Event: on November 1st, the Ministry of Industry and Information Technology and other five departments issued the Action Plan for the Integration of Virtual reality and Industrial applications (2022-2026). Xinghui Entertainment layout in advance in the meta-universe, self-research antique historical strategy mobile game "Battlefield without Borders" has won the version number in July 2022, the game in the production technology, play and player social and other aspects have a large degree of breakthrough or innovation, for players to create a realistic, authentic ancient three Kingdoms world, all-round enhance the player's immersive experience in the game. Xinghui Tiantuo, a wholly-owned subsidiary of the company, has become a member of the standing Committee of Meta-Universe Industry Committee. In the future, it will further understand the relevant trends of the industry, explore the organic combination of related technologies and games, and provide players with an immersive game product experience.
Comments:
The company's revenue grew and its loss narrowed sharply compared with the same period last year. In the first three quarters of 2022, Xinghui Entertainment achieved operating income of 1.3 billion yuan (yoy+36.54%), net profit of-49 million yuan (yoy+80.26%), and non-return net profit of-58 million yuan (yoy+77.32%). Split in a single quarter, 22Q3 achieved operating income of 523 million yuan (yoy+23.76%), net profit of-36 million yuan (yoy+31.61%), and non-return net profit of-37 million yuan (yoy+30.21%).
The game business IP is rich in resources, adhering to the development strategy of "product serialization, market internationalization, distribution brand". 1) IP Resources: the company has established a rich and complete reserve of IP resources, with more than 20 IP licenses, including "The Legend Of Three Kingdoms", "Adventure Island" and "The Deer and the Cauldron", as well as complete intellectual property rights of boutique games such as "Age of Heaven". On the basis of IP, Xinghui Game has launched a number of boutique games such as "Bawangzhiye" and "Maple Valley R: classic New definition". In the future, the company will strengthen the high-quality development and application ability of high-quality games with the help of "The Deer and the Cauldron", a high-quality IP license, and pay close attention to the application of related technologies in the game field. 2) overseas market: the company adheres to the development strategy, actively arranges the overseas distribution and operation of domestic mobile online games, and uses boutique games as the carrier to promote Chinese culture to the world. Game products are distributed in Japan, Hong Kong, Macao and Taiwan, Southeast Asia, Europe and the United States and other countries and regions. The company's self-developed antique war strategy mobile game "overlord's ambition" has long been among the top 100 in GooglePlay and AppStore in Japan, with an average overseas flow of 27.15 million yuan per month in 2021.
The company's exclusive agent and "Panilla War", which was launched in Japan, won the second free list of local iOS games and the fourth free list of GooglePlay games. The company's exclusive agent of the war strategy mobile game "Bawangye-the magnificent Annals of the three Kingdoms" won the fourth place on the local iOS game free list and the fourth GooglePlay download list on its first day of launch in Japan.
The company controls the Spaniard club with diversified business and mature operation system. The main business income of the Spaniard club includes: television broadcasting rights income, the sale of players income, advertising sponsorship income, ticket revenue, commodity sales income and so on. Among them, the company Spaniards club television broadcasting rights income according to the Spanish Football Association determined by the broadcasting rights allocation, the average recognized income according to the season.
Thanks to the advanced and mature youth training system and more than 121 years of operational practice, player transfer is a stable and regular business of the club. The Spaniards sold four players in 2022. The youth training camp of the Spaniard Club is one of the youth training camps with the highest talent export rate in Spain and Europe, and its youth academy was included in the "top football academy" by FIFA in June 2021. The club has 12 U8-U19 men's echelons and 8 women's teams, and 11 international football colleges in China, Japan, Finland, the United States and other countries.
The toy business product diversification, actively develops the domestic and foreign market. The company's toy product line is diversified, and the company's toy business includes robot products, dynamic and static car models, baby toys, building block assembly toys and outdoor cycling bicycles, etc., a total of more than 400 high-quality toy products are exported to more than 120 countries and regions, has been authorized by more than 35 world-famous car companies, and has trademark intellectual property rights in more than 110 countries and regions. On October 15, 2022, Xinghui Entertainment once again participated in the online exhibition with nearly 250 diversified toy products, introducing the "RASTAR" brand and toy products to customers around the world and actively exploring domestic and foreign markets.
Investment suggestion: the company has rich reserves of new products in its game business. the company's self-developed three-country strategic mobile game "Battlefield without Borders" has won the game version number in July 2022, and two important game products have passed the final examination and approval of the General Administration, pending approval. The Spaniard club continues to grow in strength, continues to export high-level players, and the value of players has increased steadily. According to the evaluation report issued in March 2022, the total value of players has reached about 129 million euros; in the field of toy business, the company is one of the toy derivatives manufacturers authorized by car companies in China, and the company's comprehensive R & D laboratory and modern production base have reached the international advanced level. It is recommended to pay attention.
Risk factors: the follow-up risk of the game business is not as expected, the injury risk of football club players, the risk of foreign exchange rate change.