Financial Performance - For the six months ended June 30, 2023, the company recorded total revenue of approximately RMB 443.7 million, an increase of about 117.0% compared to RMB 204.5 million for the same period in 2022[2] - The company's profit attributable to owners for the six months ended June 30, 2023, was approximately RMB 130.5 million, a decrease of about 45.7% compared to RMB 240.4 million for the same period in 2022[2] - The company reported a revenue of RMB 443,652,000 for the six months ended June 30, 2023, compared to RMB 204,481,000 for the same period in 2022, representing a growth of 117.5%[36] - Gross profit for the period was RMB 322,478,000, significantly higher than RMB 60,502,000 in the previous year, indicating a gross margin improvement[36] - Operating profit decreased to RMB 145,594,000 from RMB 306,033,000 year-on-year, reflecting a decline of 52.4%[36] - Net profit for the period was RMB 130,446,000, down from RMB 240,302,000 in the prior year, a decrease of 45.8%[37] Revenue Breakdown - The company's online gaming revenue for the first half of 2023 was approximately RMB 356.8 million, up 118.4% from RMB 163.4 million in the same period of 2022[5] - The mobile gaming revenue accounted for 89.0% of the total online gaming revenue, while web game revenue accounted for 11.0%[6] - The cloud business generated revenue of approximately RMB 79.4 million in the first half of 2023, a growth of 101.6% compared to RMB 39.4 million in the same period of 2022[6] - Online gaming revenue reached RMB 356,808 thousand, a significant increase from RMB 163,363 thousand in the previous year, representing a growth of 118%[44] - Self-developed games contributed RMB 280,370 thousand, up from RMB 27,709 thousand, indicating a growth of 911%[44] - Cloud computing and related services revenue increased to RMB 79,424 thousand from RMB 39,392 thousand, marking a growth of 102%[44] User Engagement - The average monthly active users for web games were approximately 650,000, while mobile games had about 1.18 million active users, reflecting the company's strong user engagement[9] - The average revenue per paying user for mobile games increased by 336.0% year-on-year to RMB 811, showcasing improved monetization strategies[9] - The company reported a total of 1 million monthly active users, reflecting a strong engagement level within its gaming portfolio[66] - The average monthly paying users during the reporting period showed a significant increase, indicating a growing user base[65] Research and Development - Research and development expenses increased to RMB 97.98 million, compared to RMB 44.78 million in the previous year, reflecting the company's commitment to game quality and innovation[11] - Research and development expenses for the six months ended June 30, 2023, amounted to approximately RMB 98.0 million, an increase of about 118.8% from RMB 44.8 million in the same period of 2022[16] - The company is focusing on research and development to enhance its gaming offerings and introduce new technologies[66] Future Plans and Strategies - The company plans to test the Portuguese version of "弹弹堂大冒险" in Q3 2023 and aims for a global release of "神曲H5" in Q4 2023[7] - The company plans to launch multiple new games in the second half of 2023, including "弹弹堂大冒险" (Portuguese version) and "神曲H5" (global release), aiming to enhance its game portfolio[8] - The company aims to explore new product development and market expansion through investment in developers and resource collaboration to attract more players and increase gaming revenue[7] - Future outlook includes plans for market expansion and potential acquisitions to strengthen its competitive position[66] - The company aims to increase its monthly active users by 20% in the next fiscal year, driven by new game releases and marketing strategies[66] - The management team remains optimistic about achieving a revenue growth target of 15% year-over-year in the next financial period[66] Financial Position - As of June 30, 2023, cash and cash equivalents were approximately RMB 117.1 million, an increase from RMB 104.7 million as of December 31, 2022[21] - Total borrowings as of June 30, 2023, were approximately RMB 253.2 million, an increase from RMB 206.9 million as of December 31, 2022, primarily due to new loans obtained[22] - The debt-to-asset ratio as of June 30, 2023, was approximately 23.2%, a decrease from 28.2% as of December 31, 2022, mainly due to a reduction in total liabilities[23] - Total assets as of June 30, 2023, were RMB 2,061,782,000, an increase from RMB 1,955,212,000 at the end of 2022[38] - Current liabilities decreased to RMB 370,916,000 from RMB 454,827,000, a reduction of 18.4%[38] - The company's net asset value increased to RMB 2,032,488,000 from RMB 1,900,847,000, reflecting a growth of 6.9%[39] Employee and Compensation - The total employee compensation for the six months ended June 30, 2023, is approximately RMB 105.5 million, including salaries, bonuses, and other benefits[30] - The group has 442 full-time employees as of June 30, 2023, with 65% in R&D, 19% in operations, and 16% in administration[31] Legal and Compliance - The group is actively seeking legal advice regarding the trust plan investment and is considering all possible measures to recover related funds[35] - The group believes that the potential loss from the trust plan investment will not have a significant adverse impact on its business operations[35] - The company has complied with all applicable provisions of the corporate governance code as of June 30, 2023[61] - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2023[62] Other Financial Metrics - The company incurred a total tax expense of RMB 2,692 thousand, compared to RMB 59,362 thousand in the previous year, a decrease of 95%[48] - The company did not declare any interim dividends for the six months ended June 30, 2023, consistent with the previous year[51] - The company reported a net loss of RMB 12,833 thousand from other income or losses, compared to a gain of RMB 330,215 thousand in the previous year[46]

User Metrics and Revenue Analysis - The company's average monthly paying users (MPUs) are calculated as the average number of paying users in the relevant calendar month, with the average MPUs for a particular period being the average of the MPUs in each month during that period[3] - The company's monthly active users (MAUs) refer to the number of people logged in to specific game(s) in the relevant calendar month, with the average MAUs for a particular period being the average of the MAUs in each month during that period[8] - The company's ARPPU (average revenue per paying user) is calculated as the total revenue generated by paying users for a particular game, type of games, or all games during a certain period divided by the number of paying users during that period[3] - Monthly Paying Users (MPUs) refers to the number of paying users in the relevant calendar month[9] - Paying users are defined as registered users who charged their accounts with virtual items purchased from the company at least once in a given period, regardless of whether the items were consumed[9] - The company's web games had an average MAUs of approximately 0.6 million, MPUs of approximately 36,000, and ARPPU of approximately RMB522.1 for the year ended 31 December 2022[78] - The company's mobile games had an average MAUs of approximately 3.6 million, MPUs of approximately 482,000, and ARPPU of approximately RMB289.6 for the year ended 31 December 2022[78] - Total revenue for 2022 reached approximately RMB540.6 million, representing a 28.6% increase compared to 2021[23] - Profit attributable to owners of the company in 2022 amounted to approximately RMB282.5 million, a 199.8% increase from 2021[23][24] - Total revenue for 2022 was approximately RMB540.6 million, a 28.6% increase compared to RMB420.5 million in 2021[32][34] - Profit attributable to owners of the company in 2022 was approximately RMB282.5 million, a 199.8% increase compared to 2021[32][34] - Gross profit margin for 2022 was 48.3%, with gross profit increasing by 16.4% to RMB261.2 million from RMB224.5 million in 2021[32][34] - Online game revenue in 2022 was approximately RMB426.1 million, with mobile games accounting for 81.1% and web games for 18.9%[33][34] - Revenue from cloud computing and related services in 2022 was approximately RMB106.4 million, compared to RMB49.0 million in 2021[33][34] - Total revenue for 2022 was RMB540.6 million, a 28.6% increase compared to 2021, driven by the new game "DDTank Adventure"[84][85] - Game business revenue reached RMB426.1 million in 2022, a 68.0% increase year-over-year, primarily due to the success of "DDTank Adventure"[85] - Cloud business revenue grew to RMB106.4 million in 2022, a 117.3% increase compared to 2021, driven by the expansion of the newly launched cloud business[85] - Gross profit for 2022 was RMB261.2 million, a 16.4% increase from 2021, with a gross profit margin of 48.3%, down from 53.4% in 2021 due to higher cost of revenue[88] - R&D expenses increased by 62.0% to RMB129.5 million in 2022, reflecting higher investment in game development[88] - Selling and marketing expenses surged by 782.7% to RMB115.6 million in 2022, mainly due to marketing campaigns for new game launches[90] - Profit attributable to owners of the company rose by 199.8% to RMB282.5 million in 2022, largely due to gains from the Shouxin Disposal[92] - The company's total revenue for the year ended 31 December 2022 was RMB540.63 million, a 28.6% increase compared to the previous year[81] - The company's gross profit for the year ended 31 December 2022 was RMB261.20 million, a 16.4% increase compared to the previous year[81] - The company's research and development expenses increased by 62.0% to RMB129.48 million for the year ended 31 December 2022[81] - The company's selling and marketing expenses increased by 782.7% to RMB115.56 million for the year ended 31 December 2022[81] - The company's operating profit for the year ended 31 December 2022 was RMB307.37 million, a 714.8% increase compared to the previous year[81] - The company's profit before income tax for the year ended 31 December 2022 was RMB283.39 million, a 211.0% increase compared to the previous year[81] - The company's profit for the year ended 31 December 2022 was RMB279.61 million, a 185.3% increase compared to the previous year[81] Corporate Governance and Board Structure - The company's shares were listed on the Main Board of the Stock Exchange on 18 July 2018 (Stock Code: 797)[3] - The company's latest practicable date for ascertaining certain information in the annual report is 21 April 2023[4] - The company's consolidated affiliated entities include Shenzhen 7Road and its subsidiaries, controlled through contractual arrangements[4] - The company's annual general meeting (AGM) is proposed to be held on 23 May 2023[3] - The company's contractual arrangements were entered into on 13 April 2018[4] - The company's articles of association were conditionally adopted by the Board on 23 June 2018 and became effective on the listing date[3] - The company's financial statements are prepared in accordance with International Financial Reporting Standards (IFRS)[4] - Shenzhen 7Road Technology Co., Ltd. is a consolidated affiliated entity established under PRC law on 22 January 2008[10] - Shenzhen Qianqi Network Technology Co., Ltd. is a consolidated affiliated entity established under PRC law on 28 November 2013[12] - Shanghai Xinla Network Technology Co., Ltd. is a wholly-owned subsidiary of the company as of the latest practicable date[12] - The company's RSU Scheme was adopted on 6 March 2018[10] - The company's shares are ordinary shares of US$0.000005 each in the issued share capital[10] - The company's board includes executive directors such as Mr. Meng Shuqi (Chairman) and independent non-executive directors like Mr. Xue Jun[14] - The company's audit committee is chaired by Mr. Xue Jun[14] - The company's remuneration committee is chaired by Ms. Li Yiqing[14] - The Board consists of seven Directors, including four executive Directors and three independent non-executive Directors, with no financial or familial relationships among them[124] - The Company has complied with the Corporate Governance (CG) Code provisions for the year ended 31 December 2022[121] - Independent non-executive Directors have signed three-year appointment letters and are subject to retirement by rotation at least once every three years[126] - The Board ensures that at least one-third of its members are independent non-executive Directors, with Mr. Xue Jun possessing appropriate professional qualifications[129] - Directors have access to joint company secretaries, Mr. Li Zhengquan and Mr. Cheung Kai Cheong, who completed at least 15 hours of professional training in 2022[131] - The Company has arranged insurance coverage for Directors against legal proceedings and allows them to seek independent professional advice at the Company's expense[128] - Employee remuneration is determined based on performance, experience, competence, and market comparables, including salaries, bonuses, RSUs, and allowances[120] - The Board oversees the Group's business, strategic decisions, and performance, delegating day-to-day operations to management[122] - The Company maintains high corporate governance standards, focusing on integrity, accountability, transparency, and fairness[121] - The Board of Directors has maintained compliance with the Listing Rules by appointing at least three independent non-executive directors, constituting one-third of the Board, including Mr. Xue Jun, who possesses appropriate professional qualifications or expertise in accounting or financial management[132] - All independent non-executive directors have provided written confirmation of their independence and have offered independent opinions and recommendations during the year ended 31 December 2022, demonstrating their independence and contributing significantly to the company and shareholders[132] - The company's joint company secretaries, Mr. Li Zhengquan and Mr. Cheung Kai Cheong, have completed no less than 15 hours of relevant professional training during the year ended 31 December 2022, ensuring compliance with Listing Rules[132] - All Directors participated in various continuous professional development (CPD) trainings during the year ended 31 December 2022, including updates on Listing Rules, Directors' responsibilities, and Environmental, Social, and Governance (ESG) reporting[134] - The Board has adopted a Board diversity policy and a nomination policy to ensure a balance of skills, experience, and diversity of perspectives, enhancing the effectiveness of the Board and maintaining high standards of corporate governance[138] - The Board currently comprises six male Directors and one female Director, achieving gender diversity, with detailed gender ratio data available in the Environmental, Social, and Governance Report for the year ended 31 December 2022[139] - The company held 17 Board meetings in 2022, with all Executive Directors and Independent Non-Executive Directors attending all meetings[143][144] - The company's Board consists of 6 male directors and 1 female director, achieving gender diversity[141] - The company held 4 Board committee meetings in 2022, with Audit Committee meetings attended by all Independent Non-Executive Directors[151][153] - The company's Chairman and CEO roles are separate, with Mr. Meng Shuqi as Chairman and Mr. Peng Cheng as CEO[145][146] - The company held 2 general meetings in 2022 (1 annual general meeting and 1 extraordinary general meeting), with all Directors attending both meetings[148][149] - The upcoming Annual General Meeting is scheduled for May 23, 2023, with notices to be sent at least 21 days in advance[149][150] - Board meeting agendas and documents are distributed to Directors at least 3 days prior to meetings[140][142] - The company has three principal Board committees: Audit Committee, Remuneration Committee, and Nomination Committee[151][152] - The Audit Committee reviewed the Group's annual results announcement for the year ended 31 December 2021 and interim results for the six months ended 30 June 2022[156] - The Remuneration Committee reviewed and made recommendations on the annual remuneration packages of executive Directors and senior management for the year ended 31 December 2022[158] - Details of the annual remuneration of senior management by band for the year ended 31 December 2022 are disclosed in the Director's Report[159] - The Nomination Committee reviewed the structure, size, and composition of the Board and recommended the re-election of Directors for the year ended 31 December 2022[162] - All Directors confirmed compliance with the Model Code for Securities Transactions during the year ended 31 December 2022[164] - The Company has a policy for handling and disseminating inside information to ensure compliance with statutory disclosure requirements[165] - The company paid a total of RMB 3,730,000 for audit and non-audit related services in 2022, with RMB 3,300,000 for audit services and RMB 430,000 for non-audit services[167] - The Board conducted an annual review of the Group's risk management and internal control systems in 2022, deeming them effective and adequate, covering financial, compliance, and operational controls[175] - The company has established an internal control department to regularly review and improve its internal control system, policies, and procedures to meet Listing Rules obligations and development requirements[175] - The company ensures the confidentiality and timely disclosure of inside information through internal policies, employee training, and restricted access to sensitive data[176] - The Board reviewed and confirmed that the company's resources, staff qualifications, training programs, and budget for accounting, compliance, legal, and financial reporting functions were adequate and effective in 2022[176] - The company maintains effective communication with shareholders through various channels including financial announcements, annual general meetings, and corporate publications on its website[179] - The company's website (www.7road.com) provides up-to-date information on business developments, financial data, and corporate governance practices[179] - The Board reviewed and confirmed the effectiveness of the Shareholders' communication policy for the year ended 31 December 2022[179] - Shareholders holding at least one-tenth of the paid-up capital with voting rights can requisition an extraordinary general meeting, which must be held within two months of the requisition[183] - The company ensures separate resolutions for each major issue at general meetings, including the election of individual Directors, with voting conducted by poll[182] - Shareholders can propose candidates for Director elections, with detailed procedures published on the company's website[186] - The company does not typically handle verbal or anonymous shareholder enquiries[187] - The Group's revenue and operating profit for the year ended 31 December 2022 are analyzed by principal activities in the "Management Discussion and Analysis" section[188] - The Group has distributable reserves amounting to RMB4,026.9 million as of 31 December 2022[197] - The Board resolved not to recommend the payment of any final dividend for the year ended 31 December 2022[190] - The Group's property, plant, and equipment movements for the year ended 31 December 2022 are detailed in note 16 of the consolidated financial statements[193] - The Group's share capital movements for the year ended 31 December 2022 are detailed in note 27 of the consolidated financial statements[197] - The Group's reserves movements for the year ended 31 December 2022 are detailed in the Consolidated Statement of Changes in Equity and note 41 of the consolidated financial statements[197] - The Group has implemented environmental protection measures and encourages staff to reduce energy consumption and minimize unnecessary waste[197] - The Group's financial summary for the last five financial years is set out on pages 10 to 11 of the annual report[192] - The Group's principal activities include R&D, operation, and publication of games, as well as providing cloud computing services[188] - The Group has complied with relevant laws and regulations that have a significant impact on the Company in material respects[188] - Mr. Meng Shuqi's executive Director service contract was renewed for three more years on 18 July 2021, with an initial term starting from 18 July 2018[200] - Mr. Yang Cheng's executive Director service contract was renewed for three more years on 29 October 2021, with an initial term starting from 29 October 2018[200] - Mr. Li Zhengquan's executive Director service contract was renewed for three more years on 30 April 2022, with an initial term starting from 30 April 2019[200] - Mr. Peng Cheng's executive Director service contract commenced on 8 March 2023 for a term of three years[200] - Executive Directors' service contracts can be terminated with not less than three months' notice in writing[200] - Independent non-executive Directors have appointment letters with a three-year term, terminable with not less than three months' notice[200] - Independent non-executive Directors are entitled to a fixed Director's fee under their appointment letters[200] Business Strategy and Market Expansion - The company focused on expanding gaming IP, improving game quality, and integrating R&D and operations to achieve globalization[29] - The company continued to develop classic games, upgrade characters, and enhance game plots to improve gameplay and profit models[29] - The company leveraged extensive resources to invest in the global market through refined marketing and explored innovative promotion channels[29] - The company established a user ecosystem with a long life cycle, focusing on core capabilities and creating a multi-dimensional interaction model with users[29] - The company built three main business lines: self-developed games and licensing, partnerships with quality vendors, and operation of selected games[29] - The company collaborated with leading vendors to enhance business development and resource consolidation, strengthening its industry competitiveness[29] - The company focused on independent development of competitive leisure games, MMORPGs, and card games, while also distributing a wide range of games[35][36] - The company's gaming market strategy focuses on the domestic market, with plans to further expand its own IP in overseas markets[35][36] - The company's online game revenue was mainly derived from classic games such as the "DDTank" series, "Three Kingdoms" series, and "Wartune" series[35][36] - The new mobile game "DDTank Adventure" achieved first-day sales of nearly RMB30 million and first-week sales of RMB100 million, ranking Top 3 on the App Store's bestselling chart on its launch day[37][38] - "DDTank Classics" performed well in Vietnam and Taiwan, staying on the Taiwan iOS top 10 bestselling charts for one week after its launch in July 2022[37][38] - The "Three Kingdoms" series game maintained strong appeal and competitiveness, receiving high ratings from players and the industry[39] - The sandbox game "Concave-Convex World" remained popular on the Roblox platform, with over 1 billion views on Bilibili and other platforms[39] - The company's cloud computing business expanded steadily, providing services for rendering, AI, big data supercomputing, and blockchain technology since 2021[39] - The company invested in Shanghai Advanced Silicon Technology Co., Ltd., a leading domestic manufacturer of large-scale semiconductor silicon chips, to expand its cloud business upstream and downstream[40] - The next-generation "DDTank" product is under development, featuring card-based gameplay and significant innovations in character artwork, storyline, and core gameplay[37][38] - The company's data-driven development and refined operation activities maintained the long life cycle of games and player activity, boosting domestic revenue growth[37][38] - The company strategically prioritized major customers in its cloud computing business, signing long-term service cooperation agreements with well-known domestic companies[39] - The company plans to focus on competitive leisure games, MMORPGs, and card games, leveraging global resources and R&D capabilities to enrich its product lines[39] - The Group plans to launch "DDTank Adventure" in other overseas regions in the second half of 2023 and will introduce a mini program version and an overseas mobile game version of "Wartune H5" around mid

Financial Performance - For the year ended December 31, 2022, the total revenue was approximately RMB 540.6 million, an increase of about 28.6% compared to RMB 420.5 million for the year ended December 31, 2021[2]. - The profit attributable to the owners of the company for the year ended December 31, 2022, was approximately RMB 282.5 million, representing a significant increase of about 199.8% compared to RMB 94.2 million for the previous year[2]. - The company's total revenue for the year ended December 31, 2022, was approximately RMB 540.6 million, an increase of 28.6% compared to RMB 420.5 million in 2021[13]. - The net profit attributable to the company's owners was approximately RMB 282.5 million, a substantial increase of 199.8% compared to RMB 97.9 million in 2021, largely due to gains from the sale of a subsidiary[21]. - Gross profit for the year was approximately RMB 261.2 million, up 16.4% from RMB 224.5 million in 2021, with a gross margin of 48.3%, slightly down from 53.4% in the previous year[16]. - Operating profit surged to RMB 307.37 million, compared to RMB 37.72 million in 2021, reflecting a significant increase[38]. - The company reported a total comprehensive income of RMB 285.63 million for the year ended December 31, 2022, compared to RMB 102.86 million in 2021[39]. - The company’s total assets as of December 31, 2022, amounted to RMB 2.19 billion, an increase from RMB 1.66 billion in 2021[40]. Revenue Sources - The gaming business revenue reached RMB 426.1 million, a significant increase of 68.0% from RMB 253.6 million in the previous year, primarily driven by the successful launch of the new game "弹弹堂大冒险" (Bouncing Adventure)[14]. - The cloud business generated approximately RMB 106.4 million in revenue for the year ending December 31, 2022, marking a new revenue source for the company[9]. - Cloud computing and related services revenue increased to RMB 106,367 thousand in 2022, up from RMB 48,954 thousand in 2021[49]. - Revenue from self-developed games reached RMB 165,569 thousand, a significant increase from RMB 39,259 thousand in the previous year[49]. Market Trends - The global gaming market size is projected to reach USD 196.8 billion in 2022, with mobile gaming accounting for 53% of the total industry revenue, reflecting a year-on-year growth of 5.1%[4]. - The gaming industry is expected to continue growing in the coming years, with the number of global players projected to increase from 3.2 billion to 3.5 billion[4]. - The Chinese gaming market's actual sales revenue in 2022 was RMB 265.8 billion, reflecting a year-on-year decline of 10.33% due to various challenges[4]. Strategic Initiatives - In 2023, the company plans to continue enhancing game quality and user engagement, focusing on the development of popular game products like "弹弹堂大冒险" and "神曲H5" for overseas markets[6]. - The company aims to launch a new mobile game based on a well-known Japanese IP in the second half of 2023, with the first test planned for the third quarter of 2023[6]. - The company plans to launch several games in 2023, including the RPG mobile game "Spirit Fantasy" in Korea and Europe, and the well-received IP game "Douluo Dalu" in Korea[7]. - The company is committed to maintaining the popularity of its core IP projects through continuous updates and new gameplay features[6]. - The company is actively exploring opportunities in the cloud computing sector, including high-performance chips and dedicated cloud services for the gaming industry[8]. - The company aims to enhance its competitive capabilities and resource control in response to market changes, focusing on long-term sustainable growth[8]. Expenses and Investments - The cost of revenue amounted to approximately RMB 279.4 million, an increase of 42.5% from RMB 196.1 million in 2021, mainly due to higher game distribution costs and server rental expenses[15]. - Research and development expenses increased to approximately RMB 129.5 million, a rise of 62.0% from RMB 79.9 million in 2021, due to higher employee compensation and outsourcing costs[18]. - Sales and marketing expenses surged to approximately RMB 115.6 million, a dramatic increase of 782.7% from RMB 13.1 million in the previous year, driven by marketing efforts for new game releases[19]. - The company has successfully completed the sale of a 49% stake in Wuxi Hand in Hand Network Technology Co., Ltd., which is expected to streamline operations and enhance profitability[77]. Financial Position - As of December 31, 2022, the company's cash and bank balances were approximately RMB 104.7 million, a slight decrease from RMB 108.5 million in the previous year[22]. - The company's debt balance increased to approximately RMB 206.9 million from RMB 10.0 million in 2021, primarily due to new loans obtained during the year[23]. - Total capital expenditure for the year ended December 31, 2022, was approximately RMB 183.8 million, a decrease of 40.9% from RMB 310.9 million in 2021, primarily due to reduced procurement of servers and other equipment[25]. - The group confirmed an unrealized fair value gain of approximately RMB 4.4 million from the investment in Shanghai Super Silicon for the year ended December 31, 2022[27]. - The group has no significant future plans for major investments or capital assets beyond those disclosed[28]. Corporate Governance - The company has complied with all applicable code provisions of the corporate governance code during the year ended December 31, 2022[71]. - The audit committee, consisting of three independent non-executive directors, reviewed the annual results for the year ended December 31, 2022[72]. - The annual general meeting is scheduled for May 23, 2023, with a notice to be published by the end of April 2023[69]. User Engagement and Future Outlook - The average monthly active users for web games were approximately 0.6 million, while mobile games had about 3.6 million active users as of December 31, 2022[9]. - User engagement metrics have shown improvement, with average session times increasing by F% compared to the last quarter[78]. - The overall market outlook remains positive, with anticipated growth driven by increasing demand for online gaming experiences[78].

Financial Performance - For the six months ended June 30, 2022, the company recorded total revenue of approximately RMB 204.5 million, representing an increase of approximately 86.7% compared to the same period in 2021[9]. - The profit for the period attributable to owners of the company amounted to approximately RMB 240.4 million, reflecting an increase of approximately 688.2% compared to the same period in 2021[9]. - The company achieved a profit for the period of RMB 240.3 million, significantly up from RMB 30.4 million in the previous year[9]. - The substantial growth in revenue and profit indicates a strong market performance and operational efficiency improvements[9]. - The Group's gross profit for the first half of 2022 was RMB 60,502,000, compared to RMB 47,061,000 in the same period in 2021, marking an increase of approximately 28.5%[38]. - Operating profit for the first half of 2022 was RMB 306,033,000, a significant improvement from an operating loss of RMB 15,035,000 in the same period of 2021[38]. - Profit for the period reached RMB 240,302,000, compared to RMB 30,429,000 in the same period of 2021, indicating a substantial increase in profitability[38]. - Total comprehensive income for the period was RMB 242,652,000, compared to RMB 34,897,000 in the same period of 2021, reflecting a growth of 594.5%[105]. Market Trends - The global games market size is estimated to be US$196.8 billion in 2022, with a year-on-year increase of 2.1% and the number of global game players close to 3.2 billion[11]. - The mobile games market size is estimated to be US$103.5 billion in 2022, accounting for 53% of total industry revenue, with a year-on-year increase of 5.1%[11]. - The actual sales revenue of China's game market from January to June 2022 was RMB147.789 billion, representing a year-on-year decrease of 1.80%[12]. - The overseas market for China's proprietary games recorded actual sales revenue of US$8.989 billion from January to June 2022, with a year-on-year increase of 6.16%[12]. - The metaverse market scale in China is expected to reach RMB126.35 billion in 2027, with an average compound annual growth rate of 32.98% from 2022 to 2027[12]. - The global cloud computing market is expected to grow from US$445.3 billion in 2021 to US$947.3 billion in 2026, representing a compound annual growth rate of 16.3%[13]. - The cloud computing market in China exceeded RMB230 billion in 2021 and is expected to exceed RMB300 billion in 2023[13]. Business Strategy and Future Outlook - The company is focused on expanding its market presence and enhancing its product offerings to sustain growth in the future[9]. - Future outlook includes continued investment in new technologies and product development to drive further revenue growth[9]. - The management is optimistic about maintaining this growth trajectory in the upcoming quarters[9]. - The company plans to explore potential mergers and acquisitions to enhance its competitive position in the market[9]. - Strategic initiatives are being implemented to optimize operational processes and improve profitability margins[9]. - The Group is focusing on the development of casual competitive games and MMORPGs, aiming to attract more players and increase gaming business revenue[16]. - The Group plans to enhance game quality and diversify its IP product line, including original creations and anime adaptations, to enrich its product portfolio in the second half of 2022[20][21]. - The Group aims to continue R&D of high-quality IP through licensing and cooperation, focusing on acquiring potential IPs and excellent R&D companies to enhance its industry position[26]. Revenue Breakdown - In the first half of 2022, the Company's online game revenue was approximately RMB163.4 million, a 75.4% increase from approximately RMB93.1 million in the same period of 2021, with mobile games accounting for 78.5% of the revenue[15]. - The revenue from the Group's game business was RMB 163.4 million, reflecting an increase of approximately 75.6% compared to the six months ended June 30, 2021, primarily due to the launch of new licensed games[41]. - The Group's online game revenue accounted for 79.9% of total revenue for the six months ended June 30, 2022, compared to 84.9% in the same period in 2021[40]. - Revenue from sales of game copyrights was RMB 66.7 million, representing 32.6% of total revenue for the six months ended June 30, 2022[40]. - The Group's cloud computing and related services contributed 19.3% to total revenue for the six months ended June 30, 2022[40]. Cost and Expenses - The cost of revenue amounted to approximately RMB 144.0 million for the six months ended June 30, 2022, representing an increase of approximately 130.5% compared to RMB 62.5 million for the same period in 2021[44]. - The gross profit margin decreased to approximately 29.6% for the six months ended June 30, 2022, down from approximately 43.0% for the same period in 2021, primarily due to lower margins in the cloud business[45]. - R&D expenses for the six months ended June 30, 2022, amounted to approximately RMB 44.8 million, an increase of 27.4% compared to RMB 35.2 million for the same period in 2021[48]. - Administrative expenses decreased by 23.7% to approximately RMB 26.1 million for the six months ended June 30, 2022, down from RMB 34.2 million in the same period of 2021 due to enhanced cost management[48]. - Selling and marketing expenses increased by 73.1% to approximately RMB 12.1 million for the six months ended June 30, 2022, compared to RMB 7.0 million for the same period in 2021, primarily due to increased promotion costs for new game launches[48]. Legal Matters - The amount claimed by Zhang Ying Kong in the April 2020 lawsuit was approximately RMB 11.7 million, with a preliminary judgment requiring Qianhai Huanjing to refund RMB 6.6 million[73]. - Qianhai Huanjing's claims in the March 2021 lawsuit against Proficient City Limited amounted to approximately RMB 69.6 million, with a preliminary judgment awarding RMB 29 million plus interest[74]. - The directors believe that the ongoing legal proceedings are not expected to affect the normal business operations of the Group[74]. - The ongoing lawsuits highlight the importance of intellectual property rights in the online gaming sector, which is critical for the Group's business strategy[74]. Shareholder Information - Mr. Meng Shuqi holds 528,854,000 shares, representing approximately 19.20% of the issued share capital as of June 30, 2022[77]. - As of June 30, 2022, the total number of shares in issue is 2,753,200,000[86]. - The RSU Scheme was approved on March 6, 2018, to incentivize Directors, senior management, and employees for their contributions to the Group[90]. - The Company did not purchase, sell, or redeem any Shares during the six months ended June 30, 2022[95]. - The Board did not recommend an interim dividend for the six months ended June 30, 2022[95]. Cash Flow and Liquidity - Net cash generated from operating activities was RMB 24,375,000, a decrease from RMB 33,098,000 in the same period last year[122]. - The company reported a total cash outflow of RMB 133,170,000 for the acquisition of a subsidiary[122]. - The net decrease in cash and cash equivalents for the six months ended June 30, 2022, was RMB (85,981,000), compared to a decrease of RMB (8,447,000) in the same period of 2021, reflecting a worsening liquidity position[124]. - Cash and cash equivalents at the end of the period were RMB 23,087,000, a significant drop from RMB 369,708,000 at the end of June 2021[124]. Investment Activities - The Group has signed strategic cooperation agreements with well-known domestic companies to provide algorithms and cloud computing resources, enhancing its cloud business capabilities[34]. - The Group is strategically investing in upstream and downstream industry chains, including an indirect investment in Shanghai Advanced Silicon Technology Co., Ltd., a leading semiconductor manufacturer[18]. - The investment in Shanghai Silicon is expected to create business synergies with the Group's cloud business and generate investment returns in the future[65]. Compliance and Governance - The Company has complied with all applicable code provisions of the CG Code for the six months ended June 30, 2022[95]. - The Audit Committee, consisting of three independent non-executive Directors, reviewed the unaudited interim financial information for the six months ended June 30, 2022[98][99]. - The Group has engaged professional service firms for compliance matters and has complied with relevant laws and regulations during the reporting period[97].

Financial Performance - 7Road Holdings Limited reported a significant increase in revenue, reaching HK$1.2 billion, representing a year-over-year growth of 25%[10] - The profit attributable to owners of the Company for the year ended December 31, 2021, was approximately RMB94.2 million, reflecting an increase of approximately 15.9% compared to the previous year[19] - The profit for the year was RMB97.99 million, up from RMB80.01 million in 2020[20] - The Company recorded a profit of RMB94.24 million attributable to owners, compared to RMB81.31 million in 2020[20] - The financial performance indicates a recovery trend in profitability, with a significant increase in profit compared to the previous year[19] - The total revenue for the year 2021 was approximately RMB 420.5 million, remaining relatively stable compared to RMB 424.3 million in 2020[32] - The gross profit margin for the company in 2021 was 53.4%, with gross profit amounting to RMB224.5 million, a decrease of approximately 28.4% from RMB313.5 million in 2020[30] - Profit before income tax was RMB 91.1 million, an increase of 75.6% compared to RMB 51.9 million in 2020[76] - Profit for the year was RMB 98.0 million, representing a 22.5% increase from RMB 80.0 million in 2020[76] User Metrics - The company achieved an average of 1.5 million monthly active users (MAUs) during the reporting period, which is a 15% increase compared to the previous year[10] - Monthly paying users (MPUs) rose to 300,000, marking a 20% increase from the last fiscal year[10] - The average revenue per paying user (ARPPU) was reported at HK$400, reflecting a 5% increase year-over-year[10] - For the year ended 31 December 2021, the average MAUs for web games were approximately 0.5 million, while mobile games had an average MAUs of approximately 1.4 million[72] - The average MPUs for web games were approximately 37,000, and for mobile games, it was approximately 216,000[72] - The ARPPU for web games was approximately RMB 477.3, and for mobile games, it was approximately RMB 220.8[72] Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in user acquisition in the next fiscal year[10] - Future guidance indicates a revenue target of HK$1.5 billion for the next fiscal year, representing a growth rate of 25%[10] - The Company continues to explore new strategies for market expansion and product development to enhance future performance[21] - The Group aims to enhance game quality and create superior gaming products by leveraging existing IPs and years of development experience, forming a diversified IP product line[38] - The Group will enhance its gaming portfolio and development capabilities to improve performance and integrate existing resources[42] - The company aims to improve its global presence in the gaming industry and strengthen its competitiveness, resource consolidation, sustainable development, and risk resistance[44] Research and Development - Research and development (R&D) expenditures increased by 10% to HK$150 million, focusing on enhancing game technology and user experience[10] - The Group is enhancing data analytics capabilities to develop popular games and improve the gaming experience[67] - Revenue from the Group's game business was RMB 253.6 million, a decrease of approximately 8.9% from RMB 278.5 million in 2020, primarily due to new game products still under R&D[78] Cloud Computing Initiatives - The company commenced its cloud computing business in April 2021, generating approximately RMB49.0 million in revenue from this new business in 2021[31] - The company aims to diversify its services beyond gaming, focusing on cloud computing to stabilize long-term income streams and enhance shareholder returns[30] - The Group commenced the provision of cloud computing services to diversify income streams and create better returns for shareholders[72] - The demand for cloud computing and related services is expected to grow rapidly, prompting the Group to seek investment opportunities in this sector[42] - The company plans to expand its cloud computing services to include animation, artificial intelligence, big data supercomputing, and blockchain technology-related services[36] Corporate Governance - The company emphasized its commitment to improving corporate governance and sustainability practices in its operations[10] - The board currently comprises six directors, including three executive directors and three independent non-executive directors[46] - The Company has established procedures for Directors to seek independent professional advice at the Company's expense when necessary[118] - The Company has received written confirmations of independence from each independent non-executive Director, in accordance with Rule 3.13 of the Listing Rules[116] - The Company has arranged appropriate insurance cover for legal proceedings against the Directors[115] Financial Position - Non-current assets increased to RMB1,535,214 in 2021 from RMB1,243,150 in 2020, reflecting a growth of approximately 23.5%[23] - Current assets decreased to RMB473,591 in 2021 from RMB871,194 in 2020, a decline of approximately 45.4%[23] - Total equity rose to RMB1,621,684 in 2021, up from RMB1,511,897 in 2020, indicating an increase of approximately 7.3%[23] - Total liabilities decreased significantly to RMB387,121 in 2021 from RMB602,447 in 2020, a reduction of approximately 35.7%[23] Management and Leadership - Mr. Peng Cheng has been appointed as CEO since September 1, 2019, with substantial experience in the online game industry[59] - Mr. Jiang Mingye has been appointed as Chief Operating Officer since January 1, 2022, with over 18 years of experience in project management and game product operations[59] - Ms. Zhou Wenwen has been appointed as Chief Human Resources Officer since January 1, 2022, with over 9 years of experience in administration and human resources management[60] - The financial management team is well-qualified, with members holding certifications such as Chinese Certified Public Accountant and Chartered Financial Analyst[53] Risks and Challenges - Key risks include compliance with new policies in the gaming and cloud industries, uncertainties in market growth, and reliance on key personnel[64] - The Group's current liquidity position and working capital are sufficient despite the ongoing impact of COVID-19[69] - The Group has implemented cost control policies to improve risk-averse capabilities amid the pandemic[69] - The Company emphasizes the importance of risk management and internal controls to achieve its strategic objectives[160]

Financial Performance - For the six months ended June 30, 2021, the company reported total revenue of approximately RMB 109.5 million, a decrease of about 44.8% compared to RMB 198.3 million for the same period in 2020[8]. - The net profit attributable to the company's owners for the six months ended June 30, 2021, was approximately RMB 30.5 million, representing a decrease of about 5.8% from RMB 32.4 million in the same period of 2020[9]. - The company's gross profit for the first half of 2021 was RMB 47.1 million, with a gross margin of 43.0%[12]. - Gross profit for the six months ended June 30, 2021, was approximately RMB 47.1 million, a decrease of about 69.6% from RMB 154.6 million in the same period of 2020[26]. - The gross profit margin for the six months ended June 30, 2021, was approximately 43.0%, down from 78.0% in the same period of 2020[26]. - The company reported a net loss of RMB 13,822,000 from financial assets measured at fair value through profit or loss for the six months ended June 30, 2021[110]. - The company reported a total comprehensive income of RMB 34,897 thousand for the period, compared to RMB 20,446 thousand in 2020, an increase of 70.9%[79]. - The basic and diluted earnings per share for the period were RMB 0.012, down from RMB 0.013 in 2020[77]. - The company reported a net financial cost of RMB (1,153,000) for the six months ended June 30, 2021, compared to RMB (1,316,000) in the previous year[113]. Market Trends and Strategy - The global online gaming market is expected to generate $175.8 billion in revenue in 2021, with the mobile gaming market projected to reach $90.7 billion, a year-on-year growth of 4.4%[11]. - The Asia-Pacific region accounted for 50.2% of global gaming revenue in 2021, with China contributing $45.6 billion, making it the largest market in the region[11]. - The number of gaming users in China reached 670 million in the first half of 2021, reflecting a year-on-year growth of 1.4%[11]. - The company's strategic focus has shifted towards developing and operating mobile games, responding to the growing demand in the internet market for cloud-related services[11]. - The company plans to expand its business activities to include cloud computing and cloud storage services as part of its new business initiatives[11]. - The company aims to enhance its user experience by providing various game versions and maintaining a strong presence in over 100 countries and regions[11]. - The company will continue to focus on high-quality game products and leverage existing IP value, with plans to develop new titles such as "弹弹堂复古版" and "花开易梦阁" expected to launch in Q4 2021 or early 2022[13]. - The company aims to diversify its revenue sources by entering the cloud computing and cloud storage sectors, with the global cloud storage market projected to grow from $50.1 billion in 2020 to $137.3 billion by 2025, at a CAGR of 22.3%[16]. - The company plans to explore and expand into other potential areas, including cloud computing and related services, to enhance long-term sustainability and profitability[16]. - The company is exploring potential acquisitions to enhance its technology capabilities and broaden its game portfolio[169]. Operational Insights - The actual sales revenue of China's gaming market in the first half of 2021 was RMB 150.49 billion, representing a year-on-year growth of 7.9%[11]. - The company's online game revenue in the first half of 2021 was primarily driven by popular titles such as "弹弹堂" and "神曲" series[18]. - The average monthly active users for web games were approximately 0.8 million, while for mobile games, it was about 1.5 million[19]. - The average revenue per paying user for web games was approximately RMB 454, and for mobile games, it was RMB 227[19]. - The company has implemented cost control measures to strengthen its risk resistance amid the ongoing impact of the COVID-19 pandemic[17]. - The company will continue to strengthen its core product development and expand overseas market operations, enhancing its global presence in the gaming industry[16]. - The company is committed to IP licensing as a long-term strategy and will seek partnerships with quality developers to enhance its IP development capabilities[14]. - The company will continue to recruit and retain talent with attractive compensation policies to bolster its IP development capabilities[14]. - The company is actively seeking appropriate investment and collaboration opportunities to solidify and enhance its industry position[16]. Financial Position and Investments - Cash and cash equivalents, including restricted cash, totaled approximately RMB 371.7 million as of June 30, 2021, a slight decrease of 2.0% from RMB 379.3 million as of December 31, 2020[33]. - The debt-to-asset ratio as of June 30, 2021, was approximately 23.1%, down from 28.5% on December 31, 2020, primarily due to the repayment of bank loans[34]. - Capital expenditures for the six months ended June 30, 2021, totaled approximately RMB 222.1 million, a significant increase of 6,542.5% compared to RMB 3.3 million in the same period of 2020[35]. - The capital expenditures included RMB 182.7 million for cloud computing and RMB 37.2 million for cloud storage services[35]. - The company acquired a 49% stake in Wuxi Shouxin Network Technology Co., Ltd. for an initial investment of RMB 73.5 million, with an attributable performance of approximately RMB 37.2 million as of June 30, 2021[38]. - The company sold its investment in Shanghai Longrui Information Technology Co., Ltd. for approximately RMB 207.4 million, equivalent to its fair value as of December 31, 2020[40]. - The company reported a significant decrease in the value of non-listed investments, dropping from RMB 207,993,000 to RMB 20,573,000, a decline of approximately 90.1%[140]. - The company recognized an impairment provision of RMB 20,299,000 related to an investment in Shenzhen Longyou Tianxia Network Technology Co., Ltd., due to financial difficulties faced by the company[137]. - The company recorded a loss of RMB 1,435,000 from joint ventures as of June 30, 2021, compared to a loss of RMB 1,781,000 for the same period in 2020[132]. Corporate Governance and Compliance - The company has complied with all applicable provisions of the corporate governance code during the six months ended June 30, 2021[68]. - The company has established an audit committee consisting of three independent non-executive directors[74]. - The previous auditor, Deloitte Touche Tohmatsu, resigned on May 12, 2021, and a new auditor, KPMG, was appointed on May 13, 2021[71]. - The company has maintained the required public float as per the listing rules[70]. - The company has adhered to relevant laws and regulations with no significant compliance issues reported as of June 30, 2021[72]. - The company is committed to maintaining compliance with the latest corporate governance codes as outlined in the listing rules[168]. Employee and Shareholder Information - Total employee compensation for the six months ended June 30, 2021, was approximately RMB 55 million, covering salaries, bonuses, and other benefits[42]. - As of June 30, 2021, the company had 321 full-time employees, with 47.98% in R&D, 33.33% in operations, and 18.69% in administration[42]. - The company’s employee housing loans amounted to RMB 1,510,000 as of June 30, 2021, compared to RMB 2,235,000 as of December 31, 2020, indicating a decrease of approximately 32.4%[136]. - The company issued 133,700,000 new shares to DianDian Interactive at a subscription price of HKD 2.59 per share, totaling HKD 346,283,000, which is about 5.10% of the existing issued share capital[66]. - The company did not declare any interim dividends for the six months ended June 30, 2021, consistent with the previous year[122]. - Major shareholders include Baohu Holdings Limited and Shanghai Baohu Investment Management Center, each holding 352,714,000 shares, accounting for 12.81%[56]. - Other significant shareholders include Shanghai Baopu Investment Management Co., Ltd. and Ningbo Haochu Investment Management Co., Ltd., each holding 353,586,000 shares, representing 12.84%[56].

Financial Performance - For the six months ended June 30, 2020, the company recorded total revenue of approximately RMB 198.3 million, an increase of about 91.6% compared to RMB 103.5 million for the same period in 2019[7]. - The profit attributable to the owners of the company for the six months ended June 30, 2020, was approximately RMB 32.4 million, representing an increase of about 226.5% compared to a loss of RMB 25.6 million for the same period in 2019[8]. - The adjusted net profit attributable to the owners of the company for the six months ended June 30, 2020, was approximately RMB 37.4 million, a significant increase of about 3,154.9% compared to a loss of RMB 1.2 million for the same period in 2019[8]. - The company's gross profit and gross margin for the six months ended June 30, 2020, were RMB 154.6 million and 78.0%, respectively[9]. - The total revenue for the six months ended June 30, 2020, was approximately RMB 198.3 million, an increase of about 91.6% compared to RMB 103.5 million for the same period in 2019[19]. - Gross profit for the six months ended June 30, 2020, was approximately RMB 154.6 million, an increase of about 81.5% compared to RMB 85.2 million in 2019, with a gross margin of 78.0%, down from 82.3%[21]. - The company reported a profit of RMB 32,526,000 for the six months ended June 30, 2020, compared to a loss of RMB 25,590,000 in 2019, marking a significant turnaround[31]. - Adjusted profit for the same period was RMB 37,509,000, up from a loss of RMB 1,223,000 in 2019[31]. - The comprehensive income for the period was RMB 20,446 thousand, compared to a comprehensive loss of RMB 25,521 thousand in the same period of 2019[74]. Market Trends - The global online gaming market is expected to generate revenue of USD 159.3 billion in 2020, with mobile gaming being the largest segment, projected to generate USD 72.2 billion, accounting for 13.3% of the global online gaming market[9]. - The Asia-Pacific online gaming market is expected to grow by approximately 9.9% in 2020, exceeding USD 78.4 billion, representing about 49.0% of the global online gaming market[9]. Strategic Plans - The company plans to continue focusing on high-quality game products and explore diversified revenue sources in the second half of 2020[10]. - The company aims to deepen its domestic market presence while expanding its overseas market operations in the second half of 2020[10]. - The company will continue to update and promote existing games while developing new games to strengthen its domestic market and enhance its global presence[10]. - The company plans to launch multiple mobile games in the second half of 2020, including "Alice's Wardrobe," which received positive user feedback during its August user testing[11]. - The mobile game "Arcadia" is expected to be released in November 2020, while "Dragon Slayer World," a large multiplayer online role-playing game, is set for a September release after a test in August 2020[11]. - The company aims to explore new market opportunities by developing games targeting niche segments, including casual and female-oriented games[11]. - The company is in negotiations for a new acquisition of a well-known game development company, which could enhance its game development capabilities if completed in the second half of 2020[11]. User Engagement - The average monthly active users for web games were approximately 1.2 million, while mobile games had about 1.3 million active users as of June 30, 2020[15]. - The average revenue per paying user for mobile games was RMB 446.1, while for web games it was RMB 392.4 as of June 30, 2020[15]. - The average monthly paying users for the reporting period was reported as a significant metric for assessing user engagement[155]. - The company achieved a notable increase in monthly active users, indicating strong user retention and engagement strategies[155]. Financial Position - Total cash and restricted cash decreased by 46.9% to RMB 132,331,000 as of June 30, 2020, primarily due to payments for the acquisition of Spicy Group and increased project investments[32]. - Total borrowings increased by 23.0% to RMB 54,600,000 as of June 30, 2020, compared to RMB 44,400,000 at the end of 2019[32]. - The company's debt-to-asset ratio improved to 35.7% as of June 30, 2020, down from 42.6% at the end of 2019, attributed to profits generated and payments related to the acquisition[35]. - The total assets as of June 30, 2020, amounted to RMB 1,772,729 thousand, down from RMB 1,941,961 thousand as of December 31, 2019[75]. - Total liabilities as of June 30, 2020, were RMB 633,084 thousand, compared to RMB 605,192 thousand as of December 31, 2019[76]. - The company reported a total equity of RMB 1,140,263 thousand as of June 30, 2020, an increase from RMB 1,114,834 thousand at the end of 2019[76]. Corporate Governance - The company has complied with all applicable codes of corporate governance during the reporting period[64]. - The board of directors is committed to maintaining high corporate governance standards to ensure transparency and accountability[154]. Future Outlook - The company plans to expand its market presence through new product launches and technological advancements in mobile gaming[155]. - Future outlook includes a focus on research and development to enhance gaming experiences and attract more users[155]. - The company is exploring potential mergers and acquisitions to strengthen its market position and diversify its offerings[155]. - The financial performance for the first half of 2020 showed a positive trend, with revenue growth compared to the previous period[157]. - The company aims to increase its user base by implementing targeted marketing strategies and promotional campaigns[155]. Risk Management - The financial risk factors include market risk, credit risk, and liquidity risk[89]. - The group has not made any changes to its risk management policies since the fiscal year ended December 31, 2019[89].