On October 30, Century Huatong disclosed the third quarter report of 2023. According to the report, the company achieved revenue of 3.738 billion yuan in the third quarter, a year-on-year increase of 38.89%; net profit was 561 million yuan, a year-on-year increase of 174.58%; The net profit after deducting non-profits was 467 million yuan, a year-on-year increase of 181.59%. During the quarter, the company's operating businesses rebounded steadily, and the profit growth rate was better than expected, making it unique in the game industry.
The "Legend" IP has entered a new stage
Based on the disclosed regular reports, the company's cumulative revenue and net profit in the first three quarters have been significantly improved, of which the domestic game business has played a greater stabilizing role. During the reporting period, products such as "Legend of Blood", "World of Legends", "Dragon Nest", "Adventure Island", "Rainbow Island", "Final Fantasy 14", "Bubble Hall" and "Aion" all maintained long-lasting performance; E-sports products such as "Street Basketball" continued to promote the development of events, with the SFSA National Super League covering more than 170 million viewers, and the card RPG mobile game "Legend of Seven: The Battle of Light and Darkness", introduced by Century Huatong and published by Tencent Games, topped the iOS free list on the first day of its launch, and the first place on the TapTap popular list.
At the same time, the company has many products on the R&D side that have been connected to a number of leading technologies such as AI generation models at different scales, and the effect of reducing costs and increasing efficiency has been remarkable. On the operation side, the company continued to improve the long-term operation level of its products and continuously enrich the connotation of the game: on the occasion of the 20th anniversary of "World of Legends", it joined hands with Shanghai city landmark Yuyuan Mall to open a cross-border linkage, not only launched the exclusive "Yuyuan Garden Map", but also creatively restored the characteristic buildings at the offline Chinajoy exhibition, and also joined hands with Yuyuan time-honored brands to launch co-branded peripherals to further amplify the commercial value of advantageous IP. In terms of classic IP, the "Legend" series IP ushered in a major benefit, and the holding subsidiary Altos successfully signed a contract with Lansha Information under Shengqu Games after reaching a new cooperation agreement with Legend IP Co., Ltd., a subsidiary of Wemade, so that Shengqu Games enjoyed the complete exclusive rights of the "Legend" series of IP in Chinese mainland, and also made the "Legend" series IP achieve "great unification" in Chinese mainland. Subsequently, important partners including Kaiying Network, Zhongxu Future, Sanjiu Mutual Entertainment, Sanqi Mutual Entertainment and other important partners have successively signed contracts with the company to complete the signing of legendary IP cooperation, and will launch new products in a targeted manner to comprehensively promote the evolution of the legendary IP ecology, which will have a positive impact on the company's subsequent performance.
The new product of the year has become a phenomenal product
This quarter, the revenue growth of overseas games is more obvious, for example, as the new annual product "Whiteout Survival" (frost apocalypse) as a subsidiary of Diandian Interactive, it has achieved remarkable results in overseas markets. Not only has it been in the top 10 of the iOS best-selling list for a long time in South Korea and Taiwan, China, but it has also been ranked in the top 10 of the iOS best-selling list for one consecutive month in the largest market in the United States, becoming a phenomenal product. In the top 30 Chinese game manufacturers and applications in terms of overseas revenue announced on September data.ai, "Whiteout Survival" successfully ranked among the top three, and Diandian Interactive also ranked in the top 3 of Chinese manufacturers' overseas revenue, further consolidating its stable position among Chinese game manufacturers going overseas.
In fact, since 2019, Century Huatong has strengthened its self-developed products, and its Diandian Interactive has continued to practice category micro-innovation, strategically penetrating the track, and forming a casual game matrix. It has launched a number of high-quality game products such as "Family Farm Adventure", "Valor Legends: Eternity", "Dragonscapes Adventure" and "Frozen City", all of which have been recognized by overseas markets. At present, the overseas revenue of Diandian Interactive's self-developed games has accounted for more than 70%, and it has maintained a double-digit growth every year.
In the fourth quarter, it is expected to realize computing power leasing income
At present, emerging technologies represented by generative artificial intelligence are sweeping the entire society, bringing unprecedented opportunities to the company's computing power business. In order to accelerate the promotion of related business layout, the company integrated business resources related to artificial intelligence and cloud data business, and upgraded the "cloud data division" to the "artificial intelligence cloud data division". During the same period, the company also deepened its business cooperation with its strategic partner Tencent Cloud, and won a computing power leasing order of 1.1 billion. Signed a strategic cooperation agreement with UBI Electronics to establish a joint venture company for AI computing power service project to fully promote the construction of intelligent computing power.
Up to now, the company has been deeply involved in the investment of Tencent's Yangtze River Delta Artificial Intelligence Advanced Computing Center project, which has delivered thousands of cabinets and gradually put into operation, and will become the largest artificial intelligence computing center in the Yangtze River Delta, the top three in China, the leading artificial intelligence computing center in Asia, and the largest GPU computing cluster in China after all are completed and put into operation in the future. The first phase of the Shenzhen data center project in Guangming District, Shenzhen has been delivered, and the second phase of the project is about to start construction. In addition, the first batch of dozens of GPUs in the intelligent computing business has arrived, and it is expected to realize computing power leasing revenue in the fourth quarter, thereby helping the company accelerate the construction of the "second growth curve".
Continue to deepen the implementation of sustainable strategies
Since the sustainable development strategy was proposed, Century Huatong has closely focused on relevant themes, continuously improved the company's various governance, and promoted all employees to practice precision and goodness. During the reporting period, the company's ESG construction reached a new level. In terms of internal control, the Group Data Security Committee was established in August, which is fully responsible for formulating and improving the data security management system of the enterprise, and promoting the implementation of relevant systems to build a solid data security barrier. In terms of social responsibility, the company helped release the first "Survey Report on the Internet Use of Minors in Shanghai"; Promote the research and development of green game reminder mechanisms; Joined hands with Shanghai to jointly promote the first digital collection in Shigatse, Tibet, promote local traditional crafts into modern life, and help rural revitalization with the inheritance and practice of intangible cultural heritage; During the reporting period, Shengqu Games, as the president unit of the Shanghai Online Game Industry Association, took the lead in participating in the first Game Empowerment Exhibition to comprehensively display the achievements of game empowerment.
Looking back at the company's performance in the first three quarters, it shows that the management's strategic reshaping has been remarkable, and the performance recovery trend is strong. In the future, Century Huatong will continue to go all out to promote the development of various businesses, promote the company's profitability to return to the upward channel, and strive to maximize shareholders' rights and interests and social interests.
Source: Global Network