KINGNET(002517) 东吴证券·2024-10-29 09:30Investment Rating - Buy (Maintained) [1] Core Views - The company's Q3 2024 revenue and profit exceeded expectations, with revenue reaching 1.372 billion yuan, a year-on-year increase of 30.33%, and net profit attributable to the parent company reaching 471 million yuan, a year-on-year increase of 31.52% [2][3] - The company's revenue resilience is driven by its strong performance in the Legend and Miracle game categories, as well as its effective operation of retro-themed IPs and self-developed game communities [3] - The company is expanding its IP portfolio and exploring overseas markets, with new games such as "Black Cat Detective" and "Dragon Nest World" set to launch, which are expected to drive future growth [4] - Key new games, including "Reincarnated as a Slime" and "Douluo Dalu: Legend of the Evil," have entered testing phases, with strong performance expected upon their official release [5] Financial Performance Summary - Revenue for Q1-Q3 2024 reached 3.928 billion yuan, a year-on-year increase of 29.65%, with net profit attributable to the parent company reaching 1.280 billion yuan, a year-on-year increase of 18.27% [2] - The company's sales expense ratio in Q3 2024 was 30.79%, a year-on-year increase of 1.83 percentage points but a quarter-on-quarter decrease of 7.05 percentage points, contributing to higher-than-expected profit margins [3] - The company's management expense ratio in Q3 2024 was 3.34%, a year-on-year decrease of 2.68 percentage points, while the R&D expense ratio was 12.43%, a year-on-year increase of 0.52 percentage points [3] Future Outlook - The company's revenue is expected to grow to 5.337 billion yuan in 2024, 6.388 billion yuan in 2025, and 6.967 billion yuan in 2026, with net profit attributable to the parent company projected to reach 1.706 billion yuan, 2.057 billion yuan, and 2.326 billion yuan respectively [1] - The company's EPS is forecasted to be 0.79 yuan in 2024, 0.96 yuan in 2025, and 1.08 yuan in 2026, with corresponding P/E ratios of 17x, 14x, and 12x [5] - The company's IP strategy and new game pipeline are expected to drive sustained growth, with a focus on both domestic and overseas markets [4][5] Market Data - The company's current stock price is 13.29 yuan, with a market capitalization of 28.607 billion yuan [7] - The company's P/B ratio is 4.72x, and its P/E ratio based on the latest diluted EPS is 16.77x [1][7]