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Investing.com - CLSA initiated coverage on XD Inc (HK:2400) (OTC:XDNCF) with an Outperform rating and a price target of HK$60.00 on Monday.
The research firm cited XD’s strong track record in game development and operation both in China and internationally, noting the company delivered 23% revenue CAGR over 2021-24 driven by popular self-developed games including GoGo Muffin and Heartopia.
CLSA highlighted that XD operates TapTap, described as China’s largest game community with 44 million average monthly active users as of December 2024, which functions as a free distribution platform for game developers while generating revenue through advertising.
The firm forecasts 16.2% revenue growth and 15.2% net profit growth for XD in 2025, followed by 9.4% revenue growth and 18.1% net profit growth in 2026, driven by improved gross margins from higher advertising business contribution and operating leverage.
CLSA’s HK$60.00 target price is based on a discounted cash flow valuation model, reflecting confidence in XD’s dual revenue streams from game development and the TapTap platform.
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