Chinese Media (600373) 2019 First Quarterly Report Review: Published and Published Stable Games Focus on Call of Duty Global Action Follow-up Performance
[Investment Highlights]Chinese media releases the 2019 first quarter report.
FY19Q1, Chinese media achieved revenue of 28.
78 billion, a year-on-year increase of +0.
98%; net profit attributable to mother 4.
97 billion, a year-on-year increase of 10.
18%; deducted non-attributed net profit 4.
28 billion, a year-on-year increase of 3.
06%, non-recurring gains and losses for the current period mainly include 75.04 million generated from gains and losses on changes in fair value of holding financial assets and investment income.
FY19Q1, Chinese media gross profit YOY-10.
43% reached 10.
67 billion, gross margin extended by 4.
72pct to 37.
06%; R & D expenses YOY-35.
55% reached 1.
6.7 billion, R & D expense ratio is 3 per quarter.
28 points to 5.
78%; selling expenses YOY-5.
06% reached 1.
5.1 billion, the sales expense ratio fell by 0.
34pct to 5.
24%; management expenses YOY-3.
11% to 2.
5.2 billion, the management expense ratio exceeded the expected range.
37pct to 8.
The publishing and distribution business performed steadily, and the upgrade and transformation of traditional businesses to digital publishing continued to advance.
FY19Q1 company publishing business income YOY + 0.
86% reached 7.
7.9 billion, with a gross profit margin of 21.
34%, a decline of 0 every year.
68 points; Issuance business income increased by 3.
71%, reaching 9.
2.9 billion, gross margin increased short-term1.
57pct to 38.
In 2018, the wholly-owned book publisher’s first-tier e-commerce sales code reached 1.1 billion US dollars, an increase of 26 over the previous year.
43%; According to the statistics of the open book, the company’s online store code foreign market share in fiscal 2018 was 2.
63%, reaching the sixth place of the National Publishing Group. The upgrading and transformation of traditional businesses to digital publishing continues to advance. “The 苏州夜网论坛 Disputes of the Kings” has entered a mature period and is concerned about the follow-up performance of “Call of Duty”.
FY19Q1 online game revenue YOY-30.
63% to 6.
6.1 billion, temporarily reducing operating costs by 30.
24% to 2.
2 billion, basically the same as the company’s revenue changes; according to the expansion of marketing expenses YOY-43.
17% to 41.37 million.
Zhixingxingtong’s classic “The Conflict of Kings” has entered a mature period, and the monthly flow in the first three months of 2019 is 1.
A year-on-year increase of 2.2 billion to the age of 35.
Looking at the index section of App Annie, Zhixing Tongtong’s revenue as a publisher in India, Russia, Brazil and other markets ranked first, alternating sequentially.
In terms of new games, Blizzard authorized the development 无锡夜网 of a strategic game called “Call of Duty: Global Action”, which was launched in the UK, Germany, France, Australia and other countries at the beginning of March 4. The current position is listed in the main market ‘s Google Play strategy game download list.The top ten, the flow may be reflected in Q2, whether or not to take over “COK” needs to pay attention to its subsequent performance.
At the same time, the company released a stack of papers “Love and Producer” on behalf of overseas agents. It has been on Google Play in Q1, and its performance is relatively average. The App Store shows that the game will be launched in late May.
[Investment suggestion]China’s media industry Zhixingtong has been working in the game for many years, has intellectual property reserves, has strong distribution and operation capabilities; and the publishing and distribution business has a stable and high visibility.
We expect the company’s operating income for 19/20/21 to be 119.
2.4 billion, net profit attributable to mother 17.
6.5 billion, corresponding to a price-earnings ratio of 10.
2 times PE, giving “overweight” rating.
[Risk Tips]The progress of the game online is less than expected, the game flow is lower than expected; overseas policy risks; paper price risks.