Core Viewpoint - The actual controller of Perfect World, Chi Yufeng, plans to reduce his stake by up to 32.98 million shares, representing 1.70% of the total share capital, which could result in approximately 467 million yuan in cashing out. This decision comes shortly after the company reported a strong Q3 performance, raising concerns about the impact of continuous share reductions on the company's recovery phase [1][2]. Financial Performance - Perfect World reported a revenue of 5.417 billion yuan for the first three quarters of 2025, a year-on-year increase of 33%. The net profit attributable to shareholders reached 666 million yuan, a significant increase of 271.17%, reversing a loss of 1.288 billion yuan in 2024 [2]. - Despite the positive financial results, the stock price fell by 6.59% the day after the reduction announcement, indicating investor sensitivity to the controller's selling behavior [2]. Shareholder Actions - Chi Yufeng has cumulatively cashed out over 8.5 billion yuan since 2019 through various methods, including secondary market sales and agreements. If the current reduction is completed, his direct shareholding will drop to 5.99%, but he will still control 32.36% of the company through concerted actions [4]. - The company has maintained a high dividend policy even during periods of financial pressure, with a cash dividend of 2.29 billion yuan in 2021 despite a net profit of only 369 million yuan, reflecting a dividend payout ratio of 620% [4]. Strategic Adjustments - Perfect World has faced significant challenges, including project closures and workforce reductions, with employee numbers decreasing by 32% from 5,754 at the end of 2023 to 3,905 [3]. - The company is focusing resources on key projects like the open-world game "Yihuan," which has received positive market feedback and is expected to contribute significantly to revenue in 2026 [3]. Industry Context - The domestic mobile game market is experiencing a slowdown, with growth projected at 8.7% in 2025. Perfect World faces stiff competition from major titles like Tencent's "Yuanmeng Zhixing" and NetEase's "Yongjue Wujian" [5]. - The company is attempting to expand into overseas markets, with a 40% year-on-year revenue increase in Southeast Asia for "Perfect World Mobile," although global contributions remain below 20% [5][6]. Future Outlook - The reduction in shareholding may attract institutional investors, potentially improving the company's governance structure, as institutional ownership is currently only 2.75%, below the industry average [7]. - Perfect World plans to launch three new products, including "Yihuan," in 2026, with a projected 30% increase in R&D investment. The ability to innovate and execute its international strategy will be crucial for the company's long-term valuation [7].