G-bits(SH:603444) HTSC·2025-03-28 03:34Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company achieved a revenue of 3.696 billion RMB in 2024, a year-over-year decrease of 11.69%, and a net profit attributable to shareholders of 944.92 million RMB, down 16.02% year-over-year [1] - The fourth quarter saw a revenue of 877 million RMB, slightly up by 0.08% year-over-year and up 2.19% quarter-over-quarter, with a net profit of 287 million RMB, which is an increase of 8.13% year-over-year and a significant increase of 105.78% quarter-over-quarter [1] - The company announced a cash dividend of 35 RMB per 10 shares, with an expected total cash dividend of 718 million RMB for 2024, representing 76% of the net profit for the year, resulting in a dividend yield of 4.7% [1] Revenue and Profitability - The company’s revenue from the game "Wandao" reached 1.119 billion RMB in 2024, an increase of 3.93% year-over-year, while "Wandao Mobile" generated 2.073 billion RMB, down 11.4% year-over-year [2] - The overseas revenue increased by 83.92% to 500 million RMB, attributed to the launch of new products in international markets [2] - The gross margin for 2024 slightly decreased by 0.67 percentage points to 87.86%, maintaining overall stability [4] Cost Structure - The report indicates a decrease in the issuance expense ratio in Q4, contributing to improved profitability, while the R&D expense ratio increased due to a rise in personnel [4] - The sales, management, and R&D expense ratios for 2024 were 26.53%, 8.45%, and 20.50%, respectively, with year-over-year changes of -0.41%, +0.92%, and +4.27% [4] Future Outlook - The company is expected to launch new games, including "Wanjian Changsheng," which has already shown promising rankings in the App Store, and is anticipated to contribute to revenue growth in 2025 [3] - The report projects net profits of 1.176 billion RMB for 2025, 1.320 billion RMB for 2026, and 1.449 billion RMB for 2027, with a target price set at 294.84 RMB based on an 18X PE ratio for 2025 [5]