2024Q3 公司营收环比下降-16.83%，归母净利润环比下降-47.19%，主要系：1）老游戏表现下滑：《问道》端游和《问道手游》在二季度举行周年庆活动后，三季度营收及利润环比回落；2）销售效率下降：《一念逍遥(大陆版)》发行投入增加额超过营收增长额导致利润环比大幅减少；3）财务费用增加：因定存利息减少及汇率波动导致汇兑损失，财务费用从-0.39 亿元增加至0.15 亿元。Incidents:
The company achieved revenue of 2.818 billion yuan in the first three quarters of 2024, a year-on-year decrease of -14.77%; net profit to mother 0.658 billion yuan, a year-on-year decrease of -23.48%; and deducted non-net profit of 0.613 billion yuan, a year-on-year decrease of -25.54%. Among them, 2024Q3 achieved revenue of 0.859 billion yuan, a year-on-year decrease of -10.36%; net profit to mother of 0.14 billion yuan, a year-on-year decrease of -23.82%; and deducted non-net profit of 0.151 billion yuan, a year-on-year decrease of -15.33%.
2024Q3 Revenue and net profit to mother declined month-on-month
2024Q3's revenue fell -16.83% month-on-month, and net profit to the mother fell by -47.19% month-on-month, mainly due to: 1) decline in the performance of old games: after “Enquiry” mobile game and “Wendao Mobile Game” held an anniversary event in the second quarter, revenue and profit fell month-on-month in the third quarter; 2) Decreased sales efficiency: the increase in sales investment of “Easy Thinking (Mainland Edition)” exceeded revenue growth, leading to a sharp decrease in profit from 3) Increased financial expenses: exchange losses due to reduced interest rates and exchange rate fluctuations, and financial expenses from bil-0.039 bil-0.039 The lion dollar was increased to 0.015 billion yuan.
A new round of product cycle has begun, and five games will be launched one after another
A total of 4 reserve games from 2024Q3 have received edition numbers: “The Legend of Staff and Sword (code name M88),” “The Eight Fierce Farms of Ghost Valley,” “Underground Castle 4: Knights and the Broken Chronicles,” and “Animal Master: Adventure Journey.”
In terms of new game launches, according to Qimai data, “Wangdu Genesis”, which was launched on September 23, ranked the highest in the simulation game bestseller list; “Fengshen Fantasy World”, which began public beta on October 18, ranked 52 in the game bestseller list. Looking ahead to future new game launch plans, the self-developed games “Ask the Sword Eternity (code name M72)” and “The Legend of Sword and Sword (code name M88)” are scheduled to be launched in 2025H1; the proxy game “Echo of Illusions” is scheduled to be launched in November 2024, and “One Hundred Million Light Years” and “The Omnipotent Cairo Operator” are scheduled to be launched on 2025H1. Pay attention to the pace of subsequent new game launches, and be optimistic that the launch of key products will contribute to the company's performance growth.
Continued cash dividends actively give back to investors
2024Q3 plans to distribute a cash dividend of 20 yuan for every 10 shares to all shareholders, for a total of 0.144 billion yuan in cash dividends. Including semi-annual cash dividends, the total cash dividend for the first three quarters of 2024 is expected to be $0.466 billion, with a cash dividend ratio of 70.94%. Furthermore, in the first three quarters of 2024, the company has repurchased approximately 0.285 million shares of the company's shares, and has paid a total amount of 0.052 billion yuan for employee stock ownership plans or equity incentives. In summary, the total amount of the company's cash dividends and repurchases for the first three quarters of 2024 is estimated to be 0.519 billion yuan, accounting for 78.87% of net profit returned to mother in the first three quarters.
Profit Forecasts, Valuations, and Ratings
Revenue and profits of the company's core products “Enquiry” and “Easy Thinking (Mainland Edition)” declined month-on-month.
Two new 2024Q3 games have been launched, starting a new product cycle. Subsequent reserve products are abundant, and five new games are planned to be launched one after another. Therefore, we expect the company's revenue for 2024-2026 to be 36.89/ 4.536/5.008 billion yuan, corresponding growth rate of -11.84%/22.96%/10.39%, and net profit to mother of 0.861/1.153/1.278 billion yuan, respectively, corresponding growth rate -23.48%/33.99%/10.82%. Maintain the company's “gain” rating.
Risk warning:
The risk of tightening policies and regulations, the risk of a slowdown in the growth rate of the game industry, and the risk that the pace of game flow and launch falls short of expectations.
