Tianfeng Securities·2024-08-28 10:21Investment Rating - The investment rating for the company is maintained at "Buy" [3][2]. Core Insights - The company reported a revenue of 6.13 billion yuan for Q2 2024, exceeding Bloomberg's consensus estimate by 0.6% [1]. - Gross profit reached 1.83 billion yuan, surpassing Bloomberg's consensus estimate by 2.9%, with a gross margin of 29.9%, an increase of 6.8 percentage points year-over-year [1]. - Adjusted net loss narrowed significantly to 270 million yuan, a year-over-year reduction of 72% [1]. User and Creator Metrics - Daily Active Users (DAU) exceeded 102 million, up 6% year-over-year, while Monthly Active Users (MAU) reached 336 million [1]. - The average daily usage time per user was 99 minutes [1]. - The number of creators earning income through the platform increased by 34% year-over-year, with those earning through video and live streaming sales rising by 76% [1]. Business Segment Performance - Gaming: Revenue for the gaming segment was 1.01 billion yuan, exceeding Bloomberg's estimate by 5.5%, and grew 13% year-over-year, driven by the exclusive strategy game "Three Kingdoms: Strategy" [1][2]. - Advertising: Advertising revenue reached 2.04 billion yuan, surpassing Bloomberg's estimate by 2.0%, with a year-over-year increase of 30%, attributed to improved advertising efficiency and product optimization [1]. - VAS (Value-Added Services): Revenue was 2.57 billion yuan, below Bloomberg's estimate by 3.1%, but still grew 11% year-over-year, supported by an increase in paid users for premium services [1]. - IP and Derivatives: Revenue was 520 million yuan, slightly below Bloomberg's estimate by 5.4%, with a year-over-year decline of 4% [1]. Cost Structure and Profitability - Operating costs were 4.29 billion yuan, with revenue-sharing costs accounting for 2.49 billion yuan [1]. - The company achieved a gross margin of 29.9%, an increase of 6.8 percentage points year-over-year [1]. - General and administrative expenses decreased by 10%, while R&D expenses fell by 15% year-over-year [1]. - Operating loss was 590 million yuan, a year-over-year reduction of 54% [1].