Core Viewpoint - Zhaizi City Technology (09911) has seen its stock price increase by 231% year-to-date, with a current valuation of 10 times the next 12 months' earnings and a PEG ratio of 0.5, compared to the industry averages of 16.5 times and 1.2 times in China, and 24 times and 1.5 times in the US [1] Financial Performance - The company's revenue for the first half of the year grew by 40% year-on-year, reaching 3.18 billion RMB, which met expectations [1] - Revenue from social and innovative businesses increased by 37% and 72% year-on-year, respectively [1] - Gross profit rose by 56% year-on-year, exceeding expectations by 10%, with a gross margin of 55.8%, an increase of 5.6 percentage points [1] - The gross margin for the innovative business significantly improved from 55% to 74%, driven by contributions from "Alice's Adventures" [1] - The gross margin for the social business increased by 3.8 percentage points to 54% year-on-year [1] Profitability Metrics - Adjusted operating profit and net profit grew by 51% and 137% year-on-year, respectively, surpassing expectations by 13% and 23% [1] - The strong performance is attributed to prudent cost control, operational leverage, and minority equity acquisitions [1] Target Price and Rating - The target price for Zhaizi City Technology has been raised from 12.2 HKD to 16.2 HKD, corresponding to 17 times and 14 times earnings for the fiscal years 2025 and 2026, respectively [1] - The company maintains a "buy" rating [1]