Sanqi Interactive Entertainment Network Technology Group Co., Ltd. (002555)

Equity Research Report　|　Industry: Online Game Development, Publishing and Operations　|　Report Date: September 14, 2026　|　As of September 14, 2026, the latest completed trading day was September 11, 2026; prices, trading volume and turnover rate are primarily based on the September 11, 2026 closing data, while certain technical indicators have date lags or differences in calculation methodology.

This report was automatically compiled by AI based on publicly available information and is for reference only. It does not constitute investment advice.

1. Executive Summary

Sanqi Interactive Entertainment reported revenue of RMB 7.275 billion in the first half of 2026, down 14.28% year on year; net profit attributable to the parent was RMB 1.766 billion, up 26.14% year on year, while non-GAAP net profit attributable to the parent was only RMB 1.016 billion, down 26.74% year on year. Investment income was approximately RMB 1.016 billion, representing an increase of approximately 1541%. Accordingly, the growth in net profit attributable to the parent does not fully represent an improvement in the profitability of the core game business. The company’s current core operating challenge is managing the transition between declining revenue from existing products and the introduction of new products: existing titles represented by Xundao Daqian have entered a stage of natural lifecycle decline, while new titles such as 33 Days of Survival, Ragnarok M: Journey of the World and LastAsylum:Plague remain in the introduction and ramp-up stages.

The company’s business is highly concentrated in online games. In 2025, game-related revenue was RMB 15.854 billion, accounting for approximately 99.3% of total revenue, of which mobile-game revenue was RMB 15.529 billion. Overseas revenue was RMB 5.381 billion, accounting for 33.70% of 2025 revenue; in the first half of 2026, overseas revenue further increased to RMB 3.021 billion, representing 41.53% of total revenue. Global publishing is an important growth direction. The company has integrated development, publishing and operating capabilities. Its 1,378 R&D employees accounted for 43.91% of total employees, and it continues to promote the application of AI in art, advertising, localization and coding. However, these capabilities are currently more suitable as efficiency tools and cannot directly imply inevitable profit growth.

In terms of earnings quality, the company generated revenue of RMB 15.966 billion in 2025, down 8.46% year on year; net profit attributable to the parent was RMB 2.900 billion, up 8.50%; and non-GAAP net profit attributable to the parent was RMB 2.845 billion, up 9.81%. Gross margin declined from 78.63% in 2024 to 75.86%, mainly due to a higher proportion of third-party licensed games and increased game revenue-sharing costs. Net cash flow from operating activities was RMB 3.538 billion in 2025, higher than net profit attributable to the parent, indicating relatively strong overall cash conversion. However, the five largest accounts receivable customers accounted for 67.88% of the combined balance of accounts receivable and contract assets. Bargaining power with channels and platforms, revenue sharing with licensed games, and user-acquisition efficiency will continue to affect margins.

As of September 11, 2026, the share price was RMB 17.69, close to the 52-week low of RMB 17.10 and below the MA5, MA10 and MA20. The stock had declined for three consecutive trading days. Daily turnover was approximately RMB 609 million, while combined net outflows from extra-large and large orders were approximately RMB 98.31 million. Technically, the stock was in a moderately weak medium-term trend and near short-term support, but a reversal had not yet been confirmed. Market expectations for the company’s future performance mainly depend on whether new products can scale up, whether the decline in existing products can stabilize, and whether overseas growth can offset pressure on domestic revenue.

2. Company Overview

2.1 Basic Information

2.2 Main Businesses and Product Portfolio

• Online games: revenue of RMB 15.854 billion in 2025, accounting for approximately 99.3% of total revenue
• Mobile games: revenue of RMB 15.529 billion in 2025, accounting for approximately 97.95% of online-game revenue and approximately 97.3% of total revenue
• Web games: revenue of RMB 325 million in 2025, accounting for approximately 2.05% of online-game revenue
• Domestic business: revenue of RMB 10.585 billion in 2025
• Overseas business: revenue of RMB 5.381 billion in 2025, accounting for 33.70% of total revenue
• Product categories cover SLG, MMORPG, simulation, card, RPG, casual and mini-games
• Major brands include “37Games,” “37 Mobile Games,” “37GAMES” and “37 Online Games”
• Representative long-term operating products include Puzzles & Survival, Soul Land: Shrek Academy, Be the King, The Mortal Cultivation: Immortal Realm and Xundao Daqian
• Notable new products or projects in 2025 included Time Raiders, Heroes Never Fade, Soul Land: The Hunt for Spirits and 33 Days of Survival
• Projects under development include “Desert Ark,” “Project YCSLG,” “Project KGSLG,” Soul Land: Inheritance, Little Helmet, Big Adventure, “Project FMR” and “Project Hope.” Most projects have not yet formally disclosed their names, launch dates or commercialization data and cannot be directly treated as definite sources of revenue
• As of the end of 2025, Puzzles & Survival had more than 70 million cumulative global users and cumulative gross billings of more than RMB 15 billion. These are figures disclosed by the company in its annual report and have not been independently verified against the original Sensor Tower database
• The company has no traditional fixed-asset production capacity, mineral reserves or manufacturing-line capacity typical of manufacturing or resource companies. For a game company, content capacity is primarily reflected in its R&D team, projects under development, product portfolio and publishing capabilities

2.3 Position in the Industry Chain and Cost-Profit Structure

Sanqi Interactive Entertainment is positioned in the middle-to-downstream portion of the game industry chain. It connects upstream developers, IP owners, cloud-service providers, app stores and traffic platforms, while reaching end users through its publishing, user acquisition, operating and data capabilities. The company is not merely a game developer, but an integrated game enterprise combining development, publishing and operations.

• The company’s major upstream inputs include app-store and game-platform channels, advertising traffic and user-acquisition platforms, payment channels and game-platform revenue sharing, cloud servers and bandwidth, IP licensing, third-party developers and outsourced development teams, content-production suppliers, as well as AI models, computing power and related technology services.
• In 2025, cost of revenue was approximately RMB 3.854 billion, of which game revenue-sharing costs were RMB 3.396 billion, accounting for approximately 88.10% of cost of revenue; server costs were RMB 229 million, or approximately 5.94%; amortization of copyrights was RMB 131 million, or approximately 3.40%; and other costs were RMB 99 million, or approximately 2.56%.
• The core cost is revenue sharing among the company, channels, developers and platforms, rather than servers or labor. The company has relatively limited bargaining power with upstream traffic platforms, app stores and payment channels and is closer to a price taker with respect to channels when user-acquisition competition is intense.
• The annual report attributed the decline in gross margin in 2025 mainly to the higher proportion of revenue from third-party licensed games and increased game revenue-sharing costs resulting from higher actual sharing ratios after certain mature games accumulated higher gross margins.
• The company is promoting AI applications throughout the R&D, publishing and operating processes. According to the 2025 annual report, “Xiaoqi” has completed registration for generative-AI services; the “Xiaoqi Agent Platform” has connected to more than 150 large models and AI tools; overseas localization translation covers 18 languages; AI-assisted 2D art assets account for more than 80%; AI deeply participates in the generation of more than 70% of game advertising videos; and AI-assisted code penetration exceeds 40%. These capabilities are currently more suitable as efficiency-enhancing tools and cannot directly imply that R&D costs have fallen substantially or that future profits will inevitably increase.
• The company’s ultimate revenue comes from player recharges, in-app purchases and game payments. The typical transaction chain is “player—app store/game platform—publisher or operator—developer/IP owner.”
• Domestic downstream channels mainly include Android app stores, Apple’s App Store, WeChat mini-games, Douyin mini-games and other traffic platforms. Overseas markets mainly rely on Google Play, the App Store, Facebook, TikTok and local advertising and payment ecosystems.
• The company’s end users are relatively dispersed and are not a small number of major customers in the traditional sense. However, from the perspective of book settlements, the company still has concentrated accounts receivable exposure to large platforms, channels and partners.
• As of December 31, 2025, the five largest accounts receivable customers totaled RMB 787 million, accounting for 67.88% of the combined balance of accounts receivable and contract assets. The annual report did not disclose the specific names of these customers, listing them anonymously as “First,” “Second” and so on. It is therefore impossible to determine the specific platforms or channels involved.
• The above customer-concentration data comes from a single annual report for 2025. Changes in customer names and concentration require continued tracking through subsequent annual reports, with the latest annual report taking precedence.
• Structurally, the company has a certain degree of brand and product-operating capability on the end-user side, but limited bargaining power in channels, traffic and platform revenue-sharing arrangements. Profit is affected by channel sharing, user-acquisition expenses, IP royalties, revenue sharing on licensed games and product lifecycles.
• At the end of 2025, accounts receivable were RMB 1.122 billion, accounting for 5.03% of total assets, and accounts-receivable turnover days were 26.32, down from 27.78 in 2024. Prepayments were RMB 934 million, equivalent to approximately 5.85% of 2025 revenue. Net cash flow from operating activities was RMB 3.538 billion, higher than net profit attributable to the parent of RMB 2.900 billion, indicating strong overall cash conversion. However, prepayments indicate that upfront capital remains tied up in traffic purchases, channel cooperation, R&D cooperation or other business activities. Specific suppliers and business categories require further verification through the notes to prepayments and cannot simply be attributed entirely to advertising-based user acquisition.
• As of December 31, 2025, the five largest accounts receivable customers totaled RMB 787 million, accounting for 67.88% of the combined balance of accounts receivable and contract assets. The annual report did not disclose specific customer names. This data comes from a single annual report and could not be cross-checked against other years or independent sources. The specific customer structure and changes in concentration should be based on the latest annual report.

Sanqi Interactive Entertainment is positioned in the middle-to-downstream portion of the game industry chain. It is an integrated game company centered on mobile-game publishing and operations, with in-house development and global publishing capabilities. It neither controls the underlying platform traffic of Tencent nor relies solely on a single IP like a traditional developer. Its current high gross margin mainly results from the low marginal cost of digital content, but does not imply complete pricing power. Further margin improvement depends primarily on successful launches of new products, extending the lifecycle of existing products, increasing the share of overseas revenue, improving user-acquisition efficiency and advertising ROI, increasing the proportion of internally developed products, applying AI efficiency tools, and upgrading products toward categories with higher retention, ARPU and longer lifecycles.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

Non-GAAP net profit attributable to the parent was RMB 1.016 billion in the first half of 2026, down 26.74% year on year; basic EPS was RMB 0.80. Non-GAAP net profit attributable to the parent was RMB 406 million in the second quarter of 2026, down 52.22% year on year. Non-GAAP net profit attributable to the parent was RMB 2.845 billion in 2025, up 9.81% year on year.

Revenue and non-GAAP net profit attributable to the parent came under pressure in the first half of 2026, mainly because gross billings from existing products such as Xundao Daqian naturally declined with their lifecycles, while new products such as 33 Days of Survival, Ragnarok M: Journey of the World and LastAsylum:Plague remained in the introduction and ramp-up stages. Growth in net profit attributable to the parent was mainly driven by higher investment income. Investment income was approximately RMB 1.016 billion in the first half of 2026, up approximately 1541% year on year. Therefore, growth in net profit attributable to the parent does not fully represent an improvement in the profitability of the core game business. Overseas operating revenue was RMB 3.021 billion during the same period, up 10.90% year on year and accounting for 41.53% of total revenue.

3.2 Earnings Forecasts

Forecast data mainly comes from institutional research reports extracted from the earnings-forecast page of iFinD and does not represent iFinD’s own forecasts. Around September 11, 2026, approximately 23 institutions forecast 2026 results, while approximately 21 to 23 institutions covered 2027–2028. Forecast publication dates and assumptions differ among institutions, and some individual forecasts differ materially from institutional averages.

3.3 Valuation and Institutional Ratings

As of September 11, 2026, the share price was approximately RMB 17.69 and total market capitalization was approximately RMB 39.2 billion. Based on multiple market-data sources, trailing P/E was approximately 12x, forward P/E approximately 11x–12x and P/B approximately 2.8x–2.9x. Yahoo Finance showed trailing EPS of approximately RMB 1.48 and trailing P/E of approximately 11.95x. Xueqiu showed forward P/E of approximately 11.12x, trailing P/E of approximately 12.03x, static P/E of approximately 13.55x and P/B of approximately 2.79x. Based on institutional-average EPS, the RMB 17.69 share price corresponds to 2026, 2027 and 2028 forecast P/Es of approximately 12.7x, 11.6x and 10.7x, respectively. Relative to the September 11, 2026 closing price, Soochow Securities’ RMB 22.25 target price implies upside of approximately 25.8%, Orient Securities’ RMB 22.96 target price implies approximately 29.8%, Huachuang Securities’ RMB 25.00 target price implies approximately 41.3%, and Guotai Haitong Securities’ RMB 28.40 target price implies approximately 60.5%. If institutional forecasts are achieved, the current valuation is at a low-to-moderate level. However, 2026 net profit attributable to the parent was boosted by higher investment income, while non-GAAP profit from the core business declined year on year. Simple P/E calculations based on net profit attributable to the parent may therefore underestimate volatility risk in the core business. Valuation recovery depends critically on whether new products such as LastAsylum:Plague, Ragnarok M: Journey of the World and ZRoute:Redemption can continue to scale up and whether the decline in domestic existing-product billings can stabilize.

4. Recent News and Announcements

4.1 Participation in the 2026 Online Collective Investor Reception Day for Listed Companies in Anhui

On September 9, 2026, the company disclosed the Announcement on Participation in the 2026 Online Collective Investor Reception Day for Listed Companies in Anhui. It will participate in the online collective investor reception event guided by the Anhui Securities Regulatory Bureau and jointly organized by the Anhui Association of Listed Companies and Panorama Network. As of September 14, 2026, no new material operating information had emerged from the event. The matter does not involve an earnings forecast, material asset restructuring, a new buyback plan or material capital operations such as shareholder purchases or sales.

4.2 Three Proposals to Be Considered at the First Extraordinary General Meeting of Shareholders in 2026

The company plans to hold its first extraordinary general meeting of shareholders in 2026 on September 15, 2026, to consider the Proposal on Adjusting the Estimated 2026 Guarantee Quota for Subsidiaries, the Proposal on Changing the Purpose of Repurchased Shares to Cancellation and Reduction of Registered Capital, and the Proposal on Reducing Registered Capital and Amending the Articles of Association. As of September 14, 2026, these matters remained at the pre-shareholder-meeting stage. Final implementation depends on shareholder approval and subsequent registration and cancellation procedures.

4.3 Proposed Cancellation of 12,539,547 Repurchased Shares

On August 26, 2026, the company disclosed a proposal to change the use of the 12,539,547 shares repurchased under its 2022 repurchase plan, originally intended for an employee stock ownership plan or equity incentive plan, to cancellation and reduction of registered capital. The shares to be cancelled represent approximately 0.57% of the company’s current total share capital. Before cancellation, total share capital was 2,212,237,681 shares. If completed, total share capital is expected to decline to 2,199,698,134 shares, while registered capital would decline from RMB 2.21224 billion to RMB 2.19970 billion. The company stated that the cancellation would not change its listing status, result in a change of actual control or cause its shareholding structure to fail to meet listing requirements. As of September 14, 2026, no announcement confirming completion of the cancellation had been identified. The matter still requires approval at the extraordinary general meeting before implementation.

4.4 Implementation of the 2026 Interim Cash Dividend

The company’s 2026 interim profit-distribution plan was a cash dividend of RMB 1 per 10 shares, including tax, based on the number of shares actually outstanding on the record date after excluding shares in the repurchase-specific securities account. No bonus shares would be issued and no capitalization of capital reserves would be carried out. Net profit attributable to shareholders of the listed company was RMB 1.76627 billion in the first half of 2026. Based on 2,199,698,134 participating shares, total cash dividends were RMB 219,969,813.40, or approximately RMB 220 million. The record date was September 2, 2026, while the ex-dividend and cash-payment date was September 3, 2026. Based on total share capital, the actual cash dividend was approximately RMB 0.994331 per 10 shares, and the ex-dividend reference price was calculated by deducting RMB 0.0994331 per share.

4.5 Total Annual Guarantee Quota Maintained at RMB 8.73 Billion

The company plans to make a structural adjustment to the 2026 guarantee quota for subsidiaries, increasing and adding guarantee quotas totaling RMB 1.7 billion while reducing existing guarantee quotas by RMB 1.7 billion. The total estimated annual guarantee quota before and after adjustment will not exceed RMB 8.73 billion or its foreign-currency equivalent. After adjustment, guarantee quotas for wholly owned subsidiaries with asset-liability ratios above 70% will not exceed RMB 7.8 billion, while quotas for wholly owned subsidiaries with ratios below 70% will not exceed RMB 930 million. Total guarantees provided by the company and its controlled subsidiaries account for 64.50% of the most recently audited net assets, while guarantees for controlled subsidiaries with asset-liability ratios above 70% account for 57.63% of the most recently audited net assets. The matter requires approval at the extraordinary general meeting on September 15, 2026. All guaranteed entities are wholly owned subsidiaries, and the company stated that no counter-guarantee is required.

4.6 Adjustments to Guarantee Quotas for Major Subsidiaries

Major guarantee-quota changes disclosed in the announcement include increases for Anhui Sanqi Network from RMB 550 million to RMB 650 million, Anhui Shangquwan from RMB 800 million to RMB 900 million, Guangzhou Yingxin from RMB 900 million to RMB 1.0 billion, and Bibitto from RMB 1.3 billion to RMB 1.7 billion. Building-Blocks received a new quota of RMB 600 million. Quotas for Anhui Xuhong were reduced from RMB 500 million to zero, Guangzhou Sanqi Lexiang from RMB 600 million to RMB 300 million, and LuckyKoi Bibitto from RMB 650 million to zero. As of June 30, 2026, actual guarantees provided by the company and its subsidiaries totaled approximately RMB 2.457 billion, below the annual guarantee-quota ceiling. However, the asset-liability ratios of certain guaranteed entities exceeded 90%, with some exceeding 100%, and guarantee risks require continued attention.

4.7 No Significant Change in Share-Pledge Data

As of September 11, 2026, third-party data platforms showed approximately 25.8217 million pledged shares, representing approximately 1.17% of total A shares, across three pledge transactions. Compared with aggregated data disclosed on September 4, 2026, there was no significant change in the pledge ratio or number of pledged shares. These data are third-party aggregations of information disclosed by China Securities Depository and Clearing Corporation Limited and the listed company and cannot replace specific pledge announcements. At the end of the 2026 interim reporting period on June 30, Hu Yuhang held approximately 201.6 million shares, representing 9.11% of the company, of which 24.15 million shares were pledged. This does not represent the latest shareholding status as of September 14, 2026.

4.8 Wholly Owned Subsidiary Proposes Investment in Hainan Juhong Hesheng Fund

On July 8, 2026, the company disclosed that a wholly owned subsidiary intended to invest in Hainan Juhong Hesheng Investment Partnership (Limited Partnership). Anhui Taiyun Investment Management Co., Ltd. plans to contribute no more than RMB 20 million in its own funds to subscribe for fund units. The fund’s expected total size is no more than RMB 62.01 million. Based on a fundraising size of RMB 62.01 million and a RMB 20 million contribution by Anhui Taiyun, Anhui Taiyun’s investment would account for approximately 32.2529% of the fund. The matter does not involve raised funds, does not constitute a related-party transaction or material asset restructuring, and did not reach the approval thresholds of the board or shareholders’ meeting. It was approved by the chairman, who authorized management to sign the relevant documents. As of September 14, 2026, third-party information indicated that the investment was “in progress.” No announcement confirming completion, fund liquidation or material subsequent changes had been identified.

4.9 No New Earnings Forecast or Material Regulatory Matter Identified

As of September 14, 2026, no earnings forecast, earnings preannouncement or earnings-warning announcement newly disclosed by the company in September 2026 had been identified. No new material regulatory inquiry letter, administrative penalty, filing investigation or material risk-warning announcement in September 2026 had been identified. No announcement of a large-scale purchase or sale by the controlling shareholder, actual controller, directors or senior executives in September had been identified either.

5. Share-Price Performance and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 11, 2026, 002555 was near its 52-week low, with the closing price below MA5, MA10 and MA20 and short-term moving averages in a weak alignment. The closing price was also slightly below the 20-day Bollinger lower band. The stock declined for four consecutive trading days from September 8 to September 11, while turnover on September 11 increased from the previous day and combined extra-large and large-order net outflows were approximately RMB 98.31 million, indicating weak short-term fund support. RSI calculated from recent price movements was approximately 40–45, not yet indicating extreme oversold conditions. The latest publicly verifiable MACD figure was only available through September 7, so it cannot confirm the latest status after September 11. Overall, the stock was closer to a medium-term weak trend with short-term proximity to support and potential for a technical recovery, but neither a bottom nor a trend reversal had been confirmed.

5.3 Short-Term Outlook (Next Week, Scenario Analysis for Reference Only)

⚠️ Risk warning: The following is only a subjective scenario analysis based on the September 11, 2026 closing data, historical prices and technical indicators. It does not constitute investment advice or a definitive price forecast.

1. Key Technical Levels

2. Scenarios for the Next Week (Subjective Weights, Not Statistical Probabilities)

• Range-bound consolidation (relatively higher subjective weight, approximately 60%; a heuristic judgment based on current technical and fund structures, not a statistical probability): Price range of approximately RMB 17.60–18.40. Conditions include support emerging around RMB 17.60–17.80, turnover remaining at approximately RMB 400–700 million, a narrowing of major-fund net outflows and no clear additional decline in the media and gaming sectors. If realized, the price may fluctuate repeatedly around RMB 17.80–18.30, with the RMB 18.30–18.60 area still likely to face moving-average resistance.
• Weak downward movement (medium subjective weight; not a statistical probability): Price range of approximately RMB 17.10–17.70. Conditions include a decisive closing-price break below RMB 17.60, increased daily turnover accompanied by continued major-fund net outflows, simultaneous weakness in the gaming and media sectors or a decline in market risk appetite. If support near RMB 17.60 fails, the next area to watch would be RMB 17.10–17.40. A further break below RMB 17.10 would mean the 52-week-low support had failed and could intensify downside pressure.
• Strengthening rebound (low subjective weight unless accompanied by favorable price-volume action or a clear catalyst; not a statistical probability): Price range of approximately RMB 18.40–19.20. Conditions include reclaiming RMB 18.30–18.60, daily turnover rising steadily to above approximately RMB 800 million, major-fund flows changing from net outflows to consecutive net inflows, simultaneous strength in the media and gaming sectors, and a further break above short-term resistance near RMB 19.00. If the stock merely reaches RMB 18.30–18.60 without sufficient turnover and funds remain in net outflow, it is more likely to be a weak technical bounce than a trend reversal.

3. Fund and Liquidity Background

Recent turnover rates were approximately 1.1%–3.2%, while average turnover over the past 10 trading days was approximately RMB 606 million. Turnover on September 11 was approximately RMB 609 million and the turnover rate was 2.09%, both noticeably higher than on September 10, but combined extra-large and large-order net outflows were approximately RMB 98.31 million. Current liquidity remains adequate, but support from large funds is insufficient. If turnover continues to increase during declines while major funds continue to flow out, this may reflect the release of selling pressure rather than active accumulation. As of June 30, 2026, the top 10 tradable shareholders held approximately 27.31% of the free float, and iFinD assessed major-holder control as relatively low. The number of shareholders increased 12.46% from March 31, 2026, suggesting some degree of shareholding dispersion. Public funds and gaming ETFs appeared among institutional holders, but institutions collectively held approximately 15.17% of the free float. The above shareholder-structure data lagged by approximately two and a half months and may have changed; it cannot be treated as real-time holdings as of September 11, 2026.

If the share price regains RMB 18.60 while daily turnover rises consecutively above approximately RMB 800 million and major-fund flows turn into net inflows, this could serve as a verifiable signal of improved short-term fund conditions. The threshold is based on the stock’s recent turnover range of approximately RMB 329 million–975 million shown in the research summary.

4. Points to Monitor (Observation Framework Only, Not Trading Instructions)

• Observe whether the RMB 17.60–17.80 area can stabilize and form a low-volume consolidation; this is an observation framework, not a trading instruction.
• Observe whether the 52-week low near RMB 17.10 is decisively breached; this is an observation framework, not a trading instruction.
• Observe whether the moving-average resistance zone of RMB 18.30–18.60 can be reclaimed on rising volume; this is an observation framework, not a trading instruction.
• Observe whether major-fund flows turn into net inflows when daily turnover reaches approximately RMB 800 million or more; this is an observation framework, not a trading instruction.

The above scenario analysis is based on the September 11, 2026 closing data and calculations using historical prices and technical indicators. Short-term share prices will also be affected by news, fund flows, the broader market and other factors. Technical indicators are inherently lagging and limited. This analysis does not guarantee future actual performance and does not constitute a buy or sell recommendation. Investors should make independent judgments based on the latest market information and bear their own investment risks.

6. Industry Landscape and Competitor Analysis

6.1 Industry Conditions

As of 2025, China’s game industry was characterized by concentration among leading companies, competition in niche segments and global expansion. China’s domestic game market generated actual sales revenue of RMB 350.789 billion in 2025, up 7.68% year on year, with a user base of 683 million, up 1.35%. Mini-program game revenue was RMB 53.535 billion, up 34.39% year on year. Actual overseas sales revenue from games developed independently in China was USD 20.455 billion, up 10.23% year on year. In overseas markets, strategy games, including SLG, remained the largest category by revenue among Chinese-developed mobile games going abroad, with the United States, Japan and South Korea as the main markets.

6.2 Competitive Landscape

• The first tier comprises Tencent and NetEase, which possess strong in-house development capabilities, platform traffic, IP resources and global publishing capabilities.
• The second tier includes Sanqi Interactive Entertainment, Century Huatong and miHoYo, which have strong competitiveness in specific genres, global publishing or original products.
• The third tier includes Perfect World, Kingnet Network, Gigabit, China Satellite Communications and Kunlun Tech, which have developed niche advantages in MMORPGs, Legend-style games, casual games, SLG or overseas operations.
• The long tail comprises small and medium-sized developers, independent studios and mini-game companies, which generally rely on individual blockbuster products or niche genres.
• Publicly available industry market-share data vary due to differences in statistical methodology. This study does not use a precise market-share figure from a single consulting firm as a definitive market-share conclusion for Sanqi Interactive Entertainment.
• Major industry competition and profitability risks include pressure from traffic platforms and app-store revenue sharing, rising user-acquisition costs, increased revenue-sharing costs for licensed games, uncertainty surrounding individual blockbuster products, overseas regulatory and foreign-exchange risks, delays or weaker-than-expected performance of R&D projects, and greater difficulty acquiring and retaining users amid intensified competition for existing users.

6.3 Major Competitors

Compared with Tencent and NetEase, Sanqi Interactive Entertainment lacks a super-platform traffic entrance and the advantages of large-scale premium in-house development. However, it has developed differentiated competitiveness in mobile-game publishing, user-acquisition operations, a multi-genre product portfolio and global operations. Compared with Century Huatong, Sanqi Interactive Entertainment covers domestic and overseas publishing across multiple genres, while Century Huatong has grown rapidly in overseas SLG and casual games in recent years. Compared with Perfect World, Sanqi Interactive Entertainment focuses more on mobile games, user-acquisition publishing and overseas markets, while Perfect World focuses more on large MMORPGs, PC games, esports and IP operations. Compared with Kingnet Network, Sanqi Interactive Entertainment has a more diversified product mix and stronger overseas publishing capabilities, while Kingnet Network is more concentrated in Legend-style games and classic-IP operations.

7. Risk Factors

• Risk of declining core-business revenue and non-GAAP profit: Revenue declined 14.28% year on year and non-GAAP net profit attributable to the parent declined 26.74% in the first half of 2026. Gross billings from existing products such as Xundao Daqian declined, while new products remained in the introduction stage. If new products cannot replace existing products in a timely manner, pressure on revenue and core-business profit may continue.
• Risk that new-product monetization falls short of expectations: The company’s projects under development and recent new products include 33 Days of Survival, Ragnarok M: Journey of the World and LastAsylum:Plague. Some remain in the ramp-up stage, while other projects under development have not disclosed clear launch dates or commercialization data. They may be delayed, perform below expectations or fail to generate meaningful revenue.
• Risk of channel-sharing pressure and declining gross margin: Game revenue-sharing costs were RMB 3.396 billion in 2025, accounting for approximately 88.10% of cost of revenue, while gross margin declined from 78.63% in 2024 to 75.86%. A higher proportion of third-party licensed games and higher actual sharing ratios for mature products may continue to pressure margins if licensed and channel businesses grow further.
• Risk related to user-acquisition efficiency and traffic costs: The company depends on app stores, advertising platforms and domestic and overseas traffic channels. Prepayments were RMB 934 million, equivalent to approximately 5.85% of 2025 revenue. Rising user-acquisition costs, declining advertising ROI or weaker channel bargaining power could compress game-product profitability.
• Overseas operating risk: Overseas revenue accounted for 41.53% of total revenue in the first half of 2026. The company mainly relies on Google Play, the App Store, Facebook, TikTok and local advertising and payment ecosystems. Changes in overseas regulation, platform policies, exchange rates and localization operations could affect product launches, user payments and revenue recognition.
• Risk to earnings quality from volatility in investment income: Investment income was approximately RMB 1.016 billion in the first half of 2026, up approximately 1541% year on year, making a significant contribution to growth in net profit attributable to the parent, while non-GAAP profit declined year on year. If investment income falls subsequently, net profit attributable to the parent could perform materially worse than its headline growth rate suggests.
• Subsidiary guarantee risk: The company plans to maintain the 2026 total guarantee quota at no more than RMB 8.73 billion, with actual guarantees of approximately RMB 2.457 billion. The asset-liability ratios of certain guaranteed entities exceed 90%, with some above 100%. If the operating or debt-servicing capabilities of these subsidiaries deteriorate, guarantee payments or additional asset burdens could arise.
• Accounts-receivable concentration risk: At the end of 2025, the five largest accounts receivable customers totaled RMB 787 million, accounting for 67.88% of the combined balance of accounts receivable and contract assets. The annual report did not disclose their specific names. Delayed payments by major platforms or partners could create collection and credit risks.
• Risk of further technical weakness: As of September 11, 2026, the share price was below multiple moving averages, and combined extra-large and large-order net outflows were approximately RMB 98.31 million. If the RMB 17.60–17.80 support zone fails and the stock subsequently falls below the 52-week low of RMB 17.10, short-term market pressure could intensify.

8. Conclusion and Outlook

Sanqi Interactive Entertainment’s medium- and long-term growth thesis remains based on global publishing, a multi-genre product portfolio, long-term operating capabilities and an expanding pipeline of new products. The increased proportion of overseas revenue in the first half of 2026 indicates continued resilience in overseas operations. The company has accumulated publishing and operating experience in SLG, simulation, RPG and other mobile-game genres, while AI tools may help improve content production, localization and advertising efficiency. However, most projects under development have not disclosed clear launch dates or commercialization data and cannot be treated as definite sources of revenue. Future growth still depends on the actual launch performance and lifecycles of specific products.

Institutional forecasts place 2026–2028 revenue at approximately RMB 16.995 billion, RMB 18.5–19.0 billion and RMB 20.0–20.5 billion, respectively, while average forecasts for net profit attributable to the parent are approximately RMB 3.069 billion, RMB 3.377 billion and RMB 3.653 billion. These forecasts reflect market expectations for recovery driven by the new-product cycle and overseas operations. However, the decline in non-GAAP profit in the first half of 2026 and the significant boost to net profit from investment income indicate that forecast delivery requires an improvement in core-business profitability. If new products fail to scale as expected or the decline in existing products continues, valuation based on net profit attributable to the parent may underestimate volatility in the core business.

Going forward, investors should focus on new-product billings and retention, the rate of decline in domestic existing products, overseas revenue and profit contributions, revenue-sharing costs for licensed games and channels, return on user-acquisition spending, and the final implementation of the guarantee-quota adjustment and repurchased-share cancellation. Technically, whether the RMB 17.60–17.80 area can provide support and whether the RMB 18.30–18.60 moving-average resistance zone can be effectively reclaimed may serve as references for observing short-term trend changes. These indicators should not replace assessment of operating data and cash-flow quality.

Data Sources

• https://disc.static.szse.cn/disc/disk03/finalpage/2026-04-17/4e62244e-21da-48c9-ae81-c7222b81a25e.PDF
• Sanqi Interactive Entertainment (002555)_Company Announcements_Sanqi Interactive Entertainment: 2025 Annual Report_Sina Finance
• Company Announcements_Sanqi Interactive Entertainment: 2025 Financial Settlement Report_Sina Finance
• Tencent
• Century Huatong—Zhejiang Century Huatong Group Co., Ltd.
• Perfect World Co., Ltd. 2025 Annual Report
• Sanqi Interactive Entertainment (002555)_Company Announcements_Sanqi Interactive Entertainment: 2026 Interim Report_Sina Finance
• Sanqi Interactive Entertainment Interim Report Analysis: Second-quarter Net Profit Up 4.92% Year on Year_Securities Star Stock Channel
• Sanqi Interactive Entertainment (002555) Earnings Forecast_F10_iFinD Financial Services
• Sanqi Interactive Entertainment (002555)_Company Announcements_Sanqi Interactive Entertainment: 2025 Financial Settlement Report_Sina Finance
• Sanqi Interactive Entertainment (002555) Earnings Forecast_F10_iFinD Financial Services
• 2026 Interim Report Review: H1 Net Profit Attributable to the Parent Up 26%, Overseas Revenue Exceeds 40%, AI and Globalization Drive Growth—Guotai Haitong Securities ｜ FXBaogao
• Earnings Forecast
• Sanqi Interactive Entertainment (002555): Short-Term Revenue Under Pressure; Inflection Point Expected with Rich New-Product Pipeline_Sina Finance
• Institutional Ratings | Huatai Securities Assigns Sanqi Interactive Entertainment a “Buy” Rating
• Sanqi Interactive Entertainment (002555): 2026 Interim Report Review—Performance Under Temporary Pressure, Overseas New Products Performing Well_Research Report Radar
• Sanqi Interactive Entertainment (002555)—Historical Trading Data | Dabanke
• Sanqi Interactive Entertainment (002555.SZ) Chart—Yahoo Finance
• Sanqi Interactive Entertainment (SZ002555) Share Price, Stock Price, Financial Reports and Data—Xueqiu
• Sanqi Interactive Entertainment (002555) P/E, Valuation and Fundamentals—Lixinger
• Sanqi Interactive Entertainment (002555)—Company Profile—Sohu Securities Stock Center
• Sanqi Interactive Entertainment Investor Relations
• Sanqi Interactive Entertainment (002555)—Major Announcements
• Sanqi Interactive Entertainment (002555)_Company Announcements_Sanqi Interactive Entertainment: Announcement on Changing the Purpose of Repurchased Shares to Cancellation and Reduction of Registered Capital_Sina Finance
• Sanqi Interactive Entertainment (002555)_Company Announcements_Sanqi Interactive Entertainment: Announcement on the 2026 Interim Profit Distribution Proposal_Sina Finance
• Sanqi Interactive Entertainment (002555)_Company Announcements_Sanqi Interactive Entertainment: 2026 Interim Equity Distribution Implementation Announcement_Sina Finance
• Sanqi Interactive Entertainment (002555)_Company Announcements_Sanqi Interactive Entertainment: Announcement on Adjusting the Estimated 2026 Guarantee Quota for Subsidiaries_Sina Finance
• Sanqi Interactive Entertainment—Individual Stock Calendar—Eastmoney Data Channel
• https://static.cninfo.com.cn/finalpage/2026-07-08/1225414248.PDF
• Sanqi Interactive Entertainment (002555)_Company Information_Securities Star

This report was automatically researched, compiled and generated by AI based on publicly available information. The information is current as of September 14, 2026, and the latest completed trading day was September 11, 2026; prices, trading volume and turnover rate are primarily based on the September 11, 2026 closing data, while certain technical indicators have date lags or differences in calculation methodology. The information may be subject to timeliness differences. Specific data should be based on the company’s formal announcements and authoritative data terminals. This report is for information and research reference only and does not constitute investment advice. Investors should make independent judgments and bear their own investment risks.