All-habitat IP ecological operator around the "talking Tom Cat Family". Tom Cat was founded in 2007 and listed on A shares in 2015, focusing on R & D, production and sales of fine chemical materials. In 2016, through the acquisition of Hangzhou Zhe Xin and Daili Li, the company successfully cut into the mobile Internet culture industry and realized the development of the dual main business of "chemical plus Internet". In 2018, the company acquired a 100% stake in Outfit7 and used the "talking Tom Cat Family" IP as the carrier to build Tom Cat Family Ecology. After 2019, the company transferred all its chemical assets and focused on the mobile Internet business, focusing on the IP ecological operation of the "talking Tom Cat Family".

Advertising, game two-wheel drive, online and offline coordinated development. Centering on the "talking Tom Cat Family" IP, the company meets users' cultural and entertainment needs online through the production and distribution of high-quality content such as mobile applications, animation, film and television, and offline through the development of IP derivatives and licensing business, new commercial services and other business formats to continuously enrich immersive cultural consumption scenes, to achieve the coordinated development of online and offline business. In terms of mobile applications, the company has a leading market position in global virtual pet formation, parkour and other market segments, transforming a large user base into income through the profit model of "IAA+IAP". In terms of animation, film and television, the company produces animated films, short films, miniseries and other animated films of the Tom Cat family. In terms of IP derivatives and authorized business, through the combination of independent research and development and authorized development, a number of IP derivatives covering multiple categories such as children's products, children's toys and household products have been launched; in the new business service business, the mode of "self-management + city partner" has landed in a number of Tom Cat parent-child themed indoor parks across the country.

Actively promoting the combination of AI technology and products is expected to activate the massive user groups that have been covered. In line with the trend of scientific and technological development, the company has actively explored innovative business development, has carried out access to ChatGPT and other pre-training models, carried out the research and development of products related to AI voice interaction, and has completed the first round of closed testing; it has strategically led the AI venture company West Lake Xinchen to further deepen the layout of the AGI era. By 2022, the IP series of "talking Tom Cats" has been downloaded more than 20 billion times worldwide, with a global MAU of about 400 million. a number of apps have obtained global mobile games to download TOP10; animations of the "talking Tom Cats" series have been viewed more than 1000 times.

Profit forecast and investment advice: we expect the company to achieve an income of RMB 100 million in 19-21-23 from 2023 to 2025, an increase of 16%, 12%, 10%, and a net profit of RMB 750 million, an increase of 37%, 20%, and 17%, respectively. Considering the excellent long-term operation ability of the company's products and its active combination with AI technology, we give the company's 25-year target PE 45x, discounted at a 10% discount rate to 2023, with a target market capitalization of 31.6 billion yuan and a target price of 8.99 yuan, covering for the first time and giving a "buy" rating.

Wind insurance tips: industry policy risk; new product research and development risk; goodwill and other asset impairment risk.