Zhejiang Century Huatong Group Co., Ltd. (002602)

Equity Research Report　|　Industry: Internet Gaming/Digital Technology　|　Report Date: September 13, 2026　|　As of the September 11, 2026 close. Securities code: 002602; securities abbreviation: Century Huatong.

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

1. Executive Summary

The most decision-relevant fact about Century Huatong is that the company has essentially completed its shift in business focus from automotive components to internet gaming. In 2025, gaming revenue reached RMB 36.237 billion, accounting for 95.62% of operating revenue, while overseas revenue reached RMB 22.219 billion, accounting for 58.63%. In the first half of 2026, revenue continued to reach RMB 22.117 billion, up 28.53% year on year, and net profit attributable to shareholders reached RMB 4.503 billion, up 69.51%. The product matrix comprising Whiteout Survival, Kingshot and Tasty Travels, together with its global publishing and operating capabilities, is the core driver of current earnings growth.

Both earnings quality and profit elasticity have improved significantly. In 2025, the company generated revenue of RMB 37.898 billion and net profit attributable to shareholders of RMB 5.605 billion, representing year-on-year growth of 67.55% and 362.02%, respectively; overall gross margin rose to 70.02%. Net margin was approximately 20.4% in the first half of 2026, while recurring net profit attributable to shareholders increased 66.40% year on year. The gaming business is characterised by high gross margins and rapid cash collection, but selling expenses are driven mainly by user-acquisition spending, reaching RMB 14.512 billion in 2025, or 38.29% of revenue. Profitability remains dependent on the lifecycle of hit products and the efficiency of user acquisition.

The company’s business structure remains clearly divided. Gaming contributes the overwhelming majority of revenue and profit; automotive components account for approximately 4.28% of revenue with a gross margin of approximately 12%; and AI cloud-data revenue accounts for only 0.09%. Cloud-data gross margin was approximately 8.8% to 9.96% in the first half of 2026, which is not yet sufficient to alter the company’s overall earnings profile in the short term. Goodwill stood at RMB 11.837 billion at the end of 2025, representing approximately 26.6% of total assets and approximately 38.6% of net assets attributable to shareholders. Asset quality and the effectiveness of acquisition integration therefore require continued monitoring.

As of the September 11, 2026 close, the company’s share price was RMB 15.56, implying a P/E ratio of approximately 15.39x. Technically, the stock was consolidating or undergoing a pullback confirmation at elevated levels after a rapid rise. The closing price was slightly below the MA5, MA10 and MA20, but remained above the MA50, MA100 and MA200. MACD was positive and RSI was in the neutral range. Institutions remain broadly positive on earnings continuation, but target prices have already been lowered and forecast dispersion is considerable. Market valuation will continue to be affected by product gross bookings, user-acquisition costs and changes in risk appetite.

2. Company Overview

2.1 Basic Information

2.2 Core Businesses and Product Portfolio

• Internet gaming (2025 software-services revenue of RMB 36.237 billion, accounting for 95.62%, up 72.84% year on year; overseas operations are led by Dotdot Interactive/Century Games, while Shengqu Games provides the domestic IP base. Core products include Whiteout Survival, Endless Winter, Kingshot, Tasty Travels: Merge Game and the Legend IP series.)
• AI cloud data (2025 revenue of RMB 34.7 million, accounting for 0.09%, up 96.44% year on year; IDC and computing-power projects are located in the Yangtze River Delta and Guangdong-Hong Kong-Macao Greater Bay Area.)
• Automotive components manufacturing (2025 revenue by industry of RMB 1.623 billion, accounting for 4.28%, down 0.38% year on year; the company is a Tier-2 supplier serving SAIC Volkswagen, SAIC-GM, FAW Group, Dongfeng Group, Guangzhou Honda and new-energy vehicle manufacturers, among others.)

2.3 Position in the Upstream and Downstream Value Chain and Cost-Profit Structure

The company’s core business has shifted from automotive components to three major segments centred on internet gaming: internet gaming, AI cloud data and automotive components manufacturing. Gaming accounts for more than 95% of revenue, while overseas sales represented 58.63% of revenue in 2025 and became the company’s largest revenue source for the first time. The key value-chain tension is the coexistence of rigid upstream user-acquisition costs and rigid downstream channel revenue-sharing requirements. Nevertheless, hit games allow the company to retain high gross margins and collect cash rapidly. The following points are based on research notes, with the source basis of all figures indicated.

• The largest cost item is traffic/user acquisition rather than raw materials. Securities firms summarise the core model as “low-cost user acquisition through casual and lightweight gameplay → deep monetisation through SLG → long-term operations” (Guosen Securities). Overseas user acquisition is conducted on Meta, Google, TikTok/ByteDance, Tencent Advertising and other platforms. The corresponding financial-statement item is selling expenses: RMB 14.512 billion in 2025, or 38.29% of revenue, up from 34.72% in 2024, mainly due to marketing and promotion expenses. Selling expenses fell to approximately RMB 4.5 billion in 2026 Q2, with the expense ratio declining to 40.6% (Changjiang Securities). This indicates that the company is largely a price taker in traffic procurement, and rising user-acquisition costs directly compress margins.
• Channel/platform revenue sharing: Apple App Store, Google Play, domestic Android stores, WeChat mini-games, Steam and other platforms typically take a share of gross bookings, with an industry norm of approximately 30%. This represents a deduction and cost item before gaming revenue is recognised on a net or gross basis and is an industry-wide area of weak bargaining power rather than a company-specific issue.
• IP licensing fees: RMB 100 billion per year is paid to ChuanQi IP Co., Ltd. for the Legend IP, equivalent to approximately RMB 548 million per year under the 2023 agreement. The company also pays licensing fees or revenue shares to external publishers for titles including Final Fantasy XIV, MapleStory and Aion. Sources: CLS and annual reports.
• Labour costs: 2,630 R&D employees and R&D expenditure of RMB 2.340 billion in 2025, up 39.27%, representing an R&D expense ratio of 6.18%. AI tools are used to improve art-production efficiency. China Securities has stated that Shengqu Games’ art-production efficiency increased by 60%–80%, although this is based on a single source and has not been cross-checked.
• Servers/bandwidth/cloud: The company uses a combination of self-built infrastructure and cooperation with Tencent Cloud and Huawei Cloud. The annual report states that the AI cloud-data business is deepening cooperation with major domestic cloud-computing companies including Tencent Cloud and Huawei Cloud.
• Upstream automotive-components inputs: plastic pellets, metal products, mould steel and other materials. As a Tier-2 supplier, the company is also a price taker for upstream commodities. Its business scope includes “wholesale of plastic pellets and metal products”, consistent with this description.
• Not obtained: The company’s supplier concentration, including the share of its five largest suppliers, was not disclosed in the retrieved summaries. The “Major Suppliers” section of the annual report should be consulted.
• Gaming business: End users are C-side players, but the substantive “customers” are distribution channels and platforms, including Apple, Google, WeChat mini-game platforms, Android stores and Steam. Customer concentration is therefore naturally high. The specific percentage of sales attributable to the five largest customers disclosed in the 002602 annual report was not obtained. This item is marked as unavailable and should be based on the latest annual report; unverified percentages should not be cited.
• Automotive-components business: The company is a Tier-2 supplier serving SAIC Volkswagen, SAIC-GM, FAW Group, Dongfeng Group and Guangzhou Honda, as well as Germany’s MAHLE, France’s Valeo and US-based Vista-Pro. New-energy customers include BYD, Aito, Changan, XPeng, NIO, Volkswagen, GM, Geely and a North American new-energy vehicle manufacturer. Source: Eastmoney F10 core themes. This business faces structural annual price-reduction pressure from automakers, with gross margin of only approximately 12%; automotive-components gross margin was 12.06% in 2025 and the first half of 2026, a sharp contrast with gaming.
• Industry bargaining-power assessment: Overseas gaming is primarily focused on SLG and casual products. Revenue is determined by players’ willingness to pay and platform revenue-sharing rules. The company remains dependent on channels but has some room to improve its relative bargaining position through hit products. The automotive-components business, by contrast, is a typical low-margin Tier-2 operation constrained by annual price reductions from automakers.
• Accounts receivable: RMB 3.963 billion at the end of 2025 versus RMB 3.395 billion at the end of 2024. Accounts receivable/revenue was 10.5% in 2025 versus 15.0% in 2024. Revenue increased 67.55%, while receivables rose only 16.7%, indicating that gaming revenue is settled through platforms and collected quickly, with little material use of extended payment terms. Notes receivable were RMB 85 million at the end of 2025, versus RMB 99.95 million at the beginning of the period. Contract assets were RMB 19 million, also immaterial. Contract liabilities, mainly prepaid or deferred gaming revenue, were RMB 1.296 billion at the end of 2025, RMB 1.338 billion at the end of 2024 and RMB 1.058 billion at the end of 2023. Relative to annual revenue of RMB 37.898 billion, this represented only 3.4%, indicating that most revenue is recognised promptly rather than supported by large deferred receipts. Cash-flow quality was strong: 2025 operating cash flow of RMB 8.564 billion divided by net profit attributable to shareholders of RMB 5.605 billion was approximately 1.53x, versus approximately 4.2x in 2024. Goodwill, which is a risk exposure rather than operating working capital, was RMB 11.837 billion at the end of 2025, versus RMB 12.022 billion at the end of 2024 and RMB 11.488 billion at the end of 2023. It represented approximately 26.6% of total assets of RMB 44.429 billion and approximately 38.6% of net assets attributable to shareholders of RMB 30.666 billion. Securities-firm risk disclosures explicitly identify goodwill impairment as a risk. Overall, cash flow is tilted in the company’s favour: cash is collected quickly, receivables are low and operating cash flow is materially above net profit. This is not inconsistent with rigid upstream user-acquisition costs and rigid downstream channel revenue sharing, because the company retains high margins after revenue sharing and collects cash promptly rather than using credit sales to generate revenue. Sources: 2025 annual audit report, 2025 annual report, Stockstar financial statements and Soochow Securities forecasts.
• Downstream customer concentration: The substantive customers of the gaming business are distribution channels and platforms, so concentration is naturally high. The specific percentage of sales attributable to the five largest customers disclosed in the annual report was not obtained in this search and should be verified against the latest annual report. Upstream supplier concentration was also not obtained. In addition, Legend IP licensing fees are paid to a single counterparty, ChuanQi IP Co., Ltd., at RMB 100 billion per year, or approximately RMB 548 million, under the 2023 agreement, representing material dependence on a single counterparty. All concentration information above has not been cross-checked and should be verified against the latest annual report.

The company occupies a position in the lower-middle part of the smile curve, centred on “R&D plus publishing and operations”. It is neither an upstream resource business with high gross margins nor a pure downstream brand business. Instead, it earns high margins through game-content development, global publishing and operations, hit IP and long-term operation. Overall gross margin was 70.02% in 2025 and 73.3% in 2026 Q2, while automotive components, with gross margin of approximately 12%, and AI cloud data, with gross margin of 9.96% in 2026H1, are lower-margin supplementary businesses. The genuine drivers of further margin expansion are the continuation of the hit-product matrix, product-mix upgrades, sustained improvement in mobile-game gross margin, better user-acquisition efficiency and operating leverage—not a generic statement that “industry competition is intense”. The key risks are rising user-acquisition costs and goodwill impairment; goodwill stood at RMB 11.837 billion at the end of 2025.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

All figures are based on official company disclosures and were cross-checked across multiple sources: the 2026 interim report was disclosed on the evening of August 27, 2026; the 2026 first-quarter report was disclosed in April 2026; the 2025 annual report was disclosed on April 29, 2026; and the 2024 annual report figure is from the company’s 2024 annual-report summary. Additional figures: recurring net profit attributable to shareholders in 2026H1 was RMB 4.303 billion, up 66.40%; 2026Q2 recurring net profit was RMB 2.325 billion, up 87.54% year on year and 22.10% sequentially; 2026Q1 recurring net profit was RMB 1.98 billion, up 46.9%; 2025 recurring net profit attributable to shareholders was RMB 5.64 billion, up 243%; and 2024 recurring net profit was RMB 1.643 billion, up 290.20%. The company implemented an interim dividend for the first time in 2026H1, proposing RMB 0.08 per share, or approximately RMB 590 million based on total shares of approximately 7.371 billion. Revenue has grown year on year for 13 consecutive quarters. Operating cash flow of approximately RMB 6.278 billion in 2025 was based on the first-three-quarter reporting basis. Huajin Securities stated that revenue in the first nine months of 2025 was RMB 27.223 billion, up 75.31%; net profit attributable to shareholders was RMB 4.357 billion, up 141.65%; and gross margin was 69.85%, up 4.71 percentage points, which supports the reasonableness of the full-year growth rate. TTM revenue as of June 30, 2026 was RMB 42.808 billion and TTM net profit attributable to shareholders was RMB 7.452 billion, consistent with StockAnalysis.com’s TTM revenue of RMB 42,808 million and net income of RMB 7,452 million. Derived net margins were approximately 20.4% in 2026H1, 14.8% for FY2025 and 5.4% for FY2024. Uncertainty should be noted: Eastmoney’s quarterly “profit trend” table contains column misalignment—for example, the 2025 Q4 column shows a loss of RMB 590 million, inconsistent with actual 2025 Q4 net profit of approximately RMB 1.25 billion. That quarterly table should not be relied upon independently; quarterly data should be based on the company’s interim reports and announcements.

Revenue and net profit maintained strong growth in 2026H1, at 28.53% and 69.51%, respectively, while profitability improved materially, with net margin rising from approximately 5.4% in FY2024 to approximately 20.4% in 2026H1. Operating cash flow remained healthy, and 2026Q1 revenue reached a new quarterly record since listing. The 362.02% year-on-year increase in 2025 net profit attributable to shareholders was driven mainly by the low 2024 base and the scaling of the gaming business. Gaming is the company’s core profit source and the largest gaming-company profit contributor in the A-share market. Quarterly data should be based on company interim reports and announcements; Eastmoney’s quarterly income statement contains column misalignment and should not be used directly.

3.2 Earnings Forecasts

All figures above are sell-side forecasts or consensus expectations, not company guidance. As of mid-June 2026, before the interim report, Tonghuashun iFinD consensus expectations covered 15 institutions. Forecast net profit attributable to shareholders ranged from RMB 8.606 billion to RMB 9.208 billion, with an average of RMB 8.953 billion, up 59.72% year on year. The forecast was formed before the interim report; actual 2026H1 net profit of RMB 4.503 billion represented approximately 50% of the full-year forecast. Some institutions made minor adjustments after the interim report, but no major upward or downward revisions were observed. Guotai Haitong (September 2, 2026, interim-report review) forecasts 2026–2028 EPS of RMB 1.23/1.56/1.79, applies 22x 2026E P/E and gives a target price of RMB 27.06, with an “outperform” rating. Huatai Securities’ initial coverage report dated January 2, 2026 forecast 2025–2027 net profit attributable to shareholders of RMB 5.755/8.606/10.635 billion and a target price of RMB 24.52, implying 21x 2026E P/E and a target market capitalisation of approximately RMB 180.7 billion; its target price was subsequently cut to RMB 19.61 on September 2, 2026. China International Capital Corporation forecast 2026 net profit of approximately RMB 9.007 billion and reduced its target price from RMB 26.50 in April to RMB 22.00 on August 28, 2026. China Industrial Securities gave a target price of RMB 18.75 and a “buy” rating on September 2, 2026. GF Securities gave a target price of RMB 24.55 in July 2026. Pacific Securities’ initial coverage report dated May 6, 2026 forecasts 2026–2028 revenue of RMB 47.2/52.4/56.7 billion, up 24.5%/11%/8.38%, net profit attributable to shareholders of RMB 9.1/10.4/12.0 billion, up 62.3%/14.9%/14.5%, and EPS of RMB 1.23/1.42/1.62, with an “outperform” rating. Huajin Securities’ initial coverage report dated November 16, 2025 forecasts 2025–2027 net profit attributable to shareholders of RMB 5.918/7.603/9.372 billion and gives a “buy” rating. Its EPS figures of RMB 0.80/1.02/1.26 for 2026/2027/2028 appear to contain a year or reporting-basis mismatch and differ materially from other institutions’ forecasts of above RMB 1.20 from 2026 onward; the EPS section should therefore not be relied upon. The key uncertainty is the wide dispersion in 2026 full-year forecasts, at approximately RMB 7.6 billion to RMB 9.2 billion, reflecting differing views on new-game gross bookings and user-acquisition costs. The latest complete consensus as of September 2026 should be based on each broker’s report; no unified average was available.

3.3 Valuation and Institutional Ratings

As of the September 11, 2026 close, the latest closing price was RMB 15.56, with an opening price of RMB 15.47, high of RMB 15.71, low of RMB 15.35, turnover of 1.35% and trading value of RMB 1.426 billion. Total shares outstanding were 7.371 billion and free-float shares were 6.797 billion. Total market capitalisation was RMB 114.688 billion and free-float market capitalisation was RMB 105.759 billion. Valuation metrics were: annualised H1 dynamic P/E of 12.74x; trailing P/E of 15.39x; static P/E based on 2025 net profit of RMB 5.605 billion of 20.46x; and P/B of 3.35x, based on book value per share of RMB 4.6428 and net assets of approximately RMB 34.2 billion. Cross-checks: 15.56/4.6428 = 3.35, confirming P/B; 114.688/5.605 = 20.46, confirming static P/E; and 15.56/15.39 = RMB 1.011 EPS, implying TTM net profit of approximately RMB 7.45 billion, consistent with the TTM figure. Based on 2026 consensus net profit of approximately RMB 9.0 billion, forward P/E would be approximately 12.7x.

The valuation path was as follows: the stock reached a period high at the end of September 2025 and then underwent a sharp retracement. From the beginning of 2026 through June 17, the stock fell 23.06%, while the broader market rose approximately 17.42%; the decline from the September 2025 high exceeded 40%. When the closing price was RMB 13.08 on June 17, 2026, trailing P/E was approximately 15.35x and was described by media as being in the bottom 10% of its historical range over the past decade, although this was based on a single source and China Merchants Securities methodology. The share price recovered in early September 2026, reaching approximately RMB 15.73 on September 4, RMB 16.13 on September 8 and approximately RMB 15.56 on September 10–11. Shareholder returns included a 2025 dividend of RMB 0.06 per share, or approximately RMB 441 million in total, representing a payout ratio of 7.86%; a December 2025 repurchase of 56.12 million shares for approximately RMB 1.0 billion followed by cancellation; and combined 2025 dividends and repurchase cancellations of RMB 1.44 billion, or 25.7% of net profit attributable to shareholders. The company proposed its first 2026 interim dividend of RMB 0.08 per share.

Common industry comparables used by brokers include Kingnet Network, Perfect World, Giant Network, Tencent Holdings and NetEase. Huatai estimated average 2026E P/E for comparable companies at approximately 20.7x and assigned Century Huatong 21x 2026E P/E. This valuation anchor was published in January 2026, and the subsequent target-price cut should be noted. The key uncertainty is the sharp divergence between generally positive institutional ratings and actual target prices and share prices. At the June 17 close of RMB 13.08, the average target price of RMB 25.77 from 15 institutions implied upside of more than 80%, after which target prices were broadly reduced alongside the share price. Fund ownership also declined to 148 funds holding 202 million shares in 2026Q1, versus 282 funds holding 532 million shares at the end of 2025Q3, a decline of more than 60% in shares held. Institutional target prices should therefore be treated cautiously. Sina’s institutional-rating page displayed a latest price of RMB 15.73 and a gain of 7.96% at the top, which was a snapshot taken at a different time and does not exactly match the September 11 close of RMB 15.56. Daily market data were sourced from multiple platforms and were broadly consistent, but the historical P/E percentile came from a single source.

4. Recent News and Announcements

4.1 Removal of Other Risk Warnings and Change of Securities Abbreviation from “ST Huatong” to “Century Huatong”

The company had previously been subject to other risk warnings and traded under the abbreviation “ST Huatong”. An announcement on the evening of November 10, 2025 stated that trading would be suspended for one day on November 11 and resume on November 12, when the other risk warning would be removed and the abbreviation would change from “ST Huatong” to “Century Huatong”, with the code unchanged. The full name is Zhejiang Century Huatong Group Co., Ltd.; securities code 002602; listed on the main board of the Shenzhen Stock Exchange. Its three principal businesses are internet gaming, AI cloud data and automotive components manufacturing, with gaming as the core. Source: https://stcn.com/article/detail/3488121.html (2025-11-11)

4.2 2025 Interim Report (Disclosed on 2025-08-30, Announcement No. 2025-054)

Revenue was RMB 17.207 billion, up 85.50% year on year; net profit attributable to shareholders was RMB 2.656 billion, up 129.33%; recurring net profit was RMB 2.686 billion; net operating cash flow was RMB 3.918 billion, up 107.40%; and basic EPS was RMB 0.37. Source: Shenzhen Stock Exchange announcement PDF.

4.3 2025 Third-Quarter Report (Disclosed on 2025-10-31)

Revenue for the first nine months was RMB 27.223 billion, up 75.31% year on year; net profit attributable to shareholders was RMB 4.357 billion, up 141.65%. Source: https://stcn.com/article/detail/3488121.html

4.4 2025 Earnings Forecast (Disclosed on the Evening of 2026-01-29, Announcement No. 2026-011; Published in Newspapers on 2026-01-30)

Net profit attributable to shareholders for 2025 was expected to be RMB 5.55 billion–RMB 6.98 billion, up 357.47%–475.34% year on year; recurring net profit was expected to be RMB 5.80 billion–RMB 6.33 billion, up 252.97%–285.22%; and basic EPS was expected to be RMB 0.77–RMB 0.97 per share. Consolidated revenue was expected to be approximately RMB 38.0 billion, up approximately 68%, while operating cash flow was expected to increase by more than 70%. The changes were attributed to multiple hit products, including Whiteout Survival, ranked first among overseas products, and Kingshot, ranked third; domestic Dotdot Interactive titles including Endless Winter and Kingdom Adventure; and year-on-year profit growth of more than 30% at Shengqu Games. The announcement stated that the figures had not been pre-audited by the accounting firm and were subject to the final annual report. Sources: https://paper.cnstock.com/html/2026-01/30/content_2175722.htm; https://www.stcn.com/article/detail/3620365.html. CLS estimated Q4 net profit at approximately RMB 1.193 billion–RMB 2.623 billion by subtracting the first-nine-month net profit of RMB 4.357 billion; this was a media calculation, not a company figure. Source: https://finance.sina.cn/2026-01-29/detail-inhiyrwf4223168.d.html

4.5 2026 Interim Report (Disclosed on 2026-08-28)

Revenue was RMB 22.117 billion, up 28.53% year on year; net profit attributable to shareholders was RMB 4.503 billion, up 69.51%; recurring net profit was RMB 4.303 billion, up 66.40%; net operating cash flow was RMB 4.497 billion, up 14.78%; basic EPS was RMB 0.62; and weighted ROE was 13.87%. 2026Q2 revenue was RMB 11.107 billion, up 22.56% year on year and 0.87% sequentially; 2026Q2 net profit attributable to shareholders was RMB 2.475 billion, up 89.47% year on year and 22.10% sequentially. Underwriting and research institutions, including Changjiang, Guotai Haitong, Kaiyuan, Soochow and Huatai, generally judged that earnings were “in line with expectations”. Sources: China Securities Journal (2026-08-28) and multiple broker reports dated 2026-08-28 to 2026-09-07.

4.6 Implementation of 2025 Profit Distribution: RMB 0.06 per Share

The 2025 distribution was RMB 0.06 per share before tax. The record date was May 28, 2026, and the ex-dividend date was May 29, 2026. The implementation announcement was issued on May 22, 2026. Source: http://emweb.securities.eastmoney.com/CompanyBigNews/Index?type=web&code=SZ002602

4.7 2026 Interim Profit Distribution Proposal: RMB 0.08 per Share

The company proposed a cash dividend of RMB 0.08 per share before tax, equivalent to an estimated total dividend of approximately RMB 587 million and approximately 13% of net profit attributable to shareholders. This was the company’s first interim dividend. Sources: Changjiang Securities report (2026-09-07); Guohai Securities report (2026-08-29). The proposal remains subject to approval at the second extraordinary general meeting of shareholders in 2026 on September 14, 2026.

4.8 Share Repurchase Plan (November 2025): RMB 500 Million–RMB 1.0 Billion for Cancellation and Capital Reduction

The plan was approved at the 15th meeting of the sixth Board of Directors on November 12, 2025 and at the fifth extraordinary general meeting of shareholders in 2025 on November 28. A-shares would be repurchased through centralised bidding. The total repurchase amount was set at RMB 500 million–RMB 1.0 billion, inclusive; the repurchase price would not exceed RMB 28.77 per share; the term would not exceed 12 months from shareholder approval; and the repurchased shares would be cancelled and the registered capital reduced in accordance with the law. The announcement “Announcement on the Chairman’s Proposal for the Company to Repurchase Shares” was issued on November 13, 2025. Source: https://data.eastmoney.com/notices/detail/002602/AN202511281790086539.html (Announcement No. 2025-076). As of these research notes, the latest cumulative number and amount of shares repurchased had not been cross-checked against a progress announcement.

4.9 Special Loan Commitment for Share Repurchases (Announcement of 2025-11-26)

On November 26, 2025, the company announced that it had obtained a special loan commitment from a financial institution for share repurchases. Sources of repurchase funds included the special loan. Source: https://q.stock.sohu.com/cn/002602/bw_34.shtml

4.10 Change in the Purpose of Historically Repurchased Shares and Cancellation (December 2025)

The 16th meeting of the sixth Board of Directors on December 5, 2025 and the sixth extraordinary general meeting of shareholders in 2025 on December 22 approved the change in the purpose of 1,280,000 shares repurchased under the 2022 repurchase plan from “equity incentives/employee share ownership or capital reduction” to “cancellation and reduction of registered capital”. Following cancellation, total shares decreased from 7,371,962,322 to 7,370,682,322. Sources: https://paper.cnstock.com/html/2025-12/23/content_2161199.htm; https://paper.cnstock.com/html/2025-12/06/content_2154438.htm

4.11 2026 Employee Share Ownership Plan (Draft, Disclosed on 2026-08-28)

The plan covers core employees of Dotdot Interactive and Century Games, with no more than 200 participants. It proposes to hold no more than 27.5283 million repurchased shares, equivalent to approximately 0.37% of total shares. Total funding would not exceed RMB 191 million, and the transfer price would be RMB 6.93 per share, equivalent to 50% of the average share price over the trading day and 60 trading days preceding publication of the draft. Shares would come from the special repurchase account. The plan would have a term of no more than 36 months and a lock-up period of 12 months.

Company-disclosed performance targets are as follows: in 2026, combined revenue of Dotdot Interactive and Century Games of RMB 37.5 billion, with a trigger level of RMB 31.5 billion, and net profit of RMB 7.0 billion, with a trigger level of RMB 5.5 billion; in 2027, revenue of RMB 44.3 billion, with a trigger level of RMB 38.0 billion, and net profit of RMB 9.0 billion, with a trigger level of RMB 7.0 billion. The plan was included on the agenda of the second extraordinary general meeting of shareholders in 2026 on September 14. Sources: Guohai Securities (2026-08-29), CICC (2026-08-28) and Tonghuashun shareholder-meeting materials. These figures remain subject to the shareholder resolution.

4.12 Third Lock-Up Period of the 2022 Employee Share Ownership Plan to Expire on 2026-09-14

The plan covers 97,434,120 shares, representing 1.31% of total shares at the time. Source: Sina Finance announcement. The company had previously disclosed on September 12, 2025 that the second lock-up period of the 2022 employee share ownership plan had expired and the unlocking conditions had been met.

4.13 Cooperation with Korea’s NC to Bring Aion2 to Mainland China

In July 2026, Shengqu Games and NC signed a memorandum of understanding to jointly promote the launch and operation of the next-generation MMORPG AION2 in mainland China. According to research reports, AION2 generated more than KRW 100 billion in revenue during its first 46 days of public testing in South Korea. Sources: Huatai Securities (2026-09-02); Soochow Securities (2026-09-01).

4.14 Computing-Power/IDC Business Progress

The company continues to advance the Yangtze River Delta Artificial Intelligence Advanced Computing Centre and ecological industrial park in Songjiang, Shanghai, as well as a Shenzhen data centre. According to research reports, the Yangtze River Delta centre had delivered more than 10,000 racks cumulatively. Cloud-data services revenue in 2026H1 increased 192% year on year, with gross margin turning positive at 8.8%. Sources: Huatai Securities (2026-09-02); Kaiyuan Securities (2026-09-02).

4.15 Regulatory/Risk-Warning Matters (Historical Background)

On September 9, 2025, publicly disclosed trading information was triggered after the cumulative deviation in the share-price increase over three consecutive trading days reached 12% for an ST stock. On September 10, 2025, the company disclosed an announcement regarding abnormal fluctuations in its stock trading. Source: https://q.stock.sohu.com/cn/002602/bw_34.shtml. Accounting-error correction: the 2025 interim report retrospectively adjusted comparative figures for the prior period due to “accounting-error correction”. Source: Shenzhen Stock Exchange 2025 interim-report summary PDF.

4.16 Fund Flows (Media Data for Reference Only)

As of the September 11, 2026 close at RMB 15.56, the day’s net inflow of main funds was RMB 79.5301 million. Over the previous five trading days, main-fund net flows were: September 10, outflow of RMB 15.443 million; September 9, outflow of RMB 231 million; September 8, outflow of RMB 321 million; and September 7, outflow of RMB 194 million. Over the latest 90 days, 13 institutions issued ratings, including 10 buys and 3 outperform ratings, with an average target price of approximately RMB 20.0. Source: https://wap.stockstar.com/detail/RB2026091100049589 (Stockstar, 2026-09-11). Fund-flow data are from a third party; definitions of “main funds” differ across platforms and should be used only as directional reference.

4.17 Time Basis and Unverified Items

The “as of” date for this report is approximately September 13, 2026. The latest announcement was Announcement No. 2026-047 dated September 12, 2026, while the latest market and fund-flow data were from the September 11 close. Items not fully verified or subject to uncertainty include: (1) the cumulative number and amount of shares repurchased under the 2026 repurchase plan of RMB 500 million–RMB 1.0 billion at no more than RMB 28.77 per share; no latest progress announcement was obtained, so the plan must not be described as completed or unexecuted. (2) The complete list of announcements issued in September 2026, and whether shareholders, directors, supervisors or senior executives had sold or purchased shares, including block trades, negotiated transfers or changes in controlling-shareholder pledges, were not fully retrieved and require further verification. (3) Figures for the 2026 employee share ownership plan came from broker reports and company-announcement summaries and were consistent across sources, but whether they represent the final version depends on the shareholder-meeting resolution dated September 14, 2026. (4) The 2025 earnings forecast was unaudited and provided as a range; the audited annual-report figures prevail. Q4 net profit was back-calculated by media and is not a company figure. (5) Fund-flow data came from third parties, including Stockstar and Eastmoney, and should be used only as directional reference. Corporate-governance information primarily comes from Shanghai and Shenzhen Stock Exchange announcements and electronic editions of the four major securities newspapers and is considered relatively reliable. Broker reports cited here reflect the views of individual institutions rather than multi-institution consensus and are used only to supplement event descriptions, not as the basis for earnings forecasts. “2026H1” and “2026Q2” refer to the first half of 2026 and the second quarter of 2026, respectively, as commonly used in broker reports and should not be confused with annual figures such as “2025 annual report”. According to company-announcement wording, revenue has increased sequentially for 12 consecutive quarters since 2023, while net profit attributable to shareholders has more than doubled year on year for two consecutive years.

5. Share-Price Trend and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 11, 2026, Century Huatong closed at RMB 15.56. After rising rapidly from August 21 to September 7, the stock declined for several sessions and entered high-level consolidation or pullback confirmation. The closing price was below MA5, MA10 and MA20, indicating some overhead pressure, but remained above MA50, MA100 and MA200. The self-calculated Bollinger middle band was approximately RMB 14.55, indicating that the medium-term trend had not been fully broken. RSI was neutral and MACD remained positive, but neither independently provided sufficient confirmation of a renewed short-term uptrend. Trading value and turnover declined from the active period of September 4–8. Main-fund data were positive on September 11, but flows had fluctuated materially in prior days. Investors should monitor whether the share price can reclaim RMB 15.80 with support from volume and sustained fund inflows.

5.3 Short-Term Outlook for the Coming Week (Scenario Analysis for Reference Only)

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

① Key Technical Levels

② Scenarios for the Coming Week (Subjective Weighting, Not Statistical Probabilities)

• Range-bound consolidation (relatively high subjective weighting, approximately 50%–60%; a subjective assessment based on the combination of technical conditions and liquidity, not a statistical probability): price range of approximately RMB 15.25–15.85. Trigger conditions include support around RMB 15.30–15.50, trading value remaining at approximately RMB 1.0–1.8 billion, repeated tests of RMB 15.80 without a decisive breakout, and no sustained rally or sharp decline in the gaming and media sectors.
• Weak decline (medium subjective weighting, approximately 30%; a subjective assessment based on the combination of technical conditions and liquidity, not a statistical probability): price range of approximately RMB 14.60–15.30. Trigger conditions include a close below RMB 15.30 with trading value expanding above RMB 1.8 billion, net outflows from large orders for two to three consecutive trading days, simultaneous weakness in the media and gaming sectors, or declining market risk appetite. If the MA50 area around RMB 15.00–15.20 is also broken on heavy volume, the correction could extend to RMB 14.50–14.70.
• Strengthening rebound (low-to-medium subjective weighting, approximately 20%; a subjective assessment based on the combination of technical conditions and liquidity, not a statistical probability): price range of approximately RMB 15.85–16.60. Trigger conditions include reclaiming RMB 15.80 and closing above it for several sessions, daily trading value expanding above RMB 2.0–2.5 billion, sustained net inflows from large and extra-large orders, and simultaneous strength in the gaming and media sectors or a clear incremental catalyst. Only if sustained volume accompanies a move near RMB 16.30 and the September 7 phase high of RMB 16.58 is broken could the technical pattern shift from rebound repair to a renewed attack on the previous high.

③ Fund-Flow and Liquidity Background

As of September 11, 2026, turnover was 1.35% and trading value approximately RMB 1.426 billion, within the range of ordinary recent trading days and materially below the RMB 2.0–4.6 billion seen during the rapid rally from September 4 to September 8. Recent turnover was approximately 0.71%–4.43%; ordinary-day trading value was approximately RMB 700 million–RMB 1.5 billion, while clearly active or trending sessions generated approximately RMB 2.0–4.6 billion. Current liquidity remains adequate and the stock is not an extreme low-liquidity name that is difficult to enter or exit.

As of June 30, 2026, the number of shareholders was 163,255. The top 10 shareholders accounted for approximately 37.73% of total shares, and the top 10 free-float shareholders accounted for approximately 33.88% of free-float shares. The top 10 shareholders included Wang Ji, Linzhi Tencent Technology Co., Ltd., Hong Kong Securities Clearing Company, investment partnerships and multiple funds. ChinaAMC CSI Animation & Gaming ETF held approximately 80.405 million shares, representing 1.09% of total shares. This shareholder-structure data came from the quarter ended June 30, 2026 and lagged September 11 by more than two months. Current holdings may have changed and should not be treated as real-time. Actual share distribution is influenced jointly by major shareholders, related parties, Hong Kong Securities Clearing and fund holdings; changes in concentration should be assessed using the latest disclosures and trading volume.

A measurable volume-confirmation signal would be two consecutive trading days with trading value above RMB 2.0–2.5 billion, combined with a close above RMB 15.80 and net inflows from large or extra-large orders. This could indicate renewed short-term capital participation and a stronger probability of a valid breakout. Conversely, a break below RMB 15.30 accompanied by increased trading value and net outflows would indicate heightened correction pressure.

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

• Observe whether the RMB 15.30–15.55 support zone attracts buying; do not equate an intraday break on a single day directly with a trend reversal. This is an observation framework, not a trading instruction.
• Observe the RMB 15.75–16.30 resistance zone, particularly whether volume expands around RMB 15.80 and RMB 16.30. This is an observation framework, not a trading instruction.
• Observe whether trading value expands from approximately RMB 1.4 billion to above RMB 2.0–2.5 billion and remains elevated for at least two trading days. This is an observation framework, not a trading instruction.
• Observe whether large- and extra-large-order flows shift from a single-day inflow to sustained net inflows. This is an observation framework, not a trading instruction.

The above scenario analysis is based on September 11, 2026 closing data and calculations using historical prices and technical indicators. Short-term share prices may also be affected by news, fund flows, the broader market and other factors. Technical indicators have inherent lag and limitations. This analysis does not guarantee future 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 Structure and Competitor Analysis

6.1 Industry Overview

The company is classified under “software and information technology services”, while its actual core business is internet gaming, which accounted for 95.62% of revenue in 2025, supplemented by AI cloud data and automotive-components manufacturing. The gaming industry experienced strong overseas growth in 2025. The company’s overseas revenue reached RMB 22.219 billion, or 58.63% of revenue, up from 50.26% in 2024, and became its largest revenue source for the first time, rising 95.46% year on year. According to Sensor Tower data cited by STCN and International Finance News, overseas revenue from Whiteout Survival rose 32% year on year to more than US$1.65 billion in 2025, retaining the top position in the overseas mobile-game revenue rankings. China’s iOS market revenue increased 128% to US$480 million for the year, while Kingshot ranked third among Chinese mobile games expanding overseas. Source: stcn.com (2026-05-08).

6.2 Competitive Landscape

• Overseas mobile games: The company is a leading “cultural exporter”, with Whiteout Survival retaining the top position in the overseas mobile-game revenue rankings and Kingshot ranking third among Chinese mobile games expanding overseas.
• Domestic Legend IP market: In 2023, the company reached cooperation with the co-owner of the relevant copyrights and signed the Legend 2 and Legend 3 Game Cooperation Agreement with ChuanQi IP Co., Ltd. in August 2023. The annual cooperation fee is KRW 100 billion, or approximately RMB 548 million. In 2024, the company integrated a Legend market exceeding RMB 20 billion through publishing, licensing and R&D. Sources: CLS and China Securities Journal 2024 annual-report summary.
• IDC/computing-power business: The Shanghai Songjiang Longrui Yangtze River Delta Artificial Intelligence Advanced Computing Centre and ecological industrial park, also known as the Tencent Yangtze River Delta AI supercomputing-centre project, has total project investment, including supercomputing servers, of RMB 45.0 billion and total floor area of approximately 354,000 square metres. The Shenzhen Yifeng Technology Guangming 5G Big Data Centre is another project. The company states that its IDC assets are located in the Yangtze River Delta and Guangdong-Hong Kong-Macao Greater Bay Area and form part of national computing-power hub nodes under the “Eastern Data and Western Computing” strategy. The RMB 45.0 billion figure refers to total project investment including servers, not the company’s own investment, and should not be confused with the latter. Sources: CLS and Eastmoney F10 core themes.
• Automotive-components business: The company is a Tier-2 supplier serving SAIC Volkswagen, SAIC-GM, FAW Group, Dongfeng Group, Guangzhou Honda and other traditional automakers, as well as BYD, Aito, Changan, XPeng and NIO among new-energy customers. It faces structural annual price-reduction pressure from automakers. Source: Eastmoney F10 core themes.
• Industry cost structure: Overseas user acquisition is conducted on Meta, Google, TikTok/ByteDance, Tencent Advertising and other platforms, while channels including Apple, Google, WeChat mini-games and Steam typically take approximately 30% of gross bookings. The company is a price taker in these areas.
• Industry risks identified by brokers: A sharp increase in user-acquisition costs and goodwill impairment.

6.3 Major Competitors

The core competitive factors in overseas mobile gaming are a hit-product matrix, user-acquisition efficiency and long-term operating capabilities. With a multi-product portfolio including Whiteout Survival, Kingshot and Tasty Travels, the company has a leading position in overseas mobile games. Sensor Tower data indicate that overseas revenue from Whiteout Survival exceeded US$1.65 billion in 2025 and that Kingshot ranked third among Chinese mobile games expanding overseas. In the value chain, the company occupies the midstream “R&D plus publishing and operations” position. Upstream user-acquisition costs and downstream channel revenue sharing are both relatively rigid, but hit products allow the company to achieve gross margins above 70% and operating cash flow above net profit; operating cash flow divided by net profit attributable to shareholders was approximately 1.53x in 2025. Compared with other A-share gaming companies, the company’s overseas sales ratio of 58.63% and overseas revenue as its largest source are distinctive. Automotive components, with gross margin of approximately 12%, and AI cloud data, with gross margin of 9.96% in 2026H1, together account for less than 5% of revenue and are low-margin supplementary businesses rather than the principal competitive focus. Specific financial data for comparable companies were not obtained in this search, so the comparison is based mainly on the company’s own structure and publicly available industry information and does not constitute a complete peer comparison. All data above are from the research notes; items not cross-checked are separately identified and should be verified against the latest annual report.

7. Risk Factors

• Rising user-acquisition costs: Selling expenses are the company’s largest cost item. Selling expenses reached RMB 14.512 billion in 2025, or 38.29% of revenue, mainly due to marketing and promotion. If traffic prices increase on Meta, Google, TikTok/ByteDance or other platforms, gaming margins could be directly compressed.
• Dependence on hit products and gross-bookings volatility: Revenue and profit are highly concentrated in gaming. The long lifecycle and continued monetisation of Whiteout Survival, Kingshot and Tasty Travels are important to earnings. If existing products decline or new products scale more slowly than expected, 2026 earnings forecasts could be revised downward.
• Channel dependence: Gaming depends materially on Apple, Google, WeChat mini-games, Android stores and Steam. These channels generally take a share of gross bookings, and the company has limited bargaining power regarding platform rules and revenue-sharing ratios. Policy changes or higher channel costs could affect revenue and profit.
• Goodwill impairment: Goodwill was RMB 11.837 billion at the end of 2025, representing approximately 26.6% of total assets and approximately 38.6% of net assets attributable to shareholders. If relevant gaming assets or acquired entities underperform, goodwill impairment could materially affect profit and net assets.
• Dependence on a single IP licensor: The Legend IP arrangement involves annual payments of KRW 100 billion, or approximately RMB 548 million, to ChuanQi IP Co., Ltd. Unfavourable changes in licensing terms, renewal arrangements or IP operating performance could affect Shengqu Games’ products and profit.
• Divergence in business structure: Automotive-components revenue was approximately RMB 1.623 billion in 2025 with gross margin of approximately 12% and faces annual price-reduction pressure from automakers. AI cloud data accounted for only 0.09% of revenue and remains low-margin. If gaming growth slows, the other businesses will be unable to provide an effective short-term offset.
• Overseas operating risk: Overseas revenue reached 58.63% of total revenue in 2025, increasing the company’s dependence on overseas markets, platforms and cross-border operations. Changes in regional market performance, channel environments or operating conditions could cause revenue volatility, while overall growth is sensitive to overseas product performance.
• Market and valuation volatility: As of September 11, 2026, the share price was RMB 15.56 after a rapid rise and pullback. The closing price was below MA5, MA10 and MA20. Institutional target prices were previously materially above the market price but have since been reduced, indicating substantial disagreement over earnings sustainability and valuation.

8. Conclusion and Outlook

The company’s future growth is expected to come mainly from long-lifecycle operation of hit products, succession within its multi-product matrix and a rising proportion of overseas revenue. Despite a high base, the company maintained revenue and profit growth in the first half of 2026, while Q2 net profit attributable to shareholders increased 89.47% year on year, indicating that product scaling and operating leverage are still being released. The employee share ownership plan is intended to cover core personnel at Dotdot Interactive and Century Games, with performance targets focused on the relevant businesses’ revenue and net profit. This provides a basis for monitoring the company’s incentive arrangements for overseas gaming teams and future product reserves. The cooperation with NC to bring AION2 to mainland China also provides a potential avenue for product expansion.

Looking ahead, whether earnings can reach sell-side forecasts of approximately RMB 8.6–9.2 billion in 2026 net profit attributable to shareholders will depend mainly on the ability of existing products such as Whiteout Survival and Kingshot to maintain gross bookings, the scaling of new products and user-acquisition efficiency. The company’s current valuation is below some early institutional comparable-company valuation anchors, but target prices have been lowered from earlier elevated ranges, indicating disagreement over growth sustainability and the central valuation level. Automotive components and AI cloud data remain supplementary businesses and are unlikely to replace gaming as the principal growth engine in the short term.

Key operating indicators to monitor include game gross bookings and overseas-revenue growth, the selling-expense ratio and return on user-acquisition spending, the sustainability of high gross margins, signs of goodwill impairment and the final execution of the share-repurchase and employee share ownership plans. Technically, the RMB 15.30–15.55 area and RMB 15.75–16.30 area represent reference zones for support and resistance, respectively. Future price performance should be assessed together with volume and sustained fund flows rather than on the basis of a single daily technical indicator.

Data Sources

• Century Huatong (002602)_Company Overview_Share Price_Real-Time Quotes_Charts_News_Research_Financials_FinScope-AI
• Century Huatong Listed Company Information
• Century Huatong (002602.SZ) - US Stocks
• Century Huatong (002602) - Company Overview
• Century Huatong (002602)
• Century Huatong (sz002602)
• ST Huatong: 2025 Interim Report Summary
• 002602, About to Remove the “ST” Designation! Important Progress in a Key Area
• Century Huatong (002602): Strong Multi-Product Matrix, Launches Interim Dividend and Employee Share Ownership Plan
• Century Huatong (002602)_Share Price and Market Data
• 002602 Century Huatong
• Century Huatong (002602): Joining the Ranks of Global Top-Tier Gaming Companies
• China Securities Journal - Zhejiang Century Huatong Group Co., Ltd.
• 002602 Century Huatong
• Century Huatong: A Flagbearer for Cultural Exports
• Century Huatong (002602): Multiple Hit Products and Overseas Leadership
• Century Huatong Encyclopedia Entry
• China Securities Journal - Zhejiang Century Huatong Group Co., Ltd.
• Century Huatong (002602.SZ) Core Themes
• Century Huatong: A Flagbearer for Cultural Exports
• Century Huatong: Two Overseas Gaming Hits Drive Strong Earnings Growth
• A-Share Gaming Annual Reports: Who Makes the Most Money?
• Financial Report Express: Century Huatong’s 2025 Net Profit Surged 362%
• Century Huatong’s 2025 Net Profit Attributable to Shareholders Rose 362%
• China Securities Research: Century Huatong 2025 Annual and 2026Q1 Review
• Century Huatong 2026H1 Review
• Hit Mini-Games Continue to Generate Revenue
• Century Huatong 2026H1 Financial Results
• Century Huatong: Revenue and Profit Growth, Global Gaming and AI
• Century Huatong (002602): Global SLG+X Leader
• Century Huatong: 2026H1 Net Profit Rose 69.51%
• Century Huatong: First Interim Dividend
• Century Huatong: 2026H1 Net Profit Rose 69.51%
• Century Huatong (002602) 2026H1 Review
• Century Huatong: Globalisation and AI Continue to Deliver
• Institutional Ratings - Sina Finance
• Century Huatong Share Price and Technical Analysis

This report was automatically retrieved, compiled and generated by AI based on publicly available information. Information is current to the September 11, 2026 close. Securities code: 002602; securities abbreviation: Century Huatong. Information may differ due to timing; official company announcements and authoritative data terminals prevail. 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.