CICC: Maintaining Heartbeat Company (02400) outperforms the industry rating target price of HK$89.5

The Zhitong Finance App learned that CICC released a research report stating that maintaining Heartcom (02400) outperforms the industry rating and target price of HK$89.5 (23 times 26-year P/E), with 28% upside. Maintain the 25-27 net profit forecast of 14.3/16.9/1.96 billion yuan. The current price corresponds to 26/27 18/15 times P/E. Its “Heartwarming Town” international service is a further verification of the implementation of the company's “Evergreen Game+Globalization” strategy, highlighting the company's IP renewal capabilities and the long life cycle value of the DAU category.

CICC's main views are as follows:

The company's recent situation

The company's “Heartwarming Town” overseas pre-download topped the iOS game free lists in various regions/countries on January 7, and officially launched at 9:00 a.m. on January 8, Beijing time (UTC-5 at 10:00 p.m. on January 7). The product supports Android, iOS and PC platforms (account interconnection).

The initial download volume performance exceeded expectations, focusing on the volume of localized operation activities such as user accumulation and retention and IP linkage

Since the international service began testing in November '25, the number of reservations has continued to rise. As of January '26, the number of reservations had exceeded one million. As of 10:00 a.m. on January 8, the game was ranked first in the iOS game download list in 16 countries (Japan/Korea/US/Singapore). The bank believes that it is necessary to pay attention to the accumulation of overseas users in the early stages. Considering that the product has been in operation in the domestic market for a year and a half and is relatively rich in terms of game content accumulation, the bank believes that the overall pace of the game from customer acquisition to monetization in overseas markets will be smoother than when the national service was first launched. In terms of subsequent operation (traditional Chinese version), the game and My Little Pony (My Little Pony) will launch in February '26.

Implementation of the flagship product everaging and globalization strategies; during the year, you can also pay attention to the “Torchlight” operation and TapTap platform growth

In addition to the “Heartbeat Town” international service, the bank believes that the company's growth points during the year also include: 1) “Torchlight”. It predicts that the trend of month-on-month growth in 2H25 sales may continue for 26 years. The company announced in December '25 that after the completion of the IP acquisition, it will obtain intellectual property rights in this series around the world, further enhancing its influence on IP. The 26-year S1 product season began on January 16; 2) TapTap: The bank believes that the game industry was rich in supply in '26, and the platform is expected to achieve double-digit year-on-year growth in advertising revenue; 3) ADN business continues to expand.

Pay attention to shareholder returns and launch a HK$400 million automatic share repurchase program

The company announced on January 5 that it will launch an automatic share repurchase program (which expires until 26/6/4). The company stated that it has been exempted from the Stock Exchange to allow automatic repurchases during the restricted period, and all repurchased shares were cancelled. The bank believes that the buyback reflects the company's long-term growth confidence and is also conducive to enhancing shareholders' rights and interests.

Risk Reminder: Policy changes; low expectations for game performance; low expectations for TapTap commercialization; increased competition.