XD INC(HK:02400) GF SECURITIES·2026-03-30 06:30Investment Rating - The report assigns a "Buy" rating to the company with a current price of HKD 63.90 and a fair value of HKD 77.44 [8]. Core Insights - The company has demonstrated strong growth in both its gaming and platform segments, with a notable increase in operational efficiency [3]. - For the fiscal year 2025, the company reported a revenue of RMB 5.764 billion, reflecting a year-on-year growth of 15.0%, and a net profit of RMB 1.535 billion, which is an increase of 89.2% [9]. - The company's self-developed games have shown excellent long-term performance, and the TapTap platform is expected to further drive growth [9]. Financial Projections - Revenue projections for the company are as follows: - 2024: RMB 5.012 billion - 2025: RMB 5.764 billion - 2026: RMB 7.666 billion - 2027: RMB 8.722 billion - 2028: RMB 9.346 billion - The growth rates for these years are projected at 47.9%, 15.0%, 33.0%, 13.8%, and 7.1% respectively [4]. - Non-GAAP net profit is expected to reach RMB 2.020 billion in 2026, RMB 2.367 billion in 2027, and RMB 2.689 billion in 2028, with growth rates of 24.1%, 17.1%, and 13.6% respectively [4]. Business Segments - The gaming segment generated revenue of RMB 3.796 billion in 2025, a year-on-year increase of 10.5%, while the TapTap platform revenue was RMB 1.968 billion, growing by 24.7% [9]. - The gross margin for the company improved to 73.8% in 2025, with the gaming segment's gross margin increasing from 62.6% to 67.4% [9]. Valuation - The report estimates the fair value of the gaming business at RMB 16.547 billion and the community business at RMB 17.271 billion, leading to an overall fair value of RMB 33.818 billion, approximately HKD 38.273 billion [9].