CMGE Group

Corporate Overview

CMGE Group is a mobile game operator focusing on mobile game publishing and operation in mainland China. According to CMGE Group's HKEX IPO prospectus published in Aug 10th, 2019, 65.14% of the group's revenue are derived from IP-based games. CMGE Group emphasized in the prospectus it is a leading IP-based mobile game operator and publisher. However, CMGE Group's market share in overall mobile game market in terms of gross billings is 1.5%.

The general revenue recognition principle in as follows: CMGE Group recognize publishing revenue as the gross billings paid by game players net of the amount remitted to third-party game developers. The cost of sales includes the revenue shared with and the royalities paid to publishing channels and IP owenrs.

(Game industry has a potentional double counting problem as both game publisher and game developer may treat gross billings paid by game players as their revenue)

Role in Mobile Game Industry

  1. Game developer
  2. Game publisher: Manage the life-cycle of a mobile game operation from marketing, distribution, player recruiting, customer service and etc.
  3. Game distributor

Question

The definition of "independent mobile game publisher" is unclear, yet it is a key concept in CMGE Group's self-portrait as a publisher with highest cumulative revenue generated from IP-based games. (defined as publishers that are not part of large conglomerates ?)

Glossary

ARPPU = Average Revenue Per Paying User

Uncollectible Accounts Receivables (Credit Risk)

The group considers a financial asset in default when contractual payments are 90 days past due.

As of June 30, 2019, we had RMB54.3 million outstanding
trade receivables past due over more than 90 days (10% of the trade receivalbes in HK dollar amount are past due as of June 30, 2019).
As of December 31, 2018, 3.2% of the trade receivalbes in HK dollar amount are past due).
As of December 31, 2017, 0.9% of the trade receivalbes in HK dollar amount are past due).
Net cash flows from operating activities significantly weak compared to net income.

The trade receivalbe credit terms can be extended up tp 270 days for major distribution channels.

Leagal Disbute

One of the leading game in terms of revenue contribution involved in a claim of intellectual property right infringement against the company.

复杂的持股结构

IP + Trade Receivalbe的资产持有公司

中手游主导和参与了众多知名IP的移动端游戏化
传奇世界之雷霆霸业,只在安卓端发行
择天记,实际上是腾讯发行
曙光之境,中美两国IOS应用商店均搜索不到

中手游在现在的估值水平,大概率不是一个优秀的投资标的。
中手游是国内专注于IP手游发行的发行商和运营商,根据招股书中的描述,截止2019年8月10日,公司64.15%的营收来自于基于成熟IP开发的手游。虽然招股书中着重强调中手游是国内最大的IP手游发行商和运营商,但以收入流水为统计口径,2019年该公司在包括IP和非IP游戏的整体手游市场中仅占1.5%的份额。这里也可以看出IP类游戏在手游整体市场中的流水份额约为16.12%。中手游取得的IP改编游戏授权大多期限为2到3年,到期需要续约,且为非独家授权。这意味着中手游需要面对其他IP手游发行商的同质化竞争,中手游的IP游戏需要在市场上与同IP游戏和其他手游一起竞争用户游戏时间和付费流水。

在2019年前6个月收入流水前5的游戏分别为:传奇世界之雷霆霸业,曙光之境,凡人飞仙传,龙珠觉醒,航海王强者之路。其中传奇世界之雷霆霸业贡献收入为7亿7千万人民币,占2019年前6个月中手游营收的50.5%。但因该游戏的发行,中手游已被热血传奇IP所有方在武汉市中级人民法院以知识产权侵犯为由提起诉讼。中手游的营业收入严重依赖传奇世界之雷霆霸业这个单一IP的运营,由于手游生命周期一般很短,收入过于集中给中手游业绩增长带来的隐患是不可忽视的,加上传奇IP纠纷给雷霆霸业未来的持续运营带来的隐患。中手游未来2到3年的业绩增长的可持续性存疑。

中手游从2017年到2019年手游流水和营收均实现了爆发式的增长,从2017年到2019年连续两年营收翻倍。与此同时,应收账款账期和违约率同步攀升,截止2019年6月30日,中手游有5千3百万人民币的应收账款违约,占全部应收账款的10%,2018年12月31日中手游违约应收账款占比仅为3.2%, 2017年12月31日中手游违约营收账款占比仅为0.9%。

以中手游IPO后的总发行股份数量、2019年前6个月的EBITA和中手游现阶段股价2.74人民币(3.05港币)计算,中手游现在的Price/EBITA比率约为12.1,在港股内资游戏公司的估值中处于适中水平。中手游的未来在于如何建立IP手游的独特发行运营优势,由于中手游现阶段深度依赖的传奇类IP游戏传奇世界之雷霆霸业并不为中手游所独有,该IP在端游、页游和其他手游品牌中均存在大量竞品且游戏世界观,游戏玩法高度雷同,该游戏在手游和整个传奇IP游戏中不具备持续优势地位的市场竞争力。

中手游现阶段的估值水平并没有明显低于同业平均水平,中手游依赖的传奇世界之雷霆霸业存在持续增长隐患以及IP纠纷,同时对头部IP的手游开发以及发行运营不具有独占性(如腾讯也同样发行龙珠以及火影忍者手游,传奇手游在市场上数量众多),这些因素共同决定了以中手游现阶段不论是从价值投资角度还是成长性上,都很难被称为是一个优秀投资标的。