Investment Rating - The investment rating for the company is "Buy" and is maintained [7] Core Views - The company reported a revenue of 5.012 billion yuan for 2024, representing a year-on-year increase of 47.9%, and a net profit attributable to shareholders of 0.812 billion yuan, achieving a turnaround from losses [2][4] - The strong performance in the gaming business is attributed to the successful launches of new games such as "Start Your Journey, Muffin" and "Heart Town," which significantly boosted revenue and profit margins [8] - The TapTap platform continues to benefit from high-demand self-developed games and a recovery in game advertising demand, leading to sustained user growth and the release of commercial potential [8] Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 5.012 billion yuan, with a net profit of 0.812 billion yuan and an adjusted net profit of 0.877 billion yuan, marking a return to profitability [2][4] - For the second half of 2024, the company reported a revenue of 2.792 billion yuan, a year-on-year increase of 70.6%, and a net profit of 0.606 billion yuan, also returning to profitability [4] Gaming Business - The gaming revenue for the second half of 2024 increased by 106.8% year-on-year to 1.95 billion yuan, with a significant rise in the average monthly paying user count [8] - The gross margin for the gaming business improved to 64.6%, up 18.6 percentage points year-on-year, driven by the strong performance of self-developed games [8] TapTap Platform - TapTap's user base in China grew by 19.1% year-on-year to 44.85 million MAU, while international MAU reached 5 million [8] - The revenue from the TapTap platform for the second half of 2024 was 844 million yuan, reflecting a year-on-year increase of 21.5% [8] Operational Efficiency - Marketing expenses increased by 31.2% year-on-year due to new game launches, but the sales expense ratio decreased significantly, indicating improved operational efficiency [8] - The adjusted net profit margin for the second half of 2024 was 22.9%, a substantial improvement from previous periods [8] Future Prospects - The company is focusing on the progress of new game reserves and the empowerment of its AI platform, with several new games expected to launch in 2025 [8] - The company has completed the registration of its generative AI service TapSight and integrated AI features into the TapTap platform [8]

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Insights - The company achieved a turnaround in its annual performance, reporting a revenue of 5.012 billion yuan, a year-on-year increase of 47.9%, and a net profit of 812 million yuan, marking a significant recovery from losses [2][4]. - The gaming business saw substantial growth, with revenues reaching 3.434 billion yuan, up 64.2% year-on-year, driven by the successful launch of new games [3][4]. - The TapTap platform demonstrated a growing brand effect, with an average monthly active user (MAU) count of 44 million, reflecting a 23% increase year-on-year [3][4]. Financial Performance Summary - The company reported a gross profit of 3.479 billion yuan, with a gross margin of 69.4%, an increase of 8.4 percentage points compared to the previous year [2]. - Sales and R&D expense ratios were 27.88% and 18.34%, respectively, with sales expenses rising due to increased marketing for new game launches [2][3]. - The company plans to continue focusing on self-developed games and enhancing operational efficiency, with projected net profits of 999 million yuan, 1.194 billion yuan, and 1.343 billion yuan for 2025, 2026, and 2027, respectively [4][6].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company achieved a revenue of 50.12 billion yuan in 2024, a year-on-year increase of 47.89%, and a net profit of 8.12 billion yuan, marking a turnaround from a loss in 2023 [8] - The company announced its first annual dividend of 0.4 HKD per share, indicating a positive outlook on profitability [8] - The self-developed games have significantly improved gross margins, with a gross margin of 62.56% in 2024, up 15.89 percentage points year-on-year [8] - The TapTap platform showed a notable increase in monthly active users (MAU), reaching 44.05 million in China, a year-on-year growth of 23.03% [8] - The company has effectively controlled costs, leading to a significant increase in net profit margin to 16.19%, up 18.64 percentage points year-on-year [8] Financial Summary - Total revenue is projected to grow from 50.12 billion yuan in 2024 to 55.28 billion yuan in 2027, with a compound annual growth rate (CAGR) of approximately 3.17% [1] - Net profit is expected to increase from 8.12 billion yuan in 2024 to 11.61 billion yuan in 2027, reflecting a CAGR of about 8.54% [1] - The earnings per share (EPS) is forecasted to rise from 1.65 yuan in 2024 to 2.36 yuan in 2027 [1] - The price-to-earnings (P/E) ratio is projected to decrease from 18.26 in 2024 to 12.76 in 2027, indicating improving valuation metrics [1]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company achieved a revenue of 50.12 billion yuan in 2024, a year-on-year increase of 47.89%, and a net profit of 8.12 billion yuan, marking a turnaround from a loss of 0.83 billion yuan in 2023. The company also announced a final dividend of 0.4 HKD per share [8] - The self-developed games have significantly improved gross margins, with a notable revenue contribution from titles like "Start Your Muffin" and "Lily of the Valley." The upcoming game "Heart Town" is expected to continue this trend [8] - TapTap's monthly active users (MAU) reached 44.05 million in China, a year-on-year increase of 23.03%, while international MAU was 503,000, a decrease of 13.02%. The growth in domestic MAU is attributed to a rich supply of new games and effective marketing strategies [8] - The company has demonstrated effective cost control, with an overall gross margin of 69.40% in 2024, up 8.37 percentage points year-on-year. The net profit margin also saw a significant increase to 16.19% [8] - The report projects net profits for 2025-2027 to be 9.80 billion, 10.69 billion, and 11.61 billion yuan respectively, with corresponding P/E ratios of 15, 14, and 13 times [8] Financial Summary - Total revenue for 2023 was 3.39 billion yuan, with projections of 5.01 billion yuan for 2024, reflecting a growth rate of 47.89% [1] - The company’s net profit for 2024 is projected at 811.53 million yuan, with a year-on-year growth of 20.74% for 2025 [1] - The earnings per share (EPS) is expected to rise from 1.65 yuan in 2024 to 2.36 yuan by 2027 [1]

Core Viewpoint - The company has entered a sustainable profitability phase, achieving record revenue and a significant turnaround in net profit amidst a global gaming industry adjustment [2][4]. Financial Performance - The company's total revenue for the year reached 5.01 billion RMB, a year-on-year increase of 47.9%, marking a record high since its listing [3]. - The net profit turned positive at 890 million RMB, compared to a loss of 65 million RMB in the previous year [3]. - Gross profit increased by 68.2% to 3.48 billion RMB, with an overall gross margin improvement to 69.4%, up 7.7 percentage points from the previous year [3]. Business Structure Optimization - Self-developed games contributed 3.43 billion RMB in revenue, a 64.2% increase year-on-year, with titles like "Start Up Muffin," "Sword of Lily," and "Heart Town" driving performance [4]. - The TapTap platform generated 1.58 billion RMB in revenue, a 21.6% increase, maintaining a high gross margin of 84% [4]. Operational Efficiency - The company achieved a 9.5% reduction in R&D expenses to 920 million RMB, while the R&D team size decreased from 1,031 to 993 [4]. - The company redeemed 1.596 billion USD in convertible bonds, reducing the debt-to-equity ratio from 57.6% to 30.8% [4]. - Operating cash flow turned positive, with cash and cash equivalents reaching 2.78 billion RMB, contributing to a total liquidity asset of 2.91 billion RMB [4]. Shareholder Returns - The board proposed a final dividend of 0.4 HKD per share, marking the company's first dividend distribution in five years, reflecting a commitment to shareholder returns and confidence in future profitability [4]. Game Development Strategy - The company is diversifying its game portfolio through the renewal of classic IPs and new game reserves, reducing reliance on single hits and forming a "long-lasting game" strategy [6]. - The average monthly active users for network games increased by 14.5% to 14.25 million, while average monthly paying users grew by 23.1% to 1.61 million [6]. Upcoming Titles and Pipeline - The company has two network games in development, likely "Iser: Reboot Day" and "Ragnarok RO: Guardian of Eternal Love 2," targeting the strategy card and MMORPG markets [9]. - The company is expanding its presence in the buyout game sector, with titles like "The Legend of the Hero" and upcoming releases enhancing platform diversity and player engagement [9]. TapTap Platform Evolution - The TapTap platform is evolving from a gaming community to a comprehensive distribution platform, with monthly active users increasing by 23% to 44.05 million [12]. - Exclusive content and developer ecosystem initiatives have driven user growth, while traditional channel limitations are being overcome through integrated resource promotion [12][14]. Industry Trends and Growth Drivers - The gaming industry is experiencing a structural upgrade, with the domestic market projected to grow by 7.53% to approximately 325.78 billion RMB [19]. - The overseas revenue for self-developed games reached a record high of 18.557 billion USD, reflecting a 13.39% year-on-year increase, validating the company's global strategy [20]. - The application of AI technology in game development is expected to enhance operational efficiency and create additional value [21].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][5][13] Core Views - The company achieved a revenue of 5.012 billion yuan in 2024, representing a year-on-year increase of 48%, and a net profit of 812 million yuan, recovering from a loss of 83 million yuan in 2023. The growth is primarily driven by the strong performance of self-developed games and the user growth of TapTap [5][9] - The gaming business revenue reached 3.434 billion yuan in 2024, up 64% year-on-year, with a gross margin of 63%, an increase of 16 percentage points. TapTap generated revenue of 1.578 billion yuan, a 21.6% increase year-on-year, maintaining a stable gross margin of 84% [5][9] - The company maintains its profit forecasts for 2025-2027, expecting net profits of 1.286 billion yuan, 1.592 billion yuan, and 1.757 billion yuan respectively, with corresponding EPS of 2.6 yuan, 3.2 yuan, and 3.6 yuan [5][9] Game Development and Growth - The top five games contributing to revenue in 2024 were "Let's Go Muffin," "Sausage Party," "Lily of the Valley," "Torchlight," and "Ragnarok M." The game "Heart Town," launched in July 2024, is expected to significantly contribute to revenue in 2025 [6] - The company has a pipeline of games, including "Iser," expected to launch in the second half of 2025, and "RO2," anticipated for 2026, which will continue to drive growth in the gaming business [6] TapTap Platform Performance - TapTap's monthly active users (MAU) reached 44.05 million in 2024, a 23% year-on-year increase. The growth is attributed to the launch of popular new games and exclusive partnerships [7] - The platform's revenue is expected to continue growing due to its zero-commission advantage and increasing user base, with potential for higher advertising prices and loading rates [7] Financial Summary and Valuation Metrics - The company's financial metrics for 2023A to 2027E show a significant recovery and growth trajectory, with revenues projected to reach 6.148 billion yuan in 2025 and 7.205 billion yuan in 2026 [9] - The net profit margin is expected to improve, with net profit margins of 20.9%, 22.1%, and 22.5% for 2025, 2026, and 2027 respectively [9]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 42.89 HKD [7][12]. Core Insights - The company's 2024 annual report shows revenue of 5.012 billion RMB, a year-on-year increase of 47.9%, and a net profit of 890 million RMB, marking a turnaround from losses [1][6]. - The growth in 2024 is primarily driven by a 64.2% increase in gaming revenue, supported by self-developed games such as "Let's Go Muffin," "Heart Town," and "Lily of the Valley" [1][2]. - The company has improved its gross margin by 8.4 percentage points to 69.4%, with the gaming segment's gross margin rising by 15.9 percentage points to 62.6% [1][2]. - The company plans to distribute dividends for the first time, proposing a dividend of 0.4 HKD per share [1]. Revenue and Profit Forecast - The company is expected to achieve a net profit of 1.021 billion RMB in 2025, with projections of 10.2 billion RMB and 12.1 billion RMB for 2025 and 2026, respectively [4][20]. - The gaming business is projected to generate revenues of 3.5 billion RMB in 2025 and 3.6 billion RMB in 2026, with a gross margin of 62% [12][20]. Taptap Platform Performance - The Taptap platform's average monthly active users (MAU) in 2024 are expected to reach 44.05 million, a 23% year-on-year increase, with projected revenue of 1.58 billion RMB, up 21.6% [3][4]. - The platform's gross margin is anticipated to slightly increase to 84.3% in 2024, supported by marketing activities and new game releases [3][4]. Valuation Metrics - The report employs a Sum-of-the-Parts (SOTP) valuation method, assigning a 5.5x price-to-sales (PS) multiple for the Taptap platform and a 17.4x price-to-earnings (PE) multiple for the gaming business [4][12]. - The target market capitalization is estimated at 19.585 billion RMB, translating to a target price of 42.89 HKD per share [12][14].

Group 1 - The company reported a revenue of RMB 5.012 billion for the year ending December 31, 2024, representing a year-on-year growth of 47.9% [1] - Shareholders' profit attributable to the company was RMB 812 million, marking a turnaround from loss to profit [1] - The basic earnings per share were RMB 1.71, and the company proposed a final dividend of HKD 0.4 per share [1] Group 2 - The company's business and personnel structure became stable in 2024, with successful launches of self-developed games in multiple global markets [2] - New self-developed games, including "GoGo Muffin," "Sword of Convallaria," and "Heartopia," contributed to a 64.2% year-on-year increase in gaming business revenue [2] - The average monthly active users (MAU) of the TapTap China app grew by 23.0% year-on-year, reaching 44 million [2] - The collaboration between "Heartopia" and TapTap significantly increased new user acquisition and brand recognition for TapTap [2] - The company completed the filing for its generative AI service TapSight and integrated AI Q&A and DeepSeek search functionalities into TapTap [2] - The company is committed to incorporating AI and machine learning tools into daily operations and exploring new business development directions [2] - The long-term vision of the company is to continuously provide high-quality games for global players and support developers in creating and distributing games more conveniently [2]

Financial Performance - Revenue for the year ended December 31, 2024, reached RMB 5,012,107 thousand, a 47.9% increase from RMB 3,389,144 thousand in 2023[5] - Gross profit for the same period was RMB 3,478,530 thousand, reflecting a 68.2% increase from RMB 2,068,370 thousand in 2023[5] - The company reported a net profit of RMB 890,491 thousand, compared to a net loss of RMB 65,362 thousand in 2023[5] - The operating profit for the year ended December 31, 2024, was RMB 914,789 thousand, compared to an operating loss of RMB 5,222 thousand in 2023[52] - The adjusted EBITDA for the year was RMB 1,056.4 million, compared to RMB 158.4 million in the previous year[39] - The company reported basic earnings per share of RMB 1.71 for the year ended December 31, 2024, compared to a loss per share of RMB 0.18 in 2023[53] - The company reported a net profit attributable to equity holders of RMB 811,530 thousand for 2024, a turnaround from a loss of RMB 83,039 thousand in 2023[87] User Engagement - Average monthly active users (MAU) for online games increased by 14.5% to 14,247 thousand, while average monthly paying users (MPU) rose by 23.1% to 1,609 thousand[6][11] - The TapTap China version app's average MAU grew by 23.0% to 44,046 thousand, contributing to user growth and brand recognition[8] - The average monthly active users (MAU) of the TapTap China app reached 44.0 million, a year-on-year increase of 23.0%, attributed to the launch of popular mobile games and enhanced marketing activities [17] - The average MAU for the TapTap international version decreased by 13.0% year-on-year to 5.0 million, mainly due to a significant drop in users from India and reduced overseas marketing expenditures [18] Game Development and Revenue - New self-developed games, including "GoGo Muffin," "Sword of Convallaria," and "Heartopia," drove a 64.2% increase in game business revenue year-on-year[8] - As of December 31, 2024, the company's game business revenue increased by 64.2% year-on-year to RMB 3,434.1 million, driven by new game launches such as "GoGo Muffin," "Sword of Convallaria," and "Heartopia" [20] - The existing game portfolio includes 21 online games and 35 paid games as of December 31, 2024[10] - The revenue from paid games decreased by 8.2% year-on-year to RMB 110.7 million, primarily due to a decline in existing paid game revenues [20] - The company's game operation revenue, recognized on a gross basis, increased by 72.4% year-on-year to RMB 3,280.1 million [22] - Game operation revenue in mainland China increased to RMB 2,134,300 thousand in 2024, up from RMB 1,394,503 thousand in 2023, reflecting a growth of about 53%[72] Expenses and Costs - The cost of revenue increased by 16.1% year-on-year to RMB 1,534 million, with the gaming segment accounting for RMB 1,285.9 million of this cost [25] - Sales and marketing expenses increased by 61.5% year-on-year to RMB 1,397.3 million, primarily due to promotional costs for newly launched games[32] - Research and development expenses decreased by 9.5% year-on-year to RMB 919.4 million, attributed to a reduction in share-based payments[33] - General and administrative expenses rose by 18.8% year-on-year to RMB 266.9 million, mainly due to performance-based bonuses and share-based payments[34] - The total cost of revenue for the year was RMB 1,320,774 thousand, with a significant portion attributed to online marketing services at RMB 205,227 thousand[69] Corporate Governance and Compliance - The company is committed to high standards of corporate governance, having complied with all applicable code provisions except for the separation of the roles of Chairman and CEO[114] - The company plans to review the effectiveness of its corporate governance structure to assess the necessity of separating the roles of Chairman and CEO[115] - The audit committee, consisting of three members, has reviewed the audited consolidated financial statements for the fiscal year ending December 31, 2024, ensuring compliance with applicable accounting principles and full disclosure[117] - The auditor has verified that the financial figures in the announcement align with the audited consolidated financial statements for the fiscal year ending December 31, 2024, although no assurance opinion was provided[118] Future Plans and Investments - The company plans to continue integrating AI and machine learning tools into daily operations and explore new business development directions[8] - The company is focusing on optimizing its product layout and expanding its offerings with anticipated high-quality mobile games in 2025 [15] - The company plans to continue expanding its market presence, particularly in Southeast Asia, Hong Kong, Macau, Taiwan, North America, Japan, and South Korea, as indicated by the revenue growth from these regions[72] - The company has no plans for significant future investments or capital asset acquisitions as of December 31, 2024[49] Financial Position - The company's debt-to-asset ratio improved to 30.8% as of December 31, 2024, down from 57.6% in 2023[45] - The total assets of the company were RMB 3,923,201 thousand, down from RMB 4,409,442 thousand in 2023[55] - The total liabilities decreased significantly from RMB 2,540,691 thousand in 2023 to RMB 1,208,582 thousand in 2024, indicating a reduction of about 52%[56] - The total equity attributable to the company's equity holders increased to RMB 2,513,819 thousand in 2024, up from RMB 1,709,173 thousand in 2023, reflecting a growth of approximately 47%[56] Employee and Shareholder Information - The company had 724 employees engaged in game development as of December 31, 2024, a decrease of 22 from the previous year, reflecting a focus on cost reduction and efficiency [14] - As of December 31, 2024, the company had 1,400 employees, a decrease of approximately 3.6% from 1,452 employees as of December 31, 2023[108] - Employee benefits expenses for the year ending December 31, 2024, were approximately RMB 1,195.9 million, an increase of about 1.5% from RMB 1,178.5 million for the previous year[108] - A final dividend of HKD 0.4 per share has been proposed for the year ended December 31, 2024[9] - The company did not declare or pay any dividends for the years ended December 31, 2023, and 2024, but proposed a final dividend of HKD 0.4 per share for the year ended December 31, 2024, subject to shareholder approval[102]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company is expected to achieve revenue of 49.6-50.4 billion yuan in 2024, representing a year-on-year growth of 46.3%-48.7%, and a net profit of 8.6-9.4 billion yuan, recovering from a net loss of 0.65 billion yuan in 2023, exceeding expectations [8] - The growth in revenue is driven by the successful launch of self-developed games and a rebound in TapTap's monthly active users (MAU), along with improved advertising conversion efficiency [8] - The company anticipates a significant increase in net profit in the second half of 2024, with estimates ranging from 6.09 to 6.89 billion yuan, reflecting a quarter-on-quarter growth of 143%-175% [8] - The report highlights the potential of the TapTap platform, which is expected to continue generating revenue growth through enhanced advertising capabilities and user engagement [8] Financial Summary - Total revenue for 2022 was 3.43 billion yuan, with a forecast of 5.00 billion yuan for 2024, indicating a growth rate of 47.65% [1] - The company reported a net profit of -0.55 billion yuan in 2022, with projections of 0.84 billion yuan for 2024, marking a significant turnaround [1] - The earnings per share (EPS) is expected to rise from -1.13 yuan in 2022 to 1.71 yuan in 2024 [1] - The price-to-earnings (P/E) ratio is projected to be 20.42 for 2024, decreasing to 15.99 by 2026 [1] Game Operations - The report expresses confidence in the ongoing success of self-developed games, particularly "出发吧麦芬" and "铃兰之剑," which are expected to contribute positively to revenue [8] - The company has a pipeline of new games that are anticipated to enhance performance, including "伊瑟重启日" and "仙境传说 RO：守护永恒的爱 2" [8] TapTap Platform - TapTap's advertising exposure is projected to increase by 43% year-on-year, capturing 10% of the gaming industry's advertising market [8] - The platform's value is expected to be further realized through continuous product adjustments and enhancements in user engagement [8]