Ge Long Hui·2026-01-25 14:24Company Dynamics - The company has recently launched several new products, such as the PUCKY "Knock Knock" series, which has gained significant popularity. Other successful series include the "Full Family Power" and "Star People" plush keychains. This performance highlights the company's strong product development and innovation capabilities, supported by a mature R&D mechanism and direct customer engagement system [1][2]. Product Innovation - The PUCKY "Knock Knock" series features electronic sound components that produce a wooden fish sound effect when tapped, aligning with consumer preferences for tangible experiences and emotional value. This innovation caters to younger audiences and is well-suited for short video platforms. PUCKY, an early IP signed by the company in 2017, has undergone significant design innovations, demonstrating the company's ability to revitalize established IPs [1][2]. Material and Gameplay Innovation - The company has focused on material upgrades and gameplay innovations, enhancing product uniqueness and playability. This strategy has allowed for the expansion of target demographics and usage scenarios, effectively attracting new customers and promoting repeat purchases. The recent success of popular products indicates that product innovation is driving growth, providing a replicable and certain path for the company's performance [2]. Innovation Capability and Platform Development - The company has established a comprehensive product R&D innovation system, with deep upstream involvement in process and material development and direct engagement with end-user demands. The matrix organizational structure enhances product innovation capabilities. The current market's focus on single IP sales fluctuations may overlook the company's platform attributes and matrix layout, which contribute to growth certainty. The company's sustained innovation capabilities reinforce its platform advantages and leading market position [2]. Profit Forecast and Valuation - The company maintains its adjusted net profit forecasts for 2025 and 2026 at 13.7 billion and 17.7 billion respectively, with a new forecast of 21 billion for 2027. The current stock price corresponds to adjusted P/E ratios of 19, 15, and 12 for 2025, 2026, and 2027. Recent share buybacks and a valuation shift to 2026 support a "outperform" rating and a target price of 370 HKD, indicating a potential upside of 68% from current levels [2].