The Zhitong Finance App learned that Dongwu Securities released a research report saying that maintaining the “buy” rating of Chizicheng Technology (09911), gross margin increased significantly in 23 years, and the second growth curve of the game business was further evident. The net profit returned to the mother was raised from 41/510 million yuan to 4.5/52 billion yuan in 2024 to 2025, and the net profit to the mother is expected to be 600 million yuan in 2026. It is optimistic that the company's growth logic will continue to be implemented. The company released its 2023 report, and revenue and profit growth are in line with previous performance forecasts.
By business, social business revenue increased 16.2% year on year to 2.97 billion yuan in 2023, maintaining a leading edge in markets such as the Middle East, North Africa and Southeast Asia. The gross margin increased 14.6 pct to 48.1% year over year, mainly due to product function upgrades and content quality improvements, improving the commercialization efficiency and commercial monetization capacity of social products; innovative business revenue increased 38.6% to 340 million yuan year on year. The second growth curve was further evident, and gross margin increased by 4.1 pct to 87.2% year on year, mainly due to the smooth progress of new products such as Sudoku games incubated by the company.
The bank said that in terms of social networking business, starting with MICO, the company gradually launched various social products such as YoHo, SUGO, and TopTop, which verified the viability of the “multi-product, multi-market” strategy. Since August 2023, three social networking products have entered the top 30 of data.ai's “China Non-Gaming App Overseas Revenue List” for five consecutive months. Among them, SUGO's revenue and profit both increased more than 3 times year on year; TopTop's revenue increased more than 2 times, and profit increased more than 6 times. Furthermore, through the acquisition of Chizicheng Strategy Investment, the company has further expanded its social networking business footprint and launched HeeSay, a multi-person online community for overseas LGBTQ+ users, and will select suitable regions to focus on intensive cultivation, and gradually complete the coverage of social products for diverse people such as HeeSay in more markets around the world through “national replication”.
Furthermore, in terms of the game business, the company launched the boutique game “Alice's Dream: Merge Island” in 2023, leading the Google global synthesis game list with innovative gameplay and art design, and topping Sensor Tower's overseas revenue and download rankings. Meanwhile, the company's game team incubated new games such as “Taylor's Secret,” “Merge Cove,” and “Sudoku.”