KINGNET(SZ:002517) Haitong Securities·2024-11-03 06:40Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Views - The company has shown robust revenue and profit growth in Q3 2024, achieving revenue of 1.372 billion yuan, a year-on-year increase of 30.33%, and a net profit of 471 million yuan, up 31.52% year-on-year [4] - The company has a strong pipeline of new products, with several key titles launched or set to launch, which is expected to drive continued revenue growth [6] - Management has demonstrated confidence in the company's future by committing to not sell shares for five years and has made significant share repurchases [5] Summary by Sections Financial Performance - In Q3 2024, the company achieved a net profit of 471 million yuan, with a year-on-year growth of 31.52%, and a net operating cash flow of 309 million yuan [4] - For the first three quarters of 2024, the company reported a total revenue of 3.928 billion yuan, a 29.65% increase year-on-year, and a net profit of 1.280 billion yuan, up 18.27% year-on-year [4] Product Pipeline - The company has a rich reserve of new products, including titles like "That Time I Got Reincarnated as a Slime: New World" and "LaTale: Rainbow Orange," which are expected to enhance revenue streams [6] - Multiple new games have received approval and are set to launch, indicating a busy release schedule that could boost performance in 2024 [6] Management Confidence - The chairman and controlling shareholder have increased their holdings significantly, with a total of 12 purchases amounting to over 1.5 billion yuan since 2019, reflecting strong confidence in the company's long-term prospects [5] - A commitment was made to not reduce shareholdings for five years, further reassuring investors [5] Earnings Forecast and Valuation - The company is projected to achieve earnings per share (EPS) of 0.90 yuan, 1.07 yuan, and 1.28 yuan for 2024, 2025, and 2026 respectively, with a dynamic price-to-earnings (PE) ratio of 19-21 times for 2025 [6][11] - The estimated revenue for 2024 is 5.021 billion yuan, with a year-on-year growth of 16.9% [8]