Core Insights - Several leading A-share gaming companies have released performance forecasts, with some expecting net profit growth due to overseas business expansion, long-term operation of classic products, and cost reduction measures, while others face declines in existing game revenue or post-acquisition challenges leading to goodwill impairment and losses [1] Group 1: Company Performance Forecasts - Perfect World expects a net profit of 720 million to 760 million yuan for 2025, marking a turnaround from losses [1] - Century Huatong's net profit is projected to increase by 357% to 475%, with estimated revenue of approximately 38 billion yuan, a 68% year-on-year growth [3] - G-bits anticipates a net profit of 1.69 billion to 1.86 billion yuan, representing a 79% to 97% increase compared to the previous year [4] Group 2: Key Products and Market Position - Century Huatong's success is attributed to two major global hits, "Whiteout Survival" and "Kingshot," which have positioned the company among the top in the global mobile gaming market [2][3] - Perfect World's upcoming game releases, including "Zhu Xian World" and "Persona: Night Shadow," are expected to contribute significantly to its 2025 performance [5] Group 3: Challenges Faced by Companies - Electric Soul Network is projected to incur its first annual loss since going public, with expected losses of 160 million to 230 million yuan due to declining revenue from acquired subsidiaries and goodwill impairment [6] - Toma Cat's losses are expected to widen to 1.1 billion to 1.4 billion yuan, attributed to intensified competition and underperformance of new game products [7] Group 4: Industry Trends and Future Outlook - The gaming industry is experiencing a surge in new game releases, with several titles achieving significant user engagement and revenue shortly after launch [8] - The issuance of game licenses has increased significantly, with 177 domestic and 5 imported licenses issued in January 2026, indicating a positive trend for the industry [9] - The industry is expected to enter a "golden decade" starting in 2025, driven by a focus on high-quality game production and technological advancements [10]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 28.07 CNY per share based on a 23X PE valuation for 2026 [6]. Core Insights - The company is experiencing a continuous upward trend in operations, with significant performance across multiple segments, particularly in the SLG (Simulation Game) and casual gaming categories [6]. - The company’s revenue for 2025 is projected to be approximately 38 billion CNY, representing a year-on-year growth of 68.2% [2]. - The net profit attributable to shareholders is expected to reach between 55.5 billion CNY and 69.8 billion CNY in 2025, indicating a substantial growth range of 357% to 475% year-on-year [6]. Financial Projections - Revenue Forecast: - 2023A: 13,285 million CNY - 2024A: 22,620 million CNY - 2025E: 38,036 million CNY - 2026E: 49,425 million CNY - 2027E: 54,029 million CNY - Growth Rates: 15.8% (2023A), 70.3% (2024A), 68.2% (2025E), 29.9% (2026E), 9.3% (2027E) [2][6]. - EBITDA Forecast: - 2023A: 2,666 million CNY - 2024A: 4,805 million CNY - 2025E: 8,536 million CNY - 2026E: 11,552 million CNY - 2027E: 15,297 million CNY [2]. - Net Profit Forecast: - 2023A: 524 million CNY - 2024A: 1,213 million CNY - 2025E: 6,076 million CNY - 2026E: 8,996 million CNY - 2027E: 12,072 million CNY - Growth Rates: -107.8% (2023A), 131.5% (2024A), 400.8% (2025E), 48.1% (2026E), 34.2% (2027E) [2][6]. - EPS Forecast: - 2023A: 0.07 CNY - 2024A: 0.16 CNY - 2025E: 0.82 CNY - 2026E: 1.22 CNY - 2027E: 1.64 CNY [2]. Market Position and Product Performance - The company has maintained a leading position in the SLG segment, with its flagship product "Whiteout Survival" achieving record highs in the overseas mobile game rankings [6]. - The casual gaming segment has also seen breakthroughs, with products like "Tasty Travels: Merge Game" entering the top 15 of the overseas mobile game rankings [6].

Summary of China Online Gaming Industry Journal (Dec 2025 Edition) Industry Overview - The report focuses on the **China Online Gaming Industry**, highlighting key insights from various companies and market trends in the sector [1][2]. Key Companies Mentioned - **Century Huatong** - **37 Interactive Entertainment** - **Perfect World** - **Kingnet** - **G-Bits** - **Giant Network** Core Insights and Arguments 1. **Market Performance**: The A-share gaming sector experienced a rally in early January, indicating a positive sentiment towards the industry. The focus is on the monetization potential of the upcoming game cycle and performance during the Chinese New Year promotion [1]. 2. **Earnings Visibility**: There is an emphasis on strengthening shareholder returns to boost market confidence in earnings visibility as the sector approaches 2026 [1]. 3. **Constructive Outlook**: The report maintains a positive outlook on the China online gaming sector, citing quality earnings growth, accelerating overseas expansion, and increased exposure to AI gaming [1]. 4. **Company Rankings**: The new A-share gaming pecking order is established as follows: Century Huatong > Kingnet > Giant Network > 37 > G-Bits > Perfect World [1]. Financial Highlights - **Global Mobile Game Revenues**: According to AppMagic, global mobile game grossing remained stable with a **0.5% year-over-year increase**, while downloads rose by **4.6% year-over-year**. Notably, 12 of the top 30 most profitable mobile games globally were developed by Chinese studios [2]. - **Top Performers**: Among the top 30 mobile games, **Whiteout Survival** from Century Games was highlighted as the fastest-growing mobile game globally, achieving **50% year-over-year grossing growth** [2]. Company-Specific Updates 1. **Century Huatong**: Released the domestic version of **High Seas Hero** on WeChat mini game and is testing multiple new strategy games in domestic and overseas markets [3]. 2. **37 Interactive Entertainment**: The mini game **Survival in 33 Days** achieved significant traction, reaching the 2 position in WeChat mini game grossing in December 2025 [4]. 3. **Perfect World**: Announced the third round of closed beta testing for **Neverness to Everness**, available on multiple platforms [5]. 4. **Kingnet**: Launched a new MMORPG titled **Divine** in South Korea, featuring unique gameplay mechanics [6]. Additional Insights - The report suggests that the recent performance of 37 Interactive Entertainment supports its potential for re-rating as a sector laggard following the removal of regulatory overhang [4]. - The focus on AI gaming exposure indicates a trend towards integrating advanced technologies in game development, which could enhance user engagement and monetization strategies [1]. Conclusion The China Online Gaming Industry is poised for growth, driven by strong earnings potential, innovative game releases, and a favorable market environment as it heads into 2026. The emphasis on shareholder returns and AI integration reflects a strategic approach to enhance competitiveness in the global gaming landscape [1][2].

Core Viewpoint - Century Huatong has emerged as a significant player in the gaming industry, with its subsidiary, Diandian Interactive, surpassing major competitors like NetEase and miHoYo in global mobile game revenue, primarily due to its unique game offerings and strategic market positioning [1][6]. Group 1: Company Performance - Diandian Interactive distributed approximately 600 million yuan among 27 employees this year, showcasing its financial success [1]. - From June 2023, Diandian Interactive's global mobile game revenue exceeded that of NetEase, securing the second position in the industry, only behind Tencent [1]. - The flagship games, "Whiteout Survival" and "Kingshot," have generated cumulative revenues of over $3.3 billion and $300 million, respectively [5]. Group 2: Market Strategy - Diandian Interactive has focused on niche markets, developing games in less competitive segments, such as survival strategy and shooting card games, which has allowed it to capture player interest without facing intense competition [4][7]. - The company has successfully localized its games to cater to regional player preferences, enhancing user engagement and retention [4][5]. Group 3: Competitive Landscape - The gaming industry is witnessing an influx of competitors attempting to replicate Diandian Interactive's success, particularly in the survival strategy genre, which may increase customer acquisition costs for the company [7][10]. - Major players like Tencent are also entering the same market segments, intensifying competition and potentially impacting Diandian Interactive's market share [10][8]. Group 4: Future Initiatives - Diandian Interactive is actively working on retaining existing players through updates and enhancements to current games, while also exploring new game genres and integrating AI technologies to improve game development efficiency [11][12]. - The company is expanding its workforce, particularly targeting experienced talent from larger firms, indicating a commitment to growth and innovation [12].