Group 1 - The core viewpoint of the news is that Giant Network has reported significant growth in revenue and net profit for the first half of 2025, driven by the success of its self-developed game "Supernatural Action Team" [1] - The company achieved operating revenue of 1.662 billion yuan, a year-on-year increase of 16.47%, and a net profit attributable to shareholders of 777 million yuan, up 8.27% year-on-year [1] - The game "Supernatural Action Team" has seen rapid growth in user base and revenue, with a milestone of over 1 million concurrent users reached in July, and it ranks in the top 5 of the iOS free game chart and top 4 in the iOS revenue chart [1] Group 2 - The company plans to distribute a cash dividend of 1.50 yuan per 10 shares, totaling approximately 284 million yuan, marking the third consecutive year of mid-year dividends since 2023 [1] - The "Journey" IP continues to develop its "evergreen game" strategy, with flagship mobile game "Original Journey" achieving 5.86 million new users in its first month after launching a mini-game version, and over 20 million new users in the first half of the year [1] - The average monthly revenue for "Original Journey" has remained stable at 100 million yuan [1] Group 3 - The game "Ball Ball Battle" has seen significant innovation in gameplay, leading to a substantial increase in daily participation rates and improved user retention and reputation [2] - In the first half of 2025, the game accumulated over 11 million new users, with a monthly upward trend, and daily active users exceeding 1 million on mini-program platforms [2]

Core Viewpoint - The company reported a revenue of 1.662 billion yuan for the first half of 2025, representing a year-on-year growth of 16.47% [1] - The net profit reached 777 million yuan, showing an increase of 8.27% compared to the previous year [1] - The company plans to distribute a cash dividend of 1.5 yuan per 10 shares to all shareholders, with no bonus shares issued [1] Financial Performance - Revenue for the first half of 2025: 1.662 billion yuan, up 16.47% year-on-year [1] - Net profit for the same period: 777 million yuan, an increase of 8.27% year-on-year [1] Dividend Policy - Proposed cash dividend: 1.5 yuan per 10 shares (including tax) [1] - No bonus shares to be issued [1] - No capital reserve fund to be converted into share capital [1]

[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=Item%201.%20Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) This section provides essential preliminary information, including the board's assurances, the report's structure, and definitions of key terms [Important Notice](index=2&type=section&id=Important%20Notice) The Board, Supervisory Board, and senior management guarantee the report's accuracy and completeness, detailing future risks and proposed countermeasures, with a cash dividend of **RMB 1.50 per 10 shares** (tax inclusive) approved - The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report[3](index=3&type=chunk) - The company has detailed major future risks and countermeasures, advising investors to be aware of investment risks[3](index=3&type=chunk) Profit Distribution Plan | Metric | Amount (RMB) | | :--- | :--- | | Cash dividend per 10 shares (tax inclusive) | 1.50 | | Bonus shares | 0 | | Capital reserve to share capital | 0 | [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section outlines the report's structure, comprising nine main chapters covering company profile, financial metrics, management discussion, governance, and financial statements - The report is structured into nine main chapters, covering company operations, financial performance, governance, and significant matters[6](index=6&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section defines key terms used in the report, such as company name, reporting period, actual controller, game types, and industry-specific acronyms, ensuring clarity - The reporting period refers to January 1, 2025, to June 30, 2025[9](index=9&type=chunk) - Giant Network, the Company, the listed company, and the Group all refer to Giant Network Group Co., Ltd[9](index=9&type=chunk) - Shi Yuzhu is the actual controller of Giant Network[9](index=9&type=chunk) - Various game types, including client-side, mobile, and mini-program games, are defined, along with industry terms like esports, IP, MMORPG, DAU, KOL, and NPC[9](index=9&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=Item%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's basic information, contact details, and a summary of its key accounting data and financial performance [Company Profile](index=6&type=section&id=1.%20Company%20Profile) Giant Network's stock ticker is "Giant Network" (002558) listed on the Shenzhen Stock Exchange, with Zhang Dong serving as the general manager - Stock Abbreviation: **Giant Network**, Stock Code: **002558**[12](index=12&type=chunk) - Stock Exchange: **Shenzhen Stock Exchange**[12](index=12&type=chunk) - Company General Manager: **Zhang Dong**[12](index=12&type=chunk) [Contact Persons and Information](index=6&type=section&id=2.%20Contact%20Persons%20and%20Information) The company's Board Secretary is Meng Wei and Securities Affairs Representative is Wang Hongren, both located at 655 Zhongchen Road, Songjiang District, Shanghai, with contact details provided - Board Secretary: **Meng Wei**, Securities Affairs Representative: **Wang Hongren**[13](index=13&type=chunk) - Contact Address: **655 Zhongchen Road, Songjiang District, Shanghai**[13](index=13&type=chunk) - Email: **ir@ztgame.com**[13](index=13&type=chunk) [Other Information](index=6&type=section&id=3.%20Other%20Information) During the reporting period, there were no changes in the company's registered address, office address, website, email, or information disclosure locations, as detailed in the 2024 annual report - The company's contact information, information disclosure, and archiving locations remained unchanged during the reporting period[14](index=14&type=chunk)[15](index=15&type=chunk) [Key Accounting Data and Financial Indicators](index=7&type=section&id=4.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company's operating revenue increased by **16.47% to RMB 1.662 billion**, and net profit attributable to shareholders grew by **8.27% to RMB 777 million**, with operating cash flow significantly up by **59.74%** Key Accounting Data and Financial Indicators (Current Reporting Period vs. Prior Year Period) | Metric | Current Reporting Period (RMB) | Prior Year Period (RMB) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,662,199,977.45 | 1,427,137,420.29 | 16.47% | | Net Profit Attributable to Shareholders | 777,048,091.04 | 717,710,876.16 | 8.27% | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Gains/Losses) | 806,621,940.16 | 884,393,163.39 | -8.79% | | Net Cash Flow from Operating Activities | 742,762,741.45 | 464,988,577.23 | 59.74% | | Basic Earnings Per Share (RMB/share) | 0.42 | 0.39 | 7.69% | | Diluted Earnings Per Share (RMB/share) | 0.42 | 0.39 | 7.69% | | Weighted Average Return on Net Assets | 5.87% | 5.95% | -0.08% | | Total Assets (Period-end) | 16,253,324,156.03 | 14,742,575,985.33 | 10.25% | | Net Assets Attributable to Shareholders (Period-end) | 14,043,458,336.87 | 12,822,947,321.59 | 9.52% | [Differences in Accounting Data under Domestic and Overseas Accounting Standards](index=7&type=section&id=5.%20Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20Overseas%20Accounting%20Standards) During the reporting period, the company reported no differences in net profit and net assets between international/overseas accounting standards and Chinese accounting standards - The company reported no differences in accounting data under domestic and overseas accounting standards during the reporting period[18](index=18&type=chunk)[19](index=19&type=chunk) [Non-Recurring Gains and Losses and Amounts](index=7&type=section&id=6.%20Non-Recurring%20Gains%20and%20Losses%20and%20Amounts) The company's non-recurring gains and losses totaled **-RMB 29.57 million**, primarily from asset disposals, government grants, and financial asset fair value changes, with VAT refunds classified as recurring Non-Recurring Gains and Losses and Amounts | Item | Amount (RMB) | Explanation | | :--- | :--- | :--- | | Gains/losses on disposal of non-current assets | 2,048,520.58 | Asset disposal gains/losses | | Government grants recognized in current profit/loss | 11,193,082.08 | Government grants | | Gains/losses on fair value changes and disposal of financial assets | 440,968.96 | Fair value changes of financial assets | | Other non-operating income and expenses | 4,955,339.92 | Other income and expenses | | Other items meeting the definition of non-recurring gains/losses | -47,886,745.36 | Non-recurring gains/losses from associates | | Less: Income tax impact | 1,189,515.74 | | | Impact on minority interests (after tax) | -864,500.44 | | | Total | -29,573,849.12 | | - The VAT immediate refund amount was **RMB 67,378,115.68**, classified as a recurring gain/loss due to compliance with national policies and continuous occurrence[22](index=22&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Item%203.%20Management%20Discussion%20and%20Analysis) This section analyzes the company's main business operations, core competencies, financial performance, investment activities, and risk management strategies during the reporting period [Company's Main Businesses During the Reporting Period](index=9&type=section&id=1.%20Company's%20Main%20Businesses%20During%20the%20Reporting%20Period) Operating revenue increased by **16.47%** and net profit by **8.27%**, driven by the "Zhengtu" IP strategy, the hit game "Supernatural Action Team," and deep integration of AI technology into gameplay Current Reporting Period Key Financial Performance | Metric | Amount (RMB 100 million) | Year-on-year Growth | | :--- | :--- | :--- | | Operating Revenue | 16.62 | 16.47% | | Net Profit Attributable to Shareholders | 7.77 | 8.27% | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Gains/Losses) | 8.07 | -8.79% | [Zhengtu IP Deepens "Evergreen Game" Strategy and Reforms "Non-Binding Economy", Building a Dual-Growth Engine](index=9&type=section&id=1.%20Zhengtu%20IP%20Deepens%20%22Evergreen%20Game%22%20Strategy%20and%20Reforms%20%22Non-Binding%20Economy%22%2C%20Building%20a%20Dual-Growth%20Engine) The "Zhengtu" IP enhanced user engagement and retention through layered content updates and a non-binding in-game economy, with "Original Zhengtu" mini-game version adding **5.86 million new users** in its first month - The "Zhengtu" IP enhances user stickiness and old player payment conversion through "layered experience + commercial synergy"[24](index=24&type=chunk) - The non-binding in-game economy reform, allowing free item trading, boosts player engagement and retention[24](index=24&type=chunk) - The "Original Zhengtu" mini-game version launched and was re-promoted, adding **5.86 million new users** in its first month and over **20 million** in the first half of the year[25](index=25&type=chunk) - "Original Zhengtu" maintains a stable average monthly revenue of **RMB 100 million**[25](index=25&type=chunk) ["Supernatural Action Team" Becomes a Phenomenal Hit, Highlighting Long-Term Operational Potential](index=9&type=section&id=2.%20%22Supernatural%20Action%20Team%22%20Becomes%20a%20Phenomenal%20Hit%2C%20Highlighting%20Long-Term%20Operational%20Potential) Launched on January 23, 2025, "Supernatural Action Team" became a breakout success with its "Chinese micro-horror + multiplayer co-op" gameplay, achieving over **1 million concurrent users** in July and ranking **TOP4 on iOS best-selling charts** - "Supernatural Action Team" launched on January 23, 2025, quickly gaining market traction with its differentiated "Chinese micro-horror + multiplayer co-op" gameplay[27](index=27&type=chunk) - The product's user base and revenue grew exponentially, with concurrent users exceeding **1 million** in July[27](index=27&type=chunk) - "Supernatural Action Team" consistently ranked in the **TOP5 on the iOS free game chart** and reached a high of **TOP4 on the iOS best-selling game chart**[27](index=27&type=chunk) - "Ball Battle" saw significant year-on-year growth in new users and daily active users, with mini-program daily active users exceeding **1 million**[30](index=30&type=chunk) - "Space Kill" collaborated with well-known IPs and integrated AI models like Tencent Hunyuan, Byte Volcano, and Alibaba Tongyi Qianwen to boost user activity and online duration[30](index=30&type=chunk) [AI Deeply Empowers Gameplay, Innovating Game Interaction Experience](index=11&type=section&id=3.%20AI%20Deeply%20Empowers%20Gameplay%2C%20Innovating%20Game%20Interaction%20Experience) The company deeply integrates AI into core game operations, with "Space Kill" launching an AI-powered "Endgame Showdown" mode and "Original Zhengtu" enhancing AI NPC intelligence, significantly improving player experience - "Space Kill" launched an "Endgame Showdown" mode, collaborating with major AI models like Alibaba Tongyi Qianwen, Tencent Hunyuan, and Byte Doubao to enable "real player-AI agent-real player" tripartite confrontations[32](index=32&type=chunk) - Related AI modes in "Space Kill" have accumulated millions of participating players and tens of millions of matches[32](index=32&type=chunk) - "Original Zhengtu" integrated DeepSeek-R1, upgrading its core AI NPC "Little Sister" to provide strategic assistance and emotional companionship, with strategy guidance accuracy exceeding **99%**[33](index=33&type=chunk) - The company's multiple AI research achievements were accepted by top international academic conferences such as ACMMM, ICASSP, and Interspeech[33](index=33&type=chunk) [Analysis of Core Competencies](index=11&type=section&id=2.%20Analysis%20of%20Core%20Competencies) The company's core strengths lie in its integrated R&D and operations, strong IP development, large high-quality user base, and elite, youthful talent structure, driving continuous innovation and market expansion [Integrated R&D and Operations, Adhering to Boutique Strategy](index=11&type=section&id=1.%20Integrated%20R%26D%20and%20Operations%2C%20Adhering%20to%20Boutique%20Strategy) The company maintains an integrated R&D and operations model, focusing on boutique strategy and core categories through a track-based structure, leveraging advanced technology and player co-creation to ensure high-quality products - The company adheres to independent R&D and a boutique strategy, implementing an integrated R&D and operations model, continuously iterating product features during operation[34](index=34&type=chunk) - Leveraging a track-based structure, the company specializes in core advantageous categories such as national warfare MMORPGs and multiplayer casual competitive games[34](index=34&type=chunk) - Possesses industry-leading independent R&D technologies including server architecture, client engine, and anti-cheat systems[34](index=34&type=chunk) - Enhances product quality and user fit through co-creation with players, real-time synchronization, and deep interaction[34](index=34&type=chunk) [Strong IP Development and Operation Capabilities](index=11&type=section&id=2.%20Strong%20IP%20Development%20and%20Operation%20Capabilities) The company strategically develops its "Zhengtu" and "Ball Battle" IPs through innovation and community engagement, while its new hit "Supernatural Action Team" shows potential as a new core IP, integrating traditional Chinese culture - The company formulates and advances long-term strategies around its two core IPs, "Zhengtu" and "Ball Battle," continuously innovating content and gameplay[35](index=35&type=chunk) - The self-developed new product "Supernatural Action Team" quickly gained market recognition with its differentiated "Chinese micro-horror + multiplayer co-op" gameplay, poised to become a new core IP for the company[35](index=35&type=chunk) - The company consistently integrates excellent traditional Chinese culture and positive social energy into product design, enhancing the cultural value of its games[35](index=35&type=chunk) [Large and High-Quality User Base](index=11&type=section&id=3.%20Large%20and%20High-Quality%20User%20Base) Leveraging its brand strength, the company has amassed a vast user base, with "Zhengtu" reaching **2.1 million concurrent users** and "Ball Battle" over **600 million installations**, while "Supernatural Action Team" significantly expanded its user demographic - "Zhengtu" once achieved a record of **2.1 million concurrent users**, accumulating a vast user base[37](index=37&type=chunk) - "Ball Battle" has accumulated over **600 million device installations**[37](index=37&type=chunk) - "Supernatural Action Team" attracted a large number of young users, significantly increasing the proportion of female players, and achieved over **1 million concurrent users** in July 2025, effectively expanding the user base[37](index=37&type=chunk) [Elite and Youthful Talent Structure](index=12&type=section&id=4.%20Elite%20and%20Youthful%20Talent%20Structure) The company boasts a professional, stable management team and an elite, youthful talent pool, with experienced core producers and a focus on nurturing young leaders through a strong corporate culture and incentive mechanisms - The company possesses a professional, stable, and highly cohesive management team, along with an elite and youthful talent pool[38](index=38&type=chunk) - Core producers have many years of experience in the online gaming industry, possessing strong technical development capabilities and market operation experience[38](index=38&type=chunk) - A positive corporate culture and effective incentive mechanisms ensure the stability of the core talent team[38](index=38&type=chunk) [Main Business Analysis](index=12&type=section&id=3.%20Main%20Business%20Analysis) Main business revenue increased by **16.47%**, driven by mobile online games, which grew **21.56%** and now account for **78.16%** of revenue, while sales and R&D expenses also rose Key Financial Data Year-on-year Changes | Metric | Current Reporting Period (RMB) | Prior Year Period (RMB) | Year-on-year Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,662,199,977.45 | 1,427,137,420.29 | 16.47% | Increase in game revenue | | Operating Cost | 153,288,427.92 | 165,269,191.18 | -7.25% | Decrease in game-related operating costs | | Sales Expenses | 595,053,771.27 | 429,233,167.80 | 38.63% | Increase in advertising and channel fees | | Administrative Expenses | 102,806,001.70 | 89,286,343.59 | 15.14% | Increase in labor costs | | Financial Expenses | 6,381,882.89 | -1,452,478.19 | -539.38% | Decrease in interest income | | Income Tax Expense | 12,164,560.51 | 26,918,712.09 | -54.81% | Some subsidiaries enjoy tax incentives | | R&D Investment | 376,727,173.12 | 332,014,872.48 | 13.47% | Increase in labor costs | | Net Cash Flow from Operating Activities | 742,762,741.45 | 464,988,577.23 | 59.74% | Increase in game revenue | | Net Cash Flow from Investing Activities | -27,591,052.06 | -7,031,009.77 | 292.42% | Decrease in cash received from investment income | | Net Cash Flow from Financing Activities | 351,955,664.76 | -194,386,440.24 | -281.06% | Sale of employee stock ownership plan shares | Operating Revenue Composition (by Product) | Product Type | Current Reporting Period Amount (RMB) | Proportion of Operating Revenue | Prior Year Period Amount (RMB) | Proportion of Operating Revenue | Year-on-year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Mobile Online Game Business | 1,299,232,213.46 | 78.16% | 1,068,774,740.78 | 74.89% | 21.56% | | PC Online Game Business | 317,588,135.83 | 19.11% | 338,089,827.11 | 23.69% | -6.06% | | Other Game-Related Businesses | 40,162,940.35 | 2.42% | 17,508,208.04 | 1.23% | 129.39% | | Other Businesses | 5,216,687.81 | 0.31% | 2,764,644.36 | 0.19% | 88.69% | Main Business Gross Profit Margin (by Product) | Product Type | Operating Revenue (RMB) | Operating Cost (RMB) | Gross Profit Margin | Operating Revenue Year-on-year Change | Operating Cost Year-on-year Change | Gross Profit Margin Year-on-year Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mobile Online Game Business | 1,299,232,213.46 | 105,036,001.18 | 91.92% | 21.56% | 2.25% | 1.53% | | PC Online Game Business | 317,588,135.83 | 39,442,525.17 | 87.58% | -6.06% | -32.23% | 4.79% | [Non-Core Business Analysis](index=14&type=section&id=4.%20Non-Core%20Business%20Analysis) Non-core business primarily includes investment income, fair value changes, and government grants, with investment income accounting for **39.81%** of total profit, largely sustainable from equity-accounted long-term investments Non-Core Business Gains and Losses | Item | Amount (RMB) | Proportion of Total Profit | Explanation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment income | 317,577,259.06 | 39.81% | Adjustment of long-term equity investment gains/losses accounted for by equity method and fund income | Long-term equity investment gains/losses accounted for by equity method are sustainable, others are not | | Gains/losses on fair value changes | -16,413,215.72 | -2.06% | Fair value change losses from securities and fund investments | No | | Non-operating income | 5,780,382.22 | 0.72% | Compensation received and recognition of unpayable amounts | No | | Non-operating expenses | 825,042.30 | 0.10% | Donation expenses | No | | Other income | 80,851,902.04 | 10.13% | VAT immediate refund and government subsidies | VAT immediate refund is sustainable, others are not | | Gains/losses on asset disposal | 267,036.79 | 0.03% | Losses from disposal of fixed assets | No | | Credit impairment losses | -437,022.60 | -0.05% | Provision for bad debts | Yes | [Analysis of Assets and Liabilities](index=14&type=section&id=5.%20Analysis%20of%20Assets%20and%20Liabilities) Total assets increased by **10.25% to RMB 16.253 billion**, and net assets attributable to shareholders grew by **9.52% to RMB 14.043 billion**, driven by increased cash, long-term equity investments, and deferred game revenue Significant Changes in Asset Composition | Item | Period-end Amount (RMB) | Proportion of Total Assets | Prior Year-end Amount (RMB) | Proportion of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 3,125,467,878.87 | 19.23% | 2,057,997,510.53 | 13.96% | 5.27% | Sale of employee stock ownership plan shares and increase in game revenue | | Accounts receivable | 187,305,745.23 | 1.15% | 147,427,070.05 | 1.00% | 0.15% | Increase in revenue | | Long-term equity investments | 9,844,829,123.28 | 60.57% | 9,556,739,886.80 | 64.82% | -4.25% | Increase in recognized investment income | | Contract liabilities | 889,470,559.28 | 5.47% | 633,543,789.64 | 4.30% | 1.17% | Increase in recognized deferred game revenue | | Other current liabilities | 126,541,937.13 | 0.78% | 55,864,288.87 | 0.38% | 0.40% | Increase in accrued advertising expenses | | Treasury stock | 1,035,955,042.30 | 6.37% | 1,525,597,125.97 | 10.35% | -3.98% | Sale of employee stock ownership plan shares | Total Financial Assets Measured at Fair Value | Item | Period-beginning Amount (RMB) | Period-end Amount (RMB) | | :--- | :--- | :--- | | Total financial assets | 1,637,537,024.14 | 1,634,424,611.43 | - As of the end of the reporting period, the company had no restricted asset rights[51](index=51&type=chunk) [Investment Analysis](index=16&type=section&id=6.%20Investment%20Analysis) Total investment reached **RMB 11.742 billion**, a **2.50% increase** from the prior year-end, with continued progress on the Giant Park B1 and B2 projects and **RMB 202 million** in securities investments Current Reporting Period Investment Amount | Metric | Current Reporting Period Investment Amount (RMB) | Prior Year-end Investment Amount (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Total Investment Amount | 11,742,160,409.20 | 11,456,222,304.12 | 2.50% | - Giant Park B1 and B2 projects received **RMB 961,300** in investment during the current reporting period, with cumulative actual investment reaching **RMB 263 million** and project progress at **89.69%** as of period-end[54](index=54&type=chunk) Securities Investment Status | Security Type | Period-beginning Book Value (RMB) | Period-end Book Value (RMB) | Current Period Fair Value Change Gains/Losses (RMB) | | :--- | :--- | :--- | :--- | | Domestic and overseas stocks | 215,622,592.92 | 201,932,269.56 | -13,690,323.36 | - The company had no derivative investments or use of raised funds during the reporting period[57](index=57&type=chunk)[59](index=59&type=chunk) [Significant Asset and Equity Disposals](index=18&type=section&id=7.%20Significant%20Asset%20and%20Equity%20Disposals) During the reporting period, the company did not engage in any significant asset or equity disposal transactions - The company did not dispose of significant assets during the reporting period[60](index=60&type=chunk) - The company did not dispose of significant equity during the reporting period[61](index=61&type=chunk) [Analysis of Major Holding and Associate Companies](index=18&type=section&id=8.%20Analysis%20of%20Major%20Holding%20and%20Associate%20Companies) Key subsidiaries and associates, including Giant Mobile Technology and Shanghai Jukun Network Technology, contributed significant profits, while the company optimized its structure by establishing four new subsidiaries and deregistering eight others Major Holding and Associate Companies Financial Overview | Company Name | Company Type | Net Profit (RMB) | | :--- | :--- | :--- | | Giant Mobile Technology Co., Ltd. | Subsidiary | 191,461,698.32 | | Shanghai Giant Network Technology Co., Ltd. | Subsidiary | 183,837,852.33 | | Giant Mobile Technology Co., Ltd. | Subsidiary | 87,501,037.20 | | Giant Offshore Operating Limited | Subsidiary | 106,239,916.10 | | Shanghai Jukun Network Technology Co., Ltd. | Associate Company | 575,035,944.89 | - During the reporting period, the company established four new subsidiaries: Shanghai Chaolian Network Technology Co., Ltd., Shanghai Jianlian Network Technology Co., Ltd., Shanghai Kanlian Network Technology Co., Ltd., and Shanghai Xianglian Network Technology Co., Ltd., which had no significant impact on overall operations or performance[63](index=63&type=chunk) - Eight subsidiaries were deregistered during the reporting period, including Shanghai Jujia Network Technology Co., Ltd. and Beihai Juqu Network Technology Co., Ltd., to optimize the company's resource allocation[63](index=63&type=chunk)[64](index=64&type=chunk) [Structured Entities Controlled by the Company](index=19&type=section&id=9.%20Structured%20Entities%20Controlled%20by%20the%20Company) The company reported no structured entities under its control during the reporting period - The company reported no structured entities under its control during the reporting period[65](index=65&type=chunk) [Risks Faced by the Company and Countermeasures](index=19&type=section&id=10.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces risks from industry policy changes, intensifying market competition, and potential loss of core talent, which it addresses through policy monitoring, R&D focus, and talent development [Potential Risks Faced by the Company](index=19&type=section&id=1.%20Potential%20Risks%20Faced%20by%20the%20Company) The company faces risks from strict regulatory policies in the online gaming industry, fierce market competition due to user saturation and technological changes, and the potential loss of core talent - Industry policy changes: The online gaming industry is subject to strict regulation, with potentially higher thresholds for qualification management and content review, and policy changes may cause uncertainty in business development[65](index=65&type=chunk) - Market competition risks: User numbers are nearing saturation, leading to fierce competition, and new technologies (metaverse, AI, etc.) are constantly evolving; failure to adapt promptly could result in player loss and market share decline[65](index=65&type=chunk) - Risk of core talent loss: Talent resources are a core competitive advantage in the gaming and internet industries; failure to stabilize management and retain excellent talent would adversely affect company operations[66](index=66&type=chunk) [Countermeasures](index=19&type=section&id=2.%20Countermeasures) The company plans to mitigate risks by continuously monitoring industry policies, adhering to a self-developed boutique strategy, exploring new market opportunities, and prioritizing talent development and incentives - The company regularly organizes employees to study industry policies and regulations, focuses on market hotspots, and enhances sustainable profitability[67](index=67&type=chunk) - In R&D, the company adheres to a self-development-centric approach, focusing on its strong segments, concentrating efforts on creating hit products, and seeking new market hotspots and opportunities[67](index=67&type=chunk) - The company highly values professional talent development and recruitment, provides a platform for young business leaders, and maintains a stable core talent team through a competitive compensation and benefits system[67](index=67&type=chunk) [Implementation of Market Value Management System and Valuation Enhancement Plan](index=20&type=section&id=11.%20Implementation%20of%20Market%20Value%20Management%20System%20and%20Valuation%20Enhancement%20Plan) The company has established a "Market Value Management System" in accordance with regulations, approved by the Board of Directors, but has not disclosed a valuation enhancement plan - The company has formulated the "Market Value Management System," which was approved at the thirteenth meeting of the Sixth Board of Directors[68](index=68&type=chunk) - The company has not disclosed a valuation enhancement plan[68](index=68&type=chunk) [Implementation of "Quality and Return Dual Enhancement" Action Plan](index=20&type=section&id=12.%20Implementation%20of%20%22Quality%20and%20Return%20Dual%20Enhancement%22%20Action%20Plan) The company has announced and actively implemented its "Quality and Return Dual Enhancement" action plan, focusing on core business, R&D, globalization, AI integration, shareholder returns, and corporate governance - The company has disclosed and actively implemented its "Quality and Return Dual Enhancement" action plan[68](index=68&type=chunk)[69](index=69&type=chunk) - The company continuously focuses on its main business, enhances self-R&D capabilities, promotes a globalization strategy, and is committed to AI technology research and application[69](index=69&type=chunk) - The company prioritizes shareholder returns, actively rewarding shareholders through cash dividends and other means[69](index=69&type=chunk) - The company strengthens corporate governance, enhances standardized operations, improves compliance, and actively responds to investor concerns[69](index=69&type=chunk) [Corporate Governance, Environment, and Society](index=20&type=section&id=Item%204.%20Corporate%20Governance%2C%20Environment%2C%20and%20Society) This section details changes in the company's directors, supervisors, and senior management, profit distribution plans, employee incentive measures, environmental disclosures, and social responsibility initiatives [Changes in Directors, Supervisors, and Senior Management](index=20&type=section&id=1.%20Changes%20in%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, there were no changes in the company's directors, supervisors, or senior management, with details available in the 2024 annual report - The company's directors, supervisors, and senior management experienced no changes during the reporting period[71](index=71&type=chunk) [Profit Distribution and Capital Reserve to Share Capital During the Reporting Period](index=20&type=section&id=2.%20Profit%20Distribution%20and%20Capital%20Reserve%20to%20Share%20Capital%20During%20the%20Reporting%20Period) The company's 2025 semi-annual profit distribution plan proposes a cash dividend of **RMB 1.50 per 10 shares** (tax inclusive) to all shareholders, totaling approximately **RMB 283.56 million** 2025 Semi-Annual Profit Distribution Plan | Metric | Amount | | :--- | :--- | | Bonus shares per 10 shares (shares) | 0 | | Cash dividend per 10 shares (RMB) (tax inclusive) | 1.50 | | Share capital base for distribution (shares) | 1,890,391,971 | | Cash dividend amount (RMB) (tax inclusive) | 283,558,795.65 | | Distributable profit (RMB) | 4,039,342,694.05 | | Proportion of total cash dividend to total profit distribution | 100.00% | - This profit distribution plan is subject to approval at the 2025 First Extraordinary General Meeting of Shareholders before implementation[73](index=73&type=chunk) [Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=21&type=section&id=3.%20Implementation%20of%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures) During the reporting period, the company had no equity incentive plans, but its first employee stock ownership plan was extended to April 19, 2026, with all shares sold by July 23, 2025, for subsequent liquidation - The company had no equity incentive plans during the reporting period[74](index=74&type=chunk) - The company's first employee stock ownership plan's duration was extended by **12 months**, until April 19, 2026[75](index=75&type=chunk)[77](index=77&type=chunk) - As of July 23, 2025, all shares held by the company's first employee stock ownership plan have been sold, and subsequent asset liquidation and distribution will lead to its termination[78](index=78&type=chunk) - The company had no other employee incentive measures during the reporting period[79](index=79&type=chunk) [Environmental Information Disclosure](index=22&type=section&id=4.%20Environmental%20Information%20Disclosure) The listed company and its major subsidiaries are not included in the list of enterprises required to disclose environmental information by law - The listed company and its major subsidiaries are not included in the list of enterprises required to disclose environmental information by law[79](index=79&type=chunk) [Social Responsibility](index=22&type=section&id=5.%20Social%20Responsibility) The company actively fulfills its social responsibilities by aligning its development with social progress, making donations to support environmental protection, education, and various charitable causes - The company actively fulfills its social responsibilities, striving for coordination between corporate and social benefits, short-term and long-term interests, and its own development with social progress[79](index=79&type=chunk) - During the reporting period, a donation of **RMB 50,000** was made to the Qinghai Provincial Charity Federation for environmental protection in the Sanjiangyuan region[79](index=79&type=chunk) - A donation of **RMB 70,000** was made to the Huangshan Huangshan District Red Cross Society for school playground renovation[79](index=79&type=chunk) - A donation of **RMB 50,000** was made to the Shanghai Charity Foundation to support the "Jingxin Guardian" designated fund project[79](index=79&type=chunk) - A donation of **RMB 500,000** was made to the Shanghai Songjiang District Zhongshan Community Foundation to support charitable causes[79](index=79&type=chunk) - Teaching materials worth over **RMB 50,000** were donated to Ergun City, Inner Mongolia Autonomous Region, to promote educational development in ethnic minority areas[79](index=79&type=chunk) [Significant Matters](index=23&type=section&id=Item%205.%20Significant%20Matters) This section covers commitments, fund occupation, guarantees, auditor appointments, audit report explanations, bankruptcy, litigation, penalties, integrity, related party transactions, and other significant events [Commitments Fulfilled or Overdue by Actual Controller, Shareholders, Related Parties, Acquirers, and the Company](index=23&type=section&id=1.%20Commitments%20Fulfilled%20or%20Overdue%20by%20Actual%20Controller%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%2C%20and%20the%20Company) During the reporting period, there were no commitments fulfilled or overdue by the company's actual controller, shareholders, related parties, acquirers, or the company itself - During the reporting period, there were no commitments fulfilled or overdue by the company's actual controller, shareholders, related parties, acquirers, or the company itself[82](index=82&type=chunk) [Non-Operating Fund Occupation by Controlling Shareholders and Other Related Parties](index=23&type=section&id=2.%20Non-Operating%20Fund%20Occupation%20by%20Controlling%20Shareholders%20and%20Other%20Related%20Parties) During the reporting period, there was no non-operating fund occupation by controlling shareholders or other related parties of the listed company - During the reporting period, there was no non-operating fund occupation by controlling shareholders or other related parties of the listed company[83](index=83&type=chunk) [Irregular External Guarantees](index=23&type=section&id=3.%20Irregular%20External%20Guarantees) The company reported no irregular external guarantees during the reporting period - The company reported no irregular external guarantees during the reporting period[84](index=84&type=chunk) [Appointment and Dismissal of Accounting Firms](index=23&type=section&id=4.%20Appointment%20and%20Dismissal%20of%20Accounting%20Firms) The company's semi-annual financial report was not audited - The company's semi-annual report was not audited[85](index=85&type=chunk) [Board and Supervisory Board's Explanation on "Non-Standard Audit Report" for the Current Period](index=23&type=section&id=5.%20Board%20and%20Supervisory%20Board's%20Explanation%20on%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Current%20Period) The company reported no explanations from the Board or Supervisory Board regarding a "non-standard audit report" for the current period - The company reported no explanations from the Board or Supervisory Board regarding a "non-standard audit report" for the current period[86](index=86&type=chunk) [Board's Explanation on "Non-Standard Audit Report" for the Previous Year](index=23&type=section&id=6.%20Board's%20Explanation%20on%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Previous%20Year) The company reported no explanations from the Board regarding a "non-standard audit report" for the previous year - The company reported no explanations from the Board regarding a "non-standard audit report" for the previous year[86](index=86&type=chunk) [Bankruptcy Reorganization Matters](index=23&type=section&id=7.%20Bankruptcy%20Reorganization%20Matters) The company reported no bankruptcy reorganization matters during the reporting period - The company reported no bankruptcy reorganization matters during the reporting period[86](index=86&type=chunk) [Litigation Matters](index=23&type=section&id=8.%20Litigation%20Matters) During the reporting period, the company had no significant litigation or arbitration matters, with other ongoing cases totaling approximately **RMB 71.0771 million** not expected to have a material impact - The company had no significant litigation or arbitration matters during the current reporting period[87](index=87&type=chunk) Overview of Other Litigation and Arbitration Matters | Basic Information of Litigation (Arbitration) | Amount Involved (RMB 10,000) | Provision for Estimated Liabilities Formed | Litigation (Arbitration) Progress | Outcome and Impact of Litigation (Arbitration) | | :--- | :--- | :--- | :--- | :--- | | Summary of non-significant litigation and arbitration matters (Plaintiff) | 4,917.97 | No | All are under trial or enforcement | Will not have a significant impact on the company | | Summary of non-significant litigation and arbitration matters (Defendant) | 2,189.74 | No | All are under trial or enforcement | Will not have a significant impact on the company | [Penalties and Rectification](index=24&type=section&id=9.%20Penalties%20and%20Rectification) The company reported no penalties or rectification situations during the reporting period - The company reported no penalties or rectification situations during the reporting period[89](index=89&type=chunk) [Integrity Status of the Company, Controlling Shareholders, and Actual Controller](index=24&type=section&id=10.%20Integrity%20Status%20of%20the%20Company%2C%20Controlling%20Shareholders%2C%20and%20Actual%20Controller) The company reported no integrity issues concerning itself, its controlling shareholders, or its actual controller during the reporting period - The company reported no integrity issues concerning itself, its controlling shareholders, or its actual controller during the reporting period[90](index=90&type=chunk) [Significant Related Party Transactions](index=24&type=section&id=11.%20Significant%20Related%20Party%20Transactions) During the reporting period, the company had no significant related party transactions concerning daily operations, asset/equity acquisitions or disposals, joint investments, major related party debts, or financial company dealings - The company had no significant related party transactions related to daily operations during the reporting period[90](index=90&type=chunk) - The company had no related party transactions involving asset or equity acquisitions/disposals during the reporting period[91](index=91&type=chunk) - The company had no related party transactions involving joint external investments during the reporting period[92](index=92&type=chunk) - The company had no significant related party creditor-debtor transactions during the reporting period[93](index=93&type=chunk) - The company and its related financial companies had no deposits, loans, credit lines, or other financial business with related parties[94](index=94&type=chunk) - The financial company controlled by the company had no deposits, loans, credit lines, or other financial business with related parties[95](index=95&type=chunk) - The company had no other significant related party transactions during the reporting period[96](index=96&type=chunk) [Significant Contracts and Their Performance](index=25&type=section&id=12.%20Significant%20Contracts%20and%20Their%20Performance) The company had no trusteeship or contracting arrangements, but incurred **RMB 18.3737 million** in property and right-of-use asset depreciation for leased properties, and transferred a **RMB 400 million** trust plan debt, recognizing a gain - The company had no trusteeship arrangements during the reporting period[97](index=97&type=chunk) - The company had no contracting arrangements during the reporting period[98](index=98&type=chunk) - During the reporting period, the company and its subsidiaries incurred a total of **RMB 18,373,682.69** in property management fees and right-of-use asset depreciation expenses for leased properties[99](index=99&type=chunk) - The company had no significant guarantee situations during the reporting period[100](index=100&type=chunk) - The company transferred the underlying debt of a **RMB 400 million** trust plan, received the full transfer price, and recognized a gain on the debt transfer[102](index=102&type=chunk) - The company had no other significant contracts during the reporting period[103](index=103&type=chunk) [Explanation of Other Significant Matters](index=26&type=section&id=13.%20Explanation%20of%20Other%20Significant%20Matters) This section lists **38 important announcements** made by the company during the reporting period, covering share pledges, employee stock plan extensions, board resolutions, shareholder meetings, and financial reports - During the reporting period, the company disclosed numerous important announcements, including share pledges, employee stock ownership plan extensions, board resolutions, and annual general meeting notices[104](index=104&type=chunk)[105](index=105&type=chunk) [Significant Matters of Company Subsidiaries](index=27&type=section&id=14.%20Significant%20Matters%20of%20Company%20Subsidiaries) The company reported no significant matters concerning its subsidiaries during the reporting period - The company reported no significant matters concerning its subsidiaries during the reporting period[106](index=106&type=chunk) [Share Changes and Shareholder Information](index=28&type=section&id=Item%206.%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's share capital structure, shareholder numbers, and changes in shareholdings of directors, supervisors, and senior management [Share Change Status](index=28&type=section&id=1.%20Share%20Change%20Status) During the reporting period, the company's total share capital and share structure remained unchanged, with no variations in restricted or unrestricted shares, and no progress on share repurchases Share Change Status | Share Type | Number Before Change (shares) | Increase/Decrease in This Change (shares) | Number After Change (shares) | | :--- | :--- | :--- | :--- | | I. Restricted Shares | 0 | 0 | 0 | | II. Unrestricted Shares | 1,934,750,611 | 0 | 1,934,750,611 | | III. Total Shares | 1,934,750,611 | 0 | 1,934,750,611 | - During the reporting period, the company's total share capital remained unchanged[110](index=110&type=chunk) - The company had no progress on share repurchases during the reporting period[110](index=110&type=chunk) [Securities Issuance and Listing](index=29&type=section&id=2.%20Securities%20Issuance%20and%20Listing) The company reported no securities issuance or listing activities during the reporting period - The company reported no securities issuance or listing activities during the reporting period[110](index=110&type=chunk) [Number of Shareholders and Shareholding Status](index=29&type=section&id=3.%20Number%20of%20Shareholders%20and%20Shareholding%20Status) As of the reporting period end, the company had **50,211 common shareholders**, with Shanghai Giant Investment Management and Shanghai Tengpeng Investment (LP) holding a combined **39.27%**, and Hong Kong Securities Clearing Company holding **4.76%** - As of the end of the reporting period, the total number of common shareholders was **50,211**[111](index=111&type=chunk) Shareholding Status of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Period-end Shareholding (shares) | Pledged, Marked, or Frozen Status (shares) | | :--- | :--- | :--- | :--- | :--- | | Shanghai Giant Investment Management Co., Ltd. | Domestic Non-State-Owned Legal Person | 29.16% | 564,205,115 | Pledged: 385,000,000 | | Shanghai Tengpeng Investment Partnership (Limited Partnership) | Domestic Non-State-Owned Legal Person | 10.11% | 195,574,676 | Pledged: 142,000,000 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 4.76% | 92,092,933 | N/A: 0 | | Giant Network Group Co., Ltd. - First Employee Stock Ownership Plan | Other | 1.77% | 34,311,398 | N/A: 0 | | China Minsheng Bank Co., Ltd. - Huaxia CSI Animation and Game ETF | Other | 1.63% | 31,464,483 | N/A: 0 | | Zhang Yuejun | Domestic Natural Person | 1.44% | 27,903,200 | N/A: 0 | | Agricultural Bank of China Co., Ltd. - CSI 500 ETF | Other | 1.04% | 20,141,800 | N/A: 0 | | Industrial Bank Co., Ltd. - Fullgoal Xingyuan Optimal 12-Month Holding Mixed Fund | Other | 0.86% | 16,606,500 | N/A: 0 | | Fu Zhaoting | Domestic Natural Person | 0.86% | 16,596,300 | N/A: 0 | | Shanghai Lairu Investment Consulting Center (Limited Partnership) | Domestic Non-State-Owned Legal Person | 0.76% | 14,681,197 | N/A: 0 | - Shanghai Giant Investment Management Co., Ltd. and Shanghai Tengpeng Investment Partnership (Limited Partnership) are entities controlled by Giant Network's actual controller, Shi Yuzhu, forming a concerted action party[112](index=112&type=chunk) - As of the end of the reporting period, the company's dedicated securities account for share repurchases held **44,358,640 shares**, accounting for **2.29%** of the company's total share capital[112](index=112&type=chunk) [Changes in Shareholdings of Directors, Supervisors, and Senior Management](index=31&type=section&id=4.%20Changes%20in%20Shareholdings%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) The shareholdings of the company's directors, supervisors, and senior management remained unchanged during the reporting period, as detailed in the 2024 annual report - The shareholdings of the company's directors, supervisors, and senior management remained unchanged during the reporting period[114](index=114&type=chunk) [Changes in Controlling Shareholder or Actual Controller](index=31&type=section&id=5.%20Changes%20in%20Controlling%20Shareholder%20or%20Actual%20Controller) The company's controlling shareholder and actual controller remained unchanged during the reporting period - The company's controlling shareholder remained unchanged during the reporting period[115](index=115&type=chunk) - The company's actual controller remained unchanged during the reporting period[116](index=116&type=chunk) [Preferred Share Information](index=32&type=section&id=6.%20Preferred%20Share%20Information) The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[117](index=117&type=chunk) [Bond-Related Information](index=33&type=section&id=Item%207.%20Bond-Related%20Information) The company reported no bond-related information during the reporting period - The company reported no bond-related information during the reporting period[119](index=119&type=chunk) [Financial Report](index=34&type=section&id=Item%208.%20Financial%20Report) This section presents the company's unaudited semi-annual financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in equity, along with detailed notes [Audit Report](index=34&type=section&id=1.%20Audit%20Report) The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[121](index=121&type=chunk) [Financial Statements](index=34&type=section&id=2.%20Financial%20Statements) This section provides the company's 2025 semi-annual consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owner's equity, offering a comprehensive view of financial position and performance - The consolidated balance sheet shows total assets of **RMB 16,253,324,156.03** and total equity attributable to parent company owners of **RMB 14,043,458,336.87** at period-end[123](index=123&type=chunk)[125](index=125&type=chunk) - The consolidated income statement shows total operating revenue of **RMB 1,662,199,977.45** and net profit attributable to parent company shareholders of **RMB 777,048,091.04** for the 2025 semi-annual period[130](index=130&type=chunk)[131](index=131&type=chunk) - The consolidated cash flow statement shows net cash flow from operating activities of **RMB 742,762,741.45**[136](index=136&type=chunk) [Company Overview](index=53&type=section&id=3.%20Company%20Overview) The company is registered in Chongqing and headquartered in Shanghai, primarily engaged in computer game software development and online game operations, with Shi Yuzhu as Chairman and actual controller as of June 30, 2025 - The company's registered address is No. 98 Longmenhao Old Street, Nan'an District, Chongqing, and its headquarters is at No. 655 Zhongchen Road, Songjiang District, Shanghai[152](index=152&type=chunk)[153](index=153&type=chunk) - Its business scope includes computer game software development and sales, online game publishing and operation, internet sales of game products, system integration services, and data processing[153](index=153&type=chunk) - As of June 30, 2025, Shi Yuzhu is the company's Chairman and actual controller[154](index=154&type=chunk) - These financial statements were approved by the company's Sixth Board of Directors at its fifteenth meeting on August 26, 2025[155](index=155&type=chunk) [Basis of Financial Statement Preparation](index=53&type=section&id=4.%20Basis%20of%20Financial%20Statement%20Preparation) These financial statements are prepared in accordance with the accounting standards for business enterprises issued by the Ministry of Finance and are presented on a going concern basis - These financial statements are prepared in accordance with the "Accounting Standards for Business Enterprises - Basic Standards" issued by the Ministry of Finance, and subsequent specific accounting standards, interpretations, and other relevant regulations[156](index=156&type=chunk) - These financial statements are presented on a going concern basis[157](index=157&type=chunk) [Significant Accounting Policies and Estimates](index=53&type=section&id=5.%20Significant%20Accounting%20Policies%20and%20Estimates) This section details the company's accounting policies and estimates, including revenue recognition, financial instruments, asset impairment, and deferred tax assets, emphasizing key judgments and uncertainties - The Group has formulated specific accounting policies and estimates based on its actual production and operation characteristics, primarily reflected in bad debt provisions for receivables, depreciation of fixed assets, amortization of intangible assets, and revenue recognition and measurement[158](index=158&type=chunk) - These financial statements comply with the requirements of accounting standards for business enterprises, truthfully and completely reflecting the financial position of the company and the Group as of June 30, 2025, and the operating results and cash flows for the semi-annual period of 2025[159](index=159&type=chunk) - Revenue recognition and measurement policy: The Group recognizes revenue when it fulfills its performance obligations in the contract, i.e., when the customer obtains control of the relevant goods or services, primarily from online game revenue[234](index=234&type=chunk)[235](index=235&type=chunk) - Significant accounting judgments and estimates include impairment of financial instruments, impairment of non-current assets, impairment of goodwill, estimated useful lives of in-game items and player lifecycles, fair value of unlisted equity investments, and deferred tax assets[261](index=261&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk) [Taxation](index=70&type=section&id=6.%20Taxation) This section outlines the company's main tax types and rates, including VAT (1%, 6%, 9%, 13%), urban maintenance and construction tax (7%), and corporate income tax (25%), with some subsidiaries enjoying preferential tax rates or VAT refunds Main Tax Types and Rates | Tax Type | Tax Rate | | :--- | :--- | | Value-Added Tax (VAT) | 1%, 6%, 9%, 13% | | Urban Maintenance and Construction Tax | 7% | | Corporate Income Tax | 25% (general), 15% (high-tech enterprises), 12.5% (software enterprises halved), 0% (software enterprises exempted) | | Education Surcharge | 3% | | Local Education Surcharge | 2% | | Withholding Corporate Income Tax | 10% | - Shanghai Jupeng Network Technology Co., Ltd., Shanghai Mouhan Network Technology Co., Ltd., and Shanghai Kuailian Network Technology Co., Ltd. enjoy corporate income tax incentives for software enterprises ("two-year exemption, three-year half reduction")[277](index=277&type=chunk) - Shanghai Zhengtu Information Technology Co., Ltd., Shanghai Zhengju Information Technology Co., Ltd., Giant Mobile Technology Co., Ltd., Giant Mobile Technology Co., Ltd., and Beijing Dijiang Network Technology Co., Ltd. enjoy a **15%** preferential corporate income tax rate as high-tech enterprises[278](index=278&type=chunk) - Some subsidiaries selling self-developed computer software products are eligible for an immediate VAT refund on the portion of their actual VAT burden exceeding **3%** after being taxed at the statutory **13%** rate[279](index=279&type=chunk) [Notes to Consolidated Financial Statements](index=71&type=section&id=7.%20Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes for each item in the consolidated financial statements, explaining period-end and period-beginning balances, current period changes, and related accounting treatments - Cash and cash equivalents balance at period-end was **RMB 3,125,467,878.87**, an increase from the period-beginning[281](index=281&type=chunk) - Accounts receivable balance at period-end was **RMB 187,305,745.23**, of which **RMB 47,022,843.22** was provided for bad debts on an individual basis[289](index=289&type=chunk)[291](index=291&type=chunk) - Long-term equity investments book value at period-end was **RMB 9,844,829,123.28**, primarily including the investment in Shanghai Jukun Network Technology Co., Ltd[396](index=396&type=chunk) - Operating revenue and cost breakdown shows mobile online game business as the primary revenue source, with current period revenue of **RMB 1,299,232,213.46** and a gross profit margin of **91.92%**[514](index=514&type=chunk) - Net cash flow from operating activities was **RMB 742,762,741.45**, mainly due to increased game revenue[549](index=549&type=chunk) [Research and Development Expenses](index=122&type=section&id=8.%20Research%20and%20Development%20Expenses) This section discloses the company's R&D expenditures, but the absence of capitalized R&D projects suggests no significant capitalized R&D spending during the reporting period - No capitalized R&D projects or significant externally acquired R&D projects were listed during the reporting period[564](index=564&type=chunk)[565](index=565&type=chunk)[566](index=566&type=chunk) [Changes in Consolidation Scope](index=123&type=section&id=9.%20Changes%20in%20Consolidation%20Scope) During the reporting period, the company established four new subsidiaries and deregistered eight others to optimize resource allocation, with no non-same control, same control, reverse acquisition, or loss of control over subsidiaries - The Group established four subsidiaries: Shanghai Chaolian Network Technology Co., Ltd., Shanghai Jianlian Network Technology Co., Ltd., Shanghai Kanlian Network Technology Co., Ltd., and Shanghai Xianglian Network Technology Co., Ltd[574](index=574&type=chunk) - The Group deregistered eight subsidiaries: Shanghai Jujia Network Technology Co., Ltd., Beihai Juqu Network Technology Co., Ltd., Shanghai Xibi Network Technology Co., Ltd., LION COAST LIMITED, WISE RIPPLE LIMITED, Giant Interactive (BVI) Limited, Shanghai Moyu Network Technology Co., Ltd., and Shanghai Moniwan Network Technology Co., Ltd[574](index=574&type=chunk) - The company had no non-same control business combinations, same control business combinations, reverse acquisitions, or loss of control over subsidiaries[567](index=567&type=chunk)[571](index=571&type=chunk)[573](index=573&type=chunk)[574](index=574&type=chunk) [Interests in Other Entities](index=126&type=section&id=10.%20Interests%20in%20Other%20Entities) This section details the company's interests in subsidiaries, joint ventures, and associates, including wholly-owned or controlled subsidiaries primarily engaged in game operations, and Shanghai Jukun Network Technology as a significant associate - The company owns multiple wholly-owned or controlled subsidiaries, such as Giant Interactive (HK) Limited and Shanghai Giant Network Technology Co., Ltd., primarily engaged in game operations and agency, computer software and hardware design and development, and other businesses[577](index=577&type=chunk)[578](index=578&type=chunk)[579](index=579&type=chunk) - Shanghai Jukun Network Technology Co., Ltd. is a significant associate, with the company holding **48.81%** (direct) and **0.19%** (indirect) equity, accounted for using the equity method[585](index=585&type=chunk) - Shanghai Jukun Network Technology Co., Ltd. had total assets of **RMB 50,205,423,400.58**, equity attributable to parent company shareholders of **RMB 17,283,439,038.67**, and a net profit of **RMB 575,035,944.89** for the current period[588](index=588&type=chunk) [Government Grants](index=133&type=section&id=11.%20Government%20Grants) During the reporting period, the company recognized **RMB 80,851,902.04** in government grants as current period income, primarily from VAT immediate refunds, enterprise development subsidies, and handling fee rebates Government Grants Recognized in Current Profit/Loss | Source of Other Income | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | VAT immediate refund | 67,378,115.68 | 80,028,509.05 | | Enterprise development special subsidy | 9,750,000.00 | 1,511,470.35 | | Handling fee rebate | 2,278,429.76 | 1,957,778.43 | | Other | 1,445,356.60 | 19,015.80 | | Total | 80,851,902.04 | 83,516,773.63 | [Risks Related to Financial Instruments](index=133&type=section&id=12.%20Risks%20Related%20to%20Financial%20Instruments) The company manages credit risk through reputable third-party transactions, liquidity risk through diverse financing, and market risk (equity price risk) through diversified investment portfolios, without engaging in hedging activities - The company faces credit risk, liquidity risk, and market risk[594](index=594&type=chunk) - Credit risk is managed by transacting with recognized, reputable third parties and continuously monitoring accounts receivable balances[595](index=595&type=chunk) - Liquidity risk is managed by utilizing various financing methods to maintain a balance between financing continuity and flexibility[599](index=599&type=chunk) - Market risk, primarily equity instrument investment price risk, is managed by holding diversified investment portfolios[600](index=600&type=chunk) - The company does not engage in hedging activities for risk management[604](index=604&type=chunk) Asset-Liability Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 16,253,324,156.03 | 14,742,575,985.33 | | Total Liabilities | 2,180,566,148.10 | 1,881,497,502.11 | | Asset-Liability Ratio | 13.42% | 12.76% | [Disclosure of Fair Value](index=136&type=section&id=13.%20Disclosure%20of%20Fair%20Value) This section discloses the period-end fair values of assets and liabilities measured at fair value, including trading financial assets, other equity instrument investments, and other non-current financial assets, using various valuation methods Period-end Fair Value of Assets and Liabilities Measured at Fair Value | Item | Level 1 Fair Value Measurement (RMB) | Level 2 Fair Value Measurement (RMB) | Level 3 Fair Value Measurement (RMB) | Total (RMB) | | :--- | :--- | :--- | :--- | :--- | | (I) Trading financial assets | 201,932,269.56 | 0.00 | 3,500,000.00 | 205,432,269.56 | | (II) Other equity instrument investments | 0.00 | 0.00 | 836,034,274.85 | 836,034,274.85 | | (III) Other non-current financial assets | 0.00 | 0.00 | 592,958,067.02 | 592,958,067.02 | - Stock investments use active market quotations to determine fair value[608](index=608&type=chunk) - Unlisted fund investments and equity investments use asset-based or market approaches, while structured deposits use the discounted cash flow method[609](index=609&type=chunk) [Related Parties and Related Party Transactions](index=138&type=section&id=14.%20Related%20Parties%20and%20Related%20Party%20Transactions) The company's ultimate controlling party is Shi Yuzhu, and during the reporting period, it engaged in various related party transactions, including purchasing property services, providing rental income, and transferring a **RMB 400 million** debt to a related party - The ultimate controlling party of the enterprise is Shi Yuzhu[138](index=138&type=chunk) Purchase/Acceptance of Goods/Services Related Party Transactions | Related Party | Related Transaction Content | Current Period Amount (RMB) | | :--- | :--- | :--- | | Shanghai Jiantai Biotechnology Co., Ltd. | Property fees | 5,660,377.36 | | Shanghai Jiantai Liquor Industry Co., Ltd. | Purchase of goods | 51,780.00 | | Shanghai Jianjiu Biotechnology Co., Ltd. | Purchase of goods | 11,280.00 | Lessor Related Lease Income | Lessee Name | Type of Leased Asset | Lease Income Recognized in Current Period (RMB) | | :--- | :--- | :--- | | Shanghai Kangpeijian Industrial Co., Ltd. | Property lease | 862,644.89 | | Shanghai Jianjiu Biotechnology Co., Ltd. | Property lease | 656,658.79 | - The company transferred its **RMB 400 million** claim against Minsheng Trust to related party Shanghai Zhunji Business Consulting Partnership (Limited Partnership) for **RMB 17,928,286.35**, recognizing a gain on the debt transfer[626](index=626&type=chunk) - Key management personnel compensation expenses (excluding share-based payment expenses) amounted to **RMB 7,912,377.02**[628](index=628&type=chunk) - Interest on financial accommodation with ALPHA FRONTIER LIMITED amounted to **RMB 11,001,757.22**[629](index=629&type=chunk) [Share-Based Payment](index=141&type=section&id=15.%20Share-Based%20Payment) The company reported no share-based payment activities, expenses, or modifications/terminations during the reporting period - The company reported no overall share-based payment situation during the reporting period[633](index=633&type=chunk) - The company reported no equity-settled share-based payment situation during the reporting period[634](index=634&type=chunk) - The company reported no cash-settled share-based payment situation during the reporting period[634](index=634&type=chunk) - The company reported no share-based payment expenses for the current period[634](index=634&type=chunk) - The company reported no modifications or terminations of share-based payments during the reporting period[635](index=635&type=chunk) [Commitments and Contingencies](index=142&type=section&id=16.%20Commitments%20and%20Contingencies) As of the reporting period end, the company had signed but unprovided capital commitments of **RMB 112.2514 million** and unfulfilled investment commitments of **RMB 2.9647 million**, with no other significant contingencies

Group 1 - The gaming sector is experiencing a significant rebound, with the gaming ETF (159869) showing a slight increase and potentially achieving a "six consecutive days" rise [1] - The gaming ETF has seen a net inflow of funds for four consecutive trading days, accumulating a total of 311 million yuan, indicating strong investor interest [1] - The Chinese government has released opinions on the deep implementation of "Artificial Intelligence +" actions, aiming for extensive integration of AI with six key areas by 2027, and a significant growth in the scale of the AI core industry [1] Group 2 - Tianfeng Securities indicates a positive trend in the Chinese AI sector, highlighting the continuous evolution of domestic model capabilities and the dual resonance of models and applications [2] - The release of DeepSeek's V3.1 version showcases breakthroughs in code understanding and task execution, reflecting the collaborative optimization of the industry by domestic AI companies [2] - The overall outlook for long-term investment opportunities in the Chinese AI sector remains optimistic [2] Group 3 - Companies like G-bits (603444) and K-Game Network (002517) are leveraging AI to enhance efficiency and reduce costs in game development [3] - Giant Network (002558) is integrating AI into gameplay, introducing a mixed competition mechanism between players and intelligent agents [3] - The implementation of AI technology is driving a comprehensive upgrade across the gaming industry, enhancing both competitive strength and player experience [3]

Market Performance - Global markets continued to rise last week, with MSCI Global up by 1.5%, MSCI Developed up by 1.5%, and MSCI Emerging up by 1.3%[3] - The US stock market's earnings expectations for 2025 were revised upward, with the S&P 500 EPS forecast increased from 268 to 269[4] Economic Expectations - Global economic expectations were adjusted upward, with the Citigroup Economic Surprise Index for the US rising due to dovish signals from the Fed[4] - The issuance of new special bonds by local governments reached 2392.7 billion CNY, a year-on-year increase of 76.7%[19] Industry Insights - In the home appliance sector, TCL Electronics reported a total revenue of 54.777 billion HKD for H1 2025, a year-on-year increase of 20.4%[15] - The gaming industry saw a record high of 166 domestic game approvals in August, with a total of 1050 approvals in the first eight months of 2025, significantly higher than the previous year's 850[31] Investment Recommendations - In the home appliance sector, recommended stocks include Stone Technology and Ecovacs for their strong performance and growth potential[14] - For the construction industry, low valuation high-dividend companies such as China State Construction and China Railway Construction are recommended due to their expected benefits from PPP policy catalysts[39]

Industry Overview - The National Press and Publication Administration has approved a total of 173 games in August 2025, including 166 domestic and 7 imported games, marking a new high for the year [1] - Among the approved domestic games, there are 107 mobile games, 39 casual puzzle games, 17 mobile and client games, 1 console game (PS5), and 2 client games [1] - Tianfeng Securities predicts that the market size for AAA games in China will reach 13.3 billion yuan in 2025 and 16.9 billion yuan in 2026, with a projected CAGR of 35% from 2027 to 2028 [1] Company Developments - Giant Network has launched its overseas brand ZTimes and is expanding into the European and American markets with its self-developed game "SuperSus" [1] - G-bits focuses on developing high-quality products in niche segments and aims to withstand industry fluctuations through long-term operations, with its game "Kulu" successfully obtaining a license [2]

Group 1 - The esports sector saw an increase of 1.85%, ranking 6th among concept sectors, with 26 stocks rising, including Yuntuo Holdings and 37 Interactive Entertainment hitting the daily limit [1] - Notable gainers included Kyeong Network, ST Zhongqingbao, and Giant Network, which rose by 4.66%, 3.62%, and 2.94% respectively [1] - The sector experienced a net inflow of 591 million yuan from main funds, with 15 stocks receiving net inflows, and 5 stocks exceeding 30 million yuan in net inflow [2] Group 2 - 37 Interactive Entertainment led the net inflow with 785 million yuan, followed by ST Huadong, Zhejiang Shuculture, and Oriental Pearl with net inflows of 191 million yuan, 69 million yuan, and 43 million yuan respectively [2] - The net inflow ratios for 37 Interactive Entertainment, ST Huadong, and Zhejiang Shuculture were 30.00%, 9.54%, and 6.21% respectively [3] - The trading volume for 37 Interactive Entertainment was 78.53 million yuan, with a turnover rate of 8.46% [3]

Investment Rating - The report assigns an "Overweight" rating to the gaming industry [1] Core Insights - In August, the number of domestic game approvals reached a record high of 166, with several listed companies receiving product approvals, indicating a positive outlook for the industry supported by favorable policies and abundant supply [3] - The domestic gaming market size in July 2025 was 29.084 billion yuan, showing a year-on-year growth of 4.62%, with mobile gaming growing by 0.92% and client-based gaming by 16.56% [5] Summary by Sections Approval Data - In August 2025, the National Press and Publication Administration approved 166 domestic games, marking a historical high. A total of 1,050 domestic game approvals have been issued in the first eight months of the year, significantly higher than the 850 approvals in the same period last year [5] - The report highlights specific games that received approvals, including titles from companies like NetEase, Bilibili, and 37 Interactive Entertainment [5] Market Performance - The gaming industry continues to show positive growth, with notable performances from games like Tencent's "Delta Action" achieving 20 million daily active users in July [5] - The report maintains a positive outlook for the gaming industry in the third quarter, particularly during the summer peak season, due to stable approval rhythms and rich product supply [5] Investment Recommendations - The report recommends companies with solid fundamentals and quality content reserves, including Kying Network, 37 Interactive Entertainment, Giant Network, Perfect World, Shenzhou Taiyue, and others [5][6]

Market Performance - The three major indices showed mixed results, with the Shanghai Composite Index down 0.39%, the Shenzhen Component Index up 0.26%, and the ChiNext Index down 0.76% [2] - Over 2,700 stocks rose in the two markets, with a total trading volume of approximately 2.68 trillion yuan [3] Apple Supply Chain Stocks - Apple-related stocks experienced significant movements, with GoerTek (002241.SZ) and Lingyi iTech (002600.SZ) rising by 10%, and Luxshare Precision (002475.SZ) increasing by over 6% [3] - GoerTek, as a leading player in the Apple supply chain, has benefited from the AI wave, achieving six consecutive quarters of year-on-year growth in net profit attributable to shareholders from Q1 2024 to Q2 2024 [3] Consumer Electronics Sector - The high demand in the consumer electronics sector is attributed to both AI stimulation and domestic "national subsidy" policies, which are reviving mid-range consumption and driving structural recovery in mobile phones and tablets [3] Livestock Industry - Livestock stocks showed strong performance, with Xiaoming Co. (300967.SZ) rising over 10% and Muyuan Foods (002714.SZ) increasing by over 7% [3] - The National Development and Reform Commission reported that the average pig-to-grain price ratio fell below 6:1, entering a warning zone, prompting the government to initiate central frozen pork reserves [4] Gaming Sector - The gaming sector saw positive movements, with 37 Interactive Entertainment (002555.SZ) rising by 10% and other companies like Digital Soul (603258.SZ) and Giant Network (002558.SZ) also increasing [4] - A report from Guotai Junan highlighted that the National Press and Publication Administration approved a record 166 domestic online games on August 25, 2025, indicating a stable approval rhythm and a rich supply of gaming products [4] Beauty and Personal Care Sector - The beauty and personal care sector performed well, with Shuiyang Co. (300740.SZ) rising over 10% and other companies like Proya Cosmetics (603605.SH) and Huaxi Biological (688363.SH) also increasing [5] - According to a report from Dongfang Securities, the domestic cosmetics industry is entering a phase of steady and high-quality development, driven by economic growth, demographic shifts, cultural confidence, and the rise of domestic brands [5] Declining Sectors - The banking, securities, and semiconductor sectors faced declines, with companies like Chipone Technology (688521.SH) dropping over 9% and Haiguang Information (688041.SH) down over 6% [5] - The military and rare earth sectors also weakened, with China Rare Earth (000831.SZ) and Northern Rare Earth (600111.SH) falling nearly 7% [5]

Market Overview - A-shares experienced a collective decline with the Shanghai Composite Index down 0.36%, the Shenzhen Component Index down 0.09%, and the ChiNext Index down 0.69% as of 10:30 AM, with over 2800 stocks declining in total [1]. Gaming Sector - The gaming sector showed resilience with stocks like 37 Interactive Entertainment hitting the daily limit, and companies such as Kaixin Network, Perfect World, and Giant Network also seeing gains. The National Press and Publication Administration announced the approval of 173 games in August 2025, including 166 domestic and 7 imported titles, marking a new high for the year [2]. Semiconductor Sector - The semiconductor sector faced adjustments, with companies like Chipone Technology falling over 7% and Cambricon Technologies down over 3%. Other companies such as Yuntian Lifeng and Haiguang Information also experienced declines. The innovative drug sector saw slight pullbacks, with Ji Min Health and Shunlian Bio dropping over 3%. According to Xiangcai Securities, the domestic innovative drug industry is expected to reach a turning point in 2025, shifting from capital-driven to profit-driven growth, with ongoing support from fundamentals and policies likely to continue the trend of performance and valuation recovery [3]. Investment Guidelines - In the current market context, investment advisory institutions suggest that novice investors should proceed with caution and fully understand the market conditions before engaging in stock investments. The director of Guangdong Bozhong Dayang Financial Research Institute, Wu Zhihui, emphasizes that the current slow bull market is characterized by structural differentiation and sector rotation, where only 30% of leading stocks may continue to strengthen, 40% may remain stagnant, and the remaining 30% could experience declines. Wu recommends four core principles for novice investors: 1. Abandon the idea of "getting rich overnight" and embrace long-termism, avoiding the traps of chasing themes, trading small caps, and using leverage. 2. Utilize professional tools for informed decision-making, avoiding blind following of trends, especially in the face of uncertainties. 3. Strictly adhere to risk control rules, including maintaining appropriate position sizes, setting stop-loss lines, and avoiding leverage and speculative stocks. 4. Maintain a mindset that influences long-term success, focusing on cultivating investment habits during this slow bull market and shifting from frequent short-term trading to a philosophy of weekly reviews and deepening industry logic [5].