Archosaur Games Inc. (09990) released its unaudited interim results for the six months ended 30 June 2026.
Revenue and Profitability • Revenue declined 4.1% year on year to RMB 608.60 million, reflecting deferred revenue recognition from longer player life cycles and weaker-than-expected performance of “Immortal Skywalker”, partly offset by overseas launches of “Dragon Raja: Cassell Gate”. • Gross profit fell 4.4% to RMB 433.10 million, with gross margin holding broadly steady at 71.2% (H1 2025: 71.4%). • Operating loss widened to RMB 97.80 million, up 165.8% from RMB 36.80 million a year earlier, as selling and marketing expenses surged 29.7% amid promotional campaigns for new titles and overseas expansion. • Net loss reached RMB 68.52 million (H1 2025: RMB 11.73 million). Adjusted net loss, which excludes RMB 4.40 million of share-based compensation, ballooned to RMB 64.10 million versus RMB 7.70 million in the prior-year period.
Cost Structure • Cost of revenue slipped 3.3% to RMB 175.49 million, tracking the revenue decline. • Research & development spending was largely flat at RMB 261.60 million, supported by resource optimization. • Selling & marketing costs jumped to RMB 288.30 million, driven by overseas promotion of “Dragon Raja: Cassell Gate” and pre-launch marketing for “Project: Silent Whispers” and “LOM mobile”.
Cash Flow and Balance Sheet • Net cash used in operating activities increased to RMB 142.61 million (H1 2025: RMB 36.08 million) owing to higher development and marketing outlays. • Net cash from investing activities totalled RMB 118.93 million, mainly due to term-deposit maturities. • Cash and cash equivalents stood at RMB 235.99 million at 30 June 2026, down 9.8% from year-end 2025; term deposits amounted to RMB 690.31 million. • Gearing ratio edged up to 25.6% (31 Dec 2025: 24.6%).
Revenue Mix • Integrated game publishing and operation remained the dominant contributor, accounting for 92.6% of total revenue. • Mainland China generated 76.7% of revenue (RMB 466.54 million), down 8.8%; revenue from overseas markets rose 15.9% to RMB 142.08 million.
Operational Highlights • The portfolio comprised 24 mobile titles across 14 languages. “Life Makeover” sustained strong engagement, while “Dragon Raja: Cassell Gate” surpassed RMB 1 billion in cumulative billings and expanded to Japan, South Korea, Europe and North America. • Five new games are slated for global launch between H2 2026 and 2028, including “LOM mobile” (strategy card game based on “Lord of Mysteries”, >1 million pre-registrations in Mainland China) and “Project: Silent Whispers” (female-oriented title developed on Unreal Engine 5 with over 5 million global pre-registrations).
Capital Expenditure and Investments • Capex rose to RMB 23.80 million (H1 2025: RMB 4.40 million), mainly for intangible assets. • Significant investments include US$10.70 million in Morgan Stanley Asia notes and US$25.00 million in UBS Singapore structured products, representing 4.2% and 6.7% of total assets respectively.
Other Information • Headcount totalled 1,143 employees, with personnel costs at RMB 280.50 million. • No interim dividend was declared. • Post-period, the 2026 RSU Scheme replaced the 2022 RSU Scheme to sustain talent incentives.
Archosaur Games’ board affirmed that current cash resources, including IPO proceeds (HK$2.14 billion utilised to date), are sufficient for ongoing operations and planned investments.
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