Recently, we conducted field research on Xindong.com, and discussed and answered several questions that the market is most concerned about…
Editor’s note: This article is from the WeChat public account “Dolphin Investment Research” (ID: haituntouyan), author : Dolphin Investment Research.
In the previous series of research articles on Heartbeat Network:
(1) Behind the “Heartbeat Monster”: The game industry is changing! 》
(2) Behind the “Heartbeat Strange Phenomenon”: Why is the market beating? 》
(3) Behind the “Heartbeat Weird Phenomenon”: Can I act if my heart is moved? 》
The analysis of Dolphin Investment Research believes that Xindong company (2400.HK), which has both “good products” and “good channels”, is likely to enjoy dividends by following the industry development trend.
In the valuation model of Dolphin Investment Research, the reasonable valuation of Xindong Company in 2024 (taptap user scale reaches a mature and stable period) is 48.19 billion Hong Kong dollars. From the perspective of valuation alone, the current increase of 170%+ indicates that there is still a lot of upside in the future.
But whether the heartbeat can reach such a scale has to be established on the basis that the number of TapTap monthly active users has reached the 75 million people predicted by Dolphin Investment Research, compared with the current 25 million (2020H1) and the slowdown in 18 and 19 years. The growth rate seems to have a long way to go.
From the continuous fluctuation of the stock price since the announcement of the financial report, it can be seen that the market is divided on the future development trend of TapTap.
And Dolphin Jun’s consistent philosophy-investment research projections are not the end of corporate valuation judgments, but the beginning, and research and financial reports are the core criteria for testing logic.
As for the heartbeat, we still have many questions about the key points that affect valuation: From the perspectives of corporate strategy, business model and valuation logic, we have summarized three doubts that the market is most concerned about:
1) What are the mid-to-long-term goals (user scale & business realization) of TapTap? In the future, from which aspects do you plan to advance the goal?
2) How much does the company’s own game business contribute to TapTap’s user scale (the contribution of “Human” this year to taptap)? The current reserve situation of game items?
3) How does the company view TapTap’s market competition? (Game giant, station B?)
Last Friday, Dolphin took these questions to conduct a field survey on Xindong.com, trying to understand the company’s views on these core questions. Regarding the thoughts and summaries after the survey, Mr. Dolphin first launched the dry goods and summarized the golden eight points of this survey:
①. TapTap’s long-term goal of MAU: Android mobile game market penetration rate is 15%-20%, according to the data in 2019, it corresponds to 80-120 millionpeople. (Higher than the 75 million people expected by Dolphin Investment Research), no short-term target has been set.
Judging from historical data, the self-developed games and exclusive games have significantly improved TapTap’s MAU.
②. TapTap content investment: TapTap APP functions will continue to improve, including the introduction of more video resources and high-quality content, etc.
Mr. Dolphin reminded that the introduction of high-quality content in the future may push up marketing-based sales expenses. The rise and fall of this indicator should be seen with data such as MAU and DAU.
③. Monetization ideas for TapTap users: In the short term, new games in the game industry will be released in the second half of this year. After the purchase price rises, TapTap advertising revenue will be significantly better than in the first half.
In the medium term, Heartbeat is not anxious about the realization of TapTap in the short term (2-3 years), and it is still in the stage of raising the community. At present, we need to focus on improving user stickiness. In the future, we will consider seeking financing to accelerate the ecological construction of TapTap community.
In the long run, when the user penetration of the mobile game reaches a relatively steady state of 15%-20% of Android mobile games, it should also be able to eat about 15% of the mobile game industry’s advertising budget (last year’s market size was 70 billion yuan) ).
④. Self-developed games: In the short term, the scale of R&D personnel in the first two years has limited the company’s new game development speed. In the past two years, large-scale recruitment has doubled, but the effect of manpower investment will begin to show next year. In the future stable period, 1-2 self-developed games will be released every year. (In line with Dolphin Investment Research’s opinion, the growth rate of game revenue this year is significantly lower than that of peers, and there are expectations for improvement next year)
⑤. Single-generation game: At present, the main voice is in the game CP business. The game development progress is uncontrollable, and there may be skipped tickets. Therefore, the reserve project situation is unpredictable. (In line with the opinion of Dolphin Investment Research, monopolization of games is uncontrollable in the short term, and has a greater impact on game revenue. It is optimistic with the increase in TapTap influence in the long term)
⑥. The overall strategy of the game:……
⑦. Overseas actions:…….
⑧. Market competition:…….
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