Shenwan Hongyuan: Maintains "Buy" rating on XD Inc. (02400), gaming offers both offense and defense.

According to Zhitong Finance APP, Shenwan Hongyuan released a research report stating that, considering the impact of AI investment and tax back-payment on XD Inc. (02400), it has lowered its earnings forecasts and expects the company's adjusted net profit attributable to shareholders for 2026-2028 to be RMB 1.592/2.011/2.241 billion (previously forecast at RMB 2.145/2.525/2.841 billion). The current market capitalization corresponds to only 10x PE on 2026 overall profit. Using SOTP valuation, it assigns 15x/13x PE to TapTap and the gaming business respectively, corresponding to a reasonable market capitalization of RMB 27.5 billion and a reasonable share price of HKD 66.24 per share, maintaining a "Buy" rating; the bank believes that TapTap's value is undervalued, that AI creative democratization is clearly beneficial to the platform, and is bullish on TapTap's prospects of benefiting from the surge in game approvals + AI creative democratization enhancing the community ecosystem, while the existing game business remains stable with slight growth and new products contribute upside elasticity.