On September 25th, Zhongxu Future (09890.HK) rarely experienced a surge, with the stock price once approaching an astonishing increase of 56% to 7.89 Hong Kong dollars during the trading session; by the end of the day, the stock's rise had somewhat narrowed, ultimately settling at 38.14%,报价6.99 Hong Kong dollars per share.
Extending the timeline reveals the remarkable volatility of Zhongxu Future's stock price. Since last November, the stock started near 11 Hong Kong dollars and has been on an upward trajectory, reaching a historical peak of 72.45 Hong Kong dollars on January 31st of this year.
Entering February, the company's stock price experienced a significant shock, with a single-day drop of 76.4% on February 2nd to 16.66 Hong Kong dollars per share, and then, after a short-term adjustment, it quickly rose again to nearly 60 Hong Kong dollars per share by February 28th.
However, this positive trend did not last long, and subsequently, Zhongxu Future's stock price once again fell into a continuous downward trend, continuously setting new lows. As of now, compared to the highest of 72.45 Hong Kong dollars per share in January, the stock has累计 fallen by more than 90%, and its market value has significantly shrunk to approximately 3.736 billion Hong Kong dollars.
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Behind such turbulent stock prices lies investors' deep concerns about the fundamental conditions of Zhongxu Future.
Public information shows that Zhongxu Future, with the "Tanwan Games" brand at its core, focuses on the research and development, marketing, and operation of mobile games. As of June 30th of this year, it has operated more than 380 game products in total and has a registered user base of up to 603 million.
However, from an operational perspective, Zhongxu Future is facing performance difficulties.
In the first half of this year, Zhongxu Future's revenue was 3.226 billion yuan, a year-on-year decrease of 5.1%. This decline is mainly attributed to the significant reduction in revenue from game products under the joint operation model. What is more severe is that the company turned from profit to loss during the period, with a net loss attributable to the parent company of 383 million yuan, while in the same period of the previous year, it was a profit of 276 million yuan.
It is reported that Zhongxu Future's revenue mainly comes from online games, online literary products, short videos, and consumer product businesses. Among them, the game business is the main source of profit for Zhongxu Future, with game product revenue reaching 3.15 billion yuan, accounting for 97.7% of the total revenue in the first half of the year.Zhongxu Future disclosed that the company has launched 29 new games in the first half of this year. Among them, "Douluo Continent: Shrek Academy" and "Beast Lord: New World" have been well-received by players, bringing significant revenue. During the reporting period, the revenue generated from marketing and operating game products under the self-operated model increased by 17.1% year-on-year, reaching 2.482 billion yuan.
However, the revenue from marketing and operating game products under the joint operation model was 669 million yuan, a decrease of 39.5% year-on-year. This reduction is mainly due to: (i) some existing game products have entered the later stages of their life cycle, leading to a decrease in revenue under the joint operation model; and the new games launched in the first half of the year were mainly operated under the self-operated model, thereby reducing the revenue under the joint operation model.
At the same time, with the dense launch of new games, Zhongxu Future is also facing tremendous pressure for promotion and publicity.
The semi-annual report shows that Zhongxu Future's sales and distribution expenses reached 2.289 billion yuan, a year-on-year increase of 17.2%, accounting for 70.95% of total revenue. Zhongxu Future stated that the main reason is the increased promotion and advertising efforts for new high-quality games. This has had a significant negative impact on profits at the operational level.
Zhongxu Future has admitted that the game industry is facing significant pressure due to factors such as the overall slowdown in the macroeconomy, the gradual reduction of the growth dividend of game users, and the intensifying competition in the existing market.
In addition to the difficulties at the performance level, the personnel changes at the top of the company may also add a shadow to the continuous decline in its stock price.
On August 30, Zhongxu Future announced that Liang Wenhong will replace Wu Xubo as the company's CEO, effective immediately. After this change, Wu Xubo will still serve as an executive director, chairman of the board, chairman of the nomination committee, and a member of the compensation committee.
This high-level personnel change undoubtedly adds more uncertainty to the company's future strategic direction, thereby further triggering the market's cautious sentiment.
According to Wind, on September 28, the company will have 6.3078 million shares unlocked. Whether this will bring selling pressure or emotional impact, investors also need to pay attention.
In summary, although Zhongxu Future's performance in the capital market occasionally has bright spots, it still faces many challenges and uncertainties overall. In the future, whether the company can successfully emerge from the predicament and achieve a stable recovery in performance will still be the focus of market attention.
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