CMGE Technology's first-half results fell short of our expectations, primarily due to declining revenue from legacy mobile games and delays in new-game launches. While we have factored in a revenue drop from the older titles, the decline occurred earlier than expected. However, given most of our long-term revenue forecasts hinge on the scheduled late 2024 release of Sword and Fairy: World, we keep our estimates unchanged for now. As a result, we maintain our fair value estimate for CMGE at HKD 2.40 but lift the firm's Morningstar Uncertainty Rating to Very High from High due to increasing competition in the gaming industry.
In the first half of 2024, CMGE's revenue declined 20% year over year, significantly underperforming the industry's double-digit growth. This weakness is largely due to changing preferences among Chinese gamers, who are increasingly drawn to high-quality games, leading to a diminishing appeal for CMGE's under-resourced legacy titles. Acknowledging the need for better games, management has heavily invested in Sword and Fairy: World. Having tested the game ourselves, we believe this title will significantly improve CMGE's financial performance in the subsequent quarters following its official launch.
Our model baked in around an annualized revenue contribution of CNY 1.7 billion from Sword and Fairy, which is a fraction of the CNY 8 billion generated by NetEase's similar title, Justice Mobile, in its debut year. The reason we estimate a much lower revenue figure for Sword and Fairy is due to the intensified competition within the open-world genre since 2023. Additionally, the potential overlap with the release of another NetEase open-world title, Where Winds Meet, could lead to players diversion, negatively affecting the performance of Sword and Fairy.
CMGE reported an adjusted operating income of CNY 32 million for the first half, a decrease of 28% compared with the previous year. The group also recorded a net loss of CNY 236 million, primarily due to impairment charges on several gaming companies in which it had invested. With the anticipated release of Sword and Fairy later this year, we expect the company to return to profitability in the second half.
CMGE Technology上半年的業績未達到我們的預期,這主要是由於傳統手機遊戲收入下降以及新遊戲發佈延遲。儘管我們考慮了舊遊戲的收入下降,但下降的時間比預期的要早。但是,鑑於我們的大部分長期收入預測都取決於計劃於2024年底發佈的《仙劍世界》,因此我們目前的估計保持不變。因此,我們維持對CMGE的公允價值估計爲2.40港元,但由於遊戲行業競爭加劇,該公司的晨星不確定性評級從高上調至非常高。
2024年上半年,CMGE的收入同比下降20%,表現明顯低於該行業的兩位數增長。這種弱點主要是由於中國遊戲玩家的偏好發生了變化,他們越來越被高質量的遊戲所吸引,導致對CMGE資源不足的傳統遊戲的吸引力減弱。管理層承認需要更好的遊戲,因此對《仙劍世界》進行了大量投資。我們親自測試了這款遊戲,相信這款遊戲將在正式發佈後的後續季度中顯著改善CMGE的財務表現。
我們的模型烘托出《仙劍世界》的年化收入貢獻約爲17億元人民幣,這只是網易同類產品《正義手機版》首年收入80億元人民幣的一小部分。我們之所以估計《仙劍世界》的收入數字要低得多,是因爲自2023年以來,開放世界類型遊戲的競爭日趨激烈。此外,《仙劍世界》可能與網易另一款開放世界遊戲《燕雲十六聲》的發佈時間重疊,可能導致玩家分流,從而對《仙劍世界》的表現產生負面影響。
中國手游上半年調整後營業收入爲3200萬元人民幣,同比下降28%。該集團還錄得淨虧損 2.36 億元人民幣,主要原因是對其投資的幾家遊戲公司計提了減值費用。隨着《仙劍世界》預計在今年晚些時候上映,我們預計該公司將在下半年恢復盈利。