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Once a shining star in the gaming industry, now struggling in the quagmire of transformation, this talking Tom Cat is trying to tell a new story withAI.Can he successfully transform? Let’s first take a look at his relevant data. Although the data is cold, under the current AI boom, they may leap into beautiful curves in the future.
Last month,Tom Cat’s third-quarter data was indeed concerning.The financial report shows that in the first three quarters of 2025, the company achieved operating revenue of 697 million yuan, a year-on-year decrease of 19.77%; the net profit attributable to the parent company was -43.9398 million yuan, a significant year-on-year decrease of 152.61%.
This marks several consecutive quarters of performance decline or even losses for Tom Cat, forming a stark contrast with its glorious period seven or eight years ago when it entered the ranks of the world’s top mobile game publishers with the“Talking Tom and Friends” series.
Upon examining Tom Cat’s third-quarter report, almost all key financial indicators are flashing red. In the third quarter alone, the company achieved operating revenue of234 million yuan, a year-on-year decrease of 20.06%; the net profit attributable to the parent company was -13.6129 million yuan, a year-on-year decrease of 234.06%.
Even more concerning is the continuous deterioration of the company’s profitability. As of September 30, 2025, Tom Cat’s weighted average return on net assets has dropped to -1.92%, a significant year-on-year decrease of 4.55 percentage points.
Meanwhile, the company’s total assets have shrunk from 4.373 billion yuan at the beginning of the year to 3.870 billion yuan, a decrease of 11.52%. This series of data indicates that Tom Cat’s operational difficulties are not cyclical fluctuations but rather a structural crisis.
Therefore, the multiple mergers and acquisitions that occurred during the previous business transformation have placed a heavy burden of goodwill impairment on Tom Cat. By the end of 2018, Tom Cat’s goodwill amounted to 6.377 billion yuan, accounting for nearly half of its total assets.
Faced with the decline of traditional business, Tom Cat is pinning its hopes for a breakthrough on theAI plus IP plus Agent strategy. In December 2024, the company launched the first-generation “Tom Cat AI Emotional Companion Robot,” claiming to have trained a dedicated emotional companion vertical model for Tom Cat.
This product, priced between 1499-1999 yuan, integrates the talking Tom Cat IP image with artificial intelligence technology, aiming to provide emotional companionship services to users. According to the company, from March to May 2025, the product’s GMV on Douyin, JD.com, and Tmall saw significant month-on-month increases of 137%, 96%, and 163%, respectively, indicating a certain level of market enthusiasm.
Despite the continued poor performance, Tom Cat’s performance in the capital market is paradoxical. According to data from Eastmoney Choice, as of October 31, 2025, Tom Cat’s gross profit margin reached 87.67%, far exceeding the industry average of 57.89%. This extremely high gross profit margin confirms the historical advantage of Tom Cat’s asset-light model.
However, the company’s total market value is only 16.31 billion yuan, far below the industry average of 21.77 billion yuan, with a net profit of-43.94 million yuan, significantly lower than the industry average of 579.8 million yuan.
This paradox of high gross profit and low market value reflects the market’s concerns about Tom Cat’s current growth difficulties. When the performance growth of classic products supporting high gross profit is already weak, how to convert the inflated gross profit margin into tangible, sustainable net profit is key to whether Tom Cat’s value can be reassessed.
In the future, the AI companionship market indeed holds great potential. Investment firm ARK Invest predicts that the global AI companionship market is expected to grow from $30 million in revenue in 2023 to $70 billion – $150 billion by 2030, with an annual growth rate of 200% – 236%.
If Tom Cat can leverage its original advantages in the AI companionship sector, there will be significant growth potential.
On the other hand, Tom Cat’s AI transformation still faces many challenges. Internet industry analyst Zhang Shule pointed out that IP is just a starting point; in the AI hardware track, one must either have sufficiently strong robotic effects in embodied intelligence or present stunning functionality in AI agents; otherwise, no matter how good the IP is, it will only be a game skin that attracts attention but cannot generate revenue.
Moreover, Tom Cat’s AI robot business currently relies heavily on hardware sales for revenue and has yet to establish a sustainable service subscription or content payment model, with its profit margins being squeezed by both supply chain costs and marketing expenses.
Standing at the crossroads of declining traditional business and unstable emerging business, Tom Cat needs to avoid chasing fleeting trends. It must prove that it can not only talk but also engage in dialogue in the new era. For Tom Cat,AI should not merely be a conceptual embellishment in financial reports but a real force to reshape IP value and close the commercial loop.
Let’s take a look at the market; after a sharp drop in the past few days, the rebound today has already shown significant differentiation, with some sectors hardly rebounding at all. Previously, the market was speculating on the blockchain, and now it has started to speculate on the Google chain, with many stocks in the CPO sector overlapping.
The indices have begun to differentiate; today, the Shanghai Composite Index is the weakest, while the other two indices closed up. After the close, the Shanghai Composite Index fell0.15%; the Shenzhen Component Index rose 1.02%; the ChiNext Index rose 2.14%. Today, the indices were just the opposite of yesterday, with strong indices and weak individual stocks.
In terms of trading volume, as a bull market, it is still low; the 2 trillion trading volume threshold is still a bit off, with today’s trading volume in the Shanghai and Shenzhen markets at 1.78 trillion, a slight decrease of nearly 30 billion compared to Tuesday. There are too many unstable external factors, and the wait-and-see sentiment is heavy; liquidity in the market is visibly decreasing.
From the industry sectors, today, the Google chain sector has risen significantly, while other sectors are merely supporting roles, with sectors like pharmaceutical commerce, commercial retail, and chemical pharmaceuticals rarely making it to the forefront. The declining sectors include shipbuilding, aerospace, gaming, electronic chemicals, and decoration, which are all short-lived; they rise and fall in the same manner.
From the capital flow perspective, today, semiconductors, consumer electronics, and communication equipment are seeing inflows, especially consumer electronics, which should be closely monitored, as the main force has already begun to build positions, with a net inflow of2.7 billion.
The Ministry of Industry and Information Technology and five other departments jointly issued a document to enhance the adaptability of supply and demand for consumer goods to further promote consumption. Currently, consumption is still sluggish, and the monthly data is not looking good, prompting several measures to stimulate it; once people start making money, they still need to support consumption.
Google and NVIDIA’s direct competition has already begun. Google’sTPU is competing with NVIDIA’s GPU, and the competition between the two will likely heat up, which may lead to less favorable performance data for both in the future. However, the AI track will still be the largest mainline in the future, and that won’t change.
Recently, Alibaba has been making big moves; following Qianwen, Alibaba’s latest AI hardware is coming, with the first self-developed flagship dual-display AI glasses, Quark AI glasses, set to be released in Beijing on November 27. Related upstream and downstream companies are receiving financing boosts in the capital market; I will share a chart from Data Treasure for reference.
Alibaba released its second-quarter financial report; the second-quarter revenue was247.8 billion yuan, estimated at 245.2 billion yuan; the adjusted earnings per ADS for the second quarter were 4.36 yuan, estimated at 6.34 yuan; the revenue of the China e-commerce business group for the second quarter was 132.58 billion yuan; the adjusted net profit was 10.3 billion. The main growth was also in the AI business, which increased by 34% year-on-year.
A new round of lithium battery upcycle has started, with energy storage expected to become a core driver; the new round of lithium battery technology cycle centered on solid-state batteries is accelerating towards an industrialization turning point. Institutions are mainly promoting lithium battery materials (6F, VC, iron lithium cathodes), batteries, and general components; related leading enterprises are good.
The current market rebound is showing differentiation, with the Google chain heating up; the amount of funds in the market is still low, making operations more difficult. Some high-priced tech stocks should still be approached with caution; this round of adjustment will not change due to any one sector. My personal view is that the tech sector is undoubtedly the main line, but if you enter too early, it may be uncomfortable.
There are still many excellent companies in the tech sector; if you seize the opportunity during this round of adjustment, there will be returns exceeding expectations in the future. Choosing the right track, having solid performance, and growth potential are all essential for stock selection; start slowly. In the future, you will thank yourself for your careful consideration.
Alright, that’s all for today. The market will not correct itself; on the path of investment, one can only continuously correct oneself, becoming more sensitive and gaining a deeper understanding of the market, so that the heart is no longer as restless as it once was. Wishing everyone all the best!