Cinda Securities: Gave a buy rating to Gigabit with a target price of $444.86

2022-04-22Feng Cuiting of Cinda Securities Co., Ltd. conducted a study on gigabit and released a research report "In-depth Report: Adhere to "Boutique", Heavy Quality for Players", this report gives a buy rating to Gigabit, believing that its target price is 444.86 yuan, the current stock price is 339.55 yuan, and the expected increase is 31.01%.

Gigabit (603444)

Gigabit adheres to the "boutique", is a leading domestic R&D integrated game manufacturer. Founded in 2004, the company launched a free MMORPG fairy tale blockbuster work "Ask" in the end game era, and launched the "Qingdao Mobile Game" in 2016 to successfully achieve transformation and become the core source of the company's income. In 2012, the Thunder game platform was established, and it has now become the base camp for domestic Roguelike games. In 2021, the self-developed product "One Thought Runaway" once again verified the company's R & D strength and the advantages of refined operation. The total equity of the founding team exceeds 40%, and the governance structure is good. The actual controller and chairman Lu Zhenyan is an engineer, focusing on the game industry, and the core management is mostly hardcore players, who have a deep understanding of the game.

The re-issuance of the version number released a positive signal, and the industry paid more attention to long-term operation and boutique research and development under the supply-side reform. On April 11, the resumption of the issuance of the version indicates the normalization of industrial supply, under the influence of the suspension of the version number, the 830 New Deal and other regulatory influences, the scale of China's mobile game market in 21 years is 225.538 billion yuan, yoy +7.57%, and the growth rate has slowed down. The trend of long-term operation of game products has become more and more obvious, and the average life cycle has reached three and a half years, of which products that have been online for more than three years occupy more than 50% of the flowing water of the mobile game market. The head of the old products show strong vitality, and the game products gradually move from short product cycles to stable consumer goods attributes. Among the domestic mobile game flow TOP250 products, the proportion of new products self-research is increasing, the R& D expense rate of game companies is also gradually increasing, R & D investment continues to increase, and the trend of high-quality products is further strengthened.

The main games "Ask The Question Mobile Game" and "A Thought of Escape" performed brightly, and the company's long-term operation ability was outstanding. "Qingdao Mobile Game" has performed steadily, successfully operated for more than six years, and still ranks in the top 30 on the game best-seller list, contributing to the company's main performance. In 2021, the revenue of "Qingdao Mobile Game" has been further increased, and the company's long-term operation ability has been continuously confirmed. It will also open the sixth anniversary of the big suit on April 22, and the performance is worth looking forward to. "A Thought of Escape" became a hit, excellent performance after the launch, the first month ranked top 15 in the iOS game best-seller list, as of the end of the year, the cumulative registered users exceeded 10 million, October 21 on Hong Kong, Macao and Taiwan, the beginning of the 22nd anniversary version of the centralized purchase, ranking in the iOS game best-seller list TOP10. "A Thought of Escape" has become another long-term operation product of the company after "Asking Questions" and "Asking Questions Mobile Games", consolidating the performance base.

Adhere to R & D-driven, endogenous + epitaxial to create a high-quality R & D team. By the end of 21 years, the company's R & D personnel totaled 530 people, accounting for 56.08% of the total number of employees, and the R & D strength continued to increase. In addition, the company has created a number of high-quality game research and development teams through endogenous + epitaxial methods, and invested in high-quality game developers, such as Gold Rush Interactive, Yongshi Network, Celadon Games, etc., to supplement its own research and development strength, and agent products to breed explosive models.

"Thunder Games" agent products are more diversified, and the release of high-quality games brings greater performance flexibility. The company's independent operation platform "Thunder Games" has been operating dozens of games so far, successfully released "Qingdao Mobile Game", "Unthinkable Labyrinth", "The Strongest Snail (Hong Kong, Macao and Taiwan Version)", "A Thought Escape", "Underground Castle 3: Poetry of the Soul", "Moore Manor" and other games, has crossed the terminal game, mobile game, host platform, covering MMO, Roguelike, placement and other multi-category, multi-theme game distribution capabilities, in roguelike, placement and other categories have distribution advantages.

Investment advice: The company's layout diversified product matrix, covering MMORPG, placement and cultivation, simulated management, roguelike, SLG and other game categories, the existing games "Qingdao Mobile Game", "A Thought of Escape" and other stable performance, 22 years can be released new game game version number reserves. The long-term operation of the "Q Dao" mobile game is stable, and the long-term flow continues to maintain a good momentum; the maintenance of the purchase volume after the launch of "One Thought Runaway" on February 1, 2021 has become the leader of the Xiuxian placement category; the "Obi Island: Dream Country" of the 22nd Thunder Agent will open the omni-channel payment test on April 28, and the performance is worth looking forward to. The company also reserves a number of games such as "Dawn Elite", "Flowers Fall in Chang'an", "Lost Four Realms", "Shop Legend", "Family Story (M66)" and so on, laying the foundation for 23-24 years of performance. We expect the company's net profit attributable to the parent company in 2022-2024 to be 15.98/18.28/2.122 billion yuan, corresponding to a valuation of 15.5X/13.5X/11.7X, according to the comparable company valuation method and historical valuation analysis, we give the company a 22-year 20XPE target valuation, corresponding to a target price of 444.86 yuan, and give a "buy" rating for the first time.

Risk factors: Core game performance is less than expected: New game launch schedule is less than expected: Industry policy risk: Core brain drain risk.

According to the research report data released by Securities Star Data Center in the past three years, the team of researchers Li Yanli of Western Securities has studied the stock more deeply, and the average forecast accuracy in the past three years is as high as 96.17%, and its forecast for the net profit attributable to 2022 is 1.821 billion yuan, and the forecast PE according to the current price conversion is 13.37.

The latest profit forecast breakdown is as follows:

A total of 31 institutions have given ratings in the last 90 days, with 26 buy ratings and 5 overweight ratings; the average target price of institutions in the past 90 days is 478.55. The Securities Star Valuation Analysis Tool shows that 603444) good companies are rated 3 stars, good prices are rated 3.5 stars, and valuations are rated 3 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)

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