XD INC(HK:02400) Bank of China Securities·2024-06-26 10:02Investment Rating - The report maintains a "Buy" rating for the company [3][4] - The market price is HKD 19.08, with a sector rating of "Outperform" [1] Core Insights - The self-developed idle game "Let's Go Muffin" has performed well, maintaining a top ten position on the iOS sales chart since its launch in Hong Kong, Macau, and mainland China, and is expected to significantly contribute to the company's 2024 earnings [3][4] - The stable issuance of domestic game licenses and the anticipated release of major titles during the summer are expected to drive revenue growth for the TapTap platform [4] - The company has adjusted its profit forecasts upward for 2024, 2025, and 2026, with projected net profits of RMB 538 million, RMB 690 million, and RMB 827 million respectively, corresponding to P/E ratios of 15.18, 11.82, and 9.87 [4][5] Summary by Sections Stock Performance - The company's stock has shown a 12-month absolute performance of -10.0% and a relative performance of -4.0% compared to the Hang Seng Index [1] Financial Metrics - The total market capitalization is approximately HKD 9,170.59 million, with 480.64 million shares outstanding [2] - The average daily trading volume over the past three months is HKD 75.96 million [2] Game Performance - "Let's Go Muffin" has been a standout product, achieving a peak ranking of fourth on the iOS sales chart and maintaining strong sales since its launch [4] - The company has a solid pipeline with four games in reserve, two of which have already received licenses [4] Market Trends - The report highlights a trend of increasing bargaining power for quality content providers in the gaming industry, which is expected to benefit the company and its platform, TapTap [4] - The anticipated influx of major mobile games during the summer is expected to enhance user engagement and advertising revenue on TapTap [4]