IDREAMSKY(01119) 东吴证券·2024-05-02 05:32Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company achieved a revenue of 1.916 billion yuan in 2023, a year-on-year decrease of 29.91%, but managed to narrow its net loss significantly to 453.38 million yuan, compared to a loss of 2.492 billion yuan in 2022, and reported an adjusted profit of 140 million yuan [2][3] - The revenue decline is attributed to the company's focus on high-quality games, leading to the discontinuation of non-core games, which resulted in a 26.95% year-on-year decrease in gaming operations revenue to 1.849 billion yuan [2] - The company has successfully reduced costs and improved efficiency, with a gross margin increase of 19.74 percentage points to 35.14% in 2023, driven by a focus on premium game operations and enhanced self-channel operations [2] - The company is optimistic about the long-term operation of existing games and the potential performance of new games, with the self-developed game "Kara Bichu" showing strong early engagement metrics [2][3] Summary by Sections Financial Performance - Total revenue for 2023 was 1.916 billion yuan, down 29.91% year-on-year, while adjusted profit turned positive at 140 million yuan [2] - The company expects revenue to rebound to 2.335 billion yuan in 2024, with a projected growth of 21.84% [3] - The net profit forecast for 2024 is 230.93 million yuan, with further increases expected in subsequent years [3] Earnings Forecast and Valuation - The EPS forecast for 2024, 2025, and 2026 is adjusted to 0.15, 0.32, and 0.38 yuan respectively, with corresponding P/E ratios of 18, 8, and 7 [3] - The report highlights the potential for earnings elasticity to be gradually realized as the new game cycle commences [3] Market Data - The closing price of the stock is 2.93 HKD, with a market capitalization of approximately 4.613 billion HKD [4] - The stock has a price-to-book ratio of 2.80 [4] Basic Data - The company has a net asset value per share of 1.05 yuan and a debt-to-asset ratio of 52.98% [5]