Century Huatong's performance forecast for the first half of 2023: deduction of non net profit with a pre increase of 66.80% -101.56%

On July 14th, Century Huatong released its semi annual performance forecast for 2023. The company expects to achieve a net profit attributable to the parent company of 800 million yuan to 950 million yuan in the first half of the year, a year-on-year increase of 64

On July 14th, Century Huatong released its semi annual performance forecast for 2023. The company expects to achieve a net profit attributable to the parent company of 800 million yuan to 950 million yuan in the first half of the year, a year-on-year increase of 64.76% -95.65%. Realized a net profit deduction of 720 million yuan to 870 million yuan, a year-on-year increase of 66.80% -101.56%.

The announcement points out that on the revenue side, with the optimization of the product structure of game products and the improvement of player experience, the flow of overseas self-developed games has increased; The business with key partners is progressing smoothly. On the expense side, the company has optimized the game launch and promotion strategy, optimized personnel allocation, and focused on improving business management efficiency, significantly reducing costs and increasing efficiency. The significant rebound in performance in the first half of the year fully demonstrates the effectiveness of the management's established strategies. In the future, the company will continue to accelerate the implementation of various strategies and fully promote the annual growth target.

In the first half of the year, Century Huatong's online game business continued to firmly implement various strategic adjustment measures since last year, continuously optimize product structure, maintain iterative updates of advantageous products, continuously improve player experience, and focus on improving business management efficiency on the expense side. During the reporting period, the operating status of online gaming business has significantly improved. On the domestic gaming market, its subsidiary Shengqu Games continues to leverage its long-term operational advantages, stabilize business revenue, and improve product operational efficiency. During this year's Spring Festival holiday, there has been a significant increase in daily activity and revenue for several classic end games such as Final Fantasy 14, Adventure Island, and Rainbow Island. In the near future, multiple products including "Adventure Island", "Legend World", and "Eternal Tower" will receive intensive updates, laying a solid foundation for further improving performance in the future.

On the overseas game track, the subsidiary Diandian Interactive continues to deepen its self-developed product efforts, forming a rich matrix of leisure games, and has achieved breakthroughs on multiple tracks. Among them, the simulation management game "FrozenCity", which focuses on the survival theme of the end of ice and snow, topped the global simulation mobile game revenue growth chart in February; WhiteoutSurvival, which focuses on survival strategy gameplay, stands out among a group of local RPG mobile games, ranking 8th on the best-selling Korean mobile game chart in June and achieving good results at the top of the best-selling charts in multiple countries. According to the global revenue ranking of Chinese mobile game publishers released by third-party agency SensorTower in June 2023, Diandian Interactive ranked 7th, an increase from last month's ranking; Since the beginning of the year, Diandian Interactive has continuously increased its ranking by 11 places.

In terms of reserve products, the company still has multiple new games under development ready to be launched, including IP masterpieces such as "Dragon Valley International Edition", "Famine: New Home", and "The Legend of the Ancient Dragon Heroes", as well as multiple innovative products such as "Project Code: 7", "Project Code: R&R", "Project Code: AW3", and "DiscoMatch". Among them, "Famine: New Home" and other innovative products have started external testing.

In terms of cloud data business, in addition to continuing to accelerate the construction of Big data centers in the Yangtze River Delta and the Pearl River Delta, the company is deepening its business layout and actively upgrading computing infrastructure to intelligent computing cluster (transforming from IDC to AI+IDC). At present, the Tencent Yangtze River Delta Artificial Intelligence Advanced Computing Center and Ecological Industry Park project located in Songjiang, Shanghai has delivered nearly 10000 cabinets and gradually put them into operation; The data center project located in Shenzhen is expected to officially enter the operational period of delivering the first batch of cabinets in the second half of 2023 and begin generating operating revenue. The company is expected to have a positive net profit in 2025. In terms of intelligent computing power construction, the subsidiary Century Longteng signed a strategic cooperation agreement with Litong Electronics (603629. sh) to establish a joint venture company for AI computing power service projects. It plans to deploy all of them in the Tencent Yangtze River Delta Artificial Intelligence Advanced Center in Songjiang District of Shanghai and the Shenzhen Yifeng Technology Bright 5G Big data Center in Guangming District of Shenzhen, and provide a full set of IDC hosting and operation and maintenance management services by Century Longteng or a third party recognized by both parties.

Looking ahead to the second half of the year, Century Huatong stated that with the continuous improvement of the macro environment, the online gaming industry is expected to further accelerate its recovery, and the demand for intelligent computing power from artificial intelligence will continue to increase. The company's main businesses are also expected to maintain a significant growth rhythm, while also creating value for users, shareholders, and society.

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