Tanwan (09890.HK) AI empowers efficiency and effectiveness, releasing growth momentum in overseas business performance

From a net profit of around RMB 44 million in 2024 to net profit exceeding RMB 1.5 billion in 2025, the 2025 performance report recently released by ZGPlay (09890.HK) has drawn widespread attention in the market.

Benefiting from the continued expansion of its overseas game publishing business, the company has steadily increased its penetration in high-value markets such as Southeast Asia and Japan and South Korea. Relying on its mature localized publishing capabilities and experience in operating its own traffic pool, this business has delivered profit margins well above the industry average, becoming an important driver of profit growth.

In addition, the company is embedding AI deeply into the entire publishing and operations workflow, particularly achieving model-driven dynamic bidding and creative selection in the advertising placement stage. During the reporting period, the year-over-year share of selling and distribution expenses as a proportion of revenue decreased significantly. While growing users and increasing gross bookings, the company has also achieved effective cost control, lifting the profit center.

Last year, at a conference, ZGPlay founder Wu Xubo mentioned that the company has entered a “second entrepreneurship” phase. In an era when the overall growth rate of the industry is trending toward stability, a single manufacturer’s comprehensive capabilities in efficiency, globalization, and product mix are being put to the test. For the question of how profits can still grow in the stock/steady-demand era, ZGPlay has provided answers on both internal and external fronts.

I. AI technology-driven game industrialization efficiency—how ZGPlay’s core logic has changed

Because game companies operate with a distinctive business model, changes in profit margins generally come from improved ad placement efficiency and lower expense ratios. However, the same trend may also point to entirely different operational decisions. From a breakdown of business logic, ZGPlay’s improvement does not stem from one-time cost compression, but from ZGPlay’s long-term investment in AI infrastructure and a clear strategic shift.

Wu Xubo previously said in a media interview, “I can’t build a general-purpose large model by myself, but I want to be the person who uses AI best in the game industry.” The company defines its biggest strategic move in 2025 as a transformation into an “AI technology-driven company,” and its self-developed technology framework is already taking shape.

In the stages of creativity and ad placement, ZGPlay has not merely used AI’s content production functions at a superficial level. Internally, the company overlays frontier large models such as Seedance 2.0. Combined with the R&D capabilities of its core technology team, it has built an entire AI agent system for the content creation and design teams, significantly improving both the efficiency and diversity of asset production. Creative production that previously required large amounts of manual trial-and-error can now be rapidly generated, filtered, and optimized with model assistance, greatly shortening the cycle from concept to launch.

In the game industry, however, even more critical than general AI utilization is its role on the ad placement and data analytics side. At present, ZGPlay has built an AI technology foundation for full lifecycle game business that covers game publishing, game operations, and game R&D:

ZGPlay focuses on developing self-developed AI capabilities to empower its game deployment, building a self-developed AI model platform for the game industry called the “X Wisdom Platform.” It deeply integrates AI into the dedicated “Hetu” intelligent analysis system to create data expert agents that efficiently monitor key data and gain insights into marketing performance. Relying on the “Luoshu” intelligent ad placement system, it unifies management of media channels, precisely matches demand with traffic, and achieves AI-driven omnichannel placement. At the same time, through its self-developed multi-agent capabilities and an AI task execution engine, it continuously optimizes the entire business process, fully empowers its game business, and drives an intelligent upgrade of productivity.

The financial report shows that on the basis of the “Luoshu” system, ZGPlay has built art intelligence agents and ad placement intelligence agents. Based on an LTV prediction model plus intelligent control strategies, the company ultimately achieved results of achieving an 80% combined ad placement penetration rate through AI, and improving ad placement performance by 70%.

Evidently, AI brings structural adjustments. Under the same customer acquisition budget, by locking onto audiences more precisely, running creative trial-and-error more quickly, and controlling channels more flexibly, the company gains more high-value users and increases monetization and retention across their lifecycles, thereby lifting overall ROI.

In a research report released recently, China International Capital Corporation (CICC) noted that the market often overestimates AI models’ short-term “disruptive power” in the game industry, while underestimating their long-term value as a “super tool” for enabling capabilities. The underlying logic of game production has not changed; technology only lowers the threshold for content creation and operational decision-making. What truly determines commercial value is still a deep understanding of gameplay, operations, and users’ psychology.

The direction chosen by ZGPlay is precisely to treat AI as an “amplifier” that improves decision quality and execution efficiency. Since last year, ZGPlay has also reinforced its AI moat through a series of industrial investments and capital operations—for example, acquiring a stake in Hangzhou Jiyi Artificial Intelligence Technology, establishing a wholly owned subsidiary called “Yuanda Future,” and investing RMB 100 million to focus on AI technology applications. It also issued RMB 468 million worth of zero-coupon convertible bonds, with the proceeds earmarked specifically for AI-related industrial investment.

This series of actions is both an extension of its self-developed system and a pre-layout of computing power, model, and ecosystem resources for larger-scale future AI applications. In 2025, the reshaping of the profit structure driven by AI technology has begun to show, and the sustainability of its effects is worth watching.

II. Global multipolar layout under Game Lovin, resonating with global game trends

Among the three sources of profit growth, the scaling up of its overseas game publishing business is a key curve supporting the company’s long-term growth.

ZGPlay began laying out its overseas business in 2020, treating going global as an important exploration direction for company development. In 2021, “Rebirth of Chaos” launched for the European and American markets, marking the company’s formal entry into the competitive sequence for global core markets. In 2024, “Jianghu Hot Blood: Return” topped both the Apple App Store and Google Play in Thailand simultaneously, helping ZGPlay rank among the top 30 China-outbound game publishers that year, demonstrating its product and operational strength in Southeast Asia.

In 2025, ZGPlay upgraded its overseas business again at both the organizational and branding levels: it integrated resources from overseas teams, launched a unified overseas publishing brand called Game Lovin, and expanded team size to more than 100 people, covering multi-language markets such as Vietnam, Thailand, and South Korea.

In August 2025, “Jianghu Hot Blood: Return,” led by the team, successfully entered the Korean market. On its first day after launch, it took the #1 spot on the iOS free chart, and it also ranked within the top five on the sales chart, further validating the company’s comprehensive capabilities in a market with intense competition and strong localization requirements. Wu Xubo previously said, “Compared with the first product launched in 2021, over these five years, our overseas performance has grown nearly ninefold.”

From the data disclosed by the company, its overseas revenue in 2025 reached RMB 830 million, representing a year-over-year increase of 33.6% compared with 2024. Against the backdrop of limited overall growth in the global game industry and intensifying competition among the leaders, such growth does not rely on any individual “accidental blockbuster,” but is built on coordinated operation across multiple regions, multiple languages, and multiple products.

By the end of 2025, ZGPlay has successfully published and operated more than 30 multi-language games covering 11 language versions. Products such as “Original Legend,” “Jianghu Hot Blood Merge,” “全民江湖,” and “Divine Weapon Miracles” have achieved leading positions on app stores including iOS and Google Play across multiple countries and regions.

According to information disclosed in the annual report, ZGPlay also has game products reserved that cover multiple global vertical markets, such as “The Demi-Gods and Semi-Devils 2: Flying Dragon Battles against the Heavens” (“天龙八部2：飞龙战天”), “Anh Hung BấtDiệt” (“英雄没有闪”), “Stickman GO” (“超元气火柴人”), “Merge Kingdoms” (“小兵大作战”), “던전：이세계용사” (“荣耀全明星”), and “Seal：Back to Shiltz” (“希望之启航”), among others.

There is a mutually reinforcing relationship between ZGPlay’s AI infrastructure and its globalized layout: within global markets, game operations and ad placement are supported by data-driven conditions. Understanding different regional user behaviors, channel characteristics, and payment habits can all be accumulated into reusable algorithms and models, enabling product logic to adapt more quickly to different markets such as Southeast Asia, Hong Kong/Macau/Taiwan, Japan and South Korea, and Europe and the United States.

China Audio-Video and Digital Publishing Association (China Music & Audiovisual and Games Association) Game Committee’s “2025 China Game Industry Report” pointed out that in 2025, the actual overseas sales revenue of self-developed games reached USD 20.45B, up 10.23% year over year. Self-developed capabilities, IP reserves, a globalized precision operations system, and iteration capabilities—all will affect the company’s overseas development.

At present, ZGPlay’s overseas publishing business with high profit margins is improving its income and profit structure with an even higher weight. Its long-term growth has already opened up a sufficiently wide “second track.”

III. Multiple IP product reserves—ZGPlay is expected to strengthen earnings delivery expectations through “combination capabilities”

Judging from the financial reports and global game industry development trends, although ZGPlay enjoys strong monetization ability from IPs such as “Legend,” and has benefited from the dividend of blockbuster games, it has not stopped in its comfort zone. Instead, it increases the overall chance of success and the stability of performance by building a multi-IP, full-track product matrix.

After years of deep cultivation, ZGPlay has built a relatively complete product cluster around classic IPs such as “Legend,” “Jianghu Hot Blood,” and “Miracles.” It has continued to operate in multiple markets, forming a solid foundation for steady cash flow.

The financial report discloses that the key products ZGPlay is about to launch cover multiple leading IPs and different types of tracks: for the national-level IP “Soul Land,” the company will release a new open-world title, “Soul Land: Legend of Zhusai”; around the “Jianghu Hot Blood” IP, it will develop a major domestic title, “Jianghu Hot Blood: Awakening.” While continuing the classic martial arts sentiment, it aims to reach a broader young user base by upgrading gameplay and visuals. For the “Legend” theme, the company is preparing large-scale MMORPG works “King of Legend 2” and “Blue Moon Slays the Dragon,” targeting long-term paying user groups with strong demand for immersive combat and social experiences.

In addition to these traditional strength IPs, ZGPlay is also actively expanding new content assets. Around the “Jin Yong martial arts” IP, the company plans new releases such as “New Shooting Heroes: Huashan Lunjian” and “Swordsman’s Pride: The Legends of Various Heroes,” attempting to find a new balance between classic literature IP and game-based expression. Meanwhile, completely new works such as “Time Hunter・Awakening” and “Dream Realm Warriors” provide the company with more room to try different genre tracks such as action and fantasy.

A layout across multiple categories and multiple IPs is beneficial for capturing different time windows to launch new games. It also allows for long-term operations of older products, building a product combination that has both “explosive power” and “endurance.” In addition, highly data-driven processes and reusable operations and ad placement enabled by AI can help new titles achieve a cold start and scale-up with lower trial-and-error costs. ZGPlay has already paved the road in advance for future product reserves.

In the aforementioned report, CICC emphasized that AI will not change the underlying logic of the game industry of “good content + strong operations.” It only enables capable teams to turn ideas into products more efficiently, and to extract value more precisely over longer lifecycles.

ZGPlay, with mature IPs such as “Legend,” “Jianghu Hot Blood,” and “Jin Yong martial arts” as its content foundation, and using AI toolchains and a globalized publishing system as an amplifier, will further push performance toward fuller release. In 2025, it is only the new starting point of the compounding growth curve driven by coordinated AI fine-tuned operations across multiple products and regions. With a decade of deep industry cultivation and standing on three intertwined logics—business, user needs, and industry development—ZGPlay will continue to advance steadily and climb to new heights.