Net profit increased by 111% in 2016, Sanqi Mutual Entertainment is expected to rank among the top three in the game industry

On the evening of March 14, Sanqi Mutual Entertainment released its 2016 financial report, saying that during the reporting period, the company achieved operating income of 5.248 billion yuan, a year-on-year increase of 12.69%; and achieved net profit attributable to shareholders of listed companies of 1.07 billion yuan, a year-on-year increase of 111.49%.

Original title: Sanqi Mutual Entertainment's net profit growth of 111% in 2016 is expected to rank among the top three in the game industry.

Sanqi Mutual Entertainment fired the first shot in the financial report of listed game companies. On the evening of March 14, Sanqi Mutual Entertainment released its 2016 financial report, saying that during the reporting period, the company achieved operating income of 5.248 billion yuan, a year-on-year increase of 12.69%; and achieved net profit attributable to shareholders of listed companies of 1.07 billion yuan, a year-on-year increase of 111.49%.

In 2014, 60% of Shanghai Sanqi shares were injected into Rongshun shares. In 2015, the company raised funds and reorganized and merged the remaining 40% of Shanghai Sanqi. After two name changes, the listed company Sanqi Mutual Entertainment transformed from an auto parts manufacturer to an Internet company.

The background is that in the process of shifting traffic from page games and end games to mobile games, the domestic game industry has bid farewell to the era of staking around the land. At present, Tencent and Netease are the two strongest players, accounting for 60% of the market share, and the rest of the company share the remaining space.

As one of the "other companies", Sanqi Mutual Entertainment's performance in 2016 was remarkable. Some brokerage analysts pointed out that "games are mainly divided into three major types: end-games, page games and mobile games. In terms of web games, the company owns the 37.com web games platform, with a market share of 13.5%, second only to Tencent with 33.8%; What is worth noting is mobile games. Sanqi Mutual Entertainment only began to deploy mobile games in 2014. It can be said that the start was a bit late. However, judging from the current results, the company's mobile game business is growing very rapidly. It was launched on July 1, 2016. The game "Eternal Era" exceeded 100 million yuan in the first month. As of January 2017, the monthly sales volume of this product exceeded 280 million yuan, setting a new high. This will help Sanqi Mutual Entertainment rank among the top three in the industry."

In 2016,

the first company in the industry to publish an annual report with a mobile game gross profit of 1.014 billion yuan, and its performance is often good. Broker analysts familiar with the rules told reporters that once the performance of a listed company declines, the release date of the financial report will be mainly delayed.

This is the case in the game industry. According to Wind data statistics, according to CITIC Securities industry classification, there are 35 listed companies in the Internet industry in the secondary classification of the media industry. As of March 14, 28 of them have released their 2016 performance reports. The top three are Century Cruises, Sanqi Mutual Entertainment and LeTV. These three companies are expected to achieve net profits attributable to shareholders of the parent company. The profits are 1.069 billion yuan, 1.067 billion yuan, and 766 million yuan respectively.

Judging from the financial report released by Sanqi Mutual Entertainment, in 2016, the company achieved a net profit attributable to shareholders of listed companies of 1.07 billion yuan, exceeding the level of the Century Cruises Performance Express. This also means that Sanqi Mutual Entertainment may defend its title. A-share media Internet industry net profit champion.

Regarding the growth of the company's net profit, Sanqi Mutual Entertainment said that the main reasons are two points: First, in December 2015, the company completed the purchase of the remaining 40% shares of its subsidiary Shanghai Sanqi Mutual Entertainment. During the reporting period, Shanghai Sanqi Mutual Entertainment The net profit is all attributable to the company; second, the company's game research and development business and mobile games distribution business have achieved major breakthroughs. The independently developed products represented by "Eternal Era" have greatly enhanced the company's profitability in the mobile games business.

Judging from financial data,"Eternal Era" has achieved the highest monthly active users (MAU) of more than 8 million and the world's highest monthly turnover of more than 315 million yuan for six months after its launch. This directly detonated Sanqi Mutual Entertainment's game business. According to the financial report, in 2016, the Sanqi Interactive Entertainment Mobile Games business achieved operating income of 1.639 billion yuan, a year-on-year increase of 219%, and achieved gross profit of 1.014 billion yuan, a year-on-year increase of 978%. The online game business achieved operating income of 2.949 billion yuan and gross profit of 2.072 billion yuan, a slight decrease from 2015.

With the support of games, the company is laying out the entire pan-entertainment industry chain. Li Yifei, president of Sanqi Mutual Entertainment, said in an interview with reporters that the company mainly participates in other entertainment fields through investment models, covering a wide range of directions, including VR companies, film and television companies, and Internet celebrity companies.

Maybe it will rank among the top three in the industry

. In Li Yifei's view, Sanqi Mutual Entertainment will still focus on the game field in the future, trying to gain more market share. In fact, the domestic game industry is in a reshuffle period. Tencent and Netease have monopolized the game market. Mini games companies are struggling to survive.

Statistics show that the actual revenue of China's game market in the first half of 2016 was 78.75 billion yuan, and the game revenue of Tencent and Netease was 34.209 billion yuan and 12.453 billion yuan respectively. Netease and Tencent's game revenue accounted for approximately 59.3% of the total game market in the first half of the year. In terms of mobile game performance, the combined revenue of Tencent and Netease in the third quarter of 2016 even reached 70% of the entire domestic mobile game industry, basically controlling the entire mobile game market.

Opportunities and challenges coexist, and a bloody path has also been created in the Sanqi Mutual Entertainment Game Market. According to the latest quarterly monitoring data of China's web game market, as of the third quarter of 2016, Sanqi Mutual Entertainment's market share as a web game operation platform was 13.4%, ranking only behind Tencent in the web game operation platform, maintaining second place in the industry; the company's market share as a web game developer is 10.5%.

Based on this, China Merchants Securities Research News believes that Sanqi Mutual Entertainment can compete with Netease and become a new celebrity in A-share game companies."In recent years, Sanqi Mutual Entertainment has achieved a span from page games to mobile games, and then to pan-entertainment, creating a relatively complete IP monetization industry chain. The game business model has also realized the integration from platform to research and operation, and its R & D strength has been greatly enhanced. Compared with Netease, it has many similarities, such as becoming the giant second only to Tencent in the fields of end games and page games respectively, based on the large IP of end games or page games to develop mobile games, emphasizing high-quality products. With the development of high-quality mobile games, the company is catching up with Netease."

Li Yifei said frankly that there is still a big gap between Sanqi Mutual Entertainment and Tencent and Netease. "I am also thinking about a question, what are our core competitive advantages and how to compare with Tencent and Netease in the future. Netease is actually a research and development company. Their success depends on the number of products, good products, and hot products. Compared with Netease, Tencent's R & D capabilities are weak, and its core advantage is users. For us, the first advantage lies in operations; the second advantage lies in user investment. In the long run, these will be one of Sanqi Mutual Entertainment's core competitiveness in the game industry."

Editor: yvette