Summary of the Conference Call for Xindong Company Company Overview - Xindong Company initially started as a resource website, transitioned to web games, then to the TapTap platform, and finally entered the game publishing sector. From 2011 to 2014, the company successfully operated the game "God's Path," realizing the importance of operations and subsequently shifted focus to self-developed mobile games, with mobile game revenue accounting for 92% by 2017 [2][4][8]. Key Points and Arguments Industry and Market Dynamics - The mobile gaming market in China is dominated by Tencent and NetEase, which hold 75%-80% of the market share, while the global market is more diversified with various champions in different categories [11]. - Xindong Company has actively expanded its overseas market, increasing its overseas revenue share from 2% in 2016 to 62% in 2018, maintaining over half of its revenue from international markets [2][6]. Strategic Shifts - The company faced challenges due to piracy issues, leading to a strategic pivot towards enhancing overseas distribution and increasing self-developed game efforts. R&D expenses rose from 10% to 45%-48% post-2020, with a significant increase in R&D personnel [2][9][10]. - Xindong's TapTap platform, launched in 2016, has become a key player in the mobile gaming distribution space, focusing on user engagement through community interactions and innovative marketing strategies [5][20]. Financial Performance - The company’s advertising revenue from the TapTap platform has shown a compound annual growth rate of 25%-30% from 2019 to 2023, indicating a stable income stream despite fluctuations in game revenue [10][29]. - The overall revenue growth is expected to remain in the low to mid-double digits, supported by unique platform advantages and improving R&D capabilities [29]. Game Development and Releases - Xindong's self-developed games launched in 2022, such as "Flash Party" and "T3," did not meet expectations due to incomplete features and strong competition, leading to a strategic refocus on key projects [9][13]. - Upcoming titles like "Xindong Town" and "Torchlight" are anticipated to drive revenue growth, with "Xindong Town" showing promising user engagement metrics [15][19]. Challenges and Future Outlook - The company faces significant pressure to release new products, with only one confirmed game pipeline for 2025, which is "RO2 Advanced Legend." The strategy includes leveraging mature gameplay to mitigate development risks and encouraging user-generated content [14][19]. - The TapTap platform's user growth has plateaued, with a less than 1% increase in monthly active users in the first half of 2025, indicating a need for continuous innovation and content updates to sustain growth [26][25]. Additional Important Insights - Xindong's unique zero-commission model on the TapTap platform allows for higher profit margins for developers, with gross margins ranging from 50% to 70% [22]. - The company’s ADN business, which provides one-stop advertising services, has generated over 30 million yuan monthly but faces competition from major players in the advertising market [28]. - The overall sentiment among investors remains cautious, with a focus on the company's ability to balance its game development and advertising revenue streams effectively [10][30].

Group 1 - Tencent has secured global publishing rights for SHIFT UP's new game "Project Spirits," further deepening their strategic partnership after the success of "NIKKE" [1] - "Project Spirits" is a cross-platform game developed using UE5, themed around "Eastern Fantasy," and is expected to launch globally in 2027 [1] - This collaboration strengthens Tencent's leading position in the global gaming distribution sector and reserves important IP for future revenue growth [1] Group 2 - Century Huatong's chairman Wang Ji addressed investors for the first time after the company successfully removed its delisting risk, indicating a shift in value focus towards the application layer as industry infrastructure improves [2] - The core profit structure of the company is primarily driven by "DianDian Interactive," which accounts for about two-thirds of profits, while other business segments contribute the remaining third [2] - Wang Ji's comments on the impact of the Apple-WeChat revenue sharing agreement suggest limited effects on domestic revenue, while potentially enhancing user retention and payment efficiency [2] Group 3 - Sony's "Death Stranding 2: Director's Cut" PC version has received ESRB certification, rated M for mature audiences, indicating its upcoming cross-platform release [3] - The game, which launched on PS5 on June 26, is expected to expand its user base and generate additional revenue streams for Sony [3] - This move reinforces the "console first, then PC" business model in the gaming industry, benefiting developers with strong IPs and boosting market confidence in the longevity of AAA titles [3]

Core Insights - The company reported total revenue of 1.69 billion yuan for Q3 2025, marking a nearly nine-quarter high with a year-on-year growth rate of approximately 10% [2][3] - Live streaming revenue stabilized at 1.16 billion yuan, while game-related services, advertising, and other businesses saw rapid growth, with revenue increasing by about 30% to 530 million yuan, accounting for 31.5% of total revenue [2][4] - The company achieved a Non-GAAP operating profit of 6.3 million yuan and a net profit attributable to the company of 36.3 million yuan for the quarter [2][3] - The total Monthly Active Users (MAU) reached 162 million, indicating stable user engagement [2][3] Revenue Breakdown - Live streaming revenue grew by approximately 3% year-on-year, marking the first positive growth since Q3 2021 [6] - Game-related services, advertising, and other income reached 530 million yuan, with a year-on-year increase of about 30% [4][6] - The sales of in-game items became a new growth point, with revenue from this segment increasing by over 200% year-on-year, particularly in popular games like "Honor of Kings" and "PUBG Mobile" [4][5] User Engagement and Ecosystem - The company noted a significant increase in the number of returning top streamers, enhancing platform influence [3] - The company has expanded its reach to over 100 million users outside its platform through collaborations with top streamers on various platforms [3][4] - The introduction of new features such as a short video section and game assistance tools has improved user experience and engagement [6] Game Publishing and New Initiatives - The company plans to launch its first game, "Goose Duck," a social deduction game, which has already surpassed 10 million pre-registrations during the testing phase [5] - The self-produced variety show "Goose Night" has attracted numerous top streamers, enhancing marketing efforts and engaging a large player base [5] Event and International Strategy - The company hosted nearly 100 licensed events and about 40 self-produced events in Q3 2025, maintaining a leading market share in top esports event streaming [7] - The company is focusing on international market expansion, optimizing product experience and content ecosystem to enhance user retention and engagement [7]

Core Insights - The company reported total revenue of 1.69 billion yuan for Q3 2025, marking a new high in nearly nine quarters with a year-on-year growth rate of approximately 10% [1][2] - Live streaming revenue stabilized at 1.16 billion yuan, while game-related services, advertising, and other businesses saw rapid growth, with revenue increasing by about 30% to 530 million yuan, accounting for 31.5% of total revenue [1][2] - The company achieved a Non-GAAP operating profit of 6.3 million yuan and a net profit attributable to the company of 36.3 million yuan [1] Revenue Breakdown - Total revenue reached 1.69 billion yuan, with live streaming revenue at 1.16 billion yuan and game-related services, advertising, and other income at 530 million yuan [1][2] - Game-related services, advertising, and other income accounted for over 30% of total revenue for the first time [2][3] User Metrics - The total Monthly Active Users (MAU) reached 162 million, maintaining stability [3] - The company estimates that its reach to users outside its platform has surpassed 100 million, enhancing its potential for monetization [3] Growth Drivers - The sales of in-game items have become a new growth point, with revenue from this segment increasing by over 200% year-on-year, particularly in popular games like "Honor of Kings" and "PUBG Mobile" [4] - The company plans to launch its first game, "Goose Goose Duck," which has already surpassed 10 million pre-registrations during testing [4] Live Streaming and Content Strategy - Live streaming revenue grew by approximately 3%, marking the first positive year-on-year growth since Q3 2021 [5] - The company has introduced new features such as a short video section and game assistance tools to enhance user experience and engagement [5] Event Ecosystem - The company provided nearly 100 licensed events and about 40 self-produced events in Q3 2025, maintaining a leading market share in top esports event streaming [6] - The company hosted the "League of Legends Asian Invitational," significantly enhancing its brand's international influence [6] International Expansion - The user base in overseas markets has shown steady growth, with a focus on optimizing product experience and content ecosystem to improve user retention [6]

Core Insights - The company reported total revenue of 1.69 billion yuan for Q3 2025, marking a nearly nine-quarter high with a year-on-year growth rate of approximately 10% [1][2] - Live streaming revenue stabilized at 1.16 billion yuan, while game-related services, advertising, and other businesses saw rapid growth, with revenue increasing by about 30% to 530 million yuan, accounting for 31.5% of total revenue [1][2] - The company achieved a Non-GAAP operating profit of 6.3 million yuan and a net profit attributable to the company of 36.3 million yuan [1] Revenue Breakdown - Total revenue reached 1.69 billion yuan, with live streaming revenue at 1.16 billion yuan and game-related services, advertising, and other income at 530 million yuan [1][2] - Game-related services, advertising, and other income accounted for over 30% of total revenue for the first time [2][3] User Metrics - The total Monthly Active Users (MAU) reached 162 million, indicating stable user engagement [1][3] Growth Drivers - The company noted a significant increase in the number of returning top streamers and is actively promoting a multi-platform ecosystem strategy to expand the influence of its streamer ecosystem [3] - The sales of in-game items have become a new growth point, with revenue from this segment increasing by over 200% year-on-year, particularly in popular games like "Honor of Kings" and "PUBG Mobile" [4] Future Outlook - The company plans to launch its first game, "Duck Duck Goose," which has already surpassed 10 million pre-registrations during the testing phase [4] - The company aims to enhance its game publishing capabilities and has developed a self-produced variety show to support the marketing of new games [4] Live Streaming and Content Strategy - Live streaming revenue grew by approximately 3%, marking the first positive year-on-year growth since Q3 2021 [5] - The company has introduced new features such as a short video section and game assistance tools to enhance user experience and engagement [5] Event Ecosystem - The company provided nearly 100 licensed events and about 40 self-produced events in Q3 2025, maintaining a leading market share in top esports event streaming [6] - Upcoming events include the "Demacia Cup" and the "DDC Diamond Championship Autumn Tournament," aimed at further expanding the company's influence in the event ecosystem [6] International Expansion - The company is focusing on key market layouts and optimizing product experience to enhance user retention and engagement in overseas markets [6]

Financial Data and Key Metrics Changes - Total net revenues for Q3 reached approximately RMB 1.7 billion, marking a year-over-year growth of about 10%, the highest level in the past nine quarters [3][12] - Non-GAAP operating profit was approximately RMB 6.3 million, reflecting a meaningful improvement over the same period last year [3][12] - Live streaming revenues increased by about 3% year-over-year to RMB 1.16 billion, while game-related services, advertising, and other revenues grew around 30% year-over-year to RMB 532 million, accounting for 31.5% of total net revenues [12][13] Business Line Data and Key Metrics Changes - Revenues from game-related services, advertising, and other segments grew 30% year-over-year, reaching RMB 532 million, driven by strong in-game item sales and advertising [4][12] - In-game item sales revenue grew by more than 200% year-over-year in Q3, supported by collaborations with flagship titles [5][21] - Live streaming revenues resumed growth for the first time since Q3 2021, with a more balanced content mix and solid gains in outdoor live streaming [7][12] Market Data and Key Metrics Changes - The platform ecosystem and user base remained resilient, with total monthly active users (MAUs) stable at around 162 million [3][29] - The company estimates that through top creators, it can reach over 100 million users across other platforms, expanding audience influence [4][29] Company Strategy and Development Direction - The company aims to deepen collaboration with game developers, expand SKU offerings, and enhance operations in game item sales [5][22] - A focus on diversifying into game publishing is evident, with the upcoming launch of "Goose Goose Duck Mobile" seen as a key step [6][30] - The strategy includes improving monetization efficiency, enhancing product experience, and expanding internationally for sustainable growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining robust growth momentum in game item sales and expects live streaming revenues to remain stable [5][26] - The company anticipates overall revenue growth to accelerate in 2026, driven primarily by game-related services, advertising, and other revenues [26] Other Important Information - Cost of revenues increased by 10% to RMB 1.46 billion, primarily due to increased revenue sharing fees and content costs [14] - Gross profit was RMB 227 million for Q3, with a gross margin of 13.4%, an improvement from the previous year [14][16] Q&A Session Summary Question: Updates on in-game item sales business - In-game item sales revenue grew over 200% year-over-year, supported by strong live streaming ecosystem and deeper partnerships with flagship titles [21][22] Question: Future growth of live streaming and non-live stream business - Live streaming revenue has returned to growth, while non-live streaming businesses are expected to continue growing strongly, driven by in-game item sales and deeper collaborations [26] Question: Strategy and outlook for Goose Goose Duck Mobile and game publishing - The mobile version of Goose Goose Duck is the first full-fledged publishing effort, with pre-registrations surpassing 10 million [30] - The strategy focuses on a content-driven approach, leveraging the streamer network and e-sports presence [31] Question: Ongoing partnership with Delta Force - The company is building a vibrant community engagement and e-sports tournament ecosystem for Delta Force, with successful events planned [34] Question: Financial impact of new business on profitability - Gross profit grew over RMB 23 million, leading to further improvement at the operating level, with expectations for gradual margin improvement over time [37]

Financial Data and Key Metrics Changes - Total net revenues for the third quarter reached approximately RMB 1.7 billion, marking a year-over-year growth of around 10% [3][12] - Non-GAAP operating profit was approximately RMB 6.3 million, showing a significant improvement compared to the same period last year [3][12] - Live streaming revenues increased by 3% year-over-year to RMB 1.16 billion, while game-related services, advertising, and other revenues grew around 30% year-over-year to RMB 532 million, accounting for 31.5% of total net revenues [12][13] Business Line Data and Key Metrics Changes - Game-related services, advertising, and other revenues reached RMB 532 million, driven by strong growth in in-game item sales, which grew over 200% year-over-year [5][12] - Live streaming revenues resumed growth for the first time since Q3 2021, with a more balanced content mix and solid gains in outdoor live streaming [7][12] Market Data and Key Metrics Changes - The platform maintained a stable user base with total MAUs around 162 million, and the streamer ecosystem expanded its influence, reaching over 100 million users across other platforms [4][29] - The company is deepening its presence in key geographic markets, focusing on user experience and content ecosystem to enhance engagement and retention [9] Company Strategy and Development Direction - The company aims to diversify into game publishing, with the upcoming launch of "Goose Goose Duck Mobile" as a key step in this strategy [6][30] - Future focus includes enriching item categories, expanding game partnerships, and improving the overall purchase experience for users [22][30] - The company plans to enhance monetization efficiency and product experience while steadily expanding internationally [10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining robust growth momentum in in-game item sales and expects overall revenue growth to accelerate in 2026 [5][26] - Live streaming revenues are expected to remain stable, while non-live streaming businesses should continue to grow strongly due to deeper game collaborations [26] Other Important Information - Cost of revenues increased by 10% to RMB 1.46 billion, primarily due to increased revenue sharing fees and content costs [14] - The company achieved a positive net income for the quarter with non-GAAP net income of RMB 36 million, despite a decrease in interest income [16] Q&A Session Summary Question: Updates on in-game item sales business and future outlook - In-game item sales revenue grew over 200% year-over-year, supported by strong live streaming ecosystem and deeper partnerships with flagship titles [21][22] Question: Overall revenue growth and future expectations - Live streaming revenue has returned to growth, while non-live streaming businesses are expected to continue growing at a strong pace, driven by in-game item sales [26] Question: Strategy and outlook for Goose Goose Duck Mobile and game publishing - The mobile version of Goose Goose Duck is the first full-fledged publishing effort, with pre-registrations surpassing 10 million [30] Question: Collaboration with Delta Force and ongoing partnerships - The company is building a vibrant community engagement and e-sports tournament ecosystem around Delta Force, with successful events planned [34] Question: Financial impact of new business and profitability trends - Gross profit grew over RMB 23 million, leading to further improvement at the operating level, with expectations for gradual margin improvement over time [37]

Core Viewpoint - Huya Inc. reported a total revenue of 1.69 billion yuan for Q3 2025, marking a nearly nine-quarter high with a year-on-year growth rate of approximately 10% [1][2] Financial Performance - Total revenue reached 1.69 billion yuan, with live streaming revenue stabilizing at 1.16 billion yuan [1][2] - Game-related services, advertising, and other businesses saw a rapid growth of about 30%, contributing 530 million yuan and accounting for 31.5% of total revenue [1][3] - Non-GAAP operating profit was 6.3 million yuan, and net profit attributable to Huya was 36.3 million yuan [1][2] User Metrics - Total Monthly Active Users (MAU) reached 162 million, maintaining stability [3] Business Strategy and Growth Areas - The company is focusing on enhancing its platform ecosystem and user scale, with a notable increase in the number of returning top streamers [3] - The game-related services and advertising segment is expected to continue its rapid growth, with in-game item sales becoming a new growth point, showing over 200% year-on-year growth [4] - The company plans to launch its first game, "Goose Goose Duck," which has already surpassed 10 million pre-registrations during testing [4] Live Streaming and Content Development - Live streaming revenue grew by approximately 3%, marking the first positive year-on-year growth since Q3 2021 [5] - The company has introduced new features such as a short video section and game assistance tools to enhance user experience [5] Event Ecosystem - In Q3 2025, the company hosted nearly 100 licensed events and about 40 self-produced events, maintaining a leading market share in top esports event streaming [6] - The company is expanding its international brand influence through events like the League of Legends Asian Invitational [6] International Expansion - The user base in overseas markets is steadily growing, with a focus on enhancing product experience and content ecosystem optimization [6] - The company aims to deepen cooperation with popular games to drive sustainable development and profitability in international markets [6]

Financial Data and Key Metrics Changes - Total net revenues for Q3 2025 reached approximately RMB 1.7 billion, marking a year-over-year growth of around 10%, the highest level in the past nine quarters [3][12] - Non-GAAP operating profit was approximately RMB 6.3 million, showing significant improvement compared to the same period last year [3][12] - Live streaming revenues increased by 3% year-over-year to RMB 1.16 billion, while game-related services, advertising, and other revenues grew around 30% year-over-year to RMB 532 million, accounting for 31.5% of total net revenues [12][14] Business Line Data and Key Metrics Changes - Game-related services, advertising, and other revenues reached RMB 532 million, driven by strong growth in in-game item sales, which grew over 200% year-over-year [5][14] - Live streaming revenues resumed growth for the first time since Q3 2021, with a stable number of domestic paying users at 4.4 million [12][13] - Research and development expenses decreased by 3% year-over-year to RMB 122 million, while sales and marketing expenses decreased by 4% to RMB 70 million [15][16] Market Data and Key Metrics Changes - The platform maintained a stable user base with total monthly active users (MAUs) around 162 million [3][30] - The company estimates that through top creators, it can reach over 100 million users across other platforms, enhancing audience influence and monetization opportunities [4][30] Company Strategy and Development Direction - The company aims to deepen collaboration with game developers, expand SKU offerings, and enhance operations in game item sales, which is seen as a significant growth driver [5][7] - The launch of Goose Goose Duck Mobile is a key step in diversifying into game publishing, with a focus on leveraging the streamer ecosystem and content-driven marketing [6][31] - The company plans to enhance monetization efficiency and product experience while expanding internationally to achieve sustainable growth [11] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining robust growth momentum in game item sales and expects live streaming revenues to remain stable while non-live streaming businesses will continue to grow strongly [5][27] - The company anticipates overall revenue growth to accelerate in 2026, driven primarily by game-related services, advertising, and other segments [27] Other Important Information - Gross profit for Q3 was RMB 227 million, with a gross margin of 13.4%, showing improvement from the previous year [15] - Interest income decreased significantly to RMB 35 million due to a lower time deposit balance following special dividends [17] Q&A Session Summary Question: Updates on in-game item sales business - In-game item sales revenue grew over 200% year-over-year, supported by strong live streaming and partnerships with flagship titles [20][21] - Future focus includes enriching item categories, expanding game partnerships, and improving the purchase experience [23] Question: Overall revenue growth outlook - Live streaming revenue has returned to growth, while non-live streaming businesses are expected to continue strong growth driven by in-game item sales [26][27] Question: Publishing strategy for Goose Goose Duck Mobile - The game has surpassed 10 million pre-registrations and is seen as a milestone in the company's publishing strategy [31] - The strategy will focus on content-driven publishing leveraging the streamer network and e-sports presence [32] Question: Financial impact of new business segments - Gross margin remains stable, with expectations for gradual improvement as game-related services scale [38]

Investment Rating - The investment rating for the company is "Buy" and is maintained [1] Core Insights - The company has shown resilience in its fundamental operations despite short-term revenue pressures, with emerging businesses expected to drive future growth [4][6][7] - The company reported a decline in revenue and net profit for the first half of 2025, but a significant improvement in net profit after excluding non-recurring items [4][5] - The company is actively pursuing digital transformation and diversification strategies, which are anticipated to create new revenue streams [7][9] Company Overview - Latest closing price is 6.51 yuan, with a total market capitalization of 127 billion yuan [3] - The company has a debt-to-asset ratio of 39.7% and a price-to-earnings ratio of 18.08 [3] Financial Performance - For the first half of 2025, the company achieved operating revenue of 45.93 billion yuan, a year-on-year decrease of 11.90%, and a net profit of 6.78 billion yuan, down 17.19% [4] - The company’s core business segments, including publishing and logistics, have shown stable performance despite revenue declines [5][6] - The company expects operating revenues of 111 billion yuan, 114 billion yuan, and 118 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 8.32 billion yuan, 8.97 billion yuan, and 9.42 billion yuan [10][12] Emerging Business Development - The company is focusing on digital transformation, including the establishment of new cultural landmarks and enhancing online education platforms [7] - The gaming segment has successfully launched several titles, indicating a strategic expansion into new markets [7] Shareholder Returns - The company has committed to a high dividend payout, with cash dividends and buybacks totaling 5.48 billion yuan, representing 77.71% of net profit [9]