Zhejiang Digital Culture (600633): Participating in Digital Zhejiang, the urban brain is the leader of the digital economy

Zhejiang Digital Culture (600633): Participating in Digital Zhejiang, the urban brain is the leader of the digital economy

Recommended logic: 1) Endogenous and concurrently expanding game business scale The cornerstone of the company’s valuation. The winger network has been cultivating leisure games. Since 2017, it has acquired more than a dozen games from other provinces including Shenzhen Tiantianai, Beijing Mengqi, Shenzhen LewanAfter the platform company, the company has more than 600 casual games and achieved coverage in more than 20 provinces across the country. More users may steadily improve the company’s game business.

2) In early August 2019, the company completed a 50 million yuan investment to subscribe for equity investment in Hangzhou Yunqi Venture Capital5.

7% equity. In the first half of 2019, the company launched the spin-off and reorganization of the government service network business center, and participated in the digital Zhejiang and urban brain projects.

The growth of the wing network covers the user base, and its performance continues to maintain high growth.

In 2019H1, the company’s game business achieved revenue of 10.

800 million (+ 86%), achieving gross profit of 8.

9% (+ 88%), the growth mainly comes from: 1) In July 2017, Bianfeng Network acquired 100% equity of Shenzhen Tiantianai, a casual game company, and Tiantianai promised a net profit of 2 in 2019.

1.2 billion.

2) The winger online mobile game product “Xia Ke Feng Yun Chuan OL” was launched in the first half of 2018, with an average monthly flow of over 50 million.

3) The results of the game’s overseas development are obvious. The company’s overseas revenue in 2019H1 reached 17,14 million, a significant increase of 19.
.

6%.

4) Casual games increase the coverage of user groups. In 2018, wingers increased their coverage in the three eastern provinces and Inner Mongolia and other provinces.

According to the company announcement, by the end of 2018, there were over 100 million registered users of Bianfeng Network and tens of millions of monthly active users.

In-depth participation in Digital Zhejiang, Urban Brain Project.

1) Digital Zhejiang: According to the roadmap, by 2022, Digital Zhejiang will be established as a national digital economy demonstration province, a leading province for digital government construction, and a model province for digital society construction, supporting the basic construction of Zhejiang ‘s digital infrastructure on the cloud, supporting strong dataThe province’s data resource system is basically complete.

In the first half of 2019, the company launched the spin-off and reorganization of the government service network business center, and deeply participated in the development and construction of the digital Zhejiang project.

2) The urban brain is one of the landmark projects in Zhejiang Province to promote the “No. 1 Project” of the digital economy. It is planned to form a unique application based on the urban brain by 2022, and it will be used in transportation, safety, urban management, economy, health, environmental protection, cultural tourismAnd other fields to achieve comprehensive applications.

Earnings forecasts and investment advice.

It is expected that EPS for 2019-2021 will be 0.

51/0.

58/0.

66 yuan, based on 1) the game business is constantly 南京桑拿网 expanding the market; 2) participating in the Hangzhou City Brain together with the Hangzhou Municipal Government and the construction of digital Zhejiang, with the aim of achieving external replication and mining for accumulated data during the operation of the city brainTo form a new value and maintain a “Buy” rating.

Risk Warning: Expected risks of game business or big data project investment; investment returns may be less than expected risks; performance of M & A companies may be less than promised risks.