KINGNET(SZ:002517) Haitong Securities·2024-05-03 04:02Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [2][6]. Core Views - The company has shown impressive revenue and profit growth in 2023 and Q1 2024, with a revenue of 4.295 billion yuan in 2023, representing a year-on-year increase of 15.3%, and a net profit of 1.462 billion yuan, up 42.6% year-on-year. In Q1 2024, revenue reached 1.308 billion yuan, a 36.93% increase year-on-year, and net profit was 426 million yuan, growing 47.06% year-on-year [5][6]. - The company has completed its share repurchase plan, and executives have shown confidence in the company's future by increasing their holdings [6]. - The main business continues to perform well, with a strong pipeline of new products expected to drive growth in 2024 [6][10]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 4.295 billion yuan and a net profit of 1.462 billion yuan, with significant growth rates of 15.3% and 42.6% respectively. For Q1 2024, revenue was 1.308 billion yuan, up 36.93%, and net profit was 426 million yuan, up 47.06% [5][7]. - The company has a robust dividend policy, having implemented a mid-term dividend of 213 million yuan in 2023 and plans to distribute 1 yuan per 10 shares in 2024 [5][6]. Business Developments - The company has successfully launched several new games, including "The Legend of Sword and Fairy: A New Beginning" and "Stone Age: Awakening," which have performed well. Upcoming titles include "Tomb Raider: Journey" and "Douluo Continent: Legend of the Evil," which are expected to contribute to revenue growth in 2024 [6][10]. - The acquisition of a 29% minority stake in Zhejiang Shenghe is anticipated to enhance the company's overall performance [6]. Earnings Forecast and Valuation - The company is projected to achieve earnings per share (EPS) of 0.90 yuan, 1.07 yuan, and 1.28 yuan for 2024, 2025, and 2026 respectively. The estimated price-to-earnings (P/E) ratio for 2024 is set between 19 and 21 times, indicating a reasonable value range of 17.10 to 18.90 yuan per share [6][10].