Investment Rating - The investment rating for the company is "Accumulate" (maintained) [5] Core Views - The commercialization of the "Legend Box" is accelerating, and a new product cycle is beginning [5] - The company reported a revenue of 4.075 billion yuan for the first three quarters of 2025, a year-on-year increase of 3.75%, and a net profit attributable to shareholders of 1.583 billion yuan, a year-on-year increase of 23.70% [7] - The "Legend Box" platform is showing significant value, contributing approximately 570 million yuan to the company's revenue in Q3 2025 [7] - The company has a rich pipeline of products and is actively expanding into AI applications [7] Financial Performance Summary - Revenue forecast for 2023 to 2027 is as follows: 4,295 million yuan (2023), 5,118 million yuan (2024), 6,046 million yuan (2025E), 6,929 million yuan (2026E), and 7,659 million yuan (2027E) with corresponding growth rates of 15.30%, 19.16%, 18.13%, 14.60%, and 10.54% [6] - Net profit attributable to shareholders is projected to be 1,462 million yuan (2023), 1,628 million yuan (2024), 2,094 million yuan (2025E), 2,452 million yuan (2026E), and 2,722 million yuan (2027E) with growth rates of 42.58%, 11.41%, 28.57%, 17.10%, and 11.01% respectively [6] - The price-to-earnings ratio (P/E) is expected to decrease from 34.93 in 2023 to 18.76 in 2027 [6]

Core Viewpoint - The report from Xinda Securities highlights that Kaiying Network's net profit attributable to shareholders for the first three quarters of 2025 reached 1.583 billion yuan, representing a year-on-year increase of 23.70% [1]. Financial Performance - In Q3, the net profit attributable to shareholders was 633 million yuan, showing a year-on-year growth of 34.51% and a quarter-on-quarter increase of 46.66% [1]. Business Development - The growth of the "Legend Box" is notable, emphasizing the value of the company. The company continues to optimize the operation of the Legend ecosystem through traffic sharing, content co-creation, and ecological construction to further explore the value potential of the Legend IP [1]. AI Initiatives - In the AI sector, the company has invested in Natural Selection's "EVE," the world's first 3D AI companion application, which has begun internal testing [1]. - The company launched an AI full-process development platform called "SOON" specifically designed for the gaming industry in July [1]. - A new AI healing toy brand, "Warm Star Valley Dream Journey," featuring a model of "smart dolls + virtual games," is set to release its first product during the "Double Eleven" shopping festival [1]. Future Outlook - The company's product reserves are expected to support future performance growth, with the Legend Box further tapping into the value of the Legend IP and ongoing investments in AI [1]. - The report maintains a "Buy" rating for the company [1].

Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The company reported a revenue of 4.075 billion yuan for the first three quarters of 2025, representing a year-on-year growth of 3.75%, and a net profit attributable to the parent company of 1.583 billion yuan, which is a year-on-year increase of 23.70% [1] - The "Legend Box" product line showed significant growth, achieving approximately 570 million yuan in revenue in Q3 2025, driven by brand zone entry services [4] - The company has a rich pipeline of new products and is diversifying into AI applications, which are expected to drive future revenue growth [5] Financial Performance Summary - For Q3 2025, the company achieved a revenue of 1.497 billion yuan, a year-on-year increase of 9.08% and a quarter-on-quarter increase of 22.19% [3] - The net profit attributable to the parent company for Q3 2025 was 633 million yuan, reflecting a year-on-year growth of 34.51% and a quarter-on-quarter growth of 46.66% [3] - The company’s gross profit margin for 2025 is projected to be around 82.0% [7] - The expected net profit attributable to the parent company for 2025 is 2.207 billion yuan, with a year-on-year growth of 35.5% [6][7] Product and Market Development - The company has launched several new games in Q3 2025, including "Hot Blood Jianghu: Return" and "Ragnarok: The Promised Adventure," with more titles in the pipeline [5] - The "Legend Box" platform integrates various entertainment forms, enhancing user engagement and monetization opportunities [4] - The company is actively investing in AI technologies, including a 3D AI companion application and an AI development platform tailored for the gaming industry [5]

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Insights - The company reported Q3 2025 revenue of 1.497 billion (up 9.08% year-on-year) and a net profit attributable to shareholders of 633 million (up 34.51% year-on-year) [2][4]. - The launch of new games such as "热血江湖：归来" contributed to revenue growth, with the "传奇盒子" generating approximately 570 million in revenue [2][4]. - The company's profitability improved due to stable expenses and optimized business structure, with gross margin at 84.2% and net profit margin at 42.3% for Q3 [6]. Summary by Sections Financial Performance - Q3 2025 revenue reached 1.497 billion, with a year-on-year increase of 9.08% and a net profit of 633 million, reflecting a 34.51% increase [2][4]. - The company achieved a non-GAAP net profit of 582 million, up 21.11% year-on-year [2][4]. - The revenue from "传奇盒子" was approximately 570 million, with brand zone service income contributing about 245 million [6]. Business Growth Drivers - The launch of new games, including "热血江湖：归来" and "SEVEN: GLORY ROAD," contributed to the revenue increase, with overseas revenue reaching 126 million, accounting for 8.4% of total revenue [6]. - The company is expected to benefit from the ongoing growth of the "传奇盒子" platform and the release of new games, which will drive performance [6]. Future Outlook - The company is optimistic about the performance of the "传奇盒子" and the upcoming new games, which are expected to contribute to revenue growth [6]. - The AI development initiatives are anticipated to enhance valuation flexibility, with the AI gaming development platform "SOON" expected to commercialize in 2026 [6].

Core Insights - The company reported a revenue of 4.075 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 3.75%, with a net profit attributable to shareholders of 1.583 billion yuan, up 23.70% year-on-year [1] - In Q3 alone, the company achieved a revenue of 1.497 billion yuan, reflecting a year-on-year growth of 9.08% and a quarter-on-quarter increase of 22.19%, with a net profit of 633 million yuan, marking a year-on-year rise of 34.51% and a quarter-on-quarter increase of 46.66% [1] - The significant profit growth in Q3 is attributed to the high-margin information service revenue driven by the "Legend Box" product, which saw a 65.3% increase in information service revenue in the first half of 2025, reaching 657 million yuan with a gross margin of 90.7% [1] Financial Performance - Key financial metrics for the first three quarters include a gross margin of 83.04% (up 0.8 percentage points year-on-year) and a net profit margin of 38.85% (up 6.3 percentage points year-on-year), with Q3 net profit margin reaching 42.35% (up 7.1 percentage points quarter-on-quarter) [1] - Expense ratios for the first three quarters show a sales expense ratio of 31.28% (down 3.8 percentage points year-on-year), a management expense ratio of 2.90% (down 0.7 percentage points year-on-year), and a research and development expense ratio of 10.70% (up 0.5 percentage points year-on-year) [1] Business Development - The "Legend Box" is increasingly demonstrating its aggregation effect, with daily active users growing and new partnerships established with game developers, contributing to a sustainable profit growth point [2] - The company launched its self-developed AI full-process development platform "SOON," which is expected to significantly shorten game development cycles and enhance production efficiency, while the AI companion application "EVE" is set to launch by the end of 2025 [2] - The company has a rich pipeline of new games, with several titles already approved for release, including "Super Shrimp Battle" and "Blood of Heroes: Return," indicating a strong focus on both existing and new markets [2] Investment Outlook - The company is expected to see the platform ecosystem value of the "Legend Box" become a new growth driver, with projected net profits of 2.122 billion yuan, 2.607 billion yuan, and 2.972 billion yuan for 2025-2027, corresponding to price-to-earnings ratios of 24, 19, and 17 times [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Views - The company is leveraging AI and IP to create an ecological matrix that drives stable revenue growth through multi-level optimization [5] - The company has shown strong performance in its gaming segment, with a focus on expanding its product matrix through AI and IP integration [5] Financial Data and Valuation - Projected revenue for 2023 is 4,295 million, with a year-on-year growth of 15.3%. Revenue is expected to reach 5,118 million in 2024, 6,164 million in 2025, 7,182 million in 2026, and 8,350 million in 2027 [3][6] - Projected net profit for 2023 is 1,462 million, with a year-on-year growth of 42.6%. Net profit is expected to be 1,628 million in 2024, 2,157 million in 2025, 2,565 million in 2026, and 3,102 million in 2027 [3][6] - The gross margin is projected to be 83.5% in 2023, gradually decreasing to 81.7% by 2027 [3][6] - The company’s P/E ratio is expected to decrease from 34.4 in 2023 to 16.2 in 2027, indicating an improving valuation over time [3][6] Recent Performance - In the first three quarters of 2025, the company achieved a revenue of 40.75 billion, a year-on-year increase of 3.75%, and a net profit of 15.83 billion, up 23.70% year-on-year [5] - The company reported a significant increase in net profit for Q3 2025, reaching 6.33 billion, which is a 34.51% increase year-on-year [5] Strategic Initiatives - The company is expanding its product offerings with new game releases and AI applications, including the AI game development platform "SOON" and various IP-based mobile games [5] - The "Legendary Box" initiative aims to transform the company from a single product competitor to an ecological operator, enhancing its market position [5]

Investment Rating - The report maintains an investment rating of "Buy" for the company with a target price of RMB 29.73 [1][5]. Core Insights - The company's Q3 revenue reached RMB 1.497 billion, representing a year-over-year increase of 9.08% and a quarter-over-quarter increase of 22.19%. The net profit attributable to shareholders was RMB 633 million, up 34.51% year-over-year and 46.66% quarter-over-quarter [1]. - The growth in Q3 was primarily driven by the high-margin "996 Legend Box" platform business, which signed brand area cooperation agreements with leading publishers, confirming revenue starting from Q3 [2]. - The company is transitioning from a game developer to a platform company, with expectations of continued user growth and diversified monetization methods [2]. Revenue and Profitability - For the first three quarters of 2025, the company achieved a revenue of RMB 4.075 billion, a year-over-year increase of 3.75%, and a net profit of RMB 1.583 billion, up 23.70% year-over-year [1]. - The company has a stable revenue stream from existing games and has several new IP titles in the pipeline, expected to launch by the end of 2025 or in 2026 [3]. AI Development and Commercialization - The company is diversifying its AI initiatives, including the upcoming launch of the AI companion application "EVE" and the AI game development platform "SOON," which aims to lower development barriers [4]. - The AI product lineup is expected to provide valuation flexibility and open new market opportunities [4]. Financial Forecast and Valuation - The report maintains profit forecasts for 2025-2027 at RMB 2.182 billion, RMB 2.538 billion, and RMB 2.866 billion respectively, with a PE valuation of 25X for 2026 [5]. - The target price reflects a slight adjustment from the previous value of RMB 30.72, based on the company's ongoing growth and market positioning [5].

Core Viewpoint - Kaiying Network (恺英网络) demonstrated strong performance in Q3 2025, achieving revenue of 1.497 billion yuan, a year-on-year increase of 9.08%, and a net profit of 633 million yuan, reflecting a significant growth of 34.51% compared to the previous year, showcasing its competitive edge in the gaming market [1][2] Financial Performance - The company reported a revenue of 1.497 billion yuan and a net profit of 633 million yuan for Q3 2025, with basic earnings per share at 0.3 yuan [1] - The revenue growth indicates continuous business expansion and increasing market share, while the substantial rise in net profit highlights improvements in cost control and operational efficiency [1] Industry Context - The overall gaming industry is experiencing a recovery, with the Chinese gaming market's actual sales revenue reaching 88.026 billion yuan in Q3 2025, a quarter-on-quarter increase of 6.96% but a year-on-year decline of 4.08% [2] - Kaiying Network's growth contrasts sharply with the industry's overall decline, demonstrating its resilience and adaptability in a challenging market environment [2] Product Development - The company has launched the public beta of "Blood of the River: Return" and has several other products in the pipeline, including games based on popular IPs such as "Three Kingdoms: The World Returns" and "Tomb Raider: Journey" [3] - The AI game development platform "SOON" has entered the project application phase, significantly enhancing development efficiency and is expected to be commercialized by 2026 [3] International Expansion - Kaiying Network is actively pursuing global distribution, with overseas revenue growing from 117 million yuan in 2023 to 202 million yuan in the first half of 2025, increasing its share of total revenue from 2.71% to 7.82% [4] - The company has established deep partnerships with various overseas channels, enhancing its international market presence [4] Competitive Advantage - The company is leveraging the enduring popularity of legendary games, which have generated cumulative revenue of 371.3 billion yuan in China, with a projected market value exceeding 560 billion yuan by 2030 [5] - Despite challenges in the legendary game market, such as version fragmentation and private server issues, Kaiying Network's "Legend Box" aims to create a unified ecosystem for players, enhancing user experience and engagement [6][7] Ecosystem Development - The "Legend Box" aggregates over a thousand legendary games and offers various services, including a trading platform, cloud gaming, live streaming, and community features, providing a comprehensive experience for players [7] - The platform is also expanding into derivative businesses, such as short dramas and novels, to enhance user engagement and broaden monetization channels [8] Strategic Upgrade - Kaiying Network is transitioning from a product-driven strategy to a multi-faceted approach, focusing on content, platform, and ecosystem strength to better withstand market fluctuations and provide stable growth signals to investors [8]

Core Insights - The company reported a revenue of 1.497 billion yuan for Q3 2025, marking a year-on-year growth of 9.08%, and a net profit attributable to shareholders of 633 million yuan, reflecting a year-on-year increase of 34.51%, maintaining a dual growth trend in performance [1] - The core business, "Legend Box," continues to leverage aggregation effects, attracting over a thousand legendary games and providing a comprehensive user experience with various services [1] - The company is actively expanding its IP derivative content, venturing into short dramas, novels, and digital collections to enhance monetization channels and user engagement [1] Business Development - The AI game development platform "SOON" has entered the project application phase, significantly improving R&D efficiency and is expected to commercialize by 2026 [2] - The company's overseas revenue grew from 117 million yuan in 2023 to 202 million yuan in the first half of 2025, with the revenue share increasing from 2.71% to 7.82% [2] - The company’s major shareholder and management have committed to a "five-year no reduction" policy, with a total increase of 41.68 million yuan through cash dividends for share buybacks completed by June 16, 2025 [2] Shareholder Returns - The company has repurchased shares totaling over 800 million yuan since 2019, with a recent buyback of 8.95 million shares amounting to approximately 200 million yuan [3] - The company has implemented nine cash dividend distributions since its listing, with a total dividend payout of 1.212 billion yuan, demonstrating a stable cash dividend policy and commitment to shareholder returns [3]

Core Viewpoint - Kaiying Network achieved significant growth in Q3 2025, driven by the active performance of its diversified business, particularly the "Legend Box" platform [1][4]. Financial Performance - In Q3 2025, Kaiying Network reported revenue of 1.497 billion yuan, a year-on-year increase of 9.08% and a quarter-on-quarter increase of 22.19% [2][3]. - The net profit attributable to shareholders reached 633 million yuan, marking a year-on-year growth of 34.51% and a quarter-on-quarter growth of 46.66% [2][3]. - For the first three quarters of the year, total revenue was 4.075 billion yuan, a slight increase of 3.75% year-on-year, while net profit was 1.583 billion yuan, up 23.70% year-on-year [2][3]. Business Highlights - The "996 Legend Box" platform has maintained high activity levels, contributing significantly to the company's revenue growth [4]. - The platform aggregates over a thousand "Legend" games and offers various services, including trading, cloud gaming, and community features [4]. - The daily active users (DAU) of the "996 Legend Box" have seen rapid growth since its preparation phase began in April 2020 [4]. Market Position and Future Prospects - The "Legend" game market has over 150 million users, with a market potential of approximately 35 billion to 40 billion yuan, although it faces challenges such as numerous versions and private servers [4]. - Kaiying Network's new game "Blood of Jianghu: Return" has entered public testing, with several other licensed IP games in the pipeline [5]. - The company's AI game development platform "SOON" is in the project application phase, expected to commercialize by 2026 [5]. Cost Management - Despite revenue growth, Kaiying Network managed to reduce operating costs and sales expenses, with operating costs at 691 million yuan, down 1.10% year-on-year, and sales expenses at 1.275 billion yuan, down 7.60% year-on-year [6]. - Accounts payable increased significantly to 887 million yuan, a 97.07% rise year-on-year, primarily due to increased land and marketing payments [6].