Company Overview - The game "Heart Town" will begin overseas testing on November 5, 2026, with an expected iOS App Store launch date of January 8, 2026 [1] - The company has updated its game revenue and Tap performance metrics [1] Game Performance - "Torchlight" has shown strong performance in its new season launched in October, indicating a potential increase in player engagement [1] - "Ither" has had a lackluster performance in the East Asia region since its September launch, primarily due to issues with balance and user matching, leading to limited revenue contribution for the year [1] - "Ragnarok: Origin" has also seen a decline in overseas performance, negatively impacting profits [1] Future Outlook - The primary focus for 2026 will be on the overseas performance of "Heart Town," which is expected to have a higher initial commercialization level compared to its domestic counterpart [2] - "Ither" is anticipated to contribute throughout the year, while the progress of the open-world game "Ragnarok 2" is also being monitored [2] - TapTap is expected to see a quarter-on-quarter increase in user engagement in the second half of 2025, with stable revenue performance anticipated [2] Advertising and Business Development - The company is developing its Dirichlet advertising alliance, focusing on intelligent configuration and refined operations across various advertising platforms [2] Profit Forecast and Valuation - Due to the underwhelming performance of "Ither" in East Asia, the company has revised its net profit forecasts for 2025 and 2026 down by 13.5% and 13.1% to 1.4 billion and 1.7 billion respectively [2] - The target price has been adjusted down by 4% to HKD 89.5, reflecting a 23x P/E for 2026, with an upside potential of 30% [2]

Core Viewpoint - Citic Securities reports that Xindong Company (02400) has exceeded expectations in revenue growth from both gaming and Taptap in 1H25, with a year-on-year revenue increase of 38.7% and an adjusted net profit of 796 million yuan, up 235.3% [1] Group 1: Gaming Business Performance - The gaming segment has shown significant revenue growth and improved profitability, driven by content updates for games like "Xindong Town" and "Torchlight," as well as the overseas release of "Ragnarok M" [1] - The revenue growth in the gaming business has surpassed expectations due to increased player spending following content updates and new game releases [1] Group 2: Taptap Business Performance - Despite the impact of product cycles on monthly active users (MAU) growth, Taptap has achieved revenue growth above expectations by enhancing advertising efficiency and user engagement [1] - The company anticipates that the long-term operational capabilities for high-quality content games and overseas distribution will support continued growth in the gaming segment and Taptap [1] Group 3: Future Outlook - The company expects sustained growth in the gaming sector, supported by its ability to operate quality content games and improve commercialization efficiency on Taptap as user numbers increase [1]

Core Viewpoint - Citic Securities reports that Xindong Company (02400) has exceeded expectations in revenue growth from both gaming and Taptap in 1H25, with a year-on-year revenue increase of 38.7% and an adjusted net profit of 796 million yuan, up 235.3% year-on-year [1] Group 1: Gaming Business Performance - The gaming segment has shown significant revenue growth and improved profitability, driven by content updates for games like "Xindong Town" and "Torchlight," as well as the overseas release of "Ragnarok M" [1] - The revenue growth in the gaming business has surpassed expectations due to increased player spending following game updates and new releases [1] Group 2: Taptap Performance - Despite the impact of product cycles on MAU growth, Taptap has achieved revenue growth above expectations by enhancing advertising efficiency and user engagement [1] - The company anticipates that the long-term operational capabilities for high-quality content games and overseas distribution will support sustained growth in the gaming segment [1] Group 3: Future Outlook - The company expects continued improvement in user numbers for Taptap as product cycles recover, alongside ongoing enhancements in commercialization efficiency [1] - The investment rating remains at "Buy" based on the positive outlook for both gaming and Taptap segments [1]