XD’s Revenue Set for a Rebound as New Game Launches Drive 2024 Growth

After a challenging 2023, Chinese gaming company XD (HKG: 2400) is on course for a robust recovery, with revenues projected to jump by +53% year-on-year in 2024, supported by a strong rebound in gaming. The gaming segment, which constitutes 70% of XD’s total revenue, saw a -15% contraction last year, weighing on overall company performance. However, according to Visible Alpha consensus, XD’s 2024 gaming revenue is expected to grow +73% year-on-year, thanks largely to the release of two new gaming series: GoGo Muffin, launched in January, and Heartopia, in July.

The new titles are expected to offset revenue declines in XD’s existing top-grossing games. Sales of SausageMan, which comprised 38% of XD’s online gaming revenues in 2023, are forecast to decline by -21% year-on-year to CN¥584 million, while Ragnarok M is expected to fall -24% to CN¥177 million. In contrast, GoGo Muffin alone is projected to deliver first-year revenue of CN¥1.6 billion, positioning it as XD’s highest-grossing title.

While XD’s short-term growth outlook appears bright, the company’s pipeline remains thin, with only two new titles expected post-2025, raising questions over long-term momentum. Analysts expect 2025 revenues to rise by a modest +4% year-over-year. Despite these uncertainties, XD’s 2024 profitability is set to improve markedly, with net income estimated at CN¥704 million in 2024—a sharp turnaround from the CN¥65 million net loss posted in 2023.