Archosaur Games (9990 HK) The company is expected to enter the harvest period in 2021-2022 May 14, 2021 222

PSR Recommendation: BUY Status: Maintained
Target Price: HKDHKD25.88

Investment Summary
The 2020 result is in line with expectation
The company’s revenue was RMB 1.21 billion (+13.3% YoY) in 2020. Within it, the revenue of
the developing and licensing sector /the integrated game publishing and operation sector
were RMB 597.3/611.5 million (-27.3% YoY/+148.9% YoY), respectively. In terms of the
geographical breakdown, the company’s revenue from overseas region in 2020 was RMB
788.3 million (+129.1% YoY), with a revenue proportion of 65.2% (+33.1ppts YoY). The high
growth in revenue from overseas region was mainly attributable to the impressive
performance of Dragon Raja (龍族幻想). On the other hand, the revenue from domestic
region in 2020 was RMB 420.5 million (-41.8% YoY), with a revenue proportion of 34.8% (-
33.0ppts YoY). The steep decline in domestic revenue was primarily due to the delay of the
launching of the Under the Firmament(鴻圖之下)and The New World(夢想新大陸)in
2020.
The company’s GP in 2020 was RMB 925.9 million (+4.1% YoY), with respective GPM at 76.6%(-
6.8ppts YoY). The YoY drop in GPM was mainly due to the fact that the revenue proportion of
the integrated game publishing and operation sector rose in 2020 and the GPM of the sector
is lower in general comparing to the developing and licensing sector, hence dragging down
the company’s overall GPM (the integrated game publishing and operation sector recognized
the full gross billing as revenue, while gross billings’ share to payment channels and
distribution channels are recognized in the CoGS, hence lower GPM).

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