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Perfect World (002624) 2019 Third Quarterly Report Review: Many new games with performance in line with expectations are gaining momentum

Perfect World (002624) 2019 Third Quarterly Report Review: Many new games with performance in line with expectations are gaining momentum

Event: The company released the third quarter report of 2019.

  Opinion: The performance is in line with expectations, and cash flow has improved significantly. The first three quarters of 2019 achieved operating income58.

12 ppm, an increase of 5 in ten years.

34%.

The company transferred its cinema business in 2018, excluding the impact of the cinema business, and its revenue increased by 16%.

10%.

Realized net profit attributable to mother 14.

760,000 yuan, an increase of 12% in ten years.

Deduct non-net profit 14.

20 ppm, an increase of 28 in ten years.

47%.

The gross profit margin in the first three quarters increased by 6.

05

To 65.

68%, mainly due to higher gross profit margin third-party agency products (“Perfect World” mobile games and “Yunmeng Shigege”) accounted for an increase in the proportion of revenue.

The mobile game business has performed well, and the film and television business has developed steadily. Perfect World has performed well and steadily overall, contributing more than 2 billion yuan.

Q3 self-developed mobile game “The Condor Heroes 2” contributed a major increase, with over 200 million flowing in the first month.

In terms of film and television business, the third quarter mainly confirmed the income of film and television works such as “Shanyue Unconscious” and “Old Tavern”.

The follow-up products are 武汉夜生活网 rich in reserves, and a number of new games are on the way. In terms of follow-up products, the MMO sandbox game “My Origins” is scheduled to be filed on November 15th without reducing the upper limit of the file unlimited number. Currently, the number of pre-orders has exceeded 14 million.

In addition, high-quality works such as “Dream Collection Cygnus” and “Xin Xiao Ao Jiang Jiang Hu” have obtained edition numbers.

In addition, new games such as the self-developed mobile game “Dream Episode 2”, “New God Demon Continent”, “Fantasy New Evil Immortal”, and the ARPG “God of War”, and “Very Heroic” mobile game editions that have been focused on overseas markets have also been accumulated.Ready to go.

Investment advice and profit forecast 2019 is an important year for Perfection. The great success of the “Perfect World” mobile game proves the company’s stable and excellent research and development capabilities. The follow-up and Tencent’s “My Origin” is worth looking forward to.
In terms of product research and development, Perfect has continuously increased research and development investment and absorbed excellent research and development teams. While consolidating its traditional MMO advantage categories, it has continued to seek innovation in the type of gameplay and gradually entered the harvest period.

Perfect currently forms a multi-type matrix that includes a host, a terminal game, and a mobile game, which has great advantages in the three-dimensional development of IP.

In the film and television business, the company is good at realistically overcoming and actively grasping the main melody dramas, and building overall anti-risk capabilities.

We expect the company’s EPS for 2019-2021 to be 1.

63/1.

85/1.

91, corresponding PE is 17, respectively.

51x / 15.

42x / 14.

96x, maintain “Buy” rating.

Risk reminder: old products are replaced too quickly, key new game products are less than expected, policy risks