Sanqi Mutual Entertainment (002555): The product year continues to verify that the net profit attributable to mothers achieves high growth

Sanqi Mutual Entertainment (002555): The product year continues to verify that the net profit attributable to mothers achieves high growth

In the first three quarters of revenue, net profit attributable to mothers maintained a rapid growth trend, and guidance for net profit attributable to mothers continued to maintain high growth.

Company 1?
September revenue of 95.

600 million (YOY + 73%), achieving net profit attributable to mother 15.

5.6 billion (+27.

70%), realizing net profit deducted from non-mothers14.

1.7 billion (YOY + 21%); of which Q3 achieved revenue of 34.

8.9 billion (YOY + 56%, QOQ + 24%), achieving net profit attributable to mothers5.

2.3 billion (YOY + 25%, QOQ-10%).

The rapid growth in revenue was mainly due to the launch of high-quality new games such as “Douloland” H5.

The company expects the highest net profit attributable to its mother to be 20.

500 million-21.

5 ppm, an increase of 103% -113% in ten years, the single Q4 is expected to return to the mother net profit range of 4.

9 billion?
5.

The company’s net profit was negative due to the impact of goodwill impairment in the fourth quarter of last year.

Gross profit margin increased, cash flow was abundant, and net profit margin improved due to higher sales expenses.

The company’s gross profit margin and net profit margin in the first three quarters were 86.

43% and 18.

45%, at least 11pc and 6pcct respectively, gross profit margin has improved significantly from this year. We judge that the proportion of self-developed games has continued to increase; the net cash flow from operating activities in the first three quarters was 1.9 billion, compared with the same period last year.Growth of 37%, benefit income continued to grow, and excellent cash flow performance; we judge that due to the contradiction of the overall new product launch throughout the year, the company’s sales expenses for game operations and promotion also increased, and the sales expense rate for single Q3 reached 61.

36%, an increase of 9 percentage points from the previous quarter, and an increase of 14 percentage points from the same period of the previous year. We expect that key new games will be launched in the third quarter to participate in the promotion, and correspondingly, they will get better revenue returns and better promotion results.

The reserve game reserves are abundant, and the mobile game business is expected to continue to exert its strength.

2019 is a big year for the company’s products. The company continues to create boutique games such as “One Sword”, “Douluo” H5, and “Elf Festival”. The company’s revenue in the first three quarters was close to 10 billion US dollars.In July, August, and September of the Global Mobile Games Index, Sanqi Interactive Entertainment ranked third in China ‘s App Store publisher revenue list, behind Tencent and NetEase.

The company’s existing “Super Ball” (“Always started the Android version of the evaluation”, “Angel Sword”, “Cell Battle” and other products get version numbers, we expect the innovative products to try the effects worth looking forward to,Company products “Code NB”, “Code YZD”, “Code S”, “Code DG”, “Dark Descendants”, “Duro Land 3D”, “Jiangshan and the Beauty (tentative name)” and so on are also continuing to be promotedWe believe that next year’s product reserves will be rich, and mobile 都市夜网 games and overseas businesses are expected to continue to exert their strength.

Transfer no more than 4% equity to Hu Yuhang, the company’s principal person in charge of research and development.

The company announced that shareholders holding more than 5% of the shares of Zeng Kaitian (currently holding 17 shares.

48%) Hu Yuhang, the main person in charge of research and development to the company through block transactions in the next 6 months (currently holding 1 share.

49%) transfer of shares not exceeding 4% of the company’s total share capital.

The reason for the transfer is mainly considering that Hu Yuhang has outstanding game research and development, production and management capabilities, and the introduction of the team ‘s “Angel Sword” and “Douro Continent” H5 and other boutique games on listed company performanceContinuous growth is important.

The transfer helps Hu Yuhang and Sanqi Mutual Entertainment to have a high degree of long-term interests, and promotes Hu Yuhang to implement the long-term development strategic arrangement of Sanqi Mutual Entertainment.

We judge that the transfer can achieve long-term interest binding between the two parties. After the transfer is completed, Hu Yuhang is expected to become a shareholder holding more than 5% of the company’s shares.

profit prediction.

What do we expect the company 2019?
The EPS in 2021 is 0.

99 yuan, 1.

20 yuan and 1.

39 yuan.

With reference to the consensus PE expectations of comparable companies in the industry in 2019, considering the leading position of the company’s game distribution operator and the certainty of performance growth, we give the company 19 years 20 years?24 times the target PE, corresponding to a reasonable value range of 19.

8?
twenty three.

76 yuan, maintaining the sustainable market rating.

risk warning.
New mobile games perform worse than expected, old products are rapidly broken down, and overseas market risks

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