Investment Rating - The report assigns a "Buy" rating for the company, marking it as a first-time coverage [1]. Core Insights - The company is positioned for growth through a dual engine of self-developed games and the TapTap platform, which serves as a comprehensive game community and distribution platform [1][2]. - The self-developed games have shown strong performance, with titles like "Let's Go Muffin" and "Heart Town" driving revenue growth, while the TapTap platform is expected to expand significantly due to its user base and monetization potential [2][34]. Summary by Sections Company Overview - The company is a global game developer and publisher with a diverse portfolio, including popular titles such as "Let's Go Muffin," "Heart Town," and "Torchlight: Infinite." It ranks 22nd among mobile game publishers in China and is expected to enter the global top 100 by October 2025 [1]. Investment Logic - **Self-Developed Game Capability**: The company has consistently validated its ability to develop successful games, with a strong product matrix and ongoing growth from new releases and international expansions [2][12]. - **TapTap Platform Growth**: The platform benefits from a user-game dual effect, with a zero-revenue-sharing policy attracting quality games and users. The introduction of a PC version and the expansion of the iOS ecosystem are expected to further enhance growth [2][34][39]. Financial Forecasts and Valuation - The company is projected to achieve significant profit growth, with net profits expected to reach 1.7 billion, 2.1 billion, and 2.55 billion CNY in 2025, 2026, and 2027, respectively, reflecting growth rates of 111.2%, 24.3%, and 20.0% [2][46]. - The target price is set at 103.2 HKD, based on a 22x PE ratio for 2026, indicating a strong valuation relative to industry peers [2][50]. Revenue Projections - Total revenue is expected to grow from 3.39 billion CNY in 2023 to 8.84 billion CNY by 2027, with a compound annual growth rate (CAGR) of 31.0% from 2025 to 2027 [46][47]. - Game revenue is projected to increase significantly, driven by successful titles and new game launches, while information service revenue from TapTap is also expected to grow robustly [46][47]. Cost and Margin Expectations - The company anticipates improving gross margins, with overall gross margins projected to rise from 69.4% in 2024 to 76.3% by 2027, driven by a higher proportion of self-developed games [48][49].

Core Viewpoint - Xindong Company (02400) has announced a positive earnings forecast, leading to a nearly 4% increase in stock price, with expected revenue and net profit for the first half of the year to be at least 3.05 billion and 790 million respectively [1] Group 1: Earnings Forecast - The company expects revenue and net profit for the first half of the year to be at least 3.05 billion and 790 million respectively [1] - The earnings forecast has exceeded market expectations, indicating strong performance [1] Group 2: Game Releases and Market Potential - Upcoming game releases, including "Elysium: Reboot Day" on September 25 in China, Japan, and South Korea, and "Xindong Town" debuting overseas, present opportunities for business growth [1] - The company is entering a realization phase for self-developed games, with potential for market expansion being validated [1] Group 3: TapTap Platform Performance - TapTap platform has shown steady growth, with Daily Active Users (DAU) increasing by 11%, total game downloads up by 16%, and game reservations rising by 10% over the past 12 months [1] - The platform's value is expected to continue to be released, with operational leverage driving steady profit margin improvements [1] - There are expectations for the desktop version to further expand TapTap's market space [1]