KINGNET(SZ:002517) Tebon Securities·2024-05-15 00:30Investment Rating - Buy (Maintained) [1] Core Views - The company's performance growth demonstrates strong business capabilities, and continued dividends and share buybacks are expected to enhance investment returns [1] - The company achieved revenue of 4 30 billion yuan in 2023, a year-on-year increase of 15 3%, and net profit attributable to shareholders of 1 46 billion yuan, a year-on-year increase of 42 6% [3] - In Q1 2024, the company achieved revenue of 1 31 billion yuan, a year-on-year increase of 36 9%, and net profit attributable to shareholders of 430 million yuan, a year-on-year increase of 47 1% [3] - The company is expected to maintain high dividend payouts in 2024 to further enhance investment returns [3] Market Performance - The company's stock price showed an absolute increase of 4 94% and a relative increase of 0 33% in September 2023 [2] - In January 2024, the stock price showed an absolute increase of 1 30% but a relative decrease of 2 12% [2] Business Overview - The company's mobile game revenue in 2023 was 3 577 billion yuan, a year-on-year increase of 13 3%, while web game revenue was 55 million yuan, a year-on-year decrease of 37 3% [4] - Information service revenue in 2023 was 664 million yuan, a year-on-year increase of 43 3% [4] - The company has a rich pipeline of games for 2024, including self-developed titles such as "Douluo Dalu: Zhu Xie Chuan Shuo" and "Code: Tomb Raider" [4] - The company is also expanding into overseas markets, with "New Yitian Tulongji" topping the iOS free game charts in Hong Kong and Taiwan [4] Financial Projections - Revenue is projected to grow to 5 31 billion yuan in 2024, 6 39 billion yuan in 2025, and 7 42 billion yuan in 2026, with year-on-year growth rates of 23 7%, 20 4%, and 16 1% respectively [4] - Net profit attributable to shareholders is projected to be 1 87 billion yuan in 2024, 2 25 billion yuan in 2025, and 2 52 billion yuan in 2026, with year-on-year growth rates of 27 8%, 21 0%, and 12 1% respectively [4] Strategic Initiatives - The company is focusing on AI development, with its self-developed "Xingyi" large model already applied in R&D scenarios [4] - The company has established an AI application research center and is collaborating with Fudan University on AI-driven NPCs for games [4] - The company has been actively involved in ESG initiatives and has been included in the MSCI China Index [4] Financial Metrics - The company's gross margin in 2023 was 83 5%, and it is projected to be 78 1% in 2024, 76 2% in 2025, and 76 3% in 2026 [6] - The net profit margin in 2023 was 36 8%, and it is projected to be 35 5% in 2024, 35 5% in 2025, and 34 3% in 2026 [7] - The return on equity (ROE) in 2023 was 27 9%, and it is projected to be 24 1% in 2024, 22 5% in 2025, and 20 1% in 2026 [7]