On March 24, FRIENDTIMES (06820) announced its full-year results for 2025. The company demonstrated a comprehensive reversal in its fundamentals, achieving multi-dimensional breakthroughs in its business layout and continuing to provide substantial returns to shareholders. These factors indicate not merely a recovery in financial data, but a systematic transformation from strategic planning to execution.
From an industry perspective, the global gaming channel ecosystem is set for a pivotal shift in 2026. Apple announced that starting March 15, commission rates for iOS and iPadOS on the Mainland China App Store will be adjusted. The standard commission rate for in-app purchases and paid apps will be reduced from 30% to 25%. For eligible developers under Apple's Small Developer Program and Mini Program Partner Program, the commission rate for in-app purchases and auto-renewable subscriptions after the first year will be lowered from 15% to 12%. Similarly, Google previously announced a systematic reform of the Google Play store, reducing the standard service fee for in-app purchases (IAP) from the long-standing 30% to 20%. The beta effects of these changes are beginning to materialize in the gaming industry for 2026, pushing gross and net profit margins for various companies into an upward trend.
The annual results show a return to profitability, with key metrics comprehensively optimized. According to the announcement, for 2025, FRIENDTIMES achieved total revenue of approximately RMB 1.248 billion, an increase of about 7.3% year-on-year. Annual profit was approximately RMB 93 million, turning last year's loss into a profit and representing a surge of about 290.7% compared to the previous year. Adjusted annual profit was approximately RMB 97 million, also a turnaround from a loss, growing by about 325.8% year-on-year. The return to positive territory for core profitability metrics signifies a substantive improvement in the company's operational fundamentals. This inflection point is not accidental but the inevitable result of a "twin-engine drive" combining scale growth and cost control.
On the revenue side, the company's existing core game products continued to provide stable cash flow, with titles such as *A Story of Lala's Promotion*, *Ling Yun Nuo*, and *Xi Fei Zhuan* performing notably well. Simultaneously, the company made positive progress in exploring new segments, with mini-games and new genre products becoming significant contributors to revenue growth, collectively driving a steady expansion in revenue scale. Furthermore, it was understood from the company's earnings briefing that the growth rate based on actual gross billing was even higher than the reported revenue figure, reaching double-digit levels.
"Enhancing quality and efficiency" was a key theme throughout FRIENDTIMES's 2025 report. In terms of profitability, the company's gross profit margin increased by 3 percentage points year-on-year to 73.0%, with the rising proportion of revenue from higher-margin channels being the core driver of this improvement. Concurrently, FRIENDTIMES demonstrated significant results in cost reduction and efficiency gains, with optimization seen across all expense categories. In 2025, the company's selling and marketing expenses, R&D expenses, general and administrative expenses, and finance costs all decreased compared to the previous year, showcasing refined operational management capabilities.
Behind these impressive results lies the company's sustained efforts in diversifying its product matrix, refining its R&D and operational systems, and deepening technological empowerment. This reflects strategic achievements in consolidating its leadership position in the female-oriented game segment while actively exploring new segments and markets. This suggests that FRIENDTIMES is gradually building a foundation for high-quality development characterized by sustainable profitability, supported growth, and secured value.
The product portfolio is rich and diverse, with long-term value poised for release. On the business front, throughout 2025, FRIENDTIMES deeply implemented its strategies of "diversification, quality focus" and integrated R&D and operations. The product matrix achieved breakthroughs, and the category structure continued to optimize, with new segments and markets becoming new growth engines for the company. As a definitive leader in the female-oriented game segment, the company has not rested on its laurels in a single domain but has actively built a rich product portfolio. It has now established three core segments: female-oriented ancient-style games, female-oriented modern-themed games, and creative products, with a dual-platform presence encompassing APP games and mini-games.
Financial reports indicate a significant shift in the revenue contribution from different game categories during the year. Female-oriented ancient-style products, leveraging a deep user base and cultural resonance, accounted for 64.3% of revenue, stabilizing the core business and maintaining leadership in the segment. Revenue from female-oriented modern-themed products reached 31.0% of the total, a substantial increase of 331.1% year-on-year, establishing itself as the company's second growth curve and fully demonstrating its content innovation capabilities and market expansion prowess in modern themes. Creative products accounted for 4.7%, showing the effectiveness of the company's efforts to break into new categories.
The scaled breakthrough in the mini-game segment was another highlight in FRIENDTIMES's annual report. During the period, several of the company's products successfully ranked in the top charts of major platforms. For instance, *Flower and Scarlet Thoughts*, *Mo Jian Jiang Hu*, and *A Story of Lala's Promotion* all entered the Top 100 of the WeChat Mini-Game bestseller list. Among them, *A Story of Lala's Promotion* broke into the Top 10 of the Douyin Mini-Game bestseller list, while *Mo Jian Jiang Hu* ranked in the Top 50 on both the Douyin and WeChat mini-game bestseller lists, fully demonstrating the market's recognition of the company.
The continuous deepening of long-term operational capabilities remains one of the core competencies driving FRIENDTIMES's business development. Through frequent version iterations, content updates, operational events, and IP collaborations, the company dynamically captures user demand, providing players with meticulous and comprehensive long-term services. *Xi Fei Zhuan*, even a decade after its launch, continues to contribute stable revenue. Core products like *Floating Life for the Song* and *Ling Yun Nuo* maintain their vitality through frequent updates and IP collaborations, with lifecycles far exceeding the industry average.
Simultaneously, the company's new titles have shown promising performance, highlighting their potential to become hits. *Flower and Scarlet Thoughts* (formerly *Project: Flower*), which had its full-platform public test in January 2026, rapidly saw its peak DAU climb to 500,000. The game skillfully blends merge-and-manage gameplay with female-centric emotional narratives, precisely targeting the interests of its core female audience. The excellent performance of new products fully validates the company's R&D and publishing capabilities across different genres and themes. The new, broader female user base attracted by this hybrid genre also injects fresh momentum into the company's long-term development.
In terms of product pipeline, the company has several games in development, including *Heartbeat Fall* (formerly *Project: Lover*), *Dream Tour Girl* (formerly *Project: FPJ*), *Hello Kitty My Dream Store*, and *Project: Football*, further expanding FRIENDTIMES's potential for incremental growth. This pipeline includes classic female-oriented titles, products customized for overseas markets, and the first officially licensed Sanrio IP game in China, marking what can be considered a super year for product releases.
Technological empowerment has also become a crucial support for FRIENDTIMES's business breakthroughs. Recently, the company led a strategic investment in Shanghai Shenqiong Xinghe Technology Co., Ltd., accelerating its technological iteration in the field of ultra-high-fidelity facial simulation. Shenqiong Xinghe has already made breakthroughs in micro-expression recognition and fast-slow brain architecture. In the future, the two parties will collaborate to explore innovative applications of embodied intelligence in the entertainment technology sector and AI emotional companionship scenarios.
A focus on shareholder returns presents a new opportunity for profitable development. It is noteworthy that FRIENDTIMES consistently adheres to the principle of being responsible to its shareholders. Through sustained and substantial cash dividends, share purchases in the open market, and firm commitments from management, the company conveys confidence in its long-term development, achieving a win-win situation for corporate growth and shareholder value enhancement.
For 2025, the Board proposed a final dividend of 2 HK cents per share, representing a payout ratio of 43% and a dividend yield exceeding 4%. This continues the fine tradition of consistent dividend distribution, rewarding shareholders' trust and long-term support with tangible actions. Since its listing on the Main Board of the Stock Exchange of Hong Kong in 2019, the company has cumulatively distributed cash dividends totaling over RMB 790 million to shareholders, significantly exceeding the net proceeds of RMB 434 million raised at the IPO, demonstrating strong profit realization capability and a shareholder-friendly approach.
Beyond cash dividends, during the period from August 28, 2023, to December 31, 2025, the company, through a trustee, continuously purchased shares in the open market under a share award scheme. The cumulative number of shares purchased represents approximately 4.1% of the total issued share capital. This fully demonstrates FRIENDTIMES's confidence in its business outlook and prospects, promoting the company's long-term sustainable development.
Concurrently, the company's Board Chairman and controlling shareholder, Jiang Xiaohuang, has voluntarily undertaken a commitment not to sell any shares he holds directly or indirectly through the Stock Exchange's open market within the 12 months commencing July 17, 2025. This sends a further positive signal to the market, highlighting the determination of core management to be deeply aligned with the company's long-term development.
Against a backdrop of complex and volatile external conditions in recent years, the ability to "deliver on promises" or even "exceed promises" is key to winning the trust of long-term capital. The recent strategic adjustments by Apple and Google signify that platforms are beginning to proactively cede more revenue share to developers, pushing the distribution of benefits between channels and content creators towards a new, more balanced equilibrium. This change will not only directly boost the profit margins of game developers but also steer industry resources towards core areas like R&D and operations, further enhancing the bargaining power of leading game companies.
Several institutions have published research reports indicating that reduced channel commissions will be a core catalyst for the gaming industry's performance in 2026. Leading companies possessing high-quality R&D capabilities, global reach, and efficient cost control are poised to benefit fully, with related stocks entering a window for valuation re-rating.
Simultaneously, the Hong Kong stock market has recently been affected by multiple external factors, including the US-Iran-Israel situation, pushing the Hang Seng Tech Index to a阶段性 low. The gaming sector has also experienced valuation adjustments in line with the broader market. In this context, FRIENDTIMES, as a leader in the female-oriented segment, stands out as a rare company undergoing a fundamental turnaround. The combination of earnings growth and a low valuation creates a distinct potential for a "Davis Double Play." As a high-quality investment target offering both certainty and growth potential, FRIENDTIMES is well-positioned for a value re-rating as market recognition gradually aligns with its fundamentals.
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