Giant Network(SZ:002558) Xinda Securities·2024-05-05 14:30Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company's revenue for 2023 reached 2.924 billion, a year-on-year increase of 43.5%, with a net profit attributable to the parent company of 1.086 billion, up 27.67% year-on-year [1] - The flagship new game "Original Journey" launched successfully, generating over 300 million in its first month and exceeding 1.5 billion in total revenue for the year, with cumulative users surpassing 15 million [1] - The company has seen strong performance from new games and stable performance from existing games, contributing to impressive financial results [1] - The company is actively exploring AI integration in game development, which has significantly reduced costs and improved efficiency [1] Financial Performance Summary - Total revenue for 2023 was 2.924 billion, with a year-on-year growth of 43.5% [2] - Net profit attributable to the parent company for 2023 was 1.086 billion, reflecting a 27.67% increase year-on-year [2] - The company expects revenues for 2024, 2025, and 2026 to be 3.343 billion, 3.758 billion, and 4.097 billion respectively, with year-on-year growth rates of 14.3%, 12.4%, and 9.0% [2] - The projected net profit for 2024, 2025, and 2026 is 1.545 billion, 1.738 billion, and 1.933 billion respectively, with growth rates of 42.2%, 12.5%, and 11.2% [2] Cost Structure and Efficiency - The sales expense ratio, management expense ratio, and R&D expense ratio for Q1 2024 were 29.01%, 6.00%, and 22.14% respectively, showing significant decreases compared to the previous year [1] - The company has implemented various AI tools and platforms to enhance game development and operations, leading to a gradual optimization of overall expense ratios [1]