IGG(00799) 浦银国际证券·2024-09-04 02:39Investment Rating - The report maintains a "Buy" rating for IGG (799.HK) with a target price of HKD 4.0, representing a potential upside of 21% from the current price of HKD 3.3 [2][4]. Core Insights - IGG's strong performance in both gaming and app businesses is identified as a new growth driver, with a 9% year-on-year revenue increase to HKD 2.7 billion in 1H24 [2]. - The gross margin improved by 6.5 percentage points to 78.8%, primarily due to the increased revenue share from the app business [2]. - Adjusted net profit for 1H24 was HKD 350 million, with an adjusted net profit margin of 12.7% [2]. Revenue Breakdown - Gaming revenue reached HKD 2.3 billion in 1H24, showing a slight increase of 1% year-on-year [2]. - The core product, "King of Kingdoms," experienced a 19% decline in revenue to HKD 1.3 billion, while new games "Doomsday: Last Survivors" and "Viking Rise" generated revenues of HKD 500 million and HKD 300 million, respectively, marking year-on-year growth of 97% and 151% [2]. - The new games accounted for 34% of total gaming revenue, effectively offsetting the decline from older titles [2]. App Business Performance - The app business generated HKD 400 million in revenue during 1H24, reflecting a significant year-on-year growth of 116% and increasing its revenue share to 15% [2]. - Following a business transformation earlier in the year, the app segment focused on content service-oriented applications, leading to a recovery in revenue and user engagement [2]. - Monthly revenue from the app business reached HKD 120 million in July, with expectations for continued high performance in the second half of the year [2]. Financial Projections - The report projects revenues of HKD 5.8 billion and HKD 6.4 billion for FY24E and FY25E, respectively, with adjusted net profits expected to be HKD 650 million and HKD 850 million [2][4].