KINGNET(SZ:002517) SINOLINK SECURITIES·2024-05-05 02:00Investment Rating - The report maintains a "Buy" rating for the company [2][8][10] Core Views - The company reported a revenue of 4.3 billion RMB in 2023, a year-on-year increase of 15.3%, with a net profit of 1.46 billion RMB, up 42.6% year-on-year [2] - The first quarter of 2024 showed a revenue of 1.3 billion RMB, representing a 36.9% year-on-year growth, and a net profit of 430 million RMB, up 47.1% year-on-year [2] - The increase in revenue is attributed to the stable operation of long-term products and the successful launch of new games [2] - The company has a strong focus on new game launches and category expansion, with several games in the pipeline [2] Summary by Sections Financial Performance - 2023 revenue reached 4.3 billion RMB, with a 15.3% growth, driven by mobile games and information services [2][5] - The net profit margin increased to 34.0%, up 6.5 percentage points year-on-year, due to changes in revenue structure and reduced minority shareholder losses [2][5] - For 2024-2026, the projected net profits are 1.79 billion RMB, 2.07 billion RMB, and 2.30 billion RMB, respectively, with corresponding P/E ratios of 14.1, 12.2, and 11.0 [2][5] Game Development and Strategy - The company has signed a strategic cooperation agreement in October 2023 for the "Legend" IP, indicating a commitment to long-term game development [2] - Upcoming game titles include "Douluo Dalu: Zhu Xie Chuan Shuo" and "Tomb Raider: Start," which are expected to contribute to revenue growth [2] - The company is also exploring AI and MR fields, with a self-developed large model already in practical use [2] Market Position and Outlook - The company has a solid market position with a focus on expanding its game portfolio and enhancing user engagement [2] - The report emphasizes the importance of new game launches and the potential for revenue growth in the coming years [2]