37InteractiveEntertainmentNetwork

TechnologyGroupCo.,Ltd.

2025InterimReport(Summary)

August2025

PartIImportantNotes,TableofContentsandDefinitions

TheBoardofDirectors(orthe“Board”)aswellasthedirectorsandseniormanagementof37InteractiveEntertainmentNetworkTechnologyGroupCo.,Ltd.(hereinafterreferredtoasthe“Company”)herebyguaranteethetruthfulness,accuracyandcompletenessofthecontentsofthisReport,andshallbejointlyandseverallyliableforanymisrepresentations,misleadingstatementsormaterialomissionstherein.

ZengKaitian,theCompany’slegalrepresentative,andYeWei,theCompany’sChiefFinancialOfficer&BoardSecretary,herebyguaranteethatthefinancialstatementscarriedinthisReportaretruthful,accurateandcomplete.

AlltheCompany’sdirectorshaveattendedtheBoardmeetingforthereviewofthisReport.

PossiblerisksfacingtheCompanyandcountermeasureshavebeendetailedin“VIIRisksFacingtheCompanyandCountermeasures”under“PartIIIManagementDiscussionandAnalysis”herein,whichinvestorsarekindlyremindedtopayattentionto.

TheCompanyissubjecttothedisclosurerequirementsforlistedcompaniesengagedinsoftwareandITservices.

TheBoardhasapprovedaninterimdividendplanasfollows:basedonthetotalissuedsharecapital(exclusiveofsharesintheCompany’saccountforrepurchasedshares)onthedateofrecord,acashdividendofRMB2.10(taxinclusive)per10sharesisplannedtobedistributedtoalltheshareholdersoftheCompany,withnobonusissuefromeitherprofitorcapitalreserves.

TableofContents

PartIImportantNotes,TableofContentsandDefinitions..................................................................................

PartIICorporateInformationandKeyFinancialInformation............................................................................

PartIIIManagementDiscussionandAnalysis.........................................................................................................

PartIVEnvironmental,SocialandGovernanceInformation...........................................................................

PartVShareChangesandShareholderInformation.........................................................................................

PartVIFinancialStatements......................................................................................................................................

PartIICorporateInformationandKeyFinancialInformation

ICorporateInformation

IIContactInformation

IIIKeyFinancialInformationIndicatebytickmarkwhetherthereisanyretrospectivelyrestateddatuminthetablebelow.

□Yes?No

IVAccountingDataDifferencesunderChina’sAccountingStandardsforBusinessEnterprises(CAS)andInternationalFinancialReportingStandards(IFRS)andForeignAccountingStandards

1.NetProfitandEquityunderCASandIFRS

□Applicable?NotapplicableNodifferencefortheReportingPeriod.

2.NetProfitandEquityunderCASandForeignAccountingStandards

□Applicable?NotapplicableNodifferencefortheReportingPeriod.VNon-recurringprofitsandlosses

?Applicable□Notapplicable

Unit:RMB

Particularsaboutothergainsandlossesthatmeetthedefinitionofnon-recurringprofitsandlosses:

□Applicable?NotapplicableNosuchcasesfortheReportingPeriod.ExplanationofwhytheCompanyreclassifiesasrecurrentanon-recurringprofitsandlossesitemlistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—Non-recurringProfitsandLossesItems:

□Applicable?NotapplicableNosuchcasesfortheReportingPeriod.

PartIIIManagementDiscussionandAnalysisIPrincipalOperationsoftheCompanyintheReportingPeriod(I)Industryreview

1.GrowthinindustryscaleanduserbasecontinuedtounlockthepotentialofthegameindustryAccordingtotheChina’sGameIndustryReportfromJanuarytoJune2025releasedbytheGamePublishingCommitteeofChinaAudio-videoandDigitalPublishingAssociation(CADPA),duringthefirsthalfof2025,theactualsalesrevenueofthedomesticgamingmarketreachedRMB168,000million,representingayear-over-year(YoY)increaseof14.08%;andthenumberofgameusersapproximated679million,aYoYincreaseof0.72%.Bothfigureshavehitrecordhighs.

Inrecentyears,themini-gamesegmentcontinueditsexplosivegrowth,withseveraloutstandingproductsemerging.Thesegamesexpandedintopreviouslyuntappeduserdemographicswithinexistingapplicationscenarios.Theiraccessibleentrypointsmorepreciselyandeffectivelyattractedtargetplayers,whilefragmentedgameplayandlightweightuserexperiencesintroducedmorecasualgamingmodes.Thesefeaturesmetusers’demandforlight,fragmentedentertainmentandbroughtnewgrowthpotentialtothegamingindustry.Inthefirsthalfoftheyear,theactualsalesrevenuefromdomesticappletgamesamountedtoRMB23,276million,aYoYgrowthof40.2%.FromJanuarytoJune2025,theself-developedgamesinChinageneratedUSD9.501billioninoverseasmarketrevenue,aYoYincreaseof11.07%.TheUnitedStates,Japan,andSouthKorearemainedtheprimarytargetmarketsforChinesemobilegamesabroad,withrespectivesharesof31.96%,16.20%,and7.47%.Additionally,thecombinedmarketshareofGermany,theUnitedKingdom,andFrancewas8.78%,makingEuropeakeyregionforChinesegameexports.Amongthetop100self-developedmobilegameswiththehighestoverseasrevenue,strategygames(includingSLG)accountedfor43.33%,rankingfirst,followedbyrole-playinggameswitha10.02%share,slightlydowncomparedtothesameperiodlastyear.Shootinggamesrankedthirdwithashareof8.85%,showingaslightYoYincrease.

Inthefirsthalfof2025,drivenbypolicysupport,asoundecosystem,andtechnologicalinnovations,theChinesegameindustryshowedsteadygrowth.Theindustryfocusedonthedevelopmentandinnovationofhigh-qualitygames,comprehensivelyenhancingproductqualitywhileacceleratingglobalexpansion.Theindustryscalecontinuedtogrow,economicpotentialcontinuedtobereleased,andstrongmomentumforhigh-qualitydevelopmentwasinjected.

2.Policyguidancedrovehigh-qualitydevelopmentandmulti-dimensionalexplorationof"Games+"integration

InMarch2025,theGeneralOfficeoftheCPCCentralCommitteeandtheGeneralOfficeoftheStateCouncilissuedtheSpecialActionPlanforBoostingConsumption,proposingto“strengthenconsumptionbrandleadership.Focusoncommerce,logistics,cultureandtourism,andotherservicesectors,andformulatetargetedpoliciestoenhanceservicequality.DevelopmoreChineseservicebrands.IntegrateoutstandingtraditionalChinesecultureintoproductdesign,supportthedevelopmentoforiginalintellectualproperty(IP)brands,promoteconsumptionofanimation,games,e-sportsandtheirderivativeproducts,andexpanddomesticandinternationalmarketsforfashionabledomesticbrands”.InApril2025,theMinistryofCommerce

issuedanoticetitled“WorkPlanforAcceleratingthePromotionoftheComprehensivePilotProgramforExpandingOpening-upoftheServiceIndustry”,whichproposedthedevelopmentofgameexportsandencouragedafullindustrialchainlayoutfromIPcreationtogameproduction,distribution,andoverseasoperations.InMay2025,GuangdongProvincepublishedSeveralPolicyMeasuresforPromotingHigh-QualityDevelopmentofGuangdong’sOnlineGameIndustry,whichfocusedonsupportingoriginalhigh-qualitygames,technologicalinnovation,optimizingthebusinessenvironment,establishingindustrialclusters,improvingsupportsystems,andstrengtheningservicesupportmechanismstopromotethehigh-qualitydevelopmentofGuangdong’sonlinegameindustry.Inresponsetonationalpolicies,theCompanyhasearnestlyimplementedmanagementrequirements.ItdelvedintotheessenceoftraditionalcultureingameR&Dandoperationalstrategies.Andithasactivelysoughttointegrateculturalsignificanceintoplayerexperiencesandapplyinnovativetechnologies.Byimplementinga"Games+"model,theCompanyaimstoachievemutualempowermentofculturalandindustrialvalue,andtopromotethetraditionalChinesecultureacrosstheworld.

Forexample,duringtheReportingPeriod,undertheguidanceoftheGuangdongProvincialDepartmentofAgricultureandRuralAffairs,theCompanyactivelyrespondedtothelycheeinitiativeunderthe“Hundred-Thousand-TenThousandProject”.Usingdigitalmethodstounlocktheculturalandcommercialpotentialoflychee-themedcontent,theCompanycreativelyincorporatedlycheeculturalelementsintogamessuchasTradingLegend(叫我大掌柜),BonkBonkTribe(时光大爆炸),MyMemoryShop(时光杂货店),andNobody'sAdventureChop-Chop(寻道大千),developingacrossovereditiontitled“YouLiQuanQiu(游荔全球)”.Byaggregatingin-gametraffic,theinitiativehelpedexpandsaleschannelsforlocallycheefarmers,enablingGuangdonglycheestoreachtheglobalstagethroughthe“Games+”digitalapproach.Furthermore,theCompanyactivelyexploredthe“Games+”integrateddevelopmentmodelof“technology+culturaltourism”.TheCompanyhascombinedthevirtualcharacterandreal-worldculturaltourismscenariostofacilitatethepromotionofculturaltourismincitiessuchasGuangzhou.Forexample,duringtheReportingPeriod,theCompanydevelopedthedigitalproductMyIntangibleCulturalHeritageTreasure:ACulinaryJourney,whichpresentedtherepresentativetraditionalculinarycraftsmanship,suchas

poonchoi(anauspiciousone-potdishservedinaverybigpot)andyumcha(CantonesetraditionofbreakfastorbrunchinvolvingChineseteaanddimsum),throughengaginggameinteractionsandgraphicalprogramming.Thisapproachsparkedinterestindiscoveringintangibleculturalheritagesandculturaldepth.Furthermore,atthe“Guangzhou:TheCapitalofGourmet”brandlauncheventorganizedbytheGuangzhouMunicipalAdministrationforMarketRegulation,theCompany’svirtualcharacter,“CongMei”,becamethebrandambassador,showcasingthecharmofGuangzhou’sfoodcultureinalivelyandinteractivemannerandbringingthebrandstoryof“Guangzhou:TheCapitalofGourmet”tolife.

AsAItechnologycontinuestomature,thedevelopmentofgamesinsyncwithAIhasbecomeincreasinglyprominent.TechnologicalinnovationinAIisincreasinglyseenasakeyfactorintheglobalcompetitivenessofproducts.TheCompanyadherestotechnology-driveninnovation,exploresthepotentialfordeepintegrationofAIandotheremergingtechnologieswithitsbusiness,andpromotesorganicinnovationcapabilities.In2025,theCompanybecameoneofthefirst“CityPartners”ofGuangzhouasadesignated“SuperPartner”,furtherdeepeningitscollaborationwiththelocalgovernmentandexpandingpartnershipopportunitiestoco-createanewblueprintforthedevelopmentofGuangzhou’sdigitaleconomy.TheCompanywilllaunchaspecialversionofTradingLegend(叫我大掌柜)called“NationalGamesGuangzhou”and,relyingonthein-housegaming-specificlargelanguagemodel“XiaoQi”,applygenerativeAItechnologytoallowplayerstojointheCantoneseliondanceinthedigitaltwinofGuangzhou,experienceCantoneseyumchaculture,andexploreonlinereproductionsofculturallandmarkssuchastheFiveRamsStatueandChenClanAncestralHall.Playersfromaroundtheworldwillbeabletoenjoya“cloudtourofGuangzhou”fromtheirhomes.Additionally,theCompany’svirtualcharacter“CongMei”willactasasmartcityassistant,providingservicessuchasticketing,venueguides,andrecommendationsforculturaltourismattractionsinGuangzhouduringthe15thNationalGames.

TheCompanyhasremainedfocusedonitscorebusiness,deepenedits"integrationofR&Dandoperation"strategy,andcontinuedtoenhanceitscapabilityofproducingqualitygames.Weexplorepossibilitiesofintegratingtechnologyintoourbusinessbyleveragingresourcesbothwithinandoutsidetheentertainmenttechnologydomain.Withsteadystrides,wehaveadvancedhigh-qualityandsustainablebusinessdevelopment,dedicatedtoofferingthepublicawealthofpremiumculturalcontent.(II)TheCompany’sprincipaloperationsandproducts

TheCompanyspecializesinthedevelopmentandpublishingofgamesforglobalplayers,withtheexcellentgamedevelopmentbrand“ThreeSevenGames”,aswellasprofessionalgamepublishingbrands“37Mobile”,“37GAMES”and“37Online”.TheCompanypreciselygraspedtheindustrydevelopmenttrends,

madecontinuousimprovementsinoperation,andremainedatopperformerintheindustry,whileadheringtothe"boutiqueization,diversificationandglobalization"strategy.FortheReportingPeriod,theCompanyrecordedoperatingrevenueofRMB8.486billion,andanetprofitattributabletoitsshareholdersofRMB1.4billion,aYoYincreaseof10.72%.

1.Continuouslyenhancingthelong-termoperationofdiverseproductsInresponsetoindustrytrends,theCompanyhasconsistentlyadheredtothe"diversification"strategy,understandingthedemandsofdiverseuserbasesandcontinuouslyexpandingitsuserbase.Bytappingintonewmarketsandnurturingnewgrowthdrivers,wehavecontinuouslypushedbacktheboundariesofourgamegenres.Inadditiontodelvingintotheexistingfourprimarygenres:massivemultiplayeronlineroleplayinggames(MMORPGs),strategygames,gachagames,andbusinesssimulationgames,wehavedevelopedmorediverseandlightweightgamestoprovidediversifiedplayerexperiences.DuringtheReportingPeriod,theCompany’sgloballypublishedmobilegamesachievedpeakmonthlygrossbillingofapproximatelyRMB2.2billion.

Inearly2025,severaloftheCompany’sproducts,includingBonkBonkTribe(时光大爆炸)andLootbornWarriors(英雄没有闪),werelaunchedandquicklygainedpopularityamongplayers.Amongthem,thetimeprogressionsimulationgameBonkBonkTribe(时光大爆炸)achievedfirstplaceontheiOSfreeappchartuponitsreleaseinJanuary,anditssubsequentappletversionquicklyrankedfourthontheWeChatmini-gamebestsellerlist.Similarly,thevertical-screen,side-scrollingidleARPGlootergame,LootbornWarriors(英雄没有闪),quicklyenteredthetopfiveontheiOSbestsellerlistafterthereleaseofitsappversion,anditsappletversionalsotoppedtheWeChatmini-gamebestsellerchart,demonstratingimpressiveperformance.

37InteractiveEntertainment

InJuly2025,theCompanybeganpublictestingforTheSoulLand:LieHunShiJie(斗罗大陆：猎魂世界),aself-developedgamebasedonthenovelandanime,SoulLand,whichreceivedboththenovelandanimelicenses.Thisproduct,thefirst3DrealisticMMORPGbasedontheIP,theSoulLand,fullyimplementedtheCompany’sstrategyofboutiqueization,offeringasmoothexplorationexperienceinanexpansiveopenworld.ByblendingChineseandWesternartstyles,itshowcasestheinclusivenessanddiversityofChineseculture,andcreatesaSoulLanduniversewithculturalfusionacrosstimeandspace.Thegamehadgarneredovertenmillionpre-registrationsbeforeitslaunchandquicklyascendedtothetopoftheiOSfreeappcharts,performingexcellentlyandbecominganotherbenchmarkfortheCompany’sdeepinvolvementintheMMORPGsector.

DuringtheReportingPeriod,theCompanycontinuedtostrengthenitsadvantageoflong-termoperation,withseveralofitsexistingproductsmaintainingstrongvitalityandpotential.Forexample,theChinese-stylesimulationgameNobody'sAdventureChop-Chop(寻道大千)achievedmultiplebreakthroughsinitscollaborativemodels,includingpartnershipswiththepopularChinesecomic—BattleThroughtheHeavens(斗破苍穹)—andMeituanforanimmersiveconsumerexperience,collaborationwiththefantasyclassicIP,ShenMu(神墓),anddeepinvolvementintheWeifangInternationalKiteFestivaltoshowcasetraditionalculture.Duringitssecondanniversary,thegamepartneredwiththenationallypopularIP,CalabashBrothers(葫芦兄弟),focusingonuseroperationstoboostgamerevenue.Furthermore,thegamelaunchedalycheeaidprogramforfarmers,usingthegameasaplatformtofulfillcorporatesocialresponsibility.Throughthedeepintegrationof“classicIP+regionalculture+publicwelfareactions”,thegamesuccessfullyestablishedanewmodelforcross-sectorcollaborationinthegameecosystem.

DuringtheReportingPeriod,theCompany’smodern-themedsimulationgameMyMemoryShop(时光杂货店)operatedsteadily.Byadaptingtomarkettrendsthroughcontinuousinnovationandbreakthroughs,thegameadoptedamoreflexiblego-to-marketstrategy.ItdevelopedamorecomprehensiveuserengagementmodelthroughIPcollaborations,publicwelfarecampaigns,andcitytours,suchascollaborationswithclassicfilmIPs,suchasAChineseOdyssey(大话西游)andintroducingacreativeworldviewof“ancientcharactersinthemodernworld”.Theseeffortsstrengthenedtheconsistencyofonlineandofflinecontentoperations,effectivelyprolongingthegame’slifecycleandfurthersolidifyingtheCompany’slong-termoperationstrengthinthebusinesssimulationgenre.

DuringtheReportingPeriod,theCompany’sself-developedgachamobilegameSoulLand:ClashofSpirimasters(斗罗大陆：魂师对决)launchedthe“SpeedServer”concept,whichsignificantlyimprovedtheuserexperiencebyacceleratingearly-stagegrowthandenrichingin-gamerewards.ItalsoinitiatedacollaborationwithCantoneseculture,incorporatingintangibleculturalheritagessuchasCantoneseembroideryandCantoneseoperatohelppromotetraditionalChineseculturethroughitsimmersivegamepresentation.Thisencourageduserre-engagement,stabilizeddailyactiveusers,andfurtherprolongedthegame’slifecycle.

DuringtheReportingPeriod,themobilegameFanRenXiuXianZhuan:RenJiePian(凡人修仙传：人界篇)launcheditsanniversaryversion“ShuangDaoGongRan”(双道共燃)inmid-2025.ThegamecollaboratedwithBattleThroughtheHeavens(斗破苍穹)tocreatea“Realm-BreakingDuel”cultivationconceptusingatrafficmanagement-centricapproach.ThishasnotonlyhelpedtheCompanyexpanditsactiveuserbasebuthasalsoallowedittocontinuouslyimprovethegame’secosystemandenrichplayers’experiences.ThegamehasthusbecomeaflagshipproductintheCompany’scultivation-themedMMORPGlineup.

TradingLegend(叫我大掌柜),aChinese-stylesimulationmobilegameoftheCompany,hassuccessfullyconvertednewplayersthroughanengagingandnostalgicmarketingapproachandintellectualproperty(IP)collaborations.Bycreatingalong-termecosystemwithafocusonuserinteractions,thisgamehasconsistentlysparkedaboom.DuringtheReportingPeriod,thegamepartneredwiththeanimatedseriesTrueCookingMasterBoy(厨神小当家)tolaunchanewcookingmaster-themedevent,ensuringstablelong-termgrossbilling.Tocelebrateitsfourthanniversary,thegameheldaspeciallivestreamconcertwhereplayerswereinvitedtosingandcelebratetogether.Additionally,theanniversaryupdateintroducedanew“GuardianSpirit”progressionsystemandlong-termseasonalgameplay,furtherenhancinglong-termplayerengagement,prolongingtheproductlifecycle,andreinforcingtheCompany’slong-termoperationcapabilities.

DuringtheReportingPeriod,ThreeKingdom:BaYe(霸业),oneofourself-developedstrategymobilegamesonthethemeoftheThreeKingdoms,launcheditsS7seasonandintroducedanewdungeonmode,TreasureHuntPath.Tomarkitssecondanniversary,thegamealsoheldanexclusive“June6Festival”celebration,releasingatag-teamhero,BanYuShuangShu,designedtoenhancelong-termgameplayexperienceandplayerretention.TheseeffortshavefurthercontributedtotheCompany’sexpertiseinlong-termoperationsofSLGgames.

TheCompanyconsistentlyadherestolong-termoperation,providingplayerswithmeticulousandcomprehensivelong-termservices.Itdeeplyintegratesthehighlightsofitsintellectualproperty(IP)tocontinuouslyinnovateintermsofreflowmethodsandactivities,consistentlyprolongingtheproductlifecycleandignitingproductvitality.ThisdemonstratestheCompany’sstrongcapabilitiesoflong-termgameoperation.

2.Continuouslyexploringglobalmarketopportunities,andpromotingthemutualempowermentbetweengamesandculture

DuringtheReportingPeriod,theCompanyachievedoverseasoperatingrevenueofRMB2.724billion,accountingfor32.10%ofitstotaloperatingrevenue.TheCompany,drawinguponitsyearsofexperienceinoverseasexpansion,hascontinuouslyexploreditsoverseasmarketsinlinewiththe"tailoredgames"strategy.Itcontinuedtoseekgrowthopportunitiesintheoverseasmarket,achievedregionalbreakthroughs,andcontinuedtorefineitslong-termoperationstrategy.WehaveconsolidatedourstrengthsinsectorssuchasMMORPGs,strategygames,gachagames,andbusinesssimulationgames,andopenedupopportunitiesinthecasualgamemarket,therebyboostingthesteadygrowthofouroverseasbusiness.

Puzzles&Survival,aphenomenalproductlaunchedoverseasbytheCompany,integrates“Match-3gameplay+SLG”.DuringtheReportingPeriod,thegamecontinuedtodeepenitsglobalcontentstrategyandcollaboratedwiththegloballyrenownedIPTransformers.Throughhighlyfaithfulcharacterintegrationandoriginalstorylines,thegameenhanceditsworldviewandimmersionforplayers.Withfeaturessuchasmulti-dimensionalinteractivegameplayandmultilinguallocalization,thegameeffectivelyengagedglobalcoreusers,furtherenhancingitsbrandinfluenceandconsolidatingitspositionasagenreleader.Sinceitslaunchin2020,thegamehasgeneratedoverRMB10billioningrossbilling,demonstratingtheCompany’sstrongcapabilitiesinIPintegrationandlong-termoperation.

TheCompanyhascontinuedtoexploreplayerpreferencesandmarkettrendswithinthestrategygamegenretoiteratehigh-qualityproductsthroughthemediversificationandgameplaydifferentiation.Forexample,themagicalmatch-3strategymobilegamePuzzles&Chaoshasattractedover15millionglobalplayerssinceitsofficiallaunch.DuringtheReportingPeriod,thegameintroducednewgameplayfeaturessuchastheDoomArenaLeagueandPhantomExpedition,whichhavebeenwellreceivedbyplayersacrossvariousoverseasmarkets.Itsoverseasrevenuehascontinuedtogrow,andthegamehasrankedamongthetop20best-sellingstrategygamesinmorethan80regionsworldwide.

TheCompanyadherestotheroleofan“advocatorofChineseculture”andactivelyexplorestheintegrationofgamesandculture.ItcreativelyincorporatestraditionalChineseculturalelementsintoitsgameproducts,usinggamesasaglobalculturalmediumtoshowcasetheuniquecharmofChineseculturetotheworld.DuringtheReportingPeriod,theCompanywasrecognizedasa“KeyCulturalExportCompanyofChinafor2025-2026”,anditsgameTradingLegend(叫我大掌柜)wasselectedasa“KeyNationalCulturalExportProjectofChinafor2025-2026”.Withitsengaginggameplayandstunningvisuals,thegamedeeplyintegratesChinesetraditionalculture,presentingtheprosperityofancientChinesecommercetoglobalplayers.TheCompanycontinuestoseekabalancebetweenEasternaestheticsandglobalnarratives,enablingChinesestoriestoreachglobalusersinamoreimpactfulwayandpositioninggamesasanewengineforculturalcommunicationandexchange.

3.Buildingarichproductpipelinefortheglobalmarket

TheCompanyfocusesonitscoregamingbusiness.Ononehand,itcontinuouslyexpandstheboundariesofself-developmentcapabilities,activelyexpandsintovariouscategories,anddevelopsproductswithaglobalperspective.Itcarefullyworksoutdetailsregardinggameplaydesign,artquality,musiceffects,etc.,continuestoinvestinproductiteration,userexperienceandotheraspects,andhasformedprofessionallayoutsinMMORPGs,strategygamesandlightgames.Remaining"DedicatedtoMakingPremiumGames",ithasastrongpipelineofrefinedself-developedmobilegames.Ontheother

hand,basedonitsself-developedbrands,theCompanyconsistentlyprioritizeshigh-qualitycontentasitsstrategicdirection.Throughmulti-dimensionalapproachessuchasinvestmentempowermentandbusinesssupport,theCompanyhascarriedoutin-depthcollaborationswithreputablegamedeveloperssuchasEyuGameandYanquNetwork.ThisapproachhasallowedtheCompanytoaccumulateabundantexternalR&Dreserves,whichisconducivetoitsdiversifiedarrangementsforproductsupply.IntermsofIP,theCompanyhassecuredadaptationrightsforseveralIPsincludingBattleThroughtheHeavens(斗破苍穹),LordofMysteries(诡秘之主),andSoulLand(斗罗大陆),providingarichercontentfoundationforbuildingadiversifiedproductportfolio.

TheCompanyhasbuiltaportfolioofgamesacrossgenressuchasMMORPGs,strategygames,gachagames,andbusinesssimulationgames.Thesegamescoverdiversethemes,includingwesternfantasy,orientalfantasy,ThreeKingdoms,modernthemes,andancientthemes.Theseinclude:theJapaneseChibi-styleMMORPGCodeMLK(代号MLK),therealisticThreeKingdomsSLGQiMouSanGuo(奇谋三国),theAmericancartoon-stylesurvivalSLGCodeXSSLG(代号XSSLG),theorientalfantasySLGCodeGMSLG(代号GMSLG),thetraditionalChineseinkpainting-themedbusinesssimulationgameZhuiXu(赘婿),theorientalfantasyRPGCodeDouPo(代号斗破),andtheorientalfantasyRPGTheSoulLand:Zero(斗罗大陆：零).TheCompanyiscurrentlyacceleratingthereleasescheduleofitsreservedproducts,aimingtodeliveramorediversifiedgamingexperienceforplayers.Lookingahead,certainkeygamesinthepipelinearepresentedbelow:

4.Leveragingcutting-edgetechnologicaladvantagesandbusinessapplications

(1)ContinuousupgradestotheAIcapabilitysystemandthedevelopmentofacomprehensiveAIempowermentecosystembasedonaself-developedindustry-specificlargelanguagemodelAsoneoftheearliestgamecompaniesinChinatosystematicallyadoptAItechnologies,theCompanyplacesahighstrategicemphasisonthedeploymentandapplicationofbigdataandAItechnologies.Afteryearsoftechnologicalaccumulationandbusinesspractice,theCompanyhasestablishedanAIarchitecturecenteredontheAIcapabilityfoundation,whichcoverstheintelligentproductlayerandbusinessapplicationlayer,formingafull-linkAIempowermentsystemforgameR&Dandoperation.ThissystemcomprehensivelyenhancestheindustrializationleveloftheCompany’sgameR&Dandoperation.BuildingtheAIcapabilityfoundation:Basedondeepdataaccumulationfrombusinessscenariosandcomputilityinvestment,theCompanycontinuouslyconductsinternaltrainingandinferenceoptimizationonthemassive,high-qualitydataaccumulatedovertheyears,independentlydevelopingthegaming-specificlargelanguagemodel“XiaoQi”.TheCompany,using“XiaoQi”andincorporatinganadvancedexternallargelanguagemodelcluster,hasdevelopedmorethan40AIcapabilities.ThisAIcapabilityfoundationfullyempowersvariousgeneralandspecializedsystemsacrosstheCompany,followingthetechnologyiterationpathofchatbot/tool-copilot-agent-digitallabor.

ContinuousupgradestotheAIcapabilitysystem:Basedontheindustry-specificlargelanguagemodel“XiaoQi”,theCompanyhasestablishedthe“XiaoQi”AIagentplatform.Thisplatformcoversbusinessareassuchasmarketanalysis,productplanning,artdesign,developmentassistance,advertising,operationalanalysis,intelligentcustomerservice,andgeneralofficetasks.TheupgradedAIagentscangenerateimages,videos,and3DmaterialsthatmeettheCompany'sproductneeds,accuratelysupportadvertisingcampaigns,andperformexcellentlyincodegenerationandtextcreation,thusfullyempoweringgameR&Dandoperation.DuringtheReportingPeriod,theCompanycontinuouslyupgradedthecoreinterfaceandarchitecturesystemofthe“XiaoQi”AIagentplatform,anddevelopedmorevertical-domainAIagents.Subsequently,itplanstointroducemulti-agentcollaborationcapabilitiestosupportmorecomplexinternalcoordinationtasks.

(2)AIreshapesthegamepipelineforqualityandefficiencyenhancementacrossmultipledimensionsAtthebusinessapplicationlayer,theCompanyhasleveragedAItechnologytoachieveintelligentproductionandapplicationacrossvariouscontentformats,includingAI-multimodal,AI-text,andAI-smartapplicationscategories.

ConcerningtheAI-multimodalcategory,inthepublishingprocess,over80%ofthe2DartassetsusedbytheCompanyarenowgeneratedusingAItechnologyasasupport.DuringtheReportingPeriod,morethan500,0002Dimageswereproducedeachquarter.IntermsofAI-3Dgeneration,theCompanywasalsoanearlyadopteroftoolsand3Dmodeltraining,continuouslyincreasingtheproportionofAI-3Dapplications,withmatureuseofartassetssuchascharactersanditemmodels.AI-3Dassistedassetgenerationaccountsformorethan30%.IntheReportingPeriod,theeffectivenessofAI-generatedvideosbecameevident,withmorethan70%oftheCompany’sin-gameadvertisingvideosinvolvingAIintheirgeneration.

Inaddition,AI-textapplicationscenariosoftheCompanyhaveshowncontinuousimprovement,whilecomprehensiveapplicationssuchasAIadvertisingandAIdataanalysishavealsobeengraduallyimplemented.Forexample,alloftheCompany’sgameshaveintegratedAI-poweredcustomerservicetooffermoreefficient,intelligentserviceexperiencestoplayers.AIlocalizationtranslationsnowcover85%oftheCompany’soverseasgamesin18languageswithanaccuracyrateof95%.

IntermsoftheAI-smartapplicationscategory,AI-assistedcodegenerationhasalsobeenappliedtocodereview,eventcodegeneration,backendsystemcodegeneration,andautomatedtesting,improvingefficiencyby30%.Intermsofadvertising,adsplacedbyAInowaccountfor50%ofthetotaladcontent,increasingoveralladplacementefficiencyby70%.TheCompanyhasalsodevelopedanAI-poweredmaterialinfringementdetectionsystemtoprovideintelligentriskdetectionsolutionsforinternalteams,ensuringefficientmaterialreview,effectivelyidentifyingexternalmaterialinfringementissues,protectingtheCompany’sintellectualproperty,andsafeguardingoriginalcontentrights.

IntermsofR&D,AIalgorithmshavebeenemployedtocapturehigh-precisionandhigh-performancemotions,andthecapturefunctionforfacialexpressionshasbeenintroduced,addressingthepainpointssuchashighcostsandoverlylongperiodstypicallyidentifiedwithspecializedtraditionalmotioncaptureequipment.ThishasenhancedbothR&Defficiencyandquality.IntermsofAIbalancetesting,manyofourself-developedproductssuchasSoulLand:ClashofSpirimasters(斗罗大陆：魂师对决),ThreeKingdom:BaYe(霸业),TheSoulLand:LieHunShiJie(斗罗大陆：猎魂世界),andCodeMLK(代号MLK)havebenefitedfromtheAI-assistedstatbalancetestingfunctionwithimprovedtrainingefficiencyandaccessprocess,resultinginbetterplayerexperiencesandprolongedgamelifecycles.Furthermore,theCompanyhascontinuedtodeepenitsresearchinartisticresourcegenerationalgorithmsbasedonGenerativeAdversarialNetworks(GAN),StableDiffusion(SD),andNeuralRadianceFields(NeRF).Ithasbuiltanintelligentartassetgenerationplatformthatsupportsphysicalrenderingworkflows,anddevelopedfeaturessuchasanimationgenerationandmigration,aswellas3Dmodelgeneration,therebystreamliningthegamedevelopmentpipeline.

Internally,theCompanyestablishedan“AIEfficiencyCommittee”toimplementatop-down,AIinnovation-drivencorporateculturestrategyandpromoteAIapplicationsinallbusinesslinks.TheCompanyplacesgreatimportanceoncultivatingAItalent,activelypromotingAIlearningamongemployeesthroughinnovativeactivitiessuchasthe“21-DayAILearningChallenge”and“AIExpertProgram”certification.Theseeffortsaimtocomprehensivelyenhanceemployees’AIskills.Inparallel,theCompanyhascontinuouslyexpandeditsAI-relatedjobfunctionstobuildarobusttalentpipelinethatsupportsitsAIstrategy.Theultimategoalistodriveenterprise-wideinnovationthroughAIandinjectnewmomentumintoindustrydevelopment.

Ingeneralofficescenarios,theCompany’sAIassistant,basedonthelargelanguagemodelof“XiaoQi”,isextensivelyappliedinemployees’dailywork,comprehensivelyimprovingefficiency.Thisrepresentsanewlevelofintelligenttransformationincorporateoperation.Forexample,basedonitslargemodelXiaoQi,theCompanyhasdevelopedanefficientmeetingminutesassistantcapableofaccuratelyrecordingandintelligentlyanalyzingmeetingcontent.Thishassignificantlyimprovedmeetingefficiencyandcollaborationquality,reducedcommunicationcosts,andoptimizedinformationmanagement.

AstheCompanycontinuestopromoteAIapplications,AIreshapestheworkflowofeachbusinesslinkandimprovesthelevelofautomation.AsAItechnologiescontinuetodeepeninbusinessapplications,theoptimizationandupgradingofallbusinesspipelineshaveenabledteamstofocusmoreoncreativityandemotionalexpression.Withtheindustry’songoingtechnologicaliterationandinnovation,theCompanywillcontinuetoexploretheimplementationofadvancedAIcapabilitiesinreasoninganddecision-making,providingdeepersupportandassistancefortheefficientoperationofallstagesofthegamingbusiness.

(3)AIdrivesgameinnovations

SupportingGameProjectInitiation:Duringtheearlystagesofgameprojectestablishmentandnewversionupdatesofoperatingproducts,theCompanyutilizesAItechnologytoassistindesigninggamecharacters,combatscenarios,andgameitems.Thisoptimizescharacters,gameplayenvironments,animationeffects,andstyletestingoutcomes,therebyenhancingtheefficiencyofprojectapprovalandversionupdateprocesses.ExplorationoftheAI+GameTechnology:TheCompanycontinuestoimproveandoptimizetheinternalexplorationofthe"AI+game"technology,aimingtointegratemultimodalcontentgeneration,dataalgorithmmodelsandgamedevelopmenttoimproveR&Defficiency.Atthesametime,relyingonAIgenerationandpersonalizedrecommendations,itaccuratelygraspsuserneeds,providesanewinteractiveexperience,andbuildskeytechnologyreservesforcommercialproductsinthefuture.Also,compliancecapabilitiesarecontinuouslystrengthenedtoensurethecomplianceandsecurityoftechnologyapplications.Forexample,theCompanycontinuestoworkonusingAIGCtorecommendandgenerateplayer-preferredimages,elements,andgameplay,loweringthethresholdforcreationandenablingAI-poweredproductionofallgameelements,includingplot,art,programming,andmusic.Ontopofthat,theCompanyisworkingonnon-lineargamingexperiencethroughdiscriminativeAI.Basedonuserpreferences,AIisusedtogeneratecontentforplayersinrealtime,realizinga“oneplayer,onenarrative”model.

DevelopmentofaGeneralAISolutionforIn-GameHousingSystems:TheCompanyiscontinuouslyintegratingtechnologiessuchaslargelanguagemodels,AIvoice,andAImotioncapturetodevelopintelligentNPCsystemsandAI-poweredin-gamehousingsystems.ItisexploringtheconvergenceofgameswithUGCcontentcreation,aimingtoenableNPCstoperformautonomousbehaviorsbasedoncompoundreasoning,andtoprovideplayerswithemotionalcompanionshipandpersonalizedinteractiveexperiences.Playerscanenjoycharacterdevelopment,storyandscenedesign,itemcreation,andotherinnovativesocialinteractionexperienceswithinincreasinglyenrichedhousingsystems,layingatechnologicalfoundationformorediverseandpersonalizedgameplayinthefuture.

TheCompanyisactivelyexploringinnovativeapplicationsofAIingaming.Atpresent,itcontinuestoaccumulatetechnologicalreservesforfutureAIgameproductsthroughtechnologicalverificationandcapabilityaccumulation,whilebuildingacapabilityfoundationfortheimplementationofcommercialproductsinthefuture.Underthepremiseofensuredtechnologicalfeasibility,itexplorespathsfordeepintegrationbetweenAIandgamecontent,andfocusesonthepotentialofAIinenhancinggameplayandinteractiveexperience,withtheaimofdeliveringmoreimmersiveandpersonalizedgamingexperiencestousers.

5.Empoweringbusinessinnovationandsustainabledevelopmentthroughinvestment

BenefitingfromourpioneeringstridesintheexplorationofAIapplications,wehaveremainedopen-

mindedabouttransformationsinindustrytechnologiesandecosystems.Wehaveinsistedonasteadilyprogressivemanner,continuouslyiteratedandoptimizedinnovativetoolstoalignwiththeCompany'sbusinessdevelopment,anddeeplyintegratedadvancedtechnologiesandbusinessneeds.Theseeffortshavepromotedthelong-termdevelopmentoftheCompanyinthefieldofAI.

InresponsetotherapiditerationofAItechnologiesandapplicationsworldwide,theCompanykeepspacewithtechnologicaltransformationtrends.ItinvestsinlargelanguagemodelsandapplicationlayersandcontinuallyexplorestheapplicabilityofthesemodelsandAItechnologiestotheCompany’sR&Dandoperationline.Specifically,theCompanyhas,directlyorindirectly,investedinleadingcompaniessuchasZhipuAI,MoonshotAI,BaichuanAI,aiXcoder,DeepLangAI,Yahaha,Studio51,andDeepMirrorTechnology.Supportedbyfoundationallargelanguagemodels,theCompanystrivestounlockthepotentialofAIGCtoempowerdiverseverticalscenarios.Furthermore,theCompanyisactivelybuildinganindustrialchainof“AI+computility”.Tothisend,ithasinvestedinfirmssuchasiStar,CIX,TingyuTech,Huixi,HYQ,andEeasyTech.Theseinvestmentsaimtobuildanintegratedindustrialchainthatlinkscomputilityinfrastructure,largelanguagemodelalgorithms,andAIapplications,andpromotethecoordinationandintegrationoftheinvestedbusinessesandtheCompany’sownbusinesses.

TheCompanycontinuouslymonitorshardwareandtechnologicaladvancements,withastrongfocusonhard&coretechnology,andemphasizesbusinesssynergy.Ithasinvestedincultural,entertainment,andhigh-techsectors,suchascomputility,opticaldisplays,extendedreality(“XR”)devices,culturalandentertainmentcontent,semiconductorsandmaterials,spatialcomputingengines,AI,newsensingtechnology,andAIGC-basedsocialplatformsforgames.TheCompany’sgoalistodrivebusinessinnovationthroughinvestments,therebyforgingcompetitiveedgesintheentertainmenttechnologysector.

(III)TheCompany’sprincipaloperationsandbusinessmodels

TheCompanyisprincipallyengagedinthedevelopment,publishing,andoperationofonlinegames(mostlymobileandbrowsergames).ThebusinessmodelsoftheCompany’sonlinegamesmainlyincludeindependentoperationandthird-partyjointoperation.

Undertheindependentoperationmode,theCompanyobtainsthelicensesofgamesthroughindependentR&Dorbeinganoperatorofothergames,andpublishesandoperatestheseproductsthroughitsownorthird-partychannels.TheCompanyisfullyresponsiblefortheoperation,promotionandmaintenanceofthegames;providingunifiedmanagementservicesforonlinepromotion,onlinecustomerserviceandtop-uppayment;andupdatinggamesalongwithgamedevelopersbasedonthereal-timefeedbackofusersandgames.

Underthethird-partyjointoperationmode,theCompanycooperateswithoneormoregameoperatorsorgameapplicationplatformstojointlyoperategames.Andtheaforesaidpartiesareresponsibleforthemanagementoftheirownchannels,includingoperation,promotion,therechargeandchargesystem,whiletheCompanyprovidestechnicalsupportservicesalongwithgamedevelopers.(IV)TheCompany’spresenceonthemarketandprimarygrowthdrivers

Focusingonculturalandcreativebusinessesbasedonthedevelopment,publishing,andoperationofonlinegames,theCompanyisacomprehensiveentertainmentproviderinChina’sA-stockmarket.ItisaKeyCulturalExportCompanyofChina,DemonstrationBaseforChina’sCulturalIndustry,CivilizedInstitutioninGuangdongProvince,andTop30CulturalEnterpriseofGuangzhou,andMSCIESGAA-ratedcompany,

amongothers.With“bringingjoytotheworld”asitsmission,theCompanyisdedicatedtobecominganexcellentandsustainableentertainmentprovider.TheCompanyhasbeensteadilyadvancingwiththedevelopmentstrategyof“boutiqueization,diversificationandglobalization”,andpromotinghigh-qualityandsustainabledevelopment.IICoreCompetitivenessAnalysisTheCompany’scorecompetitivenessremainedlargelythesameduringtheReportingPeriod.

1.Forgingaheadwithdetermination,theteamhasseizedmarketopportunitiesswiftlyTheCompanyhasbeendeeplyengagedintheculturalandcreativeindustryformanyyears.Itscoremanagementteamisdeeplyinvolvedinthefrontlineofbusiness,workinghardtogetherwithalltheemployees.Alwaysupholdingthespiritofmarathon-likeperseverance,theCompanyhasbeenforgingaheadwithbreakthroughs,aswellaspursuingbetterfinancialresultsandfastergrowthwhilemaintainingsoundoperation.Overtheyears,theCompanyhasdemonstratedkeenmarketinsight,seizingemergingopportunitiesintheindustrythrougharobustteamofskilledprofessionalsandscientificmanagementmechanisms.Anticipatingthe"shiftfromwebgamestomobilegames"initsearlystages,theCompanyspearheadedoverseasmarketpenetrationoveradecadeago.Presently,weremainalignedwiththetrendtowardsmini-games.Navigatingnumerousindustrytransitions,wehaveachievedsustainedgrowth.Throughoutthedevelopment,theCompanyhasconsistentlyemphasizedtalentcultivationandteambuilding.TheCompanyhasbuiltahigh-calibertalentpool.Throughascientifictalentpromotionmechanism,remunerationmanagementsystem,andperformanceincentivescheme,theCompanyinspiresemployeemotivationandcreativity.With"bringingjoytotheworld"asitsmission,theCompanyisadvancingtowardsthevisionof"becominganexcellentandsustainableentertainmentprovider".

2.StrengthsintheintegrationofR&Dandoperationhavebeenconsolidated,enrichingtheproductportfolioTheCompanyhascontinuouslyadvanceditsstrategyof"integrationofR&Dandoperation",deepeneditsdiversifiedproductportfolio,andestablishedarobustandefficientmultidimensionalproductsupplysystem.First,theCompanyhasconsistentlypushedbacktheboundariesofitsself-developmentcapabilities,delvedintocoreproductcategories,andadoptedaglobalperspectivetocreateacentralsupplylayerwithself-developedproductsatthecore.Second,throughinvestmentempowermentandbusinesssupport,theCompanyhasfostereddeeperpartnershipswithnumeroushigh-qualitydevelopersbothdomesticallyandinternationally,continuouslyaccumulatingdeeplycustomizedpremiumproducts.Third,bycollaboratingwithlong-termandstabledevelopers,theCompanyhasfurtherrefineditsproductofferings.Underthissupplysystem,theCompanyhasbuiltarobustproductsupplychain,continuouslyenrichedtheportfolioofhigh-qualityproductsanddrovesteadybusinessgrowth.

Withthe“integrationofR&Dandoperation”model,theCompanycanfullycombineitsstrengthsinproductR&Dandoperation.This,ontheonehand,facilitatesadeeperunderstandingofthemarketanduserdemandsbytheR&Dteam,therebyincreasingthesuccessrateofproductsunderdevelopment.Ontheother,throughclosecollaborationbetweenR&Dandoperationsteams,theCompanycanoptimizetheupdatesandpromotionsofalreadylaunchedproducts,thuseffectivelyachievinglong-termoperationandprolongingproductlifecycles.

3.Publishingcapabilitieshavebeencontinuouslyiteratedtofacilitatelong-termoperationfromaglobalperspectiveInresponsetotheever-evolvingglobalgamingmarket,theCompanyadherestoastrategyof“tailoredgames”foroverseasuserswithdiverseculturalbackgrounds,gamingpreferencesandpaymenthabits.Tailoredpromotionandoperationstrategiesareadoptedfordifferentcountries,regionsandgametypes.TheCompanyfocusesonpublishingdifferentgenresofgamesindifferentregions,andlocalizesgamecontentandpromotionalmaterialstoreflecttheculturalcharacteristicsofeachregion.Overtheyears,theCompany'spublishingteamhassuccessfullylaunchednumerousqualitygamesacrossdiversegenresandthemesinglobalmarkets.Duringthisjourney,wehavekeptabreastofthelatestmarkettrends,andaccordingly,innovatedourmarketingstrategies.Byemployingvariouscreativemarketingstrategies,suchascollaborationwithrenownedIP,celebrityendorsements,andimmersivestorytelling,wehaveestablishedalong-termecosystemrevolvingarounduserinteractions,thusfortifyingrobustpublishingbarriersandfacilitatingthelong-termoperationofmultipleproducts.

4.Technology-driveninnovationandbreakthroughstoembraceindustrytransformationAsoneoftheearliestgamingenterprisesinChinatosystematicallyadoptAI,theCompanyprioritizesinnovationandfostersanopenandinclusiveenvironmentforknowledgeexchange.BydeeplyintegratingbigdataandAItechnologiesintoitsbusinessoperations,theCompanyhasempoweredallaspectsofthevaluechain—fromproductdevelopmentandcontentproductiontopublishing,operationandassetaccumulation.Overtheyears,ithasaccumulatedvastamountsofdataandtechnologicaladvantages,continuouslyiteratingandoptimizingitsfull-cycledigitalintelligentproducts,upgradingitsgameindustrializationpipeline,andenhancingR&Dandoperationalefficiency.Inaddition,throughstrategicinvestmentintechnology,theCompanyisgraduallyestablishingapresenceacrosstheindustrychainspanningcomputinginfrastructure,largelanguagemodelalgorithms,andAIapplications.Thisenablesresourcesharingandtheleveragingofcomplementarystrengths,allowingtheCompanytostayattheforefrontoftechnologicaladvancementandbuildawin-winecosystem.

IIIAnalysisofPrincipalOperations

OverviewSeecontentsundertheheading“IPrincipalOperationsoftheCompanyintheReportingPeriod”.Year-over-yearchangesinkeyfinancialdata:

Unit:RMB

SignificantchangestotheprofitstructureorsourcesoftheCompanyintheReportingPeriod:

□Applicable?NotapplicableNosuchchangesintheReportingPeriod.Breakdownofoperatingrevenue:

Unit:RMB

Operatingdivision,productcategoryoroperatingsegmentcontributingover10%ofoperatingrevenueoroperatingprofit:

?Applicable□Notapplicable

Unit:RMB

CorebusinessdatarestatedaccordingtothechangedmethodsofmeasurementthatoccurredintheReportingPeriod:

□Applicable?NotapplicableBreakdownofthecostofsalesforprincipaloperations:

Unit:RMB

Anyover30%YoYmovementsinthedataaboveandwhy:

?Applicable□Notapplicable

1.Costofsalesofbrowsergamesdecreasedby66.26%YoY,primarilydrivenbythedecreasedgamelicensingfees.

2.Othercostsincreasedby178.45%YoY,primarilydrivenbytheincreasedcostoftechnicalservicecharges.

IVAnalysisofNon-principalOperations

?Applicable□Notapplicable

Unit:RMB

VAnalysisofAssetsandLiabilities

1.SignificantChangesinAssetComposition

Unit:RMB

MainlyduetotheincreasedprepaymentsforInternettrafficchargesandcopyrightmoneyasaresultofthelaunchofnewgamessuchasBonkBonkTribe(时光大爆炸)andLootbornWarriors(英雄没有闪)duringtheReportingPeriod

2.MajorAssetsOverseas

?Applicable□Notapplicable

3.AssetsandLiabilitiesatFairValue

?Applicable□Notapplicable

Unit:RMB

Contentsofotherchanges:

Otherchangeswereincurredbyexchangeratefluctuations,etc.SignificantchangestothemeasurementattributesofthemajorassetsintheReportingPeriod:

□Yes?No

4.RestrictedAssetRightsasattheEndoftheReportingPeriod

VIPrincipalSubsidiariesandJointStockCompanies

?Applicable□NotapplicablePrincipalsubsidiariesandjointstockcompanieswithanover10%effectontheCompany’snetprofit:

Unit:RMB

SubsidiariesobtainedordisposedofintheReportingPeriod:

?Applicable□Notapplicable

Otherinformationonprincipalsubsidiariesandjointstockcompanies:

None

VIIRisksFacingtheCompanyandCountermeasures

1.Changesinindustrypolicies,risksofviolationandcountermeasuresInrecentyears,theauthorityinchargehasattachedgreatimportancetothedevelopmentofgameindustry,madeaseriesofmajordecisionsandarrangementsandissuedaseriesofpoliciesandregulationstoguidetheindustrytodevelopinastandardizedandhealthyway.Forexample,clearnewstandardsandrequirementshavebeenputforwardforprotectionofminorsandanti-addictionofonlinegames.Furtherstrict

managementmeasureshavebeentakentopromotestandardizedmanagementofgameindustry.Atthesametime,informationsecurityandprotectionofusers'privacyhavedrawnmuchattentionfromthesociety.Inthelongterm,theregulationoftheonlinegameindustryisbecomingmoreandmorestandardized,whichisconducivetothehealthydevelopmentoftheindustry.Theenterpriseswithstandardizedoperationwillbenefitfromit.However,inthefuture,iftheCompanyfailstomakecorrespondingadjustmentstimelyinaccordancewithchangesinindustrypoliciesorhasadeviationinunderstandingmanagementregulationsinitsoperation,theremaybeariskthattheCompanywillbepunishedbyrelevantdepartmentsortheworkswillnotgoonlineasplanned,whichwillhaveasignificantnegativeimpactontheCompany'sbusinessdevelopmentandbrandimage.Inthisregard,theCompanywillstrictlyabidebyvariousindustrypolicies,rulesandregulations,activelyimplementrelevantrequirementsforindustrydevelopment,establishaninternalsoundqualitymanagementandcontrolmechanism,strengthenindustrypolicyriskmanagementcapability,andfullyreduceandavoidthebusinessriskscausedbychangesinindustrypolicies.

2.MarketcompetitionrisksandcountermeasuresTheonlinegameindustryisfacingincreasinglyfiercecompetitionasitgraduallymatures.Atthesametime,onlinegameusersarematuringwithhigherqualitydemandforgameproducts.Theindustryischaracteristicoffastproducttransition,limitedproductlifecycleandvolatileplayerpreferences,amongothers.IntensemarketcompetitionwillchallengetheCompany’sdevelopmentintermsofproductsandmarketchannels.

Inresponse,theCompanywillcontinuetoimplementthestrategyof"boutiqueization,diversificationandglobalization".Ontheonehand,itwillstrengthenitscorecompetitivenessofitsownbusiness,paycontinuousattentiontoself-researchinvestment,carryoutR&Dandinnovationinproductcreativity,gameplay,theme,artandtechnology,andkeepupwithindustrytechnologydevelopmenttrend;atthesametime,itwillmaintainclosecooperationwithexcellentdeveloperstoguaranteethesupplyofqualityproducts,andcontinuetoexpandgamecategoriesthroughindependently-developedandagencygamestodeepenthecompetitiveedgeof"integrationofR&Dandoperation".Meanwhile,theCompanywillspeedupthepaceofexporting,givefullplaytotheedgesofitinoverseasmarkets,facediversifiedoperationsofoverseasmarkets,deepenthecultivationofkeymarkets,andbroadenthecategoriesofgamesandincreasemarketshare.Inaddition,theCompanywilldigdeeperintooperationaldata,andtimelyadjustoperationalandR&Dstrategies,tomeetthecoredemandsofusers,furtherplaytheroleofnewideasofdigitalmarketingoperation,deepenthebusinessstrategyofmulti-channelmarketingandlong-termservice,andcontinuouslyenhancecorecompetitivenessinthemarket.

Facingthecurrentindustrialcompetitionpattern,thetop-performingenterprisehasobviousedgesintechnologyR&Dability,channeloperationability,productpromotionability,userscaleandmarketshare.TheCompanywillcontinuetoconsolidateandcementitscompetitiveedges,activelyrespondtochangesintheindustry,reducemarketcompetitionrisksandseizemarketopportunities.

3.Risksofcorepersonnelturnoverandcountermeasures

Astableandhigh-qualitytalentteamisanimportantguaranteefortheCompanytomaintainitscorecompetitiveadvantage.IftheCompanyfailstoeffectivelybuildacoretalentteam,givereasonableincentivesandmanagesthecorepersonnel,theemployees’enthusiasmandcreativitywillbeaffected,whichwillhaveanadverseimpactontheCompany’scorecompetitiveness.

Inresponse,muchattentionhasbeenattachedtocultivationandacquisitionofprofessionaltalents.TheCompanycreativelybuildsaplatform-basedtalentmanagementmechanism,accordingtowhichexcellentgameproducersarerewardedwithprojectbonus,andgivendiscretionofresearchandprojectconceptcreation.Inordertoattractandretainoutstandingmanagementtalentsandbusinesselites,theCompanyhasreformedtheprojectmechanism,shortenedthereviewcycleandestablisheddiversifiedobjectives,soastostimulatetheinnovativevitalityofemployees.Intermsofemployeeperformancemanagement,theCompanyhassetupdiversifiedKPIsbasedonemployees'contributionandability,aswellasreasonableteamobjectivesandinnovativeincentiveactivitiestoencourageemployees’creativity,soastoincreasetheattractivenesstocorestaffsandR&Dpersonnel.Inaddition,theCompanycaresaboutthelong-termdevelopmentofemployees.TheCompanyhasestablished“37InteractiveEntertainmentLearningandDevelopmentCenter”toprovidesufficienttrainingandlearningopportunitiesforemployeesandhelpthemgrowrapidly.TheCompanyactivelycarriedouttrainingfornewcomersandprofessionalabilitiessuchas"MarathonLeadershipTrainingCamp","HuangpuNewArmy","X+Plan"and"37TALK",promotedtalentupgradingtomeettheneedsofbusinessupgrading,paidattentiontointernalsharing,establishedateamofinternalprofessionallecturersamongemployees,spreadcultureofsharing,builtatalentechelonandupgradedtalentdevelopmentsystem.Centeringontheculturalconceptof"health,happinessandsustainability",theCompanyupgradedcolorfulwelfaresystem,strengthenedhumanisticcareandpromotedretentionoftalents.Thecolorfulwelfaresystemencompassesinterest-freeloan,lovefund,commercialinsuranceandemployeehealthmanagement.TheCompanyhasalsolaunchedthe“NewbornInitiative”,underwhichachildbirthfundofRMB20,000perchildwillbegrantedtoofficiallyemployedstaffwithaservicetenureoftwoyearsormore,furtherenhancingtalentcareandincentivemeasures.Inaddition,seasonalactivitiesonholidays,annualphysicalexamination,singles'fellowship,"FamilyDay","BossFace-to-Face","37BattleTalk","Carnival",“Healthy37ers”andotherthematicactivitieswereregularlyheld.Inter-departments'teambuildingpromotedtheconnectionbetweenemployeesandtheirfriends,relativesandcolleagues.Inaddition,theCompanyhasestablishedrecreationalclubsforemployees,covering“SuperRunners”,e-sports,tablegames,dancing,badminton,footballandyoga,createdculturalatmospherethatmeetsthecharacteristicsoftheyoungergeneration,strengthenedemployees'senseofbelonging,balancedemployees'workandlife,andtookcareofemployees'physicalandmentalhealthinvariousforms.

4.Technologyiterationandinnovationriskandcountermeasures

Thegameindustryhasseenrapidtechnologyiterationandfasterchangesincutting-edgetechnologies,anddemandfornewtypesofproductshasemergedamongyoungusers.Againstthisbackdrop,ifagamecompanyfailstograsptheindustrydevelopmenttrendinaforward-lookingmannerandpromptlyinnovateitstechnologyandproducts,itsR&Dandapplicationofkeytechnologieswillbeoutdated,resultingintheriskofproductsfallingbehindthemarket.

Inresponse,theCompanycontinuedtofocusonchangesintheindustry'scutting-edgetechnologies.First,itcloselyfollowedindustrychangesandprobedintocutting-edgetechnologiesthroughinvestmentlayouttomaintainsensitivetoleadingtechnologies.Second,itintensifiedtheincubationofinternaltechnologies,valuedinvestmentinself-developedgames,improvedself-developmentsystem,establishedaneffectiveR&Dsystemframework,andintroduceddiversifiedincentivestoencourageemployeestoexplorenewtechnologies.Bytakingtheseactions,theCompanyhasreservedtechnologiesandproductsfortheindustry

developmenttrend.

5.RiskassociatedwithbeinginvestigatedbytheChinaSecuritiesRegulatoryCommissionwithnoclearconclusionyetOn27June2023,theCompany,Mr.LiWeiwei(theactualcontrollerandChairmanoftheBoardoftheCompany),andMr.ZengKaitian(theViceChairmanoftheBoardoftheCompany)receivedthe"NotificationoftheChinaSecuritiesRegulatoryCommissiononCaseFiling"(CSRCCaseNo.03720230061,No.03720230062,No.03720230063)fromthesaidcommission(hereinafterreferredtoasthe"CSRC")respectively.Forsuspectedinformationdisclosureviolations,accordingtotheSecuritiesLawofthePeople'sRepublicofChina,theLawofthePeople'sRepublicofChinaonAdministrativePenaltiesandotherapplicablelawsandregulations,theCSRCdecidedtofileacaseagainsttheCompany,LiWeiweiandZengKaitian.Duringtheperiodofinvestigation,theCompanywillactivelycooperatewiththeCSRC’sinvestigationandfulfilitsinformationdisclosureobligationsinstrictaccordancewithapplicablelaws,regulationsandregulatoryrequirements.VIIIDevelopmentandImplementationofMarketValueManagementSystemandValuationEnhancementPlan

IndicatewhethertheCompanyhasdevelopedamarketvaluemanagementsystem.?Yes□No

TheCompany'smarketvaluemanagementsystemisaimedtoregulatetheCompany'smarketvaluemanagementactivities,safeguardthelegitimaterightsandinterestsoftheCompanyandinvestors,enhancetheCompany'sinvestmentvalue,andincreaseinvestorreturns.Themaincontentsincludethegoalsandbasicprinciples,organsandresponsibilities,plansandmethodsofmarketvaluemanagement,etc.IndicatewhethertheCompanyhasdisclosedanyvaluationenhancementplan.

□Yes?No

PartIVEnvironmental,SocialandGovernanceInformation

IChangesofDirectors,SupervisorsandSeniorManagement

?Applicable□Notapplicable

IIInterimDividendPlan

?Applicable□Notapplicable

IIIEquityIncentivePlans,EmployeeStockOwnershipPlansorOtherIncentiveMeasuresforEmployees?Applicable□Notapplicable

1.EquityIncentivesNone

2.ImplementationofEmployeeStockOwnershipPlans?Applicable□NotapplicableOutstandingemployeestockownershipplansduringtheReportingPeriod:

Sharesheldbydirectors,supervisorsandseniormanagementunderemployeestockownershipplansduringtheReportingPeriod:

Thenumberofsharesheldbytheabove-mentioneddirectors,supervisorsandseniormanagementattheendoftheReportingPeriodis0duetotheCompany'sFourthEmployeeStockOwnershipPlanManagementCommitteerecoveringtheunlockedshares.ChangeoftheassetmanagementinstitutionduringtheReportingPeriod:

□Applicable?NotapplicableShareownershipchangesduetosharedisposalbyholdersandotherreasonsduringtheReportingPeriod:

□Applicable?NotapplicableExerciseofshareholderrightsduringtheReportingPeriod:

NoneOtherinformationaboutemployeestockownershipplansduringtheReportingPeriod:

?Applicable□Notapplicable

Thethirdlock-upperiodoftheFourthEmployeeStockOwnershipPlanendedon29June2025.Asthe2024annualoperatingresultsfailedtoreachthetarget,theunlockablesharesofalltheawardeesinthethirdlock-upperiodoftheEmployeeStockOwnershipPlanshouldnotbeunlocked.

AccordingtotheFourthEmployeeStockOwnershipPlan(Draft),afterthethreeappraisalperiods,thecorrespondingunlockedsharesshallberecoveredandsoldbytheEmployeeStockOwnershipPlanManagementCommittee,andtheproceedsfromthesaleshallbelongtotheCompany.Changesinthemembersoftheemployeestockownershipplanmanagementcommittee:

□Applicable?NotapplicableImpactofemployeestockownershipplansonthefinanceoftheCompanyduringtheReportingPeriodand

therelevantaccountingtreatments:

□Applicable?NotapplicableTerminationofemployeestockownershipplansduringtheReportingPeriod:

□Applicable?NotapplicableOtherinformation:

None

3.OtherIncentiveMeasuresforEmployees

□Applicable?Notapplicable

IVEnvironmentalInformationDisclosure

Indicatewhetheranyofthelistedcompanyanditsmajorsubsidiariesisincludedinthelistofcompaniesthatarerequiredbylawtodiscloseenvironmentalinformation.

□Yes?NoVCorporateSocialResponsibility(CSR)

1.EmpoweringruraltalentrevitalizationSince2014,throughtheGuangdongYouxinCharityFoundation,whichitinitiatedandestablished,37InteractiveEntertainmenthasbeensupportingtherevitalizationofcounty-levelhighschools,promotingbalancededucationdevelopment,andcultivatingyouthtalent.TheCompany,viatheGuangdongYouxinCharityFoundation,collaborateswitheducationandcivilaffairsauthorities,schools,teachers,publicwelfareorganizations,andcorporatevolunteerstocontinuouslyimplementprojectssuchasthe“YouxinPeers”highschooleducationassistanceprogram,thehighschoolenrolmentguaranteeprogramforethnicminoritygirls,thecountyhighschoolfreereadingprogram,the“VocationalWisdomCalling”careerplanningprogram,andthe“EmbraceExploration”GuangzhouSummerCamp.Theseprogramsprovidescholarships,fosterinnovativethinking,expandculturalknowledge,andofferotherformsofsupporttohelpruraltalentreachtheirpotential.Toimprovethecomprehensiveabilitiesofruralyouthinadaptingtothefuturetechnologicalsociety,theCompanyhaslaunchedthe“LittleElephantAI”themedpublicwelfarecoursethroughitsqualityeducationbrand,Miaocode.TheprogramteachesstudentshowtoeffectivelyutilizeAItoolsandisplannedtobeimplementedinregionssuchasQingyuan,Guangdong,andQiannan,Guizhou.

DuringtheReportingPeriod,37InteractiveEntertainmentsupported2,767outstandinghighschoolstudentsacrossnineregions,includingAnhui,Sichuan,andGuizhou,throughtheGuangdongYouxinCharityFoundation.

2.Innovatingindustrialsupportmodels

37InteractiveEntertainmentactivelyrespondedtothe“10,000EnterprisesRevitalize10,000Villages”initiativeandthe“Hundred-Thousand-TenThousandProject”,leveragingitstechnological,creative,and

resourceadvantagestosupportthehigh-qualitydevelopmentofruralcharacteristicindustries.

TheCompanyhaspioneeredadigitalagriculturalsupportmodelcenteredaroundaninnovativetriangularframeworkof“digitalcontent+agriculturalproducts+globalcommunication”.DuringtheReportingPeriod,theCompanylaunchedthemedgameversionscenteredonlychee,afruitrichinLingnanculturalheritage,bycreativelyintegratinglycheeelementsintosixgloballydistributedgames,includingTradingLegend(叫我大掌柜),BonkBonkTribe(时光大爆炸),MyMemoryShop(时光杂货店),andNobody'sAdventureChop-Chop(寻道大千).Thishasallowedglobaluserstogaindeeperinsightsintotheculturalsignificanceoflycheethroughgamescenes,interactivegameplay,andthemedgiftboxes.

TheCompanyalsodevelopedadedicatedsupportplanfor“YinghongNo.9”,aspecialtyteafromYingde,Qingyuan.Basedonitsuniqueproductattributesandconsumerpreferences,theCompanyhelpedupgradethebrandandexploredcreativeculturaldesignsandnewdistributionchannelsaimedatattractingyoungerurbanconsumers,effectivelyexpandingtheconsumptionscenariosforruralspecialtyproducts.

3.Advancingecologicalcivilization

DuringtheReportingPeriod,37InteractiveEntertainmentcontinuedtopromoteitstransitiontowardzero-carbondevelopmentandactivelyimplementedscience-basedcarbontargets.

Tosupportecologicalcivilizationprogressandwetlandconservation,37InteractiveEntertainmentpartneredwithrenownedenvironmentalpublicwelfareorganizations,suchastheSEEConservationPearlRiverProjectCenterandtheGuangdongNatureConservationFoundation,tojointlypromotethe“UrbanWetlandsandBiodiversityProtection”initiative.Thisinitiativehasalreadyledtothedevelopmentofawetlandecologyknowledgepopularizationgame,thecreationofsevenwetlandrestorationcoursesbasedonthephilosophyofNature-basedSolutions(NbS),theconstructionoffivemicroandsmallwetlandscienceeducationfacilities,andtheorganizationof20advocacyactivitiesforyouthandvolunteers.Over1,500participantsengaged,raisingpublicawarenessandunderstandingofwetlandconservation.

4.Contributingtoabettersociety

DuringtheReportingPeriod,37InteractiveEntertainmentmadeadonationofRMB9.7614million,contributingtoruralrevitalization,innovationtalentcultivation,ecologicalandenvironmentalprotection,andcommunitydevelopmentandhelpingtoimprovesocialwelfare.

InadditiontofulfillingitsCSR,37InteractiveEntertainmentencouragesemployeestoparticipateinvarioussocialvolunteerservices.DuringtheReportingPeriod,undertheleadershipofitsPartyCommittee,37InteractiveEntertainmentorganized17volunteeractivities,engagingPartymembersandstaffinprogramssuchasdigitalliteracyeducationforyouth,careforchildrenwithspecialneeds,ecologicalandenvironmentalprotection,andsupportforunderprivilegedcommunities.

PartVShareChangesandShareholderInformation

IShareChanges

1.ShareChanges

Unit:share

Reasonsforsharechanges:

?Applicable□Notapplicable

On22January2025,theCompanyretired5,626,600repurchasedsharesanditstotalsharecapitalhasthuschangedfrom2,217,864,281sharesto2,212,237,681shares.Approvalofsharechanges:

?Applicable□Notapplicable

TheCompanyheldthe15thmeetingoftheSixthBoardofDirectorsandtheFirstExtraordinaryGeneralMeetingofShareholdersin2024on26December2023and12January2024,respectively,atwhichtheProposalonthePlantoRepurchasetheCompany'sSharesbytheWayofCentralizedBiddingwasapproved.Assuch,theCompanywasagreedtouseitsownfundstorepurchasesharesbythewayofcentralizedbidding.Therepurchasedshareswouldberetiredtoreducetheregisteredcapital.Transferofshareownership:

□Applicable?NotapplicableProgressonsharerepurchases:

?Applicable□Notapplicable

TheCompanyheldthe15thmeetingoftheSixthBoardofDirectorsandtheFirstExtraordinaryGeneralMeetingofShareholdersin2024on26December2023and12January2024,respectively,atwhichtheProposalonthePlantoRepurchasetheCompany'sSharesbytheWayofCentralizedBiddingwasapproved.Assuch,theCompanywasagreedtouseitsownfundstorepurchasesharesbythewayofcentralizedbidding.ThetotalamounttobeusedforthesharerepurchaseshallnotbelessthanRMB100million(inclusive)andnotmorethanRMB200million(inclusive),andtherepurchasepriceshouldnotexceedRMB33.90pershare(inclusive).Theperiodfortheimplementationofthesharerepurchaseshouldbewithin12monthsfromthedateonwhichtheCompany'sgeneralmeetingofshareholdersapprovedthesharerepurchaseplan.TheCompanywouldmakeandimplementrepurchasedecisionsatanappropriatetimebasedonmarketconditionswithintheaforesaidperiod.Therepurchasedshareswouldberetiredtoreducetheregisteredcapital.

Asof10January2025,thesharerepurchaseperiodexpiredandduringthesaidperiod,theCompanyhadcumulativelyrepurchased5,626,600shares(or0.25%ofthetotalsharecapital)withitssecuritiesaccountforrepurchasedsharesbythewayofcentralizedbidding.WiththehighesttradingpricebeingRMB

18.13/shareandthelowestbeingRMB17.66/share,thetotalamountpaidwasRMB100,691,594(exclusiveoftransactioncosts).Assuch,theimplementationofthesharerepurchaseplanhadbeencompleted.

On22January2025,theCompanycompletedtheretirementformalitiesfortheabove-mentioned

repurchasedsharesattheShenzhenBranchofChinaSecuritiesDepositoryandClearingCorporationLimited.Assuch,theCompany'stotalsharecapitalhaschangedfrom2,217,864,281sharesto2,212,237,681shares.Progressonreducingtherepurchasedsharesbywayofcentralizedbidding:

□Applicable?NotapplicableEffectsofsharechangesonthebasicearningspershare,dilutedearningspershare,equitypershareattributabletotheCompany’scommonshareholdersandotherfinancialindicatorsoftheprioryearandtheprioraccountingperiod,respectively:

?Applicable□NotapplicableDuringtheReportingPeriod,theCompany'stotalsharecapitaldecreasedby5,626,600sharesduetothesharerepurchase.AspertheAccountingStandardsforBusinessEnterprises,theaforesaidrepurchasedshareswereexcludedinthecalculationofbasicearningspershare.OtherinformationthattheCompanyconsidersnecessaryorisrequiredbythesecuritiesregulatortobedisclosed:

□Applicable?Notapplicable

2.ChangesinRestrictedShares

□Applicable?NotapplicableIIIssuanceandListingofSecurities

□Applicable?NotapplicableIIIShareholdersandTheirHoldingsasatthePeriod-End

Unit:share

5%orgreatershareholders,top10shareholdersandtop10un-restrictedpublicshareholdersinvolvedinrefinancingshareslending:

□Applicable?NotapplicableIndicatewhethertherewasanychangetothetop10shareholdersortop10un-restrictedpublicshareholdersduetorefinancingshareslending/returningduringtheReportingPeriodcomparedtothesameperiodoflastyear.

□Applicable?NotapplicableIndicatewhetheranyofthetop10commonshareholdersorthetop10un-restrictedcommonshareholdersoftheCompanyconductedanypromissoryrepoduringtheReportingPeriod.

□Yes?NoNosuchcasesintheReportingPeriod.

IVChangesintheShareholdingsofDirectors,SupervisorsandSeniorManagement

□Applicable?NotapplicableNosuchchangesintheReportingPeriod.Fortherelevantinformation,seethe2024AnnualReport.

VChangeoftheControllingShareholderorActualControllerChangeofthecontrollingshareholderintheReportingPeriod:

□Applicable?NotapplicableNosuchcasesintheReportingPeriod.ChangeoftheactualcontrollerintheReportingPeriod:

□Applicable?NotapplicableNosuchcasesintheReportingPeriod.

VIPreferredShares

□Applicable?NotapplicableNosuchcasesintheReportingPeriod.

PartVIFinancialStatementsIIndependentAuditor’sReportAretheseinterimfinancialstatementsauditedbyanindependentauditor?

□Yes?NoTheyareunauditedbysuchanauditor.

IIFinancialStatementsCurrencyunitforthefinancialstatementsandthenotesthereto:RMB

1.ConsolidatedBalanceSheet

Preparedby37InteractiveEntertainmentNetworkTechnologyGroupCo.,Ltd.

30June2025

Unit:RMB

Legalrepresentative:ZengKaitianChiefFinancialOfficer:YeWeiBoardSecretary:YeWei

2.BalanceSheetoftheCompany

Unit:RMB

3.ConsolidatedIncomeStatement

Unit:RMB

Wherebusinesscombinationsundercommoncontroloccurredinthecurrentperiod,thenetprofitachievedbytheacquireesbeforethecombinationswasRMB0.00withtheamountforthesameperiodoflastyearbeingRMB0.00.Legalrepresentative:ZengKaitianChiefFinancialOfficer:YeWeiBoardSecretary:YeWei

4.IncomeStatementoftheCompany

Unit:RMB

5.ConsolidatedCashFlowStatement

Unit:RMB

6.CashFlowStatementoftheCompany

Unit:RMB

7.ConsolidatedStatementofChangesinShareholders’Equity

H12025

Unit:RMB

H12024

Unit:RMB

8.StatementofChangesinShareholders’EquityoftheCompany

H12025

Unit:RMB

H12024

Unit:RMB