CENTURY HUATONG(SZ:002602) Xin Lang Cai Jing·2025-12-09 13:43Core Insights - The global mobile gaming market revenue has only slightly increased by 3.4%, with growth concentrated in specific segments such as strategy, simulation, and hybrid casual games, indicating a structural transformation in the industry [1][19]. Market Trends - The revenue trend for leading store platforms from 2023 to 2025 shows that developed markets like the US, Europe, and Japan are experiencing growth slowdowns, yet they maintain high average revenue per paying user (ARPPU), which is crucial for industry revenue stability [3][19]. - The industry is witnessing a Matthew effect, where over 40% of revenue comes from the top five paid packages or top ten games, highlighting the increasing market concentration [3][19]. Strategy Game Growth - Strategy games are identified as a significant growth engine, with a stable and strong growth trend since mid-2024. The total revenue for strategy games is projected to grow from $10.8 billion to $13.5 billion from October 2024 to September 2025, reflecting a year-on-year increase of 25.55%, significantly surpassing the global market average [4][20]. - Within the strategy game segment, the 4X strategy (SLG) category shows remarkable performance, with revenue increasing from $5.4 billion to $6.9 billion, marking a 25.84% growth [5][21]. Player Spending Behavior - Players of strategy games exhibit exceptional spending capabilities, with US strategy game players spending twice as much as those in gambling games within the first 90 days of gameplay. The ARPPU for strategy games on the App Store is eight times that of Google Play, indicating high user value and engagement [6][22]. Company Performance - Century Games has effectively leveraged industry trends with its innovative "SLG+X" strategy, creating a competitive advantage by aligning with mobile users' preferences for lightweight experiences and enhancing user spending willingness [8][24]. - The company has launched successful titles like "Whiteout Survival" and "Kingshot," which have rapidly gained traction in the global market, establishing a positive cycle of hit iterations and new product reserves [8][24]. Puzzle and Casual Game Growth - The puzzle and casual gaming market is also experiencing steady growth, with an overall revenue increase of 14.72% projected for 2025. The App Store is expected to see an 18.54% increase, driven by strong performances in T1 markets like the UK and Ireland [9][25]. - Merge games within the puzzle segment have shown a significant revenue increase of 61.36%, growing from $898 million to $1.5 billion, appealing to a broad user base due to their accessibility and engaging gameplay [11][27]. Long-term Strategy - Century Games recognizes the strategic value of the casual gaming segment, having explored various approaches since "Family Farm Adventure," which has led to valuable user insights and operational experience [13][29]. - The upcoming release of "Tasty Travels: Merge Game" is expected to drive growth, with the company preparing multiple products for a concentrated launch cycle, aiming to create a new growth cluster alongside the SLG segment [15][31]. Data-Driven Decision Making - The company has established a data-driven "research, operation, and development" collaborative system, ensuring that all decisions are based on extensive A/B testing and ROI analysis, which has led to growth exceeding industry averages [16][32]. - Century Games ranks second in global mobile publisher revenue, with flagship titles consistently topping revenue charts, demonstrating a strong dual-driver growth model [16][32]. Market Valuation - Recent reports suggest that the market should view Century Games beyond traditional gaming company metrics, focusing on its high certainty of performance growth and the scarcity of its global market position, justifying a valuation of 23 times the 2026E P/E ratio [17][33].