Incident: 2023H1 achieved revenue of 1,121 million yuan, yoy -18.84%, net profit attributable to parents of 41 million yuan, same period last year of -203 million yuan after deducting non-attributable net profit of 28 million yuan. The same period last year was -216 million yuan. The performance turned loss into profit, falling into the range previously predicted.
Focusing on the main business to divest IP derivatives, the results in cost reduction and efficiency have been remarkable. 1) Revenue side: 2023H1's revenue fell 18.84%, mainly due to: (1) the divestment of the IP derivatives business in February 2023, corresponding to a year-on-year decline of 72.71% to 111 million yuan; (2) the game business continued to focus on reducing non-key product operations, and corresponding game business revenue fell 17.08% year on year to 1,065 million yuan. 2) Profit side: 2023H1 The company's profit was reversed, with net interest rates of 3.63% and 2.51%, yoy+18.35pct, 18.13pct. Profitability increased dramatically, mainly due to the increase in gross margin brought about by the increase in the turnover share of company games in Fanbook's own channels, as well as cost side optimization brought about by refined operation of core games and continuous optimization of the organizational structure to reduce costs and increase efficiency. The gross margin of the 2023H1 company is 45.11%, yoy+2.26pct, sales expense ratio of 10.28%, yoy-20.57pct, management expense ratio of 3.83%, yoy-4.01pct, R&D expense ratio of 12.63%, yoy-0.72pct, financial expense ratio of 9.87%, yoy+4.61 pct.
The core veteran game is operating steadily, and they are optimistic that Fanbook will improve the quality of game revenue. 2023H1's core mobile game “Dream Garden” launched new versions of content such as Cat Manor and Peach Xianrui. The number of Nikkatsu, paying users, and payment rates reached new highs. In the summer, the number of Jiangnan Water Town Ancient Style theme was launched. The number of daily activity and paying users both achieved year-on-year growth against the trend, and the company's long-term operation capabilities continued to be tested. In addition, the company actively promotes user payments within the Fanbook Mall, the cost of existing game channels continues to be optimized, and product profitability and cash flow quality are steadily improving. The net cash income from 2023H1's operating activities was 246 million yuan, a significant increase from 02 million yuan in the same period last year. Looking forward to the future, we are optimistic that the company's stock products such as “Dream Garden” and “Dream Home” will continue to operate steadily, revenue quality will steadily improve, and establish a basic performance market.
The new tour “Carapiccio” performed well, and the product cycle supported the flexibility of performance. The company's first self-developed two-dimensional competitive shooter, was officially launched on PC on 2023/8/3. It was distributed and operated by Tencent. As of 2023/8/30, the average number of weekly active users of the product exceeded 700,000, the average daily online time of users exceeded 120 minutes, and ARPPU exceeded 200 yuan, with impressive performance. “Carapiccio” will continue to update gameplay, characters, and activities in the future, driving steady growth in turnover. At the same time, the mobile game is expected to be launched in 2024, so the performance is worth looking forward to. In addition, the company also has “Ni no Kuni: Interlaced Worlds” (National Service Edition) and “Operation Delta” jointly developed with Tencent. The products have all received version numbers. It is optimistic that the New Travel Reserve will be launched one after another, contributing to increased performance.
Profit forecast and investment rating: We maintain our previous profit forecast. We expect the company's EPS for 2023-2025 to be 0.15/0.29/0.36 yuan, respectively, corresponding to the current stock price of 20/11/9, respectively. The company's R&D investment layout has begun to be realized. We are optimistic that the company's new tours will be launched one after another, that performance flexibility will continue to be unleashed, and the “buy” rating will be maintained.
Risk warning: New travel performance falls short of expectations, industry competition intensifies, industry regulation risks