KINGNET(SZ:002517) Guotou Securities·2025-10-31 14:11Investment Rating - The report assigns a "Buy-A" rating to the company, with a 6-month target price of 29.75 CNY [4]. Core Insights - The company reported a record high quarterly revenue of 1.497 billion CNY in Q3 2025, representing a year-on-year increase of 9.08%. The net profit attributable to shareholders reached 633 million CNY, up 34.51% year-on-year [1]. - The growth in revenue is primarily driven by the "Legend Box," which has increased its contribution to the company's revenue, leading to an improved gross margin of 84.19%, up 3.12 percentage points from the previous quarter [1]. - The company has a robust pipeline of new games, including titles based on popular IPs, which is expected to support future revenue growth [2]. - The company is actively developing AI capabilities, which may create competitive advantages in the gaming industry [3]. Financial Performance Summary - For the first three quarters of 2025, the company achieved a total revenue of 4.075 billion CNY, a year-on-year increase of 3.75%, and a net profit of 1.583 billion CNY, up 23.70% year-on-year [1]. - The report forecasts revenues of 5.936 billion CNY, 6.986 billion CNY, and 7.442 billion CNY for 2025, 2026, and 2027, respectively, with net profits projected at 2.154 billion CNY, 2.536 billion CNY, and 2.790 billion CNY for the same years [8]. - The company's operating efficiency is reflected in its cost control, with sales, management, and R&D expense ratios showing favorable trends [1][2].