XD INC(HK:02400) Changjiang Securities·2026-03-30 15:21Investment Rating - The investment rating for the company is "Buy" and is maintained [7] Core Insights - The company reported a revenue of 5.764 billion (RMB) for 2025, representing a year-on-year increase of 15.0%. The net profit attributable to shareholders was 1.535 billion (RMB), up 89.2% year-on-year, while the adjusted net profit was 1.629 billion (RMB), reflecting an 85.7% increase [2][4] - The gaming business saw strong performance from titles like "Heart Town" and "Ragnarok M: Beginner's Server," contributing to stable revenue and significant profit margin improvements. The user growth on TapTap accelerated slightly in the second half of 2025, alongside increased user engagement and enhanced advertising effectiveness [2][4] Summary by Relevant Sections Financial Performance - In the second half of 2025, the company achieved a revenue of 2.682 billion (RMB), a decrease of 3.9% year-on-year and 13.0% quarter-on-quarter. The net profit attributable to shareholders was 780 million (RMB), up 28.7% year-on-year and 3.4% quarter-on-quarter [4] - The adjusted net profit for the same period was 833 million (RMB), reflecting a year-on-year increase of 30.2% and a quarter-on-quarter increase of 4.7% [4] Gaming Business - The gaming revenue in the second half of 2025 decreased by 11.4% year-on-year to 1.725 billion (RMB), and a quarter-on-quarter decline of 16.7%. However, the overseas performance of "Ragnarok M: Beginner's Server" showed a strong increase, with game operation revenue up 176% year-on-year to 220 million (RMB) [7] - The gross margin for the gaming business improved by 2.2 percentage points year-on-year to 66.8% due to a decrease in the proportion of lower-margin agency products and an increase in self-developed game revenue [7] TapTap Platform - TapTap's user growth slightly accelerated, with the monthly active users (MAU) in China increasing by 3.3% year-on-year and 6.2% quarter-on-quarter to 46.323 million. The platform's revenue in the second half of 2025 was 957 million (RMB), up 13.4% year-on-year but down 5.3% quarter-on-quarter [7] - The gross margin for the TapTap platform improved by 3.0 percentage points year-on-year to 88.9% [7] Operational Efficiency - The company has seen continuous improvement in operational efficiency, with a slight decrease in sales expenses to 692 million (RMB) in the second half of 2025. The sales expense ratio increased slightly to 25.8% [7] - The overall gross margin for the company improved by 3.7 percentage points year-on-year to 74.6%, with the adjusted net profit margin continuing to rise to 31.1% [7] Long-term Product Performance - The overseas version of "Heart Town" launched in January 2026 has shown promising performance, potentially becoming a new long-term product support. The company has also prepared new games like "Ragnarok RO: Guardian of Eternal Love 2" and is focusing on the progress of testing and launching [7] - The launch of TapTap PC version and TapTap Maker aims to enhance service for players and developers, contributing to the growth of the TapTap ecosystem [7]