Summary of Giant Network Conference Call Company Overview - **Company**: Giant Network - **Industry**: Gaming and Entertainment Key Points and Arguments 1. Strong Foundation and User Base - Giant Network has established a solid foundation through its IP "Journey" and products like "Ball Battle," accumulating a large user base that supports revenue growth [2][4][5] 2. Successful Product Launches - In 2024, the company successfully expanded into mini-games, with "King's Journey" generating a total revenue of 600 million yuan and adding over 25 million new users, validating the feasibility of heavy MMO games in the mini-program sector [2][4][5] - "Supernatural Action Group" performed exceptionally in 2025, targeting young female users and the micro-horror segment, with June revenue nearing 200 million yuan and July expected to exceed 300 million yuan, becoming a new growth driver [2][4][9] 3. Revenue Growth from Existing Titles - "Ball Battle" achieved record-high core user retention and significantly improved payment penetration, with monthly revenue reaching a five-year high [2][4][8] - "Space Kill" utilized AI technology to gain a leading position in Southeast Asia and South America, attracting new players and enhancing user experience [2][4][8] 4. AI Integration - The company actively employs AI technology, such as in "Space Kill," where AI-assisted gameplay enhances user engagement and reduces costs, driving innovation [2][4][10] 5. Financial Projections - Projected net profits for Giant Network from 2025 to 2027 are 1.919 billion, 2.307 billion, and 2.56 billion yuan, respectively, with potential upward adjustments due to the strong performance of products like "Supernatural Action Group" [3][12] 6. Importance of "Journey" IP - The "Journey" IP is crucial for the company, serving as a foundation for stability and a driver for innovation and expansion, with significant contributions expected from new iterations and mini-games [5][12] 7. Market Position and Competitive Edge - The company has successfully diversified its product matrix, covering various demographics and game types, which enhances its market position and growth potential [4][5][12] 8. Future Development Plans - Giant Network has a rich product pipeline, including "5,000 Years," a strategy game expected to leverage social interactions to enhance player retention and revenue [10][11] - The company is optimistic about the future performance of its products, particularly in the SLG market, which is projected to grow significantly [11] 9. Valuation and Investment Recommendation - The current valuation is considered safe, with estimates for 2026 returning to below 20 times earnings, indicating potential for upward adjustment [13][14] - The company is recommended as a key investment target due to optimistic profit forecasts and the potential for valuation recovery driven by new product cycles and AI integration [12][14] 10. Long-term Growth Outlook - The long-term growth outlook for Giant Network is very positive, supported by new product launches and AI capabilities that could enhance profitability and market share [14]

Core Viewpoint - Giant Network is experiencing a significant valuation reshaping driven by the success of its new game "Supernatural Action Group," which has led to a stock price increase of over 100% in three months and a market capitalization exceeding 50 billion yuan, marking a six-year high [1][4]. Group 1: Game Performance and Market Impact - "Supernatural Action Group," a multiplayer adventure game featuring "Chinese-style treasure hunting," has rapidly gained popularity since its launch in May, ranking in the top 2 of the iOS free chart and top 10 of the revenue chart [4][9]. - The game's success is viewed as a turning point for Giant Network, indicating a fundamental reversal in the company's performance [4][10]. - The game achieved a revenue of 54,000 yuan in its first month, which surged to over 70 million yuan in June after updates and new features were introduced [9]. Group 2: Historical Context and Development Strategy - Giant Network has a history of creating successful games, with notable titles like "Journey" and "Ball Battle," which have collectively generated over 30 billion yuan in revenue [6]. - The company has consistently focused on self-developed quality games, which has been a key factor in its ability to produce hits [11][12]. - The return of founder Shi Yuzhu to the front line has reinforced the company's commitment to its core strategy of developing quality games, leading to significant improvements in product development and user experience [14][17]. Group 3: Organizational Changes and Innovation - Giant Network has implemented a strategy to empower younger talent within the organization, fostering innovation and ensuring a continuous flow of creative ideas [12][13]. - The development team behind "Supernatural Action Group" is primarily composed of younger members, demonstrating the effectiveness of the company's talent strategy [12][14]. - The company has invested over 10 billion yuan in research and development over the past 20 years, leading to a reassessment of its valuation due to previous structural imbalances in R&D output [13][17]. Group 4: Future Growth and AI Strategy - Giant Network's growth strategy includes a diverse portfolio of long-standing IPs and new game reserves, with "Supernatural Action Group" expected to drive significant revenue growth in Q3 2025 [20][21]. - The company has established an AI laboratory to innovate game production and enhance gameplay experiences, positioning itself for competitive advantage in the evolving gaming landscape [21][23]. - Recent upgrades in ratings from multiple securities firms reflect a positive outlook on the company's growth potential and valuation, driven by the success of "Supernatural Action Group" and future product offerings [23][24].

Core Insights - The mobile gaming market in China is experiencing significant growth, with mobile game revenue expected to increase by 5.01% year-on-year in 2024, while mini-program games are projected to grow by an impressive 99.18% [1][3][10] - Major platforms like WeChat and Douyin are leading in mini-game user engagement, with WeChat's mini-games reaching over 500 million monthly active users [8][11] - The competition among game developers is intensifying, with traditional game companies increasingly entering the mini-game space to leverage their existing IPs and resources [14][16] Market Growth - The mini-game market is predicted to reach a scale of 61 billion by 2025, driven by the increasing popularity of lightweight, easily accessible games [1][3] - Mini-games are attracting a diverse range of developers, including those previously focused on app or PC games, creating a vibrant market ecosystem [3][6] Platform Strategies - WeChat and Douyin are focusing on retaining users and increasing traffic through mini-games, with both platforms hosting industry events to showcase their ecosystems [4][6] - WeChat's mini-game platform was launched in 2017, and it has since become a fertile ground for developers, benefiting from its social networking capabilities [8][20] User Engagement - Users on WeChat engage with an average of six mini-games monthly, with daily online time increasing by 10% year-on-year [8] - Douyin's mini-games have seen a 130% growth rate, with strong retention and monetization metrics [10][11] Developer Competition - Approximately 70% of listed gaming companies have entered the mini-game sector, leveraging their technological and resource advantages [14][16] - Major gaming companies are increasingly investing in marketing for mini-games, with daily advertising expenditures surpassing those for traditional mobile games [16][18] Monetization Strategies - Mini-games utilize various monetization models, including advertising, in-app purchases, and hybrid models, which are proving effective for traditional game companies [14][23] - The success of mini-games like "Jump Jump" and "Sheep Got Sheep" demonstrates the potential for high returns on low initial investments [20][23] Ecosystem Development - The competitive landscape is evolving, with platforms like Alipay and Meituan also entering the mini-game space, although their focus remains more supplementary compared to WeChat and Douyin [10][11] - The interconnectivity between platforms is being explored, with Douyin allowing links to WeChat mini-games, promoting a collaborative growth environment [26][27]

Group 1: Non-Bank Financial Sector - The report highlights a positive outlook for the brokerage sector, driven by favorable economic policies and a stable stock market environment, with a recommendation to focus on low-valuation leading brokerages, high beta fintech stocks, and firms benefiting from the expansion of the Hong Kong IPO market [4][11][10] - The brokerage sector has shown a significant increase, with a 9.6% rise in the first three days of the week, outperforming the CSI 300 by 6.6% [8] - Key metrics indicate a strong recovery in brokerage performance, with a 48% year-on-year increase in average daily stock trading volume in Q2 2025, and a 22% increase in margin financing scale [9][11] Group 2: Media Sector - Giant Network - The company is recognized as a leading online game developer, with a solid core IP and a focus on innovative game development, receiving a "Buy" rating [15][16] - Expected net profits for 2025-2027 are projected at 1.919 billion, 2.307 billion, and 2.560 billion yuan, with corresponding EPS of 0.99, 1.19, and 1.32 yuan, indicating a favorable PE ratio [15][17] - The company is expanding into new game categories, with promising titles like "Supernatural Action Group" and "Five Thousand Years" set to drive future growth [17][16] Group 3: Non-Ferrous Metals - Jincheng Mining - Jincheng Mining is positioned as a leading mining service provider in China, with a dual business model of mining services and resource development, expecting significant profit contributions from copper and phosphate sales [19][20] - The company anticipates net profits of 2.170 billion, 2.466 billion, and 3.245 billion yuan for 2025-2027, with a favorable PE ratio [19][21] - The mining service sector is expected to grow rapidly due to increasing global demand and the aging of copper resources, providing Jincheng Mining with a competitive advantage [20][21]

Core Viewpoint - The financial troubles of Giant Investment Co., a key platform under entrepreneur Shi Yuzhu, have raised concerns in the market, particularly with a recent court ruling involving a debt of over 490 million yuan [2][3]. Group 1: Company Background - Giant Investment was established in April 2001, with Shi Yuzhu holding approximately 97.9% of the shares, while its business scope includes industrial investment and asset management [3]. - Shi Yuzhu is a notable figure in Chinese business, having gained fame through health products and later expanding into gaming and financial investments [3]. Group 2: Financial Performance - Giant Network, a major company under Shi Yuzhu, has seen a decline in revenue from 25.71 billion yuan in 2019 to 20.38 billion yuan in 2022, reflecting a decrease of 31.96% to 4.07% year-on-year [3]. - In the first quarter of 2025, Giant Network reported a revenue of 724 million yuan, a year-on-year increase of 3.94%, with a net profit of 348 million yuan, remaining stable compared to the previous year [6]. Group 3: Debt and Legal Issues - Giant Investment and Purple Crystal Investment Management Co. have been listed as defendants in a court case with a claim amounting to over 490 million yuan, indicating potential shared debt or guarantee relationships [2][3]. - Shi Yuzhu has faced multiple financial issues, including the freezing of shares worth 65 million yuan in December 2024, further indicating pressure on his capital structure [5]. Group 4: Market Reaction - Following the news of the legal case, Giant Network's stock fell by 1.94%, although there was no significant volatility in the stock price [6]. - The market is reacting cautiously to the ongoing financial issues within the "Giant System" [6]. Group 5: Strategic Initiatives - Giant Network is focusing on revitalizing its core IPs, with the game "Wang Zhe Zheng Tu" attracting over 25 million new users since its launch on a mini-program platform [7]. - The company is also investing in AI technologies to enhance gameplay experiences, which could lead to increased player engagement and revenue [8].

Investment Rating - The report maintains an "Overweight" rating for the media industry [1] Core Insights - The overall performance of the media sector in Q1 2025 exceeded market expectations, driven by blockbuster films and games [5][11] - The publishing and periodicals sector is facing revenue declines due to regulatory impacts and tax policy changes, with expected revenue drops of 2% in 2024 and 4% in Q1 2025 [2] - The gaming sector showed strong performance with a revenue increase of 21% in Q1 2025, supported by successful new game launches [20][29] - The marketing sector is experiencing revenue declines due to cautious ad spending amid economic recovery challenges, but top companies are showing resilience [5][20] - The film industry is expected to have a strong start in 2025, with Q1 revenue growth of 41% driven by popular films [5][20] Summary by Sections Overall Performance - In Q4 2024, the media sector achieved a total revenue of 1,393 billion, a 2% year-on-year decline; however, in Q1 2025, revenue rose to 1,240 billion, marking a 5% year-on-year increase [11][12] Gaming Sector - The domestic gaming market's actual sales revenue reached 3,257.83 billion in 2024, with a year-on-year growth of 7.53%, and 857.04 billion in Q1 2025, growing by 17.99% [20][29] - A-share gaming companies reported total revenues of 873.7 billion and 248.2 billion for 2024 and Q1 2025, respectively, with year-on-year increases of 8% and 21% [29][37] Marketing Sector - The marketing industry faced revenue declines in Q4 2024 and Q1 2025, primarily due to cautious spending from advertisers; however, the sector showed signs of recovery with a 9% year-on-year increase in net profit in Q1 2025 [5][20] Film Industry - The film industry saw a revenue of 141.2 billion in Q1 2025, a 41% increase year-on-year, largely due to successful films like "Nezha: Birth of the Demon Child" [5][20] Digital Media - The digital media sector experienced slight revenue declines in both 2024 and Q1 2025, with major player Mango TV reporting a revenue of 140.8 billion in 2024, down 3.8% year-on-year [5][20] Publishing and Periodicals - The publishing sector is projected to see a revenue decline of 2% in 2024 and 4% in Q1 2025, influenced by regulatory changes in educational publishing [2][5]

Financial Performance - The company reported a revenue of 2.923 billion yuan for 2024, a slight decrease of 0.05% year-on-year [1] - The net profit attributable to shareholders was 1.425 billion yuan, representing a year-on-year increase of 31.15% [1] - The net profit excluding non-recurring items was 1.623 billion yuan, up 18.23% year-on-year [1] - A cash dividend of 1.40 yuan per 10 shares (including tax) is proposed, totaling approximately 265 million yuan [1] Product and User Growth - The company's "Zhengtu" IP has successfully expanded its user base, with the mini-program game "Wangzhe Zhengtu" generating significant revenue growth since its launch in February 2024, contributing 600 million yuan in revenue [2] - The "Yuan Shi Zhengtu" game has also seen innovation through short drama marketing, attracting a large number of potential users [2] - The casual competitive game "Qiu Qiu Da Zuo Zhan" achieved significant revenue growth and high user retention, with monthly revenue reaching a five-year high [3] AI Integration and Innovation - The company is embracing AI technology, collaborating with Alibaba Cloud to enhance game applications and develop intelligent agents [4] - The game "Tai Kong Sha" has integrated AI features, including the "Inner Ghost Challenge," which utilizes advanced AI models for gameplay [4] - The introduction of AI NPCs in "Yuan Shi Zhengtu" aims to enhance player engagement through personalized experiences [4] Future Outlook - The company maintains a strong investment rating, with projected revenues of 3.332 billion yuan, 3.665 billion yuan, and 3.977 billion yuan for 2025-2027, reflecting year-on-year growth rates of 14%, 10%, and 8% respectively [5] - Expected net profits for the same period are projected to be 1.618 billion yuan, 1.764 billion yuan, and 1.949 billion yuan, with growth rates of 14%, 9%, and 10% respectively [5]

Group 1: Financial Performance - In Q1 2025, the company achieved revenue of 724 million yuan, representing a year-over-year increase of 3.94% and a quarter-over-quarter increase of 2.75% [1] - The net profit attributable to shareholders was 348 million yuan, showing a year-over-year decrease of 1.29% and a quarter-over-quarter decrease of 1.76% [1] - The non-recurring net profit attributable to shareholders was 349 million yuan, reflecting a year-over-year decline of 10.45% but a quarter-over-quarter increase of 3.95% [1] Group 2: Contract Liabilities and Revenue Recognition - Contract liabilities continued to grow, reaching 761 million yuan by the end of Q1 2025, an increase of 290 million yuan year-over-year and 128 million yuan quarter-over-quarter [1] - The increase in contract liabilities is primarily due to user recharge flows that need to be amortized based on item consumption and player lifecycle [1] - The sales expense ratio for Q1 2025 was 38.41%, up 9.40 percentage points year-over-year but down 3.76 percentage points quarter-over-quarter, indicating a mismatch between revenue recognition and expense recognition [1] Group 3: New Game Development - The company is actively developing new games to expand its product matrix and create new growth points [2] - The multiplayer game "Supernatural Action Team" began a paid test in early 2025 and reached a peak ranking of 16 in the iOS free game chart and 18 in the iOS adventure game sales chart [2] - The strategy card game "Code Kill" started a limited test on March 27, 2025, while historical SLG "Five Thousand Years" and casual competitive game "Pocket Fight" have obtained approval for launch [2] Group 4: AI Integration - The company has built comprehensive AI capabilities centered around self-developed large models, aiming to industrialize AI applications across various modalities [3] - AI tools have been developed for image, video, voice, code, text, and strategy, which help reduce research and operational costs [3] - The company announced a deepened AI collaboration with Alibaba Cloud in February 2025, focusing on AI applications in gaming scenarios and computational power ecosystem development [3] Group 5: Earnings Forecast and Investment Rating - The company maintains its previous earnings forecast, expecting EPS of 0.85, 0.92, and 0.99 yuan for 2025-2027, corresponding to current PE ratios of 17, 16, and 15 times [3] - The company is optimistic about the steady release of existing game performance and the incremental contributions from new game launches, while also looking forward to the exploration of AI in gaming [3]

每经记者 张梓桐 每经编辑 文多 4月24日，巨人网络（SZ002558）发布2024年年度报告。报告显示，公司2024年实现营业收入29.23亿元，与上年基本持平，归母净利润14.25亿元，同比 增长31.15%。 《每日经济新闻》记者注意到，财报显示，公司旗下《王者征途》游戏于2024年2月上线小程序平台，全年贡献流水（营业收入）达6亿元，成为公司新的 增长引擎。 在过去的一年里，国内小程序游戏市场呈爆发式增长态势。"2024中国游戏产业年会"上发布的《2024年中国游戏产业报告》显示，2024年国内小程序游戏 市场收入398.36 亿元，同比增长幅度达99.18%。 不仅仅是巨人网络，ST华通（SZ002602，即世纪华通）、恺英网络（SZ002517）等游戏公司也在将小游戏当作开拓新市场、"投石问路"的利器。但如何 在同质化的竞争中厮杀出一条血路，仍然需要游戏公司持续摸索。 "征途"IP借道小程序游戏实现用户扩圈 巨人网络目前最主要的两条产品线分别为"征途"系列和《球球大作战》。其中，"征途"IP（知识版权）是"国战"类MMORPG（大型多人在线角色扮演游 戏）网游知名品牌之一，《球球大作战》则是公司 ...

Core Insights - The gaming market is experiencing a robust recovery, driven by normalized licensing and technological advancements, leading to a stable growth in market size [1] - Giant Network has reported impressive financial results for 2024, with revenue reaching 2.923 billion yuan and a net profit of 1.425 billion yuan, reflecting a year-on-year increase of 31.15% [1] Group 1: Financial Performance - Giant Network achieved a revenue of 2.923 billion yuan in 2024, with a net profit of 1.425 billion yuan, marking a 31.15% increase year-on-year [1] - The company's net profit excluding non-recurring items was 1.623 billion yuan, up 18.23% year-on-year [1] Group 2: Product Performance - The "征途" IP's game "王者征途" has attracted over 25 million new users since its launch on the mini-program platform, generating a revenue of 600 million yuan [2] - The game "球球大作战" saw significant growth in 2024, with core user retention reaching a new high and monthly revenue hitting a five-year peak [2] - The game "月圆之夜" has successfully transitioned to a networked model, with a significant increase in revenue share from this mode [3] Group 3: Strategic Initiatives - Giant Network is focusing on innovation to cultivate new growth drivers while consolidating its existing advantages [2] - The company is actively developing an "AI + gaming" ecosystem, leveraging its self-developed AI capabilities to innovate gameplay [3][4] - Giant Network has deepened its AI collaboration with Alibaba Cloud and invested in AI image generation startup LiblibAI [4] Group 4: Future Outlook - The gaming industry is expected to benefit from favorable policy changes, with the issuance of 118 domestic and 9 imported game licenses in April [3] - Giant Network is set to launch new games, including "超自然而行动组," which is currently in paid testing [3]