Overview of events
At 10:00 on September 13, 2023, Netmarble joined hands with Dreamland and Tencent to jointly develop and operate "two countries: staggered World" to start the national service travel test, which is a limited deletion test.
Analysis and judgment
The results of overseas public tests are eye-catching, and the national service reduces the burden and krypton to break through the traditional MMO boundary. "two countries: staggered World" is a new sequel to the series of "two countries" games produced by Level-5 planner, Ghibli Studio animation and Hisashi Music. it is a fresh animation style MMORPG mobile game with different world adventures. On June 10, 2021, the overseas public test of "two countries: staggered World" topped the App Store free list of Japan, South Korea, Hong Kong, Macao and Taiwan, and ranked among the best-selling Top10 in many places. According to SensorTower, "two countries: staggered World" earned $101.3 million within 11 days of its overseas launch, surpassing "Pokemon:GO" (12 days) and "the original God" (13 days) as the shortest game with revenue exceeding 100 million US dollars.
The game was imported in December 2022, and the first joint research test of national service was conducted on June 6-12, 2023, and the national service travel test was launched on September 13. The core of the national service version is:
1) reduce complexity to simplicity, subtract a large number of complex training lines, so that players can easily experience the game; 2) reduce the social burden, give players the right to choose, rather than simply driven by the traditional MMO numerical game. The core of traditional MMO games is mostly numerically driven, and its long-term survival relies heavily on social networking, which has gradually failed in the content-to-content market. We believe that the national service of "two countries: staggered World" is not a digital product, but a content-oriented product: it is expected to achieve long-term content-oriented operation by dispelling the common design of heavy liver, heavy krypton and heavy MMO, which has been criticized by players in the past, and transferring the focus of experience to Ghibli's relaxing audio-visual experience.
The basic set of boutique games has grown steadily, and self-developed games have gradually ushered in the harvest period.
(1) "Metro parkour", "Dream Garden" and "Dream Home" are full of growth momentum, and the performance of "Glory all-Star" is strong. "Metro parkour" continues to launch "competition", "body training ground", "big fight" and other play modes to further enhance the stickiness of users. "Dream Garden" and "Dream Home" communicate closely with core users through Fanbook, accurately iterating products to better meet the deeper emotional experience needs of female users. The online hours of users inside and outside the "Glory all-Star" 23H1 game have been significantly improved, and the company has launched a series of community discount activities in line with the online rhythm of the game version, promoting users to break the ice and form the habit of continuous consumption in Fanbook Mall, effectively improving product profitability and operating cash flow.
(2) self-developed games are gradually delivered with high quality, and the performance is expected to be released step by step. The company's self-developed two-dimensional theme competitive shooting game "Karabichu", PC started on August 3 without deleting the file for public testing.
Less than a month after its launch, the average weekly active users of "Karabichu" reached 700000. According to the public test so far, the ARPPU of paying users is more than 200, and the average daily playing time of users is more than 120 minutes. Another self-developed game, "two countries: staggered World", has a high degree of product completion, and the national service travel test was launched on September 13. In addition, Delta Action, a multi-game shooter game based on special agents / teams, is jointly developed by the company and Tencent, and the Chinese mainland area is exclusively distributed by Tencent. A global appointment has been opened on August 23rd and will be launched in the future.
Investment suggestion
The company's agent games contribute to stable cash flow, while self-developed games gradually usher in the harvest period, and have Fanbook, a community user management tool that supports the operation and growth of tens of millions of users, with high performance flexibility and platform scarcity. We expect the company to achieve net profit of 201 million yuan (yoy+108.1%), 317 million yuan (yoy+57.5%) and 401 million yuan (yoy+26.6%) from 2023 to 2025, respectively, and the corresponding EPS is 0.13,0.20,0.25yuan respectively. The current share price corresponds to 23 times, 15 times and 12 times the valuation, maintaining the "buy" rating.
Risk hint
The risk of stricter regulation in the industry, the risk of intensified competition in the industry, the lower-than-expected risk of issuing version numbers, the lower-than-expected risk of running water, and the lower-than-expected risk of new business development.