Core Viewpoint - The overall performance of A-share listed gaming companies in 2024 showed a decline, with over half experiencing revenue downturns, while a few companies achieved significant growth [1][5][11]. Group 1: Company Performance - More than half of the 23 A-share listed gaming companies reported a decline in total revenue in 2024, with 13 companies experiencing a year-on-year decrease compared to 9 in 2023 [5][9]. - Perfect World, once a leading company, saw its gaming revenue drop from 66.69 billion yuan in 2023 to 51.81 billion yuan in 2024, marking a decline of nearly 15 billion yuan [5][11]. - Century Huatong and 37 Interactive Entertainment remained the top gaming companies, with Century Huatong's gaming revenue reaching 208.75 billion yuan, a year-on-year increase of 86.57% [11][12]. - 37 Interactive Entertainment's gaming revenue was 172.93 billion yuan, up 5.47% year-on-year, maintaining its position as a profitable leader with a net profit of 26.73 billion yuan [10][12]. Group 2: Revenue and Profit Trends - The gaming revenue of companies like Jibite and Icefire Network declined significantly, with Jibite's revenue falling to 36.49 billion yuan, a decrease of 11.52% [8][10]. - Icefire Network reported a net profit drop of 190% due to high marketing costs, leading to a net loss of 2.47 billion yuan [14][10]. - Perfect World was the only major A-share gaming company to report a loss, with a net loss of 12.88 billion yuan in 2024 [9][10]. Group 3: Market Dynamics and Strategies - Many companies increased their sales expenses significantly, with Century Huatong's sales expenses rising by 129.47% to 77.42 billion yuan, while 37 Interactive Entertainment's sales expenses reached 97.12 billion yuan, an increase of 6.84% [15][14]. - The trend of "de-gaming" was noted, with companies like Zhongqingbao seeing their gaming revenue contribution drop from 49.59% in 2020 to 22.29% in 2024 [7][9]. - The gaming industry faced challenges with aging main products and a lack of new releases, impacting revenue for companies like Jibite and Electric Soul Network [8][9]. Group 4: International Performance and Employee Trends - Century Huatong achieved overseas revenue of 113.68 billion yuan, accounting for 50.26% of its total revenue, driven by successful titles like "Whiteout Survival" [17][18]. - Perfect World experienced a significant reduction in its workforce, with employee numbers dropping from 5,754 to 3,905, a decrease of 32.13% [19][20]. - Overall, 14 out of 23 companies reduced their workforce, indicating a trend of downsizing in the industry [19][20]. Group 5: Future Outlook - The first quarter of 2025 showed better-than-expected performance for several companies, with Century Huatong reporting a revenue increase of 91.12% year-on-year [22][23]. - Analysts predict continued improvement in the gaming sector as new products are launched and the market adapts to changing consumer preferences [25][22].

Core Viewpoint - The company reported strong financial performance for 2024, with significant growth in net profit, while the first quarter of 2025 showed a decline in both revenue and net profit, indicating potential challenges ahead [1][2]. Financial Performance - For 2024, the company achieved revenue of 6.452 billion and net profit of 1.428 billion, representing year-on-year growth of 8.22% and 60.92% respectively [1]. - In the first quarter of 2025, revenue and net profit were 1.323 billion and 0.239 billion, showing year-on-year declines of 11.07% and 19.09% respectively [1]. Business Segmentation - The company's revenue composition was 72% from gaming and 28% from software and information services, with year-on-year growth of 3.66% and 22.21% respectively [2]. - Key gaming titles, Age of Origins and War and Order, contributed 74% and 23% to total gaming revenue [2]. - The software and information services segment focused on AI/ICT operational management products, including AI, cloud services, and information security [2]. Profitability Metrics - The overall gross margin slightly decreased by 1.7 percentage points to 61%, while the gaming gross margin increased by 1.56 percentage points to 72.7% [2]. - The company experienced changes in expense ratios, with sales, management, finance, and R&D expense ratios adjusting to 15.6%, 19.66%, -1.71%, and 5.15% respectively [2]. Regional Performance - The overseas business showed a revenue growth of 12.84%, with a slight increase in gross margin by 0.82 percentage points to 68.09%, indicating strong momentum and competitiveness in international markets [2]. Competitive Advantage - The company has established significant competitive barriers through its subsidiary, Shellwood Games, which is recognized as an early pioneer in the overseas market for strategy games, showcasing international product development and distribution capabilities [3]. - The integration of AI technology and AIGC tools is expected to help maintain this competitive edge and facilitate the launch of new products in the future [3]. Profit Forecast - The company anticipates revenue growth rates of 18.8%, 12.7%, and 10% for 2025-2027, with net profit growth rates of 6.5%, 9.7%, and 7.2% respectively [3]. - Earnings per share (EPS) are projected to be 0.77 yuan, 0.85 yuan, and 0.91 yuan for 2025-2027, with a target price of 15.4 yuan based on a 20x PE valuation for 2025 [3].