SANQI HUYU(002555) 长江证券·2024-04-26 03:02Investment Rating - The report maintains a "Buy" rating for the company [6]. Core Insights - The company reported a revenue of 16.547 billion (up 0.86% year-on-year) and a net profit attributable to shareholders of 2.659 billion (down 10.01% year-on-year) for 2023. The fourth quarter of 2023 saw a revenue of 4.504 billion (down 4.74% year-on-year) and a net profit of 466 million (down 33.17% year-on-year) [4][5]. - The company anticipates a revenue growth of approximately 25% in the first quarter of 2024, with an expected net profit of around 600 to 650 million [4][5]. - The company has a rich product pipeline and is actively integrating AI into its operations, focusing on the growth potential of mini-games and the performance of upcoming products [5]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 16.547 billion, with a net profit of 2.659 billion and a non-recurring net profit of 2.497 billion, reflecting a decline of 10.01% and 13.38% year-on-year, respectively. The fourth quarter of 2023 reported a revenue of 4.504 billion and a net profit of 466 million, marking a year-on-year decline of 33.17% [4][5]. - The company expects a revenue increase of over 25% in Q1 2024, translating to a revenue of over 4.7 billion, with a net profit growth of approximately 30%-40% quarter-on-quarter [5]. Product Development and Market Position - The company has launched several new games, including "Seeking the Great Thousand" and "Soul Chapter," which have contributed to revenue growth in Q4. The mini-game "Seeking the Great Thousand" remains a top seller in the WeChat mini-game rankings [4][5]. - The company has over 40 self-developed or agency mobile games in its pipeline, covering various genres, which are expected to drive future revenue growth [5]. Cost and Expense Management - The company faced increased marketing expenses due to the launch of new products, with Q4 sales expenses exceeding 2.7 billion, leading to a sales expense ratio increase of 6.7 percentage points year-on-year to 60.6% [4][5]. - R&D personnel decreased by 11.1% year-on-year, resulting in a slight decline in R&D expense ratio [4][5].