Core Insights - The company reported a 9% YoY growth in total revenue to RMB27.9 billion, which was 2% below consensus expectations [3] - Operating profit increased by 30% YoY to RMB9.1 billion, also missing consensus by 1% [1] - Cash revenue reached RMB21.2 billion, reflecting a 20% YoY increase and beating forecasts by 3%, indicating successful summer campaigns [1] Financial Performance - Core online game revenue grew 15% YoY to RMB22.1 billion, slightly below consensus estimates [3] - Gross profit margin expanded to 64.7%, exceeding the consensus of 63.4% [3] - The company has a deferred revenue of RMB16.1 billion, which is a 28% YoY increase [3] Strategic Initiatives - The company is focusing on rejuvenating existing game portfolios and improving operational efficiency, prioritizing quality over quantity in game development [1] - Successful summer campaigns for key franchises such as Marvel Rivals and Where Winds Meet were highlighted, supported by strong operational capabilities [1] - Upcoming game launches include Destiny Rising and Diablo II, with a focus on cross-terminal global launches [1] Operational Adjustments - The company has streamlined its game development and marketing operations, leading to improved efficiency [1] - Significant increases in operating expenses (opex) by 6-8% were noted, particularly in sales and marketing (S&M) estimates, which were raised by 10-14% [2] Valuation and Outlook - The target price has been uplifted to US$153/HK$240 based on adjusted earnings per share and net cash [3] - The company has repurchased approximately 0.5 million shares and has a remaining buyback quota of US$3.0 billion until January 2026 [3]

Infrastructure & Scalability - Requires diligence and proof of concept phases before deployment to address scaling issues in development and technology [1] - Needs improvement and scaling of backend testing to meet end-user expectations [1] - GPU acceleration is a growing need for teams to provide better testing coverage [2] - NVIDIA vGPU solution is considered the best option for addressing GPU needs in the market [2] Efficiency & Cost Savings - Infrastructure improvements enable faster validation for level design, UI, and textures [3] - Significant improvements in power draw efficiency translate to data center savings [3] - New infrastructure facilitates easier management of more devices within the CICD system [3] Business Impact - Central Technology team's efforts are focused on supporting game studios [4] - Improved infrastructure contributes to meeting user needs more effectively [4]

Game Development - Ready to bring your game to life with the provided link [1]