G-bits(SH:603444) Guoxin Securities·2024-08-19 13:00Investment Rating - The investment rating for the company is "Outperform the Market" [4][12]. Core Insights - The company reported a revenue of 1.96 billion yuan for the first half of 2024, a year-on-year decline of 16.6%, primarily due to decreased revenues from "Wandao Mobile Game" and "A Thought of Immortality" [1][6]. - The net profit attributable to the parent company for the same period was 520 million yuan, down 23.4% year-on-year, mainly because new games like "Immortal Family," "Shenzhou Qianshifang," and "One Piece: Dream Pointer" have not yet turned profitable [1][6]. - The company plans to distribute a cash dividend of 323 million yuan for the first half of 2024, accounting for 62.4% of the net profit attributable to shareholders [1][6]. - The gross margin remained above 87%, with a gross margin of 88.2% for 2023, down 0.3 percentage points year-on-year [1][8]. Summary by Sections Financial Performance - For Q2 2024, the company reported revenue of 1.03 billion yuan, a year-on-year decline of 14.3%, with a net profit of 260 million yuan, down 28.4% year-on-year [1][6]. - The overall expense ratio increased by 6.7 percentage points to 53.0% in the first half of 2024 due to a significant drop in revenue [1][8]. Product Development and Market Strategy - The company is focusing on MMORPG, idle games, and SLG genres, with self-developed products like "Wanjian Changsheng" and "Zhangjian Chuanqi" in the pipeline [2][9]. - Upcoming titles include "Fengshen Fantasy World," "Echo of Anomalies," and "Kingdom Creation," set to launch in the second half of 2024 [2][9]. International Business Growth - The company's overseas revenue grew by 113.8% year-on-year to 260 million yuan in the first half of 2024, driven by the release of international versions of existing games [2][9].