XD INC(02400) 中银证券·2024-04-02 16:00Investment Rating - The report maintains a Buy rating for the company [1] - The sector rating is Outperform [1] Core Views - The company's losses have significantly narrowed, with the new game Departure Maifen performing well [3] - The company's self-developed games are expected to contribute to future performance growth, and TapTap's active user base has returned to growth [4] - The company's gross margin has improved significantly, and various expenses have been reduced [4] Financial Performance - In 2023, the company's revenue was RMB 3.39 billion, a year-on-year decrease of 1.22%, while net loss attributable to the parent company was RMB -83 million, a year-on-year reduction of 85% [3] - The gross margin in 2023 was 61.03%, an increase of 7.54 percentage points year-on-year [6] - TapTap platform revenue in 2023 was RMB 1.3 billion, a year-on-year increase of 32.6%, with a gross margin of 84.18%, up 10.49 percentage points year-on-year [4] Game Performance - Game revenue in 2023 was RMB 2.09 billion, a year-on-year decrease of 14.7%, accounting for 61.7% of total revenue [4] - The new game Departure Maifen achieved monthly revenue exceeding RMB 100 million in February and is expected to launch in mainland China in May [4] - The company has four games in reserve, with Heartbeat Town and Iser Restart Day already obtaining licenses [4] Valuation and Forecast - The report forecasts net profit attributable to the parent company for 2024/2025/2026 to be RMB 332/567/804 million, with corresponding P/E ratios of 20.50/11.99/8.46 times [4] - Revenue for 2024/2025/2026 is expected to be RMB 4.153/4.789/5.434 billion, with year-on-year growth rates of 22.52%/15.33%/13.47% [5] Key Metrics - The company's total market capitalization is HKD 7.639 billion, with 480.46 million shares issued and outstanding [2] - The 3-month average daily trading volume is HKD 58.02 million [2] - The major shareholder, Happy Today Holding Limited, holds 32.8% of the shares [2]