Summary of the Gaming Industry Conference Call Industry Overview - The gaming industry is experiencing a steady upward trend and stable performance, making it a worthwhile sector for investment in the current market environment, particularly due to the product cycle in 2023 and 2024 [1][3] Key Companies and Their Performance 1. Giant Network - The game "Supernatural Action Group" has a high Daily Active Users (DAU) count and utilizes content dissemination strategies to effectively reduce sales expenses, leading to profit release. Significant revenue contribution is expected in Q3 due to frequent version updates that extend the game's lifecycle [1][5] - In July, the game reached over one million concurrent users, with continuous updates planned for September, enhancing user engagement and revenue potential [5] 2. G-bits - G-bits launched three new games this year: "Wen Jian Chang Sheng," "Zhang Jian Chuan Shuo," and the mini-program game "Dao You Lai Wa Bao." These are expected to contribute positively to profits in Q3, with "Zhang Jian Chuan Shuo" also having an overseas version that will generate additional revenue [1][6] - "Wen Jian Chang Sheng" generated 363 million yuan in Q1 but saw a decline to 203 million yuan in Q2. "Zhang Jian Chuan Shuo" contributed 426 million yuan in Q2, with expectations for improved performance in Q3 [6] 3. Kaiying Network - Kaiying Network holds exclusive rights to the "Legend" franchise, allowing it to sign cooperation agreements with major publishers, generating stable annual revenues of 100 to 200 million yuan [1][7] - The "Legend Box" business is expected to generate 543 million yuan in revenue in the second half of 2024, with projections of 1 billion yuan in total revenue for 2025, reflecting a year-on-year growth rate of 40% to 70% [1][8] - The high gross margin of 92% to 93% for the "Legend Box" business significantly enhances the company's overall revenue and profit [8] Market Outlook - The performance of the gaming industry is expected to remain stable in 2025 and 2026, supported by a substantial product cycle. The gaming sector and its ETFs are projected to continue their steady growth despite volatility in other sectors [3][4] Recommendations - Investors are advised to focus on Giant Network, G-bits, and Kaiying Network due to their strong performance and growth potential in the current market environment [2][4][9]

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Insights - The company achieved a revenue of 2.52 billion in H1 2025, representing a year-over-year growth of 28.5%, and a net profit of 640 million, with a year-over-year increase of 24.5% [7] - The second quarter saw a revenue of 1.38 billion, up 33.9% year-over-year, and a net profit of 360 million, which exceeded market expectations [7] - The strong performance in Q2 was primarily driven by the new hit game "Zhang Jian" which generated 420 million in revenue, surpassing market forecasts [7] - The company has optimized its workforce, reducing the number of R&D personnel by 30, while maintaining a high dividend payout ratio of 73.5% [7] - The company has adjusted its profit forecasts upwards, expecting revenues of 5.99 billion, 6.89 billion, and 7.16 billion for 2025, 2026, and 2027 respectively [7] Financial Data and Profit Forecast - Total revenue for 2025 is projected at 5,993 million, with a year-over-year growth rate of 62.2% [6] - The net profit attributable to the parent company is expected to reach 1,549 million in 2025, reflecting a growth rate of 63.9% [6] - The earnings per share (EPS) is forecasted to be 21.50 yuan in 2025, with a projected PE ratio of 21 [6]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company's Q2 performance exceeded expectations, with new products expected to drive growth for the entire year [3] - The company announced a cash dividend of 66.00 yuan per 10 shares, totaling 474 million yuan, which represents 73.46% of the net profit attributable to shareholders for H1 2025 [7] - The company has a rich product matrix for 2025, with anticipated contributions from new products in Q3 and Q4, leading to expected profit growth [14] Financial Performance Summary - For H1 2025, the company achieved revenue of 2.518 billion yuan, a year-over-year increase of 28.49%, and a net profit of 645 million yuan, up 24.50% year-over-year [9][10] - In Q2 2025, the company reported revenue of 1.382 billion yuan, a year-over-year increase of 33.89% and a quarter-over-quarter increase of 21.71% [10] - The net profit for Q2 2025 was 361 million yuan, reflecting a year-over-year increase of 36.64% and a quarter-over-quarter increase of 27.55% [10] Future Projections - The company is projected to achieve revenues of 5.230 billion yuan in 2025, 5.753 billion yuan in 2026, and 6.230 billion yuan in 2027, with net profits of 1.561 billion yuan, 1.727 billion yuan, and 1.855 billion yuan respectively [14][15] - The expected growth rates for revenue and net profit in 2025 are 42% and 65% respectively [13][14]

Core Viewpoint - Dongwu Securities report indicates that Jiubite's net profit attributable to shareholders for H1 2025 is 645 million yuan, representing a year-on-year increase of 24.50% [1] - The company announced an interim dividend of 66 yuan per 10 shares (tax included), with a payout ratio of 73.46% and a semi-annual dividend yield of 2.19% [1] Financial Performance - In Q2 2025, Jiubite's net profit attributable to shareholders reached 361 million yuan, showing a year-on-year growth of 36.64% and a quarter-on-quarter increase of 27.55%, exceeding expectations [1] - The stable performance of the mobile game "Wen Dao" and the launch of new games are contributing to revenue growth [1] Future Prospects - The company has several upcoming game releases, including "Wen Jian Chang Sheng" planned for H2 2025 in China, Hong Kong, Macau, and Korea [1] - The game "Jiu Mu Zhi Ye," a seasonal strategy game based on the Three Kingdoms theme, has received approval and is expected to enhance company performance with its upcoming testing and scheduling [1] - The new game cycle is driving strong growth in performance, alongside significant dividend returns to shareholders, maintaining a "buy" rating [1]

Group 1 - The core viewpoint of the report is that Dongwu Securities has given a "buy" rating for Jibite (603444.SH) based on several positive factors [2] - The game "Wen Dao Mobile" has shown stable year-on-year performance, and the new game cycle is expected to contribute additional revenue [2] - New games such as "Zhang Jian Chuan Shuo" and "Dao You Lai Wa Bao" have performed well, with expectations for further profit release [2] - The company is also monitoring the progress of new game launches like "Jiu Mu Zhi Ye" [2]