Tanwan (9890) H2 2024 earnings summary

Executive summary

• FY2024 revenue fell 14.3% YoY to RMB5,580.1m; net profit declined 83.9% to RMB44.0m, following a RMB385.0m net loss in H1 2024.

• Overseas revenue grew 44.9% to RMB623.4m and represented 11.2% of revenue, up 4.6 percentage points YoY.

• Strategy centered on a diversified game portfolio, AI-enabled operations and global expansion, while prioritizing core game publishing and operations.

Financial highlights

• Revenue was RMB5,580.1m, down 14.3% YoY; gross profit declined 12.0% to RMB4,024.3m.

• Gross margin increased to 72.1% from 70.2% in 2023; cost of sales fell 19.9% to RMB1,555.8m.

• Net profit was RMB44.0m, down 83.9%; profit before tax was RMB98.4m versus RMB413.4m in 2023.

• Loss attributable to owners was RMB3.6m versus profit of RMB235.5m; basic and diluted loss per share were each less than RMB0.01.

• Selling and distribution expenses fell 9.4% to RMB3,516.7m; R&D costs fell 25.4% to RMB127.7m.

Outlook and guidance

• Continue developing a high-quality, diversified portfolio, with reserved IPs including Legend, MU, Yulgang and The Smiling Proud Wanderer across varied game categories.

• Plans include closer developer collaboration, intelligent operations and further AI integration in user acquisition, NPC dialogue and scene generation.

• Global expansion priorities include Southeast Asia, Europe, the Americas and the Middle East; 17 reserved games were ready for release at year-end.

• Publication numbers were obtained for multiple titles, including Free Jianghu, Kingdom Crisis, The Smiling Proud Wanderer: The Legend of Heroes and Yulgang: Awakening.