20210824-招银国际-中手游-00302.HK-Moving_into_strong_2H21E_pipeline_4页_803kb

报告摘要

CMGE Technology (302 HK) Summary

Core Content Overview

CMGE Technology (302 HK) is a company in the China internet sector that reported largely-in-line results for the first half of 2021 (1H21). The company's performance was driven by the success of its new games and existing portfolio, particularly The Voyage (with ByteDance) and Soul Land. It also achieved significant growth in game development, IP licensing, and overseas business. The company is expected to have a strong second-half of 2021 (2H21E) with over 15 new titles launching, including Dynasty Warriors and New Sword and Fairy, which are anticipated to boost revenue and profitability.

Key Financial Performance (1H21)

Revenue: RMB2,180 million (+27% YoY)
Adjusted Net Profit: RMB402 million (+18% YoY)
Adjusted Net Profit vs. Estimates: +0% (unchanged)
Game Publishing Revenue: RMB1,341 million (+2.4% YoY)
Game Development Revenue: RMB773 million (+156.8% YoY)
IP Licensing Revenue: RMB78 million (+2012.6% YoY)
Overseas Revenue: RMB219.7 million (+6x YoY)

2H21E Outlook

Expected Revenue Growth: +10% for revenue, +16% for adjusted net income
Key Titles: Dynasty Warriors (launched on 5 Aug with Tencent), New Sword and Fairy (with ByteDance), Sword and Fairy 7 (15 Oct), Thunder Empire 3, My Sword Diary, and Rakshasa Street
Overseas Rollout: Condor Heroes, Hitman Reborn, and Sword and Fairy 7 are set for overseas launch, contributing to the anticipated growth
Market Position: CMGE's revenue and profit growth is expected to outperform the market, supported by its robust pipeline and strategic collaborations

Strategic Initiatives

IP Acquisition: Acquired the remaining interest of Softstar and Sword and Fairy rights in mainland China for HK$642 million, reinforcing its IP-centric strategy
Collaborations: Partnered with Huawei and Bilibili (third-largest shareholder since April 2021)
Investments: Invested in four game developers in 2021, including its self-developed game Project: World with Sword and Fairy IP

Financial Ratios

Gross Margin: Improved from 32.0% (FY20A) to 34.4% (FY21E)
Operating Margin: Increased from 15.3% (FY20A) to 20.6% (FY21E)
Adjusted Net Margin: Slightly declined from 21.1% (FY20A) to 19.3% (FY21E)
ROE: Maintained at 21.1% (FY21E), with a strong performance in FY19A (21.9%)

Valuation & Investment Recommendation

Target Price (TP): HK$6.2 (implying 12x FY21E P/E)
Current Price: HK$3.61
Investment Recommendation: Maintain BUY
Catalysts: Upcoming titles in 2H21E, further cooperation with Bilibili

Stock Data

Market Cap: HK$9,993 million
Average 3-Month Turnover: HK$125.00 million
52-Week High/Low: HK$5.09 / HK$2.59
Total Issued Shares: 2,768 million

Shareholding Structure

Fairview Ridge Investment: 25.0%
Pegasus Network: 10.6%
Hotel Zhike: 7.2%

Share Performance

1-Month Return: -31.7% (Absolute), -23.8% (Relative)
3-Month Return: +2.1% (Absolute), +16.9% (Relative)
6-Month Return: +5.8% (Absolute), +29.1% (Relative)

Analyst Certification

The research analyst certifies that the views expressed accurately reflect their personal views
No compensation was directly or indirectly related to the specific views in the report

Disclosures & Risk Information

CMBIS or its affiliates may have financial interests in the issuer
There are risks involved in transacting in any securities
Past performance does not guarantee future performance
Information is provided for general purposes only, not for individual investment advice

CMBIS Ratings

BUY: Stock with potential return of over 15% over next 12 months
HOLD: Stock with potential return of +15% to -10% over next 12 months
SELL: Stock with potential loss of over 10% over next 12 months
NOT RATED: Stock not rated by CMBIS

Important Disclosures

The report is not an offer or solicitation to buy or sell any security
CMBIS does not assume responsibility for any loss or damage arising from reliance on the report
The information is based on analyses and interpretations of publicly available data
CMBIS provides information on an "AS IS" basis and may issue other publications with different conclusions

Legal & Distribution Information

United Kingdom: Report is provided only to certain persons under the Financial Services and Markets Act 2000
United States: Report is intended for distribution solely to "major US institutional investors"
Singapore: Report is distributed by CMBI (Singapore) Pte. Limited, an Exempt Financial Adviser, and regulated by the Monetary Authority of Singapore