Zhi Tong Cai Jing·2025-11-17 06:29Core Viewpoint - The report from Zheshang Securities highlights that NetDragon (00777) is expected to perform well in its dual business of gaming and education starting from the second half of 2025, with several key developments exceeding market expectations [1] Group 1: Business Performance - The new game "Code MY" is anticipated to significantly improve the existing gaming business through various technological breakthroughs, expanding the IP portfolio and potentially increasing user payment levels [1] - The North American education equipment sector is entering a renewal cycle, which is expected to drive a recovery in the education business, supported by the company's high market share in international markets [1] - The group broadcasting business, which features IP derivatives and idolized content creation, is expected to outperform traditional live streaming in terms of monetization capabilities, bolstered by content supply chain efficiency, platform collaboration advantages, and a robust host training system [1] Group 2: Market Expectations - Despite market concerns about the live streaming industry entering a phase of stagnant growth, the report argues that group broadcasting will exceed expectations due to its focus on female audiences and interactive elements, which can expand the paying audience and increase payment levels [2] - The core of group broadcasting is its IP, which not only relies on traditional monetization methods but also includes IP derivatives and idolized content creation, enhancing its monetization potential [2] - The report suggests that the prohibition of talent shows does not significantly impact group broadcasting, as the industry has implemented self-regulatory measures to maintain order and reduce external regulatory risks [2] Group 3: Financial Projections - The company is projected to achieve revenues of 4.67 billion, 4.88 billion, and 5.10 billion yuan for 2025-2027, reflecting year-on-year changes of -22.77%, 4.45%, and 4.47% respectively [4] - The net profit attributable to shareholders is expected to be 415 million, 650 million, and 725 million yuan for the same period, with year-on-year growth rates of 33.52%, 56.49%, and 11.63% respectively [4] - The current price-to-earnings ratios are projected to be 15.16, 9.69, and 8.68 times for 2025-2027, with a target market capitalization of 13.46 billion Hong Kong dollars based on a sum-of-the-parts valuation method [4]