XD INC(02400) KAIYUAN SECURITIES·2024-08-08 13:01Investment Rating - Buy (maintained) [2] Core Views - The self-developed slow-paced life simulation game "Heartbeat Town" has maintained a top 3 position on the App Store free chart since its launch on July 17, with over 3 million downloads on Apple devices and over 21 million downloads on TapTap as of August 8, indicating significant user growth and potential for a large DAU product [5] - The game has a high reputation, with a score of 8.7 on TapTap and over 3.2 billion views for the HeartbeatTown topic on Douyin, suggesting strong user engagement and potential for long-term operation [5] - The first trend season event "Beach Paradise" for "Heartbeat Town" is set to launch on August 10, which is expected to drive game revenue growth through new paid content and improved user experience [6] - The rapid growth of "Heartbeat Town" users has also boosted TapTap's download growth, with the platform reaching a historic high of 11th on the App Store free chart, potentially expanding the platform's user base and monetization opportunities [7] Financial Projections - Revenue is projected to increase from 3,431 million CNY in 2022 to 7,955 million CNY in 2026, with a significant jump expected in 2024 to 6,005 million CNY [8] - Net profit is forecasted to turn positive in 2024 at 783 million CNY, growing to 1,246 million CNY by 2026 [8] - Gross margin is expected to rise steadily from 53.5% in 2022 to 65.2% in 2026, indicating improving profitability [8] - EPS is projected to increase from 1.6 CNY in 2024 to 2.6 CNY in 2026, with a corresponding decrease in P/E ratio from 12.9x to 8.1x [8] Market Performance - Current stock price is 22.800 HKD, with a total market capitalization of 10.959 billion HKD [4] - The stock has a 3-month turnover rate of 57.6%, indicating active trading [4]