Focusing on Core Business, Thriving in Symbiosis with AI

In recent years, the global macro economy has been under pressure, and   the domestic and international market environments have been constantly changing. This has placed Chinese private enterprises in a new round of intense competition for market positioning, profoundly affecting every industry and individual.

In 2025, we made a significant decision to divest our stake in RCD Espanyol. Through this adjustment, we will move forward with greater agility and ample resources, fully focusing on the game and toy industries. We will continue to embrace industrial transformation and increase R&D investment to build differentiated competitive advantages.

Deeply Cultivating Advantageous Tracks, Adhering to Globalization

The past two years have seen the Chinese cultural industry shine on the global stage. The Chinese game industry is one of the few sectors that has maintained growth, becoming an important carrier for Chinese culture going global and a typical representative of "new quality productive forces." Similarly, China's toy industry has maintained steady growth, with certain categories successfully gaining a foothold across the ocean and setting off a wave of popularity.

However, beneath the prosperous industry data, top-tier players have captured the vast majority of the incremental market, while the survival conditions for small and medium-sized manufacturers remain challenging. To win the future, we need to define our positioning more precisely and resolutely execute our established strategies.

In our past development, we have formed two advantageous product categories in niche sectors: Archaistic Strategy and Idle Games, maintaining a healthy balance driven by both domestic and overseas markets. Since 2019, Rastar Games has been recognized as a "National Key Cultural Export Enterprise" for four consecutive terms, demonstrating the competitiveness of our game business. Regarding product development, we adhere to the principle of global multi-region publishing for continuous investment. We have also been actively expanding high-quality IPs and currently hold authorizations for numerous renowned IPs, including Legend of Three Kingdoms, Ragnarok, Battle Through the Heavens, MapleStory, Time Raiders, and Joy of Life.

Our toy business has maintained robust growth in exports and an upward trend in domestic sales. Data shows that in 2024, Rastar Toys achieved a year-on-year increase of 20.28% in main business revenue and a 40.17% increase in net profit, with the product gross margin rising to 46.47%. The simultaneous rise in revenue and profit is mainly due to the optimization of product structure and the effectiveness of cost control, which is inseparable from the dedicated efforts of the toy business team.

Whether in games or toys, we still face numerous challenges in the process of globalization, such as political and economic fluctuations, cultural differences, and legal and regulatory restrictions. The development and operation of our products rely on localization operations and global thinking, which is the direction we have always been striving for. We must stay closer to the target markets and use insightful and forward-looking thinking to optimize our products.

Fully Embracing AI, Building a Stronger Team

No matter the individual, everyone felt the huge impact from DeepSeek during the 2025 Spring Festival, marking the first comprehensive AI experience for many. The combination of our major businesses with AI holds a natural advantage. This not only accelerates our operational efficiency but also places higher demands on the capabilities of our team, especially the management layer.

In the game industry, the application of AIGC has become increasingly widespread and has withstood the test of the market. We have currently covered AI technology applications across multiple links, including art design, content planning, code debugging, and ad placement analysis. Meanwhile, the Hong Kong, Macau, and Taiwan version of our self-developed strategy mobile game Battlefield without Borders has introduced intelligent NPCs driven by AI large models, enabling flexible and fluent interaction with players. In the future, the company will continue to actively explore the deep integration of game business and AI, improving quality and efficiency while further enhancing the entertainment experience for players.

In the toy industry, the "AI + Toys" market has immense potential and is expected to rapidly elevate the form and depth of interaction between toys and users. Currently, Rastar Toys has built a reserve system covering core technology areas, mastering basic technologies such as VR spatial positioning remote control and intelligent voice interaction control. We have achieved product R&D adaptation for new interaction methods, such as Bluetooth near-field interaction technology and AI voice assistants that support docking with mainstream large model platforms. Moving forward, we will continue to deepen our AI technology layout and explore the integrated application and scenario expansion of innovative technologies such as multimodal interaction and cloud based intelligent synergy in toy products.

"Idle boast the strong pass is a wall of iron, with firm strides we are crossing its summit." Despite the layers of challenges, we are fortunate to be able to allocate more resources to focus on our core business and rise to the difficulties. Rastar Group will, as always, adhere to the mission of "building a cultural core of mainstream values and positive energy." Upholding our values of "Integrity and Ingenuity," we will inherit and promote outstanding traditional Chinese culture and continue to provide users with healthy and high-quality product experiences.

I will grow together with all Rastar colleagues amidst these challenges, becoming stronger together. Hand in hand, we will create more economic benefits and social contributions, accelerating Rastar Group's growth into a first-class backbone cultural enterprise with Chinese characteristics.

Chen Chuanghuang, Chairman of Rastar Group