KINGNET(002517) Tebon Securities·2024-08-27 06:06Investment Rating - The report maintains a "Buy" rating for Kingnet Network (002517 SZ) [1] Core Views - Kingnet Network's 24H1 performance is strong, with sufficient new game reserves expected to sustain growth momentum [1] - The company achieved significant growth in both revenue and profit in 24H1, driven by stable operations of long-term products and strong performance of newly launched games [3] - Kingnet Network has a rich and diverse pipeline of new games, with a new product cycle gradually starting [4] - The company is actively exploring AIGC and has developed its own "Xingyi" large model to improve efficiency and reduce costs [4] Financial Performance - 24H1 revenue reached 2 555 billion yuan, a YoY increase of 29 28%, with net profit attributable to the parent company of 809 million yuan, up 11 72% YoY [3] - 24Q2 revenue was 1 248 billion yuan, a YoY increase of 22 13%, but net profit attributable to the parent company decreased by 11 85% YoY to 383 million yuan [3] - Mobile game revenue in 24H1 was 2 095 billion yuan, up 23 42% YoY, driving core growth [3] - Overseas business revenue in 24H1 was 126 million yuan, a YoY increase of 334 95%, driven by strong performance in regions such as Hong Kong, Macao, Taiwan, and Southeast Asia [3] Product Pipeline - The company has a diversified product pipeline, including IP-adapted games such as "Douluo Dalu: Zhu Xie Chuanqi," "That Time I Got Reincarnated as a Slime: New World," and "Tomb Raider: Departure" [4] - Short-term, mid-term, and long-term product reserves are strategically planned, with a focus on IP development and game matrix construction [4] AI and R&D - Kingnet Network has established an AI application research center and developed the "Xingyi" large model, which focuses on "out-of-the-box" content output and has significantly improved R&D efficiency [4] - 24H1 R&D expenses were 228 million yuan, accounting for 8 94% of revenue, a YoY increase of 10 67% [4] Market Performance - The stock's absolute return over the past 1M, 2M, and 3M periods was -1 37%, -8 70%, and -21 00%, respectively, while the relative return was 0 83%, -4 83%, and -13 30% [2] Financial Forecast - Revenue for 2024-2026 is projected to be 5 362 billion yuan, 6 116 billion yuan, and 7 025 billion yuan, with YoY growth rates of 24 8%, 14 1%, and 14 9%, respectively [4] - Net profit attributable to the parent company for 2024-2026 is forecasted to be 1 715 billion yuan, 2 080 billion yuan, and 2 359 billion yuan, with YoY growth rates of 17 3%, 21 3%, and 13 4%, respectively [4] Valuation Metrics - The P/E ratio for 2024-2026 is projected to be 10 70x, 8 75x, and 7 66x, while the P/B ratio is expected to be 2 83x, 2 21x, and 1 76x [6] - The EV/EBITDA ratio for 2024-2026 is forecasted to be 7 40x, 5 37x, and 3 94x [6]