Giant Network(SZ:002558) Huajin Securities·2024-09-04 07:30Investment Rating - The report assigns an investment rating of "Buy - A" for the company, indicating a positive outlook for future performance [1][3]. Core Insights - The company has shown significant growth in its mobile gaming segment, particularly with the successful launch of multiple mini-program games, including "Wangzhe Zhengtu," which has gained over 8 million new users and achieved consistent revenue growth [1][3]. - The integration of AI technology into game development is expected to enhance user experience and operational efficiency, with the company actively exploring AI-driven gameplay innovations [3][8]. - The favorable policy environment and the increasing value of quality IP assets are anticipated to support the company's long-term growth in the digital entertainment sector [3][8]. Summary by Sections Financial Performance - In H1 2024, the company reported revenue of 1.427 billion yuan, with a net profit of 718 million yuan, reflecting an 8.16% year-on-year increase [1]. - The company plans to distribute a cash dividend of 1.40 yuan per 10 shares [1]. Revenue Projections - Revenue forecasts for 2024 to 2026 are projected at 3.297 billion yuan, 3.673 billion yuan, and 4.018 billion yuan, respectively, with year-on-year growth rates of 12.75%, 11.40%, and 9.41% [3][8]. - The expected net profit for the same period is 1.395 billion yuan, 1.716 billion yuan, and 1.947 billion yuan, with corresponding EPS of 0.71, 0.87, and 0.99 yuan [3][8]. Market Position and Strategy - The company has established a strong competitive advantage in the MMORPG and multiplayer casual gaming sectors, focusing on high-quality game development and player retention [3][10]. - The report highlights the company's strategy to leverage its classic IPs and explore diverse gaming avenues, particularly in the context of AI integration [3][10]. Valuation Metrics - The company's projected P/E ratios for 2024, 2025, and 2026 are 12.9, 10.5, and 9.3, respectively, indicating a relatively low valuation compared to peers [3][10]. - The average P/E ratios of comparable companies are 13.56, 11.12, and 9.77 for the same period, suggesting potential for valuation improvement [10][11].