Core Viewpoint - The company is expected to see a slight revenue growth in Q3 2025, driven by various business segments, while the gaming sector faces challenges with declining sales [4][5]. Revenue Forecast - The company anticipates Q3 2025 revenue of 7.65 billion RMB, representing a year-over-year increase of 4.7%. The revenue breakdown by business segment is as follows: gaming at 1.52 billion RMB (down 16.5%), VAS at 3.12 billion RMB (up 10.5%), advertising at 2.52 billion RMB (up 20%), and e-commerce at 490 million RMB (down 14%) [4]. Gaming Business Update - The self-developed game "Escape from Duckov" launched globally on October 16, achieving over 500,000 sales within three days and surpassing 1 million sales by October 22, with a projected revenue of over 150 million RMB [5][6]. - The international version of "Dudu Face Prank" was released on October 9, generating an estimated revenue of 4.02 million RMB in its first three days, with Japan, Taiwan, and the USA being the largest markets [5][6]. - A new game titled "Three Kingdoms Hundred Generals Card" is in development, targeting strategy game enthusiasts and expected to enter testing on October 30, with a launch anticipated in early 2026 [6]. AI Product Development - The company has launched AI translation features for content creators, enhancing user engagement and experience. Additionally, an AI video tool named "Peanut AI" is in internal testing, allowing creators to generate videos quickly [7]. - In advertising, the company has introduced AI capabilities across the ad placement process to improve creative efficiency and effectiveness, including AI-generated titles and automatic modifications of rejected materials [7].

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Insights - The company is expected to achieve revenue of 7.65 billion RMB in Q3 2025, representing a year-over-year increase of 4.7%. The revenue breakdown by business segment includes gaming at 1.52 billion RMB (down 16.5% YoY), VAS at 3.12 billion RMB (up 10.5% YoY), advertising at 2.52 billion RMB (up 20% YoY), and e-commerce at 490 million RMB (down 14% YoY) [1] - The self-developed game "Escape from Duckkov" has exceeded expectations with sales surpassing 1 million copies within a week of its global release, potentially generating over 150 million RMB in revenue [2] - The company is actively enhancing its AI product functionalities, including AI translation and video generation tools for content creators, as well as integrating AI capabilities into its advertising offerings to improve efficiency and effectiveness [3] Revenue Forecast and Valuation - The company is projected to generate revenues of 22.53 billion RMB in 2023, increasing to 36.42 billion RMB by 2027, with a compound annual growth rate of approximately 8.8% [4] - Adjusted net profit forecasts for 2025, 2026, and 2027 are revised to 2.44 billion RMB, 3.77 billion RMB, and 4.83 billion RMB respectively, reflecting an upward adjustment of 14%, 7%, and 4% compared to previous estimates [3]