IGG(HK:00799) Guoyuan Securities2·2026-01-14 09:30Investment Rating - The report assigns a "Buy" rating to IGG, with a target price of HKD 4.77, indicating a potential upside of 24.6% from the current price of HKD 3.83 [1][5]. Core Insights - The company has demonstrated resilience in its business fundamentals, achieving total revenue of HKD 2.72 billion in the first half of the year, which is roughly flat compared to the same period last year, despite a challenging macroeconomic environment and intense competition in the gaming industry [7][8]. - The application of AI technology and optimization in the distribution process has led to significant cost and expense control, resulting in a reduction in the ratio of R&D and administrative expenses [7][8]. - The flagship product, "King of Kingdoms," continues to perform strongly, contributing HKD 1.15 billion in revenue in the first half of 2025, maintaining its status as a cornerstone of IGG's business [8]. Summary by Relevant Sections Revenue and Profitability - Total revenue is projected to grow from HKD 5.27 billion in 2023 to HKD 6.48 billion in 2026, reflecting a compound annual growth rate (CAGR) of approximately 7.0% [6]. - Net profit is expected to increase from HKD 67.5 million in 2023 to HKD 637.3 million in 2026, with a net profit margin stabilizing around 9.84% in 2026 [6][13]. Product Strategy - IGG is focusing on a diversified product strategy, combining long-term operations with continuous innovation. The company is actively exploring non-SLG (Simulation Game) segments, with new products like "Tycoon Master" showing promising market performance [4][9]. - The company has successfully built a product matrix that mitigates the lifecycle risks associated with single products, leveraging its global operational capabilities to maximize user acquisition and operational efficiency [10]. Market Position and Growth Potential - IGG's established global operational network allows it to effectively penetrate over 200 countries, adapting to local market preferences and regulations [10]. - The report highlights the potential for further growth in the non-SLG market, with the successful launch of "Tycoon Master" indicating the company's ability to innovate and capture new user segments [9][10].