20180824-广发证券_香港_-IGG-00799.HK-Monthly_average_grossing_strong_during_1H18__six_new_games_to_belaunched_in_4Q18_3页_490kb
报告摘要
IGG (799 HK) Equity Research Summary
Core Content
IGG (799 HK) is a gaming company that has shown strong performance in the first half of 2018. The report maintains a "Buy" rating with a target price of HK$12.60, indicating positive expectations for the company's future earnings and stock performance.
Main Points
Financial Performance (1H18)
- Revenue: US$388 million, up 42.0% YoY and 16.4% HoH.
- Net Profit: US$98.61 million, up 28.6% YoY and 24.3% HoH.
- Gross Margin: 70.3%, up 2.2pp YoY and 1.8pp HoH.
- Expenses Ratio: 37.7%, up 24pp YoY.
- Income Tax Rate: 20.6%, up both YoY and HoH due to increased tax provisions.
Grossing Performance
- Monthly Average Grossing: US$70 million, with total grossing up to US$422 million (Rmb2.9 billion).
- Lords Mobile: Monthly grossing reached US$56 million, with a peak of US$59 million in August.
- June-July Downturn: Likely due to the World Cup, but rebounded in early August.
- Castle Claw: Monthly grossing was maintained at US$10 million.
New Game Launches
- The company plans to launch six new games from September to December 2018.
- Project SOK (military strategy game) is expected to launch in September.
- Galaxy Mobile (real-time military strategy game) is expected to launch at the end of October.
- Other new games: Project COG (strategy + tower defense), Project LR (strategy), and Project CL (sandbox).
Key Information
Earnings Forecasts
| Year | Revenue (US$ m) | Growth (%) | Net Profit (US$ m) | Growth (%) | EPS (HK$/share) |
|---|---|---|---|---|---|
| 2016 | 322 | 59.0% | 73 | 75.0% | 0.43 |
| 2017 | 607 | 88.5% | 156 | 114.9% | 0.92 |
| 2018E | 766 | 26.2% | 200 | 28.1% | 1.18 |
| 2019E | 829 | 8.2% | 215 | 7.3% | 1.26 |
| 2020E | 869 | 4.8% | 231 | 7.5% | 1.36 |
Valuation Metrics
| Metric | 2016 | 2017 | 2018E | 2019E | 2020E |
|---|---|---|---|---|---|
| P/E | 23.3 | 10.8 | 8.4 | 7.9 | 7.3 |
| P/B | 8.6 | 7.4 | 5.1 | 3.9 | 3.1 |
| EV/EBITDA | 15.7 | 7 | 5.3 | 5 | 4.7 |
Financial Ratios
| Ratio | 2016 | 2017 | 2018E | 2019E | 2020E |
|---|---|---|---|---|---|
| Revenue Growth (%) | 59% | 89% | 26% | 8% | 5% |
| Net Profit Growth (%) | 75% | 115% | 28% | 7% | 8% |
| Profit Margin (%) | 68% | 68% | 70% | 69% | 69% |
| Net Profit (%) | 23% | 26% | 26% | 26% | 27% |
| ROE (%) | 37% | 68% | 61% | 49% | 42% |
| ROIC (%) | 37% | 66% | 60% | 49% | 41% |
| Asset-Liability Ratio (%) | 19.6% | 28.5% | 23.8% | 20.9% | 17.6% |
Cash Flow
- Operating Cash Flow: US$175 million in 2018E.
- Net Profit: US$200 million in 2018E.
- Cash Flow at End of Year: US$222 million in 2018E, increasing to US$413 million in 2020E.
Outlook and Rating
The company is expected to benefit from the upcoming launch of six new games, which are anticipated to drive new growth. The analyst maintains a "Buy" rating with a target price of HK$12.60, citing the strong performance of core games and the company's leading position in SLG (Social Live Game) and game globalization.
Risks
- Grossing growth may fall short of expectations.
- Delays in new game launches.
- Performance of new games may disappoint.
Analyst Certification
The research analyst certifies that all views expressed in the report reflect his or her personal views and that no part of his or her remuneration was directly or indirectly connected with the specific recommendations.
Disclosure of Interests
- GF Securities (Hong Kong) and its affiliated companies do not hold any shares of the securities mentioned.
- No investment banking relationship with the companies mentioned in the past 12 months.
- No financial interests or shares in the securities mentioned.
Disclaimer
This report is for informational purposes only and does not constitute an offer to buy or sell securities. It is intended solely for the use of GF Securities (Hong Kong) clients. The information may be subject to change and the company accepts no liability for any loss arising from its use. Investments involve risks and past performance does not guarantee future results.
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