Core Viewpoint - The company reported a significant decline in revenue and incurred substantial losses in the first half of 2025, primarily due to quality issues with its core game and high marketing costs for new releases [1][3]. Financial Performance - The company achieved a revenue of RMB 763 million in the first half of 2025, a year-on-year decrease of 38.1% [1]. - The net loss for the period was RMB 644 million, with an adjusted net loss of RMB 638 million [1]. - Operating cash flow turned positive, reaching RMB 108 million, attributed to cost reduction and efficiency measures [3]. Game Development and Releases - The company launched several new games, including "Three Thousand Fantasy World" and "Daily Life of Chat Group," which received positive initial reception [3][5]. - The game "Spring and Autumn Mysteries" performed well, ranking in the top 10 of the WeChat mini-game sales chart shortly after its release [5]. Overseas and Mini Game Performance - Overseas revenue reached RMB 235 million, a 33.2% increase year-on-year, now accounting for 30.8% of total revenue [6]. - The mini-game segment is identified as a key growth driver, with "Spring and Autumn Mysteries" generating over RMB 100 million in revenue within three months of launch [5][6]. Future Outlook - The company anticipates a turnaround in the second half of 2025 with multiple game launches planned, including "Naruto: Leaf Master" and several others targeting international markets [9][10]. - The company has outlined a new update and promotion strategy for its core game, which may lead to reduced development and marketing costs moving forward [1].

Core Viewpoint - The company reported a significant decline in revenue and an increase in losses for the first half of 2025, attributed to various factors including the performance of new game launches and the expiration of successful game IPs [1] Financial Performance - The company achieved revenue of RMB 763 million, a year-on-year decrease of 38.13% [1] - The loss attributable to the parent company was RMB 639 million, an increase of 170.32% year-on-year [1] Game Performance - The newly launched mini-game "Spring and Autumn Mysteries" performed well, gaining market and player recognition [1] - The company successfully launched several major IP games overseas, including "Battle Through the Heavens: Unmatched," "Douluo Continent: Shrek Academy," and "Douluo Continent: Time Reversal," leading to a significant increase in overseas revenue [1] - However, the new games "Three Thousand Fantasy Worlds" and "Daily Life of Chat Groups" did not meet revenue expectations after their launch [1] - The recently launched game "New Three Kingdoms: Cao Cao's Biography" achieved good rankings but did not contribute significantly to revenue due to its short launch period within the reporting timeframe [1] - The expiration of the IP authorization for the successful game "The Legend of the Condor Heroes: Iron Blood and Heart" resulted in no revenue generation during the reporting period, as the operation was terminated in 2024 after friendly negotiations with the partner [1]

Core Viewpoint - The company reported a significant decline in revenue and an increase in losses for the first half of 2025, attributed to various factors including the performance of new game launches and the expiration of a successful IP license [1] Financial Performance - The company achieved revenue of RMB 763 million, representing a year-on-year decrease of 38.13% [1] - The loss attributable to the parent company was RMB 639 million, an increase of 170.32% year-on-year [1] Game Performance - The newly launched mini-game "Spring and Autumn Mysteries" performed well, gaining market and player recognition [1] - The company successfully launched several major IP games overseas, including "Battle Through the Heavens: Unmatched," "Douluo Continent: Shrek Academy," and "Douluo Continent: Time Reversal," which significantly boosted overseas revenue [1] - However, the new games "Three Thousand Fantasy Worlds" and "Daily Life of Chat Groups" did not meet revenue expectations after their launch [1] - The recently launched game "New Three Kingdoms: Cao Cao's Biography" achieved good rankings but did not contribute significantly to revenue due to its short launch period within the reporting timeframe [1] - The expiration of the IP license for the previously successful game "New Legend of the Condor Heroes: Blood and Heart" led to its termination in 2024, resulting in no revenue generation during the reporting period [1]

Summary of Zhongshou's Conference Call Company Overview - Zhongshou's overseas revenue reached RMB 272 million in 2024, accounting for 14.1% of total revenue, with significant contributions from the game "Douluo Dalu: Shrek Academy" in the Hong Kong, Macau, and Taiwan markets [1][3] - The company plans to expand its overseas business by launching "Douluo Dalu: Reverse Time" in international markets [1][3] Core Business Segments - Zhongshou's game publishing revenue for 2024 was RMB 1.665 billion, with three main business segments: game publishing, game development, and IP licensing [2] - Key games launched include "Douluo Dalu: Shrek Academy," "Doupo Cangqiong: Peak Showdown," and "Douluo Dalu: Reverse Time," all performing exceptionally well [2][15] - The company aims to launch 18 new games in 2025, focusing on high-quality IP games and innovative mini-games [2][10] Long-term Operating IP Games - Zhongshou has several long-term operating IP games, including "Xianjian Qixia Chuan," "One Piece: Bloodline," and "True Three Kingdoms: Domination," which have shown strong revenue performance [4] - "New Legend of the Condor Heroes: Iron Blood and Heart" generated RMB 260 million in its first month, while "One Piece: Bloodline" has maintained active engagement since its launch [4] Research and Development - The company invested RMB 244 million in R&D in 2024, focusing on projects like "Code: Dark Night Legend" and the open-world game "Xianjian World" [5] - "Xianjian World" was launched in early 2025, while "Code: Dark Night Legend" is expected to enter testing later in 2025 [5][13] IP Licensing Achievements - In 2024, IP licensing revenue was RMB 116 million, with Zhongshou holding complete global rights to "Xianjian Qixia Chuan" [7] - The company collaborates with partners like iQIYI and Tencent to produce series based on the IP, enhancing its market presence [8] Mini-Game Platform - The mini-game platform has lower channel costs and higher profit margins, with "Chunqiu Xuanqi" generating over RMB 100 million in its second month [17] - The company aims to deepen its development in the mini-game sector, targeting a revenue increase [17] Overseas Market Strategy - Zhongshou began its overseas business in 2021, with revenue contribution rising from less than 1% to over 10% in the first year [19] - The company plans to accelerate its overseas expansion, targeting a revenue contribution of 20% to 30% from international markets in the next three years [19][20] Future Outlook - The company is considering stock buybacks and dividends based on market conditions, with ongoing support from major shareholders [21] - The competitive landscape in the gaming market remains intense, but Zhongshou's strong IP portfolio positions it favorably [16]