SANQI HUYU(SZ:002555) Great Wall Securities·2025-09-03 10:41Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index in the next six months [4][16]. Core Views - The company is experiencing a recovery in profits due to reduced sales expenses and improved advertising efficiency through AI, with a notable 31.24% year-on-year increase in net profit for Q2 2025 [2][3]. - The company has a rich product pipeline, with several new games expected to contribute to revenue growth, particularly the self-developed game "Douluo Dalu: Hunting Soul World" which has already topped the iOS free chart [3][2]. - The financial outlook for the company is positive, with projected revenues and net profits increasing steadily from 2025 to 2027, alongside a decreasing P/E ratio, indicating potential for value appreciation [3][4]. Financial Summary - For 2023, the company reported revenue of 16,547 million yuan, with a slight growth rate of 0.9% year-on-year. The net profit attributable to the parent company was 2,659 million yuan, reflecting a decline of 10.0% year-on-year [1]. - The forecast for 2025 estimates revenue to reach 18,838 million yuan, with a growth rate of 8.0%, and net profit expected to be 2,931 million yuan, marking a 9.7% increase [1][3]. - The company's return on equity (ROE) is projected to remain strong, around 19.3% in 2025, while the earnings per share (EPS) is expected to grow from 1.20 yuan in 2023 to 1.33 yuan in 2025 [1][3]. Product and Market Position - The company has a diverse product portfolio, including self-developed and licensed games, with a significant focus on SLG and MMORPG genres. The upcoming releases are anticipated to enhance revenue streams [3][2]. - The company has successfully reduced its sales expenses by 19.3% in Q2 2025, contributing to improved profit margins and overall financial health [2][3].