Core Insights - The company reported a significant revenue of RMB 763 million for the first half of 2025, but incurred a net loss of RMB 638 million primarily due to high marketing costs for new games and one-time restructuring expenses [1] - Despite short-term challenges, the company's strategic adjustments are showing positive results, with a notable increase in overseas revenue and a turnaround in operating cash flow [1][2] Financial Performance - The company's overseas business revenue reached RMB 235 million, marking a year-on-year increase of 33.2%, with overseas revenue accounting for 30.8% of total revenue [2] - The operating cash flow turned positive, recording RMB 108 million, laying a solid foundation for the second half of the year [1] Game Performance - The mini-game segment has emerged as a strong growth engine, with the game "Spring and Autumn Mysteries" generating over RMB 100 million in revenue within three months of its launch [4] - The company has a robust pipeline of games, including several new releases that have performed well in various markets, such as "Naruto: Konoha Master" and "Three Thousand Fantasy" [5][6] IP Development - The company is actively expanding its IP portfolio, with the "Xianjian" IP generating RMB 33.1 million in licensing revenue, a 134.8% increase year-on-year [10] - A series of events and collaborations are planned to celebrate the 30th anniversary of the "Xianjian" IP, enhancing its market presence and brand influence [12] Strategic Outlook - The company aims to continue its focus on business efficiency and cost control while exploring new growth opportunities in the Web3 space [13][15] - Strategic partnerships have been established to leverage Web3 technologies, indicating a proactive approach to future market trends [16]

Core Insights - The company reported a significant revenue of RMB 763 million for the first half of 2025, but faced a net loss of RMB 638 million primarily due to high marketing costs for new games and one-time restructuring expenses [1] - Despite short-term challenges, the company's strategic adjustments have shown positive results, with operating cash flow turning positive at RMB 108 million, laying a solid foundation for the second half of the year [1] Revenue Breakdown - Overseas business revenue reached RMB 235 million, a year-on-year increase of 33.2%, with its share of total revenue rising from 14.1% to 30.8%, becoming a key driver of growth [2] - The success of new games like "斗破苍穹：無雙" and "牛头人GO" in various markets has demonstrated the strong appeal of top-tier IPs in overseas markets [2] Mini Games Performance - The mini games segment has emerged as a significant growth driver, with "春秋玄奇" generating over RMB 100 million in revenue within three months of launch, climbing from 24th to 10th in the WeChat game sales ranking [4] - As of June 30, 2025, the company had 42.82 million new registered users, with an average of 1.1573 million monthly active users and 833,000 monthly paying users [4] IP Game Development - The company continues to expand its IP game portfolio, launching several new titles in mainland China, including "三千幻世" and "新三国志曹操传," which have received positive feedback from players [6] - The "仙剑奇侠传" IP has seen a revenue increase of 134.8% to RMB 33.1 million, with various activities planned to celebrate its 30th anniversary [10][11] Future Outlook - The company has a robust product pipeline for the second half of 2025, including new titles like "代号：暗夜传奇" and "城主天下," which are expected to continue driving growth [8] - The company is also exploring Web3 opportunities, including the integration of its IP into real-world assets and the development of decentralized gaming platforms [16]

Game Launch Overview - In July 2025, a total of 11 new key mobile games were launched, including titles from Tencent Games, KuLo Games, and others [1] Game Performance Analysis - "Douluo Continent: Soul Hunting World" has established strong competitiveness in the MMORPG sector through its open world, IP fidelity, and multi-soul combat system. It is the first 3D realistic MMO RPG mobile game based on the Douluo IP developed by 37 Interactive Entertainment [2] - The game features unique innovations such as an open world, multi-soul combat design, and deep character development, along with multiple branching storylines and a sect social system. It achieved significant success, topping the iOS free charts in multiple regions and maintaining the number one position in China for four consecutive days [2] - On July 12, the game reached a peak daily download of 113,776 times. As of August 15, the corrected total revenue for the iOS mobile version was $4,643,377, with a peak daily revenue of $323,467 on July 20. Initial revenue growth has stabilized after a decline [2] Investment Outlook - The number of game licenses issued in July 2025 remains high, with a continuous release of industry product reserves and a stabilizing market environment, indicating promising performance for new games. There is a recommendation to focus on quality game developers with innovative capabilities and effective IP adaptation and fidelity [2]