G-bits(603444) Guoxin Securities·2024-10-28 09:31Investment Rating - The investment rating for the company is "Outperform the Market" [6][15]. Core Views - The company experienced a narrowing decline in revenue and profit in the third quarter, with a high dividend payout ratio. For the first three quarters of 2024, revenue was 2.82 billion yuan, down 14.8% year-on-year, primarily due to declines in core games. The net profit attributable to the parent company was 660 million yuan, down 23.5% year-on-year. The cash dividend for the first three quarters was 470 million yuan, representing 70.9% of net profit [1][7]. - The gross margin remained high at over 89%, with a slight increase of 1.5 percentage points year-on-year. However, the expense ratio rose by 10.5 percentage points to 63.1% due to the decline in revenue [2][8]. - The overseas business saw nearly 100% year-on-year growth, with new agency products expected to contribute to revenue growth. The company plans to focus on MMORPG, idle games, and SLG genres, with several self-developed and agency products in the pipeline [3][9]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company reported revenue of 2.82 billion yuan, a year-on-year decline of 14.8%, and a net profit of 660 million yuan, down 23.5% year-on-year. In the third quarter alone, revenue was 860 million yuan, down 10.4% year-on-year, and net profit was 140 million yuan, down 23.8% year-on-year [1][7]. - The company maintained a high dividend payout, with a proposed cash dividend of 140 million yuan for the third quarter, representing 100% of net profit [1][7]. Profitability and Expenses - The gross margin for the third quarter was 89.0%, up 1.5 percentage points year-on-year, while the overall expense ratio increased to 63.1%, with sales, management, financial, and R&D expense ratios at 28.9%, 10.0%, 1.8%, and 22.4%, respectively [2][8]. Product Development and Market Strategy - The company’s overseas revenue grew by 99.6% year-on-year to 370 million yuan, driven by the release of several international titles. The company is focusing on MMORPG, idle games, and SLG genres, with multiple self-developed and agency products in various stages of development and testing [3][9].