On April 30, Century Huatong (SZ .002602) disclosed its 2023 annual report and 2024 first quarter report. According to the announcement, in 2023, the company will achieve revenue of 13.3 billion yuan, a year-on-year increase of 16%, net profit attributable to the parent company of 524 million yuan, net profit of 420 million yuan after deducting non-profits, and net cash flow from operating activities of 3.102 billion yuan, a year-on-year increase of 108%.
The announcement pointed out that through a series of refined management methods, the company's strategic intentions have been well implemented, the highlights of operation and management are outstanding, the performance is in a rapid growth trend, the company's profits in various business segments have increased significantly year-on-year, and the overall profit and cash flow have achieved substantial year-on-year growth.
In the first quarter of 2024, the company continued its performance growth, achieving revenue of 4.262 billion yuan, a year-on-year increase of 41%, net profit attributable to the parent company of 652 million yuan, a year-on-year increase of 50%, net profit after deducting non-profits of 647 million yuan, a year-on-year increase of 92%, and net cash flow from operating activities of 872 million yuan, a year-on-year increase of 53%. In terms of revenue, profit, cash flow and other important indicators, it ranked among the best in the A-share game sector, achieving a contrarian upward trend.
Looking back on 2023, the outstanding performance of the game overseas business has become a highlight of Century Huatong's performance growth, and the company's Diandian Interactive for overseas markets has achieved a leap from publishing agency to comprehensive self-research through years of polishing, and its revenue in 2023 has increased by 56.96% year-on-year compared with last year.
The ice and snow survival game "Whiteout Survival" has become the dark horse of the year, with a total of more than 20 million downloads since its launch, ranking at the top of the best-selling iOS game list in the United States for a long time.
According to the December 2023 Chinese game manufacturers' overseas revenue ranking released by data.ai, a world-renowned mobile market evaluation agency, "Whiteout Survival" successfully ranked first in the overseas revenue list, and according to the "January 2024 China Mobile Game Publisher Global Revenue Ranking" released by Sensor Tower, Whiteout Survival ("Endless Winter" Maintain the top spot in the best-selling list of SLG mobile games in the world.
In April this year, the domestic mini program game "Endless Winter" was successfully launched, ranking at the top of the mini program game rankings, showing that the product also has strong vitality in the domestic market.
《Whiteout Survival》（《无尽冬日》）
In addition to "Endless Winter", a number of products such as the open-world sandbox game "LiveTopia" launched by Diandian Interactive, the story-driven business simulation game "Family Farm Adventure", and the frozen apocalyptic survival game "Frozen City" also maintained a good operating momentum.
In 2023, after a series of active adjustments, Century Huatong's domestic game business has achieved "light travel", and the revenue of terminal games will continue to grow steadily. Series products such as "Legend of Blood" and "World of Legends" continue to explore new ways to play, launch new versions, and expand new channels, maintaining long-lasting performance. A number of classic games such as "Dragon Nest", "MapleStory Island", "Rainbow Island" and "Bubble Hall" have continued to grow in revenue over the past few years, and the market performance for the whole year is in line with expectations.
In terms of mobile games, "Bright Warriors" has in-depth cooperation with strategic cooperation channels, and the turnover in June has increased significantly compared with the same period last year. As a new genuine sequel to the classic game "Dragon Nest", "Dragon Nest 2: Evolution" has been launched worldwide, with more than 1 million downloads and entering the high-quality recommendation of iOS stores in many regions.
At the same time, with the continuous maturity of AI-related tools, the company's well-known IP products, including "Legend", "Dragon Nest", "Rainbow Island" and "Don't Starve", have begun to access AI tools, and the cost reduction effect is remarkable. On the service side, the company is carrying out large-scale internal testing of the self-developed artificial intelligence customer service system, which will further improve the quality and efficiency of user services in the future.
In particular, it is worth mentioning that with the proper resolution of the IP dispute of the "Legend" series, Shengqu Games enjoys its complete exclusive rights in Chinese mainland, and the company will subsequently integrate the domestic legendary market through licensing, distribution, and research and development, so as to realize the return of legendary games to orthodoxy, which is expected to bring a predictable increase to subsequent performance.
In terms of new product reserves, the number of pre-orders for the game on all platforms of "Hungry Wilderness" exceeded 10 million, which was widely praised by players. Its overseas version has long been at the top of the best-selling lists in Japan and South Korea, and has won the honor of Best Battle Game on Google Play. The first test of the national server scored 9.0 points on the TapTap platform, which is expected to be widely recognized by domestic players.
"Dragon Nest International Edition", "Hungry Wilderness", "Sea of Clouds: Infinite Frontier", "Fifeci Travel", "Project Code: 7", "Project Code: R&R", "Project Code: AW3", "Disco Match", "The Legend of the Ancient Dragons" and many other new products are stepping up research and development efforts to accelerate the introduction to the market.
The artificial intelligence cloud data business, which is closely related to the game business, also ushered in phased results last year. The company is 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, while the first phase of the Shenzhen data center project has been delivered in the first batch, and the second phase of the project has also started construction.
It is worth noting that the company is expanding from the traditional single cabinet hosting service to the whole industry chain model of "comprehensive computing power service", and transforming from IDC to AI+IDC, so as to grasp the new opportunities of the wave of intelligent computing power.
Shenzhen data center project under construction
In 2023, with the official debut of e-sports at the Hangzhou Asian Games, sports e-sports will once again become a new focus.
Last year, the "Street Basketball" event operated by Tianyou Software, a subsidiary of Century Huatong, hit a new high in the number of viewers, of which the SFSA National Super League covered more than 170 million online and offline audiences, and the FSPL Professional League covered more than 5 million viewers.
During this year's two-day FSPL Pro League Finals, the number of online viewers exceeded the 2 million mark, showing the strong attraction of sports esports.
The scene of the 2023 "Street Basketball" SFSA National Super League Finals
While promoting the rapid development of various businesses, Century Huatong has simultaneously focused on strengthening the management of internal risk control, and further standardized and improved the level of operation and management through the restructuring of the system and the adjustment of important personnel. In response to the concerns about data security and diversity, the company has established a group-level data security committee and promulgated the "Employee Diversity Policy".
In the field of ESG construction, the company continues to practice "precise public welfare", focusing on the protection of young people and socially disadvantaged groups, and has donated a total of 30.77 million yuan in the past three years, and the company's volunteers have traveled all over Shanghai, Zhejiang, Wuhan, Yunnan and other places, with a total of more than 3,023 hours of service, and the company has also joined forces with professional institutions and experts to help cultivate young people's Internet literacy, developed a "green game reminder mechanism" to guide teenagers to develop good habits of healthy games with a gamified mechanism, and donated "green computers" classrooms to help young people in the border areas of the motherland "digital equality", create public welfare digital collections, and practice rural revitalization with the inheritance of intangible cultural heritage. The company's "2023 Sustainability Report" was also released at the same time as the annual report.
In terms of shareholder returns, last year, the listed company launched a share repurchase plan with the chairman and some senior managers, intending to increase the company's shares with its own funds or self-raised funds through the Shenzhen Stock Exchange trading system through centralized bidding, block trading or other transactions permitted by laws and regulations.
Looking forward to 2024, the company will continue to focus on its main business, continuously improve product quality, improve the operational efficiency of long-term projects, and consolidate its dominant position in overseas markets. The company believes that with the further integration of the IP ecosystem of the "Legend" series, it will bring predictable increments in the new year. At the same time, the transformation of artificial intelligence to content innovation is accelerating, and the company will continue to accelerate the integration of its main business and cutting-edge technology to achieve sustainable performance growth with higher efficiency and higher quality, and ultimately effectively improve shareholder returns and enhance the confidence of investors and society.