公司产品储备 丰富，小游戏端产品利润有望逐步释放，维持“增持”评级。我们预计2024-2026 年公司EPS 分别为1.26/1.47/1.66 元，相比上次预测（1.38/1.58/1.85 元）有所下调，主要由于国内游戏行业竞争激烈，公司下半年或面临竞争压力。参考行业平均水平的14.27xPE，下调目标价至18.90 元（前值19.96 元），相对24 年15xPE，维持“增持”评级。Introduction to this report:
The company has a remarkable leading edge in the field of mini games. It has abundant products in stock, and is expected to gradually be introduced to the market. The quarterly dividends are abundant, and the valuation is currently low.
Key points of investment:
The company is rich in product reserves, and profits from small game terminal products are expected to be gradually released, maintaining the “increase in holdings” rating. We expect the company's EPS for 2024-2026 to be 1.26/1.47/1.66 yuan respectively, down from the previous forecast (1.38/1.58/1.85 yuan). Mainly due to intense competition in the domestic game industry, the company may face competitive pressure in the second half of the year. Referring to the industry average of 14.27xPE, the target price was lowered to 18.90 yuan (previous value 19.96 yuan), compared to 15 xPE in 24, maintaining the “gain” rating.
On August 26, 2024, 37 Mutual Entertainment released its 2024 semi-annual report. It plans to distribute a cash dividend of 2.10 yuan for every 10 shares to all shareholders. As of 2024H1, the company achieved operating income of 9.232 billion yuan, a year-on-year increase of 18.96%; net profit attributed/withheld from mother was 1.265/1.275 billion yuan, respectively, +3.15%/+14.27% year-on-year. Looking at 24Q2, the company's revenue was 4.482 billion yuan, down 5.65% from the previous month, up 12.16% year on year; net profit to mother was 0.6485 billion yuan, up 5.25% month on month, up 43.63% year on year.
Mobile games grew by more than 19% year over year, and mini-game products continued to maintain their dominant position. 24Q2's mobile game business revenue was about 8.96 billion yuan, an increase of 19.82% over the previous year. The company continues to lead the way in terms of mini-games. As of July 2024, “Seek Out a Thousand” remained in the top 3 of the WeChat Mini Game Bestsellers. Among the top 50 products, the company had 5 products, such as “The Unknown Man,” “Demon Warrior,” “Call Me the Treasurer,” and “Fairy Sword.”
The company has created a rich “self-development+agency” product reserve, covering various topics such as Western fantasy, Oriental fantasy, Three Kingdoms, modernity, and antiquity. The company has formed a specialized layout on the three tracks of MMORPG, SLG, and light games, and at the same time cooperated deeply with many high-quality developers to form rich external R&D reserves. Only some of the reserve products disclosed by the company have reached 25 models. Among them, various mobile games, including the Guoman Oriental fantasy MMORPG “Doulo: World of Soul Hunters”, the ancient style ink simulation management “The Son-in-law”, and the picture book cartoon Guofeng simulation management “The Explosion of Time”, have received domestic game versions.
Risk warning: Regulatory risks, increased purchasing costs for mini-games, and the pace or performance of new product launches falls short of expectations.
