SANQI HUYU(SZ:002555) Great Wall Securities·2025-05-08 07:03Investment Rating - The report maintains a "Buy" rating for the company, expecting the stock price to outperform the industry index by more than 15% in the next six months [4]. Core Views - The company experienced pressure on its performance in Q1 2025, with a year-on-year revenue decline of 10.67% to 4.243 billion yuan, and a net profit decrease of 10.87% to 549 million yuan. This was attributed to the early promotional phase of several new games and the natural decline in revenue from mature products [2][3]. - The company has a rich product pipeline, with new games like "Time Grocery Store" and "Heroes No Flash" showing strong market performance, indicating potential for future growth [3]. - The company is expected to achieve revenues of 19.033 billion yuan, 20.533 billion yuan, and 21.769 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding net profits of 2.839 billion yuan, 3.156 billion yuan, and 3.482 billion yuan [3][4]. Financial Summary - For 2023, the company reported a revenue of 16.547 billion yuan, with a projected growth rate of 0.9% year-on-year. The net profit for the same year was 2.659 billion yuan, reflecting a year-on-year decline of 10% [1][2]. - The company's return on equity (ROE) is projected to be 20.6% in 2023, gradually decreasing to 17.4% by 2027 [1][3]. - The price-to-earnings (P/E) ratio is expected to decrease from 13.0 in 2023 to 9.9 by 2027, indicating a potentially more attractive valuation over time [1][3].