Giant Network Group Co.,Ltd. (002558.SZ) has posted blockbuster first-half earnings fueled by its breakout mobile title, yet the company's controlling shareholder has been reducing holdings amid a sharp pullback in the share price.
On the evening of September 8, the A-share gaming firm disclosed that Shanghai Tengpeng Investment Partnership (Limited Partnership) ("Tengpeng Investment"), a concerted actor with controlling shareholder Shanghai Giant Investment Management Co., Ltd. ("Giant Investment"), had completed a stake reduction plan. Between July 16 and September 7, 2026, Tengpeng Investment sold a total of 53.597 million shares, representing approximately 2.82% of the company's total share capital, through both centralized竞价 trading and block trades.
Following the reduction, Tengpeng Investment and its concerted actor Giant Investment together hold 706 million shares, or about 37.16% of the company's total share capital. Corporate records show that Tengpeng Investment's shareholders include Shanghai Jiant Special Health Products Co., Ltd., Shanghai Giant Investment Management Co., Ltd., and Shanghai Giant Investment Group Co., Ltd., with Jiant Special holding approximately 91.64%. Further tracing the ownership structure reveals that the ultimate controller of Tengpeng Investment is Giant Network's chairman, Shi Yuzhu, who controls the company through both Giant Investment and Tengpeng Investment.
In a previous announcement in May, Tengpeng Investment explained that the reduction was intended to repay bank loans. Market observers believe the share sale to service debt is likely linked to Giant Network's associated company, Shanghai Jukun Network Technology Co., Ltd. ("Jukun Network"), which previously incurred merger-related loans from acquiring the parent company of Playtika Holding Corp. (PLTK), Alpha Frontier Limited. Those bank loans are approaching maturity, and the proceeds from the stake sale may be used to repay that portion of Jukun Network's debt.
According to the latest filing, Tengpeng Investment sold approximately 18.936 million shares between July 16 and August 7 via centralized bidding at an average price of 29.91 yuan, cashing out around 566 million yuan. It also offloaded 34.662 million shares through block trades between August 31 and September 7 at an average price of 24.82 yuan, raising approximately 860 million yuan. The total proceeds from the reduction amount to about 1.426 billion yuan.
Notably, these sales occurred after the company's share price had fallen significantly from its year-to-date high. On January 23, the stock touched an intraday peak of 53.35 yuan per share, but that momentum faded quickly. By midday on September 9, Giant Network's shares were down 4.56% to 26.15 yuan, giving the company a market capitalization of roughly 49.7 billion yuan. From the January high, the stock has now halved.
In stark contrast to the persistent shareholder selling and weak share price, Giant Network delivered soaring profits in the first half, largely thanks to "Supernatural Action Team." The company posted revenue of 4.689 billion yuan in the first half, up 182.08% year-on-year. Net profit attributable to shareholders reached 2.144 billion yuan, a jump of 175.96%, while net profit excluding non-recurring items hit 2.236 billion yuan, up 177.23%.
From a product perspective, "Supernatural Action Team" is undoubtedly a major growth driver. The horror-adventure mobile game, developed by NIGHT STUDIOS and operated by Giant Network, officially launched without a wipe in January 2025. Combining Chinese-style horror themes with "search, extract, and retreat" gameplay, it became a dark horse in the gaming market last year, and its blockbuster momentum has continued into this year.
In its earnings report, Giant Network attributed the strong first-half performance to the sustained high revenue contribution from the hit mobile game, which provided crucial support for growth. Meanwhile, mature titles such as the "Zheng Tu" series and "Ball Battle" maintained stable income through refined long-term operations. Bolstered by the surge in revenue from its hit game, the company's net operating cash flow reached 2.072 billion yuan during the reporting period, up 178.93% year-on-year. Its weighted average return on equity also improved to 13.22%, up 7.35 percentage points from 5.87% in the same period last year.
Amid the surge in earnings, Giant Network also announced its 2026 interim dividend plan: a cash dividend of 8 yuan (pre-tax) per 10 shares to all shareholders. Based on the calculation base of 1.894 billion shares as of the announcement date, the total cash dividend amounts to approximately 1.515 billion yuan, all funded by the company's own capital. Relative to the first-half net profit of 2.144 billion yuan, the planned dividend represents approximately 70.65% of attributable net profit, meaning the company intends to pay out over 70% of its first-half earnings as cash dividends.