On October 2, XD INC fell 5.19% in regular trading, trading at HK$38.0/share, with turnover of approximately HK$3.22 million. The decline was driven by the company's recently released interim results showing margin compression alongside broad-based selling across the interactive home entertainment sector.

According to the company's mid-year report, XD INC recorded H1 revenue of RMB 3.312 billion, up 7.5% year-over-year, while adjusted net profit came in at RMB 784 million, down 8.1% year-over-year. Gross margin contracted from 73.1% to 70.3%, pressured by rising overseas channel and cloud service costs tied to titles such as Heartbeat Town, a one-time tax remediation charge of approximately RMB 97 million, and a sharp increase in AI-related computing expenses to RMB 71 million. TapTap platform revenue dipped 1.6% to RMB 994 million.

Sector-wide weakness amplified the selloff, with NTES down 2.7%, IGG down 2.43%, NetDragon down 2.0%, and Kingsoft down 1.69%. Multiple brokerages, however, maintain constructive ratings, with Goldman Sachs upgrading the stock to Buy with a HK$60.7 target, citing an expected acceleration in gaming revenue growth in H2 driven by overseas expansion.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)