Chizicheng Technology (09911.HK) achieved total revenue of RMB 2.27 billion in the first half of fiscal year 2024, an increase of 65.3% over the same period last year, of which approximately RMB 2.07 billion came from social services.

Sugo and TopTop remain strong: Thanks to the strong expression of the MENA region, Sugo and TopTop contributed more than 30% of the Group's revenue, which is still the Group's main growth engine. In June 2024, Sugo achieved turnover of more than 10 million dollars, accounting for about 24% of the Group's total social work turnover. We expect that in the 2024 fiscal year, Sugo and TopTop will be able to more than double their revenue and drive the group's social services to grow by more than 50% year over year. These social apps are currently focused on growing the number of active users, and will continue to invest in expansion in the future.

Mico World's expression is ideal, and Mico's trend is stable: Mico achieved a rebound in the first half of the 2024 fiscal year. Its revenue accounted for more than 40% of the social work revenue of the general population. The optimization of I-luck and commercialization strategies brought good expression to Mico, and Mico continued to be one of the Group's core sources of profit. Furthermore, the Group announced the acquisition of non-wholly-owned subsidiary companies holding Mico and YoHo, which is beneficial to increasing the level of profit attributable to shareholders.

Waiting for IAP Gaming to contribute to the group: Chizicheng Technology (09911.HK) achieved a year-on-year increase of 53.7% in its innovative business. Of this, about 1/3 of the revenue came from IAA games, and the rest came from other traffic transformation businesses. Although IAP games have strong expression, such as Alice's Dream, the group does not directly own the game, so the game was unable to directly report back and forth for the group. If such games can be profitable, the Group may in the future obtain revenue from such games through profit sharing.

Increased profit accrued to shareholders: TopTop and Sugo's tables were superior to our expectations. At the same time, Mico's business picked up as a positive signal, and the acquisition of non-wholly-owned subsidiaries helped bring greater returns to shareholders. As a result, we raised our group target price to HK$3.80 per share and maintain? buy? ratings.