This report is read as follows:

The company is a well-known online game enterprise in China, and its big IP such as "Journey", "Xian Xia" and "Ball Battle" has been deeply rooted in the hearts of the people. The integrated business model of research and transportation helps the company's development, and the IP value maximization strategy is expected to expand the company's territory.

Main points of investment:

thirty。 Cover for the first time, give the target price 19.17 yuan and carefully increase the rating. It is estimated that 2019-2021 EPS0.56/0.61/0.67 yuan, the resumption of the release of the game version will put the company's growth back on track, giving the industry an average of 34.23 times PE, with a target price of 19.17 yuan, and a cautious overweight rating for the first time.

thirty-one。 Efficient operation system + strong R & D capability, research and transportation integrated operation to promote the development of the company. On the one hand, the company has maintained the popularity of the famous PC games "Journey" and "Fairy Xia" series, on the other hand, it has successfully launched boutique mobile games such as "Journey Series" and "Ball Battle". After years of development, the company has accumulated rich experience in game operation, through accurate analysis of user behavior big data, building user behavior statistics and analysis system, mining user needs.

thirty-two。 Sitting on a strong IP, long-term multi-operation and maintenance to maximize the value of IP. The company has cultivated "Journey", "Xianxia World" and "Ball Battle" into well-known high-quality IP in the industry, and will continue to carry out all-round maintenance and operation. Take the classic IP "Journey" as an example, the company launched the "Journey"

For the shooting and production of the film, "Journey" will become the first film of the same name adapted from a large-scale game in China; the company has also launched a new way of playing "National War e-sports", which combines the National War with e-sports and attracts a large number of players to try new and old players back. At the same time, the company has a strong development ability to transform well-known IP into game products, and reserves a number of high-quality IP resources, including "Invyasha", "Dragon Ball" and so on, to provide protection for the follow-up development and operation of the game.

thirty-three。 Rely on the advantages of brand and platform to promote the global layout. The company includes Playtika, a world-famous leading leisure social board game company, by issuing shares to buy assets. Playtika has the world's leading artificial intelligence, big data analysis and machine learning technologies.

At the same time, the company will rely on the accumulation of overseas distribution and operation of Playtika, and make use of its existing distribution and operation channels to create a global game distribution and operation platform.

thirty-four。 Risk hint: the risk of slowing down the growth rate of the industry and the risk of policy regulation change in the game industry.