Incidents:
The company held the Youth Day and 15th anniversary carnival on June 16, released the first AI product, and updated the status of various new products.
Investment highlights:
The progress of 6 new products was updated on the 616 Youth Day, and the new product launch in 2024 performed well.
(1) The company released the first AI product “AI Playmate”, “Code Name Xiaoyouchan”, which can provide users with customer service questions and game strategy services to achieve personalized companionship.
(2) Images such as the sequel to the game “Little Three Kingdoms 3”, the “Three Body” IP license “My Three Body: 2277”, the city-themed SLG “Vice Nation”, and the mild casual game “Code Name: PACK” were revealed. The ultra-casual Western magic RPG game “Code Name: Agame” has already started testing in Southeast Asia and is scheduled to be launched in many countries and regions. The business simulation game “Code Name: SR2” is scheduled to be launched globally in 2025.
(3) Excellent performance of new products in 2024. On June 5, the mobile card game “Scarlet Echo” was launched in Korea. The number of pre-order users exceeded 1 million. It topped the Korean iOS free list on the first day, and ranked in the top 4 free apps on the App Store & Google Play platform for the first week. On April 30, the card game “Journey to the West 2” was publicly tested on all domestic platforms. On the first day, it ranked second in the iOS free game list. According to Sensor Tower, the total sales volume for the first month of iOS was estimated at 17.39 million yuan.
The company plans to convert fund-raising project funds into supplementary working capital, which is conducive to the flexible allocation of capital.
As of September 2019, the company has publicly issued 11.5 million convertible bonds, with a total issuance of 1.15 billion yuan, and actually raised 1.13 billion yuan of capital after deducting sponsorship, underwriting and issuance fees. As of May 31, 2024, the “online game development and operation construction project”, “online game operation platform upgrade and construction project” and “supplementary working capital” in the fund-raising project had invested a total of 520 million yuan, with a balance of 630 million yuan. Based on the current competitive environment in the market, the impact of AI technology on the game industry, and the company's own business conditions Due to various considerations such as development strategies, it is proposed to terminate the above project and permanently supplement the remaining 630 million yuan in working capital for the company's daily business activities, which is conducive to improving the efficiency of the use of raised funds, optimizing resource allocation, and reducing the company's financial costs, and conforms to the company's long-term interests.
Risk warning: Public opinion risk, litigation risk, increased market competition, new product launch progress and performance falling short of expectations, rising traffic costs, falling short of expectations in the life cycle of old products, falling short of expectations in technological development, exchange rate fluctuations, stricter policy supervision, falling short of expectations, etc.