Core Viewpoint - The company, Century Huatong, expresses confidence in the gaming industry's future, highlighting multiple favorable developments and opportunities in the sector [4][7]. Group 1: Product Operations and New Product Incubation - The company's main SLG products, "Whiteout Survival" and "Endless Winter," are performing steadily, while another product, "Kingshot," is in a rapid growth phase. The company has sufficient resource reserves and does not face concerns regarding resource allocation [3][6]. - The subsidiary, Diandian Interactive, employs a "horse racing" mechanism for new product incubation, leveraging mature R&D capabilities and extensive user acquisition experience to enhance its new product development capacity [3][6]. - The company aims to create a second growth track beyond SLG by diversifying into casual subcategories, utilizing differentiated designs to avoid direct competition with market hits [3][6]. Group 2: Business Layout and Competitive Barriers - The core competitiveness of Diandian Interactive lies in its integrated R&D and publishing model, which helps the company break revenue records in the SLG category [3][6]. - The company has established a strong risk resistance framework against the impacts of product imitation, focusing on refining its own products [3][6]. Group 3: Financial Management - The company plans to continue optimizing its financial structure and strengthening financial management in 2026 [3][6]. Group 4: Industry Outlook - The gaming industry is experiencing a convergence of favorable factors, including increased governmental support for the dual promotion of technology and culture, heightened focus among industry players, and the efficiency improvements brought by AI technology [4][7]. - The gaming sector is characterized as a supply-driven demand market, where high-quality products remain the core growth engine [4][7].

Industry Overview - The Chinese gaming industry is undergoing a deep transformation characterized by a dual evolution, focusing on both deepening the value of existing users and exploring global growth opportunities, driven by policy support and increasing market demand [1] - The "Consumption Promotion Special Action Plan" has included the gaming industry in its policy support, encouraging traditional cultural empowerment, original IP cultivation, and the extension of the entire industry chain, injecting new growth momentum into the market [1] - According to the "China Gaming Industry Report," the domestic gaming market is expected to exceed 325.78 billion yuan in 2024, representing a year-on-year growth of 7.53%, with a user base of approximately 674 million, up 0.90% year-on-year, and an ARPU value increase of 6.73% to 485.52 yuan [1] Company Performance - Qingci Games reported a revenue of 628 million yuan in 2024, with overseas revenue growing from 28.47% to 43.93% of total revenue, and a gross profit margin of 57.8%, leading to a net profit of 51.12 million yuan [7][8] - The company’s global registered player base approached 100 million, with a year-on-year growth of 11.24%, and a monthly active user count of 2.36 million, maintaining stable conversion efficiency among paying users [8] - Qingci Games has successfully managed product lifecycles, with long-term operations enhancing user value and expanding market space, exemplified by the performance of its flagship product "The Strong Snail," which achieved 3.629 billion yuan in revenue [9][13] Strategic Initiatives - The company has adopted a dual strategy of "innovation reserve + globalization," focusing on both risk mitigation through innovative product categories and the global replication of mature products [15] - Successful product launches, such as "Ares Virus 2," have validated the methodology of developing sequels, achieving 23.18 million yuan in revenue within four months of launch [15][17] - Qingci Games is also making strides in global markets, with self-developed games generating overseas sales of 18.557 billion dollars in 2024, a year-on-year increase of 13.39%, significantly outpacing the domestic market growth rate [17][19] Market Trends - The gaming industry is experiencing a technological bull market, with the Hang Seng Technology Index projected to lead global markets with over 40% growth by 2025, driven by policy incentives and increased capital inflow [22] - AI technology is deeply empowering the gaming industry, evolving from an efficiency tool to a productivity revolution, enhancing existing product experiences and creating opportunities for new AI-native games [22] - Qingci Games is positioned uniquely within this technological revolution, with a current price-to-sales ratio of 2.25, significantly lower than the industry average of 3.67, indicating a mismatch with its improving fundamentals [25][26]