Core Viewpoint - The report emphasizes the growth potential of TapTap platform driven by the resumption of game license approvals and AI-enabled game development, alongside the strategic adjustments in the company's self-developed game pipeline [1][2]. Group 1: TapTap Platform Value - TapTap has become a significant channel for game promotion, with online promotion service revenue reaching 976 million in the first half of 2025, capturing approximately 3.27% of the mobile game advertising market [1]. - The platform offers low or no revenue sharing, making it friendly for small and independent developers, and has emerged as a vital promotional channel due to the fragmentation of user time and the rise of vertical communities [1]. - TapTap provides comprehensive services including analysis, testing, and marketing promotion, enhancing its value to developers [1]. Group 2: Growth Drivers for TapTap - The developer-user flywheel effect is established, with over 240,000 developers and 300,000 games launched, and an average monthly active user (MAU) of 43.6 million in the first half of 2025, with a year-on-year increase of 37% in user advertising ARPU [2]. - The total number of game licenses issued in 2025 reached 1,195, a 25% year-on-year increase, boosting the demand for promotion [2]. - The strategic expansion into multi-platform and international markets, along with AI-enabled game development, is expected to enhance TapTap's revenue potential, with projections estimating revenue could reach 5 billion by 2030 [2]. Group 3: Self-Developed Game Capabilities - The self-developed game strategy has shown positive results since 2024, with a focus on core categories and efficient resource allocation, leading to successful titles like "Torchlight" and "Muffin" [3]. - The company has demonstrated the ability to develop enduring games through focused resources, continuous optimization, and frequent updates, with successful overseas contributions [3]. - Future game pipeline includes promising titles such as the strategy card game "Ither" and the open-world MMO "Ragnarok RO: Guardians of Eternal Love 2," indicating a solid reserve of upcoming products [3].

Investment Rating - The report initiates coverage with a "Buy" rating for the company [3][8]. Core Insights - The report emphasizes the "Content + Platform" flywheel effect, highlighting the value of the TapTap platform and the company's self-developed games [7][10]. - The gaming industry is experiencing a recovery in license supply, which, combined with changes in distribution channels, positions TapTap as a significant promotional channel for games [20][27]. - The company's self-developed game capabilities are gradually being validated, with successful titles contributing to revenue growth [51]. Financial Data and Profitability Forecast - Revenue projections for the company are as follows: 2025E at 6,431 million RMB, 2026E at 7,927 million RMB, and 2027E at 9,059 million RMB, with year-on-year growth rates of 28%, 23%, and 14% respectively [6][8]. - Adjusted net profit attributable to ordinary shareholders is forecasted to be 1,702 million RMB in 2025E, 2,226 million RMB in 2026E, and 2,760 million RMB in 2027E, with significant growth rates of 94%, 31%, and 24% respectively [6][8]. - The report employs the SOTP valuation method, estimating the company's market value at 549 billion HKD [8]. TapTap Business Growth Drivers - The growth of TapTap is driven by an increase in domestic game licenses, advancements in self-developed games, and expansion into PC and international markets [9][35]. - The platform has established a developer-user flywheel effect, with over 240,000 developers and 300,000 games launched, leading to a significant increase in monthly active users (MAU) [35][41]. - The report anticipates that TapTap's advertising revenue could exceed 5 billion RMB by 2030, driven by user growth and improved monetization strategies [11][49]. Self-Developed Game Capabilities - The company has successfully adjusted its product cycle since 2024, focusing on strong game categories and validating its strategic direction [51]. - Upcoming titles such as "伊瑟" and "心动小镇" are expected to contribute positively to the company's pipeline and revenue [51][40].