Radar Finance by Li Qian | Edited by Shenhai

On the evening of August 30, Shiji Huatong delivered a remarkable interim report.

In the first half of the year, the company achieved revenue of 9.276 billion yuan, a year-on-year increase of 53.33%; net profit attributable to shareholders of listed companies was 1.158 billion yuan, a year-on-year increase of 33.41%; net profit after deducting non-recurring gains and losses was 1.152 billion yuan, a year-on-year increase of 56.33%. Operating cash flow maintained steady growth, up 12.78% year-on-year.

According to the "China Game Industry Report January-June 2024" released by the Game Publishing Working Committee of the China Audio-Video and Digital Publishing Association, China's game industry maintained steady growth in the first half of this year, with actual sales revenue in the domestic game market reaching 147.267 billion yuan, a year-on-year increase of 2.08%. In terms of overseas markets, China's self-developed games generated $8.554 billion in overseas sales revenue in the first half of the year, a year-on-year increase of 4.24%.

With the growth of the game market tending to stabilize, the company's overseas and domestic game businesses have grown rapidly, achieving growth rates far exceeding those of the game industry as a whole. The integration of the "Legend" market has begun to bear fruit, especially with the continuous strong growth of Diandi Interactive setting new records, reflecting the keen insight of the management team into market trends.

In terms of online game business, the company generated revenue of 8.512 billion yuan from its online game business in the first half of 2024, a year-on-year increase of 72.92%, of which mobile game revenue was 6.784 billion yuan, accounting for 73.14% of total revenue.

The company's game products such as "Mir 2," "Legend of Mir," and "Aion" continue to explore new gameplay. Among them, "Mir 2" has achieved remarkable results by combining retro and innovation in its "New Hundred Area" to create a unique gaming experience. The active user base of the "Mir 2" series of PC games has surged by 82% year-on-year over the past two months, with revenue growing by 108% year-on-year, largely due to the introduction of new and innovative modes within the game, which have effectively attracted the return of legacy players and the active participation of new players, resulting in the phenomenon of thousands of players online simultaneously on multiple servers.

Games such as "Dragon Nest," "MapleStory," "Rainbow Island," and "Bubble Fighter" have maintained stable revenue for several years. On August 20, 2024, "Dragon Nest" launched a retro server, bringing back the classic gameplay of 14 years ago for players, achieving both high player numbers and positive word-of-mouth. The active user base of the game in its first week was up 82% year-on-year, with revenue up 88% year-on-year. "MapleStory" celebrated its 20th anniversary with undiminished popularity. The "Final Fantasy XIV" Fan Festival attracted tens of thousands of players, and the upcoming new version continues to garner user attention.

Driven by the hit TV series of the same name, the "Fallout" series of mobile games has seen a 48% year-on-year increase in new players, with a 578% increase in overseas regions. Diandi Interactive's mini-program game "Endless Winter" has been a huge success in China, consistently ranking first among mini-program games, replicating its strong overseas performance. Pipeline products: As a classic survival game franchise, the "Don't Starve" IP series has sold over 25 million copies worldwide. The all-platform game pre-orders for the pipeline product "Don't Starve Together: Wilderness" have exceeded 10 million, earning widespread praise from players. Its overseas version consistently ranks high on bestseller lists in Japan and South Korea, having won the Google Play Best Multiplayer Game award. The first closed beta test in China received a high score of 9.0 on the TapTap platform.

In the first half of the year, the company's overseas game business continued to grow rapidly after the explosive growth achieved in 2023. In overseas markets, Diandi Interactive's games maintained stable revenue streams. Based on data from multiple third-party mobile app market research institutions, Diandi Interactive's star product "Whiteout Survival" consistently ranked at the top of China's mobile game overseas revenue charts and successfully entered the global top 10 mobile game revenue rankings. Another new title, "Truck Star," has achieved monthly revenue of over 10 million yuan across both platforms in just four months of operation. Diandi Interactive not only consistently ranks among the top 5 global mobile game publishers by revenue but has also broken into the global top 10. The company's overseas business has developed a relatively complete methodology and has the ability to continuously launch hit games.

According to the financial report, the company's export revenue reached 5.019 billion yuan in the first half of the year, a year-on-year increase of 115.28%, accounting for 54.11% of total revenue.

In terms of game development, the company is committed to enhancing agile development and collaborative innovation capabilities, focusing on user needs and supported by a wide range of technology, data, and art resources.

In terms of AI cloud data services, in 2023, the company upgraded its "Cloud Data Business Department" to the "AI Cloud Data Business Department" to keep pace with the wave of AI innovation. This year, the company continues to deepen its comprehensive layout related to AI, expanding its reach in computing power infrastructure and AI applications. The company is deeply involved in the Advanced Computing Center for AI (ACCA), which is positioned as an important AI computing hub in the Yangtze River Delta region. It undertakes various large-scale AI algorithm computing tasks, including machine learning, natural language processing, image processing, scientific computing, and engineering computing. To date, the ACCA has delivered over ten thousand cabinets and is gradually being put into operation in the Tencent Yangtze River Delta region. The company's Shenzhen Data Center project, located in Guangming District, Shenzhen, provides customized data center services for Huawei Cloud. Phase I of the Shenzhen Data Center project has been delivered, and Phase II is under construction.

In the first half of the year, various collaborations progressed smoothly, and the computing power construction progressed well. The company is expanding from traditional single-cabinet hosting services to a full-industry-chain model of "computing power comprehensive services," creating higher value for customers. The AI cloud data business is still in the investment and construction phase, with the Shanghai Data Center project achieving profitability in the first half of the year, while the Shenzhen Data Center project incurred a slight loss. Overall, the business has not yet contributed significant profits to the company.

The company's automotive parts manufacturing business achieved positive year-on-year growth in profits, with the business continuing to improve. The company has successively won new energy supporting projects from BYD, AITO, Changan, Xpeng, NIO, Volkswagen, GM, Geely, and benchmark new energy automakers in North America.

It is worth mentioning that Shiji Huatong also faces claims from damaged investors. Song Lianmin, the director of Jiangsu Shengheng Law Firm, which has represented numerous stock claims and obtained compensation, told Radar Finance that the investor claims cases he and his team are representing against Shiji Huatong have been successively filed with the Shaoxing Intermediate People's Court, awaiting court processing.

According to Song Lianmin, on the evening of July 24, 2023, Shiji Huatong issued a "Notice of Filing," stating that the China Securities Regulatory Commission (CSRC) had decided to launch an investigation into the company for suspected information disclosure violations. This indicated that the CSRC had identified evidence of violations by Shiji Huatong. On the evening of April 1, 2024, Shiji Huatong disclosed the CSRC's "Notice of Advance Penalty," indicating that the CSRC had verified the details of Shiji Huatong's violations. After all the facts are clarified and the procedural matters of statement, defense, and hearing are completed, a formal penalty decision will be issued. Song Lianmin believes that Shiji Huatong failed to fulfill its strict information disclosure obligations, resulting in significant losses for shareholders who purchased the stock. Investors who purchased Shiji Huatong shares between April 27, 2019, and July 25, 2023, and still held the shares at the close on the evening of April 17, 2024, are eligible to seek compensation through litigation. They can register their claims for free by following the official account "Leizhuba" (with the code "99"). There are no upfront fees before compensation is received.

According to Tianyancha, Shiji Huatong was established in 2005 in Shaoxing, Zhejiang Province, with a registered capital of 7.452557 billion yuan.