Giant Network(SZ:002558) Guoyuan Securities·2024-05-08 10:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% in the next six months compared to the Shanghai Composite Index [10]. Core Insights - The company reported a steady increase in revenue and profit, with 2023 revenue reaching 2.924 billion RMB, a year-on-year increase of 43.50%, and a net profit of 1.086 billion RMB, up 27.67% year-on-year [2][4]. - The flagship mobile game "Original Journey" under the Journey IP generated over 300 million RMB in its first month and 1.5 billion RMB for the year, attracting over 15 million new users [3]. - The company is actively integrating AI technologies across its operations, enhancing productivity in areas such as art production and game development [4]. Financial Performance - In 2023, the company achieved a revenue of 2.924 billion RMB, with a net profit of 1.086 billion RMB, and a non-GAAP net profit of 1.373 billion RMB, reflecting growth rates of 43.50%, 27.67%, and 34.84% respectively [2][6]. - For Q1 2024, the company reported a revenue of 696 million RMB, a year-on-year increase of 37.21%, and a net profit of 352 million RMB, up 43.97% year-on-year [2]. - The projected net profits for 2024-2026 are 1.473 billion RMB, 1.624 billion RMB, and 1.756 billion RMB, with corresponding EPS of 0.75, 0.82, and 0.89 RMB [5][6]. Business Segments - The Journey IP continues to perform well, with multiple products maintaining stable user numbers and revenue. The casual competitive segment has solidified its category advantage, with "Ball Battle" seeing a significant increase in daily active users [3]. - The company has launched the iMagine AI painting platform, achieving a 50%-70% improvement in production efficiency for character and scene designs [4]. Valuation Metrics - The company’s projected P/E ratios for 2024, 2025, and 2026 are 15x, 13x, and 12x respectively, indicating a favorable valuation trend [5][6].