巨人网络(002558)2026年上半年初步利润略超预期_重申买入

Giant Network (002558.SZ) Preliminary 1H26 Profit Slightly Beating Ours/Street; Reiterate Buy CITI’S TAKEToday Giant announced a preliminary profit guidance of Rmb2-2.2bn in 1H26, +157.38-183.12% yoy with mid-point of which 3/2% aboveours/Street. In our view, the strong yoy growth in 1H26 and implied 2Q26attributable profit likely indicate strong revenue performance ofTombBustersduring Chinese New Year holiday in 1Q and a stable momentumentering 2Q with controllable S&M. GivenTomb Busters‘ early access intooverseas market, we expect a relatively smaller monetization impact in1H26 from overseas expansion as Giant continued to explore potentialadaptation in key markets such as Japan, Korea. As Giant will likely release1H/2Q26 results in late Aug, we expect market will focus on managementcomments related to summer performance ofTomb Busters, its progressin overseas expansion and update on large-scale monetization ofMingJiang Shaand new releases such as5,000 Yearsand other SLG. MaintainBuy and TP Rmb47 with solid earnings growth. Nelson CheungAC+852-2501-2728nelson.cheung@citi.com Alicia Yap, CFA+852-2501-2773alicia.yap@citi.com See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations Not for distribution in the People's Republic of China, excluding the Hong Kong Special Administrative Region and QualifiedForeign Institutional Investors. Preliminary 1H26 profit slightly beating ours/Street –On Jul 7 after market close, Giant Network published 1H26 preliminaryresults (link) which guided attributable profit of Rmb2-2.2bn, +157.38-183.12% yoy. Mid-point of which is 3% above ourRmb2.04bn and 2% above Street of Rmb2.05bn. This also implies 2Q26 attributable profit at Rmb920-1,120mn, +114-161%yoy. Excluding extraordinary items, core profit would have reached Rmb2.2-2.4bn in 1H26, +172.74-197.54% yoy, implying abasic EPS range between Rmb1.06-1.16 per share. Giant Network noted that the strong yoy revenue and profit growth in 1H26was mainly driven by meaningful contribution ofTomb Bustersand evergreen operations forZhengtuandBattle of Balls. Latest performance on Tomb Busters –During 1H26,Tomb Bustersrecorded history daily and monthly grossing during ChineseNew Year holiday. Entering 2Q26,Tomb Bustersmaintained a stable momentum by enriching new content and activities in-game. Looking into upcoming summer season,Tomb Busterslaunched an IP collaboration with Candle in the Tomb on Jul 2 tointegrate the title’s core gameplay into a new map which has received broad recognition by domestic gamers.Tomb Bustersalso expanded into overseas market particularly Japan, Korea and US on May 27. Available on iOS, Android and PC,TombBustersreached #3/#7 by iOS game downloads in Japan and Korea, respectively. Adding Upside 30-Day Short-Term View on Giant Network (002558.SZ) With Tomb Busters bringing meaningful IP collaboration with Candle in the Tomb from Jul 2, we believe any positive gamerfeedback and higher Jul monthly grossing by third-party tracking may likely drive price revision from valuation trough of GiantNetwork. Giant Network Valuation Our target price for Giant Network of Rmb47.0 is based on 22x 2026E PE (Rmb2.12 EPS). Our target multiple is set based on10% premium to A-share gaming average, which we view as reasonable reflecting faster growth momentum of Giant Networkdue to potential success of Tomb Busters. We use PE as the company has been profitable, and PE is a commonly adoptedvaluation methodology for Chinese gaming companies. Risks Downside risks that could push the stock below our target price include: 1) shorter-than-expected lifecycle for Tomb Buster; 2)unsuccessful overseas expansion strategies; and 3) failure to deploy AIGC technology to lower operating costs and improvecontent quality. If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside theUS +1-210-677-3788 Appendix A-1 ANALYST CERTIFICATION The research analysts primarily responsible for the preparation and content of this research report are either (i) designatedby “AC” in the author block or (ii) listed in bold alongside content which is attributable to that analyst. If multiple ACanalysts are designated in the author block, each analyst is certifying with respect to the entire research report other than(a) content attributable to another AC certifying analyst listed in bold alongside the content and (b) views expressed solelywith respect to a specific issuer which are attributable to another AC certifying analyst identified in the price charts orrating history tables for that issuer shown below. Each of these analysts certify, with respect to the sections of the reportfor which they are responsible: (1) that the views expressed therein accurately reflect their personal views about eachissuer and security referenced and were prepared in an independent manner