Summary of G-bits Conference Call Company Overview - **Company**: G-bits - **Industry**: Mobile and PC Gaming Key Points and Arguments Financial Performance - **Mobile Game Performance**: - "Ask the Dao Mobile Game" experienced a slight year-on-year decline but remained stable quarter-on-quarter. No significant growth was observed in November 2024 due to lack of special services [2][6] - "Friends Digging Treasure" had an average monthly revenue of less than 100 million RMB in Q3 and Q4, showing no significant changes [2][6] - "Ask the Dao PC Game" saw a moderate year-on-year decline from October to November, potentially due to version updates and post-pandemic user shifts [2][6] New Game Releases - **"Sword Legend"**: - Domestic version saw a slight decline in Q3 but did not meet expected stability; overseas versions in Hong Kong, Macau, and Japan showed similar trends [2][6] - Expected revenue for Q4 2025 is between 150 to 200 million RMB, with total revenue projected around 300 million RMB including overseas markets [2][9] - **New Game User Retention**: - A new game showed a slight decline in user retention, prompting design and gameplay adjustments, with a new version planned for January 2026 [2][8] - Compared to "One Thought of Immortality," the new game performed poorly, with September and October activities failing to significantly boost revenue [2][8] Revenue Structure and Marketing Strategy - **Revenue Changes**: - Significant changes in revenue structure were noted for "Friends Digging Treasure" since its launch, with high revenue sharing percentages from platforms like Tencent and Apple [3][4] - G-bits focuses on iOS for new game promotions, utilizing KOLs and KOCs for community marketing, with controlled costs and no reliance on high-profile celebrity endorsements [3][13][14] User Engagement and Retention - **User Feedback**: - "Longing for the Wild" received positive feedback from core users, but broader user performance remains uncertain [3][17] - The company aims to balance long-term operations and profitability while assessing the impact of new games on existing IPs [3][7] Operational Adjustments - **Team Structure**: - The company has seen a reduction in employee numbers from approximately 1,400 to around 1,100 due to project terminations, retaining core talent for new projects [22][23] - The issuance team remains stable, with a focus on competitive internal structures to enhance project outcomes [15][27] Future Outlook - **Financial Projections**: - New products are expected to have limited short-term profit contributions due to initial investment phases, with a gradual increase in revenue anticipated [12][19] - The company plans to conduct regular evaluations of project performance, leading to frequent but minor adjustments in strategy [24] Market Positioning - **Competitive Landscape**: - The Japanese market shows good potential for user lifecycle payments, but initial payments are low, with no immediate improvements [10] - The company is cautious about expanding into other regions until existing markets are stabilized [10] Conclusion - G-bits is navigating a challenging gaming landscape with mixed performance across its titles, focusing on strategic adjustments in marketing, user engagement, and operational efficiency to enhance profitability and market presence [2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31]

Core Insights - The Chinese gaming market's actual sales revenue for Q3 2025 reached 880.26 billion yuan, marking a quarter-on-quarter growth of 6.96% but a year-on-year decline of 4.08% [1] - The revenue from self-developed games in overseas markets was 49.94 billion USD, with a quarter-on-quarter increase of 6.34% and a year-on-year decrease of 3.39% [1] Market Performance - The client game market in China generated 202.9 billion yuan in Q3 2025, with a quarter-on-quarter growth of 16.05% and a year-on-year growth of 19.88% [1] - The mobile game market's revenue was 643.89 billion yuan, showing a quarter-on-quarter increase of 4.39% but a year-on-year decline of 1.93% [1] - The web game market saw a revenue of 10.75 billion yuan, with a quarter-on-quarter decrease of 1.41% [1] Company Performance - In the first three quarters of 2025, 23 A-share gaming companies reported a total revenue of 772.45 billion yuan, a year-on-year increase of 23.30%, and a net profit of 141.67 billion yuan, up 73.95% [2][3] - Century Huatong achieved significant growth with a revenue of 272.23 billion yuan and a net profit of 43.57 billion yuan, marking a year-on-year increase of 141.65% [3] - 13 out of 23 gaming companies reported revenue growth, while 17 companies were profitable, indicating a positive trend in the industry [3] Notable Companies - Perfect World and Giant Network improved their rankings to 3rd and 7th respectively, while Jiubite also saw a ranking increase [6] - Jiubite's revenue for the first three quarters was 44.86 billion yuan, with a year-on-year growth of 59.17% and a net profit of 12.14 billion yuan, up 84.66% [7] - Ice Age Network turned a profit with a revenue of 18.76 billion yuan, despite a year-on-year decline of 5.39%, and a net profit of 5.02 billion yuan, a significant increase from a loss in the previous year [8]

Core Insights - The Chinese gaming market's actual sales revenue for Q3 2025 reached 880.26 billion yuan, marking a quarter-on-quarter growth of 6.96% but a year-on-year decline of 4.08% [1] - The revenue from self-developed games in overseas markets was 4.994 billion USD, with a quarter-on-quarter increase of 6.34% and a year-on-year decrease of 3.39% [1] - A total of 23 A-share gaming companies reported a combined revenue of 772.45 billion yuan for the first three quarters of 2025, reflecting a year-on-year growth of 23.30% [2][3] Market Performance - The client game market in China generated 202.9 billion yuan in Q3 2025, with a quarter-on-quarter increase of 16.05% and a year-on-year increase of 19.88% [1] - The mobile game market's revenue was 643.89 billion yuan, showing a quarter-on-quarter growth of 4.39% but a year-on-year decline of 1.93% [1] - The web game market saw a revenue of 10.75 billion yuan, with a quarter-on-quarter decrease of 1.41% [1] Company Performance - Century Huatong reported a revenue of 27.223 billion yuan for the first three quarters, a year-on-year increase of 75.31%, and a net profit of 4.357 billion yuan, up 141.65% [2][3] - Perfect World achieved a revenue of 5.417 billion yuan, a year-on-year increase of 33.00%, and a net profit of 0.666 billion yuan, up 271.17% [2] - G-bits reported a revenue of 4.486 billion yuan, a year-on-year increase of 59.17%, and a net profit of 1.214 billion yuan, up 84.66% [2][7] New Product Impact - G-bits launched successful new games, contributing to a revenue of 19.68 billion yuan in Q3, a year-on-year increase of 129.19% [7] - Ice Age Network turned a profit with a revenue of 1.876 billion yuan, despite a year-on-year decline of 5.39% [8] - Century Games' titles, including "Kingshot," significantly boosted revenue, with the game surpassing 100 million USD in monthly revenue [5][4]

Core Insights - The Chinese gaming market's actual sales revenue for Q3 2025 reached 880.26 billion yuan, marking a quarter-on-quarter growth of 6.96% but a year-on-year decline of 4.08% [1] - The revenue from self-developed games in overseas markets was 4.994 billion USD, with a quarter-on-quarter increase of 6.34% and a year-on-year decrease of 3.39% [1] - A total of 23 A-share gaming companies reported a combined revenue of 772.45 billion yuan for the first three quarters of 2025, reflecting a year-on-year growth of 23.30% [2] Market Performance - The client game market in China generated 202.9 billion yuan in Q3 2025, with a quarter-on-quarter increase of 16.05% and a year-on-year increase of 19.88% [1] - The mobile game market's revenue was 643.89 billion yuan, showing a quarter-on-quarter growth of 4.39% but a year-on-year decline of 1.93% [1] - The web game market saw a revenue of 10.75 billion yuan, with a quarter-on-quarter decrease of 1.41% [1] Company Performance - Century Huatong reported a revenue of 272.23 billion yuan for the first three quarters, surpassing last year's total, with a net profit of 43.57 billion yuan, up 141.65% [3] - 13 out of 23 gaming companies achieved revenue growth, while 17 companies reported profitability [3] - Perfect World and Giant Network improved their rankings to 3rd and 7th respectively, while Jiubite also moved up two places [6] Notable Companies - Century Games, a subsidiary of Century Huatong, significantly contributed to revenue growth, with its games topping the overseas revenue charts [4] - 37 Interactive Entertainment maintained its position as the second-largest A-share gaming company, with a revenue of 124.61 billion yuan, despite a year-on-year decline of 6.59% [5] - Jiubite's revenue for the first three quarters was 44.86 billion yuan, reflecting a year-on-year increase of 59.17% [7] Strategic Adjustments - Ice Glacier Network shifted its focus from quantity to quality in marketing, resulting in a significant reduction in sales expenses by 52.31% [8] - The company reported a net profit of 5.02 billion yuan for the first three quarters, compared to a loss in the previous year, indicating a successful turnaround [8]

Core Insights - The company's products such as "Zhang Jian Chuan Shuo" and "Dao You Lai Wa Bao" have shown strong performance and sustainability, expected to continue contributing to revenue in 2026 [1] - The company maintains an "Overweight" rating due to the promising performance of new products and an upward revision of EPS forecasts for 2025-2027 [2] Financial Performance - For the first three quarters of 2025, the company's net profit attributable to shareholders reached 1.214 billion yuan, a year-on-year increase of 84.66%, with a single-quarter net profit of 569 million yuan, up 307.7% [2] - Total revenue for the first three quarters was 4.486 billion yuan, reflecting a year-on-year growth of 59.17%, with a single-quarter revenue of 1.968 billion yuan, up 129.19% [2] - The company announced a cash dividend of 6 yuan per share, with total dividends amounting to 904 million yuan for the first three quarters of 2025 [2] Product Performance - "Zhang Jian Chuan Shuo" generated a total revenue of 1.166 billion yuan in the mainland for the first three quarters, maintaining a position in the top 40 of the iOS game sales chart [3] - "Dao You Lai Wa Bao," launched in May, has generated 316 million yuan in revenue by the end of September, contributing positively to the company's performance [3] - The company's overseas revenue for the first nine months reached 588 million yuan, a year-on-year increase of 59.46%, with "Zhang Jian Chuan Shuo (Overseas Version)" contributing 478 million yuan since its launch [3] Future Outlook - Upcoming product launches such as "Wen Jian Chang Sheng" and the overseas release of "Zhang Jian Chuan Shuo" are anticipated to further drive growth [3] - The company is preparing to launch the SLG mobile game "Jiu Mu Zhi Ye," which is expected to contribute to 2026 performance, with offline trials already commenced [3]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][3][18] Core Views - The company's revenue in Q3 2025 increased by 129% year-on-year, driven by new product launches, with total revenue for the first three quarters reaching 4.49 billion yuan, a 59.1% increase year-on-year [1][7] - The net profit for the first three quarters of 2025 was 1.21 billion yuan, up 84.6% year-on-year, with Q3 net profit showing a remarkable growth of 307.7% [1][3] - The gross margin improved by 5.6 percentage points to 94.6% in Q3 2025, attributed to the successful launch of new games [1][9] Summary by Sections Financial Performance - For Q3 2025, the company's operating revenue was 1.97 billion yuan, reflecting a 129.2% year-on-year increase, while the net profit was 570 million yuan, marking a 307.7% increase [1][7] - The gross margin for Q3 2025 was 94.6%, up 5.6 percentage points year-on-year, with overall expense ratio decreasing by 12.5 percentage points to 50.5% [1][9] Product Performance - New games such as "Zhang Jian Chuan Shuo" and "Dao You Lai Wa Bao" contributed significantly to revenue and profit, while older games like "Wen Dao" saw a decline in revenue [2][11] - The overseas game revenue for the first three quarters grew by 59.5% to 590 million yuan, primarily due to contributions from "Zhang Jian Chuan Shuo (Overseas Version)" [2][11] Future Outlook - The company expects continued growth from its self-developed products and plans to expand the global distribution of "Zhang Jian Chuan Shuo" and "Wen Jian Chang Sheng" [2][13] - The profit forecast for 2025-2027 has been revised upwards, with expected net profits of 1.8 billion, 1.92 billion, and 2.12 billion yuan respectively [3][17]

Core Insights - The company reported a significant increase in revenue and net profit for the first three quarters of 2025, with total revenue reaching 4.486 billion yuan, a year-on-year increase of 59.17%, and net profit attributable to shareholders at 1.214 billion yuan, up 84.66% [1] - The third quarter alone saw revenue of 1.968 billion yuan, representing a year-on-year growth of 129.19% and a quarter-on-quarter increase of 42.37%, with net profit of 569 million yuan, up 307.70% year-on-year and 57.58% quarter-on-quarter [1] - The company plans to distribute a cash dividend of 60 yuan per 10 shares to all shareholders [1] Financial Performance - Key financial metrics for the first three quarters include a gross margin of 93.31% (up 4.9 percentage points year-on-year) and a net profit margin of 33.61% (up 4.6 percentage points year-on-year), with the third quarter net profit margin at 34.96% (up 3.1 percentage points quarter-on-quarter) [1] - The sales expense ratio for the first three quarters was 32.18% (up 4.3 percentage points year-on-year), while the management expense ratio was 7.14% (down 2.3 percentage points year-on-year) and the R&D expense ratio was 14.25% (down 6.5 percentage points year-on-year) [1] Game Performance - The main source of revenue growth comes from new game launches, with the newly released games contributing significantly to profits. The core mobile game "Wandao Mobile" generated 1.499 billion yuan, a decrease of 7.02% year-on-year, while the two versions of "Zhangjian Chuan Shuo" contributed over 1.6 billion yuan in revenue [2] - The newly launched "Wanjian Changsheng (Mainland Version)" contributed 713 million yuan, with 147 million yuan in Q3, and the mini-game "Daoyou Lai Wabai" generated 316 million yuan, totaling 2.673 billion yuan from new games by the end of Q3 [2] - The company's overseas revenue reached 588 million yuan, a year-on-year increase of nearly 60%, indicating resilience in the overall product matrix despite a slight decline in older products [2] Future Outlook - The company is expected to continue its global expansion with the upcoming launch of "Wanjian Changsheng" in Q4 2025 in regions such as Hong Kong, Macau, and South Korea, along with the release of the new Three Kingdoms-themed SLG mobile game "Jiubing Zhi Ye" [2] - The company maintains a positive outlook on the performance of new games and their contribution to sustained revenue growth [3]

Group 1: Sanqi Interactive Entertainment - The company reported a net profit of 944 million yuan in Q3 2025, with a proposed cash dividend of 462 million yuan [1] - For the first nine months of 2025, the company achieved a revenue of 12.461 billion yuan, a year-on-year decrease of 6.59%, while net profit increased by 23.57% to 2.345 billion yuan [1] - The growth in Q3 was attributed to the long-term operation of existing products and the successful launch of new games such as "Time Explosion" and "Heroes Without Flash" [1] Group 2: Gigabit Network - The company reported a net profit growth of 307.70% in Q3 2025, reaching 569 million yuan, with a revenue of 1.968 billion yuan, up 129.19% year-on-year [2] - For the first three quarters of 2025, the company achieved a revenue of 4.486 billion yuan, a year-on-year increase of 59.17%, and a net profit of 1.214 billion yuan, up 84.66% [2] - The significant growth was driven by new game launches and a 59.46% increase in overseas business revenue [2] Group 3: Giant Network - The company reported a revenue of 1.706 billion yuan in Q3 2025, a year-on-year increase of 115.63%, with a net profit of 640 million yuan, up 81.19% [3] - For the first three quarters of 2025, the company achieved a revenue of 3.368 billion yuan, a year-on-year increase of 51.84%, and a net profit of 1.417 billion yuan, up 32.31% [3] - The growth was primarily due to an increase in game revenue, indicating the effectiveness of its product line operation strategy [3]

Group 1 - The game "Wen Jian Chang Sheng" is planned to be launched in the fourth quarter of 2025 in regions such as Hong Kong, Macau, and South Korea [2] - The game "Jiu Mu Zhi Ye" has obtained its license and is currently in the testing and adjustment phase, with the specific launch date yet to be determined [2] - Investors are encouraged to follow official information from Thunder Game for updates on the launch of "Jiu Mu Zhi Ye" [2]

Core Viewpoint - The company, Gigabit (603444.SH), has seen a significant recovery in both stock price and performance under the leadership of Lu Hongyan, with a stock price increase of 278.5% from its 2024 low and a revenue growth of over 20% in the first half of 2025 [1][6]. Company Performance - On September 12, 2025, Gigabit's stock price reached 542.28 CNY per share, up from a low of 143.27 CNY in 2024, marking a 278.5% increase [1][6]. - In the first half of 2025, the company reported a revenue of 2.518 billion CNY and a net profit of 645 million CNY, both showing year-on-year growth exceeding 20% [1][6]. - The company has a history of strong profitability, with a cumulative dividend payout of 6.489 billion CNY since its listing, and plans to distribute 4.74 billion CNY in cash dividends for the first half of 2025 [6]. Leadership and Strategy - Lu Hongyan, the founder, emphasizes a pragmatic approach, focusing on product quality rather than aggressive expansion, which has allowed the company to maintain resilience during industry fluctuations [4][7]. - The company has shifted its focus to developing new products, launching two self-developed games, "Wanjian Changsheng" and "Zhangjian Chuanqi," in 2025, which contributed to the performance recovery [1][6]. Market Position and Competitive Landscape - Despite being less known compared to larger competitors, Gigabit is recognized for its strong profitability and investment returns, earning the nickname "Game King" [5]. - The company has transitioned from a single-product focus to a diversified game enterprise, with successful titles like "Wandao," "Yinian Xiaoyao," and "Moyuan Zhi Ren" [7]. Future Outlook - Gigabit plans to focus on high-quality products in its agency business and will adjust its self-developed projects based on their commercial success and player engagement [7]. - The company has increased its marketing expenditure, with sales expenses reaching 836 million CNY in the first half of 2025, a 55.57% increase year-on-year, indicating a strategic investment in growth [7].