Western Bull Securities: Reiterates Chizicheng Technology's (09911) “Buy” Rating Target Price Increase to HK$13.2

The Zhitong Finance App learned that Xiniu Securities released a research report saying that Chizicheng Technology (09911) has achieved strong growth in terms of both revenue and profits attributable to shareholders. The Middle East and North Africa market continues to grow, and SUGO and TopTop also have huge room to expand in other emerging markets. The successful experience of “Alice's Dream” is also expected to be replicated in other niche games in the future, injecting further growth momentum into the group. In view of this, the bank raised the target price to HK$13.20 per share and reaffirmed the “buy” rating.

According to the report, Chizicheng handed over impressive results in the first half of 2025, and total revenue increased 40.0% year over year to 3.18 billion yuan. During the period, revenue from social services increased 37.0% year-on-year to RMB 2.83 billion, and revenue from innovative businesses increased 70.5% to RMB 350 million compared to the same period last year. Thanks to a decrease in the share of anchors and an increase in the contribution of boutique games, gross margin increased significantly to 55.8%. At the same time, the completion of the acquisition of non-controlling interests in NBTSocial Networking also brought about a significant increase in the profits attributable to the Group's shareholders.

The bank said that the company's social networking business performed well, and SUGO and TopTop continued to be the main drivers of the group's growth. Both recorded a year-on-year increase of more than 100% in revenue, and together contributed nearly half of the group's revenue. Sugo has performed particularly well in the Middle East and North Africa markets and Southeast Asia, and is actively entering the Latin American and European markets. TopTop's monthly turnover also surpassed the $10 million level for the first time. The self-developed AI model BoomIIX can significantly improve the average online time, payment rate, and ARPU of users, which is particularly important for expanding new markets and improving product social matching efficiency.

In addition, Chizicheng's innovative business also grew strongly. The Group's innovation business maintained strong performance in the first half of 2025, and the boutique game Alice's Dream provided an important driving force for performance growth. The integration of AI technology effectively shortens product development cycles and increases ARPU and user retention rates. Given the Group's successful replication experience and shorter development cycle, it is expected that new flagship boutique games will be launched faster in the future. In addition, Aippy, an AI creative content community, was officially launched, allowing users to create interactive content such as mini-games through natural language, and the platform is expected to monetize in the future using a subscription model.