KINGNET(002517) 华源证券·2024-12-03 02:23Investment Rating - The report assigns an "Overweight" rating to Kaiying Network (002517 SZ) for the first time [2] Core Views - Kaiying Network has established a solid foundation with its nostalgic games, particularly in the Legend and Miracle game categories, which have a broad user base, strong stability, and high ARPU values [2] - The company completed the acquisition of Zhejiang Shenghe in 2023, which contributed RMB 737 million in net profit in H1 2024, a 38 5% YoY increase, and is expected to reach new highs in profit contribution for 2024 [2] - The company's chairman has been increasing his shareholding since 2020, with three increases in 2024 alone, reaching a 14 77% stake by the end of Q3 2024, and the chairman and executives have pledged not to reduce their holdings for the next five years, demonstrating strong confidence in the company's long-term development [4] - Kaiying Network has a robust pipeline of new games, including "Liangshan Legend," "Taishang Butian Scroll," "Tomb Raider: Departure," "Douluo Dalu: Zhuxie Legend," "Dragon Nest World," and "Romance of the Three Kingdoms: The World Returns to the Heart," with a rich IP portfolio supporting its product diversification strategy [4] - The company is deeply involved in AIGC, with its self-developed "Xingyi" large model already enhancing multiple projects, and it has invested in an AI-driven 3D male-oriented romantic companion product "EVE," which has garnered over 1 million views on Bilibili and is expected to pioneer the male-oriented romantic companion market [4] Financial Forecasts - The company's revenue is expected to grow from RMB 4 295 billion in 2023 to RMB 7 055 billion in 2026, with a CAGR of 17 13% [5] - Net profit attributable to the parent company is projected to increase from RMB 1 462 billion in 2023 to RMB 2 236 billion in 2026, with a CAGR of 16 44% [5] - The company's ROE is forecasted to remain strong, ranging from 23 86% to 27 87% over the forecast period [5] - The P/E ratio is expected to decrease from 19 92x in 2023 to 13 03x in 2026, indicating potential undervaluation [5] Industry and Market Performance - The company's market capitalization stands at RMB 29 123 56 billion, with a circulating market capitalization of RMB 25 899 91 billion [3] - The stock price closed at RMB 13 53 on December 2, 2024, with a 52-week range of RMB 8 33 to RMB 14 55 [3] - The company's asset-liability ratio is 19 41%, and its net asset per share is RMB 2 81 [3]