The 2023 A-share game stock financial reports have been released one after another, and we find that game stocks have undergone major changes this year:
For example, the dividends of Gigabit, which has always been "heroic", have shrunk greatly;
For another example, Diandian Interactive, a subsidiary of Century Huatong, will enter the top five in overseas revenue in 2023;
For another example, Sanqi Mutual Entertainment plans to pay dividends 4 times a year in 2024.
How will A-share game stocks perform in 2023?
Let's take stock of the financial reports of 7 A-share game stocks that have disclosed their financial reports, and reveal the new highlights in the "report card".
1. Inventory of game stock dividends: Sanqi Mutual Entertainment's annual cash dividends exceeded 1.8 billion, and Gigabit dividends shrank significantly
Under the background of the "New National Nine Articles", dividends of listed companies have become one of the concerns. How are the A-share game stocks that have already issued earnings reports performing?
(1) Inventory of cash dividends of A-share game stocks in 2023
According to the incomplete statistics of Game Finance Hui, as of now, 7 A-share game stocks have released their 2023 financial reports.
Judging from the annual dividend in 2023, Sanqi Mutual Entertainment's cash dividend will reach 1.812 billion, which is the A-share game stock with the highest dividend amount in 2023, with a total dividend of more than 800 million for Perfect World, more than 500 million for Gigabit, and more than 100 million for Zhejiang Digital Culture, Glacier Network, and Shenzhou Taiyue.
Source: Company financial report, game financial exchange chart
It is worth noting that Sanqi Mutual Entertainment announced in the announcement that it will pay dividends in the first quarter, half year and third quarter of 2024 in combination with undistributed profits and current performance, with no more than 500 million yuan per period and a total of no more than 1.5 billion yuan.
On April 29, Sanqi Mutual Entertainment announced that it is expected that the cash dividend amount in the first quarter of 2024 will be about 466 million yuan, and the proportion of cash dividends in the first quarter to the net profit attributable to the parent company in the current period will be as high as 75%.
This also means that the dividend frequency of Sanqi Mutual Entertainment will be increased from the original semi-annual to once a quarter. This is also the first A-share listed company to propose consecutive quarterly dividends since the release of the new "National Nine Articles".
(2) Inventory of income and net profit of A-share game stocks in 2023
So, how will these 7 gaming stocks perform in 2023?
Source: Company financial report, game financial exchange chart
Source: Company financial report, game financial exchange chart
On the whole, Shenzhou Taiyue and Glacier networks are growing rapidly, Gigabit and Sanqi Mutual Entertainment are stable, while Perfect World and Electric Soul Network are declining significantly.
Among them, Sanqi Mutual Entertainment will achieve revenue of 16.5 billion yuan in 2023 and a net profit attributable to the parent company of 2.66 billion yuan, both of which have ranked first among A-share game stocks for two consecutive years.
(3) Analysis of the reasons for cash dividends of A-share game stocks
Through the above analysis, it can be found that the A-game stocks that have disclosed the 2023 dividend plan are mainly divided into two categories:
The first category is "generous" dividends. Representative companies: Sanqi Mutual Entertainment, Perfect World, Shenzhou Taiyue, Zhejiang Digital Culture.
There are two main reasons for the large dividends of the above-mentioned game stocks:
On the one hand, it is to actively respond to the requirements of the new "National Nine Articles", increase the return to investors, and boost investor confidence.
The new "National Nine Articles" put forward requirements for cash dividends of listed companies. Among them, it focuses on "enhancing the stability, sustainability and predictability of dividends, and promoting multiple dividends a year, pre-dividends, and dividends before the Spring Festival". Recently, Sanqi Mutual Entertainment proposed a plan to pay dividends 4 times a year, which is a response to this policy.
On the other hand, the net profit of some game stocks in 2023 has increased significantly, giving the company the ability to achieve "large" dividends.
For example, the net profit attributable to the parent company of Shenzhou Taiyue and Zhejiang Digital Culture in 2023 increased by 63.84% and 34.91% year-on-year respectively, and the dividend amount of the two companies in 2023 has also increased.
The second category is to temporarily choose to reduce dividends. Representative companies: Gigabit, Electric Soul Network.
Due to the decline in revenue and net profit in 2023, coupled with the company's consideration of the issuance investment of follow-up reserve projects, the need for funds for overseas business development, and the need for funds for the implementation of the repurchase plan, the total dividend in 2023 will only be 504 million, less than half of that in 2022.
The net profit attributable to the parent company of Electric Soul Network in 2023 will decline by more than 70% year-on-year, so the cash dividend will be about 50 million yuan, far lower than the 199 million yuan in the same period last year.
二、游戏股出海盘点：5家跻身海外发行商TOP30，《Puzzles＆Survival》累计流水超100亿
1. Inventory of overseas income of A-share game stocks in 2023
From the perspective of overseas revenue, among the 7 companies that have disclosed their financial reports, Sanqi Mutual Entertainment and Gigabit will have little change in overseas revenue in 2023 compared with the same period last year, Shenzhou Taiyue and Glacier Network have increased significantly, while Perfect World, Zhejiang Digital Culture, and Electric Soul Network have declined sharply.
Source: Company financial report, game financial exchange chart
From the perspective of the amount of overseas income, Sanqi Mutual Entertainment ranked first, with overseas income of more than 5 billion yuan, Shenzhou Taiyue second, with overseas income of more than 4 billion yuan, and the overseas income of the rest of the game stocks was less than 1 billion.
From the perspective of the proportion of overseas revenue, Shenzhou Taiyue, which focuses on games going overseas, has the highest proportion of overseas revenue, and Sanqi Mutual Entertainment's overseas revenue accounts for 35%.
2. Ranking of A-share game stocks in overseas issuance revenue in 2023
According to Sensor Tower data, in 2023, there are 5 A-share game stocks on the top 30 overseas revenue list of Chinese mobile game publishers. Among them, Sanqi Mutual Entertainment ranked 3rd, Century Huatong's Diandian Interactive ranked 5th, Shenzhou Taiyue's Shellwood Games ranked 7th, Baotong Technology's Yihuan Network ranked 27th, and Youzu Network ranked 30th.
Among the 5 game stocks, except for Youzu Network, the remaining 4 overseas revenue rankings have improved compared with 2022. Among them, Diandian Interactive will rise 13 places in overseas revenue ranking in 2023 with its new game "Whiteout Survival" with the ice and snow apocalypse strategy, jumping to 5th place in the revenue list.
Judging from the monthly rankings, according to data.ai data, Sanqi Mutual Entertainment, Shenzhou Taiyue, and Glacier Network performed steadily, Century Huatong and Baotong Technology rose sharply in the rankings driven by explosive products, and Youzu Network opened high and went low. Specifically, Sanqi Mutual Entertainment's overseas revenue ranking in 2023 will be in the TOP4, Shenzhou Taiyue will be in the TOP10, and Glacier Network will be around 25.
Source: data.ai;
From the perspective of products, according to the 2023 overseas revenue list of Chinese mobile games released by Sensor Tower, 4 products under A-share game stocks are on the list. Sanqi Mutual Entertainment's "Puzzles & Survival" ranked 5th, with a cumulative turnover of more than 10 billion, Diandian Interactive's "Whiteout Survival" ranked 7th, and the two products of Shellwood Games "Age of Origins" and "War and Order" were shortlisted.
3. Analysis of overseas new products and models of A-share game stocks in 2023
From the perspective of new product performance, in the past year, the ice and snow survival SLG "Whiteout Survival" launched by Diandian Interactive has performed the most prominently, which can be called the dark horse going to sea in 2023, and the MMO mobile game "데블 M" launched by Sanqi Mutual Entertainment in the Korean market has performed steadily, in addition, "Little Demon Asks" has performed well in the Chinese Taiwan and American markets, Gigabit has performed mediocre overseas new products, and there are few overseas new products from Shenzhou Taiyue, Perfect World, and Glacier Network.
From the perspective of the model, there are mainly the following "paths" for A-share game stocks to go overseas in 2023:
Path 1: [Domestic Mini Game→ Domestic APP → Triple-hop mode for going to Hong Kong, Macao, Taiwan →other markets]. Representative company: Sanqi Mutual Entertainment.
In 2023, a number of popular domestic mini games will go overseas as apps, and the triple jump model of [domestic mini games→ domestic APPs → going to Hong Kong, Macao, Taiwan → other markets] will gradually take shape. According to Diandian data, Sanqi Mutual Entertainment's "Little Demon Asks" has accumulated more than 250 million in the App Store and Google Store.
The biggest advantage of this mode is that the investment cost is low, and the gameplay can be quickly verified in a low-cost way.
Path 2: Transferring overseas products to domestic sales. Representative companies: Century Huatong, Shenzhou Taiyue.
For example, Century Huatong's popular mobile game "Whiteout Survival" launched a mini-game version of "Endless Winter", and public data shows that within 15 days of its launch, the game rushed to the 7th place on the best-selling list of WeChat mini games. Similarly, Shenzhou Taiyue's "Infinite Galaxy" launched the national server version of "Endless Sky".
Path 3: Buys sub-gameplay. Representative company: Glacier Network.
In 2022, the Dark Horse Glacier Network still adopted a large number of sub-game buying strategies in the past year.
At present, the three main games promoted by Glacier Network, "X-hero", "Super World" and "Hero Clash", all adopt the strategy of buying volume by side gameplay. This kind of play method of incorporating hyper-casual gameplay into medium-to-heavy games is still popular, and it has a certain cost advantage over traditional buying methods, but the secondary gameplay materials will quickly fail, and manufacturers need to keep piling up materials.
3. Inventory of game stock product reserves: Sanqi Mutual Entertainment has more than 40 reserve products, and the three major trends of globalization, mini games, and theme diversification are highlighted
Judging from the reserve products disclosed in the financial report, among the 7 A-share game stocks, Sanqi Mutual Entertainment has more than 40 reserve products, 13 Perfect World, 10 Glacier Network, and 9 Gigabit.
Source: Company financial report, game financial exchange chart
In general, the disclosed product reserves have the following characteristics:
The first is the establishment of global projects, and most of the reserve products are issued globally, or to one or several overseas markets (such as Southeast Asia/Hong Kong, Macao and Taiwan/Japan and South Korea, etc.). It can be seen that going overseas has become an important issue for game manufacturers in 2024.
The second is to actively deploy mini games, and the three companies of Sanqi Mutual Entertainment, Perfect World, and Glacier Network all mention mini games in their financial reports.
Perfect World pointed out in its financial report that the company is developing lightweight mini games, and Glacier Network also said that the company will explore growth opportunities in emerging segments such as mini games and interactive games.
The third is that product themes tend to be diversified, and minimally invasive and integrated gameplay has become the mainstream.
For example, in the SLG track, Sanqi Mutual Entertainment's reserve products include the Q version of the war SLG "Codename Casual SLG", the dinosaur cartoon SLG "Primal Conquest: Dino Era", the magic cartoon SLG "Abyss Survivor" and other products; Shenzhou Taiyue has reserved two SLG fusion games with a science fiction theme (code name DL) and civilization theme (code name LOA); Gigabit has a reserve of strategy tower defense "The Strongest Castle" and a science fiction strategy card " Billions of Light Years" and other products.
Fourth, the performance analysis of game stocks: some companies are strong and stable, and some companies are volatile
There have been some changes in all aspects of gaming stocks this year.
In terms of market capitalization, Sanqi Mutual Entertainment currently ranks first, Century Huatong ranks second, and Kaiying Network ranks third. (Note: Due to the complexity of Kunlun's business, we are not included in the game stocks for the time being)
Source: Wind;
Game Finance has noticed that the top 10 companies by market capitalization are basically in the field of AI.
The seven A-share game stocks that have disclosed their financial reports have all stated in their financial reports that they are actively exploring cutting-edge technologies such as AI, and some companies have applied AI to their R&D pipelines.
For example, Sanqi Mutual Entertainment said in its financial report that the company actively embraces the application of AI in the game industry and adopts the "AI three-step" strategy. The first step is to release the AI application and gradually integrate it into all business links. The second step is to realize tooling and modularization based on the accumulation in the early stage, and build a more automated and intelligent game industrialization pipeline. The third step is to explore more possibilities for AI-rich gameplay.
Perfect World said in its financial report that the company has applied AI technology to multiple core links such as art, programming, planning, operation, security, and testing, covering intelligent NPCs, intelligent game assistants, scene modeling, AI painting, AI plots, AI dubbing and other aspects. In February 2024, Perfect World's self-developed intelligent character dialogue algorithm was filed for the record, which is mainly used in scenarios such as game intelligent customer service and intelligent character dialogue.
At the same time, the game team continues to "feed" data resources with the characteristics of Shellwood Games to the AI software, and through continuous training and iteration, it trains AI models with the characteristics of Shellwood games, so as to accelerate the creation progress of games and improve the user experience of game products.
In terms of dividends, in 2023, the total dividends of Sanqi Mutual Entertainment will exceed 1.8 billion yuan, the total dividends of Perfect World will exceed 800 million, the total dividends of Gigabit will exceed 500 million, and the cash dividends of Zhejiang Digital Culture, Glacier Network, and Shenzhou Taiyue will all exceed 100 million.
It is worth noting that Sanqi Mutual Entertainment is the A-share game stock with the highest dividend amount in 2023, accounting for 68% of the annual net profit attributable to the parent company.
In terms of overseas revenue, 5 A-share game stocks ranked among the top 30 overseas revenue lists of Chinese mobile game publishers in 2023, Sanqi Mutual Entertainment ranked 3rd, Century Huatong's Diandian Interactive ranked 5th, Shenzhou Taiyue's Shellwood Games ranked 7th, Baotong Technology's Yihuan Network ranked 27th, and Youzu Network ranked 30th.
In terms of the amount of overseas income, Sanqi Mutual Entertainment ranked first, with overseas income of more than 5 billion yuan, and Shenzhou Taiyue was second, with overseas income of more than 4 billion yuan.
In terms of new product reserves, Sanqi Mutual Entertainment has the largest number of reserve products, and Perfect World and Glacier Network reserve products are also 10 or more.
Overall, in the past year, Sanqi Mutual Entertainment has performed steadily, with particularly outstanding performances in overseas and mini games, with Century Huatong and Shenzhou Taiyue growing rapidly in terms of revenue going overseas, and Gigabit and Perfect World's net profits fluctuating greatly.
In 2024, with the return to normal distribution of edition numbers and the wave of AIGC technology, the game industry is expected to develop in a better direction!