SANQI HUYU(SZ:002555) Changjiang Securities·2025-11-01 23:45Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Insights - The company reported Q3 2025 results with revenue of 3.975 billion yuan, a year-on-year decrease of 3.23%, and a net profit attributable to shareholders of 944 million yuan, an increase of 49.24% year-on-year. The non-recurring net profit was 873 million yuan, up 44.97% year-on-year. Despite a slight decline in revenue, the company continues to optimize its investment and improve profit margins [2][4][6]. Summary by Sections Financial Performance - In Q3 2025, the company achieved revenue of 39.75 billion yuan, a slight decline of 3.23% year-on-year. The net profit attributable to shareholders was 9.44 billion yuan, reflecting a significant increase of 49.24% year-on-year. The non-recurring net profit was 8.73 billion yuan, up 44.97% year-on-year [2][4]. Product Development and Market Strategy - The company has a rich product pipeline with over twenty high-quality games in genres such as MMORPG, SLG, card games, and simulation management. Notable new releases include "Douluo Dalu: Hunting Soul World," which contributed to revenue growth despite a natural decline in existing game revenues [6][11]. Cost Management and Profitability - The company has optimized its resource allocation and marketing strategies, leading to improved operational efficiency. Q3 sales expenses decreased to 1.79 billion yuan, down 5.5 million yuan year-on-year and 2 million yuan quarter-on-quarter, achieving the lowest sales expense ratio since 2019 at 45.0% [11][12]. Shareholder Returns - The company plans to distribute a cash dividend of 2.1 yuan for every 10 shares, maintaining a high dividend payout ratio of approximately 59% of net profit for the first three quarters of 2025. The annual dividend yield is estimated at 4.8% based on the closing price on October 30, 2025 [11][12]. Future Outlook - The company is expected to achieve net profits of 3.09 billion yuan and 3.38 billion yuan in 2025 and 2026, respectively, with corresponding price-to-earnings ratios of 15.0 and 13.7 times. The "Buy" rating is maintained based on these projections [11][12].