G-bits(SH:603444) Xinda Securities·2024-04-25 11:00Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The company's revenue for Q1 2024 was 927 million yuan, a year-on-year decrease of 18.97%. The net profit attributable to the parent company was 253 million yuan, down 17.35% year-on-year. The net profit excluding non-recurring items was 198 million yuan, a decline of 29.54% year-on-year [1] - Core product revenues have stabilized, with games like "Wandao Mobile" and "Yinian Xiaoyao" experiencing natural declines in revenue during their lifecycle. The online game "Fei Ba Long Qi Shi" launched in August 2023 has reached breakeven. New games launched at the end of 2023 and in Q1 2024 are expected to contribute to revenue growth, although they have not yet turned profitable due to mismatched revenues and expenses [1] - The overseas segment has shown strong growth, with Q1 2024 overseas revenue reaching 139 million yuan, a year-on-year increase of 146.68%. New games launched overseas include "Fei Ba Long Qi Shi (Overseas Version)" and "Monster Never Cry (European and American Version)" [1] Financial Projections - Revenue projections for 2024-2026 are 3.992 billion yuan, 4.425 billion yuan, and 4.949 billion yuan, with year-on-year growth rates of -4.6%, 10.8%, and 11.9% respectively. Net profit attributable to the parent company is projected to be 1.075 billion yuan, 1.209 billion yuan, and 1.356 billion yuan, with year-on-year growth rates of -4.4%, 12.4%, and 12.2% respectively [1][4] - The company's gross margin is expected to remain stable around 88.2% to 88.6% over the forecast period [4] - The price-to-earnings ratio (P/E) is projected to decrease from 11.54 in 2024 to 9.15 in 2026, indicating a potentially attractive valuation as earnings recover [4]