FriendTimes Inc. (06820) reported a return to profitability for the year ended 31 December 2025, driven by resilient domestic game revenues, tighter cost controls and improved gross margins.

Financial Highlights • Revenue rose 7.3% year-on-year to RMB 1.25 billion, supported by sustained contributions from legacy titles such as “A Story of Lala’s: Rising Star”, “Promise of Lingyun” and “Legend of Empress” as well as accelerating mini-game traction. • Gross profit increased 12.0% to RMB 911.31 million, lifting gross margin to 73% (FY2024: 70%). • Profit before tax reached RMB 96.28 million versus a RMB 35.83 million loss a year earlier; net profit stood at RMB 93.17 million, compared with a RMB 48.86 million loss in FY2024. • Adjusted net profit (excluding share-based payments) totalled RMB 96.74 million, reversing a RMB 42.84 million loss in the prior year. • The Board proposes a final dividend of HK2 cents per share, reinstating shareholder payouts after no dividend in FY2024.

Operational Metrics • Revenue mix by genre: ancient-style female-oriented games 64.3%; modern female-oriented 31.0% (up 331.1% year-on-year); creative titles 4.7%. • Geographic split: Mainland China contributed 80.7% of game revenue (RMB 1.01 billion, up 12.3%), while overseas markets accounted for 19.3% (RMB 240.22 million, down 9.2%). • Cost discipline saw sales & marketing expenses edge down 2.2% to RMB 544.47 million, R&D spend dip 3.9% to RMB 281.21 million, and G&A costs fall 4.3% to RMB 40.04 million.

Cash Flow & Balance Sheet • Operating cash inflow reached RMB 117.20 million, reversing a RMB 52.83 million outflow in FY2024. • Cash and cash equivalents totalled RMB 153.02 million at year-end; net current assets stood at RMB 724.56 million. • Gearing ratio improved to 5.7% (31 December 2024: 13.0%) as interest-bearing borrowings declined to RMB 70.34 million. • Capital expenditure was modest at RMB 3.39 million, mainly for servers, software and office leases.

Strategic Initiatives • Continued emphasis on “AI + Games” with platform-level tool development, data asset accumulation and AI-native gameplay experiments across R&D, distribution and operations. • Expansion of product portfolio to modern and creative categories, with mini-games driving incremental user growth; several titles entered WeChat and Douyin best-seller lists. • Ongoing investments in AI through venture capital partnerships and a lead-position in the angel round of Shanghai Novacore Technology. • Total dividends distributed since 2019 IPO exceed RMB 790 million, well above the RMB 434 million net IPO proceeds. • Share Award Scheme has repurchased 100.81 million shares (about 4.6% of issued shares) as at 31 December 2025; Chairman Jiang Xiaohuang has committed to a 12-month lock-up on his holdings from 17 July 2025.

Outlook Pipeline titles include “Code: Lovers”, “Code: FPJ”, “Code: KT”, “Code: MX” and “Code: Football”. Management plans to deepen the research-operation integration model, expand AI applications, and pursue a “regional focus + category breakthrough” strategy to reinforce global growth.

The proposed dividend is subject to shareholder approval at the AGM on 12 May 2026, with payment targeted for 10 June 2026.