KINGNET(SZ:002517) Soochow Securities·2024-05-02 01:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's revenue for 2023 reached 4.295 billion yuan, a year-on-year increase of 15.30%, with a net profit attributable to shareholders of 1.462 billion yuan, up 42.57% year-on-year, indicating that performance fell within the forecast range [2][3] - The strong growth in revenue and profit is driven by both new and existing games, with successful titles such as "Original Legend" and "Sword of Legends" contributing significantly [3] - The company has a robust pipeline of new games and is actively expanding its global presence, achieving notable success in overseas markets [3] - The company is enhancing its research and operational capabilities, with a focus on integrating AI into its development processes [3] Financial Performance and Forecast - The company achieved a total revenue of 4.295 billion yuan in 2023, with projections for 2024, 2025, and 2026 at 5.408 billion yuan, 6.027 billion yuan, and 6.576 billion yuan respectively, reflecting a growth rate of 25.91%, 11.43%, and 9.12% [2][4] - The net profit attributable to shareholders is forecasted to be 1.814 billion yuan in 2024, 2.082 billion yuan in 2025, and 2.324 billion yuan in 2026, with corresponding growth rates of 24.10%, 14.78%, and 11.63% [2][4] - The earnings per share (EPS) are projected to be 0.84 yuan for 2024, 0.97 yuan for 2025, and 1.08 yuan for 2026, with current price-to-earnings (P/E) ratios of 14, 12, and 11 respectively [4][8] Market Data - The closing price of the company's stock is 11.79 yuan, with a market capitalization of approximately 25.378 billion yuan [5] - The price-to-book (P/B) ratio stands at 4.47 [5] Operational Insights - The company reported a gross margin of 83.47% in 2023, with expectations to maintain a high level of profitability due to increased self-developed game revenue and reduced sharing costs [3][4] - The company has a strong focus on marketing and promotion for new game launches, which has led to an increase in sales expenses [3][4]