Boutique game developers to achieve PC games, mobile games, mainframe games of all types of layout. Dianghui Network was founded in 2008 and listed on the Shanghai Stock Exchange in 2016. its main business is the research and development, production and operation of online game products. The company first started with PC games such as "Dream three Kingdoms" and "Dream Tower Defense". With the rise of the mobile game market in recent years, the company has gradually extended its business scope to mobile games such as "Dream three Kingdoms" (duplicate version) and "Dream Tower Defense Mobile Games". At the same time, the company also prospectively laid out H5 games, VR games, consoles, stand-alone games, APP platform, comics and e-sports games and other fields. The company has been adhering to the strategy of quality, continue to strengthen content innovation and R & D investment, and achieve the full coverage of PC games, mobile games, console games, VR games.
The core products are rising steadily, highlighting the long-cycle product operation ability. In recent years, China's PC-end game market has entered a mature period, the scale of market revenue continues to shrink, and the industry competition is fierce. The company launched "Dream three Kingdoms" in 2009.
PC-end game products, and then continue to strengthen product version updates, technical improvements, optimize user experience, at the same time, the company also continues to optimize operational strategies and programs, the product has been in operation for more than 10 years, the trend is still stable and rising, demonstrating the company's long-term product operation capability. In the field of mobile games, the duplicate version of "Dream three Kingdoms Mobile Games" developed by the company was officially launched in July 2019. The product updated the large version of the original "Dream three Kingdoms Mobile Games" with better iterative results, and 20Q3 pipeline revenue also increased compared with the same period last year. In addition to the "Dream three Kingdoms" series, the company also develops and distributes products such as "Dream Tower Defense Mobile Travel", "Barbarian Battle" and so on.
"X2 Solver" and "my Chivalrous Man" start a new product cycle of the company. Recently, the company's new research and development of "X2 solver" and "my knight-errant" will be launched soon, and a new round of product cycle will begin. "X2 Solicitor."
It is a POV multi-line narrative Rogue-Lite role-playing mobile game produced and released by the company's SIVA Studio. The game painting style and vertical painting are both two-dimensional style, so it is jointly operated with Bilibili Inc., the largest second-dimensional community website in China. As of October 18, 2020, the product has been booked by more than 780000 people on taptap and more than 940000 on Bilibili Inc.. The product has been scheduled to be launched in all channels on October 22nd, and we think it is expected to become a popular style product in the future. In addition, the company developed "my Chivalrous" is a retro martial arts role-playing game, the product has joined the Tencent Aurora Mobile Limited plan, Tencent exclusive in charge of product release, as of October 18, the product on the taptap channel has more than 440000 people booked, player score up to 8.7 points, August has been deleted payment test, we expect to be officially released in November. We believe that "X2 Solver" and "my Knight-errant" are the company's next blockbuster mobile game products. The two games focus on popular categories such as QQ and RPG respectively, and cooperate with head channel companies (Bilibili Inc. and Tencent). Popular style probability is high, we believe that if the two new products are launched smoothly, it is expected to bring better performance contributions to the company in the fourth quarter and next year.
Profit forecast and valuation analysis. We estimate that the EPS of the company from 2020 to 2022 is 1.65,2.53 and 3.08 yuan per share, respectively. With reference to comparable companies, we give the company 28-30 times dynamic PE in 2020, corresponding to a reasonable value range of 46.2-49.5 yuan per share, giving the company a "better than the market" rating for the first time.
Profit forecast hypothesis. 1) We expect the company's classic IP games such as "Dream three Kingdoms" to rise steadily, while products such as "Dream Tower to defend against Mobile Travel" and "Barbarian Battle" perform relatively steadily. 2) the company's new reserve games "my Knight-errant" and "X2 Solver" are expected to be launched in 20Q4 and will become a new performance growth point for the company in the future.
Risk hint: "Dream three Kingdoms" and other old products decline, the launch of new travel has been postponed.