Event: the company issues a forecast of results for the first three quarters of 2020
On October 14, the company released its results for the first three quarters of 2020. the company's net profit for the first three quarters of 2020 is expected to be 660 million yuan to 748 million yuan, an increase of 2.94% to 16.67% over the same period last year. The net profit after deducting non-return is expected to be 550 million yuan to 638 million yuan, compared with 641 million yuan in the same period last year.
The operation data at home and abroad in the first three quarters are excellent.
The number of active users and online hours of the company increased in the first three quarters of 2020 due to the epidemic of COVID-19 at home and abroad. The company is currently taking the "talking Tom Cat Family" IP as its core strategy and has made a strategic contraction of other businesses. The focus of the company's launch in the first three quarters of 2020 is "Tom Cat Story," which has been among the top 10 downloads of iOS and Google Play games worldwide since its launch in June, according to App Annie. In the future, the company will continue to take the "talking Tom Cat Family" IP as the core, constantly enrich the role of IP and improve the connotation of IP. In addition, Simon Meng, the godfather of games, has joined the company, which will help the company introduce overseas high-quality IP and excellent game products, and further improve the company's IP system.
Early-stage offline investment returns show, online and offline linkage is getting better according to the company announcement, with the domestic epidemic tends to stabilize, the company theme park, IP derivatives offline sales and other offline business has returned to normal operation. Since 2018, based on Tom Cat IP, the company has created a number of offline scene experiences for 1-to 10-year-old parent-child families-Tom Cat Paradise. At present, three Tom Cat parent-Child Paradise have been landed and opened, which are located in Hefei, Shaoxing and Hangzhou, and stores in Ningbo, Foshan and Rizhao are also under active preparation. Since its opening at the end of December 2019, Hangzhou store has been ranked No. 1 on the popular list of parent-Child Paradise in Xihu District by Dianping Network for many times. In July 2020, the company also announced that it would acquire a trading stake in Wanjin and acquire its commercial properties such as malls and hotels for the construction of the main commercial complex of "talking Tom Cat". We think, "the talking Tom Cat."
IP is enduring and plays an important role in young education. It is very suitable for the joint development of online and offline, and is optimistic about the profit increment brought by offline business to the company in the future.
We are optimistic about the company's long-term IP operating capacity and maintain the "recommended" rating. We expect the net profit from 2020 to 2022 to be 9.9,12.51 and 1.52 billion yuan respectively, an increase of 135.6%, 26.3% and 21.5% over the same period last year, and the corresponding EPS is 0.28,0.35,0.43 yuan respectively. We believe that the company's multi-channel realization around the "Tom Cat" IP has a strong sustainability, and the offline channel is developing rapidly, maintaining the "recommended" rating.
Risk tips: offline park development progress is lower than expected, stock game life cycle depletion and so on.
