Tanwan (9890) H1 2025 earnings summary

Executive summary

• H1 2025 revenue was RMB2,004.6m, down 37.9% YoY; net profit was RMB649.6m, versus a RMB385.0m loss.

• Lower user-acquisition and marketing costs, AI-enabled efficiencies and a RMB475.6m fair-value gain on listed investments supported profitability.

Financial highlights

• Gross profit fell 48.7% to RMB1,213.6m; gross margin declined to 60.5% from 73.3%.

• Other income and gains rose to RMB533.9m from RMB78.7m, mainly reflecting fair-value gains on listed equity investments measured at FVTPL.

• Selling and distribution expenses fell 63.1% to RMB843.7m; administrative expenses fell 36.9% to RMB71.0m and R&D costs fell 37.9% to RMB46.3m.

• Profit before tax was RMB784.9m versus a RMB416.4m loss; income tax expense was RMB135.3m versus a RMB31.4m credit.

• Basic and diluted EPS were RMB1.14 and RMB1.12, respectively, versus a loss per share of RMB0.74 in H1 2024.

Outlook and guidance

• Priorities include global distribution, localized game content, long-term IP operations, mini-program expansion and AI across R&D, content production, operations and player services.

• A broad pipeline is planned for sequential launches, including The Smiling Proud Wanderer: The Legend of Heroes, Soul Land, Yulgang, Legend, MU and Jin Yong Martial Arts titles; The Smiling Proud Wanderer: The Legend of Heroes obtained publication approval.

• More than ten overseas game reserves are in the pipeline, targeting expansion across Southeast Asia, Japan, South Korea, Europe, the US and the Middle East.