G-bits(603444) Guotai Junan Securities·2024-10-27 15:18Investment Rating - The investment rating for the company is "Add" [2] Core Views - The Q3 performance met expectations, with a year-on-year decline primarily due to the continued decline in revenue from existing products. However, the company maintains its dividend distribution rhythm, and several new games are expected to launch in 2025, warranting attention to the transition from old to new products [3] Summary by Sections Financial Performance - For the first three quarters, the company achieved operating revenue of 2.818 billion yuan, a year-on-year decrease of 14.77%. The net profit attributable to the parent company was 658 million yuan, down 23.48% year-on-year, while the net profit after deducting non-recurring gains and losses was 613 million yuan, down 25.54% year-on-year. The Q3 single-quarter revenue was 859 million yuan, a year-on-year decline of 10.36%, with a net profit of 140 million yuan, down 23.82% year-on-year [7] - The company announced a cash dividend of 20 yuan for every 10 shares, with a single-quarter dividend payout ratio of 103% [7] Future Outlook - The company is expected to launch multiple new products in 2025, including self-developed games "M72" and "M88," and agency products "Wangdu Chuangshiluo" and "Fengshen Fantasy World," which have already launched in Q3. The agency product "Yixiang Echo" is planned for launch on December 30, 2024, and has already opened for reservations on the App Store [7] - The EPS forecast for 2024-2026 is adjusted to 12.87, 15.23, and 17.15 yuan, respectively, down from the previous forecast of 14.56, 16.81, and 18.70 yuan, mainly due to the continued decline in revenue from existing games [7] Valuation - The target price is raised to 257.34 yuan from the previous 213.29 yuan, reflecting an increase in industry valuation levels. The company is expected to maintain a 20x PE ratio for 2024 [7]