XD INC(HK:02400) Shenwan Hongyuan Securities·2025-09-30 12:57Investment Rating - The report initiates coverage with a "Buy" rating for the company [3][8]. Core Insights - The report emphasizes the "Content + Platform" flywheel effect, highlighting the value of the TapTap platform and the company's self-developed games [7][10]. - The gaming industry is experiencing a recovery in license supply, which, combined with changes in distribution channels, positions TapTap as a significant promotional channel for games [20][27]. - The company's self-developed game capabilities are gradually being validated, with successful titles contributing to revenue growth [51]. Financial Data and Profitability Forecast - Revenue projections for the company are as follows: 2025E at 6,431 million RMB, 2026E at 7,927 million RMB, and 2027E at 9,059 million RMB, with year-on-year growth rates of 28%, 23%, and 14% respectively [6][8]. - Adjusted net profit attributable to ordinary shareholders is forecasted to be 1,702 million RMB in 2025E, 2,226 million RMB in 2026E, and 2,760 million RMB in 2027E, with significant growth rates of 94%, 31%, and 24% respectively [6][8]. - The report employs the SOTP valuation method, estimating the company's market value at 549 billion HKD [8]. TapTap Business Growth Drivers - The growth of TapTap is driven by an increase in domestic game licenses, advancements in self-developed games, and expansion into PC and international markets [9][35]. - The platform has established a developer-user flywheel effect, with over 240,000 developers and 300,000 games launched, leading to a significant increase in monthly active users (MAU) [35][41]. - The report anticipates that TapTap's advertising revenue could exceed 5 billion RMB by 2030, driven by user growth and improved monetization strategies [11][49]. Self-Developed Game Capabilities - The company has successfully adjusted its product cycle since 2024, focusing on strong game categories and validating its strategic direction [51]. - Upcoming titles such as "伊瑟" and "心动小镇" are expected to contribute positively to the company's pipeline and revenue [51][40].