XD INC(HK:02400) Guoxin Securities·2026-03-30 13:40Investment Rating - The report maintains an "Outperform" rating for the company [3][5][22] Core Insights - The international version of the game "Heart Town" has shown excellent performance, significantly contributing to revenue growth, while the domestic version faced challenges due to high base effects [1][8] - The company has acquired the IP for the "Torchlight" game series, which is expected to enhance profitability in the future [1][8] - TapTap platform revenue increased by 13% year-on-year, driven by improved user engagement and advertising algorithms, although growth has slowed due to limited new game launches in the second half of the year [1][8] Revenue Summary - The company achieved a revenue of 2.68 billion yuan in the second half of the year, a decrease of 4% year-on-year. Game revenue was 1.7 billion yuan, down 11% year-on-year, while TapTap platform revenue was 960 million yuan, up 13% year-on-year [1][8] Profit Summary - Adjusted net profit was 830 million yuan, with a net profit margin of 31%, an increase of 8 percentage points year-on-year. Adjusted EBITDA was 870 million yuan, with an EBITDA margin rising from 26% to 32% [2][9] - The gross profit margin improved to 75%, up 4 percentage points year-on-year, primarily due to strong overseas performance of the RO game and an increased share of higher-margin TapTap revenue [2][9] Shareholder Returns - The company repurchased shares worth 210 million HKD, accounting for 0.6% of total shares [10] Financial Forecasts - Revenue projections for 2026 and 2027 are maintained at 7.3 billion and 8.2 billion yuan, respectively, with an additional forecast of 9.1 billion yuan for 2028. Adjusted net profits for 2026 and 2027 are projected at 2.2 billion and 2.6 billion yuan, respectively [3][22]