Financial Performance - For the six months ended June 30, 2024, the company reported total revenue of RMB 101.8 million, a decrease of 5.7% compared to RMB 107.9 million in the same period of 2023[1][2]. - Gross profit for the same period was RMB 85.6 million, down 9.8% from RMB 94.9 million year-on-year[1][2]. - The company recorded a loss before tax of RMB 1.6 million, compared to a profit of RMB 40.3 million in the previous year, indicating a significant decline in financial performance[1][2]. - Game operation revenue for the six months ended June 30, 2024, was approximately RMB 83.3 million, a decrease of about 8.6% compared to RMB 91.2 million in the same period of 2023[10]. - The company reported a net loss of RMB 1.964 million for the six months ending June 30, 2024, compared to a profit of RMB 40.262 million in the same period of 2023[15]. - The company reported a basic earnings per share of (RMB 1,586,000) for the period, compared to RMB 40,262,000 in the previous year, with a weighted average of 1,733,746,210 shares outstanding[80]. User Engagement and Game Development - The number of new games approved in the first half of 2024 increased compared to the same period last year, reflecting a more favorable regulatory environment[2]. - The company is focusing on developing new HTML5 games, which are expected to enhance user engagement and improve financial performance in the long term[2]. - The "Defend the Carrot" game series continues to generate stable revenue contributions, demonstrating the company's ability to maintain strong user engagement[3][4]. - The company launched seven co-branded "Defend the Carrot" slippers, which have been well received by consumers across major e-commerce platforms and retail stores[4]. - The company plans to launch 8 new HTML5 games in the second half of 2024, starting with "One Step Two Steps" on August 1, 2024[7]. - The company is focusing on long-term operation of "Defend the Carrot 4," which has led to a decrease in immediate revenue generation[10]. - The company continues to implement various in-game promotions and activities to enhance user experience and maintain user interest, which is deemed essential for retaining and expanding active player base[13]. Revenue Streams and Costs - Advertising revenue decreased by approximately 12.1% from RMB 11.0 million in the six months ending June 30, 2023, to RMB 9.6 million in the same period of 2024, primarily due to a focus on long-term game operation[18]. - The total cost of sales increased by 24.0% to RMB 16.2 million for the six months ending June 30, 2024, compared to RMB 13.0 million in the same period of 2023[15]. - Selling and distribution expenses increased by approximately 102.9% from approximately RMB 17.8 million for the six months ended June 30, 2023, to approximately RMB 36.2 million for the six months ending June 30, 2024, mainly due to promotional activities for "Shenxian Dao 3"[22]. - R&D costs were approximately RMB 27.2 million for the six months ending June 30, 2024, a decrease of approximately 1.7% from approximately RMB 27.6 million for the six months ended June 30, 2023[24]. User Metrics - The company reported a total of approximately 235.3 million registered users for RPG mobile and online games, with 173.3 million for online games and 62.0 million for mobile games as of June 30, 2024[11]. - The average Monthly Active Users (MAU) for RPG mobile games was approximately 0.1 million, while the MAU for casual games was about 5.3 million as of June 2024[12]. - For the six months ending June 30, 2024, the average Monthly Active Users (MPU) for online games was approximately 5,000, compared to about 6,000 for the same period in 2023, indicating a decline due to the games entering their expected life cycle's later stage[13]. - The average MPU for mobile RPG games decreased by 80.8% from approximately 313,000 in the six months ending June 30, 2023, to about 60,000 in the same period of 2024, primarily due to the initial high MPU of "Gods and Demons 3" launched in June 2023[13]. Strategic Initiatives - The company is expanding its intellectual property licensing strategy, including the construction of theme parks in various cities[7]. - The company aims to enhance collaboration with leading online platforms and explore brand co-marketing activities with offline chain stores[7]. - The company is leveraging artificial intelligence to enhance operational efficiency and improve game content creation[6]. - The company has initiated discussions for potential acquisitions to strengthen its portfolio and expand its capabilities[96]. Investment and Financial Position - Total equity as of June 30, 2024, was approximately RMB 529.6 million, stable compared to approximately RMB 525.9 million as of December 31, 2023[30]. - As of June 30, 2024, the company held cash resources of approximately RMB 7.6 million, an increase from RMB 7.4 million as of December 31, 2023[32]. - The total bank loans amounted to approximately RMB 92.5 million, a decrease from RMB 95.5 million as of December 31, 2023, with RMB 6.0 million due within one year[32]. - The company has a diversified investment portfolio, with at least 50% of total investments allocated to risk-free or capital-protected investments[33]. - The fair value of debt investments and equity investments designated at fair value through other comprehensive income was approximately RMB 138.1 million, down from RMB 147.0 million as of December 31, 2023[32]. Corporate Governance - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[89]. - The company has adopted standard rules for directors conducting securities transactions, with no violations reported as of June 30, 2024[90]. - The audit committee was established on November 17, 2014, and has been updated several times, with the current members being independent non-executive directors[88].

Financial Performance - The company reported a revenue of RMB 226.2 million for the year ended December 31, 2023, representing an 18.1% increase compared to RMB 191.5 million in 2022[8]. - Gross profit for the same period was RMB 194.5 million, with a gross margin improvement of 5.5 percentage points to 86.0%[10]. - The company achieved a profit attributable to equity holders of RMB 52.0 million, a significant turnaround from a loss of RMB 29.6 million in 2022[8]. - Total assets rose to RMB 701.9 million in 2023, up from RMB 625.7 million in 2022, reflecting overall financial strength[9]. - Total equity increased to RMB 525.9 million in 2023 from RMB 456.5 million in 2022, showcasing improved financial health[9]. - The company reported a profit of approximately RMB 52.2 million, marking a turnaround from a loss in 2022[14]. - The net profit for the year ended December 31, 2023, was RMB 52.2 million, a significant recovery from a loss of RMB 24.4 million in the previous year[35]. - The company's game operation revenue increased by approximately 13.6% to RMB 174.7 million, benefiting from the full-year contribution of "Defend the Carrot 4" and the successful launch of "Xianxian Dao 3"[37]. Game Development and Launches - The company launched the highly anticipated game "Xianxiandao 3," which quickly reached the 11th position on the Apple China App Store sales chart[10]. - The successful launch of new games, particularly "Defend the Carrot 4" and "Immortal Path 3," significantly contributed to the improved financial performance[14]. - The company launched three new games in 2023, with "Immortal Path 3" quickly topping the Apple China App Store free chart on its release day[15]. - The company plans to launch five new games in 2024, including HTML5, mobile, and console games, while continuing to invest in existing games[21]. - Feiyu Technology launched several new games in 2023, including "God仙道3," "Clear Sky Twins," and "Block Hunter" to enhance its product offerings[104]. User Engagement and Market Presence - As of December 31, 2023, the company had approximately 234.8 million registered users for its RPG mobile and online games, with 173.3 million for online games and 61.5 million for mobile games[29]. - The average Monthly Active Users (MPU) for mobile RPG games grew by 25.3% from approximately 75,000 to 94,000, primarily due to the launch of "Xianxian Dao 3" in 2023[31]. - The average MPU for casual games increased by 28.5% from approximately 246,000 to 316,000, driven by attractive events and updates like the PVP feature in "Defend the Carrot 4"[31]. - The company continues to manage and optimize its existing game portfolio to enhance player engagement and retention[20]. Financial Management and Investments - Non-current assets increased to RMB 477.7 million in 2023 from RMB 425.1 million in 2022, indicating a growth in long-term investments[9]. - Current liabilities decreased to RMB 80.8 million in 2023 from RMB 87.7 million in 2022, indicating improved short-term financial management[9]. - The company is focusing on operational efficiency by strategically reallocating resources to higher-return business projects, resulting in reduced operating expenses for 2023[14]. - The company has maintained a diversified investment portfolio, with at least 50% of total investments allocated to low-risk or capital-preserving investments[61]. Regulatory and Compliance Issues - The company continues to face risks related to strict regulations in the online gaming industry, which could adversely affect its operations and financial performance[18]. - The company has established a game content review team to ensure compliance with relevant laws and regulations, focusing on player health and safety[20]. - The company has complied with all relevant laws and regulations affecting its business and operations as of the report date[96]. Environmental, Social, and Governance (ESG) Initiatives - The company is committed to sustainable operations by promoting eco-friendly practices and community service initiatives, including waste management and environmental awareness among employees[93][94]. - The environmental, social, and governance (ESG) report covers the company's performance from January 1, 2023, to December 31, 2023, maintaining the same scope as the previous year[100]. - Feiyu Technology emphasizes the integration of environmental, social, and governance (ESG) principles into its corporate governance and decision-making processes to create long-term value[110]. - The company has established an ESG working group to oversee the implementation of its sustainability initiatives and to monitor progress towards environmental goals[111]. Employee Management and Development - The total number of employees as of December 31, 2023, is 334, a decrease from 365 in 2022, with 100% being full-time employees[130]. - Employee turnover rate for the overall workforce is 33%, down from 53% in the previous year[139]. - The company emphasizes the importance of employee welfare and career development as a priority[129]. - The company has implemented a transparent recruitment process to meet current and future staffing needs, utilizing various channels such as online platforms and campus recruitment[141]. Community Engagement and Support - The company funded 40 high school students from Yunnan Province with a total financial support of RMB 56,000 in the current year[180]. - The company donated 2 computers, 50 sets of stationery, and 1 projector to a charity event organized by the China Audio-Video and Digital Publishing Association[182]. - The company is dedicated to supporting youth development and community contributions through various initiatives and partnerships with charitable organizations[115].

Financial Performance and Revenue - Revenue for the year 2023 reached RMB 226.2 million, an increase of 18.1% compared to the previous year[44] - Net profit attributable to owners of the company for 2023 was RMB 52.2 million, turning around from a loss in 2022[44] - Gross profit for 2023 was RMB 194.5 million, a 26.1% increase from 2022[44] - Total revenue increased by 18.1% from RMB 191.5 million in 2022 to RMB 226.2 million in 2023[98] - Licensing and intellectual property-related revenue surged by 261.6% from RMB 7.7 million in 2022 to RMB 28.0 million in 2023, driven by a one-time licensing fee for "Shen Xian Dao 3"[99] - Game development service revenue decreased by 75.6% from RMB 7.7 million in 2022 to RMB 1.9 million in 2023 due to the completion of commissioned game development projects[100] - Net profit for the year was RMB 52.2 million in 2023, compared to a net loss of RMB 24.4 million in 2022[107] - Revenue from continuing operations for the six months ended December 31, 2023, was HKD 17,066 million, a 25.1% decrease year-over-year, primarily due to reduced property development revenue in Hong Kong and mainland China[123] - Gross profit for the six months ended December 31, 2023, increased by 2.4% to HKD 7,257 million, benefiting from higher-margin property investments in K11 projects[123] - Game operation revenue increased to RMB 174.674 million, accounting for 77.2% of total revenue, up from RMB 153.768 million (80.3%) in 2022[126] - Online game distribution revenue surged by 478.4% to RMB 2.7 million in 2023, driven by the launch of the mobile game "晴空双子" in the second half of the year[127] - Advertising revenue decreased by 13.2% to RMB 18.7 million in 2023, primarily due to the aging lifecycle of key games like "保卫萝卜1," "保卫萝卜2," and "保卫萝卜3"[128] - Gross profit rose by 26.1% to RMB 194.5 million in 2023, with a gross margin of 86.0%, up 5.5 percentage points from 80.5% in 2022[130] - Net profit attributable to equity holders of the company was RMB 52.013 million in 2023, compared to a loss of RMB 29.637 million in 2022[136] - Revenue for the year ended December 31, 2023, was RMB 226.189 million, with a gross profit of RMB 194.467 million, compared to RMB 191.519 million in revenue and RMB 154.201 million in gross profit for the previous year[200] - The company reported a profit before tax of RMB 52.560 million for the year ended December 31, 2023, compared to a loss of RMB 23.129 million in the previous year[199] Investments and Financial Assets - The fair value of ordinary bonds increased slightly from RMB 58,121,000 in 2022 to RMB 58,177,000 in 2023[3] - The fair value of non-listed equity investments, measured at fair value, increased significantly from RMB 16,205,000 in 2022 to RMB 34,204,000 in 2023[3] - The fair value of non-listed debt investments, measured at fair value, increased from RMB 44,337,000 in 2022 to RMB 47,297,000 in 2023[3] - The bond fund investment remained relatively stable, with a fair value of RMB 7,347,000 in 2023 compared to RMB 7,605,000 in 2022[3] - The company invested USD 1,614,000 (approximately RMB 11.1 million) in a bond fund issued by UBS (CAY) Fund Series in January 2020, with a face value of USD 1,600,000 and diversified income sources[5] - The company held approximately RMB 7.4 million in non-RMB denominated deposits as of December 31, 2023, down from RMB 10.2 million the previous year[113] - The fair value of CHINLP medium-term notes was RMB 21,012 thousand, accounting for 14.3% of total FVOCI and FVPL investments and 3.0% of the group's total assets[118] - The fair value of POLHON guaranteed notes was RMB 18,436 thousand, representing 12.5% of total FVOCI and FVPL investments and 2.6% of the group's total assets[118] - The fair value of NWDEVL medium-term notes was RMB 18,729 thousand, accounting for 12.7% of total FVOCI and FVPL investments and 2.7% of the group's total assets[118] - The group's non-listed debt investments are classified as financial assets at fair value through profit or loss, with fair value assessed by management or using other available methods[161] - The group holds a 2% equity stake in Yiming, a Chinese domain name service provider listed on the New Third Board, which accounted for 15.5% of the group's total assets as of December 31, 2023[156][157] - The group invested USD 3.783 million in NWD bonds with a 4.5% annual coupon rate, maturing in 10 years[175] - UBS Asian Bonds Series 5 (USD) has a yield of 5.0% and a duration risk of 1.0%, managed by a team with over 10 years of experience[177][178] - Future Capital, a non-listed limited partnership, holds a 1.8797% equity stake with a total investment cost of USD 1,452,197.91, focusing on smart systems and IT sectors[184][185] Corporate Governance and Compliance - The company maintains high standards of corporate governance to protect shareholder rights and enhance corporate value and accountability[26] - Yao Jianjun serves as both Chairman and CEO, with the board believing his dual role is beneficial for the company's business prospects[27] - The company regularly reviews and monitors its corporate governance practices to ensure compliance with the Corporate Governance Code[28] - All directors confirmed compliance with the standard code for securities transactions during the year ended December 31, 2023[29] - The audit committee reviewed the accounting policies and practices adopted by the group and the consolidated financial statements for the year ended December 31, 2023[23] - The company's auditor confirmed that the figures in the preliminary announcement match the draft consolidated financial statements for the year ended December 31, 2023[25] Game Development and Performance - The company's new games, particularly "Defend Radish 4" and "Immortal Taoism 3," contributed significantly to the improved financial performance[46] - "Defend Radish 4" showed strong performance in 2023, with new player-versus-player (PVP) features enhancing user engagement and driving growth in active users and user payment data[47] - The company launched three new games in 2023, including "Shen Xian Dao 3," which topped the Apple China App Store free chart and Bilibili game popularity chart on its release day[56] - The company plans to launch five new games in 2024, including HTML5 games, mobile games, and console games, while continuing to invest in existing games[63] - Game operations revenue increased by 13.6% to RMB 174.7 million in 2023, driven by the launch of "Shen Xian Dao 3" and the full-year contribution of "Defend Radish 4"[67][76] - RPG mobile game ARPPU decreased by 32.5% to RMB 53.7 in 2023 due to the early lifecycle stage of "Shen Xian Dao 3"[70][72] - Casual game ARPPU increased by 27.9% to RMB 25.9 in 2023, supported by frequent updates and new features in the "Defend Radish" series[70][72] - The company's RPG and online games had a cumulative registered user base of 234.8 million, with 173.3 million for online games and 61.5 million for mobile games[69] - Casual games recorded a cumulative download count of 711.9 million, while HTML5 games had 39.4 million registered users[69] - RPG mobile game MAU reached 0.1 million, and casual game MAU was 5.8 million in December 2023[69] - Average MPU for casual games increased by 28.5% to 316,000 in 2023, while RPG mobile game MPU grew by 25.3% to 94,000[70] - The company launched "Shen Xian Dao 3" on June 7, 2023, which was well-received in mainland China[66] - The company also released "Clear Sky Twins" and "Cube Hunter" in the second half of 2023, expanding its game portfolio[66] - The average MPU for mobile RPG games increased by 25.3% from 75,000 in 2022 to 94,000 in 2023, driven by the launch of "Immortal Tao 3"[94] - The average MPU for casual games increased by 28.5% from 246,000 in 2022 to 316,000 in 2023, due to attractive activities and content updates in "Defend the Radish 4"[94] Expenses and Cost Management - Sales and distribution expenses decreased by 7.3% from RMB 40.4 million in 2022 to RMB 37.5 million in 2023, primarily due to a reduction in promotional and advertising expenses from RMB 15.3 million to RMB 9.7 million[81] - R&D costs decreased by 16.6% from RMB 76.8 million in 2022 to RMB 64.1 million in 2023, mainly due to reduced outsourcing expenses from RMB 6.1 million to RMB 0.6 million and lower employee costs from RMB 67.0 million to RMB 61.2 million[82] - Cost of sales decreased by 15.0% from RMB 37.3 million in 2022 to RMB 31.7 million in 2023, primarily due to streamlined corporate structure and reduced employee costs[101] - Administrative expenses decreased by 15.2% from RMB 64.4 million in 2022 to RMB 54.6 million in 2023, mainly due to the absence of bad debt recognition for unrecoverable licensing fees[104] - R&D costs decreased by 16.6% from RMB 76.8 million in 2022 to RMB 64.1 million in 2023[96] - Income tax expenses decreased by 69.0% from RMB 1.2 million in 2022 to RMB 0.4 million in 2023, mainly due to changes in deferred tax expenses[107] - Other expenses decreased by 53.9% from RMB 8.6 million in 2022 to RMB 4.0 million in 2023, primarily due to reduced fair value losses on financial assets[106] - Research and development costs for the year ended December 31, 2023, were RMB 64.092 million, a decrease from RMB 76.847 million in the previous year[200] - Administrative expenses for the year ended December 31, 2023, were RMB 54.576 million, down from RMB 64.389 million in the previous year[200] - The company's sales and distribution expenses for the year ended December 31, 2023, were RMB 37.494 million, a decrease from RMB 40.444 million in the previous year[200] - The company's financing costs for the year ended December 31, 2023, were RMB 3.685 million, slightly lower than the RMB 3.968 million in the previous year[200] Cash Flow and Financial Position - Operating activities generated a net cash inflow of RMB 40,071 thousand, while investment activities resulted in a net cash outflow of RMB 43,693 thousand[112] - The net increase in cash and cash equivalents was RMB 24,365 thousand, with year-end cash and cash equivalents reaching RMB 160,678 thousand, a 20.7% increase from the beginning of the year[112] - Net current assets increased by 27.0% from RMB 112.9 million in 2022 to RMB 143.4 million in 2023, driven by cash inflows from operating activities[111] - Total equity increased to RMB 525.9 million as of December 31, 2023, up from RMB 456.5 million in 2022, driven by net profit and exchange rate differences[136] - Cash and cash equivalents totaled RMB 160.7 million as of December 31, 2023, up from RMB 133.2 million in 2022, mainly due to operating cash inflows[138] - Bank loans increased to RMB 95.5 million as of December 31, 2023, with RMB 6.0 million due within one year and RMB 64.7 million due after five years[139] - The company's financial assets, including debt and equity investments, amounted to RMB 147.0 million as of December 31, 2023, up from RMB 126.3 million in 2022[141] - The group's debt-to-asset ratio as of December 31, 2023, was 25.1%, compared to 27.0% as of December 31, 2022[166] - Net proceeds from the subscription in 2021 amounted to approximately HKD 119.1 million, which were fully utilized by December 31, 2023[168][169] - Net proceeds from the subscription of new shares by THL H Limited were allocated as follows: RMB 119.1 million for new product development, RMB 43.1 million for attracting suitable personnel, and RMB 45.4 million for increasing issuance and marketing budgets[190] Industry and Market Trends - The Chinese online game industry recorded a significant growth of 14.0% in total revenue in 2023, according to the "2023 China Game Industry Report"[55] - The company expects the operating environment for the Chinese online game industry to remain challenging in the first half of 2024, with intense competition for user time and generally low consumer sentiment[62] - The online gaming industry presents opportunities, particularly in the development of HTML5 games, and the company aims to remain flexible and efficient to capitalize on these opportunities[86] - In 2024, the company plans to expand the intellectual property (IP) of the "Defend the Radish" game series into new formats such as short videos, animation series, and music[87] - New World Group plans to launch over 2,500 residential units and continue selling premium office projects in the second half of 2024[176] Employee and Organizational Structure - The company had 8,300,000 unexercised share options as of the end of the reporting period, representing 0.47% of the issued shares[37] - The company did not recognize any share option expenses in 2023, compared to a reversal of RMB 1,906,000 in 2022[37] - Employee distribution: Development (190, 56.9%), Operations (70, 21.0%), Administration (59, 17.7%), Sales & Marketing (15, 4.4%), totaling 334 employees[170] - The company had 334 full-time employees as of December 31, 2023, with the majority located in Xiamen, Fujian Province, China[191] Risk Management and Future Outlook - The company faces risks such as potential disruptions to its network infrastructure or IT systems, intense competition in the mobile and online gaming industry, and challenges in retaining and attracting players due to changing preferences[83] - The company is actively investing in technology infrastructure to enhance player experience and game performance, while also managing and optimizing its existing game portfolio to attract and retain players[84] - The company is focusing on talent retention and development to maintain the competitiveness of its R&D and operational teams[85] - The group continues to seek new opportunities for business development[165] Other Income and Gains - Other income and gains increased by 37.9% to RMB 22.3 million in 2023, driven by a rise in investment income from RMB 1.5 million to RMB 7.2 million[80] - The company's other income and gains for the year ended December 31, 2023, were RMB 22.310 million, up from RMB 16.181 million in the previous year[200] Capital Expenditures and Investments - Capital expenditures for the year ended December 31, 2023, amounted to RMB 2.6 million, a decrease of 53.3% compared to RMB 5.6 million in the previous year, primarily due to reduced office leasehold improvements[188] - The company's investment policy mandates that at least 50% of total investments be allocated to risk-free or capital-protected products, with the remainder in low-risk products[142] - CLP Financing, a wholly-owned subsidiary of CLP Holdings, was established to raise funds for CLP Power, which supplies approximately 77% of Hong Kong's electricity consumption[146] - In July 2021, the group invested a cumulative amount of $2.883 million (approximately RMB 18.6 million) in bonds issued by Anye Global and guaranteed by Poly Real Estate, with a face value of $2.8 million, a coupon rate of 4.0%, and a 5-year maturity[147] - On January 23, 2020, the group invested $1.614 million (approximately RMB 11.1 million) in 16,000 units of UBS (CAY) Investment Fund Series - UBS Asian Bonds Series 5 (USD), with a target yield of 4.8% to 5.3% per annum and a maturity of 4.5 years[152] - According to UBS (CAY) Investment Fund Series' annual report for the year ended December 31, 2022, the sub-fund recorded a loss of approximately $60 million and a decrease in net asset value attributable to unit holders of approximately $80 million[153] - Future Capital recorded revenue of approximately $19,587 and a net increase in partner capital from operations of approximately $49.2 million for the year ended December

Financial Performance - Total revenue for the six months ended June 30, 2023, was RMB 17,907,000 (approximately 17.9 million), compared to RMB 11,524,000 for the same period in 2022, representing a year-on-year increase of 55.5%[3] - The group reported a pre-tax profit of RMB 6,770,000 for the first half of 2023, compared to RMB 7,283,000 in the same period of 2022, indicating a decrease of 7%[3] - For the six months ended June 30, 2023, the company's revenue was RMB 107,902 thousand, representing a 45.1% increase from RMB 74,343 thousand in the same period of 2022[107] - Gross profit for the same period was RMB 94,870 thousand, up 65.8% from RMB 57,206 thousand year-on-year[107] - The company reported a profit before tax of RMB 40,297 thousand, compared to a loss of RMB 6,947 thousand in the previous year, marking a significant turnaround[107] - The net profit attributable to the company's shareholders was RMB 40,262 thousand, a recovery from a loss of RMB 9,520 thousand in the prior period[107] - Basic and diluted earnings per share for the period were RMB 0.02, compared to a loss of RMB 0.01 per share in the same period last year[107] - The company reported a profit of approximately RMB 40.9 million for the six months ended June 30, 2023, compared to a loss of approximately RMB 7.8 million for the same period in 2022[173] - For the six months ended June 30, 2023, the profit attributable to the owners of the parent company was approximately RMB 40.3 million, a significant increase of 522.9% compared to a loss of RMB 9.5 million in the same period of 2022[175] Revenue Sources - Revenue from Tencent for cloud server services was RMB 1,519,000 for the six months ended June 30, 2023, compared to RMB 1,619,000 in the previous year[39] - Revenue from Tencent amounted to RMB 4,508,000 for the six months ended June 30, 2023, up from RMB 2,826,000 in the previous year[39] - Game operations revenue for the six months ended June 30, 2023, was approximately RMB 91.2 million, an increase of about 54.9% compared to RMB 58.9 million for the same period in 2022[155] - The company reported a total revenue of RMB 91,184 thousand, with RPG games contributing RMB 35,675 thousand (33.1% of total revenue) and casual games contributing RMB 47,806 thousand (44.3% of total revenue) in the first half of 2023[132] User Engagement and Market Trends - The company experienced a 2.4% year-on-year decline in the Chinese online gaming market, influenced by reduced user interest in paid online games due to the COVID-19 pandemic[110] - New game approvals in China have resumed, positively impacting the online gaming market and stimulating industry growth[110] - The company has focused on long-term value through continuous updates and new content for its game "Defend the Carrot 4," which has successfully maintained user engagement[111] - The company aims to enhance user engagement through various in-game promotions and regular updates for quality games[160] - The total registered users for RPG mobile and online games reached approximately 234.0 million as of June 30, 2023, with 173.2 million for online games and 60.8 million for mobile games[157] - Monthly Active Users (MAU) for RPG mobile and online games was approximately 1.8 million in June 2023, with mobile games accounting for 1.7 million MAU[157] Cost Management and Financial Position - Cash and cash equivalents as of June 30, 2023, amounted to RMB 134,094,000, an increase from RMB 133,153,000 as of December 31, 2022[24] - The total liabilities as of June 30, 2023, were RMB 37,450,000, a decrease from RMB 59,609,000 as of December 31, 2022[26] - The group’s cash and cash equivalents totaled approximately RMB 134.1 million as of June 30, 2023, a slight increase from RMB 133.2 million as of December 31, 2022, primarily due to cash inflows from operating activities[197] - The group’s current assets net value increased by approximately 25.1% to RMB 141.2 million as of June 30, 2023, compared to RMB 112.9 million as of December 31, 2022[196] - The company has a bank loan with a secured interest rate of 4.3% due in 2024, amounting to RMB 6,000,000[27] - The group had bank loans totaling approximately RMB 685 million as of June 30, 2023, down from RMB 700 million as of December 31, 2022, with a portion due within one year[178] Game Development and Launches - In the first half of 2023, the company launched the RPG mobile game "Xianxiandao 3," which quickly topped the Apple China App Store free chart and reached the 11th position on the best-selling chart[125] - The "Xianxiandao" series has attracted over 160 million users since its debut 12 years ago, indicating strong brand recognition and user engagement[125] - The company aims to optimize its recently launched games, including "Xianxiandao 3," "Defend the Carrot 4," and "Dougui," to expand the player base and enhance user engagement[128] - The company plans to explore opportunities to expand "Xianxiandao 3" and "Dougui" into overseas markets, adapting the games to fit different cultural preferences while retaining core gameplay elements[128] - The company continues to focus on long-term operations of its popular IP portfolio, including "Defend the Carrot" and "Xianxiandao," to lay a solid foundation for potential sequels[131] Investment and Financial Management - The company has a total of RMB 10,000,000 in fixed deposits as of June 30, 2023[47] - The company's internal investment management policy allows for at least 50% of total investments to be allocated to risk-free or capital-preserving investments, with the remaining 50% allocated to low-risk products[200] - The company maintains a diversified investment portfolio to mitigate risks, aligning with effective capital and investment management policies and strategies[200] - The fair value of non-listed equity investments is estimated using market-based valuation methods, with the board believing the derived fair value is reasonable and appropriate as of the reporting date[58] Research and Development - Research and development costs decreased by approximately 25.1% to RMB 27.6 million for the six months ended June 30, 2023, from RMB 36.9 million for the same period in 2022[169] Other Financial Metrics - The average monthly revenue per paying user (ARPPU) is calculated based on the average monthly revenue from virtual goods sales and upgrades divided by the average number of monthly paying users (MPU)[64] - Average Revenue Per Paying User (ARPPU) for mobile RPG games decreased by 55.3% to RMB 19.0 from RMB 42.5, attributed to the early lifecycle stage of "Xianxian Dao 3"[138] - The ARPPU for casual games increased by 63.5% to RMB 36.3 from RMB 22.2, mainly due to frequent updates and new features in the "Defend the Carrot" game series[138]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告 全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 Feiyu Technology International Company Ltd. 飛魚科技國際有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1022） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 的 中 期 業 績 公 告 董事會欣然宣佈本集團截至二零二三年六月三十日止六個月的未經審核綜合 中期業績（「中期業績」），連同二零二二年同期的比較數字。 財務表現摘要 截至六月三十日止六個月 二零二三年 二零二二年 變動% （人民幣千元） （人民幣千元） （未經審核） （未經審核） 收益 107,902 74,343 45.1 毛利 94,870 57,206 65.8 除稅前溢利╱（虧損） 40,297 (6,947) (680.1) 母公司擁有人應佔期內溢利╱（虧損） 40,262 (9,520) (522.9) ...

Financial Performance - The company's total revenue for the year ended December 31, 2022, increased by 82.8% year-on-year to RMB 191.5 million[9]. - The loss attributable to equity holders of the parent company narrowed by 62.1% year-on-year to RMB 29.6 million[9]. - Total assets as of December 31, 2022, amounted to RMB 625.7 million, a decrease from RMB 668.5 million in 2021[10]. - The total equity as of December 31, 2022, was RMB 456.5 million, down from RMB 493.9 million in 2021[10]. - The gross profit margin for 2022 increased by 1,378 basis points to 80.5% compared to the previous year[16]. - The company's total revenue for 2022 was approximately RMB 191.5 million, representing a year-on-year increase of 82.8%[16]. - The net loss attributable to the company's owners narrowed by 62.1% year-on-year to RMB 29.6 million in 2022[16]. - The revenue for the year ended December 31, 2022, was approximately RMB 191.5 million, an increase of 82.8% compared to RMB 104.8 million for the previous year[35]. - The gross profit rose by approximately 120.5% to RMB 154.2 million, with a gross margin of 80.5% for the year ended December 31, 2022, compared to 66.7% the previous year[40]. - The company reported a net loss of RMB 24.4 million for the year ended December 31, 2022, a reduction of 68.2% compared to a loss of RMB 76.6 million the previous year[35]. User Engagement and Game Development - The company has over 660 million users in a market valued at over RMB 1 trillion[11]. - The cumulative registered users for the "Defend the Carrot" series reached 672.1 million as of December 31, 2022, contributing significantly to the company's growth in 2022[12]. - The company launched three new games in 2022, including "Mushroom War 2," "Doubt," and "Defend the Carrot 4," with "Doubt" achieving over 1 million users and RMB 10 million in recharge consumption within its first week[17]. - The "Defend the Carrot 4" game achieved top rankings in multiple app stores upon release, including the Apple China App Store and TapTap[18]. - The average monthly active users (MAU) for RPG mobile and online games was approximately 0.4 million as of December 2022, with mobile games accounting for 0.3 million and online games for 0.1 million[30]. - The average monthly paying users (MPU) for mobile RPG games increased significantly to 75, up 341.2% from 17 in the previous year[31]. - The company plans to launch two major new games in 2023, "Xianxiandao 3" and "Meow Island," both of which have received publishing licenses[24]. - The company continues to implement various in-game promotions and updates to enhance user engagement and retention[33]. - The company aims to optimize existing games to extend their lifecycle and create long-tail value in 2023[13]. Market Challenges and Strategic Focus - The gaming industry in China is experiencing increased competition and tighter regulations, impacting growth dynamics[11]. - The company faced challenges in the online gaming industry, with total revenue in the sector declining by 10.3% year-on-year to RMB 265.9 billion in 2022[16]. - The company aims to leverage its diverse portfolio of popular games to drive growth in a challenging market environment[11]. - The company is focusing on developing original intellectual property to enhance brand recognition and user acquisition[11]. - The company plans to launch prequels and sequels of popular games to capitalize on existing user bases and brand strength[11]. Financial Position and Cash Flow - The net cash flow used in operating activities for 2022 was RMB (4,496) thousand, a significant improvement of 91.6% compared to RMB (53,226) thousand in 2021[55]. - The net cash flow from investing activities for 2022 was RMB 22,329 thousand, a turnaround of 131.6% from RMB (70,622) thousand in 2021[55]. - The total cash and cash equivalents at the end of 2022 amounted to approximately RMB 133.2 million, representing a year-on-year increase of 5.5% from RMB 126.3 million in 2021[55]. - The group’s financial assets measured at fair value through other comprehensive income amounted to approximately RMB 126.3 million as of December 31, 2022, down from RMB 179.8 million in 2021[57]. - The group’s debt-to-asset ratio as of December 31, 2022, was 27.0%, an increase from 26.1% as of December 31, 2021[84]. Corporate Social Responsibility and ESG Initiatives - The company is committed to corporate social responsibility through sustainable practices and community engagement initiatives[97][98]. - The company established an Environmental, Social, and Governance (ESG) working group to oversee its ESG strategies and report on performance[116]. - The company emphasizes the importance of stakeholder feedback on its ESG policies and performance[106]. - The company aims to create a healthy virtual gaming environment based on player interests and expectations[107]. - The company has implemented a consistent reporting framework for its ESG performance to allow stakeholders to make fair comparisons over time[104]. - The company is committed to implementing the United Nations Sustainable Development Goals, focusing on seven key areas related to sustainability[120]. - The company aims to reduce its environmental footprint, including greenhouse gas emissions and waste, while improving energy and water efficiency[121]. Employee Engagement and Development - The company employed 365 full-time employees as of December 31, 2022, with 59.2% in development roles[92]. - The employee turnover rate increased to 53% in 2022 from 37% in 2021, with a notable rise in turnover among employees aged 21 to 30, reaching 72%[140]. - The company provided a total of 1,690 training hours for employees in the current year, reflecting a commitment to employee development[157]. - The percentage of male employees receiving training was 63.71%, while female employees accounted for 36.29% of the training participants[158]. - The average training hours per employee were 2.85 for males and 3.32 for females in 2022[158]. Environmental Impact and Sustainability Efforts - The company reduced greenhouse gas emissions to 554.67 tons CO2 equivalent in 2022, compared to 487.55 tons in 2021[170]. - The total waste generated by the company was 318.98 tons, an increase from 255.36 tons in 2021[173]. - The total waste recycled was 157.49 tons, significantly up from 71.98 tons in 2021[173]. - The company implemented energy-saving measures to improve energy efficiency and reduce unnecessary energy consumption[168]. - The company aims to minimize daily operational waste and promote the "3R" concept of reducing, reusing, and recycling[168].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告 全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 Feiyu Technology International Company Ltd. 飛魚科技國際有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1022） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 年 度 業 績 公 告 董事會欣然宣佈本集團截至二零二二年十二月三十一日止年度的綜合年度業 績，連同截至二零二一年十二月三十一日止年度的比較資料。 財務表現摘要 截至十二月三十一日止年度 二零二二年 二零二一年 變動% （人民幣千元）（人民幣千元） （經審核） （經審核） 收益 191,519 104,788 82.8 毛利 154,201 69,929 120.5 除稅前虧損 (23,129) (73,574) (68.6) 除稅後虧損 (24,356) (76,561) (68.2) ...

Financial Performance - The total revenue for the first half of 2022 was approximately RMB 743.43 million, representing a year-on-year increase of 43.9%[13] - Gross profit for the same period was RMB 572.06 million, reflecting a growth of 58.2% compared to the previous year[13] - The company reported a pre-tax loss of RMB 69.47 million, which is a 15.4% increase from the previous year's loss of RMB 60.20 million[13] - The loss attributable to equity holders of the parent company slightly decreased by 1.6% to RMB 95.20 million from RMB 96.77 million in the same period last year[13] - Game operation revenue for the first half of 2022 was approximately RMB 58.9 million, a 77.9% increase from RMB 33.1 million in the same period of 2021[26] - The company reported a net loss of RMB 7.8 million for the six months ended June 30, 2022, a slight improvement from a loss of RMB 8.5 million in the same period of 2021[37] - Other income and gains decreased by approximately 23.8% from RMB 15.1 million to RMB 11.5 million for the six months ended June 30, 2022, primarily due to a drop in investment income from RMB 7.9 million to RMB 3.6 million[46] Assets and Liabilities - As of June 30, 2022, total assets amounted to RMB 633.79 million, down 5.2% from RMB 668.50 million at the end of 2021[14] - Total equity was RMB 483.14 million, a decrease of 2.2% from RMB 493.91 million at the end of the previous year[14] - The company experienced a 28.9% decrease in current liabilities, which stood at RMB 63.16 million compared to RMB 88.80 million previously[14] - Cash and cash equivalents totaled approximately RMB 107.8 million as of June 30, 2022, down from RMB 126.3 million as of December 31, 2021, mainly due to cash used in operating activities[61] - The total bank loans amounted to approximately RMB 75.0 million, a decrease from RMB 80.0 million as of December 31, 2021, with RMB 10.0 million due within one year[63] - The company has lease liabilities of approximately RMB 7.1 million, up from RMB 2.0 million as of December 31, 2021[63] Game Development and Launches - The company attributed its stable financial performance to a diversified game portfolio and the successful launch of new games during the reporting period[16] - The company launched three new games in the first half of 2022: "Mushroom Wars 2," "Duoqi," and "Defend the Carrot 4" [17] - "Duoqi" achieved over 1 million users and RMB 10 million in recharge consumption within its first week of launch [17] - "Defend the Carrot 4" had over 600 million registered users as of June 30, 2022, and became a trending topic on social media upon release [18] - The average Monthly Active Users (MPU) for mobile RPG games rose significantly from approximately 23,000 to 146,000, primarily due to the launch of "斗詭" in May 2022[32] - The Average Revenue Per Paying User (ARPPU) for mobile RPG games decreased by 53.6% from RMB 91.6 to RMB 42.5, attributed to the early lifecycle stage of "斗詭" which resulted in lower ARPPU[35] Marketing and Licensing - The company signed 6 new licensing agreements in the first half of 2022 to expand its intellectual property licensing efforts [18] - The company aims to increase the number of licensed products featuring "Defend the Carrot 4" elements, focusing on fast-moving consumer goods, stationery, and apparel [21] - The company continues to collaborate with existing licensing partners to develop new products, launching 15 new licensed physical products during the reporting period [20] Research and Development - Research and development costs rose by 17.6% to RMB 36.9 million, reflecting the company's ongoing investment in new game development[37] - The company plans to continue launching various in-game promotions and updates to enhance user engagement and retention[35] Corporate Governance and Structure - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value and accountability[194] - The board consists of seven members, including four executive directors and three independent non-executive directors, ensuring a balance of experience and qualifications[198] - The company has adopted a post-IPO share option scheme and restricted share unit plan as part of its long-term incentive program[137] Shareholder Information - The total number of shares issued as of June 30, 2022, was 1,718,826,062[147] - The family trusts mentioned hold significant equity stakes in the company, with Honour Gate Limited owning 161,538,000 shares[143] - The company has maintained sufficient public float as per the listing rules as of the report date[192]

Financial Performance - Total revenue for the year 2021 was RMB 104,788,000, a decrease of 10.5% compared to RMB 117,004,000 in 2020[14] - Gross profit for 2021 was RMB 69,929,000, down from RMB 82,419,000 in 2020, reflecting a gross margin decline[14] - The company reported a loss before tax of RMB (73,574,000) for 2021, compared to a loss of RMB (16,900,000) in 2020[14] - The company reported a net loss attributable to owners of the parent of RMB (78,103,000) for 2021, compared to RMB (21,460,000) in 2020[14] - The basic and diluted loss per share for 2021 was RMB (0.05), compared to RMB (0.01) in 2020[14] - The company recorded a loss of RMB 76.6 million for the year, compared to a loss of RMB 21.5 million in the previous year[22] - The company reported a net loss of RMB 76.6 million for the year ended December 31, 2021, compared to a net loss of RMB 18.1 million in 2020, representing an increase of 322.5%[52] Assets and Equity - Total assets as of December 31, 2021, were RMB 668,500,000, an increase from RMB 634,063,000 in 2020[15] - Total equity increased to RMB 493,907,000 in 2021 from RMB 489,166,000 in 2020[15] - Non-current assets amounted to RMB 481,546,000, up from RMB 430,922,000 in the previous year[15] - Current liabilities were RMB 88,801,000, slightly up from RMB 84,217,000 in 2020[15] - The company’s net current assets decreased by 17.5% to approximately RMB 98.2 million as of December 31, 2021, from RMB 118.9 million in the previous year[74] Revenue Breakdown - The total revenue from game operations for the year ended December 31, 2021, was RMB 70,487 thousand, representing 67.2% of total revenue, compared to RMB 65,757 thousand or 56.2% in the previous year[39] - Game operations contributed approximately RMB 70.5 million in revenue, a year-on-year increase of about 7.2% from RMB 65.8 million in 2020, driven by updates to the "Defend the Carrot" series[42] - Online game distribution revenue decreased by approximately 75.3% to about RMB 7.2 million, primarily due to the late life cycle of "Kaji Adventure Team" and the maturity of "Soul Device Academy" in the first half of 2020[55] - Licensing and intellectual property-related income increased by approximately 29.4% to about RMB 6.9 million, mainly due to a one-time licensing fee of approximately RMB 2.0 million recognized after terminating a simulation game licensing agreement[55] - Advertising revenue increased by approximately 20.1% to about RMB 20.2 million, driven by collaboration with a new advertising platform[55] Game Development and Strategy - The company has nine game development teams focusing on various genres, including RPG and FPS[23] - The company launched three new mobile games in 2021 and updated an existing RPG game to enhance user experience[23] - The "Defend the Carrot" game series has accumulated over 6 million registered users, positioning the company favorably for IP licensing opportunities[23] - The company expanded its IP licensing activities by adding five new product partners for "Defend the Carrot" characters and images[23] - The company plans to launch "Defend the Carrot 4" and "Xianxian Road 3" in 2022, indicating a focus on developing sequels to popular games[18] - The company aims to enhance its R&D and game operation capabilities to develop engaging and innovative games for a diverse user base[19] - The company plans to launch 5 to 6 new mobile games targeting both domestic and international markets in 2022, including sequels to popular titles "Defend the Carrot 4" and "God仙道3"[31] User Engagement and Metrics - As of December 31, 2021, the company had approximately 229.1 million registered users for RPG mobile and online games, with 173.0 million for online games and 56.1 million for mobile games[43] - The average Monthly Active Users (MAU) for RPG mobile games decreased from approximately 25,000 in 2020 to 17,000 in 2021, while the MAU for casual games decreased from 102,000 to 88,000[46] - The Average Revenue Per Paying User (ARPPU) for online RPG games increased from RMB 147.0 in 2020 to RMB 164.5 in 2021, primarily due to increased spending by loyal players[50] - Casual games' ARPPU rose from RMB 9.9 in 2020 to RMB 16.7 in 2021, attributed to frequent updates and new features in the "Defend the Carrot" series[50] Research and Development - Research and development costs increased by 47.3% from RMB 56.8 million in 2020 to RMB 83.6 million in 2021, reflecting the company's focus on new game development[52] - The company has established a game content review team to ensure compliance with relevant laws and regulations, focusing on player health and safety[30] - The company is developing approximately 5 additional games planned for release in 2023 and beyond, either developed in-house or sourced from third-party developers[31] Cash Flow and Financing - The company recorded a net cash outflow from operating activities of RMB 53.2 million, compared to an outflow of RMB 35.5 million in the previous year, indicating a worsening cash flow situation[76] - Cash and cash equivalents decreased to approximately RMB 126.3 million as of December 31, 2021, down 9.3% from RMB 139.2 million at the end of 2020[76] - The company had bank loans totaling approximately RMB 80.0 million as of December 31, 2021, an increase from RMB 63.8 million in 2020, with a portion used for the construction of the R&D center[78] - The company’s financing activities generated a net cash inflow of RMB 112.1 million, contrasting with a net outflow of RMB 56.2 million in the previous year, indicating improved financing conditions[76] Employee and Organizational Structure - The company had a total of 464 full-time employees as of December 31, 2021, with 61.9% in development, 19.0% in operations, and 17.0% in administration[136] - The employee distribution by gender in 2021 showed 283 males and 171 females, while in 2020, there were 291 males and 173 females[185] - The company has adopted a post-IPO share option scheme and restricted share unit plan as part of its long-term incentive program[139] - Attractive employee benefits include a five-day work week, paid annual leave, discretionary bonuses, and training subsidies[194] Environmental, Social, and Governance (ESG) - The company emphasizes the importance of environmental, social, and governance (ESG) issues for long-term business success[160] - The board of directors is responsible for the company's ESG strategy and reporting, including risk identification and management[162] - The company has established an ESG working group to implement strategies and collect relevant data across departments[160] - The company supports the United Nations Sustainable Development Goals and has selected 7 relevant goals for its business activities[164] - The company is committed to reducing its environmental footprint, including greenhouse gas emissions and waste, while improving energy and water efficiency[182] - The company has implemented green operational policies to mitigate climate change impacts[182] - The company maintains a zero-tolerance policy towards discrimination, harassment, and bullying, ensuring a transparent career platform for employees[194] Community Engagement - The company has committed to community investment and collaboration with charitable organizations to enhance community resources[182] - The company organized fewer employee activities during the reporting year due to the pandemic but still focused on employee well-being through health and entertainment activities[199] - Special compensation leave and rewards were provided to employees affected by travel restrictions during the COVID-19 pandemic[198]

Financial Performance - For the first half of 2021, the company's total revenue was approximately RMB 51.67 million, representing a year-on-year increase of 9.7%[14] - The gross profit for the same period was RMB 36.17 million, reflecting an 11.1% increase compared to RMB 32.54 million in the previous year[14] - The pre-tax loss was reduced by 72.5% to RMB 6.02 million from RMB 21.89 million in the prior year[14] - The loss attributable to equity holders of the parent company decreased by 56.8% to approximately RMB 9.68 million, down from RMB 22.41 million[14] - Total revenue increased by 9.7% from RMB 47.1 million in the six months ended June 30, 2020, to RMB 51.7 million in the same period of 2021[39] - Game operation revenue rose by approximately 8.6% from RMB 30.5 million to RMB 33.1 million, largely due to the positive reception of "Neon Abyss" launched in July 2020[40] - Licensing and intellectual property-related income surged by approximately 1,453.6% from RMB 0.4 million to RMB 5.8 million, due to the recognition of various licensing fees[41] - Advertising revenue increased by about 13.2% to approximately RMB 8.8 million, attributed to a partnership with Huawei Software Technology Co., Ltd.[41] - Gross profit rose by 11.1% from RMB 32.5 million to RMB 36.2 million, with a gross margin of 70.0% compared to 69.1% in the previous year[44] - Other income and gains increased by approximately 91.5% from RMB 7.9 million to RMB 15.1 million for the six months ended June 30, 2021, primarily due to investment income rising from RMB 1.8 million to RMB 7.9 million[45] Asset and Equity Growth - Non-current assets increased by 5.8% to RMB 456.11 million from RMB 430.92 million at the end of 2020[15] - Current assets rose by 18.5% to RMB 240.62 million compared to RMB 203.14 million at the end of 2020[15] - Total assets increased by 9.9% to RMB 696.73 million from RMB 634.06 million at the end of 2020[15] - Total equity increased by 16.1% to RMB 567.89 million from RMB 489.17 million at the end of 2020[15] - Net current assets increased by approximately 42.1% from RMB 118.9 million to RMB 168.9 million, mainly due to Tencent's share subscription[59] - Cash and cash equivalents increased by approximately 29.2% from RMB 139.2 million to RMB 179.8 million[61] - As of June 30, 2021, the total cash and cash equivalents amounted to approximately RMB 179.8 million, an increase from RMB 139.2 million as of December 31, 2020, primarily due to Tencent's subscription activities and cash used in operating activities[64] - Total equity increased to approximately RMB 567.9 million as of June 30, 2021, from RMB 489.2 million as of December 31, 2020, primarily due to Tencent's subscription of shares[58] User Engagement and Game Development - As of June 30, 2021, the company had approximately 228.7 million registered users for its RPG mobile and online games, with 172.8 million for online games and 55.9 million for mobile games[29] - The average Monthly Active Users (MAU) for RPG mobile games was approximately 0.1 million, while online games had an MAU of about 0.2 million as of June 2021[29] - The company plans to launch 2 to 3 mobile games targeting domestic and international markets in the second half of 2021, focusing on established IPs like "Gods and Immortals" and "Carrot Defense"[21] - The company maintained a limited but high-quality game product portfolio, focusing resources on developing sequels for popular titles like "Carrot Defense" and "Gods and Immortals"[25] Operational Efficiency - Sales and distribution expenses decreased by approximately 55.9% from RMB 8.9 million to RMB 3.9 million, mainly due to a reduction in advertising expenses from RMB 6.8 million to RMB 2.0 million[46] - Administrative expenses increased by approximately 8.6% from RMB 19.5 million to RMB 21.1 million, driven by an increase in employee costs from RMB 13.2 million to RMB 14.4 million[47] - Research and development costs rose by approximately 44.0% from RMB 21.8 million to RMB 31.4 million, attributed to the establishment of a development team focused on a first-person shooter game[49] - Other expenses significantly decreased from RMB 10.5 million to RMB 0.2 million, primarily due to the absence of impairment losses related to the investment in GaoWo Technology[51] Investment and Financial Management - The group has adopted a prudent cash and financial management policy, concentrating on managing cash activities to minimize funding costs[64] - The group has a diversified investment portfolio to mitigate risks, with at least 50% of total investments allocated to risk-free or capital-protected investments[69] - The expected annual interest rate for the structured financial product "Tianlibao" is approximately 2.6%, with an actual rate of about 2.8% upon redemption[73] - The group focuses on effective capital and investment management policies to ensure compliance with its investment strategies[69] Stock Options and Employee Compensation - The company has established a stock option plan to incentivize management and employees, aligning their interests with shareholders[151] - The total number of stock options granted under the post-IPO stock option plan as of June 30, 2021, is 146,160,000, which represents approximately 8.50% of the issued shares as of that date[151] - The company has adopted a post-IPO share option scheme and restricted share unit plan as part of its long-term incentive program[137] - The performance-based stock options are designed to motivate employees to achieve specific financial targets, enhancing overall company performance[159]