1. Financial Performance Surges in 2025

• Revenue Growth: Wanka Online Inc. achieved a strong financial performance in 2025. Revenue from its core mobile advertising business rose to RMB4,275.2 million, up 66.8% year-on-year. Notably, overseas business revenue soared by 518.2%, marking a significant expansion of the Group’s global footprint.
• Profitability: Gross profit increased by 84.5% to RMB431.8 million. Adjusted EBITDA climbed 53.5% to RMB104.4 million, and adjusted net profit nearly doubled, up 93.4% to RMB65.0 million. The adjusted net profit margin also improved from 1.3% in 2024 to 1.5% in 2025, driven by higher gross margins.
• Balance Sheet Strength: Total assets reached RMB2,829.4 million (up 21.5%), and total equity increased 11.0% to RMB1,567.7 million, demonstrating robust asset and capital growth.
• Dividend Policy: The Board did not recommend a final dividend for 2025. Shareholders should note there has been no dividend since 2024, indicating retained earnings are being used for reinvestment and business expansion.

2. Business Expansion and Technology Innovation

• AI Marketing Agent: The Group’s proprietary AI marketing agent has proven effective in improving advertisers’ return-on-investment (ROI) and repeat replacement rates, strengthening Wanka’s competitive edge in the mobile Internet ecosystem.
• Capital Expenditure: Capital expenditure nearly doubled to RMB18.9 million in 2025, reflecting major investments in property, plant, and equipment to support business growth.
• Strategic Investments: In October 2025, a significant capital injection of RMB60 million was completed into its Suzhou joint venture, enhancing its innovation capacity and market reach.

3. Shareholder Actions and Capital Structure Developments

• Share Placement: On March 20, 2025, the company completed a placement of 244.6 million new shares at HK\$0.177 per share, raising HK\$43 million (approx. RMB40 million) in net proceeds for R&D in AI applications. All proceeds were fully utilized as of year-end.
• Share Buyback: Wanka repurchased 26.3 million of its shares in the market in 2025 at an average price of HK\$0.83 per share, totaling HK\$21.8 million. Repurchased shares were not cancelled, representing potential future capital management flexibility.
• Subsequent Share Subscription: After year-end, in March 2026, Wanka raised further capital by issuing 215,384,614 shares at HK\$1.625 per share, with the subscriptions completed on March 24, 2026. The significant increase in capital at a much higher price than the previous placement may be positively viewed by the market and suggests strong institutional demand.

4. Share Incentive Schemes and New Share Option Plan

• Employee Incentives: The 2016 and 2019 Share Incentive Schemes remain in effect, with the latter having about 3.5 years’ validity left. These schemes are designed to attract and retain talent by granting RSUs and share options.
• Launch of New Share Option Scheme: On February 27, 2026, Wanka adopted a new share option scheme with a 10-year life and a 10% scheme mandate limit (174.4 million shares). Notably, performance-based conditions have been attached to executive grants, especially for Mr. Tong Hui, including milestones tied to market capitalization and strategic partnerships in AI and overseas ventures. These performance targets, if met, could signal significant value creation and may positively impact future share price.

5. Connected Transactions and VIE Structure

• Contractual Arrangements (VIE): Due to regulatory restrictions in China, Wanka operates key business segments via variable interest entities (VIEs) through contractual arrangements. In February 2026, these arrangements were updated to add Ms. Jiang Yu as a registered shareholder and inject RMB92.8 million into Huanju Information.
• Regulatory Risks: The company highlights ongoing PRC regulatory risks associated with the VIE structure, including potential nullification of contracts or forced relinquishment of interests, which is a material ongoing risk factor for shareholders.

6. Corporate Governance, Risk, and Compliance Highlights

• Governance and Audit: The company continues to comply with the Hong Kong CG Code and has robust risk management and internal control systems. The Audit Committee and an external internal auditor oversee these systems, with no major weaknesses identified in 2025.
• Environmental and Social Governance: No environmental-related violations occurred during the period. The company continues to adopt energy-saving and resource-conservation policies.
• Human Resources: Headcount increased to 388 in 2025, from 343 in 2024, reflecting business growth.
• Liquidity and Capital Position: Liquidity is strong, with a year-end cash and cash equivalents of RMB533.2 million, and a low capital risk profile as assessed by management.

7. Risks and Opportunities for Investors

• Foreign Exchange Exposure: The company is exposed to RMB, USD, HKD, and SGD fluctuations, but did not hedge currency risk in 2025. A 5% fluctuation in RMB against USD or HKD would impact profits by several hundred thousand RMB.
• Customer Concentration: The five largest customers contributed 26.6% of revenue, with the single largest at 9.5%. The five largest suppliers accounted for 57.7% of costs, indicating some business concentration risk.
• Shareholding Structure: Insiders, including Mr. Gao Dinan and related parties, collectively hold significant stakes, with Wanka Media Limited and United Millennial Tech Limited Partnership controlling over 23% and 9.9% respectively.

Conclusion: Material Factors and Potential Share Price Impact

• The rapid revenue and profit growth, especially in overseas markets, is a significant positive for share value.
• The successful capital raises, especially at sharply higher prices, and ongoing share buybacks demonstrate strong market confidence and capital flexibility.
• The introduction of a new share option scheme with high performance targets signals management’s confidence in continued strong growth and alignment with shareholder interests.
• The continued reliance on the VIE structure for core PRC operations is a material risk factor; any regulatory changes could have a substantial adverse impact.
• The absence of dividends may be a concern for income-focused investors but indicates a focus on growth and reinvestment.

Overall, Wanka Online’s 2025 Annual Report contains several price-sensitive developments that investors should closely monitor, including strong financial growth, major capital events, strategic investments, and ongoing regulatory risks.