Summary of Kingnet (002517.SZ) Conference Call Company Overview - **Company**: Kingnet (002517.SZ) - **Market Cap**: Rmb54,757 million (approximately US$7,921 million) [6] Key Industry Developments 1. **AI Native Apps**: - Kingnet's investee, NatureSelect.ai, is testing a new AI native app called Elys, which allows users to create AI avatars for social networking. This app is positioned as a next-generation platform for human-AI interaction and is currently available on iOS by invitation only [2][2]. - The first app, EVE, is set to launch on March 14, which is expected to be a significant milestone for the company [1]. 2. **Game Center Expansion**: - Kingnet has introduced the Yulgang Online IP into its 996 Game Center, enhancing the platform's content offerings and monetization opportunities. This move aims to establish a robust legacy IP ecosystem [3][3]. 3. **Settlement with WeMade**: - A settlement agreement with WeMade's subsidiary has been reached, which will release asset freezes and improve liquidity for Kingnet. The settlement is expected to have a positive profit impact of approximately Rmb200 million in the current financial year [4][8]. Financial Strategies 1. **Share Buyback Program**: - Kingnet announced a share buyback program of Rmb100-200 million, representing 0.13-0.25% of total share capital. This initiative is aimed at reinforcing confidence in future business development and supporting an employee stock incentive program [9][9]. 2. **Target Price and Valuation**: - The target price for Kingnet is set at Rmb31, based on a 22x PE ratio for 2026E and an expected EPS of Rmb1.41. This valuation is in line with peers in the online gaming sector [10][10]. Risks and Challenges - Potential risks that could hinder reaching the target price include: 1. Delays in launching new games such as SAO and The Night Dawn. 2. A faster-than-expected decline in the existing game portfolio. 3. Higher-than-anticipated marketing expenditures [11][11]. Conclusion - Kingnet is positioned to capture greater market share in the legacy IP market and is optimistic about returns from AI investments. The company maintains a positive outlook, supported by recent developments in AI applications and strategic partnerships [1][1].