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<Research>CICC Drops XD INC (02400.HK) TP to $89.5, Lowers Earnings Forecasts
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XD INC (02400.HK)'s game, Torchlight, showed an impressive performance in the new season, with a certain increase in players, according to CICC's research report. Heartopia strengthened its commercialization operations during the summer, with estimated sell-through increment from 1H25. Considering that Heartopia' China server has been operating for over a year, with its content materials having been consumed and being reusable, it is estimated that the initial monetization level of its overseas versions will exceed that of the China server during the same period. However, due to the muted performance of Etheria in the East Asian region, CICC lowered its 2025/ 2026 net profit attributable to the parent company forecasts for 2XD INC by 13.5%/ 13.1% to RMB1.4 billion/ RMB1.7 billion, corresponding to a PE ratio of 21x/ 17x for 2025/ 2026 at the current price, respectively. Therefore, CICC kept rating at Outperform for the stock, and dropped its target price by 4% to $89.5, due to the adjustment in earnings forecasts, shift to 2026 valuation, and considering platform valuation premium. AASTOCKS Financial News Website: www.aastocks.com |
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