Event: on October 25, 2023, Shunwang Technology released its third quarterly report. In the first three quarters of 23 years, the company achieved a total operating income of 1.109 billion yuan, + 34.08% compared with the same period last year, and a net profit of 157 million yuan, + 138.15% over the same period last year. The non-return net profit was 153 million yuan, which was + 177.26% compared with the same period last year. Operating costs 560 million yuan, year-on-year + 37.56%; sales expenses 80 million yuan, year-on-year-2.45%, sales expense rate 7.17%; management expenses 153 million yuan, year-on-year + 17.5%, management expense rate 13.82%; research and development expenses 132 million yuan, year-on-year-7.06%, R & D expense rate 11.95%. Achieve a gross profit margin of 49.49%, year-on-year-1.28pct.
To achieve a net interest rate of 14.19%, year-on-year + 6.2pct.
In the third quarter, Shunwang realized revenue of 427 million yuan, year-on-year + 36.32%, month-on-month + 34.85%, operating cost of 196 million yuan, year-on-year + 11.6%, month-on-month ratio of 20.2%, and net profit of 95 million yuan, + 394.88% and + 355.05%, respectively. The sales costs of 23Q1-23Q3 are 0.28, 0.25, and 27 million yuan respectively, the management costs are 0.49, 0.54, and the R & D expenses are 0.41 million, respectively, the gross profit margin is 45, 48.47, and the net interest rate is 11.25, 6.61, 22.31, respectively.
Comments:
Basic business maintained steady growth and ChinaJoy diversified development. 23 the company's revenue in the first half of the year was 680 million yuan, + 32.71% compared with the same period last year, mainly due to the increase in revenue from online advertising and value-added services, of which revenue from online advertising and value-added services was 470 million yuan, + 49.75% from the same period last year, achieving a gross profit margin of 29.51%. The revenue of the game business is 210 million yuan, + 5.02% year-on-year, achieving a gross profit margin of 85.01%.
Revenue grew by + 34.08% in the first three quarters of 23, continuing the growth trend. The total amount of goodwill in 22 years has been basically completed. by the third quarter of 2023, goodwill was 228 million yuan, a decrease of 460 million yuan compared with 2021. A total of 338000 people participated in the 2023 ChinaJoy event, with nearly 500 Chinese and foreign enterprises participating in the exhibition, and their business recovered well. On July 27, 2023, it has signed a strategic cooperation agreement with Beijing Kustav Culture to jointly build the brand of ChinaJoy Music Festival. In the future, it is expected to open the growth space with the gradual landing of the music festival project.
Based on edge computing network resources and technical advantages, Shun GPU Cloud flexibly schedules computing resources according to business needs, and provides computing services to different industries. In 2020, Mi Goo has become a partnership with Shunwang. In July 23, Shunwang signed a strategic cooperation agreement with Migu. The company will carry out comprehensive computing network cooperation with Migu in cloud games, cloud Internet cafes and metasmology. Migu provides Chinajoy with 5G cloud game services and many other aspects, which can verify the market recognition and brand effect of GPU Cloud from the side. At present, a unified network of high-availability and high-performance cloud computing and edge computing services characterized by GPU computing power has been formed.
Dig deep into the field of "AI+ games" and focus on leisure and entertainment personal intelligent companionship. Shunwang Lingzhi, an intelligent companion application based on SPICE engine, is in the process of being polished and upgraded and is expected to open a public trial in the fourth quarter. SPICE is a set of intelligent companion full-link capability engine built by Shun, which can easily create intelligent companion applications. Shunwang Lingzhi has cooperated with a number of game manufacturers to build game companionship ability, jointly create intelligent companion ecology, and explore commercial realization space and mode. Shunwangling learned that a limited number of orienteering tests were launched on September 23. Currently, it can be roughly experienced in WeChat Mini Programs and PC clients, including features such as customized virtual human, AI tools (AI writing, AI translation, copywriting), AI painting, etc., which are targeted at game companionship and leisure companionship. At the same time, the company also explored and developed digital people for many different industries and different scenes, and actively explored the technical application of AI in the game industry.
Investment suggestion: Shunnet technology profitability remains stable, while maintaining the steady development of basic business, continue to open up new growth space, such as Shunwang GPU cloud business, ChinJoy music festival, intelligent companion AI application products and so on. With the gradual recovery of traditional business and the growth of growth business, we are optimistic about the development space and performance flexibility of the follow-up company, and suggest that we should pay attention to it.
Risk factors: increased market competition, AI industry policy changes and other risks.