Zhi Tong Cai Jing·2025-10-20 04:01Core Viewpoint - The report from Guotai Junan highlights the robust growth of NetDragon's gaming business, particularly the strong long-term operational capabilities of the "Magic Domain" IP series, supported by AI production centers that enhance cost efficiency and gaming experience [1][2] Group 1: Financial Projections - The company is expected to achieve revenues of 4.86 billion, 5.31 billion, and 5.84 billion CNY for the years 2025 to 2027, respectively, with net profits projected at 450 million, 650 million, and 830 million CNY for the same period [1] - A target price of 16.7 HKD is set for 2025, based on an 18x PE valuation [1] Group 2: Gaming Business Insights - The core gaming business focuses on the MMORPG segment, with three evergreen IPs (Magic Domain, Conquest, and Soul of Heroes) providing stable cash flow [1] - "Magic Domain," being a 100% original IP, has seen a steady increase in MAU, surpassing 2.5 million, while "Conquest" supports the company's overseas gaming strategy, and "Soul of Heroes" benefits from a content and esports-driven approach, with MAUs exceeding 800,000 [1] Group 3: AI and Strategic Investments - The company is strategically investing in AI technology and the broader entertainment sector, including a partnership with Zhongke Wenge for AI model development and applications [2] - In 2023, NetDragon invested 20 million USD in Rokid and signed a five-year strategic cooperation agreement to enhance quality in education and gaming through hardware interaction [2] - The company is also advancing in the group broadcasting sector, holding a 46% stake in Hangzhou Shuai Ku Network Technology, which is a leading MCN with over 700 million fans and significant monthly engagement [2]