Core Viewpoint - The recent surge in G-bits stock price, driven by short-term performance, raises concerns about sustainability and underlying governance issues [1][6]. Financial Performance - G-bits reported a revenue growth of 28.49% and a net profit increase of 24.50% in the mid-year report, but this growth is heavily reliant on the new game "杖剑传说," which has shown signs of declining performance [2]. - The revenue from existing products, such as "问道手游," has decreased by 7.25% year-on-year, indicating a lack of natural growth momentum [2]. - Overseas revenue has dropped by 21.01% year-on-year, with management expressing doubts about the likelihood of developing successful new products [2]. Governance Issues - The dividend policy appears to favor the controlling shareholder, with a proposed payout of 66 yuan per 10 shares, resulting in a 73.46% payout ratio, while R&D investment is only 14.17% of revenue [3]. - The reduction in the number of R&D personnel by half over four years raises concerns about the company's commitment to innovation [3]. - Executives, including the secretary, are cashing out significant portions of their shares, reflecting a lack of long-term investment commitment [3]. Strategic Challenges - The company faces delays in new product launches, with the SLG project "九牧之野" still in testing and no confirmed release date [4]. - The focus on short-term monetization has led to a decline in innovation capabilities, as seen with the quick shutdown of the project "非匿名指令" after just one year [4]. - Despite claims of developing an AI gaming platform in collaboration with NVIDIA, the project remains in the incubation stage without generating revenue [4]. Market Sentiment - A significant reduction in the number of shareholders by 16.51% indicates a potential exit of retail investors, aligning with a drop in institutional holdings from 53 to 14 [5]. - Following the announcements of executive share reductions, there has been a net outflow of 29.99 million yuan from the market, raising concerns about further sell-offs by original shareholders [5]. Conclusion - The combination of executive sell-offs, declining game performance, and governance issues suggests that G-bits may be facing a critical juncture, with the current high valuation potentially being unsustainable if new products do not perform well in the upcoming quarter [6].