Shen Wan Hongyuan: Raise the 2026-2027 net profit forecast for Chizicheng Technology (09911) to maintain a “buy” rating

The Zhitong Finance App learned that Shen Wan Hongyuan released a research report saying that considering the strong momentum of Chizicheng Technology (09911) social networking products, the company's 2026-2027 net profit forecast was raised to 1.26 billion yuan and 1.54 billion yuan (the original forecasts were 1.25 billion yuan and 1.53 billion yuan, respectively), and the net profit forecast for 2028 was added to 1.89 billion yuan; the current price corresponds to the company's target PE for 2026, maintaining a “buy” rating.

Shen Wan Hongyuan's main views are as follows:

Global expansion of social networking business

In terms of the general social networking business, the company is committed to a rich product matrix. Currently, it has launched 4 differentiated products, namely the live entertainment social networking platform MICO, the multi-player voice social networking platform YoHo, the multiplayer game social networking platform TopTop, and the audio and video companion social networking platform SUGO. Among them, MICO and YoHo have been in operation for many years, and their products have entered a mature period, contributing to the basic market of performance by increasing profit margins. TopTop and SUGO are in a period of growth and are expanding rapidly from the Middle East market.

In the first half of 2026, SUGO's revenue increased by more than 60% year on year, and TopTop's revenue increased by about 30% year on year; SUGO entered the top 10 best-selling iOS social apps in Brazil, Mexico, France, Germany, etc., and TopTop entered the top 10 free iOS casual game lists in Japan, South Korea, and France. Furthermore, the company's social networking business for a diverse group of people is operating steadily overseas.

The AI empowerment effect is remarkable

In the first half of 2026, the number of the company's token calls increased more than 100 times over the same period last year, and AI has been deeply integrated into the company's R&D, operation, and marketing. In the field of social products, AI is widely implemented in key modules such as recommendation matching, social assistance, intelligent operation, material design, and safety risk control to continuously improve product operation efficiency and optimize user experience.

In terms of marketing customer acquisition, the company has built a closed loop of AI marketing, covering the entire process of identifying popular materials and large-scale production, creative generation, intelligent delivery and launch management. At the same time, the company continues to expand its AI application layout and actively explore more possibilities for the integrated development of artificial intelligence and social entertainment.

Actively buy back and improve shareholder returns

In the first half of 2026, the company repurchased 10.206 million shares, with a total amount exceeding HK$85 million, and cancelled 5.174 million shares. In the third quarter of 2026, the company further actively repurchased, striving to enhance the long-term value of shareholders and demonstrate the company's long-term confidence in operations.

Risk Alerts

Competition in the industry is intensifying, and the risk of losing existing users and developing new products falls short of expectations; the global macroeconomic downturn affects the risk of user payments; and the risk of market expansion falling short of expectations.