Event: the company released its 2021 results report, subject to "Heart of Noah" and "Project Code: Sigmar"
The delayed launch of the two key new games resulted in an annual operating income of 920 million yuan, a decrease of 23.8% compared with the same period last year. The company recorded an adjusted net loss of 240 million yuan, which was higher than that of 220 million yuan in the same period in 2010. this is due to the fact that the performance of some new games is lower than expected, the expansion of the R & D team and the increase in marketing expenses, resulting in short-term pressure on the profit end.
The reserve of game products is rich, and the product year is approaching. The company's first SLG game "Hongtu under" outstanding performance at home and abroad, based on the UE4 engine to create the MMO mobile game "Dream New World" in the first month of 100 million yuan, in addition, "Dream Zhu Xian", "Dragon Raja" and other 11 products in the camp. Eleven new games are expected to be launched in 2022-2024, and four key games will be released globally in 2022. The new MMORPG game "Heart of Noah", which is issued solely by Tencent and independently released overseas, will be launched on April 13; the top IP MMORPG shooting mobile game "Avadar:Reckoning", authorized by Walt Disney Company and released worldwide by Tencent, has carried out its first overseas test and is expected to be launched this year; the first female game "in the name of Shining" has started overseas version testing and is scheduled to be officially launched this year, with more than 1.33 million TapTap reservations. The company's second SLG game "project code: Sigmar" plans to start global testing of 22Q2, which will be launched in major overseas regions by the end of the year. In the pipeline research, the company expects to launch "The Legend Of Three Kingdoms", project code: IM "project code: SE" in 2023, and plan to launch MMORPG works "project D", "project code: rebirth", strategy card game "project E" and SOC game "project code: spark" in 2024. With the single product category expanded to SLG, female orientation and strategy cards and other categories, superimposed research and transportation integrated model, the product life cycle is expected to be further extended, the follow-up performance is worth looking forward to.
The strategic layout of "boutique, multi-category, globalization, research and transportation" to build the core competitiveness. The company maintains the advantage in the MMO category, realizes the SLG track breakthrough, the multi-category product global release. The core team of Shanghai Studio already has games under production, the strength of R & D bases in Changchun and Chengdu is increasing, and the R & D ecosystem is formed with the headquarters in Beijing. At the end of 2021, a distribution center for overseas specific regions was established in Guangzhou to accumulate self-issuing experience. In terms of engine technology, the application of Unreal engine 4 has made remarkable progress, and cooperation with Epic Game on Unreal 5 engine technology is expected to continue to improve the company's boutique game style.
Profit forecast and investment advice. It is estimated that the adjusted net profit of the company from 2022 to 2024 is 200 million yuan, 510 million yuan and 810 million yuan, corresponding to 51 times, 15 times and 9 times of PE respectively. The company's integrated research and operation model is mature, and the category of reserve projects is rich. in the short and medium term, the performance side is under pressure due to the lower-than-expected performance of new games and the delayed launch of key projects. with the launch of the new tour in 2022, it is expected to stabilize and warm up and maintain the "buy" investment rating of the company.
Risk hint: the risk of industry policy change, market competition aggravates the risk, and the new tourism is less than the expected risk.