Caesars culture (002425): 19H1 noticed a net profit increase of 70-120% into the high-speed growth channel

Caesars culture (002425): 19H1 noticed a net profit increase of 70-120% into the high-speed growth channel

Event: The company announced the 18-year annual report, the number of reports, the company’s realized revenue, net profit attributable to the mother, and net operating cash flow were 7, respectively.

4.4 billion, 2.

7.8 billion, 1.

3.7 billion, an increase of 5 each year.

79%, 9.

30%, -31.

16%; EPS 0 achieved.

34 yuan, it is planned to distribute a cash dividend of 0 to every 10 shares for all shareholders.

60 yuan (including tax), no bonus shares will not be given, and the capital reserve will not be converted into capital.

The company announced a quarterly report for the year of 19, the number of reports, the company’s realized revenue, net profit attributable to the mother, and net operating cash flow were 2 respectively.

60 billion, 1.

170,000 yuan, -1.95 million yuan, an annual increase of 78.

54%, 100.

63%, -104.

14%.

The company announced 19 years of H1 business performance forecast, and is expected to realize net profit attributable to mothers1.

99-2.

5.8 billion, an annual increase of 70-120%.

Opinion: The company’s income structure has changed slightly in 18 years, with the culture and entertainment industry and the clothing industry accounting for 93% of the revenue respectively.

65%, 3.

74%, of which 1) the company’s copyright operation business has developed rapidly and achieved revenue 2 in 18 years.

100,000 yuan, an increase of 109.

39%; 2) The company’s apparel business has stopped production of new products and is in the inventory liquidation stage.

The 杭州桑拿养生会所 company’s operating cash flow has temporarily weakened, and our judgment is mainly due to: 1) payment of game fee distribution; 2) prepayment of commissioned research and development expenses; 3) part of the outstanding overseas royalty income confirmed in the first quarter of 19th.

In addition, the number of R & D personnel of the company increased to 511 by the end of 18 years, accounting for 72.

48%, 100 million R & D investment (335 R & D personnel at the end of 17 years, accounting for 55.

46%).

The annual report and the first quarterly report strengthened our knowledge and judgment of the company. In 19 years, it started high-speed growth and focused on the progress of the launch of key products.

1) The company ‘s main product SLG mobile game “Three Kingdoms 2017” (subsidiary R & D by Tianshang Youjia, launched in August 17 in China, launched in May 18 in Korea, launched in August 18 in Japan) in the Asian region, and continued to gain in AsiaOutstanding results: up to No. 5 in the iOS bestseller list in Mainland China; No. 9 in the iOS bestseller list in Korea, No. 12 in Google Play bestseller list; No. 21 in Japan iOS bestseller list, No. 20 in Google Play bestseller list, becoming the company for 18 yearsThe main source of revenue for the gaming business.

2) Entering the large-scale harvest period in 19 years, Q1 company confirmed the overseas copyright revenue of “Naruto” and “Fairy Tail” 4-5 million yuan. It is expected that Q2 will continue to obtain product revenue; the company’s new tour “Dragon Ball” in the first quarter”Awakening” (customized mobile game customization) was launched, the performance was slightly higher than expected, up to the 15th best-selling iOS list, currently stable at TOP100.

3) In 19 years, the company will focus on promoting the domestic and foreign operations of “Fairy Tail”, “Naruto”, as well as “New Three Kingdoms”, “Gourd World”, “Conquest of the Gods” (with version number) and “Shou Yin GraveWith the launch of products such as “People”, the above-mentioned research and development and testing are progressing smoothly, focusing on the release of the version number.

IP reserves are sufficient and long-term development is expected.

According to the announcement of the annual report, the company currently has “One Piece” (a series of comics created by the single author with the highest circulation in the world, certified by Guinness), “A Sword Mountain in the past”, “Yu Yu Bai Shu”, “Dragon Rune””Soul Street” and other high-quality IPs, and some of them have started the development of game adaptation products, which will provide a good foundation for the company’s development in the next 2-3 years.

Investment suggestion: The company has a solid transformation, clear strategy, and abundant product reserves in the next two years, which will expand and expand the company’s product scale and achieve flexibility in performance.

It is expected that the company’s net profit for 2019-2021 will be 5 respectively.

7.0 billion, 6.

8.9 billion, 8.

26 trillion, corresponding to EPS 0.62 yuan, 0.

85 yuan, 1.

02 yuan.

We give a 15x target PE for 2019, corresponding to a target price of 9.

3 yuan, maintaining the “Buy-A” level.

Risk Warning: The pace of new games going online is lower than expected, and the gaming industry is becoming more closely regulated.