Core Viewpoint - NetEase CEO Ding Lei acknowledged the impact of a competing product on their offerings during the summer, particularly among users in second- and third-tier cities, drawing attention to Giant Network's new game "Supernatural Action Group" [1][3]. Market Performance - "Supernatural Action Group" has shown a textbook-level market performance since its launch in January 2025, with exponential growth in user base and revenue [3]. - The game reached a peak ranking of 4th on the iOS sales chart in July and has maintained a position within the top 20 since then [3][5]. - As of July, the game reported over 1 million concurrent users, indicating its entry into the top tier of games [5]. Factors Behind Success - The success of "Supernatural Action Group" is attributed to multiple factors, including a precise market positioning that combines "Chinese micro-horror" themes with strong social gameplay, appealing particularly to young female players [7][8]. - The development team, led by a post-95 producer, has a deep understanding of Gen Z players' needs for emotional and social connections, which has been crucial for the game's design [8]. - Continuous content updates and user co-creation have driven sustained growth, with significant events and new versions released regularly [8]. Financial Impact - The financial success of "Supernatural Action Group" is beginning to reflect in Giant Network's financial statements, with a reported revenue of 1.662 billion yuan for the first half of 2025, a year-on-year increase of 16.47% [10]. - By the end of Q3 2025, the company achieved a revenue of 3.368 billion yuan, up 51.84% year-on-year, and a net profit of 1.417 billion yuan, up 32.31% [10]. - The total contract liabilities increased to 1.33 billion yuan by the end of Q3, largely attributed to the contributions from "Supernatural Action Group" [10]. Strategic Insights - Giant Network's CEO emphasized the importance of long-term commitment and deep market understanding, stating that the success of "Supernatural Action Group" is a result of trusting and empowering young teams to focus on their strengths [13]. - The company aims to focus on areas where it has accumulated knowledge and experience, allowing for sustained investment and exploration [13][14]. Industry Implications - The success of "Supernatural Action Group" highlights the value of niche markets in a highly competitive gaming landscape, suggesting that targeting unmet needs can lead to significant growth [15]. - Understanding the demands of Gen Z users is becoming a core competitive advantage for gaming companies, as demonstrated by Giant Network's approach [15]. - The emphasis on long-term strategies over short-term gains is crucial in the gaming industry, with a focus on continuous improvement and iteration [15][16].

Core Insights - NetEase's CEO Ding Lei acknowledged that the company's main products are facing competition, particularly from Giant Network's new hit game "Supernatural Action Group" [1][2] - "Supernatural Action Group" has shown remarkable growth, surpassing 1 million concurrent users within six months of its launch and reaching the top 4 in the iOS sales chart [3][11] - The success of "Supernatural Action Group" is attributed to its young development team, which has a deep understanding of the preferences of younger users [4][5] Company Performance - Giant Network's "Supernatural Action Group" has maintained a strong presence in the iOS free and sales charts, with its Halloween version propelling it from around 20th to the top 10 [9][11] - The game is positioned as a long-term product rather than a short-term hit, reflecting the company's strategy of focusing on sustainable growth and user engagement [12][13] Industry Trends - The gaming industry has seen a shift towards teams that are sensitive to current user preferences, which has contributed to the success of "Supernatural Action Group" [4] - The game redefines the micro-horror genre by combining cultural familiarity with social connectivity, appealing to the younger demographic's dual needs for cultural recognition and social sharing [17] - The competitive landscape has shifted, with "Supernatural Action Group" impacting the performance of established titles like "Identity V," as evidenced by their respective rankings on the iOS charts [17][20] Organizational Strategy - Giant Network is implementing a young talent strategy, allowing younger team members to take on leadership roles and participate in strategic decision-making [14][15][16] - The company emphasizes a long-term approach to game development, focusing on continuous improvement and user satisfaction rather than chasing fleeting trends [13][12] Market Impact - The success of "Supernatural Action Group" has created competitive pressure on existing products, leading to strategic adjustments in the industry [20] - The game's performance has prompted industry leaders to reassess their strategies and understand the importance of connecting with younger audiences [20]

Core Viewpoint - The article discusses the recent management changes at Giant Network, highlighting the return of Liu Wei and the resignation of Zhang Dong, while emphasizing the company's strong financial performance and the need for nurturing young talent for future leadership [4][9][21]. Group 1: Management Changes - Liu Wei, a trusted associate of founder Shi Yuzhu, has returned to Giant Network to focus on cultivating young core talent after Zhang Dong's resignation as general manager [8][9]. - Zhang Dong, who had been with the company for many years and was seen as a successor, stepped down for personal reasons, with the company stating that this would not affect normal operations [4][16]. Group 2: Financial Performance - Giant Network reported a net profit of 640 million yuan for the third quarter, representing an 81% year-on-year increase, and a total revenue of approximately 1.71 billion yuan, up 115.63% from the previous year [17]. - For the year-to-date, the company achieved a net profit of approximately 1.42 billion yuan, reflecting a 32.31% increase compared to the same period last year [17]. Group 3: Strategic Focus - Shi Yuzhu has been actively involved in the company's operations since 2022, implementing significant reforms and focusing on game development and user experience [18][24]. - The company has launched successful new titles, such as "Supernatural Action Group," which contributed to a 72% month-on-month revenue increase in August [18][21]. Group 4: Challenges and Future Outlook - Despite the positive financial results, Giant Network faces ongoing debt issues related to past guarantees made by Shi Yuzhu, which have led to frozen assets [33][36]. - The average age of the leadership team is around 60, indicating a pressing need for younger executives to ensure the company's long-term sustainability [22].

Core Viewpoint - The article discusses the recent management changes at Giant Network, highlighting the resignation of General Manager Zhang Dong and the return of Liu Wei, emphasizing the company's strong performance and the need for nurturing young talent under the leadership of founder Shi Yuzhu [4][7][13]. Group 1: Management Changes - Shi Yuzhu, the founder of Giant Network, has reinstated Liu Wei as General Manager after Zhang Dong's resignation due to personal reasons [4][9]. - Liu Wei, who has been with the company for many years, aims to focus on cultivating young core talent, indicating a potential shift towards a younger leadership team in the future [7][23]. - Zhang Dong, who had been in the role for seven years, was seen as a capable leader, having previously worked on successful projects like "Journey to the West 2" [10][14]. Group 2: Financial Performance - Giant Network reported a net profit of 640 million yuan for the third quarter, representing an 81% year-on-year increase [14]. - The company's revenue for the first nine months of the year reached 3.37 billion yuan, up 51.84% compared to the previous year [15]. - The stock price of Giant Network has surged by 180% over the past ten months, with a market capitalization of 68 billion yuan [13][34]. Group 3: Strategic Focus - Shi Yuzhu has emphasized the importance of respecting players and improving game experiences, which has been a key factor in the company's recovery from previous challenges [19][25]. - The company has launched new successful titles, such as "Supernatural Action Group," which contributed to a 72% month-on-month revenue increase in August [17][34]. - Giant Network is focusing on core strengths in MMORPG and multiplayer casual gaming, while also exploring innovative directions for new hit games [35][36]. Group 4: Ongoing Challenges - Despite the positive developments, Shi Yuzhu faces ongoing debt disputes, particularly related to guarantees made for the Pan-Hai Group [38][39]. - There have been instances of shareholdings being frozen due to personal financial issues, but these have been stated to not affect the operations of Giant Network [41][42]. - Shi Yuzhu remains active in various roles across multiple companies, indicating a broad engagement in the business landscape beyond Giant Network [45].

Core Insights - The return of founder Shi Yuzhu has revitalized Giant Network's growth trajectory, with significant announcements and personnel changes indicating a strategic shift towards nurturing young talent [2][3][4] Management Changes - CEO Zhang Dong resigned for personal reasons, and Liu Wei, a board member, has been appointed as the new CEO and General Manager, focusing on developing young core talent [2][4] - Liu Wei previously served as CEO from April 2016 to December 2023 and is expected to bring a fresh perspective to the leadership [3][4] Financial Performance - In Q3, Giant Network reported revenue of 1.706 billion yuan, a year-on-year increase of 115.63%, and a net profit of 640 million yuan, up 81.19% [2][7] - For the first three quarters of the year, total revenue reached 3.368 billion yuan, reflecting a 51.84% increase, while net profit grew by 32.31% to 1.417 billion yuan [7] Product Success - The self-developed game "Supernatural Action Group" has become a phenomenon, significantly contributing to the company's Q3 performance and showcasing the effectiveness of a young development team [2][6][7] - The game achieved a revenue increase of 800 million yuan in August alone, marking a 106% month-on-month growth, and reached a peak of 1.1 billion yuan in total revenue [6][7] Market Position and Future Outlook - The success of "Supernatural Action Group" has positioned Giant Network favorably in the market, with its stock price doubling since the beginning of the year, closing at 37.92 yuan per share [8] - Analysts express optimism about the game's potential for further growth, particularly with upcoming seasonal updates and the possibility of expanding its player base [8]

Core Viewpoint - Giant Network has reported significant growth in revenue and net profit for the first three quarters of 2023, alongside a management change with the return of former CEO Liu Wei, raising expectations for the company's future performance and strategic direction [1][2][5]. Financial Performance - For the first three quarters of 2023, Giant Network's revenue reached 3.368 billion yuan, a year-on-year increase of 51.84%, while net profit was 1.417 billion yuan, up 32.31%. In Q3 alone, revenue and net profit saw year-on-year growth of 115.63% and 81.19%, respectively [1]. - The operating cash flow for the first three quarters was 1.851 billion yuan, a significant increase of 151.9% year-on-year [4]. Management Change - Zhang Dong, the current general manager, has resigned for personal reasons, and Liu Wei, who previously held the position, will return to lead the company [1][2]. - Liu Wei is recognized for his deep understanding of the company's strategy and management capabilities, which are expected to provide continuity during a critical transformation period [2][5]. Strategic Focus - The company aims to continue its "youth-oriented" strategy, with new products like "Supernatural Action Group" developed by a team of young talent [3][4]. - Liu Wei plans to implement an internal rotation mechanism to involve frontline developers in decision-making, aligning with the founder's philosophy of prioritizing player engagement over short-term revenue [3][4]. Product Development and AI Integration - The classic IP "Journey" has revitalized through multi-platform collaboration, contributing significantly to revenue, with "King's Journey" attracting over 25 million new users since its launch [4]. - AI technology is becoming a major growth driver, with the company launching its first game AI model, GiantGPT, and integrating AI features into existing games to enhance user engagement [4][5]. Global Expansion Challenges - Giant Network's overseas revenue remains low at 604.6 thousand yuan, accounting for only 0.36% of total revenue, highlighting a significant challenge in global market penetration [5]. - The company is focusing on building an overseas publishing team and enhancing localization capabilities to drive international growth, particularly for products like "Supernatural Action Group" [5].

Core Insights - Giant Network reported a revenue of 3.368 billion yuan for the first three quarters, representing a year-on-year growth of 51.84%, with a net profit of 1.417 billion yuan, up 32.31% [1] - The company announced the resignation of General Manager Zhang Dong, with Liu Wei returning to the position, highlighting a significant management change [1][2] - The return of Liu Wei is expected to continue the company's strategy of youth-oriented transformation and address challenges in globalization [1][3] Financial Performance - For Q3, Giant Network's revenue and net profit saw year-on-year increases of 115.63% and 81.19%, respectively [1] - The net profit for Q3 2025 reached 640 million yuan, marking an 81.19% increase year-on-year, with operating cash flow net amounting to 1.851 billion yuan, a surge of 151.9% [3][4] Management Changes - Zhang Dong, who took over as CEO in January 2024, has been credited with driving AI strategy and product development, including the successful launch of "Supernatural Action Team" [2] - Liu Wei's return is seen as a move to maintain strategic continuity during a critical transformation period for the company [2][5] Strategic Focus - The company aims to enhance its youth talent development system, with new products being developed by teams primarily composed of individuals born in the 1990s [3] - Liu Wei plans to implement an internal rotation mechanism to involve frontline staff in decision-making processes [3] Product and Market Development - The classic IP "Journey" has revitalized through multi-platform collaboration, contributing significantly to revenue growth [4] - The company is focusing on AI technology integration, with the launch of the industry’s first game AI model, GiantGPT, and various AI-driven gameplay innovations [4] Globalization Challenges - Giant Network's overseas revenue remains low at 604.6 thousand yuan, accounting for only 0.36% of total revenue, indicating a need for improved global market penetration [5] - The company is expected to enhance its overseas publishing team and local development capabilities to address these challenges [5]

Market Overview - The A-share market saw a rebound on September 10, with the Shanghai Composite Index rising by 0.13% and the Shenzhen Component Index increasing by 0.38% [1][2] - The total market turnover was approximately 2 trillion yuan [1] Sector Performance - The oil and gas exploration and service sector experienced significant gains, with stocks like Junyou Co. and Keli Co. hitting the daily limit [4][5] - The tourism and hotel sector also performed well, with stocks such as Caesar Travel and Tianfu Cultural Tourism reaching their daily limits [7][8] - The gaming sector saw fluctuations, with major stocks like Giant Network hitting the daily limit near the market close [9] International Market Trends - The Hang Seng Index reached a nearly four-year high, closing with over a 1% increase [2] - The Nikkei 225 index closed at a historical high, up 0.87% [3] Oil and Gas Sector Insights - Significant breakthroughs in oil and gas exploration were reported, with major reserves found in deep basins and offshore areas, supporting stable production levels [6] - International oil prices have risen due to geopolitical tensions in the Middle East, particularly involving Israel and Hamas [6] Consumer Sector Developments - The film industry is seeing a boost with upcoming releases, such as "731" and "The Volunteer Army: Blood and Peace," which are expected to drive box office performance [7][11] - The short drama segment is expanding globally, covering over 200 countries and becoming a new growth point in digital content [9] Gaming Industry Highlights - In August, 32 Chinese companies made it to the global mobile game publisher revenue ranking, collectively earning $2.04 billion, accounting for 35.1% of the total revenue [10] - The issuance of game licenses in August reached a new high, indicating a stable recovery trend in the gaming industry [11]

Summary of Conference Call Records Industry Overview - The gaming industry is expected to see significant growth in 2025, with an estimated increase of approximately 14% in the first half of the year, and mobile gaming growth at 19%, surpassing the 7.5% growth in 2024 [1][2] - The valuation of the gaming sector has shifted from a range of 15-20 times PE to 20-25 times PE, with leading companies nearing a valuation of 25 times [1][2] Key Points and Arguments - Major companies have exceeded market expectations in product revenue, leading to upward revisions in EPS forecasts for 2025 and 2026, with many companies experiencing growth rates of over 20%, and some even doubling their performance [1][2] - The gaming sector's valuation is expected to transition to 25 times by 2026, driven by clear revenue contributions from single products and sustained high growth [1][5] - The third quarter of 2025 is anticipated to show significant growth, with some companies expected to double their revenue, supported by major product contributions [6][7] Company-Specific Insights - **Giant Network**: The core product "Supernatural Action" is expected to maintain stable revenue post-summer, with Q3 performance projected to at least double compared to Q2. The company is also expected to see close to double growth in 2026, with a valuation of 20-25 times [3][10] - **G-bits**: The company has shown the highest year-on-year growth in Q3, driven by the new game "Sword" and a low base from the previous year. The overseas market performance has also been strong [11][12] - **Century Huatong**: The company has maintained stable revenue levels, with significant contributions from both new and existing products [8][13] Policy and Market Environment - There is a noticeable upward trend in policy support for the gaming industry, with an increase in the number of game approvals and local incentives for game development [4][5] - The market sentiment is optimistic, with a bullish atmosphere contributing to the early transition of valuations towards 2026 [5][6] Emerging Trends - The gaming industry has experienced four significant changes in 2025: improved product quality, increased net profit margins, expanded user demographics, and a shift in business models from project-based to platform-based operations [15] - Companies like Kaiyin Network and Xindong have successfully transitioned to platform-based models, resulting in substantial revenue and profit margin improvements [16][17] Conclusion - The gaming sector is poised for continued growth, with strong performances from leading companies and supportive market conditions. The anticipated changes in valuation and business models suggest a robust future for the industry, with significant opportunities for investment in key players.

Core Insights - The 22nd ChinaJoy was held from August 1 to 4 in Shanghai, showcasing the debut of the game "Supernatural Action Team," which attracted significant attention from attendees [2] - The game has performed well in the market, with simultaneous online users exceeding 1 million and ranking high on multiple platform charts [2] - Giant Network's stock price has surged by 100% over the past three months, with a year-to-date increase of over 90% as of July 31 [2] Company Developments - Giant Network continues to leverage its two major evergreen IPs, with "Zhengtu" collaborating with the film IP "Empresses in the Palace" to introduce a "Palace Storm" gameplay, exploring the integration of national warfare games with traditional culture [2] - The tenth anniversary of "Ball Battle" has been marked by the launch of a nostalgic server and a series of welfare activities [2] Industry Trends - Other games such as "Space Kill," "Night of the Full Moon," "Light of El," and "Pocket Fighting" also presented new highlights at the exhibition [2] - "Space Kill" featured an AI-native gameplay demo called "Endgame Duel," becoming a highlight in the AI direction at the event [2] - "Night of the Full Moon" is set to release a collaborative DLC with "Wang Wang Mountain Little Monsters," showcasing a new 1v1 card battle gameplay demo at the exhibition [2] - Giant Network is focusing on a premium development strategy to expand user reach and brand influence [2]