High performance growth + expectation of delisting, CENTURY HUATONG (002602.SZ) turns from extreme to positive.
According to Zhitong Finance APP, CENTURY HUATONG recently released its 2024 annual report and 2025 Q1 financial report, with all performance indicators being very impressive, and the performance growth in 2025 showing a significant acceleration. In 2024, it achieved revenue of 22.62 billion yuan, a year-on-year increase of 70.3%, while the revenue for Q1 2025 was 8.145 billion yuan, a year-on-year increase of 91.1%. On the profit side, both the annual and quarterly reports achieved double growth, with Q1 achieving a net profit of 1.346 billion yuan after deducting non-recurring items, a year-on-year increase of 107.95%.
The company maintains a high quality of operation. On one hand, the net profit margin after deducting non-recurring items continues to rise, reaching 16.53% in Q1; on the other hand, the operating cash flow is strong, demonstrating its robust business operation capability, with net operating cash flow of 5.046 billion yuan and 1.291 billion yuan for 2024 and Q1 2025, respectively, representing year-on-year growth of 62.67% and 48%. The improvement in profitability has also driven an increase in ROE, with the annualized ROE for 2025 at 20.72%.
In addition, the company disclosed the progress of error correction. Based on the self-inspection situation, CENTURY HUATONG has carried out relevant rectifications for the illegal matters in the penalty notice one by one and made error corrections. DaXin Accounting Firm (Special General Partnership) has eliminated the reserved opinion from the previous period, which will no longer affect the current audit opinion. This may indicate that the company has eliminated the risk of delisting and can apply for the withdrawal of risk warnings, receiving major capital support the day after the performance announcement.
<h2>Strong core business, expected to maintain high growth in 2025</h2>
From the Q1 financial report, the high growth of CENTURY HUATONG's performance in 2025 has a high degree of certainty, which also brings right-side opportunities for the company to delist and restore its market value.
In Q1 2025, the company achieved multiple performance indicators at historical highs, with revenue, net profit, profitability, and shareholder return rates all reaching record highs for a single quarter. In terms of growth, after recovering in 2024, the quarterly growth trend is accelerating; in terms of profitability, the gross profit margin during the period was 69.4%, an increase of 6.3 percentage points year-on-year. Due to the impact of sales expenses, the expense ratio (sales, management, and finance) increased during the period, but the overall profitability remained strong, with a net profit margin after deducting non-recurring items of 16.53%, an increase of 1.33 percentage points year-on-year.
The core business of CENTURY HUATONG, the internet gaming business, has shown strong growth, continuously expanding both domestically and overseas, with its subsidiary Diandian Interactive becoming a highlight of growth.
Structurally, in recent years, the performance of internet games has surged, especially mobile games, with the proportion of gaming business increasing to 82.35% in 2024, while the revenue proportion reached 76.33%. This is attributed to the contribution of Diandian Interactive, which achieved revenue of approximately 15 billion yuan in 2024, a year-on-year increase of 155%, growing at a compound annual growth rate of 100% over the past three years, and its revenue proportion has risen to 70%, becoming the backbone of the company's sustained high growth.
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Century Huatong's gaming business includes several subsidiaries such as Shengqu Games, Diandian Interactive, Tianyou Software, and Qiku Network, with Shengqu Games and Diandian Interactive serving as the operational core.
Shengqu Games is one of the earliest pioneers in China's online gaming industry, owning dozens of high-quality PC games including &#34;Legend of Blood,&#34; &#34;Legend World,&#34; &#34;Dragon Nest,&#34; &#34;Legend 3,&#34; &#34;Final Fantasy 14,&#34; and &#34;Legend Eternal.&#34; In 2024, multiple games are expected to achieve revenue and profit growth, with growth expectations for 2025 relying on the strong performance of new releases such as &#34;Mengzhong Shenbing&#34; and &#34;Dragon Nest World,&#34; as well as user interest in products like &#34;Hunger in the Wilderness&#34; and &#34;Under the Cloud Sea,&#34; with &#34;Hunger in the Wilderness&#34; achieving over ten million pre-registrations across all platforms.
Diandian Interactive is the main pillar of Century Huatong's performance growth, boasting over ten years of overseas game development and operation experience, continuously expanding into overseas markets, and persistently practicing micro-innovation in game categories. It has created a diversified game matrix primarily focused on casual games and 4X strategy games. The company has several globally bestselling game products, including &#34;Family Farm Adventure,&#34; &#34;Frozen City,&#34; &#34;Whiteout Survival,&#34; and &#34;Endless Winter.&#34;
Among them, the casual game &#34;Family Farm,&#34; a self-created IP series, has accumulated over 150 million users, setting a new record for mobile simulation games going overseas; the hit games &#34;Whiteout Survival&#34; and &#34;Endless Winter,&#34; featuring a globally pioneering ice and snow survival theme, have broken records in the SLG category, frequently ranking at the top of global game distribution lists. Diandian Interactive has consistently ranked first among domestic game companies in terms of overseas expansion scale for several months, entering the top ten global game companies by scale.
In 2025, the industry faces fierce competition, especially in the SLG overseas market, but Diandian Interactive's performance continues to soar. &#34;Whiteout Survival&#34; remains highly popular, showcasing strong market dominance through its differentiated gameplay. According to Sensor Tower data, in the recently concluded March, &#34;Whiteout Survival&#34; achieved a historic high in global revenue, topping the global mobile game revenue chart.
The success of Diandian Interactive is attributed to its strong R&amp;D capabilities, launching globally differentiated game products to meet player demands. Additionally, the strong demand for SLG games going overseas has allowed the company to strategically penetrate the market with its &#34;X+SLG&#34; gameplay, addressing the shortcomings of homogenized SLG gameplay while attracting a large number of players.
<h2>Focusing on the &#34;X+SLG&#34; gameplay strategy, Diandian Interactive creates multiple hit products</h2>
According to Zhitong Finance APP, the domestic game overseas market maintains a high growth level. According to the GPC &#34;2024 China Game Overseas Research Report,&#34; the sales revenue of independently developed Chinese games in overseas markets is expected to reach USD 18.557 billion in 2024, a year-on-year increase of 13.39%, significantly higher than the market average. Mobile games account for the majority, with the United States and Japan as the main target markets, holding shares of 31.06% and 17.32% respectively in mobile game exports in 2024
In the wave of mobile games going overseas, SLG and RPG are the core forces of domestic games going abroad, which mainly depends on global player preferences. According to the report &#34;State of Mobile 2025&#34; released by Sensor Tower, in 2024, strategy games (SLG) will rank first in global consumer spending, totaling $17.5 billion. The United States is the main overseas market, with strong demand in the sector, but competition is also relatively fierce.
In 2024, domestic game manufacturers will continue to increase the scale of SLG overseas investment. In the subcategory of strategy games for overseas investment in 2024-2025, classic 4X military combat games account for 57% of the games structured for players. In the ranking of material investment for overseas SLG, Youda Games' two flagship products, &#34;The Grand Mafia&#34; and &#34;Underworld Empire,&#34; as well as Dandian Interactive's &#34;Frost Awakening&#34; and &#34;Little Ship Super Brave,&#34; and IGG's &#34;King of Avalon,&#34; are all among the top of the investment list.
Dandian Interactive has several hit games, and &#34;Whiteout Survival&#34; has already established a foothold in the overseas market, consistently ranking in the Top 10 of the U.S. iOS bestseller list, maintaining strong attraction. Drawing on successful experiences, the company has released another hit product, &#34;Kingshot.&#34; This game was launched globally in early February and has entered the Top 50 of the U.S. iOS game bestseller list within two months, while also breaking into the Top 100 in 33 global markets.
Why have &#34;Whiteout Survival&#34; and &#34;Kingshot&#34; stood out among numerous SLG games? This is mainly due to the company's &#34;X+SLG&#34; gameplay strategy, which integrates more differentiated elements. For &#34;Kingshot,&#34; it continues the excellent genes of &#34;Whiteout Survival,&#34; while incorporating different elements such as Rogue, tower defense, MOBA, and simulation management, providing players with a multi-layered gaming experience.
&#34;Whiteout Survival&#34; and &#34;Kingshot&#34; demonstrate the tremendous success of Dandian Interactive's &#34;X+SLG&#34; gameplay. 'X,' as a constantly exploring variable, not only attracts more players but also enhances player stickiness and the game's lifecycle through multi-layered experiences. In 2025, &#34;Kingshot&#34; will bring significant performance contributions to Dandian Interactive, and in addition to the two aforementioned hit games, the company is expected to continue creating more high-quality overseas products, continuously releasing overseas performance and driving Century Huatong to maintain high growth levels.
<h2>&#34;AI+IDC&#34; fully empowers the main business, and future performance growth is promising</h2>
In recent years, artificial intelligence has developed rapidly, especially after the launch of DeepSeek this year, AI has ushered in an application wave, and gaming is an important &#34;testing ground&#34; and &#34;incubator&#34; for AI. Century Huatong is keeping pace with the times, actively following the new generation of artificial intelligence generation technology in 2023, using AI+IDC as a strategic layout direction, enhancing the business stickiness of internet platform customers through empowerment, and creating higher value for customers
AI has become the main driving force behind the development of the gaming industry. According to the &#34;2025 Game Industry Status Report&#34; released by the Game Developers Conference (GDC), 52% of developers' companies are using generative AI tools, indicating that AI is transitioning from conceptual exploration to the production tool stage. The company has also achieved a series of results with AI tools, with AI technology fully integrated into the entire process of game development and operation, improving art production efficiency by 60%-80%. For example, &#34;Endless Winter&#34; has established an &#34;AI generation + manual refinement&#34; content production model, providing strong support for efficient content iteration.
Century Huatong's AI + IDC layout shows clear strategic intent. On one hand, AI + IDC fully empowers the development of the gaming main business. Shengqu Games and Diandian Interactive will be key targets for empowerment, enhancing player stickiness and willingness to pay through AI gameplay. The significant reduction in costs through the use of AI tools not only drives high growth in the main gaming business revenue but also improves profitability. By 2025, DeepSeek will have integrated most industry systems, forming a prototype of the AI era, with gaming as a core scenario for rapid development.
On the other hand, it seizes the opportunity of the times by establishing industrial funds and investment methods to layout the AI-related industrial chain, contributing to the company's performance growth.
In summary, Century Huatong's performance growth is strong, with the main business structure and mobile gaming continuously driving growth. Diandian Interactive, as the main growth driver, has created several popular overseas products with the &#34;X + SLG&#34; gameplay and has become a leader in domestic overseas expansion, with continuous high revenue growth. In addition, the company has taken the lead in the AI + IDC strategic layout, fully empowering the development of the internet main business and reducing costs while increasing efficiency, making future performance growth promising

002602

Century Huatong released its 2024 annual report and 2025 Q1 financial report, showing significant growth in performance. In 2024, revenue reached 22.62 billion yuan, a year-on-year increase of 70.3%; in Q1 2025, revenue was 8.145 billion yuan, a year-on-year increase of 91.1%. The net profit excluding non-recurring items in Q1 reached 1.346 billion yuan, a year-on-year increase of 107.95%. The company's operating cash flow is strong, amounting to 5.046 billion yuan in 2024 and 1.291 billion yuan in Q1 2025, with ROE rising to 20.72%. The company's rectification progress is good, which may eliminate the risk of delisting, and high growth in future performance is expected

Quarterly profits doubled again, CENTURY HUATONG's "AI + IDC" fully empowers the future of its gaming main business