Giant Network Group Co.,Ltd. has delivered a remarkable mid-year performance for 2026, propelled by its blockbuster game title. On August 26, the company released its semi-annual report showing revenue of 4.689 billion yuan for the first half of the year, a year-on-year increase of 182.08%, while net profit attributable to shareholders reached 2.144 billion yuan, up 175.96% from the same period last year.

Alongside the strong earnings, Giant Network Group Co.,Ltd. announced an interim profit distribution plan proposing a cash dividend of 1.515 billion yuan. The company also unveiled its shareholder return roadmap for 2026-2028, extending its commitment to stable cash payouts over the next three years to enhance the continuity and predictability of shareholder rewards.

Despite the impressive earnings growth and generous dividend, the company's share price has declined nearly 50% since the start of the year.

Blockbuster game drives performance

When discussing Giant Network Group Co.,Ltd. today, the game "Supernatural Action Group" inevitably takes center stage. Although the title has been live for a year and a half, it continues to be the primary revenue driver for the company. During the first half of this year, the company's gaming-related business generated 4.684 billion yuan in revenue, up 182.69% year-on-year, accounting for 99.90% of total revenue. Mobile gaming revenue specifically reached 4.368 billion yuan, a 236.18% increase, representing 93.15% of total revenue.

The company attributed the growth in its financial report to the sustained high-level revenue contribution from "Supernatural Action Group," which provided crucial support for the performance increase. Meanwhile, mature titles such as the "Zheng Tu" series and "Balls Bounce Together" maintained stable income through refined long-term operations.

Sources within the company revealed that to embrace the 2026 summer season, "Supernatural Action Group" launched a crossover map called "Yunnan Insect Valley" in collaboration with "Ghost Blows Out the Light." The exclusive limited-time skins also significantly boosted commercialization, helping the game return to the top five on the iOS bestseller chart. Concurrently, an original micro-horror gameplay mode called "Infinite Dreamscape" was introduced, gradually completing the micro-horror gameplay matrix and cementing the product's leading position in the "Chinese-style micro-horror" vertical category.

Recently, the daily active users (DAU) of "Supernatural Action Group" surpassed 12 million, up from the 10 million milestone achieved in February. This indicates that within six months, the product has achieved further growth on an already high base of tens of millions of DAU.

However, the company's growing reliance on this single title for revenue has raised potential risks. In fact, the game's revenue saw a natural decline after the Spring Festival this year. Zhang Shule, an analyst in the cultural and entertainment industry, noted that a single-core game strategy does carry the long-term risk of a slowdown if the blockbuster title loses momentum. However, in China, only a handful of major gaming companies like Tencent, NetEase, miHoYo, and Shengqu have successfully maintained two or more super hits simultaneously. As an established mainstream gaming company, Giant Network Group Co.,Ltd. has shown that "Supernatural Action Group" possesses the potential to become a super hit. Even if it eventually loses steam, the company still has mature products like the "Zheng Tu" series and "Balls Bounce Together" as support, giving it sufficient depth and the potential to incubate another blockbuster, with no developmental bottlenecks in sight.

"Although 'Supernatural Action Group' falls under the horror-adventure genre, its core 'search-fight-extract' mode is currently a hot category. By incorporating horror-adventure elements and stepping outside the boundaries of pure shooting games, it has achieved strong differentiation. As the 'search-fight-extract' genre grows increasingly popular and mainstream, its user base is likely to expand further," Zhang Shule analyzed.

Zhang added that games like "Supernatural Action Group" benefit from the "new game every round" characteristic. As long as the developer continuously introduces fresh story elements and new adventure rooms before players experience fatigue, the game can sustain its popularity. This has been proven by long-running titles like "Peace Elite" and "Honor of Kings," which also feature this model. If such games successfully break through to a wider audience, the true decline typically only occurs when the entire category undergoes disruptive innovation or when players grow tired of it.

Among the company's pipeline products, "Ming Jiang Sha" has accumulated over 1 million registered users since the second quarter, with DAU and MAU steadily climbing. The product's social media following exceeds 800,000, and cumulative exposure has surpassed 300 million. The game has launched features such as a "multiplayer identity mode" and the PVE gameplay "Thousand-Mile Solo Ride: Endless Mode," continuously enriching its gameplay and content systems.

Generous dividend payout

Amid the strong performance, Giant Network Group Co.,Ltd. has also begun distributing substantial dividends. According to the interim profit distribution plan, the company proposes a cash dividend of 8 yuan per 10 shares to all shareholders. Based on the calculation base of 1.894 billion shares as of the announcement date, the total cash dividend amounts to approximately 1.515 billion yuan, all funded from the company's own resources. Based on the first-half net profit of 2.144 billion yuan attributable to shareholders, the proposed dividend accounts for approximately 70.65% of the period's net profit.

The company has emphasized its long-standing commitment to shareholder returns. Since its restructuring and listing in 2016, Giant Network Group Co.,Ltd. has distributed cash dividends for ten consecutive years. In 2025, interim and annual cash dividends totaled approximately 643 million yuan, representing 36.67% of that year's net profit attributable to shareholders.

In addition to the interim dividend, the company has published its "Shareholder Dividend Return Plan for 2026-2028," which stipulates that the company will, in principle, distribute cash dividends annually, provided that profit distribution principles and cash dividend conditions are met and the company's normal operations and long-term healthy development are ensured.

With net profit surging in the first half and 70% of profits earmarked for dividends, Giant Network Group Co.,Ltd.'s mid-year report card is undeniably impressive. However, this seemingly generous response has failed to drive significant share price gains, with the stock nearly halving in value this year. On August 27, the shares closed up only 2.48%, even dipping during intraday trading.

In fact, the company's share price has been on a downward trend throughout the year, falling from a high of 53.16 yuan per share on January 20 to 27.24 yuan on August 27, a decline of 48.76%. When asked whether the company would take effective measures to address the annual share price decline, the company responded, "All matters will be disclosed as per official announcements."

Regarding the phenomenon of "rising earnings but falling share price," Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, believes that secondary market pricing naturally anchors to future cash flows rather than already-realized current performance. Even if current results are strong, as long as the market anticipates weakening growth momentum, it will adjust valuations in advance through share price declines. The market is currently restructuring its valuation logic to adapt to the new development phase, no longer simply matching current earnings growth rates directly to valuations. For industry targets with strong cyclicality or reliance on a single blockbuster, the market will proactively reduce valuation premiums to avoid overpricing short-term spike earnings.

"The gaming industry itself is a cyclical sector driven by strong content. The high earnings growth brought by a single blockbuster product is naturally defined by the market as a phased spike in returns rather than a long-term sustainable profit trend. The market will not grant long-term high valuations for short-term explosive performance," Wang Peng further explained. He noted that the domestic gaming industry has entered a phase of deep differentiation, where short-term earnings growth at leading companies cannot mask the broader trends of slowing user growth and intensifying competition in the existing market. The market will react in advance to marginal changes in overall industry prosperity.

Based on the August 27 closing price of 27.24 yuan, the dividend yield for this interim distribution is approximately 2.94%. Against the backdrop of a significant share price decline this year, whether this yield level can effectively offset concerns about potential risks remains to be seen.