G-bits(SH:603444) Great Wall Securities·2024-04-25 03:02Investment Rating - The investment rating for the company is "Buy" with a maintained rating, expecting a price increase of over 15% relative to the industry index in the next six months [11]. Core Insights - The company's revenue in Q1 2024 is gradually stabilizing, with a quarter-on-quarter increase of 5.60% but a year-on-year decrease of 18.97%. This is attributed to the lifecycle impact on existing products and the contribution from newly launched games [14][16]. - The company is expected to see revenue growth driven by the 8th anniversary event of "Wandao Mobile" and multiple new game launches in late 2023 and early 2024, which will begin to enter the revenue recovery phase from Q2 2024 [2][16]. - The company’s financial performance shows a decline in net profit, with Q1 2024 net profit at 2.53 billion yuan, down 17.35% year-on-year and 4.68% quarter-on-quarter, primarily due to increased expenses and the natural decline in contributions from existing games [15][16]. Financial Summary - Revenue for 2022 was 5,168 million yuan, projected to decrease to 4,185 million yuan in 2023, with a slight recovery to 4,219 million yuan in 2024 and further growth expected in subsequent years [1]. - The net profit for 2022 was 1,461 million yuan, expected to decline to 1,125 million yuan in 2023, with projections of 1,080 million yuan in 2024 and gradual recovery thereafter [1]. - The company's P/E ratio is projected to decrease from 11.1 in 2023 to 9.9 by 2026, indicating a potential increase in valuation attractiveness over time [1].