Investment Rating - The report maintains a "Strong Buy" investment rating for the company [2][5]. Core Insights - The company achieved profitability in H1 2025, with a revenue of 3.691 billion yuan, a year-on-year increase of 33.74%, and a net profit of 503 million yuan, marking a turnaround from losses [1][5]. - The launch of new games such as "Yihuan" and "Zhuxian 2" is expected to contribute significantly to future revenue growth [5]. - The esports business continues to grow steadily, supported by high-quality and frequent events, contributing to stable performance [5]. - The film and television segment has adopted a quality-over-quantity strategy, achieving a revenue of 767 million yuan in H1 2025, a year-on-year increase of 756.35% [5]. - The company is projected to achieve revenues of 6.852 billion, 9.044 billion, and 9.858 billion yuan from 2025 to 2027, with corresponding net profits of 793 million, 1.508 billion, and 1.786 billion yuan [5][6]. Financial Data Summary - In H1 2025, the gaming business generated 2.906 billion yuan in revenue, a 9.67% year-on-year increase, with a net profit of 504 million yuan [5]. - The company’s total market capitalization is 32.3 billion yuan, with a circulating market value of 30.5 billion yuan [2]. - The company’s total assets are projected to reach 11.730 billion yuan by 2025, with total liabilities of 4.607 billion yuan [8][9]. - The company’s return on equity (ROE) is projected to improve from -8.8% in the trailing twelve months to 11.6% in 2025 [2][10].

Core Viewpoint - Perfect World is expected to achieve a net profit attributable to shareholders of 480 to 520 million yuan in the first half of 2025, driven by the success of its self-developed MMORPG game "Zhu Xian World" and a stable growth in its esports business [1][3]. Group 1: Financial Performance - The company anticipates a net profit of 480 to 520 million yuan for the first half of 2025, with a non-GAAP net profit of 290 to 330 million yuan [1]. - The esports business continues to show a year-on-year growth trend, contributing to stable performance [1][3]. - Non-recurring gains are expected to be around 190 million yuan, primarily from the sale of Chengfeng Studio in the first quarter [3]. Group 2: Game Development - The MMORPG "Zhu Xian World," launched in December of the previous year, has significantly contributed to the company's turnaround [1]. - The upcoming MMORPG "Zhu Xian 2" is scheduled for public testing on August 7, 2025, which is expected to strengthen the company's position in this genre [3]. - The company plans to focus on its strengths in game categories and projects, exploring new opportunities with small-scale investments [3]. Group 3: Esports Strategy - Perfect World aims to develop a complete esports ecosystem, following the strategy of "events driving products and events driving overseas expansion" [3]. - The company will host the CS Asia Invitational Championship (CAC 2025) in October 2025, which is expected to further boost its esports business [3]. Group 4: Film and Television Business - The film and television segment is projected to achieve a net profit of approximately 40 million yuan, with a non-GAAP net profit of around 20 million yuan [4]. - The company is focusing on a "quality over quantity" strategy, with several projects currently in post-production [4]. - Perfect World is also expanding into short dramas to enhance content offerings for viewers [4].

Group 1: Financial Performance - In Q1 2025, the company achieved a net profit of 163 million CNY, a year-on-year increase of 203.06% [5] - The gaming business contributed 163 million CNY to the net profit, primarily due to the performance of "Zhu Xian World" [5] Group 2: Game Development and Releases - "Yihuan" is currently in the process of obtaining a license and is expected to enter a new round of testing soon [2] - "Zhu Xian 2" has received both mobile and client version licenses and is actively progressing towards its launch [4] - The company is focusing on high-quality content updates for "Persona: Night of Shadows" and is planning its release in Japan and Europe [3] Group 3: E-sports Initiatives - The company will host the CS Asia Invitational (CAC 2025) in October 2025, following the Shanghai Major, to enhance its e-sports ecosystem [8] - The e-sports business is expected to grow steadily, supported by high-quality events [8] Group 4: International Expansion - The company is advancing its global strategy with a focus on multi-platform releases, including "Yihuan" across PC, mobile, and console [7] - The overseas publishing of "Persona: Night of Shadows" will primarily rely on third-party authorization [2] Group 5: Employee Incentives and Talent Strategy - The employee stock ownership plan will involve no more than 500 participants, aimed at incentivizing core employees [12] - The company emphasizes a comprehensive talent management system to attract and retain skilled personnel [14] Group 6: Technological Advancements - The company is exploring AI tools to enhance efficiency in game development and film production [16] - There is a focus on integrating new technologies to drive business growth [16]

Financial Performance - In 2024, the company reported a net loss of 1.288 billion CNY attributed to underperforming new games and film projects, as well as inventory impairment losses [2] - In Q1 2025, the company achieved a turnaround with a revenue of 2.023 billion CNY, a 52.22% increase year-on-year [3] - The net profit attributable to shareholders in Q1 2025 was 302 million CNY, a significant increase of 1,115.29% compared to the previous year [3] - The gaming segment generated 1.418 billion CNY in revenue, benefiting from titles like "Zhu Xian World" and "DOTA2," marking a 10.37% increase year-on-year [3] - The film segment achieved 596 million CNY in revenue, a staggering 1,616.29% increase year-on-year [3] Game Development and Releases - "Zhu Xian World" was launched on December 19, 2024, and has contributed positively to Q1 2025 profits through ongoing content updates and player engagement [4] - "Persona 5: Phantom Night" has received positive feedback during its anniversary version release and is expanding into overseas markets [5][7] - "Yihuan," a key product under the company's global strategy, is in active development and is expected to launch tests in both domestic and international markets soon [8] Esports Initiatives - The company is actively developing its esports business, having successfully hosted the 2024 CS:GO World Championship in Shanghai, marking a significant milestone for esports in Asia [9] - The upcoming CS Asia Invitational 2025 is set for October 2025, aimed at further enhancing the esports ecosystem [9] Film and Television Strategy - The company has produced several successful series in 2025, including "Thousand Blossoms Bloom" and "Only This Jianghu Dream," focusing on quality over quantity [10] - The strategy includes reducing overall investment in film projects while increasing focus on short-form content to enhance viewer experience [10]