KINGNET(SZ:002517) CHINA DRAGON SECURITIES·2024-08-28 10:02Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage [1][3]. Core Views - The company has shown significant growth in its IP business, which is expected to empower its core gaming operations. The report highlights the successful acquisition of several well-known IPs, contributing to the launch of popular games [1][3]. - The company is actively expanding its overseas market presence, with a notable increase in overseas revenue, which grew by 334.95% year-on-year in the first half of 2024 [1][3]. Financial Performance Summary - For the first half of 2024, the company reported a revenue of 2.555 billion yuan, representing a year-on-year growth of 29.28%. The net profit attributable to shareholders was 809 million yuan, up 11.72% year-on-year [1][4]. - The company plans to distribute a cash dividend of 1 yuan per 10 shares, totaling 213 million yuan [1][4]. Revenue Projections - The company forecasts revenues of 5.050 billion yuan, 5.913 billion yuan, and 6.880 billion yuan for 2024, 2025, and 2026, respectively, with corresponding net profits of 1.833 billion yuan, 2.426 billion yuan, and 2.643 billion yuan [4][6]. - The mobile gaming segment is expected to generate revenues of 4.141 billion yuan, 4.756 billion yuan, and 5.397 billion yuan from 2024 to 2026, with a growth rate of approximately 15.77%, 14.86%, and 13.48% [3][4]. Market Position and Competitors - The report compares the company with peers such as 37 Interactive Entertainment, Giant Network, and Shenzhou Taiyue, indicating a positive outlook for the company's main business and its proactive overseas market strategy [3][5]. - The company's current price-to-earnings (P/E) ratios for 2024, 2025, and 2026 are projected to be 10.1, 7.6, and 7.0, respectively, which are competitive compared to its peers [4][5].