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].

Core Insights - Perfect World reported a significant increase in revenue and net profit for Q3 2025, with revenue reaching 1.726 billion yuan, a year-on-year growth of 31.45%, and a net profit of 162 million yuan, up 176.59% [1] - The company achieved a total revenue of 5.417 billion yuan for the first three quarters of the year, marking a 33.00% increase, and turned a profit with a net profit of 666 million yuan [1] Financial Performance - In Q3 2025, the company generated a net cash inflow from operating activities of 889 million yuan, primarily driven by revenue growth in the gaming sector and cost-reduction measures [2] - The gaming business reported revenue of 4.475 billion yuan for the first three quarters, reflecting a year-on-year increase of 15.64%, with a net profit of 717 million yuan and an increase in gross margin from 65.78% to 69.29% [2] Product Development and Market Strategy - Perfect World has focused on enhancing creativity and R&D, optimizing its global distribution system, and expanding its product lineup [2] - The MMORPG titles "Zhu Xian World" and "Zhu Xian 2" have contributed positively to revenue, while the game "Persona: Nightshade" has successfully entered international markets [2] Esports and Media Business - The esports segment has shown continuous revenue growth, highlighted by the successful hosting of the CAC2025 event in Shanghai, showcasing the company's global competitiveness in esports [3] - The media business achieved revenue of 918 million yuan in the first three quarters, a remarkable increase of 432.90%, driven by multiple successful releases [3] Future Outlook - Perfect World has several upcoming projects, including the highly anticipated RPG game "Yihuan," which is currently in the deep development phase and has received positive feedback from both domestic and international users [3] - The company plans to integrate resources for the 2026 International Invitational in Shanghai, aiming to deliver a high-quality esports event [4] - In the media sector, Perfect World intends to explore short-form content while continuing to develop high-quality long-form series [4]

Core Insights - Giant Network (002558.SZ) reported a significant increase in Q3 2025, with revenue reaching 1.706 billion yuan, a year-on-year growth of 115.63%, and a net profit attributable to shareholders of 640 million yuan, up 81.19% [1] - The company's new game "Supernatural Action Group" has been a major driver of growth, performing exceptionally well during the summer [1][2] - For the first three quarters of 2025, the company achieved a total revenue of 3.368 billion yuan, with a year-on-year growth of 51.84% [1] Financial Performance - Q3 revenue was 1.706 billion yuan, with a net profit of 640 million yuan and a non-recurring net profit of 678 million yuan, reflecting year-on-year increases of 115.63%, 81.19%, and 73.88% respectively [1] - For the first three quarters, the company reported a net profit of 1.417 billion yuan and a non-recurring net profit of 1.484 billion yuan, with year-on-year growth rates of 51.84% and 16.50% respectively [1] Product Performance - "Supernatural Action Group" has become a phenomenon, showcasing strong long-term operational potential and exceeding market expectations [1] - The game achieved a milestone of over 1 million concurrent users in July and ranked in the top 5 of the iOS free games chart, peaking at 4th in the iOS revenue chart [2] - The product's success is attributed to the company's extensive experience in developing high DAU (Daily Active Users) products [2] Management Changes - Giant Network announced the return of Liu Wei as CEO and General Manager, focusing on nurturing young core talent [2] - The company's talent strategy emphasizes youth, with a commitment to empowering young individuals in key project roles, as seen in successful games like "Supernatural Action Group" [2]

Core Insights - Giant Network reported a significant increase in Q3 2025 revenue and net profit, with revenue reaching 1.706 billion yuan, a year-on-year growth of 115.63%, and net profit of 640 million yuan, up 81.19% [1] - The company's new game "Supernatural Action Group" has been a major driver of growth, showcasing strong long-term operational potential [1][2] - The company aims to enhance its competitive edge by focusing on young talent and innovative game development strategies [2] Financial Performance - Q3 2025 revenue was 1.706 billion yuan, with a year-on-year increase of 115.63% [1] - Net profit for Q3 2025 was 640 million yuan, reflecting an 81.19% year-on-year growth [1] - For the first three quarters of 2025, total revenue reached 3.368 billion yuan, with a year-on-year growth of 51.84% [1] Product Development - "Supernatural Action Group" has achieved significant user growth, surpassing 1 million concurrent users in July and ranking in the top 5 of iOS free games [2] - The game is characterized by its unique gameplay and strong emotional resonance with players, indicating its potential as a long-term hit [2] - Future plans include enhancing game content, optimizing performance, and collaborating with well-known IPs to boost visibility [2] Management Changes - Liu Wei has returned as CEO and General Manager, focusing on nurturing young talent within the company [2] - The company emphasizes a youthful organizational strategy, with a commitment to empowering young professionals in key roles [2]

Core Insights - The company reported a significant increase in active accounts and paying accounts in Q3 2025, driven by the launch of new games and sustained performance of existing titles [1] - The average revenue per paying account decreased both quarter-on-quarter and year-on-year, attributed to the user growth structure and initial payment behaviors of new users [1] - The company is focusing on user-centric IP operations and enhancing community engagement through high-quality content and events [2] - Future plans include launching two self-developed games and expanding into international markets to enhance brand recognition and competitive advantage [3] Group 1 - The quarterly active accounts reached 10.2 million, a 29.1% increase from the previous quarter and a 37.8% increase year-on-year [1] - The quarterly paying accounts totaled 1.1 million, reflecting a 22.2% increase both quarter-on-quarter and year-on-year [1] - The average revenue per paying account was RMB 141.2, showing a 19.2% decrease from the previous quarter and a 13.2% decrease year-on-year [1] Group 2 - The company emphasized user demand in its IP operations, achieving notable results with core products like "Aoqi Legend Mobile" and "Aola Star Mobile" [2] - The "Aola Star Mobile" game received positive feedback through collaborations with popular IPs and community engagement initiatives [2] - The company plans to launch two self-developed games, "Chaos Color World" and "Under the Night," which are in the later stages of development [3] Group 3 - The company aims to accelerate its overseas market expansion while deepening its presence in the domestic market [3] - It plans to adapt its IP for global markets and create customized products for niche segments [3] - The focus is on building a diverse product matrix through innovative gameplay and quality content [3]

Core Viewpoint - Li Kaiming, head of NetEase Interactive Entertainment's Tenth Division, announced his departure for personal career development reasons and will embark on a new entrepreneurial journey [1][3]. Group 1: Departure Announcement - Li Kaiming expressed gratitude towards the company and leadership for their support during his twelve years at NetEase, describing the experience as "invaluable wealth" [3][5]. - The Tenth Division confirmed that Li Kaiming has recently submitted his resignation and that the transition process is proceeding smoothly, ensuring no disruption to the department's operations [5]. Group 2: Contributions and Achievements - Li Kaiming joined NetEase in 2013 and has been instrumental in developing hit products such as "Rate of the Land" and "Endless Lagrange," as well as overseeing the agency distribution of games like "Sky" and "FIFA" [5]. - "Rate of the Land" has maintained its competitiveness and frequently returns to the top ten of the sales charts despite challenges from emerging competitors [5]. Group 3: Future Projects - The Tenth Division continues to focus on the strategy game sector, with the 2021 release of "Endless Lagrange" entering the top ten sales charts, although it did not sustain the growth seen with its predecessor [7]. - The upcoming historical strategy game "Ten Thousand People Long Song" is anticipated to launch in October 2025, but development has reportedly faced delays, raising concerns about the uncertainties and challenges in game development [9].

Group 1 - The company held an online investor meeting to address concerns regarding its operations, product launches, and financial status [1] - Several upcoming games are set to launch, including "The World of the Sky," "All-Star Awakening," and "Ultraman: The Light Warrior," with Tencent and Chao Xi Guang Nian as publishers [2] - The sale of investment properties aims to optimize the asset structure without changing the main business focus, and the properties have not yet been sold [3] Group 2 - The company raised 800 million for game development, with cumulative returns of 181.61 million as of the first half of 2025, and no losses have been recognized for unlaunched projects [4] - The overseas market has become a significant revenue component, with products like "Romance of the Three Kingdoms 2017" and "Saint Seiya: Awakening" generating stable income in Japan and South Korea [5] - Despite operational pressures, the company reported positive revenue growth year-on-year, and plans to expedite game launches to meet annual targets [6]

Core Viewpoint - The company's 2024 performance met expectations, with a revenue of 5.57 billion and a net loss of 1.29 billion, while Q1 2025 exceeded expectations with a revenue of 2.02 billion and a net profit of 0.302 billion [1] Financial Performance - 2024 revenue was 5.57 billion, with a net loss of 1.29 billion, aligning with market forecasts [1] - Q1 2025 revenue reached 2.02 billion, surpassing the expected 1.45 billion, with a net profit of 0.302 billion, exceeding both internal and market expectations [1] - The company announced a cash dividend of 0.23 yuan per share for 2024 [2] Growth Drivers - Q1 2025 revenue growth was driven by a 10% increase in gaming revenue, attributed to the performance of "Zhu Xian World" and esports titles [3] - The film and television segment saw a significant revenue increase of 1616% in Q1 2025, primarily due to the confirmation of multiple TV series revenues [3] - Future focus includes the mid-year major update for "Zhu Xian World" and the planned overseas launch of "P5X" in Japan and Europe [3] Cost Management - The company effectively controlled costs, with sales and management expenses decreasing by 27% and 44% respectively in Q1 [4] - R&D expenses remained stable year-on-year, with expectations of a slight decrease in subsequent quarters due to improved internal management and cost control [4] Profit Forecast and Valuation - The net profit forecast for 2025 has been raised by 9.5% to 640 million, while the 2026 forecast remains unchanged [5] - The current stock price corresponds to 37/16 times the P/E for 2025/26, with a target price increase of 11% to 15.2 yuan, indicating a potential upside of 24% [5]