YAOJI TECHNOLOGY(SZ:002605) KAIYUAN SECURITIES·2025-05-05 06:35Investment Rating - The investment rating for the company is "Buy" (maintained) [1][3] Core Views - The company demonstrated resilience in its performance, with a notable improvement in Q1 2025 compared to the previous quarter, driven by a recovery in its main business and a focus on new product categories in casual gaming and card business [3][4] - The revenue for 2024 was reported at 3.271 billion yuan, a year-on-year decrease of 24.0%, while the net profit attributable to the parent company was 539 million yuan, down 4.2% year-on-year [3][4] - The company is expected to see a gradual recovery in its performance, with projected net profits for 2025, 2026, and 2027 at 651 million, 720 million, and 768 million yuan respectively, indicating a positive growth trajectory [3][4] Financial Performance Summary - In Q1 2025, the company achieved a revenue of 779 million yuan, a year-on-year decrease of 20.67% but a quarter-on-quarter increase of 61.66% [3][4] - The gross margin improved to 44.27% in Q1 2025, up 6.47 percentage points year-on-year, attributed to a higher proportion of high-margin gaming business and price increases in the card business [4] - The company maintained effective cost control, with sales expenses down 12.7% and R&D expenses down 21.9% year-on-year in Q1 2025 [4] Business Outlook - The gaming business remains solid, with leading market positions in products like "Finger Fishing" and new growth potential from card games and strategic investments in platforms like "Card Tao" for trading star cards [5] - The digital marketing business is expected to recover as the structural adjustments are completed and the macroeconomic environment improves, leading to increased demand in the advertising market [5] - The company is expanding its production capacity for playing cards, which is anticipated to support overall performance as the new production base comes online [5]