Sanqi Mutual Entertainment (002555) Third Quarterly Report Review: Elves’ Grand Ceremony Creates Peak Water Growth and Expected Growth

Sanqi Mutual Entertainment (002555) Third Quarterly Report Review: “Elves’ Grand Ceremony” Creates Peak Water Growth and Expected Growth

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

Opinion: High-speed performance growth.

1) Revenue for the first three quarters of 2019 was 95.

60 ppm, a 72-year increase of 72.

72%, net profit attributable to mother 15.

560,000 yuan, an increase of 27 in ten years.

70%, net of non-attributed net profit of 14.

17 ppm, an increase of 21 in ten 佛山桑拿网 years.

30%; 2) Revenue in Q3 2019 of 34.

890,000 yuan, an increase of 56 in ten years.

29%, net profit attributable to mother 5.

23 ppm, an increase of 25 in ten years.

37%, net of non-attributed net profit4.

68 ppm, an increase of 14 in ten years.


3) The company expects the initial net profit attributable to the mother to be 20 in 2019.


5 trillion, an annual increase of 103.

27% -113.


The fast-growing performance is mainly due to the launch of three major games in the year, “Doulau”, “One Blade” and “Elf Festival”.

The fluctuation of sales expense rate is the rhythm of game promotion, and the potential for future profit release is expected.

1) Net cash flow from operating activities in Q3 201912.

810,000 yuan, an increase of 211 in ten years.

43%, the largest increase in ten years since listing.

2) Selling expenses in 2019Q3 61.

37%, compared to the promotion of “Doulau” and “Sword Passed One” in 2019Q1.

96% has decreased, and at the same time has increased from Q2, because the “elf festival” which is the key issue of the current period is located in the expenditure period, and its profit can be released during the harvest period; 3) R & D expenses in Q3 20191.

910,000 yuan, an increase of 35 in ten years.

78%, research and development costs have maintained rapid growth, the company has abundant reserves, and the probability of continuing to launch explosive games in the future is expected to continue to rise.

The boutique mobile games performed well, and the follow-up product reserves were abundant.

1) Outstanding mobile game performance is outstanding. The best-selling rankings of IOS mobile games in the “Qingdao Continent” and “One Blade Passed on” in Q3 2019 remain basically within 40, and “Elven Festival” basically maintains the top ten; 2) Rich mobile game reserves, Self-developed products: “Code NB”, “Code YZD”, etc., Domestic agent products: “Code MK4”, “Code DIG”, etc.

Profit forecast and rating.

EPS 0 is expected for 2019/20/21.



24 yuan. The closing price on October 30 corresponds to 18/15/14 times PE. The newly launched “Elf Grand Ceremony” 北京桑拿洗浴保健 in the second half of the year performed well, and its profit can be expected in the harvest period. The performance is committed to maintaining high growth and maintaining a “prudent increase””” Level.

Risk reminders: copyright risks; increased competition; stricter policies; risk of major shareholders reducing their holdings; and risk of goodwill impairment.