Investment Rating - The investment rating for the company is Neutral, with a target price adjusted to HKD 29.00, indicating a potential upside of 13.9% from the current price of HKD 25.45 [1][14]. Core Views - The report highlights a downward revision of the 2023 revenue and profit expectations for the company, projecting a total revenue of RMB 7 billion, a year-on-year decline of 8%, primarily due to adjustments in online business channels and delays in key IP projects. The adjusted net profit is expected to be RMB 1.1 billion, a 20% decrease year-on-year, with a profit margin of 15%, down by 3 percentage points [1][2]. - Despite the challenges, the company maintains a rich reserve of IP projects for 2024, with anticipated strong performance from key adaptations and a robust pipeline of popular IP adaptations [2][3]. Financial Summary - The company’s projected financials for 2023 include: - Revenue: RMB 7,004 million, down 8.2% year-on-year - Adjusted net profit: RMB 1,083 million, down 20.1% year-on-year - Earnings per share (EPS): RMB 1.06, with a projected decline of 28% [3][12]. - For 2024, the company expects a revenue increase to RMB 7,579 million, with a net profit forecast of RMB 1.387 billion, reflecting a recovery in profitability [3][12]. Business Operations - The online business segment is projected to generate RMB 3.98 billion in 2023, a decline of 9% year-on-year, while the IP operation revenue is expected to decrease by 8% due to project delays [2][3]. - The company is exploring short drama formats, which may provide additional revenue opportunities, as evidenced by the success of the fantasy short drama "万道龙皇" [2][3]. Valuation - The report suggests a valuation based on a 20x price-to-earnings ratio for 2024, leading to a target price adjustment from HKD 36 to HKD 29. The current price corresponds to a 1.2x PEG ratio for 2024, compared to the industry average of 1.0x [2][3].
AI投入及项目递延或致利润承压；2024年重点IP项目储备丰富