KINGNET(SZ:002517) Guohai Securities·2024-05-13 11:30Investment Rating - Buy (Maintained) [1] Core Views - The company's 2023 performance showed significant growth with revenue reaching 4.295 billion yuan, a year-on-year increase of 15.30%, and net profit attributable to the parent company of 1.462 billion yuan, a year-on-year increase of 42.57% [2] - The company's 2024Q1 performance continued to accelerate with revenue of 1.308 billion yuan, a year-on-year increase of 36.93%, and net profit attributable to the parent company of 426 million yuan, a year-on-year increase of 47.06% [2] - The company has a rich product matrix for 2024, which is expected to open a new product cycle [7][8][9] Business Performance - In 2023, the company's mobile game/information service/web game revenues were 3.577 billion yuan, 664 million yuan, and 55 million yuan, with year-on-year growth rates of 13.28%, 43.28%, and -37.31%, respectively [4] - The company's gross margin in 2023 was 83.47%, an increase of 8.45 percentage points year-on-year [4] - In 2024Q1, the company's gross margin was 82.05%, a decrease of 1.76 percentage points year-on-year [4] Product Pipeline - The company has a rich reserve of self-developed products in the Legend and Miracle categories, including "King of Legend 2," "Dragon Rising Legend," and "Liangshan Legend" [7] - The company has a diverse portfolio of innovative products, including IP-adapted mobile games such as "That Time I Got Reincarnated as a Slime," "Douluo Dalu," and "The Legend of the Condor Heroes" [8] - The company is actively expanding into the small game and overseas markets, with products like "Monster Alliance" and "The Legend of Sword and Fairy: A New Beginning" performing well in the WeChat mini-game charts [10] Technological Innovation - The company has developed the "Xingyi" large model, which integrates deeply into the R&D pipeline, significantly improving efficiency [11] - The company is exploring AIGC and XR technologies, with its first VR game, "Mecha Party," already launched on overseas mainstream platforms [11] Financial Forecast - The company is expected to achieve revenues of 5.281 billion yuan, 6.351 billion yuan, and 6.740 billion yuan in 2024, 2025, and 2026, respectively [12] - Net profit attributable to the parent company is expected to be 1.875 billion yuan, 2.191 billion yuan, and 2.355 billion yuan in 2024, 2025, and 2026, respectively [12] Shareholder Confidence - The company's controlling shareholder and chairman, Jin Feng, has invested over 1.5 billion yuan in share purchases, demonstrating long-term confidence in the company's development [6]