Summary of the Conference Call for Kaiying Network Company Overview - The focus is on the 996 Legend Box, which enhances brand recognition through exclusive IP licensing, such as "Legend of Blood" and "Legend World" [2][4][5] - The company is shifting its strategy towards a platform-based community centered around "retro sentiment" to expand game categories and community services [2][6] Key Points and Arguments Industry and Company Strategy - The 996 Legend Box is positioned as a vertical community platform catering to "Legend" users, with potential expansion to other retro IPs [3] - The current daily active users (DAU) are approximately 400,000 to 500,000, with a potential market of over 2 million "Legend" users, indicating significant growth potential [3] - The company has signed exclusive licensing agreements, expecting an increase in revenue by 400 to 500 million RMB in 2025, with a projected revenue of 1.5 to 2 billion RMB in 2026, and gross margins of 90% [2][8] Revenue and Profitability - The primary revenue model is currently advertising, but future monetization paths include cloud services, live streaming fees, and in-game rewards [7][9] - The company anticipates a significant revenue boost in Q3 2025 due to new licensing agreements, with total revenue expected to reach around 1 billion RMB [8] - The net profit margin is projected to be between 50% and 60%, with potential increases as advertising prices rise [8] User Growth and Engagement - New users are expected to be attracted through brand zones and the integration of popular products, with all products required to feature the 996 Legend Box logo [10][11] - The company aims to double its user base through live streaming and influencer engagement, enhancing platform activity [11] Future Growth Potential - The company sees potential for revenue growth to reach 2 to 3 billion RMB in the next two years, with corresponding net profits of approximately 12 to 18 billion RMB [13] - The overall profit potential for the company could exceed 3 to 4 billion RMB if other major products perform well [14] Recent Initiatives - Recent initiatives include a unified branding campaign requiring all products to feature the 996 logo and inviting influencers to enhance platform engagement [15] - The company is also developing a props trading platform and a points system to ensure user retention [15] Confidence in Future Development - The company demonstrates confidence in its future through share buybacks and commitments from executives not to sell shares for five years [16] Additional Important Insights - The core of the business model revolves around user growth and advertising revenue, with a significant increase in revenue from 200 million to 900 million RMB over the past few years [17] - Key performance indicators for future growth include user engagement metrics and advertising investments, with a focus on high-quality user acquisition [19] - The company has several upcoming game releases, including "Three Kingdoms" and "Douluo Dalu," which are expected to contribute to overall performance [20][21] Conclusion - The 996 Legend Box is positioned for significant growth through strategic licensing, user engagement, and diversified revenue streams, with a strong focus on community building and brand recognition. The company's proactive measures and confidence in its strategy suggest a promising outlook for future performance.

Core Viewpoint - The company achieved significant revenue growth in 2024 and continued this trend into Q1 2025, driven by both established and new game titles, as well as effective cost management [1][2]. Group 1: Financial Performance - In 2024, the company reported revenue of 5.118 billion yuan, a year-on-year increase of 19.16%, and a net profit attributable to shareholders of 1.628 billion yuan, up 11.41% [1]. - For Q1 2025, the company achieved revenue of 1.353 billion yuan, a growth of 3.46%, with a net profit of 518 million yuan, reflecting a 21.57% increase [1][2]. Group 2: Game Operations and Releases - The revenue growth in 2024 was primarily due to the long-term operation of nostalgic games like "Original Legend" and "Blood of the Hero," as well as strong overseas performance, with international revenue reaching 375 million yuan, a 221% increase [2]. - The company has a rich pipeline of games, having announced 22 new titles, including "Dragon Valley World" and "Digital Monster: Source Code," with several games already launched or in testing phases [3]. Group 3: Shareholder Returns and Management Confidence - The company plans to distribute a cash dividend of 1 yuan per 10 shares for 2024, totaling approximately 214 million yuan, with a cash dividend ratio of 26.18% [4]. - Management has committed to not reducing their holdings from 2024 to 2028 and has already completed two rounds of share buybacks, demonstrating confidence in the company's future [4]. Group 4: Future Outlook - The company expects continued revenue growth driven by stable operations of existing games and the release of new titles, projecting revenues of 5.99 billion, 6.56 billion, and 7.18 billion yuan for 2025, 2026, and 2027, respectively [5]. - Net profits are forecasted to reach 2.13 billion, 2.38 billion, and 2.64 billion yuan for the same years, indicating a robust growth trajectory [5].