Zulong Entertainment (09990) Interim Report Decoded: Long-term Premium Games Consolidate Basic Platforms, Globalization Opens Second Growth Curve
On August 19, Zulong Entertainment (09990) announced the 2026 interim results. During the reporting period, the company achieved revenue of 609 million yuan (RMB, same below), of which comprehensive game distribution and operation amounted to 563 million yuan, accounting for 92.6% of total revenue, fully reflecting the integrated advantages of game manufacturers in R&D and operation. During the period, the company's overall gross profit was 433 million yuan, with a gross profit margin of 71.2%.
In terms of cost and expenses, R&D expenditure was 262 million yuan during the reporting period, and the overall scale remained stable; sales and marketing expenses of 288 million yuan were mainly used for overseas promotion and new product warm-up for “Dragon Clan: Kassel's Gate”. In terms of cash reserves, as of June 30, 2026, the total amount of the company's total cash and cash equivalents, time deposits, financial assets and other equity investments measured at fair value is close to RMB 2 billion. The capital can support pipeline development and market investment.
Through Zulong Entertainment's mid-term financial report, it can be seen that in the context of the mobile game industry entering stock competition and concentrating resources on leading products, the company relies on long-term operation of core products, cost structure optimization, and R&D efficiency improvement to build a strong operating chassis. In the future, the company is expected to activate new growth potential by focusing on a high-potential competitive circuit and global layout.
Core quality games support performance, and long-term operation forms a stable contribution
According to the interim results announcement, Zulong Entertainment has now launched a total of 24 boutique mobile games, which support multiple regional versions in 14 languages, covering the vast majority of countries and regions around the world.
In the first half of the year, the company's two boutique games, “In the Name of Shining” and “Dragon Clan: Kassel's Gate”, performed steadily. Among them, “In the Name of Shining”, a phenomenal game for women created by the company's VVANNA division, has been in the top 30 iOS game bestsellers more than 100 times since its launch in mainland China in March 2023, and has broken into the top 10 iOS game bestsellers 15 times. The number of paying users in the month of the 3rd anniversary celebration (March 2026) increased compared to the same period in 2025 and reached its peak since May 2024. The average DAU (number of daily active users) in the first half of this year surpassed the average DAU for previous years. In addition to iterating versions, “In the Name of Shining” is also expanding the IP value boundary, incorporating many intangible heritage elements into digital fashion, carrying out projects such as cultural relics return donations, rural public welfare repairs, etc., and implementing various commercial collaborations such as game linkage and consumer goods IP licensing.
The long-term operation results of the strategic card product “Dragon Clan: Kassel's Gate” have also been remarkable. The game continues to enrich players' gaming experience through content updates and themed activities. On the basis of long-term stable operation, the game has continuously achieved new breakthroughs: the number of single-day turnover and single-day fee users on the first day of the launch of the “White Moon Changming Office” version (July 18, 2026) both reached new highs after the first day of the 2025 anniversary celebration (September 12, 2025), and the number of new DAU and single-day users also reached new highs after the 2024 11th holiday.
The Zhitong Finance App learned that in addition to the core products showing strong long-term vitality, the MMORPG masterpieces “Dream Immortals” and “Dragon Fantasy”, which were launched in 2016 and 2019, respectively, are in good long-term operation. According to financial reports, as of the disclosure of the results announcement, the company had 2 games with cumulative global sales of more than 4 billion yuan; 1 game had cumulative global sales of between 3 billion yuan and 4 billion yuan; 5 games had a cumulative global turnover of between 1 billion yuan and 3 billion yuan; and 9 games had a turnover of more than 100 million yuan in the first month after release in mainland China. A number of classic games performed relatively steadily and continued to contribute revenue to the company, which is enough to verify that Zulong Entertainment's long-term boutique strategy is replicable.
Efficient allocation of R&D resources, and the market for products under development is booming
The long life cycle of Zulong Entertainment's game products is no accident; rather, the company's multi-dimensional “R&D, positioning, and operation” capabilities that have settled in long-term development have collaborated to form competitive barriers that are difficult to replicate.
In terms of product layout, in the context of rapid rotation of category dividends and diversified user needs in the game industry, Zulong Entertainment has achieved comprehensive coverage of different user groups through the layout strategy of “deep cultivation of core categories and exploration of emerging tracks”. The company's product matrix has covered mainstream game categories, and each category has created benchmark products to diversify market risks.
As of June 30, 2026, Zulong Entertainment accounted for about 80% of R&D personnel, and the overall scale remained stable. In the first half of the year, the company's R&D resources, on the basis of guaranteeing high-frequency version updates for online games, were skewed towards two key research projects, namely the authorized IP adaptation strategy card “Master of Secrets: The Fool”, and the original woman created by Unreal Engine 5 to the new product “Code Name: God Doesn't Speak”.
“Code Name: God Doesn't Speak” is an important vehicle for the company's technical capabilities. The project team was invited to participate in the 2026 Chicago Unreal Engine Developers Conference to share technology. The product is based on the full Unreal Engine 5 tool chain and uses MetaHuman, Substrate materials and the MegaLights cinematic lighting system to create high-quality character performance and story atmosphere; at the same time, it is equipped with a hierarchical adaptation solution to balance PC image quality and mobile performance, and achieve smooth operation of movie-level images across devices. The film received widespread global attention when it was first revealed in April. As of the performance announcement date, the number of reservations worldwide had exceeded 5 million, and market expectations were high.
“Master of Secrets: The Fool” is a strategy card game adapted and developed based on the global phenomenal IP “Master of Secrets”. The first promotional video was released in June 2026. Product reservations topped the TapTap and Station B game reservation lists. As of the performance announcement date, the number of reservations in mainland China had exceeded 1 million. The project highly restored the original worldview, built a card system around character traits, and provided rich derivative content.
Including two major products, Zulong Entertainment will continue to build a diversified game portfolio. The company expects to launch 5 different game products around the world from the second half of 2026 to 2028. Relying on the integrated model of R&D and operation, the company can quickly respond to player feedback, iteratively optimize products, and explore the full life cycle value of products. This set of capabilities will also run through the entire process of new product development, helping the project to balance the needs of subsequent localization, version iteration, and user operation in the early stages.
Globalization is advancing at an accelerated pace, and a second growth curve is being built
The Zhitong Finance App notes that the overseas market has grown into a new growth engine for Zulong Entertainment. Looking at the regional revenue structure, in the first half of the year, the company achieved revenue of 142 million yuan outside mainland China, accounting for 23.3% of total revenue. Revenue outside mainland China increased 15.9% over the same period last year.
At the overseas business level, the company has formed an overseas echelon with mature products+newly launched products. “In the Name of Shining” is a long-term benchmark for women. The layout of multi-regional and multi-language versions was completed at the beginning of its launch. The theme aesthetic has a cross-regional audience base and forms the basic market for overseas business. In the first half of 2026, “Dragons: Kassel's Gate” landed in the Japanese, Korean, European, and American markets, and topped the Japanese iOS free game list for three consecutive days. As of the disclosure of the results announcement, the game's cumulative global turnover had already exceeded 1 billion yuan, verifying the company's ability to export IP adaptation strategy cards overseas. Subsequent new products are planned to be distributed simultaneously around the world, and the increase in overseas users will continue to be exploited.
According to Gamma Data Research, the overseas mobile game market pattern has solidified, and new products account for only 5.5% of the overseas TOP200 list in 2024, and the threshold for new products to break through is high. In addition to product content, deep localization and long-term operation capabilities are important tests for going overseas. However, the domestic market is also characterized by an increase in the difficulty of new products breaking through. The share of new products entering the TOP100 has declined somewhat, and the R&D and promotion threshold continues to rise. The domestic mobile game market has entered a stage of stock competition, and it is difficult to open up incremental space by relying on a single track alone. Zulong Entertainment is simultaneously promoting overseas market expansion and breaking through two new categories to broaden business boundaries.
In summary, in the first half of 2026, Zulong Entertainment handed over a steady management questionnaire with technological innovation and an “integrated research and operation” model, with a boutique strategy as the core. Looking forward to the future, sufficient reserves of new games and a clear global layout will continue to inject momentum into the company for development. In the long run, Zulong Entertainment is expected to grow into a game manufacturer with both domestic competitiveness and global influence, and the room for growth is expected to continue to open up.