Sanqi Mutual Entertainment (002555) 2019 Interim Report Review: Explosive mobile games drive high performance of the company and high-precision buying volume model has obvious advantages
I. Event Overview The company’s 2019H1 revenue reached 60.
710,000 yuan (+83 compared to the same period last year).
8%), realizing net profit attributable to mother 10.
3.3 billion (+ 28% YoY).
9%), net profit after deducting non-attribution is 9.
490,000 yuan (+24.
7%), net cash flow from operating activities was 6.
160,000 yuan, an average of 36 in ten years.
9%, semi-annual ROE (diluted) is 16.
75%, an annual increase of 3.
19H1 non-recurring gains and losses of 83.7 million yuan, mainly investment income of 44.79 million yuan, government subsidies of 22.42 million yuan (mainly for water treatment and reimbursement and deduction), entrusting others to invest or manage assets of 11.17 million yuan(Mainly income from banking wealth management products).
Second, the analysis and judgment of right-hand games led to high growth of the company’s performance, and related purchases increased significantly. First, the company’s operating income in 2019H1 achieved rapid growth, with a one-time growth rate of 83.
8%, mainly due to the bright performance of the mobile game business, 19H1 mobile game business achieved operating income of 54.
$ 2.7 billion and gross profit of 47.
51 ppm, an increase of 152 per year.
9% and 185.
With the launch of a number of high-quality new games in 19H1, the purchase expenses also increased significantly, and the sales expenses reached 36 in 19H1.
320,000 yuan, an increase of 217 in ten years.
6%, selling expenses accounted for 59% of total revenue.
8%, an increase of 20% over the same period last year.
At the same time, the company continued to increase investment in game research and development, and continued to develop into an integrated research and transportation model, with research and development costs in 19H13.
18 ppm, an increase of 22 in ten years.
7%, R & D expenses accounted for 5 of total revenue.
The market share of the domestic mobile game business of the company in 19H1 further increased to 10.
02%, the highest monthly flow of operations exceeds 13.
50,000 yuan, with a total of more than 1.
3.3 billion, the highest monthly active users of more than 34 million, outstanding performance.
The company’s self-developed products have characteristics such as high performance, high success rate, and long cycle. The company’s self-developed mobile games “Eternal Era”, “Angel Sword H5” and page games “Legendary Domination Page Game” still maintain stable comparisonHigh running water; New games such as “One-handed” and “Douro Continent” H5 have achieved monthly achievements of over 100 million. Currently, “One-handed” passed the 31st IOS bestseller list, and “Dolo continent” IOS bestseller list was 11th, this weekClimbing 23 consecutively, it is expected that the launch of Tencent video “Douro Continent” anime plot will immediately enter the most exciting alternative. The action of the film game intensifies the mobile game guide of “Douro Continent”, and the flow of water promotes further improvement.After going online, it ranks third in the AppStore game bestseller list, and currently ranks 5th in the IOS bestseller list. It performs well and is expected to become another important source of mobile game revenue for the 19H2 company.
The company’s page game business was affected by the shift of users to mobile terminals and the decrease in the number of products. The company’s page game business revenue in 19H1 was 6.
44 trillion, a year-on-year decrease of 29%.
Self-developed and agency product reserves are abundant, games go overseas to expand into new markets, 19Q3 game pipeline is expected to go further. Under the “diversification” strategy, the company has sufficient reserves from product categories, product substitutions, and product numbers. The product matrix includes ARPG, MMO, Card, SLG, simulation management and other different types, covering magic, western fantasy, oriental fantasy, adventure, fantasy and other alternatives.
The company is currently developing “Super Ball”, “Code NB”, “Code YZD”, “Code S”, “Code DG”, “Dark Descendants”, “Duro Land 3D”, “Jiangshan and the Beauty (tentative)”Name” “and other mobile games, while also stocking a wealth of domestic agency products, including MMO games” Fantasy Tomorrow “,” Songs of the Cloud City “, card games” Bright Adventure “,” Heroes of the District “, simulation business games”Codename-SF”, magic ARPG game “Codename-TARO”, etc.
The company also made breakthroughs in overseas market development. The company continued to advance its strategic layout and increased efforts to expand overseas markets.
While the company maintains competitiveness in advantageous regions such as Southeast Asia, the company continues to focus on developing high-potential markets such as Japan, South Korea, Europe, and the United States in combination with localized product selection and marketing methods.
The company’s self-developed product “Douro Mainland” H5 launched in Singapore and Malaysia and other regions in the first month. The flow exceeded 10 million, and the ace product “Eternal Era” continued to maintain a stable flow in Southeast Asia, Japan, and South Korea.
Many self-developed boutique projects such as “Dark Descendants”, “Duro Land” and “Code DG” will be launched in the second half of the year, which is expected to provide strong performance support.
With the launch of new products in the third quarter, the company’s flow in the third quarter is expected to increase further than the second quarter.
Third, investment 深圳桑拿网 recommendations We expect the company to achieve profitability in 2019-2021.
46 yuan, corresponding PE is 16X, 13X, 11X.
We are optimistic about the continuity of the company’s current head games and the further increase of the company’s revenue in the second half of the year. At present, the company’s PE (TTM) is at 20 for 16 years.
6% score, high margin of safety, maintain the “recommended” level.
Fourth, the risk reminds that the flow of new games is not up to expectations, and the domestic and overseas game policy supervision risks.