Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company reported a total revenue of 3,696 million yuan for 2024, a year-on-year decline of 11.69%, and a net profit attributable to shareholders of 945 million yuan, down 16.02% year-on-year [5] - The company has a healthy cash flow with a cash dividend total of 718 million yuan for 2024, representing 75.94% of net profit, resulting in a dividend yield of 4.57% based on the closing price on April 7, 2025 [5] - The core product revenue showed a decline, with the main titles experiencing a total revenue of 3,788 million yuan in 2024, down 14.92% year-on-year [5] Financial Performance Summary - Revenue and Profit Forecasts: - 2023A: Revenue of 4,185 million yuan, net profit of 1,125 million yuan - 2024A: Revenue of 3,696 million yuan, net profit of 945 million yuan - 2025E: Revenue of 3,909 million yuan, net profit of 908 million yuan - 2026E: Revenue of 4,222 million yuan, net profit of 1,063 million yuan - 2027E: Revenue of 4,433 million yuan, net profit of 1,122 million yuan [2][5] - The company’s P/E ratio is projected to be 16.7x for 2025, 14.3x for 2026, and 13.5x for 2027 [5] Business Trends - The company has several new products in the pipeline, including "Wanjian Changsheng" set to launch in January 2025 and "Zhangjian Chuanqi" planned for the first half of 2025 [6] - The company’s overseas revenue has shown significant growth, with a total of 500 million yuan in 2024, up 83.92% year-on-year [5] Cash Flow and Expenses - Operating cash flow for 2024 was 1,249 million yuan, with a cash conversion ratio of 132.2% for net profit [5] - Sales expenses decreased by 13% year-on-year to 980 million yuan, while R&D expenses increased by 11.52% to 758 million yuan due to a rise in personnel [5]

Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Views - The company's growth is supported by new games and overseas business expansion [1] - The company has shown a steady performance in its core products, with new releases and a strong pipeline for future games [6] - The financial forecast indicates a recovery in net profit and earnings per share (EPS) over the next few years [6] Financial Data and Valuation - Revenue (in million) for 2023A is 4,185, with a YoY decrease of 19.0%. The forecast for 2025E is 4,127, showing an 11.7% increase [3] - Net profit (in million) for 2023A is 1,125, with a YoY decrease of 23.0%. The forecast for 2025E is 1,125, indicating a 19.0% increase [3] - Gross margin is projected to remain stable around 87.5% from 2025E to 2027E [3] - The company’s EPS is expected to rise from 15.61 in 2025E to 19.44 in 2027E [3] - The Price-to-Earnings (P/E) ratio is forecasted to decrease from 14.3 in 2025E to 11.5 in 2027E, indicating potential undervaluation [3] Business Performance - The company’s revenue primarily comes from self-developed products, with significant contributions from titles like "Wandao" and "Yinian Xiaoyao" [6] - Overseas revenue reached 500 million, marking an 83.92% increase, driven by new international game launches [6] - R&D expenses accounted for 20.50% of revenue, reflecting the company's commitment to innovation [6] - New game releases have shown promising user engagement, with over one million registrations for "Wanjian Changsheng" within a week of launch [6]