Core Insights - The gaming industry is experiencing significant growth, with domestic self-developed game revenue surpassing 350 billion and industry scale exceeding 390 billion, reflecting a 10% year-on-year increase [1] - The net profit of listed gaming companies in A-shares and Hong Kong stocks increased by 38.6 billion, a 23% year-on-year growth, alongside a 11.9 billion increase in R&D investment [1] - However, the industry faces challenges as the logic of game development shifts from "creating games to attract traffic" to "creating games for traffic" [3][4] Industry Trends - The gaming industry's high-quality development is becoming a consensus, but the reality is that new products are struggling to break through due to a solidifying leaderboard [4] - The number of new products entering the iOS top 100 list is declining, with only a few evergreen products generating significant revenue, which increased by 14% year-on-year [4] R&D Perspective - The focus for game development is shifting towards content that is more conducive to sharing and virality, as daily app usage increases while gaming time decreases [8] - Developers are encouraged to adopt a creator's perspective by enhancing visual appeal, providing low-threshold sharing tools, and leveraging AI for innovative gameplay [10][12] Operational Strategy - The future of long-term game operation lies in achieving "full-scenario coverage," which involves multi-platform experiences and effective marketing events [12] - Successful examples include the integration of live events and cross-industry collaborations, such as the "Airdrop Festival" by "Peace Elite," which significantly boosted engagement and sales [13][15] Growth Strategy - Social sharing is identified as a key growth driver, with 20% of Douyin users sharing content daily, indicating the importance of social engagement in long-term operations [17] - AI technology is becoming essential for content production, significantly reducing development cycles and enabling automated content generation [19] Future Outlook - The gaming industry is expected to face a reduction in traffic dividends, necessitating a deeper understanding of traffic management and content operation [23] - Companies must evolve from mere developers to comprehensive content ecosystem operators, focusing on maximizing the efficiency of their traffic management strategies [23]

Core Insights - The Chinese mini-game market is experiencing significant growth, with actual sales revenue reaching 23.276 billion yuan in the first half of 2025, a year-on-year increase of 40.2%, far exceeding the mobile game market's growth rate of 16.55% [1] - The company, 37 Interactive Entertainment, is actively seeking transformation by expanding from gaming into artificial intelligence, quality education, and global distribution, aiming to create a future-oriented global entertainment technology ecosystem [1] Group 1: Market Trends - The mini-game market is projected to exceed 60 billion yuan in size by 2025, indicating that it remains unsaturated compared to the slowing mobile game market [1] - The company is reducing its reliance on traditional user acquisition methods and is focusing on technology-driven content efficiency through AI and data platforms [2] Group 2: Product Development - The company is enhancing its long-term operational capabilities for existing games, with titles like "Seeking the Path of the Universe" and "Time Grocery Store" effectively extending game lifecycles through various engagement strategies [3] - New products are achieving impressive results, with "Time Explosion" reaching the top of the iOS free chart upon launch, and "Heroes Have No Flash" quickly entering the top five of the iOS sales chart [4] Group 3: R&D and Global Strategy - The company is expanding its self-developed capabilities and diversifying its product line, forming a rich external development reserve through partnerships with quality developers [5] - 37 Interactive Entertainment has established itself as a leading global game publisher, successfully distributing numerous titles across over 200 countries and regions [7][8] Group 4: Talent Strategy - The company offers a comprehensive employee welfare system, including an enhanced insurance package and housing support for employees who have been with the company for over two years [9][10] - A focus on work-life balance is evident through policies like double weekends and early leave on certain holidays, alongside a robust talent development program [12][18] Group 5: Future Outlook - The company is committed to building a long-term competitive advantage through technological innovation, quality development, global distribution, ESG governance, and talent development strategies [26] - 37 Interactive Entertainment aims to enhance its global cultural expression and maintain a long-term perspective to improve the quality of cultural output [26]

Core Viewpoint - The gaming industry is leveraging artificial intelligence (AI) to enhance operational efficiency, innovate cultural dissemination, and enable cross-industry collaboration, with a focus on creating a new ecosystem of productivity through technology [1][10]. Group 1: AI in Game Development and Operations - AI has permeated the gaming industry, enhancing the entire process from project initiation to operation, driving a revolution in production efficiency [4][14]. - The company has developed a proprietary AI model, "Xiao Qi Model," which serves as the foundation for AI capabilities across various business applications, significantly improving the industrialization level of game development and operations [4][14]. - AI customer service has been implemented across all games, achieving over 80% accuracy in responses and saving approximately 30 personnel [5][14]. Group 2: Cultural Innovation and Dissemination - The company integrates intangible cultural heritage projects into games, utilizing digital and AI technologies to enhance cultural content and reach younger audiences [6][15]. - A virtual ambassador, "Cong Mei," has been created to promote local culture through AI-generated promotional materials, bridging the gap between gaming and cultural tourism [6][15]. - The combination of online gaming experiences and offline activities fosters a richer cultural exchange, enhancing both gaming content and tourism development [6][15]. Group 3: AI Applications Beyond Gaming - The company has developed an AI copyright protection system named "Ling Cha Cha," which utilizes AI algorithms and big data to monitor and respond to copyright issues effectively [7][16]. - An intelligent assistant for the city of Guangzhou has been created, providing real-time responses to citizen inquiries and enhancing the city's digital transformation [8][17]. - The company aims to collaborate with various government entities to further showcase the benefits of AI technology in urban development [9][18]. Group 4: Future Outlook - Embracing the AI wave is seen as essential for the future of the gaming industry, with a focus on technological empowerment and innovative growth to create a more imaginative digital gaming ecosystem [10][19].

2025年上半年，中国小游戏市场以232.76亿元销售收入、40.2%的同比增速，成为远超手游市场 （16.55%增速）的行业新增长极，600亿元规模的市场潜力正加速释放。 面对行业过度买量、管理粗放、产品生命周期短等突出痛点，三七互娱跳出单一游戏赛道局限，以"技 术革新、精品研发、品牌价值升级"为核心战略，全面拓展素质教育、人工智能、全球发行等多元业 务，在布局全球化盈利网络的同时，构建起抗风险能力与竞争力兼具的娱乐科技生态，为企业可持续发 展筑牢根基。 一、技术创新与买量转型：以长期主义打造精准营销新时代 随着老游戏进入成熟期，公司逐步降低粗放式买量比重，以技术赋能内容效率，通过 AI 大模型、数据 平台、素材自动化生成工具 等方式，实现买量智能化及营销链路降本增效。 1、存量游戏的长线运营能力持续强化 《寻道大千》以联动多IP模式实现多维突破，《时光杂货店》通过公益联动、城市巡游等内容有效延长 游戏生命周期。自研三国题材策略手游《霸业》通过开启S7赛季、新版副本玩法等促进玩家长线玩法 体验和留存，为公司SLG产品长线运营积累经验。 品牌荣誉与行业认可 三七互娱近年来获评多项国家级与行业级荣誉，包括： ● ...

Core Insights - The event "Guangdong Intangible Cultural Heritage Goes Viral" was held in Guangzhou, showcasing the integration of traditional Chinese culture into gaming products [1][2] - The game "Time Grocery Store" launched a special edition map focusing on Guangdong's intangible cultural heritage, emphasizing the theme "Lingnan Elegance, Time Resonance" [1] Group 1: Event Overview - The event featured the launch of the "Guangdong Intangible Cultural Heritage Special Edition Map" [1] - The map integrates five major intangible cultural heritage projects from Guangdong, allowing players to experience the region's craftsmanship and cultural beauty [1] Group 2: Cultural Integration in Gaming - The Guangdong government has encouraged the incorporation of traditional culture into game development through policies aimed at high-quality growth in the gaming industry [1] - The game includes a "Roaming Album" feature that records players' experiences at various heritage sites, enhancing their understanding of Lingnan's intangible cultural heritage [1] Group 3: Discussion and Future Opportunities - A roundtable discussion included experts discussing the role of media in promoting intangible cultural heritage and the potential of gaming as a medium for cultural transmission [2] - The integration of "intangible cultural heritage + gaming" is seen as a significant opportunity for the fusion of culture and technology, supported by policy initiatives [2]

Core Insights - The Chinese gaming market, despite being perceived as saturated, continues to evolve with the emergence of mini-games, which have shown significant growth in recent years [1][3] - The mini-game market generated revenue of 39.836 billion yuan in the past year, marking a year-on-year growth of 99.18%, with 500 million monthly active users, only 10% of whom overlap with the mobile gaming market [1][3] Group 1: Market Dynamics - The success of mini-games is attributed to their reliance on social platforms, ease of access, and strong social sharing attributes, alongside lower development costs compared to traditional mobile games [3][6] - Currently, 70% of listed gaming companies are investing in the mini-game sector, with notable products like "Endless Winter" and "Seeking the Great Thousand" leading the market [3][6] Group 2: Challenges for Small Teams - The entry of large companies into the mini-game market has increased operational costs, making it harder for small teams, which constitute 80% of the market, to compete [5][6] - As competition intensifies, the marginal returns on purely creative gameplay are diminishing, making it difficult for new mini-games to achieve significant user acquisition without substantial marketing budgets [8][9] Group 3: Opportunities for Small Teams - Despite challenges, small teams remain a vital part of the mini-game ecosystem and can leverage partnerships with larger platforms for support in product development and marketing [9][10] - Companies like ByteDance and Kuaishou are providing financial incentives and technical support to developers, helping to reduce marketing costs and enhance product competitiveness [10][12] Group 4: Evolution of Game Development - The mini-game sector is evolving similarly to the mobile game market, with a shift towards combining creative gameplay with established genres to meet user expectations [6][17] - Traditional mobile game content is increasingly influencing mini-game development, with many existing mobile games being adapted for mini-game platforms [17][19] Group 5: Future Directions - The unique social and high-sharing characteristics of mini-games may lead to distinct developmental paths compared to traditional mobile games, emphasizing the importance of innovation and adaptation to platform features [19][20] - Developers are encouraged to focus on gameplay creativity while relying on professional teams for technical optimization and commercialization, allowing them to carve out a niche in the growing mini-game market [20]

Core Viewpoint - Sanqi Interactive Entertainment has demonstrated significant achievements in social responsibility through its 2025 Semi-Annual Social Responsibility Report, focusing on rural revitalization, AI technology application, cross-industry innovation, and environmental initiatives [1][2] Group 1: Rural Revitalization Support - The company has donated nearly 10 million to support rural revitalization and social development, emphasizing talent cultivation and industrial empowerment as dual strategies [1] - Sanqi Interactive has established the Youxin Public Welfare Foundation, funding 2,767 students across 49 county high schools in 9 provinces through the "Youxin Partner" program [1] - Various projects are being implemented to enhance students' comprehensive abilities, including career planning sessions and summer camps [1] Group 2: AI Technology Application - Sanqi Interactive has embraced AI as a core driver for business development, forming an "AI Efficiency Committee" to enhance AI penetration across operations [1] - The company has deployed over 400 self-developed AI agents and created a game industry model named "Xiao Qi," which possesses over 40 AI capabilities [1] Group 3: Cross-Industry Innovation - The company is actively exploring effective paths for game empowerment in industry and urban development, recently becoming a "super partner" in Guangzhou's city partnership initiative [1] - Sanqi Interactive's games have engaged in cross-industry collaborations with cultural sites and events, promoting traditional culture through innovative formats [1] Group 4: Environmental Initiatives - The company has engaged 1,500 participants in ecological practices to promote the concept of a green and beautiful environment [2] - Collaborating with well-known environmental organizations, Sanqi Interactive is involved in urban wetland protection and biodiversity initiatives [2] - The company plans to continue driving innovation through AI and creating social value through quality products and projects [2]

Investment Rating - The investment rating for the company is maintained as "Buy" [1] Core Views - The company reported a revenue of 8.486 billion RMB for H1 2025, a year-over-year decrease of 8.08%, while the net profit attributable to shareholders was 1.4 billion RMB, an increase of 10.72% year-over-year [1] - The second quarter showed significant improvement with a revenue of 4.243 billion RMB, down 5.33% year-over-year but with a net profit of 0.851 billion RMB, up 31.24% year-over-year [1] - The company plans to distribute a cash dividend of 2.10 RMB per 10 shares, totaling 0.924 billion RMB, which represents approximately 66% of the net profit for the period [1] - The company is optimistic about its product operational capabilities and overseas expansion potential, maintaining a "Buy" rating [1] Revenue and Product Performance - The mobile gaming business generated 8.239 billion RMB in H1 2025, a decline of 8.03% year-over-year, with the highest monthly revenue from global releases reaching approximately 2.2 billion RMB [2] - New products launched in early 2025, such as "Time Explosion" and "Heroes Don't Flash," performed well, while long-term products continued to contribute to revenue [2] - Overseas revenue was 2.724 billion RMB, down 6.01% year-over-year, accounting for 32.10% of total revenue [2] Product and IP Development - The company has a rich reserve of products and IPs, including adaptations of popular titles like "Douluo Dalu" and "Doupocangqiong" [3] - The self-developed game "Douluo Dalu: Hunting Soul World" has entered public testing, aligning with the company's strategy of product excellence [3] - The company is enhancing its AI capabilities, building a comprehensive AI-enabled ecosystem centered around its self-developed industry model "Xiao Qi" [3] Financial Metrics and Profitability - The gross margin for H1 2025 was 76.71%, a decrease of 2.92 percentage points year-over-year, influenced by increased operating costs [4] - The sales expense ratio decreased by 6.09 percentage points to 51.97%, as previous growth-phase games entered maturity, leading to reduced traffic investment [4] - The net profit margin increased by 2.81 percentage points year-over-year to 16.51% due to reduced sales expenses [4] Profit Forecast and Valuation - The company forecasts net profits of 2.831 billion RMB, 3.137 billion RMB, and 3.429 billion RMB for 2025, 2026, and 2027 respectively, with corresponding EPS of 1.28 RMB, 1.42 RMB, and 1.55 RMB [5] - The target price is adjusted to 23.04 RMB based on an 18x PE valuation for 2025, up from a previous target of 19.33 RMB [5]

Core Viewpoint - Despite a slight decline in revenue, the company achieved profit growth in the first half of 2025, driven by successful new game launches and the continued contribution from existing games [1]. Financial Performance - The company reported a revenue of 8.486 billion yuan, a year-on-year decrease of 8.08% - Net profit attributable to shareholders was 1.4 billion yuan, an increase of 10.72% compared to the previous year [1]. New Game Performance - The new games "Time Explosion" and "Heroes No Flash" performed exceptionally well, with "Time Explosion" reaching the top of the iOS free chart and "Heroes No Flash" entering the top five of the iOS sales chart [2]. - The self-developed game "Douluo Continent: Hunting Soul World" also topped the iOS free chart after its public beta in July 2025 [2]. Product Pipeline and IPs - The company has over 20 games in its product pipeline, covering various themes such as Western fantasy, Eastern fantasy, and historical settings [3]. - The company holds adaptation rights for several well-known IPs, including "Doupo Cangqiong" and "Douluo Dalu" [3]. Dividend Distribution - The company announced a cash dividend of 2.10 yuan per 10 shares, totaling approximately 462 million yuan, with cumulative dividends for the first half of 2025 expected to reach 924 million yuan, accounting for about 66% of the net profit [3].

Financial Performance - In the first half of 2025, the company achieved operating revenue of 8.486 billion yuan and a net profit attributable to shareholders of 1.4 billion yuan, representing a year-on-year growth of 10.72% [1] - The company plans to distribute a cash dividend of 2.10 yuan per 10 shares, amounting to approximately 462 million yuan, with total dividends for the half-year expected to reach 924 million yuan [1] Product Development - The company has launched several successful new products, with the highest monthly revenue from mobile games reaching approximately 2.2 billion yuan [2] - Notable game releases include "Time Explosion," which topped the iOS free chart, and "Douluo Continent: Soul Hunter World," which quickly ascended to the iOS free chart and ranked 13th on the iOS revenue chart [2] - The company continues to maintain strong product vitality with titles like "Seeking the Great Thousand" and "Time Grocery Store," which have implemented innovative marketing strategies to enhance user engagement [2] Strategic Focus - The company is committed to deepening its focus on MMORPG, SLG, card games, and simulation management genres, with over twenty key products in development across various themes [3] - The company has established a robust return system for investors through consistent cash dividends, share buybacks, and executive stock purchases, with total cash dividends reaching 5.778 billion yuan over the past three fiscal years [3] - Starting in 2024, the company will increase its dividend frequency from semi-annual to quarterly, reinforcing its commitment to a stable and sustainable dividend policy [3]