Key events of investment: in 2023, the company achieved revenue 43Freebingogamesforcash.100 million yuan, yoy+10Freebingogamesforcash.0%FreebingogamesforcashThe net profit is 560 million yuan, yoy+61.4%. 2024Q1, the company achieved revenue of 980 million yuan, yoy-17.4%; returned to the mother of the net profit of 150 million yuan, yoy-24.0%. Steady revenue growth, poker production expansion and the new version of the game is expected to lead to performance improvement. 1) Poker business: in 2023, the revenue of poker business reached 1.09 billion yuan. Yoy-1.6%; raised product pricing by adjusting its sales structure. The gross profit margin of poker business reached 26.6%, an increase of 3.4pct over the same period last year. In 2024, the company will actively promote the "annual production base construction project of 600 million sets of playing cards" to improve production efficiency and expand production scale. 2) Mobile game business: the revenue of game business is 1.23 billion yuan, yoy+1.94%. Although the performance of the overseas game business has declined due to market competition, the overall game sector still maintains good profitability, with a gross profit margin of 96.01%, down 0.14pct from the same period last year. In 2024, the company will continue to promote the development of new games, develop new versions of existing mobile game products, extend the life cycle of products, and look for growth points in overseas game markets, which is expected to promote performance growth. The company has many years of experience in the field of marketing, and the digital marketing business contributes to the income increment. In 2023, the company's digital marketing business achieved revenue of 1.91 billion yuan, yoy+24.9%. The company is the long-term ecological partner of the massive engine, providing high-value marketing services for advertisers; in addition, through the massive cloud map tool, the company pioneered the VTATM model to provide game customers with marketing planning in the initial stage of the new game.FreebingogamesforcashMethodology, based on this model, the company helped a number of customers to launch new games, and achieved good results. In the future, the company will continue to cultivate the digital marketing track, join hands with a huge number of engines to output more high-quality marketing cases, and open up the space for marketing business growth. Gross profit margin fell slightly compared with the same period last year, mainly due to changes in revenue structure. In 2023, the company's gross profit margin was 37.6%, mainly due to changes in revenue structure. The gross profit of the digital marketing business is low, and the revenue share has increased from 39.1% in 22 years to 44.4% in 23 years. The sales / management / R & D expense rates are 7.4%, 6.7%, 5.6%, respectively, and the sales expense rate decreases mainly due to the optimization of the launch strategy of the game sector. 24Q1, the company's sales cost is 71.597 million yuan, yoy+55.0%, is mainly due to overseas game business operation mode adjustment, promotion costs increased. Profit forecast and investment rating: the company's 23-year homing net profit has increased rapidly, but taking into account the Q1 performance and the increase in overseas promotion costs caused by the adjustment of the operation model, we adjust the company's homing net profit from 830 million yuan to 70.90 million yuan in 2024-2025, and it is estimated that the net profit will be 870 million yuan in 2026. The current stock price corresponds to the 870 million times of PE in 2024-2026. Maintain a "buy" rating. Risk tips: game regulatory risk, intellectual property protection risk, overseas market policy risk. [disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.

[disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.