XD INC (02400) rose more than 5% during the session. At the time of writing, the stock was up 5.09% to HK$75.4, with a turnover of HK$195 million. The company had previously issued a profit alert, expecting the group to achieve revenue of no less than RMB 5.71 billion for the 2025 fiscal year, an increase of approximately 13.9% year-on-year. Net profit is anticipated to be no less than RMB 1.58 billion, representing a surge of about 77.4% compared to the previous year. Analysis suggests the strong profit growth is primarily driven by the robust performance of self-developed games, including *Ragnarok M:初心服*, *Tiptoe Town*, and *Torchlight: Infinite*. These titles, alongside the new game *Ether* launched in June 2025, are collectively boosting revenue and improving gross margins. Furthermore, the TapTap platform recorded significant growth, propelled by enhancements to its advertising algorithm and increased user engagement. Citigroup released a report stating that the market may be underestimating the strong performance of the overseas version of *Tiptoe Town*. Estimated total billings for the game across all platforms reached RMB 250-300 million in February, significantly surpassing the domestic version. Leveraging its strong social features, effective localization strategy, and successful IP collaborations, the game is poised to become the largest contributor to game revenue forecasts for the 2026 fiscal year. Given that the overseas version's performance has exceeded expectations, potentially reversing market sentiment, Citigroup has initiated a 30-day positive catalyst watch on XD INC.
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