三七互娱：持续高分红，新游表现不俗

Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 18.93 [2][4][7] Core Views - The company reported Q3 revenue of RMB 4.107 billion, a year-over-year decrease of 4.09% and a quarter-over-quarter decrease of 8.35%. The net profit attributable to shareholders was RMB 633 million, down 34.51% year-over-year and 2.41% quarter-over-quarter, slightly below the forecasted range of RMB 650-750 million for Q3 2024 [4] - For the first three quarters of 2024, the company achieved revenue of RMB 13.339 billion, a year-over-year increase of 10.76%, and a net profit of RMB 1.897 billion, down 13.45% year-over-year [4] - The company plans to distribute a cash dividend of RMB 2.10 per 10 shares, totaling over RMB 460 million, which represents approximately 73% of the net profit for the first three quarters of 2024 [4] - The company has initiated a share buyback program using RMB 100-200 million of its own funds, with over RMB 100 million already repurchased, indicating strong operational capability and management confidence [4] Financial Performance - The company’s overall gross margin for Q1-Q3 2024 was 79.12%, a slight decrease of 0.08 percentage points, while the sales expense ratio increased by 4.93 percentage points to 57.75% due to increased marketing expenditures for new games [7] - The company has adjusted its profit forecast for 2024-2026, expecting net profits of RMB 2.6 billion, RMB 2.8 billion, and RMB 3.05 billion respectively [7] - The company’s revenue projections for 2024-2026 are RMB 18.398 billion, RMB 20.671 billion, and RMB 23.054 billion respectively, with a projected net profit margin of around 14% [7] Product Performance - The self-developed game "Time Grocery Store" launched on August 1 and has consistently ranked in the top ten of the simulation game sales charts, with estimated revenue exceeding RMB 400 million in its first week on iOS [5] - The company has over twenty products in its pipeline, with strong performance from overseas titles such as "Puzzles & Survival" and "Puzzles & Chaos" [6] - The company continues to maintain a leading position in the mini-game sector, with multiple titles entering the top 100 of the WeChat mini-game sales charts from July to September [5][6]