Perfect World (002624) 2019 Third Quarterly Report Review: Deferred Revenue Two Year High

Event: The company released the third quarter report of 2019.

19Q1-Q3, the company achieved operating income of 58.

12 ppm, an increase of 5 in ten years.

43%; net profit attributable to mother 14.

76 ppm, an increase of 12 in ten years.

00%; net profit attributable to non-parents is 14.

20 ppm, an increase of 28 in ten years.

47%; Meet performance forecast and market expectations.

Opinion: High base of income and net profit caused by incomparable factors in the same period of 18 years.

1) The company’s 18-year transfer of theater business has ceased to consolidate its scope since August; the company’s revenue increased in the first three quarters of 19 after excluding the impact of the theater business

1%; 2) The company disposed of part of Zulong Technology’s equity in 18Q3 and recognized non-profit and loss after tax1.

1 trillion, and Universal Film’s single film investment to confirm investment income; no such project impact in 19Q3, a high base last year led to a low growth rate this year.

Q3’s gross profit margin increased, its sales expense ratio increased, its cash flow improved significantly, and deferred revenue created a two-year high.

1) The gross profit margin in the third quarter decreased by 8 from the previous quarter.

4pct to 60.

8%, mainly due to the decrease in gross profit margin of the film and television revenue of “Old Tavern” and “Shanyue”, as well as the confirmation that the gross profit margin of the “Second Eagle 2” self-publishing and consolidation method is lower than that of agency distribution; 2) The sales expense ratio increased by 12 from the previous quarter.

3pct, mainly due to the promotion of Q3 “Shen Diao 2”, the anniversary of “Xianxian Mobile Games” and TI9 promotion expenses; 3) The R & D expense rate has decreased in the past two quarters, mainly due to the capitalization of some R & D expenses from Q2; 4) Net operating flow of the company in the first three quarters 8.

US $ 200 million, which has been growing rapidly before, thanks to the increase in gaming business flow and the decrease in cash expenditure for the film and television business; 5) As of the end of 19Q3, the company’s other current liabilities reached 14.

1 ppm, a new high since 17Q4, mainly due to increased deferred revenue for games.

The company’s game pipeline is suitable, and the growth certainty is high next year.

1) 19Q4 “Xin Xiao Ao Jiang Hu”, “My Origin” and “Dream Collection Cygnus” have all got the version number ready to go; the company’s rejuvenation of classic IP, and the focus of new IP is gradually becomingClimate; 2) 20 years of “Dream of New Fantasy”, “Remains of War” and “Magic Tower” are worth looking forward to. The vertical team works introduced in 18 years have entered the release period; the company’s film and television business profits have become the leading industry recovery, and sufficient production capacity will strongly support film and televisionBusiness growth.

Revisions to earnings forecasts, investment ratings and estimates: The company’s three quarterly report is in line with expectations, cash flow improvements and 杭州桑拿 new highs in deferred revenue confirm growth drivers.

Maintain the company’s 19-21 net profit forecast22.

3, 26.

5, 32.

20,000 yuan, EPS1.

72, 2.

05, 2.

49 yuan, the current price corresponds to 17/14 / 12x PE, maintain “Buy” rating.

Risk reminders: industry growth risk, brain drain risk, policy change risk