Core Viewpoint - IGG (00799) reported significant growth in its annual performance for the year ending December 31, 2024, with adjusted net profit increasing by 427.9% to HKD 607 million, driven by new game launches and robust app business development [1][2] Financial Performance - The company achieved revenue of HKD 5.737 billion, marking an 8.95% year-on-year increase [1] - Shareholder profit reached HKD 5.81 billion, up 694.87% compared to the previous year [1] - Earnings per share stood at HKD 0.5061 [1] Revenue Contributions - The new games "Doomsday: Last Survivors" and "Viking Rise," along with the app business, were key growth drivers, contributing approximately HKD 1 billion, HKD 700 million, and HKD 1.1 billion respectively [1] - The revenue share from these projects increased from 32% in 2023 to 49% in 2024, indicating a diversification in revenue sources [1] - The classic product "King of Kingdoms" continued to perform well, generating nearly HKD 2.6 billion in revenue [1] Geographic Revenue Distribution - Revenue distribution by region showed that Asia accounted for 42%, Europe for 34%, and North America for 20% of the total revenue [1] Profit Growth - The company reported a profit of HKD 5.58 billion, a substantial increase of 697% year-on-year, attributed to the expansion of its business and the deep application of AI technology [2] - Main business profit surged by 3626% to HKD 650 million [2] - The investment business recognized an unrealized loss of approximately HKD 70 million due to changes in the fair value of investment targets [2]

Revenue and Profit Growth - In 2024, the revenue from the new games "Doomsday: Last Survivors" and "Viking Rise" reached approximately HKD 1 billion and HKD 700 million respectively, contributing to a total revenue increase of 67% year-on-year, with their combined revenue share rising from 32% in 2023 to 49% in 2024[11]. - The long-standing game "King of Kingdoms" generated nearly HKD 2.6 billion in revenue this year, maintaining a stable income stream for the company after nine years of operation[12]. - The APP business achieved approximately 11 billion HKD in revenue, supported by a user base of 62 million monthly active users, further solidifying the company's diversified growth strategy[12]. - The company reported a significant profit increase of 697% year-on-year, reaching HKD 580 million in 2024, following a profit of HKD 73 million in 2023[15]. - In 2024, IGG's revenue increased by 9% year-on-year to HKD 5.74 billion, driven by new games and stable APP business growth[19]. - The contribution from new games "Doomsday: Last Survivors" and "Viking Rise" along with APP business accounted for 49% of total revenue, up from 32% in 2023[19]. - The group achieved a profit of HKD 582.6 million in 2024, a significant increase of 697% year-on-year, with core business profit soaring by 3,626% to HKD 655.5 million[20]. Game Performance - "King of Kingdoms" celebrated its 9th anniversary with 740 million registered users and over 9 million monthly active users[21]. - "Doomsday: Last Survivors" saw a 50% year-on-year revenue growth, attracting 73 million players[22]. - "Viking Rise" experienced a 66% year-on-year revenue increase, with over 40 million players engaged[23]. - The gaming business revenue breakdown includes: "Kingdoms Rise" at HKD 2.589 billion (45.1%), "Doomsday: Last Survivors" at HKD 1.021 billion (17.8%), and "Viking Rise" at HKD 680 million (11.8%) for the year ended December 31, 2024[36]. Research and Development - The introduction of innovative gameplay features and AI-assisted development has enhanced product competitiveness and reduced R&D costs[13]. - Research and development expenses for the year ended December 31, 2024, were HKD 787 million, a 16% decrease from HKD 935 million, representing 14% of revenue, down from 18%[42]. - The company plans to launch a series of new strategy games in 2025, leveraging its strengths in the strategy game sector to drive further growth[15]. - The company plans to launch two major strategy games and one casual game in 2025, aiming for sustained growth in gaming and APP business[30]. Financial Position and Cash Flow - The company's revenue for the year ended December 31, 2024, was HKD 5.737 billion, an increase of 9% compared to HKD 5.266 billion for the year ended December 31, 2023[35]. - Gross profit for the year ended December 31, 2024, was HKD 4.611 billion, an 18% increase from HKD 3.919 billion in the previous year, with a gross margin of 80%, up from 74%[38]. - The company reported a net cash inflow from operating activities of HKD 1.121 billion for the year ended December 31, 2024, compared to HKD 128 million in the previous year[51]. - The company's cash and cash equivalents increased to HKD 2.446 billion as of December 31, 2024, from HKD 1.475 billion a year earlier[49]. - The income tax expense for the year ended December 31, 2024, was HKD 97 million, a 304% increase from HKD 24 million in the previous year[46]. - The company’s capital debt ratio was 29.3% as of December 31, 2024, compared to 26.0% a year earlier[49]. Corporate Governance - The company is committed to maintaining high standards of corporate governance, ensuring transparency and accountability to shareholders[88]. - The board currently does not separate the roles of chairman and CEO, with Mr. Cai Zongjian serving in both capacities, which the board believes provides strong leadership[89]. - The company has adhered to the corporate governance code, except for the provision C.2.1 regarding the separation of the roles of chairman and CEO[88]. - The board consists of five executive directors, one non-executive director, and three independent non-executive directors, ensuring a balance of power and authority[89]. - The company has appointed at least three independent non-executive directors, meeting the requirements of the listing rules[92]. - The board diversity policy was first adopted in September 2013 and reviewed annually, with the latest review in March 2022[95]. - The company has established a dividend policy aimed at providing consistent dividends to shareholders while preserving liquidity for future growth opportunities[105]. Risk Management and Compliance - The company has established a risk management and internal control system to ensure effective management of business risks[127]. - The company monitors various indicators such as game data, player feedback, and employee turnover rates to identify potential risks[133]. - The company has established a comprehensive risk management framework that incorporates ESG factors, with the board responsible for overseeing risk management and internal control effectiveness[157]. - The company emphasizes the importance of information security and user privacy protection as a key expectation from its users[159]. Environmental, Social, and Governance (ESG) Initiatives - The company has established an ESG working group led by the board to effectively implement and oversee ESG matters[145]. - The company aims to ensure that new office buildings meet China's Green Building Evaluation Standards and promotes energy-saving and waste reduction measures[147]. - The company received the "Annual Corporate Governance Award" at the ESG100 Green Development Awards in November 2024, highlighting its integration of corporate governance and sustainable development practices[153]. - The company actively participates in public welfare activities and charitable donations while leveraging the influence of games to fulfill social responsibilities[147]. Supplier and Procurement Management - The company has approximately 400 major suppliers, with 76% located in Asia, 13% in North America, and 10% in Europe[180]. - The company conducts regular audits of supplier performance to ensure product and service quality, utilizing various assessment indicators[180]. - The company has established a procurement management system to ensure transparency and fairness in procurement processes[180]. Customer Engagement and Support - The company has a customer service center that operates 24/7, handling over 959,000 inquiries and more than 640,000 online chat interactions in 2024, ensuring timely and accurate support[197]. - The company actively collects player feedback through various channels to improve product quality and enhance player engagement[194]. - The company is continuously optimizing customer service and quality inspection systems to enhance service efficiency and quality[198].

Investment Rating - The report maintains a "Buy" rating for IGG (799.HK) with a target price of HKD 4.2, representing a potential upside of 13% from the current price of HKD 3.73 [4][5]. Core Insights - The company is expected to see a revenue growth of 9% year-on-year in 2024, reaching RMB 5.72 billion, with an adjusted net profit of RMB 614 million and an adjusted net profit margin of 10.7% [3][4]. - The core product, "King of Avalon," is anticipated to maintain stable revenue in the second half of 2024 due to gameplay adjustments and content updates [3]. - New game products "Doomsday: Last Survivors" (DLS) and "Viking Rise" (VR) are projected to contribute significantly to revenue growth in the second half of 2024, offsetting declines from older games [3][4]. - The company's APP business has transitioned to focus on content-driven applications, particularly in news services, which is expected to drive strong revenue growth in the second half of 2024 [3]. Financial Projections - Revenue and profit forecasts for IGG are as follows: - FY22 Revenue: HKD 4,591 million - FY23 Revenue: HKD 5,266 million - FY24E Revenue: HKD 5,720 million - FY25E Revenue: HKD 6,136 million - FY26E Revenue: HKD 6,348 million - Adjusted Net Profit for FY24E: HKD 614 million, with a target PE of 8.0x [5][4].

Financial Performance - The company reported a revenue of HKD 2,735,274,000 for the six months ended June 30, 2024, representing a 9% increase compared to HKD 2,499,020,000 in the same period of 2023[5]. - The group achieved a profit of HKD 330,945,000 in the first half of 2024, a significant recovery from a loss of HKD 359,798,000 in the previous year[6]. - The main business profit for the period was HKD 356,298,000, compared to a loss of HKD 360,765,000 in the same period last year[5]. - The gross profit for the period was HKD 2.155 billion, representing a 19% increase year-on-year, with a gross margin of 79%[17]. - The total comprehensive income for the period was HKD 298,642,000, which includes other comprehensive losses of HKD 32,303,000[114]. - For the six months ended June 30, 2024, the company reported a profit attributable to equity shareholders of HKD 330,945,000, compared to a loss of HKD 359,798,000 for the same period in 2023, indicating a significant turnaround[133]. Revenue Breakdown - The mobile game "Doomsday: Last Survivors" and "Viking Rise" contributed approximately HKD 500,000,000 and HKD 300,000,000 in revenue, respectively, driving growth[8]. - The APP business generated HKD 400,000,000 in revenue, accounting for 15% of the total revenue, marking a significant recovery after a business transformation[8]. - Revenue distribution by region shows that Asia, Europe, and North America contributed 41%, 34%, and 21% of total revenue, respectively[8]. - Revenue from mobile games was HKD 2,326,208, slightly up from HKD 2,309,934 in the previous year, with significant contributions from titles such as "King of Kingdoms" and "Doomsday: Last Survivors"[122]. Cash Flow and Assets - The group reported a net cash inflow from operating activities of HKD 603 million for the period, compared to a net cash outflow of HKD 44 million in the same period last year[24]. - As of June 30, 2024, the group had a net current asset value of HKD 1.406 billion, an increase from HKD 1.115 billion as of December 31, 2023[23]. - The group has cash and cash equivalents of HKD 1.940 billion as of June 30, 2024, up from HKD 1.470 billion as of December 31, 2023[23]. - Cash generated from operating activities was HKD 583,492,000, a significant improvement from cash used in operations of HKD 47,998,000 in the previous year[116]. - Cash and cash equivalents totaled HKD 1,940,320,000 as of June 30, 2024, up from HKD 1,481,464,000 at the end of June 2023[117]. Expenses and Cost Management - Sales and distribution expenses decreased by 20% to HKD 1.221 billion, attributed to a shift in promotional strategy as games gained traction[19]. - Research and development expenses were reduced by 21% to HKD 395 million, reflecting ongoing optimization of existing teams[20]. - Employee costs totaled HKD 462,715 for the six months ended June 30, 2024, down from HKD 541,339 in the previous year, reflecting a reduction in salaries and benefits[127]. - Total advertising and promotion expenses decreased to HKD 1,193,878,000 from HKD 1,483,886,000, reflecting a reduction of approximately 19.5% year-over-year[129]. Dividends and Share Repurchase - The company declared an interim dividend of HKD 0.085 per share, which accounts for 30% of the profit for the first half of 2024[6]. - The board declared an interim dividend of HKD 0.085 per share, totaling approximately HKD 100 million, marking a return to dividend payments after no dividends were declared in the same period last year[29]. - The company repurchased shares totaling nearly HKD 33,000,000 in the first half of 2024, which, along with dividends, accounted for 40% of the half-year profit[6]. - The company repurchased a total of 9,895,000 shares at a total cost of HKD 32,862,730, with all repurchased shares being canceled[91]. Investments and Financial Assets - The group experienced a slight loss of HKD 25,353,000 in investment-related activities due to fair value changes[6]. - The group reported a net income of HKD 8 million from associated companies, a 22% increase compared to HKD 6.5 million in the previous year[20]. - The group reported a net loss of HKD 45,345 from fair value losses on investments for the six months ended June 30, 2024, compared to a loss of HKD 7,775 in the same period last year[126]. - The fair value of financial assets and liabilities as of June 30, 2024, included bonds and other investments valued at HKD 17,612,000 and listed equity securities at HKD 4,827,000[168]. Corporate Governance - The group has maintained a high level of corporate governance, with the board consisting of five executive directors, one non-executive director, and three independent non-executive directors[40]. - The audit committee, composed entirely of independent non-executive directors, has reviewed the interim financial report and confirmed compliance with applicable accounting standards[92]. Structural Contracts and Regulatory Compliance - The company has established a new structural contract with Fuzhou Tianmeng to comply with Chinese laws regarding foreign ownership in value-added telecommunications services[93]. - The company confirmed that the structural contracts have not faced any challenges from Chinese authorities, ensuring uninterrupted operations through Fuzhou Tianmeng and Xinhang Liaokuo[103]. - The company acknowledges that future changes in laws and regulations may impact the recognition of structural contracts as foreign investments, potentially requiring the sale of its interests in Fuzhou Tianmeng and Xinhang Liaokuo[105]. Share Incentive Plans - The company aims to retain and attract talent through its share incentive plan, which does not require performance targets for the shares granted during the six months ending June 30, 2024[62]. - The share incentive plan was adopted on June 29, 2023, aimed at motivating eligible individuals to enhance their contributions to the company[84]. - The total number of shares that can be issued under the share incentive plan is capped at 119,800,659 shares, representing approximately 10.20% of the issued shares as of the report date[85]. - The company has not granted any options or reward shares to directors or senior management during the reporting period[89].

Investment Rating - The report maintains a "Buy" rating for IGG (799.HK) with a target price of HKD 4.0, representing a potential upside of 21% from the current price of HKD 3.3 [2][4]. Core Insights - IGG's strong performance in both gaming and app businesses is identified as a new growth driver, with a 9% year-on-year revenue increase to HKD 2.7 billion in 1H24 [2]. - The gross margin improved by 6.5 percentage points to 78.8%, primarily due to the increased revenue share from the app business [2]. - Adjusted net profit for 1H24 was HKD 350 million, with an adjusted net profit margin of 12.7% [2]. Revenue Breakdown - Gaming revenue reached HKD 2.3 billion in 1H24, showing a slight increase of 1% year-on-year [2]. - The core product, "King of Kingdoms," experienced a 19% decline in revenue to HKD 1.3 billion, while new games "Doomsday: Last Survivors" and "Viking Rise" generated revenues of HKD 500 million and HKD 300 million, respectively, marking year-on-year growth of 97% and 151% [2]. - The new games accounted for 34% of total gaming revenue, effectively offsetting the decline from older titles [2]. App Business Performance - The app business generated HKD 400 million in revenue during 1H24, reflecting a significant year-on-year growth of 116% and increasing its revenue share to 15% [2]. - Following a business transformation earlier in the year, the app segment focused on content service-oriented applications, leading to a recovery in revenue and user engagement [2]. - Monthly revenue from the app business reached HKD 120 million in July, with expectations for continued high performance in the second half of the year [2]. Financial Projections - The report projects revenues of HKD 5.8 billion and HKD 6.4 billion for FY24E and FY25E, respectively, with adjusted net profits expected to be HKD 650 million and HKD 850 million [2][4].

Financial Performance - For the six months ended June 30, 2024, IGG Inc reported revenue of HKD 2,735,274,000, a 9% increase from HKD 2,499,020,000 in the same period of 2023[6]. - The group achieved a profit of HKD 330,945,000 for the first half of 2024, compared to a loss of HKD 359,798,000 in the previous year, marking a significant turnaround[7]. - The gross profit for the period was HKD 2.155 billion, a 19% increase from HKD 1.806 billion in the previous year, with a gross margin of 79%[18]. - The company reported a total comprehensive income of HKD 298,642 for the period, compared to a loss of HKD 404,783 in the previous year[111]. - For the six months ended June 30, 2024, the company reported a net profit of HKD 330,945,000, compared to a loss of HKD 359,798,000 for the same period in 2023[114][115]. - Basic earnings per share for the six months ended June 30, 2024, was HKD 0.2880, compared to a loss per share of HKD 0.3080 in 2023[110]. - The company reported a net unrealized loss of HKD (46,159,000) for the period, which is a significant increase compared to the previous year's loss of HKD (7,730,000)[175]. Revenue Breakdown - The classic game "King of Kingdoms" contributed HKD 1.338 billion, accounting for 48.9% of total revenue, while "Doomsday: Last Survivors" and "Viking Rise" contributed HKD 492.85 million (18.0%) and HKD 308.515 million (11.3%) respectively[17]. - Revenue from mobile games was HKD 2,326,208, slightly up from HKD 2,309,934 in the previous year, with significant contributions from titles like "King of Kingdoms" and "Doomsday: Last Survivors"[122]. - Revenue from the mobile application business reached HKD 409,066, a substantial increase from HKD 189,086 in the prior year, reflecting a growth of 116%[122]. - The revenue distribution by region shows that Asia, Europe, and North America contributed 41%, 34%, and 21% respectively to the total revenue[16]. Expenses and Costs - Sales and distribution expenses decreased by 20% to HKD 1.221 billion, compared to HKD 1.521 billion in the same period last year, due to adjusted promotional efforts[20]. - The group’s R&D expenses for the first half of 2024 were HKD 394,508,000, down from HKD 500,419,000 in the same period of 2023[6]. - Employee costs for the six months ended June 30, 2024, totaled HKD 462,715, down from HKD 541,339 in the same period last year, indicating a reduction of 14.5%[127]. - Total advertising and promotion expenses decreased to HKD 1,193,878,000 from HKD 1,483,886,000, reflecting a reduction of approximately 19.5%[129]. Cash Flow and Liquidity - Cash and cash equivalents increased to HKD 1.94 billion as of June 30, 2024, from HKD 1.47 billion as of December 31, 2023[24]. - Net cash inflow from operating activities was HKD 603 million, compared to a net cash outflow of HKD 44 million in the same period of 2023, driven by increased game revenue and reduced promotional expenses[25]. - The company reported a net cash inflow from financing activities of HKD 60,184,000, compared to an outflow of HKD 39,210,000 in the previous year[117]. Shareholder Returns - The company declared an interim dividend of HKD 0.085 per share, representing approximately 30% of the profit for the first half of 2024[7]. - The board declared an interim dividend of HKD 0.085 per share, totaling approximately HKD 100 million, compared to no dividend in the same period of 2023[30]. - The group repurchased 9,895,000 shares for approximately HKD 33 million, with total outflows for share repurchase and declared dividends amounting to HKD 133 million, representing 40% of the current period's profit[31]. Investments and Fair Value - The investment business experienced a slight loss of approximately HKD 25 million due to fair value changes of investment targets[14]. - The fair value changes of financial assets measured at fair value through profit or loss resulted in a loss of HKD 25,353,000 for the six months ended June 30, 2024, compared to a profit of HKD 967,000 in the same period of 2023[34]. - The group's investment in MFund, L.P. has a fair value of HKD 147,148,000 as of June 30, 2024, down from HKD 186,261,000 as of December 31, 2023, reflecting an unrealized loss of HKD 39,019,000[36]. Corporate Governance - The board of directors has not separated the roles of chairman and CEO, which is a deviation from corporate governance code C.2.1[41]. - The company has adopted the standard code of conduct for securities trading by directors, confirming compliance during the reporting period[42]. - The company has established an audit committee to oversee financial reporting and risk management, composed entirely of independent non-executive directors[92]. Regulatory Compliance - The company confirmed that as of the report date, there are no regulatory challenges regarding its structured contracts from Chinese authorities[103]. - The company is subject to ongoing compliance with the "Negative List" which prohibits foreign investment in certain internet cultural operations[104]. - The company acknowledges that future changes in laws and regulations could adversely impact its business operations and financial performance[106].

Financial Performance - The company achieved a profit of HKD 73 million in 2023, reversing the losses of the previous two years[6]. - In 2023, IGG's revenue reached HKD 5.3 billion, marking a 15% year-on-year growth, driven by new strategy games and app business[11]. - The company's revenue for the year ended December 31, 2023, was HKD 5,265,911, representing a 15% increase from HKD 4,591,327 in 2022[21]. - The gross profit for the year was HKD 3,919,057, a 24% increase from HKD 3,151,000 in the previous year, with a gross margin of 74%, up from 69%[24]. - The adjusted net profit for the year was HKD 114,987, compared to a loss of HKD 406,025 in 2022[21]. - The investment business yielded over HKD 55 million in profit due to recognized valuation gains from investment targets[17]. - The company reported other net income of HKD 90,369, a significant recovery from a loss of HKD 263,752 in the previous year[25]. - The company’s capital expenditure for the year included HKD 123,138 for office properties and renovations, with a total capital expenditure of HKD 134,926[32]. - The company reported a total distributable reserve of approximately HKD 2.94 billion as of December 31, 2023, which includes share premium and retained earnings[156]. - The board does not recommend any final dividend for the year ending December 31, 2023[155]. Revenue Sources - The mobile application business revenue share increased from less than 5% at the beginning of the year to over 40% by year-end[6]. - The mobile application business has evolved from initial communication apps to a diverse range of content applications, driving significant growth[6]. - The app business generated HKD 580 million, accounting for 11% of total revenue, with over 350 million registered users and around 9.5 million MAU[16]. - The classic game "King of Kingdoms" contributed over HKD 3.1 billion in revenue, while new titles "Doomsday: Last Survivors" and "Viking Rise" generated approximately HKD 700 million and HKD 400 million, respectively[11]. - The game "King of Kingdoms" has contributed approximately HKD 30 billion in revenue since its launch, maintaining its position as a top strategy game[6]. - Two new strategy games, "Doomsday: Last Survivors" and "Viking Rise," have each generated over HKD 100 million in revenue[6]. User Engagement and Growth - The total user base of IGG exceeds 1.7 billion, with monthly active users (MAU) surpassing 25 million[10]. - The game "Doomsday: Last Survivors" has reached a monthly revenue milestone of HKD 82 million, with expectations to rise to HKD 100 million by March 2024[14]. - The company has implemented innovative gameplay features in its new games to enhance user engagement and retention[8]. - The company emphasizes the importance of user experience in gaming, continuously innovating and updating game content to attract and retain users[115]. - The company hosted player interaction events in 16 countries to celebrate the 7th anniversary of "King of Kingdoms," enhancing player engagement[121]. Research and Development - The company established R&D centers in Shanghai and Chengdu to enhance its development capabilities[6]. - The company is actively integrating AI-generated content (AIGC) technology across various operational aspects to improve efficiency[8]. - The company plans to leverage Artificial Intelligence Generated Content (AIGC) technology to enhance efficiency and profitability[18]. - The company plans to continue its long-term operational strategy to ensure stable revenue growth for its new games[8]. Operational Efficiency and Cost Management - Research and development expenses decreased by 28% to HKD 934,852, reflecting ongoing optimization and cost control efforts[28]. - Sales and distribution expenses increased by 57% to HKD 2,665,908, primarily due to concentrated promotions for new games[26]. - The company aims to navigate industry challenges by focusing on continuous improvement and long-term management strategies[8]. Corporate Governance - The company has adhered to the corporate governance code, except for the deviation regarding the separation of the roles of Chairman and CEO, which are currently held by the same individual, Mr. Cai Zongjian[61]. - The board consists of nine members, including five executive directors, one non-executive director, and three independent non-executive directors, ensuring a balance of power and authority[62]. - The board diversity policy was first adopted in September 2013 and has been reviewed annually, with the latest review in March 2022, emphasizing the importance of diversity in board appointments[63]. - The company has confirmed the independence of all independent non-executive directors as of December 31, 2023, in compliance with listing rules[65]. - The audit committee is composed entirely of independent non-executive directors, ensuring unbiased oversight of financial reporting and risk management[76]. Environmental, Social, and Governance (ESG) Initiatives - The company has integrated Environmental, Social, and Governance (ESG) risks into its risk management framework[88]. - The company aims to balance business objectives with stakeholder interests through its ESG policies and practices[96]. - The company has established an ESG working group led by an executive director to oversee ESG strategies and reporting[95]. - The company promotes energy-saving and environmental protection concepts among employees to encourage sustainable living[144]. - The company has established a robust anti-corruption framework, including a dedicated anti-corruption leadership team[110]. Employee Management and Development - The total number of employees decreased to 1,976 as of December 31, 2023, down from 2,503 a year earlier, with total employee-related costs amounting to HKD 1.026 billion compared to HKD 1.3 billion in the previous year[41]. - The overall employee turnover rate is 27%, with a breakdown of 27% for both male and female employees[129]. - 100% of all employees received training, with an average training duration of 44 hours; female employees averaged 57 hours while male employees averaged 38 hours[131]. - The company conducts regular training on workplace issues such as bullying and discrimination to foster a positive work environment[128]. - IGG actively promotes employment opportunities for disabled individuals and collaborates with organizations to support their hiring[127]. Community Engagement and Social Responsibility - The company donated approximately HKD 1.7 million for charitable causes in 2023[139]. - The company supported disaster relief efforts in Turkey and Syria by providing emergency supplies and engaging local players in the initiative[142]. - The company actively participates in community building and social responsibility initiatives[104]. - The company has integrated charitable elements into its games, raising awareness for social causes through in-game events[141]. Shareholder Structure and Equity Management - The company has a significant shareholder structure, with Mr. Cai Zongjian holding 295,559,643 shares, representing 24.91% of the total shares[159]. - The performance incentive shares granted to executives are part of a broader strategy to align interests with shareholders[160]. - The company is actively managing its equity structure to ensure alignment and performance incentives for key personnel[162]. - The overall shareholding percentages indicate a concentrated ownership, which may impact governance and decision-making processes[159]. Compliance and Risk Management - The company emphasizes compliance with local laws and regulations in its global operations, including advertising practices[124]. - The company has established internal policies to ensure proper handling and communication of insider information, with annual training provided to employees[88]. - The company has integrated climate change risks into its risk assessment framework, identifying low overall risk exposure[146]. - The board is responsible for assessing the nature and extent of risks the company is willing to take to achieve its strategic objectives[88].

Financial Performance - The company achieved a profit of HKD 73 million for the fiscal year ending December 31, 2023, reversing the losses of the previous two years[7]. - Revenue for the year reached HKD 5.3 billion, a 15% year-on-year increase, driven by new game launches and app business growth[12]. - The company reported a net profit of HKD 73 million for the year, a significant recovery from a loss of HKD 504 million in the previous year[20]. - The gross profit for the year was HKD 3.92 billion, up 24% from HKD 3.15 billion, resulting in a gross margin of 74%, an increase of 5 percentage points from the previous year[25]. - The company reported a total distributable reserve of approximately HKD 29.40 billion as of December 31, 2023[157]. - The board does not recommend any final dividend for the year ending December 31, 2023[156]. Revenue Sources and Growth - The cumulative revenue contribution from the game "King of Kingdoms" reached approximately HKD 30 billion, maintaining its position as a top strategy game for eight years[7]. - The revenue share from new games and app business increased significantly from less than 5% at the beginning of the year to over 40% by year-end[7][8]. - The app business achieved revenue of HKD 580 million, accounting for 11% of total revenue[12]. - "Doomsday: Last Survivors" generated nearly HKD 700 million in revenue, while "Viking Rise" contributed approximately HKD 400 million[12]. - The company expects total revenue for the first quarter of 2024 to approach HKD 1.4 billion, representing a projected growth of approximately 20% year-over-year[19]. User Engagement and Retention - Total user base exceeds 1.7 billion, with monthly active users (MAU) over 25 million[11]. - The company continues to focus on long-term user retention and daily active users, which has been a key strategy since the launch of its first mobile strategy game in 2013[7]. - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[56]. - User retention rates improved to 85%, reflecting successful engagement strategies implemented in the last quarter[56]. Research and Development - The company established R&D centers in Shanghai and Chengdu to enhance its development capabilities and optimize team structure[7]. - Research and development expenses decreased by 28% to HKD 935 million, reflecting ongoing optimization and cost control measures[29]. - Research and development expenses increased by 10% to support innovation in new technologies[56]. Corporate Governance - The company has adopted a corporate governance code to ensure transparency and accountability to shareholders, with a focus on internal controls and risk management[62]. - The board consists of nine members, including five executive directors and three independent non-executive directors, ensuring a balance of power and authority[63]. - The company has confirmed compliance with the standard code regarding securities trading by all directors for the year ending December 31, 2023[65]. - The board believes that having the same person serve as both chairman and CEO provides strong leadership and effective execution of company plans[62]. - The company aims to maintain high levels of corporate governance in the best interests of shareholders, continuously reviewing and improving governance practices[62]. Environmental, Social, and Governance (ESG) Initiatives - The company has integrated Environmental, Social, and Governance (ESG) risks into its risk management framework, reflecting its commitment to responsible governance[89]. - The board is responsible for the overall ESG strategy and reporting, ensuring compliance with relevant laws and regulations[96]. - The company aims to ensure new office buildings meet China's Green Building Evaluation Standards and promotes energy-saving and waste reduction measures[97]. - The company has established a systematic approach to identifying and prioritizing significant ESG issues and risks[94]. - The company emphasizes the importance of information security and user privacy in its operations[103]. Employee Management and Development - The total number of employees as of December 31, 2023, is 1,976, reflecting a 21% decrease compared to the previous year[129]. - The overall employee turnover rate is 27%, with a breakdown of 27% for both female and male employees[130]. - 100% of all employees received training, with an average training duration of 44 hours[132]. - The company emphasizes employee career development through a structured training management system[131]. - The company provides competitive compensation and benefits to attract and retain talent, including performance bonuses and stock incentive plans[134]. Shareholder Structure and Incentives - The company has a significant ownership structure, with Mr. Cai Zongjian holding 24.91% of shares, equating to 295,559,643 shares[160]. - The ownership structure indicates a concentrated control among a few key individuals, which may impact corporate governance and decision-making[160]. - The company has a strategy of granting performance-based incentives to align management interests with shareholder value[161]. - The share option plan adopted on September 16, 2013, was terminated on June 29, 2023, following a resolution at the annual general meeting[172]. Community Engagement and Social Responsibility - The company donated approximately HKD 1.7 million for charitable causes in 2023[140]. - The company actively participated in disaster relief efforts following the earthquake in Turkey and Syria, providing essential supplies[143]. - The company has established various employee clubs and provided funding for activities, fostering team cohesion[139]. - The company emphasizes compliance training for all employees, focusing on issues like intellectual property infringement and anti-corruption, with specific case studies analyzed[114].

Financial Performance - For the first half of 2023, IGG reported revenue of HKD 2,499,020, a year-on-year increase of 0.5% from HKD 2,485,739 in 2022[6]. - The company recorded a net loss of approximately HKD 359,798 for the first half of 2023, with a main business loss of HKD 360,765[6]. - Total revenue for the period was HKD 2.499 billion, a 1% increase year-on-year and a 19% increase compared to the second half of 2022[15]. - Gross profit for the period was HKD 1.806 billion, with a gross margin of 72%, up from 68% year-on-year[17]. - The company reported a total comprehensive loss of HKD 404,783 for the six months ended June 30, 2023, compared to a loss of HKD 171,771 for the same period last year[117]. - The company incurred a total loss of HKD 359,798 thousand for the period, which is a substantial increase from the loss of HKD 171,771 thousand reported in the same period last year[111]. - The company reported a pre-tax loss of HKD 359,798,000 for the six months ended June 30, 2023, compared to a loss of HKD 171,771,000 for the same period in 2022, representing an increase in loss of 109.5%[136]. Revenue Sources - The revenue distribution for the period was 44% from Asia, 26% from Europe, and 25% from North America[9]. - Kingdom Age contributed over HKD 1.6 billion in revenue during the period, accounting for 66.3% of total revenue[16]. - Doomsday: Last Survivors generated over HKD 82 million in revenue in July, with a total of 2.2 million players[12]. - Viking Rise achieved over HKD 70 million in revenue in May, following its launch in December 2022[11]. - Revenue from mobile games amounted to HKD 2,309,934,000, with the top titles being "King of Kingdoms" at HKD 1,657,471,000 and "Doomsday: Last Survivors" at HKD 249,850,000[126]. - Revenue from the app and mobile advertising aggregation platform business was HKD 189,086,000, a substantial increase from HKD 47,210,000 in the previous year[126]. User Metrics - IGG's total user base exceeded 1.6 billion, with monthly active users reaching over 38 million[8]. - The APP business experienced significant growth, with monthly revenue increasing from over HKD 12 million at the beginning of the year to over HKD 63 million in July, with registered users exceeding 300 million[12]. Expenses and Cost Management - R&D and administrative expenses were reduced by 30% year-on-year due to the integration of AI-generated content technology[7]. - Sales and distribution expenses increased by 85% to HKD 1.521 billion due to concentrated promotion of new games[19]. - R&D expenses decreased by 32% to HKD 500 million, representing 20% of total revenue[21]. - The total employee-related costs for the period amounted to HKD 541 million, down from HKD 714 million in the same period last year, with the number of employees decreasing to 2,165 from 2,763[31]. Cash Flow and Assets - The group reported a net current asset value of HKD 839 million, down from HKD 1.147 billion as of December 31, 2022, with a capital debt ratio of 34.6% compared to 25.4% in the previous year[24]. - The group had cash and cash equivalents of HKD 1.481 billion as of June 30, 2023, a decrease from HKD 1.582 billion as of December 31, 2022[24]. - The net cash outflow from operating activities during the period was HKD 44 million, an improvement from HKD 140 million in the same period last year, primarily due to increased advertising expenses for new game promotions[25]. - The net cash outflow from investment activities was HKD 13 million, with major cash outflows related to the construction of the office building in Fuzhou amounting to HKD 47.9 million[26]. Corporate Governance - The group is committed to maintaining high standards of corporate governance, with a focus on transparency and accountability to shareholders[40]. - The board of directors includes five executive directors, one non-executive director, and three independent non-executive directors, ensuring a balance of power and authority[40]. - The group has complied with the corporate governance code, except for the separation of the roles of chairman and CEO, which are currently held by the same individual[40]. Shareholder Information - The company holds a total of 295,559,643 shares, representing approximately 24.67% ownership[43]. - The beneficial owner Cai Zongjian holds 746,000 shares directly and has rights to 193,752,027 shares in Duke Online, totaling 194,498,027 shares[44]. - The company has not declared any interim dividends for the six months ended June 30, 2023, consistent with the previous year[30]. Strategic Initiatives - The company is optimistic about future performance, driven by the launch of two major new games and the expansion of the APP business[14]. - The company is focused on expanding its gaming distribution network in China through these structural agreements[98]. - The company plans to acquire full equity of Fuzhou Tianmeng and Xinhan Liaohuo if regulations allow in the future[106]. Structural Contracts and Regulatory Compliance - The original structural contract with Fuzhou Tianmeng was terminated, and a new structural contract was established, allowing for the financial performance of Fuzhou Tianmeng to be consolidated as if it were a subsidiary of the company[96]. - The company confirmed that there have been no regulatory inquiries from Chinese authorities regarding the structural contracts[104]. - The company has engaged KPMG as auditors to ensure compliance with structural contracts and that no dividends have been paid to equity holders of Fuzhou Tianmeng and Xinhan Liaohuo[105].

Financial Performance - For the six months ended June 30, 2023, IGG Inc reported revenue of HKD 2,499,020, an increase of 0.5% compared to HKD 2,485,739 in the same period of 2022[7]. - The group recorded a net loss of HKD (359,798) for the period, compared to a loss of HKD (171,771) in the previous year, primarily due to ongoing investments in new game development[7]. - The group's revenue for the first half of 2023 reached HKD 2.499 billion, a 1% increase year-on-year and a 19% increase compared to the second half of 2022[16]. - The gross profit for the period was HKD 1.806 billion, a 6% increase from HKD 1.699 billion in the same period last year, resulting in a gross margin of 72%[18]. - The company reported a total comprehensive loss of HKD 404,783 for the six months ended June 30, 2023, compared to a loss of HKD 359,798 in the previous period[118]. Revenue Sources - The classic game "King of Kingdoms" contributed over HKD 1.6 billion in revenue during the first half of 2023, demonstrating stable performance after seven years of operation[7]. - The new games "Doomsday: Last Survivors" and "Viking Rise" achieved monthly revenues exceeding HKD 70 million, with "Doomsday: Last Survivors" reaching a record of HKD 82 million in July[7]. - The new games "Doomsday: Last Survivors" and "Viking Rise" contributed approximately 35% to the group's revenue, with "Doomsday: Last Survivors" generating HKD 249.85 million and "Viking Rise" generating HKD 122.88 million in the first half of 2023[10][17]. - Revenue from mobile games was HKD 2,309,934,000, with a notable decrease in revenue from "Kingdoms of Camelot" to HKD 1,657,471,000 from HKD 2,008,898,000 year-over-year[127]. Cost Management - The cost of sales decreased to HKD (693,307), down from HKD (787,102) year-on-year, indicating improved cost management[7]. - R&D and administrative expenses were reduced by 30% year-on-year, reflecting effective cost control measures[8]. - Administrative expenses for the period were HKD 159 million, a decrease of 19% compared to HKD 197 million in the same period of 2022, representing 6% of revenue, down from 8%[21]. - R&D expenses for the period were HKD 500 million, a significant decrease of 32% from HKD 738 million in the same period of 2022, accounting for 20% of revenue, down from 30%[22]. User Engagement - IGG Inc has a total user base exceeding 1.6 billion, with monthly active users (MAU) surpassing 38 million, indicating strong market presence[9]. - The total registered users for the APP business exceeded 300 million, with nearly 20 million monthly active users as of June 30, 2023[13]. - The total number of registered users for "Kingdoms of the World" reached 640 million, with nearly 10 million monthly active users as of June 30, 2023[11]. Strategic Outlook - The company is optimistic about future performance, expecting growth from the expansion of new games and APP business[8]. - The group plans to continue leveraging AIGC technology to enhance operational efficiency and reduce costs in future developments[15]. - The company plans to continue focusing on mobile game development and expanding its customer base in international markets, leveraging its diverse portfolio[126]. Financial Position - As of June 30, 2023, the group had net current assets of HKD 839 million, down from HKD 1.147 billion as of December 31, 2022, with a debt-to-asset ratio of 34.6%[25]. - The group had cash and cash equivalents of HKD 1.481 billion as of June 30, 2023, down from HKD 1.582 billion as of December 31, 2022[25]. - The company reported a total of HKD 5,783,000 in the balance of joint ventures as of June 30, 2023, down from HKD 7,599,000 as of December 31, 2022[149]. Shareholder Information - The company has a total of 295,559,643 shares held by various beneficial owners, representing 24.67% of the total shares[44]. - The performance shares that failed to meet vesting conditions totaled 7,688,862 shares for Mr. Cai and 1,289,437 shares for Mr. Zhang[46]. - The company has established an audit committee to oversee financial reporting and risk management, composed entirely of independent non-executive directors[96]. Regulatory and Compliance - The company is subject to Chinese laws that restrict foreign ownership in value-added telecommunications services and prohibit foreign provision of internet content and information services[96]. - The company confirmed that there have been no regulatory inquiries from Chinese authorities regarding the structural contracts as of the report date[104]. - The company has retained independent non-executive directors to review the performance and compliance of the structural contracts annually[105]. Investment and Acquisitions - The company is exploring potential acquisitions to enhance its product offerings and market presence, with a focus on companies that align with its strategic goals[194]. - The company plans to acquire full equity of Fuzhou Tianmeng and Xinhan Liao Kuo if regulations allow in the future[107]. - The company has ongoing commitments for the construction of self-use office buildings amounting to HKD 245,847 as of June 30, 2023[189].