--- title: "XD Inc.: TapTap must step up to justify the faith premium" type: "Topics" locale: "zh-CN" url: "https://longbridge.com/zh-CN/topics/39576356.md" description: "At midday Beijing time on Mar 27, $XD INC(02400.HK) released its FY2025 results. With a pre-announcement in early Mar, the headline is that earnings came in above guidance.Bloomberg consensus had a lag and did not capture post-guidance estimate revisions. As a result, the absolute variance vs. consensus can be ignored.On margins alone, results were a beat, driven by tighter costs and opex optimization. However, beyond the forecasts, Dolphin Research is not satisfied with TapTap's marked slowdown in 2H growth..." datetime: "2026-03-27T11:03:27.000Z" locales: - [en](https://longbridge.com/en/topics/39576356.md) - [zh-CN](https://longbridge.com/zh-CN/topics/39576356.md) - [zh-HK](https://longbridge.com/zh-HK/topics/39576356.md) author: "[Dolphin Research](https://longbridge.com/zh-CN/news/dolphin.md)" --- > 支持的语言: [English](https://longbridge.com/en/topics/39576356.md) | [繁體中文](https://longbridge.com/zh-HK/topics/39576356.md) # XD Inc.: TapTap must step up to justify the faith premium At midday Beijing time on Mar 27, $XD INC(02400.HK) released its FY2025 results. As a trading update was issued in early Mar, the main takeaway is that earnings came in above guidance. BBG consensus lagged and did not reflect post-guidance estimate revisions. On an absolute basis the surprise is negligible, but margins beat on cost and opex optimization. **That said, Dolphin Research is not satisfied with TapTap's marked deceleration in 2H growth.** Given the current valuation (post-tax OP PE = 16x, above HK gaming peers, already pricing a TapTap premium), the bull case hinges on TapTap. So while the 2H profit beat was driven by cost cuts and efficiency, it is not enough to support a meaningful re-rating. This year TapTap's user growth slowed significantly, likely because there were no big-DAU self-developed/exclusive hits like last year's 'Xindong Town' to pull in users. The sequential slowdown in ad revenue growth in 2H also raises the question of whether ad monetization has begun to hit a ceiling. **From here, either new games need to lift platform traffic, or new businesses beyond ads need to scale. Based on current visibility on both fronts, a clear catalyst for a valuation uplift will likely take more time.** 1) At present, there are two in-house titles in the pipeline, likely including 'Ragnarok: Love at First Sight 2'. As a long-lived IP sequel, it could bring some users back to active status, while deeper Intl ops for 'Xindong Town' should help retention. But to deliver sustained and meaningful MAU gains, breakout new titles—akin to 2024—are still needed. 2) On the monetization path, TapTap launched an AI game-creation agent—'TapTap Maker'—in Jan, which remains in invite-only testing. Near-term user feedback and whether it unlocks incremental monetization will be key. On shareholder returns, the company will not pay a dividend this year (vs. HKD 0.4/share last year; ~HKD 200 mn outlay), likely because it announced a HKD 400 mn six-month buyback at the start of the year. **If buybacks continue at the same pace (net cash of RMB 3.8 bn provides capacity), the annual shareholder yield would be about 2.5%.** That is not high, but for a small/mid-cap, some return is better than none. **Specifically:** **1\. TapTap growth slowed:** In 2H, TapTap's domestic MAU edged up, but Q3 peak-season revenue underperformed 1H. Growth slowed from 38% to 13%. We think this reflects slower user growth in 1H, budget cuts at some advertisers, and tougher competition for traffic acquisition. Even so, MAU likely saw a notable net increase in 2H (back-solved from the annual Avg. MAU), driven mainly by the Jul launch of TapTap Mini Games. This year, watch whether 'Xindong Town Intl' and 'Ragnarok: Love at First Sight 2' can keep expanding the user base to support TapTap's ad value. **2\. Games down YoY on a high base:** Game revenue fell 11% YoY in 2H on a decline in player count. The key new launch was the CN server of 'Ether', where expectations were high; it started well but decayed quickly, likely amid genre competition. Management now sees 'Ether' in a mature phase. For 2026, the main pipeline comprises 'Xindong Town' Intl and 'Ragnarok: Love at First Sight 2', plus one title in development. 'Xindong Town' Intl went live in Jan. As a 3D open-world MMO sequel to a long-cultivated premium IP, 'Ragnarok' could achieve \>RMB 2 bn in first-year gross bookings; after an initial test late last year, a typical test-to-launch cadence suggests a mid-year launch. Among live titles, 'Torchlight' follows a seasonal, competitive ops model, so bookings could remain stable or rebound. Following the IP acquisition, globally synchronized marketing and ops should be easier, enhancing IP reach. **3\. 'Cost-down, efficiency-up' beat:** Profitability was the standout. Core OPM reached 31% in 2H, up 300 bps vs. 1H. GPM contributed +100 bps on a higher mix from high-margin TapTap, while opex efficiency added +200 bps, mainly in G&A—down 32% YoY—helped by lower management incentives. Game GPM should see modest further upside this year as the Apple tax adjustment helps and XD's iOS mix is below industry thanks to TapTap distribution. The 'Torchlight' IP acquisition also reduces revenue sharing, helping offset domestic revenue shares for 'Ragnarok 2'. **4\. Metrics vs. the Street** _The BBG forecasts below are lagging. After the early Mar pre-announcement, the Street has already revised estimates._ ![表格描述已自动生成](https://pub.pbkrs.com/uploads/2026/1be544d8ba957b3a9cbd1e6863c712dc?x-oss-process=style/lg) **Financial metrics and charts follow** ![图表, 直方图描述已自动生成](https://pub.pbkrs.com/uploads/2026/a3cb71b59fad2fdb2c894daabb0a72c8?x-oss-process=style/lg) ![图表, 条形图描述已自动生成](https://pub.pbkrs.com/uploads/2026/9faee9160131b6610140add3bad9bd50?x-oss-process=style/lg) ![图表, 条形图描述已自动生成](https://pub.pbkrs.com/uploads/2026/ca84b92e78a181b37c644c12e3436a93?x-oss-process=style/lg) ![图表, 条形图描述已自动生成](https://pub.pbkrs.com/uploads/2026/66398b9b7fbce13f78005ee66a19cac4?x-oss-process=style/lg) ![图表, 直方图描述已自动生成](https://pub.pbkrs.com/uploads/2026/b45f013384b1e051443e050e66eab933?x-oss-process=style/lg) ![图片包含 图示描述已自动生成](https://pub.pbkrs.com/uploads/2026/4ea70f539db1facf1eba79d56612b8ee?x-oss-process=style/lg) ![图表, 条形图描述已自动生成](https://pub.pbkrs.com/uploads/2026/b83cbee85e79bd2280021b746489379d?x-oss-process=style/lg) **Dolphin Research on XD: historical pieces** **Earnings season** Aug 29, 2025 earnings call notes: '[XD (Trans): Overseas breakout aided by key partner's return](https://longbridge.cn/topics/33492830?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=c6c93315-10d6-4c8c-bce0-650823c0de60)' Aug 29, 2025 earnings take: '[XD Inc.: Surprise hits in games, TapTap monetization accelerating](https://longbridge.cn/topics/33466649?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=2a9ef995-8127-4e27-b451-154ad1903f63)' Risk disclosure and disclaimer: [Dolphin Research Disclaimer and General Disclosure](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### 相关股票 - [XD INC (02400.HK)](https://longbridge.com/zh-CN/quote/02400.HK.md) - [Apple (AAPL.US)](https://longbridge.com/zh-CN/quote/AAPL.US.md)