Event: 2023Q1-3 achieved revenue of 2.267 billion yuan, yoy+44.18%, return net profit of 1.085 billion yuan, yoy+39.87%, deduction of non-return net profit of 1.116 billion yuan, yoy+30.36%.
Among them, 2023Q3 revenue 824 million yuan, yoy+61.96%,qoq-11.99%, return net profit 421 million yuan, yoy+52.36%,qoq+0.58%, deducted non-return net profit 425 million yuan, yoy+60.39%,qoq-1.07%, performance slightly exceeded our expectations.
The "original journey" long-term operation is stable and continues to release performance increments. 2023Q3's net profit of homing and deducting non-homing is higher than the same period last year, and it is flat compared with the previous month. We believe that it is mainly due to the slowing down of the promotion of the "original journey" of the new tour, the gradual recognition of deferred revenue, and the continued release of profits. by the end of 2023Q3, the company's contract liability was 313 million yuan, which was 112 million yuan less than that at the end of 2023Q2 and 78 million yuan more than at the end of 2022. On the expense side, 2023Q3 has a sales expense rate of 27.75% (yoy+8.47pct,qoq-10.80pct), a management expense rate of 4.30% (yoy-4.36pct,qoq-1.05pct), a R & D expense rate of 22.20% (yoy-6.50pct,qoq+2.14%), and a financial expense rate of-0.11%. According to Qimai data, "original Journey" 2023Q2/3 and October 2023 iOS game bestseller list average ranking is 19-37-39, we think that in the context of Q3 overall purchase volume narrowing, "original Journey" flow is still relatively stable, long-term operation ability is excellent, we are optimistic about "original Journey" continuous version iteration, steady contribution performance increment.
The new tour advances steadily to consolidate the advantages of the track. 1) Journey IP: the company plans to launch an "original journey-official version" with a better functional experience in 2024Q1. At the same time, it will also launch a Mini Program version, which will continue to follow product progress and expect it to expand its user base through Mini Program channels, while optimizing and upgrading core games, prolonging the product life cycle, and thickening the company's performance base. 2) Leisure sports: as of 2023-7-31, the DAU of "Space Action", a rival tour, exceeded 2.5 million, and its name was officially changed to "Space Kill" in September 2023. It pays close attention to the promotion of the product during the Spring Festival and winter vacation in 2024. It is expected that the scale of its users will continue to expand, and the amount and rate of payment will increase steadily. 3) in terms of new market expansion, the company's first brand-new national mobile game for the global market, the Thrones without owner, made its debut in ChinaJoy in 2023, and started small-scale technical testing in early August 2023 to keep an eye on the progress of product research and development.
Earnings forecast and investment rating: the steady performance of the "original journey" has driven 2023Q3's performance slightly higher than we expected, but considering the uncertainty of 2023Q4's investment income, we will not adjust our profit forecast for the time being. It is estimated that the company's EPS for 2023-2025 will be 0.67 EPS 0.77max 0.88 yuan respectively, and the share price PE before the corresponding period will be 18-15-13 times. We are optimistic about the company's core advantage track continued steady performance, layout of new categories and new markets to expand the increment, to maintain the "buy" rating.
Risk hint: the old travel stream is falling faster than expected, the new tourism performance is not as expected, the industry competition is intensified, and the industry supervision is becoming stricter.