Main points of investment
Sell forging business to focus on core business, multiple mergers and acquisitions layout leisure games + advertising dual main business. Zitian Technology, formerly known as Nantong forging, is mainly engaged in the research and development, production and sales of forging equipment. The company acquired Shenzhen olive leaf technology in 17 years, successfully cut into the field of advertising marketing, acquired 100 million Jingshi in 18 years, cut into building elevator advertising, and successfully transformed into new media advertising service providers. In the past 20 years, the company focused on the main business, sold the forging business and acquired Clockwork, to complete the international layout of Internet advertising, entered the leisure game R & D and distribution market, and formed a dual main business strategy of leisure games and advertising.
Merger and acquisition of the leading domestic leisure game CP hippo games into the leisure game industry, to create a new growth engine of the company. In October, 20 years, Zitian Technology acquired Clockwork, whose hippo games focus on the casual game market. Hippo game has "Ludo Master", "National bullet" and other masterpieces. With its stable output ability of popular style, hippo game has gradually grown into an expert brand of mobile games at home and abroad. The total number of downloads of mobile games developed and issued by hippo games has exceeded 140 million. In February, 21, iOS games super casual games download list hippo games ranked TOP5.
Cooperate with the short video giant to realize the industrial production and realization of leisure games. An incubation college is set up with bytes, and the giant is empowered to research and develop ideas: the company's Zitian jump incubation base relies on massive byte jump data resources to provide game developers with leisure game ideas and the ability to analyze and optimize the full chain of data from release to cash, so as to improve the success rate and realization efficiency of game developers, and the incubation platform can get a share of advertising from the incubated leisure games. Access to the Advertising Alliance to share data to improve advertising cash efficiency: the company provides high-quality games for byte jumps, and bytes are issued through its own content ecological platform. In-game access byte's pangolin advertising platform, through the incentive video advertising realized. In-depth strategic cooperation with Kuaishou to build an incubation base: Lian Media, a subsidiary of Zitian, and JOYO, a subsidiary of Kuaishou, signed a "Strategic Cooperation Framework Agreement" in January 21, and the two sides set up a joint venture "Little Orange". In terms of content creation, JOYO provides cutting-edge information in the industry and empowers the efficient and accurate creative production of Li'an Media, which is responsible for mining excellent content creators. In terms of traffic promotion, JOYO uses its own platform ecological flow to provide various forms of promotion services for Ryan Media, which provides advertising display, traffic conversion and other services for JOYO.
Leisure games are connected to the advertising alliance to achieve the improvement of advertising space resources and unit price, and the commercial realization ability is greatly enhanced. The leisure game has a wide user base. In the early days, under the domestic purchase-based payment mode, the commercial realization ability was weak, and the current rising leisure game advertising alliance mode launched video incentive advertisements. Players can get game currency by watching video ads in the course of the game, which is a kind of incentive advertising. Byte and other advertising platforms communicate with the casual game background and use the platform's accurate algorithm to match advertising materials. Distribute the inventory of advertisements that you undertake to app, an alliance game company, and then pay it to CP according to the agreed share of advertisements. The realization of casual game access advertising alliance has realized the improvement of advertising inventory and unit price (ecpm), and the current advertising alliance is still in a period of explosive growth. At the same time, with the rise of the buying market, casual games as a flow supplier are expected to benefit. Under the trend of short video going out to sea, casual games will also become an important supplement for the giant's offshore content ecology.
Profit forecast and investment rating: the 21-22 year revenue is estimated to be 2.087 billion yuan, the net profit of the parent company is 598 million yuan, and the PE is 14max 10X. With the accelerated commercialization of advertising alliances and the rapid growth of casual games, the giant holding hands of the company is expected to enjoy growth dividends, while the production capacity and success rate are expected to increase, giving a 21-year 25-fold PE, target price of 92.3 yuan and a "buy" rating for the first time.
Risk hint: stricter regulatory policy, goodwill impairment risk, credit compliance risk.