牧者之息》，有望于25 年上线并上线小游戏版本。两款新游为公司累积丰富经验的SLG 品类，且融合了新的玩法，我们预计推出后有望助力公司整体业绩持续提升，建议关注新品的推出节奏及流水变化。The company achieved revenue of 1.461 billion yuan (yoy +4.53%, qoq -6.62%) and net profit of 0.463 billion yuan (yoy +191.43%, qoq +37.72%) in Q3, which exceeded previous performance expectations (24Q3 net profit of 0.32-0.36 billion yuan), mainly due to an increase in non-recurring profit and loss, of which bad debt provisions accrued after recovering litigation receivables were reduced by about 0.25 billion yuan. Q1-Q3 2024 achieved revenue of 4.514 billion yuan (yoy +11.42%), net profit to mother of 1.094 billion yuan (yoy +94.33%), deducting non-net profit of 0.832 billion yuan (yoy +54.84%). We are optimistic about the company's SLG game's overseas advantage. The launch of new Q4 products is expected to increase performance and maintain a “buy” rating.
Shell Gaming's overseas revenue remained competitive, and purchasing efficiency increased year over year. According to point data, Shell Games ranked 6/6/5 in the overseas revenue list of Chinese game manufacturers in July-September, and its core products “Age of Origins” and “War and Order” steadily occupied the TOP10 and TOP30 overseas game lists. We expect sales to remain at a high level. 24Q3 company gross profit margin 61.2%, yoy-2.1pct. In terms of period expenses, the company's sales expense ratio was 14.6%, yoy-14.8pct, mainly due to a contraction in purchasing volume investment; the management expense ratio was 24.4%, yoy +7.5pct, mainly due to an increase in employee remuneration expenses; and the R&D expense ratio was 5.4%, yoy-0.5pct. We believe that the company's purchasing efficiency continues to improve.
Major new products are expected to be launched in Q4. Actively following subsequent releases, the company is deeply involved in the SLG category. The two Q4 SLG games are expected to be launched overseas. Among them: 1) The “Code DL” game is an SLG with a sci-fi theme, focusing on the Q version of the cartoon style, which combines simulation management and RPG gameplay. 2) The “Code Name LOA” game is an SLG with a civilizational theme. The painting style is exquisite, and combines gameplay such as simulation management and tower defense. In addition, “Code Name DL” has received the domestic version number “Legend of the Wild Star:
“Breath of a Shepherd” is expected to launch in '25 and launch a mini-game version. The two new games are in the SLG category where the company has accumulated rich experience, and incorporate new gameplay. We expect that they will help the company's overall performance continue to improve after launch. It is recommended to pay attention to changes in the pace and flow of new products.
Non-recurring profit and loss changes contributed to a high increase in Q3 performance. Maintaining the “buy” rating and considering that Q3's non-recurring profit and loss increased net profit to mother, we raised our 24-year profit forecast. The net profit to mother for 24-26 is 1.34/1.36/1.54 billion yuan (the original value was 1.2/1.35/1.54 billion yuan).
Comparatively, the company's 25-year Wind unanimously expected an average PE value of 14 times. Considering that the company's overseas position is stable, the core products are stable, and the purchasing efficiency is improved. New Q4 overseas products have a high probability of success. They were given 25 times PE in 25 years, with a target price of 17.27 yuan (previous value of 10.39 yuan), maintaining the “buy” rating.
Risk warning: Product performance falls short of expectations, industry competition intensifies, AI+ products fall short of expectations, etc.
