storing high-quality IP resources to lay the foundation for further deepening the construction of the game operation platform.
Profit forecast: we predict that the company will achieve operating income of 2.37,2.95 and 385 million yuan from 2016 to 2018, an increase of 16.4%, 24.3% and 30.7% over the same period last year; the net profit attributed to the parent company will be 10752 yuan, 13186 yuan and 162.99 million yuan, up 16.70%, 22.64% and 23.60% year-on-year.
At present, the total share capital of the company is 93 million, and we estimate that the diluted EPS of the company from 2016 to 2018 will be 1.15,1.41,1.75 yuan respectively.
Risk tips: 1) the risk that the market share of stand-alone mobile games will decline too quickly; 2) the risk of product innovation; 3) the systemic risk of the stock market.
