PWRD(SZ:002624) ZHESHANG SECURITIES·2025-12-23 08:50Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Viewpoints - The company is a well-established game developer known for heavy-duty game development, with its previous title "Honkai: Star Rail" achieving both reputation and revenue success. However, it faced challenges in recent years due to being at the bottom of the product cycle, organizational restructuring, and divesting some traditional assets, which impacted profit levels and stock prices. Most of these issues have now been resolved, and the upcoming title "Eternal Ring" is expected to boost revenue and profits, marking an opportune investment time [1][2][3] Summary by Relevant Sections Revenue Expectations - The company anticipates that "Eternal Ring" will exceed market expectations in terms of revenue. The game is expected to generate over 5 billion yuan in its first 12 months, based on its quality and market feedback, compared to "Honkai: Star Rail," which generated 4 billion yuan over two years [2][5] Financial Health - The company has cleaned up its balance sheet, having divested underperforming assets, leading to a significant reduction in inventory to 1.182 billion yuan, the lowest since 2022, and goodwill at 221 million yuan, the lowest since its A-share listing [2][3] Organizational Efficiency - The company has improved its organizational structure, transitioning to a studio-based model that enhances development and operational efficiency, focusing on a product-centric approach [3] Catalysts and Indicators - Key indicators to watch include the launch date of "Eternal Ring" and its revenue post-launch. Catalysts include the December 2025 promotional video release, small-scale offline testing at the end of 2025, and the potential official launch in Q2 2026 [4] Unique Insights - The market generally expects "Eternal Ring" to perform similarly to or slightly better than "Honkai: Star Rail," but the report suggests it may exceed expectations in both revenue and profit margins, potentially reaching 50% due to its high quality and effective marketing strategies [5][6] Financial Projections - Revenue projections for the company are as follows: 2025 - 6.97 billion yuan, 2026 - 10.921 billion yuan, and 2027 - 11.207 billion yuan. Corresponding net profits are expected to be 820 million yuan, 1.83 billion yuan, and 2.17 billion yuan, with P/E ratios of 37, 17, and 14 respectively [11][39]