Investment Rating - Buy (maintained) [2] Core Views - The self-developed slow-paced life simulation game "Heartbeat Town" has maintained a top 3 position on the App Store free chart since its launch on July 17, with over 3 million downloads on Apple devices and over 21 million downloads on TapTap as of August 8, indicating significant user growth and potential for a large DAU product [5] - The game has a high reputation, with a score of 8.7 on TapTap and over 3.2 billion views for the HeartbeatTown topic on Douyin, suggesting strong user engagement and potential for long-term operation [5] - The first trend season event "Beach Paradise" for "Heartbeat Town" is set to launch on August 10, which is expected to drive game revenue growth through new paid content and improved user experience [6] - The rapid growth of "Heartbeat Town" users has also boosted TapTap's download growth, with the platform reaching a historic high of 11th on the App Store free chart, potentially expanding the platform's user base and monetization opportunities [7] Financial Projections - Revenue is projected to increase from 3,431 million CNY in 2022 to 7,955 million CNY in 2026, with a significant jump expected in 2024 to 6,005 million CNY [8] - Net profit is forecasted to turn positive in 2024 at 783 million CNY, growing to 1,246 million CNY by 2026 [8] - Gross margin is expected to rise steadily from 53.5% in 2022 to 65.2% in 2026, indicating improving profitability [8] - EPS is projected to increase from 1.6 CNY in 2024 to 2.6 CNY in 2026, with a corresponding decrease in P/E ratio from 12.9x to 8.1x [8] Market Performance - Current stock price is 22.800 HKD, with a total market capitalization of 10.959 billion HKD [4] - The stock has a 3-month turnover rate of 57.6%, indicating active trading [4]

Investment Rating - Buy (Maintained) [1] Core Views - The company is expected to achieve revenue of 2.18-2.23 billion yuan in 2024H1, a year-on-year increase of 24.4%-27.2%, and net profit of 220-270 million yuan, a year-on-year increase of 114.0%-162.7%, exceeding expectations [3] - The new game cycle has begun, and the profit inflection point has emerged, driven by the successful launch of self-developed games such as "出发吧麦芬" and "铃兰之剑" [3] - TapTap's monetization efficiency is expected to improve steadily, benefiting from increased industry advertising demand [3] Financial Forecasts and Valuation - Revenue is projected to grow from 3,433 million yuan in 2022 to 6,154 million yuan in 2026, with a significant year-on-year increase of 73.24% in 2024 [2] - Net profit attributable to the parent company is expected to turn positive, reaching 616.44 million yuan in 2024, up from a loss of 553.50 million yuan in 2022 [2] - EPS is forecasted to increase from -1.15 yuan in 2022 to 1.45 yuan in 2026, with a P/E ratio of 16.34x in 2024 [2] Game Operations - The revenue growth in 2024H1 is primarily driven by new games "出发吧麦芬" and "铃兰之剑," partially offset by the natural decline in revenue from existing games [3] - "出发吧麦芬" has performed better than expected, with stable rankings on the iOS game bestseller list, and its profit elasticity is expected to be released in 2024H2 [3] - The newly launched "心动小镇" has shown excellent user retention and commercialization potential, while "铃兰之剑" has been launched overseas, with "出发吧麦芬" planned for release in Japan and South Korea in late 2024 [3] TapTap Performance - TapTap's information service revenue in China continued to grow year-on-year in 2024H1, driven by increased advertising demand and the launch of exclusive self-developed games [3] - TapTap's MAU in China has rebounded, and its advertising conversion efficiency has been optimized, leading to steady monetization efficiency improvement [3] - With the normalization of marketing and the launch of new games, TapTap's MAU and revenue are expected to continue growing in 2024H2 and beyond [3] Market Data - The closing price of the stock is 22.75 HKD, with a one-year low/high range of 7.47/23.80 HKD [5] - The P/B ratio is 6.40x, and the market capitalization is 10,935.18 million HKD [5] Financial Ratios - ROE is expected to improve significantly from -4.86% in 2023 to 26.51% in 2024 [9] - The gross margin is projected to remain stable at around 57% from 2024 to 2026 [9] - The P/E ratio is forecasted to decrease from 16.34x in 2024 to 14.41x in 2026, indicating improving valuation attractiveness [9] Cash Flow and Balance Sheet - Operating cash flow is expected to increase significantly from 235.45 million yuan in 2023 to 1,080.96 million yuan in 2024 [8] - The company's total assets are projected to grow from 4,409.44 million yuan in 2023 to 6,783.28 million yuan in 2026, driven by increased liquidity and non-current assets [8] - The debt-to-asset ratio is expected to decrease from 57.62% in 2023 to 41.70% in 2026, reflecting improved financial health [8]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][3] Core Views - The company is expected to see significant growth in H1 2024, driven by new game launches and increased revenue from TapTap, with projected revenue of HKD 2.18-2.23 billion, representing a year-on-year growth of 24.4%-27.2% [3] - The net profit for H1 2024 is anticipated to be between HKD 220-270 million, showing a substantial year-on-year increase of 114.0%-162.7% [3] - The report maintains profit forecasts for 2024-2026, estimating net profits of HKD 783 million, HKD 1.137 billion, and HKD 1.246 billion respectively, with corresponding EPS of HKD 1.6, HKD 2.4, and HKD 2.6 [3] Summary by Sections Financial Performance - The company reported a revenue of HKD 3.431 billion in 2022, with a slight decrease to HKD 3.389 billion in 2023. The forecast for 2024 is HKD 6.005 billion, indicating a significant increase [6] - The net profit was negative in 2022 at HKD -554 million, improved to HKD -83 million in 2023, and is projected to turn positive in 2024 with a profit of HKD 783 million [6] - The gross margin is expected to improve from 53.5% in 2022 to 63.7% in 2024, while the net margin is projected to shift from -16.1% in 2022 to 13.0% in 2024 [6] Game Launches and User Growth - The game "Heart Town" has surpassed 20 million downloads on TapTap since its launch on July 17, 2024, and has achieved a rating of 8.6 on the platform [4] - The game "Start Up Muffin" has maintained a position in the top 40 of the App Store's best-selling list since its launch on May 15, 2024, with a mini-game version launched on July 17, 2024 [4] - The self-developed game "Bellflower Sword" launched globally on August 1, 2024, and is currently ranked in the top 20 on the App Store in Japan and South Korea [4] Advertising Revenue and Market Position - The exclusive game "Heart Town" has driven an increase in TapTap's user base, contributing to a rise in advertising revenue due to heightened demand from new game launches [5] - TapTap's ranking on the App Store has reached an all-time high of 11, benefiting from a zero-commission policy and a strong core user base [5]

Investment Rating - Buy (Maintained Rating) [1] Core Views - The company achieved a turnaround in 2024H1, with revenue expected to reach 2.18-2.23 billion yuan, a year-on-year increase of 24.4%-27.2%, and net profit expected to be 220-270 million yuan, a year-on-year increase of 114%-162.7% [2] - New games, particularly *Departure, Muffin* and *Heartbeat Town*, drove significant growth in the gaming business, with *Departure, Muffin* maintaining a top 10 position on the iOS game bestseller list in mainland China for most of its first month [2] - TapTap platform is expected to benefit from the launch of new games, with *Departure, Muffin* and *Heartbeat Town* driving user growth, as both games are exclusive to TapTap on Android [2] Financial Performance and Projections - Revenue for 2024/2025/2026 is projected to be 4.97/5.68/6.34 billion yuan, with net profit attributable to the parent company expected to be 505/664/764 million yuan [3] - The current stock price corresponds to a PE ratio of 20.28/15.42/13.4X for 2024/2025/2026 [3] - Revenue growth rates for 2024/2025/2026 are projected at 46.61%, 14.25%, and 11.73%, respectively, with net profit growth rates at 708.09%, 31.53%, and 15.05% [5] Key Financial Metrics - Gross margin improved significantly, reaching 62.9% in 2024E, up from 53.5% in 2022A [6] - ROE (Return on Equity) is expected to rise to 22.81% in 2024E, compared to -29.31% in 2022A [5] - Operating cash flow per share is projected to increase to 1.83 yuan in 2024E, up from -0.68 yuan in 2022A [5] Game Performance and Strategy - *Departure, Muffin* achieved 1.97 million downloads on TapTap with a rating of 7.1, while *Heartbeat Town* reached 19.87 million downloads with a rating of 8.7 [2] - The company's strategy for *Heartbeat Town* focuses on user accumulation in the early stages, with expectations of increased revenue as user acquisition progresses [2] - TapTap is expected to benefit from the launch of major games like *DNF Mobile*, *Eternal Calamity Mobile*, and *Zenless Zone Zero* in 2024 [2]

Financial Data and Key Metrics Changes - The company has seen significant changes in its financial performance, particularly driven by the successful launch of self-developed games, which are expected to continuously release performance [3][5][9] - The first month of revenue for the game "触发麦芬" in the Hong Kong and Macau markets was estimated to exceed 100 million RMB, indicating strong market performance [11] - The first month of revenue for "触发麦芬" in the domestic market was estimated to be over 300 million RMB, achieving a ranking in the top four of the sales chart shortly after launch [13][14] Business Line Data and Key Metrics Changes - The self-developed game "触发麦芬" has shown stable revenue performance in both the Hong Kong and Macau markets, maintaining a top ranking in the sales charts [12] - The newly launched game "心动小镇" has achieved over 500,000 downloads within a short period, with a ranking that has climbed to the top of the charts [30][31] - The company is focusing on enhancing its self-developed game portfolio, with "心动小镇" expected to contribute significantly to user engagement and revenue growth [32] Market Data and Key Metrics Changes - The company has observed a growing user base on its platform "tap tap," with the average monthly active users (MAU) expected to exceed 40 million, potentially reaching 50 to 60 million during peak periods [38] - The launch of several major games has driven user growth on the "tap tap" platform, contributing to an increase in advertising revenue [39][40] Company Strategy and Development Direction - The company is strategically focusing on self-developed games and platform growth, with a dual-driver model expected to support long-term growth [9][41] - The return of a key figure in the industry to lead the company's publishing efforts is anticipated to enhance the effectiveness of game launches and marketing strategies [23][24] Management Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the performance of self-developed games, highlighting the potential for sustained revenue growth as new markets are entered [7][25] - The company is preparing for the launch of "触发麦芬" in the Japanese and Korean markets, which are expected to provide significant revenue opportunities [26] Other Important Information - The company has successfully leveraged social media for marketing, resulting in high user engagement and organic growth for "心动小镇" [28][29] - The company has maintained a focus on user experience and product quality, which has contributed to the positive reception of its games [17][20] Q&A Session Summary Question: What are the expectations for the new game launches? - The company anticipates that the new game launches will significantly contribute to revenue growth, with "触发麦芬" and "心动小镇" expected to perform above market expectations [41] Question: How is the company addressing user acquisition costs? - The company is currently managing user acquisition costs carefully, with plans to increase marketing efforts as costs stabilize post-summer [15][16]

Summary of the Conference Call on Xindong Company Company and Industry - **Company**: Xindong Company (心动公司) - **Industry**: Gaming and Media Key Points and Arguments 1. **Core Recommendation Logic**: The conference focused on the core recommendation logic for Xindong Company, emphasizing the significant changes in the company's self-developed games and their performance in various markets [2][3][4]. 2. **Game Launches**: The self-developed game "Chufa Maifen" launched in late January in Hong Kong and Macau has shown strong performance, exceeding market expectations. The game was later launched in mainland China on May 16, achieving over 300 million RMB in revenue in its first month [3][11][13]. 3. **User Growth**: The newly launched game "Xindong Xiaozhen" has also performed well, reaching 3.9 million downloads shortly after its launch on July 17, with rankings in the iPhone free game charts climbing to first place [5][6][25]. 4. **Sustained Performance**: Both "Chufa Maifen" and "Xindong Xiaozhen" are expected to drive continuous revenue growth, with "Xindong Xiaozhen" being positioned as a long-lifecycle product due to its gameplay mechanics [6][7][30]. 5. **Market Strategy**: The company plans to expand "Chufa Maifen" into the Korean and Japanese markets, which are expected to provide significant revenue potential based on previous performance metrics from similar games [23][40]. 6. **User Engagement**: The games are designed to enhance user engagement through innovative gameplay and social features, which are crucial for retaining players over the long term [18][21][31]. 7. **Platform Growth**: The Tap Tap platform is benefiting from the launch of new games, with an expected increase in monthly active users (MAU) surpassing 5 million during the summer [34][37]. 8. **Advertising Revenue**: The growth in user base is anticipated to lead to increased advertising revenue for the Tap Tap platform, as more users engage with the games [39][40]. Other Important but Possibly Overlooked Content 1. **Marketing Strategies**: The return of Huang Xiwei, the original founder of Tap Tap, has positively impacted the company's marketing strategies, particularly for "Chufa Maifen" [22]. 2. **Social Media Impact**: The game's success has been amplified by social media discussions, with significant user-generated content contributing to its visibility and user acquisition [26][27]. 3. **Long-term Potential**: The long-term potential of "Xindong Xiaozhen" is highlighted, with expectations of stable revenue contributions through low-cost in-game purchases and subscriptions [31][32]. 4. **Competitive Landscape**: The competitive landscape is noted, with Xindong's games positioned against major titles like "Honor of Kings" and "Peacekeeper Elite," indicating a strong market presence [13][29]. This summary encapsulates the key insights from the conference call regarding Xindong Company's strategic direction, game performance, and market positioning.

Investment Rating - Buy (maintained) [2] Core Views - The self-developed life simulation mobile game "Heartbeat Town" officially launched on July 17, with pre-downloads ranking No 1 on the iOS free list and TapTap hot list, with over 300,000 pre-registrations and over 800,000 downloads on TapTap, with a score of 8 8 The game is expected to attract users through quality and word-of-mouth, retain users through rich content and strong social interaction, and monetize through low-priced skins and outfits, driving stable revenue growth [2] - The WeChat mini-game version of "Let's Go Muffin" launched on July 17, with the game maintaining a top 25 position on the iOS bestseller list and over 3 million downloads across all platforms The mini-game version is expected to cover more Android users and non-core players, further boosting overall game revenue [3] - TapTap is expected to benefit from increased advertising demand due to the launch of numerous new games in 2024, including Tencent's "DNF Mobile" and "StarCraft: Dawn", NetEase's "Naraka: Bladepoint" and "Yanyun Sixteen Sounds", and miHoYo's "Zenless Zone Zero" The platform's zero-commission policy and large core user base are expected to drive user growth [4] Financial Projections - Revenue is projected to be 6,005 million yuan in 2024, 7,313 million yuan in 2025, and 7,955 million yuan in 2026, with year-on-year growth rates of 77 2%, 21 8%, and 8 8% respectively [5] - Net profit is projected to be 783 million yuan in 2024, 1,137 million yuan in 2025, and 1,246 million yuan in 2026, with year-on-year growth rates of 1,043 4%, 45 1%, and 9 6% respectively [5] - Gross margin is projected to be 63 7% in 2024, 64 9% in 2025, and 65 2% in 2026 [5] - Net margin is projected to be 13 0% in 2024, 15 5% in 2025, and 15 7% in 2026 [5] - ROE is projected to be 31 4% in 2024, 31 3% in 2025, and 25 6% in 2026 [5] - EPS is projected to be 1 6 yuan in 2024, 2 4 yuan in 2025, and 2 6 yuan in 2026 [5] - P/E ratio is projected to be 9 3x in 2024, 6 4x in 2025, and 5 8x in 2026 [5] - P/B ratio is projected to be 2 6x in 2024, 1 8x in 2025, and 1 3x in 2026 [5] Company Overview - Current stock price is 16 22 HKD [6] - One-year high and low are 22 25 HKD and 7 47 HKD respectively [6] - Total market capitalization is 7 796 billion HKD [6] - Total shares outstanding are 481 million [6] - Turnover rate over the past 3 months is 50 73% [6]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The public beta of "Heart Town" is scheduled for July 17, which is expected to continue driving growth. The game has already garnered over 2.3 million pre-registrations on TapTap with a rating of 9.0, indicating strong interest. The game targets female and casual players, which may contribute to revenue growth and user expansion for TapTap [3] - "Let's Go Muffin" has shown stable performance since its launch on May 15, maintaining a position in the top 10 of the iOS bestseller list, which is anticipated to contribute significantly to the company's revenue [4] - Multiple games are set to be exclusively released on TapTap, including "The Time of Posia" and "The Legend of the Great Hero," which may enhance user engagement and revenue growth due to TapTap's favorable zero-revenue-sharing policy [5] Financial Summary - The company's projected financials for 2024-2026 include: - Revenue: 6,005 million in 2024, 7,313 million in 2025, and 7,955 million in 2026 - Net profit: 783 million in 2024, 1,137 million in 2025, and 1,246 million in 2026 - EPS: 1.6 in 2024, 2.4 in 2025, and 2.6 in 2026 - Current PE ratios are 10.4 for 2024, 7.2 for 2025, and 6.5 for 2026, indicating a favorable valuation outlook [6]

Investment Rating - Maintain "Buy" rating [1][2] Core Views - **Game Performance**: "Let's Go Muffin" has maintained a stable position in the iOS game bestseller list, with its ranking fluctuating but generally staying within the top 10. The game's revenue rebounded after the launch of a new event, with iOS revenue estimated at $32.54 million as of June 30, 2024. Total revenue across all platforms is estimated at approximately RMB 464 million [1] - **New Game Launches**: Heartbeat's self-developed games, including "Heartbeat Town" and "Sword of Linlang," are expected to launch in the second half of 2024. "Heartbeat Town" has a TapTap rating of 9.0 and over 2.3 million pre-registrations, while "Sword of Linlang" has a rating of 7.7 and nearly 2 million downloads [1] - **TapTap Platform**: The platform's daily downloads on iOS reached 31,000 in the first half of 2024, a 103% increase year-over-year. The platform's MAU is expected to recover to over 40 million, driven by the launch of high-quality games such as "Let's Go Muffin" and "DNF" mobile. The removal of "DNF" mobile from some Android app stores may benefit TapTap's ad revenue [1] Financial Forecasts - **Revenue and Profit**: Revenue forecasts for 2024-2026 have been slightly increased to RMB 4.71 billion, RMB 5.09 billion, and RMB 5.35 billion, respectively, representing increases of 10%, 4%, and 2% from previous forecasts. Net profit attributable to shareholders is expected to be RMB 421 million, RMB 597 million, and RMB 781 million for the same periods [1][2] - **Valuation Metrics**: The company's P/E ratio for 2024-2026 is projected at 20x, 14x, and 11x, respectively [2] Market Data - **Market Capitalization**: The company's total market capitalization is HKD 9.046 billion, with a total share capital of 481 million shares [3] - **Stock Performance**: Over the past year, the stock has shown a relative return of 1.9% and an absolute return of -4.5% [4] Game Revenue Analysis - **Revenue Trends**: "Let's Go Muffin" has shown strong revenue performance since its launch, with daily revenue peaking at RMB 2.5 million on June 14, 2024. The game's revenue has been supported by in-app purchases and events [6]

【 广 发 传 媒 & 海 外 】 心 动 公 司 (02400.HK) TapTap 游戏发布会举行,关注《心动小镇》上线表现 核心观点: ⚫ 事件:TapTap 游戏发布会于 6 月 28 日线上举行,根据公司官方微信, 本次发布会为开放式主题,"玩家的夏天,从___开始"。发布会共更新 44 款游戏,分为"移植佳作","续写新篇","次元幻想","YEAH!", "独家游戏"和"聚光灯游戏"六个篇章。聚焦多种品类和风格产品。 ⚫ 头部游戏借力 TapTap 宣传,带动平台活跃提升。本次发布会参会游 戏包括《永劫无间》、《绝区零》、《剑与远征:启程》、《燕云十六声》等 头部大厂重磅产品。其中《永劫无间》更新全新英雄"岳山",《燕云十 六声》首次曝光了新武器"绳镖"。我们认为,知名游戏公司的头部产 品与 TapTap 合作发布更新,有利于平台后续的用户活跃增长。除大厂 产品外,真人恋爱互动电影《完蛋!我被美女包围了》移动版预计 24 年 Q3 上线,TapTap 平台已于 6 月 28 日开放限量体验。建议关注重 点产品密集上线带动下,平台用户活跃表现。 ⚫ 自研游戏测试定档,关注后续上线表现。据公司官微, ...