KINGNET(SZ:002517) Guotai Junan Securities·2024-07-28 06:31Investment Rating - The report maintains a "Buy" rating for the company with a target price of 26.06 RMB, consistent with the previous forecast [2] - The target price implies a 24x PE valuation for 2024 [4] Core Viewpoints - The company has achieved a breakthrough in AI technology for game production, with its "Xingyi" large model upgraded to enable fully automated game generation through conversational AI [3][4] - This advancement is expected to revolutionize game production models and gameplay ecosystems by significantly lowering the barrier to game development [4] - The company's "IP strategy" is progressing steadily, with a rich pipeline of future products and active exploration of AI's impact on game development and product forms [4] Company Event Analysis - On July 26, the company announced its AI technology breakthrough at the ChinaJoy China Game Developers Conference (CGDC) [4] - The upgraded "Xingyi" large model allows users to generate complete games through conversational AI, automating tasks such as drawing, documentation, art, and music creation [4] - The model's multi-task parallel processing and three-dimensional operation matrix have significantly improved game development efficiency and automation capabilities [4] Industry Trends - The gaming industry is actively exploring AI applications, particularly in content generation, which has a fundamental impact on production models and gameplay ecosystems [4] - Current AI applications in gaming include AI NPCs (text language), AI companions (character control and text interaction), and AI content generation (graphics, 3D assets) [4] - The company has been at the forefront of AI integration, having introduced its "Xingyi" large model in April, which initially focused on internal R&D assistance [4] Financial Projections - The report forecasts the company's EPS for 2024-2026 to remain unchanged at 0.94/1.12/1.28 RMB [4] Related Reports - The report references previous analyses on the company's IP strategy, product pipeline, and performance [5]