Sanqi Mutual Entertainment (002555): High growth in mobile games continues to focus on major developments
Core point of view: The company announced the 2018 annual report and the 19Q1 quarterly report: 1) The company’s revenue increased by 23 in 2018.
33% to 76.
300 million, net profit attributable to mothers fell by 37.
77% to 10.
10,000 yuan, 2 yuan (taxes included) for every 10 shares.
2) 19Q1 revenue increased by 95%.
5% reached 32.
500 million; net profit attributable to mother increased by 10.
8% reached 4.
In 19H1, the company’s net profit attributable to mothers is expected to increase by 12.
8% reached 9-10 ppm.
1) The company ‘s mobile game market share has increased to 6. In 2018, the company’s mobile game market share has increased to 6.
5%, the follow-up product schedule is rich.
On the existing games, the company’s “Douro Continent” H5, “Knife passed on to the world”, etc. have achieved a monthly flow of over 100 million.
In the future, it has more than 12 self-developed projects including “Legend NB” and “Codename YZD”, 9 exclusive agent products such as “Xian Ling 2”, and more than 10 overseas product reserves.
The company continues to iterate in research and development, while maintaining the advantages of ARPG category, while achieving cross-category expansion in multiple areas; rich product supply at the issue end, and also trying alternative substitutions and categories; and establishing 佛山桑拿网 “three-dimensional marketing + precision promotion” in promotion services”” Method to build a new idea of systemic traffic management.
2) The selling expenses are high, and the subsequent net profit may be restored. According to the annual report, the company accrued 9 in 2018.
6 million goodwill was impaired, net profit adjusted for non-GAAP adjustments excluding the impact of goodwill, investment income, etc. increased by 6.
5% reached 15.
In addition, high selling expenses in 18Q4 and 19Q1 dragged down the net profit margin. The quarterly report showed that the net profit margin in 19Q1 was 14% (selling expense ratio 66%); we expect the products to mature and the selling expense ratio may be partially controlled.
Investment suggestion: The company adheres to the development strategy of “high-quality, diversified, platformized, and integrated”, with strong core capital and strong prospective strategic layout capabilities.
And the company has established an alternative first-mover advantage in the issuance market, and subsequently tried to achieve diversified breakthroughs in product types and overseas markets.
We expect the company to achieve net profit for 2019-202018.
4 billion, 21.
6 ppm, the current sustainable corresponding PE is estimated to be 14.
7X, referring to the current average PE of the game industry company in 2019 is 16X, and the company’s reasonable value should be about 14.
00 yuan / share, maintain “Buy” rating.
Risk reminder: lower than expected flow, increased market competition, and the risk of maintaining a high sales expense ratio.