Ultrapower(SZ:300002) Soochow Securities·2024-07-01 06:30Investment Rating - The report assigns a "Buy" rating for the company with a target price of 12.27 CNY, based on a total estimated market value of 241 billion CNY [3]. Core Insights - The company has a dual business model focusing on computer services and gaming, with strong revenue growth driven by both sectors. The gaming segment, particularly in SLG mobile games, has shown impressive performance in overseas markets, while the computer business is expanding into AI and innovative services [9][11]. - The gaming business has achieved a compound annual growth rate (CAGR) of 48% in revenue from 2016 to 2023, with net profit CAGR of 27%. The company is set to launch new games in 2024, which are expected to contribute to revenue growth [2][31]. - The computer business is expected to stabilize and grow, particularly through AI applications and innovative solutions, with significant revenue increases noted in recent years [2][19]. Summary by Sections Company Overview - The company was established in 2001, initially focusing on ICT operations and later expanding into gaming through the acquisition of Tianjin Shellwood in 2014. It now operates two main business clusters: computer services and gaming [9][11]. - The management team is experienced and has successfully improved operational efficiency, with significant increases in revenue per employee noted from 2020 to 2023 [15][19]. Gaming Business - The gaming segment is a leader in SLG mobile games, with a focus on overseas markets. The company has successfully launched popular titles such as "War and Order" and "Age of Origins," which have contributed significantly to revenue [2][31]. - The gaming revenue for 2023 reached 44.98 billion CNY, with a year-on-year growth of 26.52%, and a net profit of 11.05 billion CNY, reflecting a net profit margin of 24.56% [2][31]. - Upcoming game launches in 2024 are anticipated to further enhance revenue streams, leveraging the company's established expertise in the SLG genre [2][31]. Computer Business - The computer business provides digital solutions and services, including ICT operations, IoT, and AI applications. The AI segment has shown rapid growth, with revenues increasing significantly in 2022 and 2023 [2][19]. - The company has introduced innovative AI solutions, such as the "Taiyue Smart Call" platform, which is expected to enhance profitability as initial costs stabilize [2][19]. Financial Forecast - The company is projected to achieve revenues of 66.81 billion CNY, 77.61 billion CNY, and 86.88 billion CNY for the years 2024 to 2026, with corresponding net profits of 11.51 billion CNY, 12.69 billion CNY, and 14.49 billion CNY [3].