The net profit of deducting non-return in 19 years has increased rapidly, and the performance of 20Q1 has declined due to the epidemic. In 2019, the company realized revenue of 2.594 billion yuan, down 8.01% from the same period last year; realized net profit of 259 million yuan, up 8.41% from the same period last year; deducted 269 million yuan from non-net profit, up 37.72% from the same period last year; and realized net operating cash flow of 820 million yuan, an increase of 31.10% over the same period last year. The level of the company's asset-liability ratio has gradually declined, from 53.58% in 2018 to 48.65%, and financial control has achieved results. In the first quarter of 2020, affected by the COVID-19 epidemic, the company achieved revenue of 397 million yuan, down 22.20% from the same period last year, and net profit of 13 million yuan, down 59.54% from the same period last year.
Sports: the sports business has increased significantly, the club's record has improved, and the commercial impact has increased significantly. In 19 years, the company's football club business realized revenue of 1.212 billion yuan (YOY+40.59%) and net profit of 224 million yuan (YOY+116.14%). The football club business has become the main source of revenue growth for the company, which mainly includes television rights, player transfers, sponsorship and advertising. The club made a breakthrough in 19 years, the Spaniard returned to Europe with 53 points in seventh place in the league table, and reached the last 32 in the Europa League. In January 19, Chinese player Wu Lei joined the Spaniard Club, which caused the "Wulei effect", which greatly enhanced the popularity of the club and the team in China. With the improvement of the record and the joining of Wu Lei, the influence of the team's commercial value has gradually increased. In 19 years, the club has cooperated with China Mobile Limited Migu, Leisure Sports, iFLYTEK translator and Aijianshi respectively. We believe that with the strengthening of the team lineup, the record is expected to be further improved in the future, and the football club business will bring continued revenue growth for the company.
Game: subdivide the game market, deepen the development of international layout, and enrich the diversified IP matrix. In 1919, the company's game business achieved revenue of 807 million yuan (YOY-37.79%), accounting for 31.12% of the total revenue, with a net profit of 127 million yuan (YOY-17.25%). The revenue of overseas game business was 253 million yuan, and overseas pipelining was 845 million yuan, accounting for 37.48% of the total gaming pipeline. The company is deeply engaged in SLG strategy category, secondary category and other game segments. In 19 years, the antique historical strategy game "Bawangzhiye", which was independently developed by the company and exclusively represented by Tencent, maintains an average global monthly flow scale of about 100 million yuan. The game invites Wu Lei to act as the game spokesman to realize the linkage between the company's game IP and sports IP. In terms of international layout, the company's new online games "overlord's ambition", "the Age of Heaven" and "Magic Night of the Tang Dynasty" have all performed well in overseas markets. In terms of diversified IP, the company launched original animation in conjunction with the film and television industry, in which "reversing Dimensions: the rise of AI" is eye-catching. In 2020, the company will also launch "pick up the Dream Walk", "Girl's Throne", "Fantasy Book" and other games.
Profit forecast and valuation analysis. We predict that the EPS of the company from 2020 to 2022 will be 0.19,0.29,0.36 yuan respectively. With reference to companies in the same industry, we give the company 20-25 times dynamic PE valuation in 2020, and the corresponding reasonable value range is 3.80-4.75 yuan, which is better than that of the big city.
Risk hint: the epidemic affects the development of the company's sports business, and the launch of new games is delayed.