The Zhitong Finance App learned that CICC released a research report stating that maintaining IGG (00799)'s “neutral” rating and considering that intensive promotion of new products generates a certain amount of sales investment, the net loss of non-IFRS in 2023 was adjusted from HK$280 million to HK$400 million, and the 2024 non-IFRS net profit forecast remains unchanged. Also, considering the downward shift in the valuation center, the target price was lowered by 9% to HK$5.09. The company predicts that 1H23 will achieve revenue of around HK$2.45 billion, a decrease of about 1% /more than 15% month-on-month, mainly due to increased business flow contributions from the two new games and apps; net loss of around HK$400 million (1H22 net loss of about HK$172 million), mainly due to a certain investment in sales expenses due to centralized promotion of new tours.
According to the report, IGG's revenue side increased significantly, and “VikingRise,” “Doomsday,” and the app business flow achieved a breakthrough. On the incremental side, according to the company's announcement, the monthly turnover of “Doomsday: Last Rise” and “VikingRise” both exceeded HK$70 million; in addition, application apps and mobile ad aggregation platform business (APP business) sales also increased rapidly, from an average monthly turnover of HK$6 million in 1H22 to over HK$50 million recently. The company said that the two new game and app businesses are expected to optimize the group's overall revenue structure, achieve product diversification, and promote steady development of the business in the medium to long term. In terms of product stock, the bank judges that “LordsMobile” and “Time Princess” are relatively stable.
The bank said that the two key new games and app businesses are expected to build the company's next three major growth drivers, focusing on the inflection point of performance. The company said that the breakthrough in “VikingRise”, “Doomsday: LastFeeds” and the app business has broken the previous situation where the company was highly dependent on a single product; the three new kinetics are expected to drive the company back to a historic peak in overall flow on the basis of existing product flows. Looking ahead, the company said that “VikingRise” and “Doomsday” will all have major updates in August, and the app business is also expected to continue to rise. The bank believes that the company's new products are expected to gradually start contributing profits or help the company reverse losses.