KINGNET(SZ:002517) Haitong Securities·2024-08-23 12:10Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The company achieved steady revenue and net profit growth in the first half of 2024, with revenue reaching 2.555 billion yuan, a year-on-year increase of 29.28%, and net profit attributable to shareholders of 810 million yuan, up 11.72% year-on-year [4][5] - The management has committed to not reducing their holdings, which boosts investor confidence, with the chairman having increased his stake 12 times since 2019, totaling over 1.5 billion yuan [4] - The company has a rich pipeline of new products, with several key IPs set to launch, which is expected to drive significant revenue growth in 2024 [4] Summary by Sections Financial Performance - In 2024, the company is projected to achieve revenues of 5.021 billion yuan, a 16.9% increase from 2023, and net profits of 1.939 billion yuan, a 32.7% increase [5][8] - The gross margin is expected to improve, reaching 83.8% in 2024, up from 83.5% in 2023 [5][8] Product Pipeline - The company has successfully launched several new products, including "The Legend of Sword and Fairy: A New Beginning," which topped the charts in Taiwan, and "Monster Alliance," which entered the top ten in mini-program game sales [4] - Upcoming products include "That Time I Got Reincarnated as a Slime: New World," scheduled for release on August 28, along with several others that have recently received approval [4] Valuation and Earnings Forecast - The company is projected to have earnings per share (EPS) of 0.90 yuan in 2024, 1.07 yuan in 2025, and 1.28 yuan in 2026, with a dynamic price-to-earnings (PE) ratio of 19-21 times for 2024, leading to a fair value range of 17.10-18.90 yuan [4][5][8]