Group 1 - The company reported total revenue of approximately RMB 623.5 million for the six months ending June 30, 2025, representing an increase of about 18.5% compared to the same period in 2024 [1] - The company achieved a profit of approximately RMB 40.7 million, marking a turnaround from a loss, with a year-on-year growth of about 156.3% [1] - Key drivers for the profit growth include new game revenue contributions, an increase in high-margin channel income, and a reduction in both research and development expenses and sales expenses [1] Group 2 - The company adheres to a long-term operational strategy, focusing on user needs through frequent version updates, content refreshes, operational activities, and IP collaborations to extend product lifecycles [2] - The company tailors game content and promotional materials to meet the characteristics of overseas users in different regions, enhancing local player attraction and retention [2] - Several products have maintained strong performance and reputation not only domestically but also in regions such as Hong Kong, Macau, Taiwan, South Korea, Japan, Southeast Asia, and North America [2]

Core Viewpoint - The company, Friendship Time (6820.HK), has issued a positive profit forecast for the first half of 2025, reflecting a strong recovery in the gaming industry and confidence from both the company and its major shareholders [1][2]. Industry Summary - The gaming industry in China experienced a growth rate of nearly 15% in the first half of 2025, with actual sales revenue reaching 168 billion yuan, a year-on-year increase of 14.08% [2]. - The number of gaming users in China reached approximately 679 million, marking a historical high with a growth of 0.72% [2]. - Self-developed games generated overseas sales revenue of $9.501 billion, reflecting a year-on-year increase of 11.07%, indicating ongoing global competitiveness of Chinese gaming companies [2]. Company Performance Summary - Friendship Time expects revenue for the first half of 2025 to be between 600 million to 650 million yuan, representing a year-on-year growth of 14.1% to 23.6% [2]. - The company anticipates a profit of approximately 38 million to 44 million yuan, marking a turnaround from losses with a year-on-year increase of 152.5% to 160.8% [2]. - The growth is primarily driven by the strong performance of mini-games such as "Dulala's Promotion" and "Lingyun Nuo," along with an increase in high-margin channel revenue contributing to a gross margin increase of about 5 percentage points [2]. Game Highlights - The new game "Chaotic Chef Party" launched on May 28, 2025, quickly topped various app store charts and features collaborations with over 30 well-known food brands [3]. - The game has also initiated a second phase of the "Chef Creator" incentive program to support content creators [3]. - "Dulala's Promotion," another key product, has received positive feedback in both domestic and international markets, particularly in South Korea, where it reached the iOS game sales chart's Top 30 [4]. Shareholder Returns - The company has a strong commitment to shareholder returns, having distributed over 750 million yuan in cash dividends since its IPO, exceeding the net proceeds from its initial public offering [5]. - The company has repurchased approximately 3.7% of its total issued share capital as part of its share incentive plan [5]. - The chairman and major shareholder has committed not to sell any shares in the open market for 12 months starting from July 17, 2025, to reinforce confidence in the company's long-term prospects [5].

Core Insights - Jiangsu province has 38 enterprises and 7 projects listed as key cultural export entities for 2025-2026, covering various fields such as film, animation, gaming, music, and arts and crafts [1] - The province is leveraging a "traditional culture + digital technology" dual-drive model to enhance cultural exports, focusing on three innovative modes: an animation and gaming "new fleet," platform aggregation to build an ecosystem, and digital empowerment of traditional culture [1] Group 1: Animation and Gaming Cluster - Animation and gaming enterprises account for nearly half of the 38 key cultural export companies, with 18 firms primarily located in Suzhou, Wuxi, and Changzhou [2] - Wuxi has developed a complete animation and gaming industry chain, with leading companies like Wuxi Beishi participating in over 70 international films, including "Captain America: Civil War" and "Star Wars: The Force Awakens" [2] - Technological innovation is becoming the core competitive advantage for Jiangsu's animation companies, with firms like Yuanli Animation utilizing advanced systems for high-precision digital content creation [2][3] Group 2: Digital Content Industry - Suzhou Industrial Park has established a digital content industry cluster focused on gaming and animation, with notable achievements from companies like Ailuo Information and Snail Digital [3] - The immersive experience and interactivity of games serve as new cultural carriers, enhancing the international visibility of Chinese culture [3] Group 3: Platform Aggregation - The Yixing Cultural Export Promotion Platform has successfully transformed from a single exporter to a collective platform, integrating over 20 local SMEs to promote "Yixing ceramics" [4] - This platform approach reduces costs and enhances the overall impression of "Eastern aesthetics" in international markets [4] Group 4: Policy Support - Suzhou Industrial Park has implemented targeted support policies for the animation and gaming industry, providing financial incentives for award-winning original works and subsidies for participation in international events [5] - The National Cultural Trade Base in Nanjing has created a one-stop service system for cultural export enterprises, with over 600 companies registered and significant revenue growth [5] Group 5: Cultural Exchange and Innovation - Nanjing is actively expanding its international connections, having established friendly city relationships with 25 countries, facilitating cultural exchanges that benefit enterprises [6] - The integration of traditional culture with digital technology is exemplified by projects like the Jiangsu Women's Ethnic Orchestra's use of 3D holographic projection to create immersive experiences [8] Group 6: Globalization of Cultural Expression - Jiangsu enterprises are exploring ways to break cultural barriers and achieve resonance in global markets, with successful examples in both traditional and digital sectors [8][9] - The gaming industry demonstrates strong cultural transformation capabilities, with companies like Suzhou Lezhi Software and Huanta Network incorporating local cultural elements into their products [8][9]

Core Viewpoint - The company possesses a unique ability to create hit products in the traditional advantageous ancient-style RPG female-oriented game sector, while maintaining a long-term operational strategy, resulting in stable revenue performance from titles like "Floating Life for the Emperor" and "Lingyun Nuo" [1][2] Game Performance - The recent game "Violent Chef" has shown impressive performance, currently ranking first on the iOS free game chart, with plans for increased user acquisition to enhance its long-term development and contribution to revenue and profit [1][3] - The game features a differentiated cooking gameplay combining "Chinese cuisine kitchen party + restaurant casual management," appealing to a broad audience [1][3] Product Pipeline and Market Expansion - The company is actively expanding its product categories, including male-oriented games and overseas markets, with a rich pipeline expected to yield multiple game tests in Q3/Q4 [2][5] - The company has improved its publishing system, focusing on ROI in project initiation and distribution, leading to successful low-cost, high-return games like "Ink Sword Jianghu" and "Lingyun Nuo" [2][5] Cultural and Brand Integration - The company has successfully enhanced market penetration and user engagement through diverse brand collaboration strategies, creating a unique "culture + consumption" ecosystem [2] - Collaborations with cultural landmarks and consumer brands have strengthened the cultural depth of its IPs and increased foot traffic to physical locations [2] Financial Forecast - Revenue is projected to improve gradually, with expected revenues of 1.45 billion and 1.76 billion yuan for 2025 and 2026, respectively, reflecting year-on-year growth of 25% and 21% [5] - Adjusted net profits are forecasted to be 85 million and 175 million yuan for the same years, indicating stable profitability [5]