It starts with the player and gives it to the player. Razer is the world's leading gamer brand, providing players with an integrated ecosystem of hardware, software and services. Benefiting from the booming global game market and Southeast Asian e-commerce market, we expect Razer's peripheral hardware, systems, and services to grow at a compound annual growth rate of 18%, 20%, 35% in 2021-24. In view of Razer's market leading position and rapidly improving profitability, we believe that the company will be one of the excellent investment targets for investors to obtain fast-growing dividends in game-related markets. We are optimistic about Razer's prospects, mainly based on 1) a large player base and high growth rate, 2) higher player participation driving up per capita consumption, and 3) strong development of payment business in emerging markets. First coverage, given a buy rating, with a target price of HK $3.22.

Razer: build a comprehensive ecosystem and seize the growth opportunities of the game market. We expect the global gaming market to reach $205 billion in 2023, with a compound annual growth rate of 8 per cent in 20-23 years. We believe that the game peripheral hardware business will be the main beneficiary of the strong expansion of the game industry. In 2020, the global hardware market for games and game peripherals grew by 19% and 45% compared with the same period last year, while Razer's hardware business grew even better, growing by 52% year-on-year, exceeding US $1 billion. Looking ahead, we are optimistic about Razer's revenue growth and continued improvement in profitability. We expect the company's revenue and net profit to grow at a compound annual growth rate of 20% and 50% in 2021-24.

Razer's monetization strategy: from game platform to payment service. In Southeast Asia, 82% of the Internet population are gamers. With strong user stickiness, Razer focuses on the broader payment market outside the game market from the game payment. We believe that strong growth in Internet sales will boost demand for payment services as the total value of transactions in the Internet economy in Southeast Asia will reach $309 billion (a five-year compound annual growth rate of 24 per cent) by 2025. We expect Razer's layout and expansion of payment services in recent years to become a new growth driver for the company. Driven by the arrival of new merchants and the surge in online shopping and digital entertainment consumption, the compound annual growth rate in 2021-24 is expected to be 35 per cent.

Coverage for the first time, with a buy rating, with a target price of HK $3.22 (upside 48%). Our valuation is based on the category-plus valuation method, giving the 22-year Pamp E valuation of the peripheral hardware, the 25.6x/10.3x of the systems division and the 22-year Pamp S valuation of the service department 1.0x, respectively. We believe that this better reflects 1) the company's diversified ecosystem business, 2) its leading position in the gaming hardware market, and 3) its early but expected fast-growing services business. The target price of HK $3.22 is equivalent to 31.4 times 22-year-old Pmax, 1.9-fold 22-year PPPot S. It is expected that the company will achieve a compound annual growth rate of revenue / net profit of 20% / 50% in 21-24. Give a buy rating with a target price of HK $3.22.