Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company achieved revenue of 1.136 billion yuan in Q1 2025, representing a year-on-year increase of 22.47% and a quarter-on-quarter increase of 29.44%. The net profit attributable to shareholders was 283 million yuan, up 11.82% year-on-year, while the net profit excluding non-recurring items was 275 million yuan, up 38.71% year-on-year. This marks the first quarter of positive revenue growth since 2023 [2][4] - The new game "Wen Jian Chang Sheng" contributed over 360 million yuan in revenue increment, with other core products like "Wen Dao" and "Yi Nian Xiao Yao" also showing quarter-on-quarter revenue growth. The report emphasizes the importance of monitoring the revenue trends of core products and the progress of new game launches [5][7] Summary by Sections Financial Performance - In Q1 2025, the company reported a revenue of 1.136 billion yuan, a year-on-year increase of 22.47% and a quarter-on-quarter increase of 29.44%. The net profit attributable to shareholders was 283 million yuan, reflecting an 11.82% year-on-year increase, while the net profit excluding non-recurring items was 275 million yuan, up 38.71% year-on-year [2][4] - The company’s revenue returned to positive growth for the first time in 2023 [4] Game Performance - The new game "Wen Jian Chang Sheng" significantly contributed to revenue, generating 363 million yuan in Q1 2025. The revenue from "Wen Dao" was 321 million yuan, down 16.3% year-on-year but up 34.9% quarter-on-quarter. "Wen Dao Mobile" generated 441 million yuan, down 15.9% year-on-year and down 4.3% quarter-on-quarter [5][6] - The report highlights the need to focus on the revenue trends of core products and the testing and launch schedules of new games [7] Investment and Expenses - The company increased its marketing expenses due to the launch of "Wen Jian Chang Sheng," with sales expenses rising to 360 million yuan, an increase of 66 million yuan year-on-year and 165 million yuan quarter-on-quarter. The sales expense ratio increased by 9.5 percentage points to 31.7% [6] - The report notes that the overall investment return on marketing spending remains good, with stable year-on-year sales expense ratios [6]

Core Viewpoint - The company, Xiamen Gigabit Network Technology Co., Ltd. (吉比特), has clarified that rumors regarding the dissolution of its Guangzhou R&D team are unfounded, and no major layoffs have occurred. The adjustments made are due to the evaluation of underperforming self-developed projects rather than financial pressure [1][6]. Group 1: Company Adjustments - The company has recently halted several self-developed projects after a thorough review, indicating that some projects did not meet the required standards. While there will be some personnel changes, the company aims to retain talented individuals from the discontinued projects and reallocate them to fewer ongoing projects [4][5]. - The chairman, Lu Hongyan, emphasized that the adjustments are not due to financial constraints but rather a response to the underperformance of certain projects [6][7]. Group 2: Financial Performance - Gigabit's financial performance has been under pressure, with a reported revenue of 859 million yuan for the first nine months of the previous year, a decrease of 10.36% year-on-year. The total revenue for the year-to-date period was 2.818 billion yuan, down 14.77% compared to the previous year [11][12]. - The net profit attributable to shareholders was approximately 140 million yuan, reflecting a decline of 23.82% year-on-year, while the year-to-date net profit was 658 million yuan, also down 23.48% [11][12]. Group 3: Product Performance - The company's main products, including "Wandao" and "Yinian Xiaoyao," have been in operation for many years, with total revenue for these products declining by 17.19% year-on-year in the first nine months of 2024 [11][12]. - Newer titles like "Chao Jinhua Yushi 2" and "Lost Four Realms" have not performed well in the market, failing to generate significant hits. The recently launched "Wanjian Changsheng" has shown promising data, potentially contributing positively to future performance [13][14]. Group 4: Strategic Focus - The company is shifting its focus towards headlining projects, with plans to concentrate resources on key products like "Wanjian Changsheng" and "Zhangjian Chuan Shuo" [18][19]. - The company has also announced a strategic contraction, with adjustments in its operational structure, including changes in the management of certain game titles [19].