Financial Performance - In 2024, the company achieved operating revenue of 3.696 billion yuan, a year-on-year decrease of 11.69%; net profit attributable to shareholders was 945 million yuan, down 16.02%; and net profit excluding non-recurring items was 877 million yuan, down 21.61% [1] - In Q1 2025, the company reported operating revenue of 1.136 billion yuan, a year-on-year increase of 22.47%; net profit attributable to shareholders was 283 million yuan, up 11.82%; and net profit excluding non-recurring items was 275 million yuan, up 38.71% [1] Game Development and Launches - The company has 9 main operating products in 2024, with the game "Wen Dao" maintaining stable revenue since its launch 19 years ago; however, mobile games like "Wen Dao Mobile" and "Yi Nian Xiao Yao" have seen a natural decline in revenue [2] - The new game "Wen Jian Chang Sheng" launched on January 2, 2025, contributing 363 million yuan in revenue in Q1 and maintaining an average ranking of 52 in the App Store [2] - Upcoming games include "Zhang Jian Chuan Shuo" (code M88), which has obtained a license and is expected to launch in H1 2025, and "Jiu Mu Zhi Ye," a Three Kingdoms-themed SLG game, planned for launch in H2 2025 [2] Dividend Policy - The company plans to distribute a cash dividend of 35.00 yuan per 10 shares for 2024, totaling 251 million yuan; the total cash dividend and buyback for 2024 is expected to be around 770 million yuan, accounting for 81.46% of net profit [3] - For 2025, the company intends to distribute cash dividends based on undistributed profits and current performance, with the total not exceeding 100% of the net profit for the period [3] Profitability and Cost Management - In 2024, the company's gross margin was 87.86%, down 0.67 percentage points; net margin was 31.90%, down 3.01 percentage points [3] - In Q1 2025, gross margin increased by 1.65 percentage points to 90.89%, and net margin increased by 1.15 percentage points to 33.39%; the period expense ratio decreased by 2.06 percentage points to 56.39% [3] Investment Outlook - The company has bright prospects with new game launches and has adjusted profit forecasts for 2025-2027, expecting operating revenues of 4.127 billion, 4.476 billion, and 4.761 billion yuan, and net profits of 1.083 billion, 1.191 billion, and 1.294 billion yuan respectively [4] - The expected EPS for 2025-2027 is 15.03, 16.53, and 17.96 yuan per share, with corresponding PE ratios of 16, 15, and 13 times based on the closing price on May 10, 2025 [4]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company achieved revenue of 1.136 billion yuan in Q1 2025, representing a year-on-year increase of 22.47% and a quarter-on-quarter increase of 29.44%. The net profit attributable to shareholders was 283 million yuan, up 11.82% year-on-year, while the net profit excluding non-recurring items was 275 million yuan, up 38.71% year-on-year. This marks the first quarter of positive revenue growth since 2023 [2][4] - The new game "Wen Jian Chang Sheng" contributed over 360 million yuan in revenue increment, with other core products like "Wen Dao" and "Yi Nian Xiao Yao" also showing quarter-on-quarter revenue growth. The report emphasizes the importance of monitoring the revenue trends of core products and the progress of new game launches [5][7] Summary by Sections Financial Performance - In Q1 2025, the company reported a revenue of 1.136 billion yuan, a year-on-year increase of 22.47% and a quarter-on-quarter increase of 29.44%. The net profit attributable to shareholders was 283 million yuan, reflecting an 11.82% year-on-year increase, while the net profit excluding non-recurring items was 275 million yuan, up 38.71% year-on-year [2][4] - The company’s revenue returned to positive growth for the first time in 2023 [4] Game Performance - The new game "Wen Jian Chang Sheng" significantly contributed to revenue, generating 363 million yuan in Q1 2025. The revenue from "Wen Dao" was 321 million yuan, down 16.3% year-on-year but up 34.9% quarter-on-quarter. "Wen Dao Mobile" generated 441 million yuan, down 15.9% year-on-year and down 4.3% quarter-on-quarter [5][6] - The report highlights the need to focus on the revenue trends of core products and the testing and launch schedules of new games [7] Investment and Expenses - The company increased its marketing expenses due to the launch of "Wen Jian Chang Sheng," with sales expenses rising to 360 million yuan, an increase of 66 million yuan year-on-year and 165 million yuan quarter-on-quarter. The sales expense ratio increased by 9.5 percentage points to 31.7% [6] - The report notes that the overall investment return on marketing spending remains good, with stable year-on-year sales expense ratios [6]

Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company achieved a revenue of 3.696 billion RMB in 2024, a year-on-year decrease of 11.69%, with a net profit attributable to shareholders of 944.92 million RMB, down 16.02% year-on-year [1] - The fourth quarter saw a slight revenue increase to 877 million RMB, with a year-on-year growth of 0.08% and a quarter-on-quarter growth of 2.19% [1] - The company announced a cash dividend of 35 RMB per 10 shares, with an expected total cash dividend of 718 million RMB for 2024, representing 76% of the net profit for the year [1] Revenue and Profitability - The company’s revenue from the game "Wandao" reached 1.119 billion RMB in 2024, an increase of 3.93% year-on-year, while "Wandao Mobile" revenue was 2.073 billion RMB, down 11.4% year-on-year [2] - The overseas revenue increased by 83.92% to 500 million RMB due to the launch of new products [2] - The gross margin for 2024 slightly decreased by 0.67 percentage points to 87.86%, remaining stable overall [4] Expense Management - The report indicates a decrease in the issuance expense ratio in Q4, contributing to improved profitability [4] - The R&D expense ratio increased due to a rise in personnel, reflecting the company's commitment to enhancing product development [4] Future Outlook - The company is expected to launch new products, including "Wanjian Changsheng," which has already shown promising rankings in the App Store [3] - The revenue forecast for 2025 is set at 4.509 billion RMB, with a projected net profit of 1.176 billion RMB, indicating a recovery trend [5] - The target price for the company is set at 294.84 RMB, based on an 18X PE ratio for 2025 [5]

Core Viewpoint - The company, Xiamen Gigabit Network Technology Co., Ltd. (吉比特), has clarified that rumors regarding the dissolution of its Guangzhou R&D team are unfounded, and no major layoffs have occurred. The adjustments made are due to the evaluation of underperforming self-developed projects rather than financial pressure [1][6]. Group 1: Company Adjustments - The company has recently halted several self-developed projects after a thorough review, indicating that some projects did not meet the required standards. While there will be some personnel changes, the company aims to retain talented individuals from the discontinued projects and reallocate them to fewer ongoing projects [4][5]. - The chairman, Lu Hongyan, emphasized that the adjustments are not due to financial constraints but rather a response to the underperformance of certain projects [6][7]. Group 2: Financial Performance - Gigabit's financial performance has been under pressure, with a reported revenue of 859 million yuan for the first nine months of the previous year, a decrease of 10.36% year-on-year. The total revenue for the year-to-date period was 2.818 billion yuan, down 14.77% compared to the previous year [11][12]. - The net profit attributable to shareholders was approximately 140 million yuan, reflecting a decline of 23.82% year-on-year, while the year-to-date net profit was 658 million yuan, also down 23.48% [11][12]. Group 3: Product Performance - The company's main products, including "Wandao" and "Yinian Xiaoyao," have been in operation for many years, with total revenue for these products declining by 17.19% year-on-year in the first nine months of 2024 [11][12]. - Newer titles like "Chao Jinhua Yushi 2" and "Lost Four Realms" have not performed well in the market, failing to generate significant hits. The recently launched "Wanjian Changsheng" has shown promising data, potentially contributing positively to future performance [13][14]. Group 4: Strategic Focus - The company is shifting its focus towards headlining projects, with plans to concentrate resources on key products like "Wanjian Changsheng" and "Zhangjian Chuan Shuo" [18][19]. - The company has also announced a strategic contraction, with adjustments in its operational structure, including changes in the management of certain game titles [19].