XD INC(02400) 华泰证券·2025-03-30 06:05Investment Rating - The report maintains a "Buy" rating for the company with a target price of 42.89 HKD [7][12]. Core Insights - The company's 2024 annual report shows revenue of 5.012 billion RMB, a year-on-year increase of 47.9%, and a net profit of 890 million RMB, marking a turnaround from losses [1][6]. - The growth in 2024 is primarily driven by a 64.2% increase in gaming revenue, supported by self-developed games such as "Let's Go Muffin," "Heart Town," and "Lily of the Valley" [1][2]. - The company has improved its gross margin by 8.4 percentage points to 69.4%, with the gaming segment's gross margin rising by 15.9 percentage points to 62.6% [1][2]. - The company plans to distribute dividends for the first time, proposing a dividend of 0.4 HKD per share [1]. Revenue and Profit Forecast - The company is expected to achieve a net profit of 1.021 billion RMB in 2025, with projections of 10.2 billion RMB and 12.1 billion RMB for 2025 and 2026, respectively [4][20]. - The gaming business is projected to generate revenues of 3.5 billion RMB in 2025 and 3.6 billion RMB in 2026, with a gross margin of 62% [12][20]. Taptap Platform Performance - The Taptap platform's average monthly active users (MAU) in 2024 are expected to reach 44.05 million, a 23% year-on-year increase, with projected revenue of 1.58 billion RMB, up 21.6% [3][4]. - The platform's gross margin is anticipated to slightly increase to 84.3% in 2024, supported by marketing activities and new game releases [3][4]. Valuation Metrics - The report employs a Sum-of-the-Parts (SOTP) valuation method, assigning a 5.5x price-to-sales (PS) multiple for the Taptap platform and a 17.4x price-to-earnings (PE) multiple for the gaming business [4][12]. - The target market capitalization is estimated at 19.585 billion RMB, translating to a target price of 42.89 HKD per share [12][14].