During the interim results disclosure season, China Ruyi (00136) delivered impressive performance: the company achieved revenue of RMB 22.06 billion in the first half of the year, representing a 20% year-on-year increase with steady overall growth. Net profit reached RMB 12.28 billion, successfully turning around from losses to profitability, while adjusted net profit was RMB 13.03 billion, up 140% year-on-year, demonstrating significantly improved profitability.

Behind this substantial performance improvement lies the continued release of synergistic effects from the company's three core businesses: "film & TV + streaming + gaming," while the company actively expands into new business segments including trendy toys and financial payment services, injecting new momentum for future growth.

Currently, the cultural and creative industries including film, TV, and gaming are experiencing a critical transformation from quantitative to qualitative change, entering a premium development phase centered on content quality. Against this backdrop, China Ruyi not only continues to strengthen its content production capabilities but also leverages its multi-industry synergy advantages to enhance the company's steady risk resistance and deepen its differentiated competitive strength.

Based on the verified profitability inflection point in the interim results, with further industry recovery in the second half and the intensive launch of the company's multiple new film, TV, and gaming products, the company is poised to welcome a "Davis Double Play" with both performance and valuation rising simultaneously.

**Three Core Businesses Advance Together with Accelerated Synergistic Effects**

In the first half of 2025, the company continued to optimize its diversified business structure with forward-looking strategies, deepening industry synergy. The collaborative driving effects of each core segment were significant, continuously transforming industrial layout advantages into sustained growth momentum.

In the first half, the company's content production segment achieved revenue of RMB 5.70 billion, with multiple popular film and TV works receiving enthusiastic market response. As a renowned domestic film and TV company, China Ruyi has produced hit works including "Hi, Mom," "Enthusiasm," "A Little Blessing for Your Heart," "My Altay," and "Nirvana in Fire," demonstrating strong content production capabilities.

Since this year, multiple films co-produced by the company have achieved excellent results. "Tang Detective 1900" earned RMB 3.6 billion at the box office, securing second place during the Spring Festival season and topping the Chinese film box office charts in the UK and Ireland during Spring Festival 2025. "Chang'an's Lychee" accumulated RMB 647 million at the box office as of August 6, ranking second in the 2025 summer season, both contributing significant incremental performance to the company.

Looking ahead, multiple high-quality film and TV productions are awaiting release, providing strong momentum for subsequent performance growth. In terms of films, director Yao Tingting's romantic fantasy film "There's a Cloud Like You" will be released on August 29 this year for the Qixi Festival. The science fiction film adaptation of the novel "We Live in Nanjing" by the two-time China Science Fiction Galaxy Award winner is actively in preparation. Additionally, major projects including "Forbidden Wilderness," "Cold War 1994," and "Welcome to Dragon Restaurant," as well as animated film collaborations with Light Chaser Animation, are steadily progressing.

For TV dramas, the original novel adaptation romantic martial arts costume drama "With Jin Chang'an" starring Song Yi and Cheng Lei has launched on the iQiyi platform. The suspense drama "Confessions in the Dark" starring Pan Yueming and Wang Hedi, the realistic legal drama "Prosecutor and Youth" starring Zhang Xiaofei and Yu Jiacheng, and the urban emotional light comedy "Meeting Strangers" starring Cai Wenjing have all completed post-production and are expected to air sequentially from the second half of the year. Furthermore, multiple highly anticipated series including the urban romance "Dazzling" and the costume fantasy light comedy "The Strongest Sect of All Time" have begun filming, forming a premium drama reserve lineup.

The streaming segment maintains steady operations. In the first half, the company completed deep iteration of AI large model technology, using AI innovation to provide highly personalized content services for members, driving user experience upgrades. The company actively expanded multi-media platform cooperation, successfully creating industry-leading film and TV content account clusters, with collaborative influencers (including exclusive and non-exclusive cooperation models) covering over 250 million total users.

The company's Pumpkin Movie is a membership subscription application focusing on high-quality film and TV content, featuring ad-free immersive viewing experiences. During the period, the company actively embraced emerging technology waves, leveraging advanced algorithms and AI large models not only to potentially precisely understand user preferences and improve personalized content recommendation effects on streaming platforms, but also to reversely empower upstream content production in the industry chain.

Meanwhile, the new AI intelligent recommendation system based on the model has entered testing phase with some users, achieving breakthrough progress in intelligent user interaction. According to information available, the company's self-developed DreamShapers platform, in the process of developing AI-assisted creation based on deep understanding of film and TV content and exploration in three dimensions of "cost, efficiency, and personalization," has leveraged its understanding capabilities to possess functions such as "video commentary" and "video key content identification." In the second half of this year, it is expected to release AI-generated video commentary segments and distribute them to Pumpkin Movie and various short video platforms to serve film and TV audiences.

The gaming segment continues to maintain leading growth rates, becoming the company's new growth engine. The company's gaming business brand "JINGXIU" achieved revenue of RMB 12.1 billion in the first half, up 40% year-on-year.

In the first half of 2025, Ruyi Jingxiu intensively launched multiple new games, continuously consolidating its position as a leading SLG manufacturer, and building diversified competitiveness through the "SLG + sports competition + leading IP localization distribution" model. "Galaxy Era," launched in April, performed excellently in the market, ranking second on the China mainland App Store games free chart on its first day and entering the top ten on the bestseller chart. It also won the "Science Fiction Game Champion" at the Third Science Fiction Planet Competition, demonstrating the company's strong operational capabilities.

"Dragon Stone War," launched in June, made bold innovations in gameplay, integrating COC city-building defense design, optimizing combat experience through individual AI design for each unit, and adopting a "script system" to replace traditional season systems, significantly improving player freedom.

Simultaneously, the company actively expanded differentiated development paths. In the first half, it reached strategic cooperation with NBA China, expecting to launch the game "Codename: NBAGO" in 2026, leveraging top-tier sports IP to expand potential user groups and expand into more subdivided categories beyond SLG.

Additionally, the company comprehensively integrated AI technology into the entire game development and operation process, significantly improving development efficiency and product experience. Through computer vision and motion transfer algorithms, the company has successfully achieved efficient conversion of 2D real event footage into 3D character dynamic actions, improving sports game action modeling efficiency by approximately 70%, laying the foundation for creating highly realistic court experiences for products like "NBA Dynasty."

The intelligent strategy engine based on reinforcement learning can achieve personalized tactical recommendations, while the built-in AI commentary system leveraging natural language processing (NLP) and emotional computing models achieves 98% context restoration and emotional matching accuracy, effectively enhancing user engagement and immersion.

Currently, Ruyi Jingxiu has abundant product reserves, including multiple new games such as "Yan Wu," "Dafeng Watchman," "Codename: Football Restart," "Heroes of Might and Magic: Lord's Competition," "Red Alert: Glory (Codename: RH)," and "Cookie Alliance."

Furthermore, the company collaborates with international manufacturers like Ubisoft and EA, obtaining domestic development and distribution rights for classic foreign IPs such as "Heroes of Might and Magic" and "Command & Conquer." These IP collaborations and product reserves will further consolidate the company's market position and provide sustained growth momentum for performance.

**Exploring Potential Profit Points in Trendy Toys and Payments, Continuously Improving Multi-Industry Portfolio**

In recent years, China Ruyi has continuously expanded business boundaries through a series of strategic investments and acquisitions, gradually building a diversified collaborative industrial ecosystem of content, technology, and finance. The company consistently focuses on strategic synergy in investments and acquisitions, concentrating on projects that complement existing main businesses and have mature market performance, ensuring business expansion while maintaining stable and healthy financial structure.

For example, the company acquired Wanda Cinema to strengthen downstream layout in the content industry chain and enhance industrial integration capabilities. It acquired partial stakes in Youai Interactive (ByteDance gaming assets) and Yonghang Technology (Tencent's "QQ Dance" series developer) to further expand in the gaming field and promote synergistic development between film/TV and gaming segments.

In the first half of this year, the company invested in leading trendy toy enterprise 52TOYS, entering the rapidly growing "figurine economy" track. Public information shows that 52TOYS has six major product lines including blind boxes, transforming mechs, and action figures, with rich experience in successfully incubating multiple popular original IPs. For instance, its "Benben" co-branded transforming mech from "The Wandering Earth 2" exceeded RMB 8 million in crowdfunding within ten days.

This transaction will help China Ruyi expand non-box office revenue for cinema companies, share high-growth dividends in the IP derivative market, and strengthen emotional connections with young audiences.

In July this year, China Ruyi acquired a 30% stake in 99Bill for RMB 240 million, entering the third-party payment and fintech field for the first time, attracting widespread market attention. 99Bill obtained one of the first batch of third-party payment licenses from the People's Bank of China in 2011, with business covering internet payments, mobile payments, bank card acquiring, and cross-border RMB payments, accumulating deep merchant resources and industry experience in finance, insurance, retail, and cross-border sectors.

More notably, the Type I payment transaction processing license held by 99Bill is a national qualification, with only approximately 30 institutions nationwide currently holding such licenses, demonstrating significant scarcity. Public information shows that from 2014 to July 2025, the total number of licensed payment institutions nationwide has decreased from over 270 to 169, with continuously increasing industry concentration, highlighting the value of quality licenses.

From a synergy perspective, 99Bill's payment business can highly integrate with China Ruyi's existing ecosystem, such as accessing digital RMB payment systems in Wanda Cinemas, providing membership and on-demand payment solutions for Pumpkin Movie, and embedding into Jingxiu gaming platforms to improve payment experiences.

As the company accelerates resource integration and business synergy with 99Bill, it not only hopes to open new profit growth points through payment business but will also promote the company's achievement of a "content payment + fintech" closed loop, further enhancing platform operation and ecosystem construction capabilities.

Overall, China Ruyi, with its three core businesses of "film & TV + streaming + gaming," has clear strategic layout and significant synergistic effects, forming a sustainable positive flywheel effect for growth. Meanwhile, newly deployed businesses in trendy toys and payments further expand the company's development space in IP derivatives, fintech, and online-offline scenario integration, potentially opening new performance growth ceilings.

Relying on deep product reserves, strong content production capabilities, and comprehensive industrial layout, the company has sufficient growth momentum and is expected to continuously explore new profit sources, achieving long-term steady and high-quality development.