Incidents:

The Three Kingdoms SLG game “Three Kingdoms: Determining the World”, which is exclusively represented by the company, began open beta on June 13. According to Qimai data, it was ranked 3rd in the game bestseller list from June 13 to June 18, after “DNF” and “Wang Zhe Rongyao”, and 4th in the game bestseller list on June 19.

Comment:

The flow rate has been stable in the past week since launch, and we are watching the subsequent long-term operation situation.

According to point data, as of June 18, “Three Kingdoms: Designing the World” had a total turnover of about 102 million yuan, with a turnover of 12.96 million yuan on the first day of launch on June 13, and remained at around 18 million yuan from June 14 to June 18. Compared to the SLG game “Tsuchigahama,” which also has the theme of the Three Kingdoms, it was launched in 2015 and is still in the top 40 best sellers. “Three Kingdoms: Designing the World” may have the potential for long-term operation.

Purchase volume levels have shrunk, so keep an eye on subsequent retention performance.

According to AppGrowing, in June, the company began launch on June 11, peaked on June 13 (the day of public beta), and then contracted rapidly. The number of advertisements placed from June 11 to June 19 was: 34,000/35,000/105,000 /54,000/20,000/19,000/22,000/12,000/11,000, respectively.

Looking at marketing channels, the company mainly launched on massive engines, accounting for 76.68%; followed by Tencent advertising, accounting for 15.87%; followed by Ali Super Huichuan and Qilin Sheng Sheng, accounting for 4.13% and 2.24%, respectively.

Profit forecasting and investment advice

We expect the company's revenue for 2024-2026 to be 247.29/280.19/30.932 billion yuan, respectively, and net profit to mother of -18.52/-2.43/663 million yuan, respectively. The corresponding PE is -28.4X/-216.2X/79.3X, respectively, giving a “buy” rating.

Risk warning

Game retention falls short of expectations, game circulation falls short of expectations