XD INC(HK:02400) Changjiang Securities·2026-03-31 09:50Investment Rating - The investment rating for the company is "Buy" and is maintained [5]. 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 year-on-year [3][6]. - The gaming business, particularly titles like "Heart Town" and "Ragnarok M: Original Server," showed strong performance, contributing to stable revenue and significant profit margin improvements. In the second half of 2025, TapTap's user growth accelerated slightly, and the platform's advertising effectiveness improved due to upgrades in the advertising system [3][6]. - Long-term products like "Heart Town" are performing well, and with the launch of TapTap's PC version and TapTap Maker, the commercial value of TapTap is expected to continue to be released [3][6]. Summary by Relevant Sections Financial Performance - In 2025, the company achieved a revenue of 5.764 billion (RMB), with a net profit of 1.535 billion (RMB) and an adjusted net profit of 1.629 billion (RMB) [3][6]. - For the second half of 2025, the company reported a revenue of 2.682 billion (RMB), a decrease of 3.9% year-on-year and 13.0% quarter-on-quarter, with a net profit of 780 million (RMB), up 28.7% year-on-year and 3.4% quarter-on-quarter [3][6]. Gaming Business - The gaming revenue for the second half of 2025 decreased by 11.4% year-on-year to 1.725 billion (RMB), with a significant contribution from "Ragnarok M: Original Server" in overseas markets, which saw a 176% year-on-year increase in revenue [6]. - 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 [6]. TapTap Platform - TapTap's user growth slightly accelerated, with a monthly active user count of 46.323 million, up 3.3% year-on-year and 6.2% quarter-on-quarter [6]. - The revenue from TapTap in the second half of 2025 was 957 million (RMB), reflecting a year-on-year increase of 13.4% and a quarter-on-quarter decrease of 5.3% [6]. - The gross margin for the TapTap platform increased by 3.0 percentage points year-on-year to 88.9% [6]. Operational Efficiency - The company has improved operational efficiency, with a slight decrease in sales expenses to 692 million (RMB) in the second half of 2025, and the sales expense ratio increased to 25.8% [6]. - The overall gross margin for the company increased by 3.7 percentage points year-on-year to 74.6%, with the adjusted net profit margin continuing to improve to 31.1% [6].