ZDDC(600633) 国海证券·2024-03-28 16:00Investment Rating - The report maintains a "Buy" rating for the company Zhejiang Shuculture (600633) as of March 29, 2024 [3][20]. Core Insights - In 2023, the company reported a revenue of 3.08 billion yuan, a year-over-year decline of 40.65%, while the net profit attributable to shareholders was 660 million yuan, an increase of 34.9% [3][20]. - The company plans to distribute a cash dividend of 0.13 yuan per share, totaling 165 million yuan, with a dividend payout ratio of 24.82% [3][20]. - The decline in revenue is attributed to the contraction of the social business and asset impairment, which has put pressure on performance [4][16]. - The company's online game "Guandan" has gained popularity, and the gaming business is progressing steadily [5][16]. Financial Performance Summary - The online gaming business generated 1.317 billion yuan in revenue, down 23.6% year-over-year, with a gross margin of 92.17% [17]. - The online social business revenue was 769 million yuan, a significant decline of 70.2%, but with an improved gross margin of 57.18% [17]. - The company's total revenue for Q4 2023 was 790 million yuan, a decrease of 36.9% year-over-year, with a net loss attributable to shareholders of 29 million yuan [20]. - The company reported a gross margin of 68.3% for 2023, an increase of 6.88 percentage points year-over-year, and a period expense ratio of 42.9%, down 1.41 percentage points [20]. Future Earnings Forecast - The company is expected to see a gradual recovery, with projected net profits of 769 million yuan, 861 million yuan, and 945 million yuan for 2024, 2025, and 2026, respectively [21][20]. - The earnings per share (EPS) are forecasted to be 0.61 yuan, 0.68 yuan, and 0.75 yuan for the same years [21][20]. - The price-to-earnings (P/E) ratio is expected to decrease from 21.27 in 2023 to 14.92 by 2026, indicating potential value appreciation [21][20].