Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, primarily due to the maturity of core games and the underperformance of new titles [1][2]. Revenue Summary - In 1H25, the company achieved revenue of 2.685 billion yuan, a year-on-year decrease of 12.05% [1]. - The decline in revenue is attributed to the core games "Age of Origins" and "War and Order" entering their maturity phase, with "Age of Origins" seeing a drop in user numbers from 3.935 million to 3.172 million [2]. - The gaming business revenue decreased by 16.41% year-on-year, totaling 2.028 billion yuan [2]. Cost Summary - The gross margin for Q2 25 was 58.4%, reflecting a slight year-on-year decrease of 2.64 percentage points [3]. - Sales expenses in Q2 25 were 177 million yuan, down 32.19% year-on-year, with a sales expense ratio of 13.02% [3]. - R&D expenses for Q2 25 were 91 million yuan, a year-on-year decrease of 9.98%, with an R&D expense ratio of 6.66% [3]. - Management expenses in Q2 25 were 252 million yuan, an increase of 3.78% year-on-year, with a management expense ratio of 18.51% [4]. Future Outlook - The company plans to build a "2 + 2 + N" product matrix focusing on the SLG category, with two new games, "Stellar Sanctuary" and "Next Agers," currently in overseas commercialization testing [4]. - Both new games have received domestic licenses and will be launched in China under the names "荒星传说：牧者之息" and "长河万卷" [4]. Investment Recommendations - The company is projected to achieve revenues of 6.93 billion yuan, 8.94 billion yuan, and 9.93 billion yuan for 2025, 2026, and 2027, respectively, with corresponding net profits of 1.29 billion yuan, 1.96 billion yuan, and 2.15 billion yuan [5]. - The current stock price corresponds to P/E ratios of 22, 15, and 13 for the years 2025, 2026, and 2027, respectively, maintaining a "buy" rating [5].

Investment Rating - The report maintains a "Buy" rating for the company [5][7]. Core Viewpoints - The company is actively developing a "2+2+N" game product matrix and has launched the "Taiyue Lighthouse" AI model, aiming to enhance its product offerings and operational efficiency [2][3]. - In the first half of 2025, the company reported a revenue of 2.685 billion yuan, a year-on-year decline of 12.05%, and a net profit attributable to shareholders of 509 million yuan, down 19.26% year-on-year [1][5]. - The gaming business revenue decreased by 16.41% to 2.028 billion yuan, while the gross margin improved by 0.62 percentage points to 73.48% [2]. Financial Overview - The company is projected to achieve net profits of 1.245 billion yuan, 1.490 billion yuan, and 1.674 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 23, 19, and 17 [5]. - The financial forecast indicates a revenue of 5.807 billion yuan in 2025, reflecting a year-on-year decrease of 10% [6]. - The company has applied for 381 patents in the AI field, with 216 patents granted, focusing on model training, graphical analysis, and intent recognition [3].