IDREAMSKY(HK:01119) Soochow Securities·2024-09-02 23:40Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a revenue of 845 million yuan in H1 2024, a year-on-year decrease of 24.62%, and a net profit attributable to shareholders of -110 million yuan, compared to 41 million yuan in the same period last year [3] - The focus on long-term games has put pressure on performance, but cost control continues to improve [3] - Long lifecycle products are solidifying the company's fundamentals, with expectations for new game releases to drive performance [4] - The earnings forecast has been adjusted downward for 2024-2026, with EPS estimates of -0.02, 0.28, and 0.33 yuan respectively, corresponding to a PE of 7 and 6 times for 2025 and 2026 [4] Revenue and Profitability - Total revenue for 2022 was 2,734 million yuan, which decreased to 1,917 million yuan in 2023, with an expected slight decline to 1,893 million yuan in 2024 before a significant increase to 4,226 million yuan in 2025 [2] - The net profit attributable to shareholders is projected to improve from -2,492.29 million yuan in 2022 to -41.24 million yuan in 2024, and then to 464.92 million yuan in 2025 [2] Financial Metrics - The company’s operating cash flow is expected to increase from 252.96 million yuan in 2023 to 630.44 million yuan in 2024 [9] - The gross margin is projected to improve from 35.14% in 2023 to 40.59% in 2024, indicating better cost management [10] - The asset-liability ratio is expected to decrease from 52.98% in 2023 to 51.01% in 2024, reflecting improved financial stability [10]