BAIOO(HK:02100) East Money Securities·2024-04-09 16:00Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market index [5]. Core Views - The company's financial performance in 2023 was under pressure due to the absence of new game launches and the natural decline in revenue from existing games. The total revenue for 2023 was 783 million, a year-over-year decrease of 16.6%, with a net loss attributable to shareholders of 31 million, compared to a profit of 10 million in the previous year [3][9]. - The company is focusing on product development and has seven games in the pipeline, with "Aola Star 2" expected to launch within the year. This game is anticipated to leverage its existing fan base and enhance user engagement [4][9]. - The company is restructuring its global publishing team to accelerate its overseas expansion, with plans to release international versions of existing games and prepare new titles for foreign markets [4][9]. Financial Summary - The company reported a sales cost of 465 million in 2023, down 19.6% year-over-year, leading to a gross margin increase to 40.6%. The average quarterly active users were 7.3 million, a decrease of 27.7% year-over-year, while the average revenue per paying user increased by 15.9% to 176.1 [3][10]. - The revenue projections for 2024-2026 are 1,004 million, 1,104 million, and 1,187 million respectively, with expected net profits of 23 million, 35 million, and 54 million. The earnings per share (EPS) are projected to be 0.01, 0.01, and 0.02 respectively, with corresponding P/E ratios of 27, 18, and 12 [9][10].