. THE . Z WANKAONLINE Interim Report 2024 中期報告 WANKA ONLINE INC. 萬 咖 壹 聯 有 限 公 司 * (Incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立之有限公司） Stock Code 股份代號 : 1762 . ✽ For identification purposes only 僅供識別 o Corporate Information 公司資料 2 Chairman's Statement 主席報告書 5 Management Discussion and Analysis 管理層討論及分析 8 Other Information 其他資料 22 Contents 目錄 | --- | --- | |-------------------------------------------------------------------------------|-------| | | | | Interim Condensed Consolidated ...

Financial Performance - Total revenue for the first half of 2024 amounted to RMB1,232.1 million, representing an increase of 17.7% from RMB1,047.2 million in the corresponding period in 2023[9]. - Gross profit increased by 3.2% on a period-on-period basis to RMB136.7 million[9]. - Profit after tax grew by 9.2% on a period-on-period basis to RMB47.0 million[9]. - Revenue for the six months ended June 30, 2024, increased by 17.7% to RMB 1,232,052,000 compared to RMB 1,047,189,000 for the same period in 2023[21]. - Profit for the period rose by 9.2% to RMB 46,991,000 compared to RMB 43,045,000 in the previous year[21]. - Total comprehensive income for the period was RMB 47,318, compared to RMB 43,111 in the previous year, reflecting a growth of 9.1%[110]. - Basic and diluted earnings per share remained stable at RMB 0.03 for both 2024 and 2023[109]. Revenue Breakdown - Revenue from mobile advertising services amounted to RMB1,191.0 million, representing a period-on-period growth of 16.1% from RMB1,025.9 million[12]. - Revenue from online-video distribution services rose to RMB20.9 million, a significant increase of 301.9% compared to RMB5.2 million in the same period of 2023[28]. - Game co-publishing services revenue increased from RMB1.7 million for the six months ended June 30, 2023, to RMB3.3 million for the six months ended June 30, 2024[28]. - Mobile advertising revenue from mobile game distribution grew by 16.2%, from RMB1,023.2 million to RMB1,188.8 million, primarily due to an increase in the number of mobile games marketed[26]. - Revenue from other services, including software maintenance, was RMB16.9 million, compared to RMB14.3 million in the previous year[25]. Cost and Expenses - Cost of sales increased by 19.8% from RMB914.7 million for the six months ended June 30, 2023, to RMB1,095.3 million for the six months ended June 30, 2024[29]. - Selling and distribution expenses increased by 34.5% from RMB11.4 million for the six months ended June 30, 2023, to RMB15.3 million for the six months ended June 30, 2024[30]. - Research and development costs amounted to RMB30.6 million for the first half of 2024, representing a period-on-period increase of 11.9%[12]. - Administrative expenses decreased by 2.6% from RMB25.3 million for the six months ended June 30, 2023, to RMB24.6 million for the six months ended June 30, 2024[30]. Assets and Liabilities - The company's cash and bank balances increased to RMB 580.1 million as of June 30, 2024, compared to RMB 534.9 million as of December 31, 2023, marking an increase of 8.4%[35]. - Current assets increased by 12.1% to RMB 2,013.4 million as of June 30, 2024, compared to RMB 1,795.5 million in 2023[35]. - Current liabilities increased by 24.8% to RMB 703.8 million as of June 30, 2024, compared to RMB 563.9 million in 2023[35]. - Total equity grew by 3.4% to RMB 1,452.3 million as of June 30, 2024, from RMB 1,405.0 million in the previous year[35]. Shareholder Information - As of June 30, 2024, the total number of shares issued was 1,525,743,350[71]. - Mr. Gao Dinan holds 419,209,300 shares, representing approximately 27.48% of the company's shareholding[70]. - The company did not recommend an interim dividend for the six months ended June 30, 2024[68]. - The weighted average number of ordinary shares in issue during the period was 1,504,510,115, compared to 1,457,829,545 for the same period in 2023, reflecting an increase of about 3.19%[145]. Incentive Schemes - The company aims to attract and retain skilled personnel through the Share Incentive Schemes[80]. - The 2016 Share Incentive Scheme has granted RSUs representing 62,500,000 shares as of June 30, 2024[82]. - The 2019 Share Incentive Scheme aims to attract and retain skilled personnel by providing equity ownership opportunities[86]. - The total number of shares underlying the exercised RSUs during the reporting period was 15,000,000 shares[87]. Risk Management and Governance - The Audit Committee reviews the effectiveness of the risk management and internal control systems on an annual basis, ensuring adequate measures are in place[97]. - The Company has established a monitoring system for anti-bribery and anti-corruption measures, conducting annual fraud and bribery risk assessments[98]. - The Board considers the risk management and internal control systems effective and adequate for the six months ended June 30, 2024[101]. - The Company has implemented internal rules and policies to regulate employee behavior, including anti-bribery and anti-corruption measures[103]. Market Position and Strategy - The company is positioned to achieve double-digit revenue growth and positive profit growth due to rising domestic market demand and increased smartphone shipments from China[8]. - The company aims to deepen operations across multiple platforms, enhancing collaboration with Huawei HarmonyOS and expanding within the Apple iOS ecosystem[15]. - The company plans to actively explore and expand into overseas markets to support the internationalization of Chinese games[15]. - The company is primarily engaged in mobile advertising services, online-video distribution services, and game co-publishing services[119].

Corporate Information This section provides an overview of the company's fundamental details and structure 2023 Annual Milestones This section highlights the company's significant achievements and events throughout 2023 [Summary of 2023 Annual Milestones](index=6&type=section&id=Annual%20Memorabilia%202023_summary) In 2023, the company achieved significant business collaborations with Apple and iQiyi, becoming the exclusive service provider for Honor mobile gaming, while enhancing its industry influence through active participation in AI and gaming events - Collaborated with Apple on mobile advertising business[12](index=12&type=chunk)[13](index=13&type=chunk) - Became a core service provider for iQiyi's direct sales business[14](index=14&type=chunk)[15](index=15&type=chunk) - Became the exclusive service provider for Honor's mobile gaming industry[25](index=25&type=chunk)[26](index=26&type=chunk) - The company's subsidiary, Wanka Huanju, received the **'2022 AI Golden Goose Award for AI Industry Influence'**, and Chairman Gao Dinan was honored with the **'Outstanding Elite Award'**[16](index=16&type=chunk) Chairman's Statement This section presents the Chairman's review of the company's performance in 2023, strategic partnerships, and future growth initiatives [Summary of Chairman's Statement](index=9&type=section&id=Chairman's%20Statement_summary) Chairman Gao Dinan reviewed 2023 performance, noting a full-year revenue decline due to slow H1 market recovery but a strong Q4 rebound, with the company now covering Android, HarmonyOS, and iOS ecosystems and planning global iOS expansion, HarmonyOS opportunities, and new ventures like connected vehicles 2023 Financial Performance Overview | Metric | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | RMB 2.098 billion | RMB 2.301 billion | -8.8% | | Gross Profit | RMB 223 million | RMB 234 million | -4.8% | | Profit After Tax | RMB 22 million | - | - | - Business fully covers Android, Huawei HarmonyOS, and Apple iOS ecosystems, with deep cooperation with top smartphone manufacturers including Huawei, Xiaomi, OPPO, vivo, Honor, and Apple[28](index=28&type=chunk)[33](index=33&type=chunk) - Achieved global strategic cooperation with Apple for iOS ecosystem mobile distribution services both domestically and internationally; secured exclusive game distribution partnership with Honor[33](index=33&type=chunk)[35](index=35&type=chunk) - Future plans include strengthening global expansion in the Apple iOS ecosystem, seizing Huawei HarmonyOS development opportunities, and deepening comprehensive cooperation with Huawei[39](index=39&type=chunk)[41](index=41&type=chunk) - In connected vehicle business, the Group's associate company, Wanxin Chelian, has deeply partnered with renowned car manufacturers like Changan, Great Wall, and Leapmotor, signing **3 million** intelligent connected vehicles[38](index=38&type=chunk)[40](index=40&type=chunk) Financial Highlights This section provides a concise overview of the company's key financial performance indicators and position for the reporting period [Financial Highlights](index=13&type=section&id=Financial%20Highlights_summary) The company's 2023 revenue was RMB 2.098 billion, an 8.8% decrease year-on-year, with gross profit at RMB 223 million, down 4.8%, while achieving a profit of RMB 22 million compared to a RMB 129 million loss in 2022, and adjusted net profit decreased by 32.9% to RMB 32.51 million, with total assets growing to RMB 1.974 billion Consolidated Statement of Profit or Loss Summary (RMB Thousand) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenue | 2,098,220 | 2,300,875 | 2,098,198 | | Gross Profit | 223,268 | 234,475 | 263,316 | | Profit/(Loss) Before Tax | 34,612 | (111,453) | 84,073 | | Profit/(Loss) for the Year | 21,996 | (128,558) | 62,297 | | Adjusted EBITDA | 65,626 | 87,132 | 121,838 | | Adjusted Net Profit | 32,506 | 48,420 | 80,905 | Consolidated Statement of Financial Position Summary (RMB Thousand) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Non-current Assets | 178,181 | 125,474 | 272,485 | | Current Assets | 1,795,549 | 1,785,626 | 1,572,878 | | **Total Assets** | **1,973,730** | **1,911,100** | **1,845,363** | | Current Liabilities | 563,893 | 531,021 | 434,628 | | Non-current Liabilities | 4,861 | 7,255 | 19,822 | | **Total Liabilities** | **568,754** | **538,276** | **454,450** | | **Total Equity** | **1,404,976** | **1,372,824** | **1,390,913** | Management Discussion and Analysis This section provides management's perspective on the company's operational performance, financial condition, and future outlook [Revenue Analysis](index=15&type=section&id=Revenues) Total revenue for 2023 was RMB 2.098 billion, an 8.8% year-on-year decrease, with mobile advertising services remaining the core revenue source at 95.2% of total revenue, despite a 9.1% decline to RMB 1.998 billion due to fewer promoted games, while online video product distribution and game co-publishing services also saw declines 2023 vs 2022 Revenue Composition (RMB Thousand) | Business Segment | 2023 Revenue | % of Total Revenue | 2022 Revenue | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Mobile Advertising | 1,997,751 | 95.2% | 2,196,736 | 95.5% | | Online Video Product Distribution | 56,583 | 2.7% | 84,525 | 3.7% | | Game Co-publishing | 4,314 | 0.2% | 5,512 | 0.2% | | Others | 39,572 | 1.9% | 14,102 | 0.6% | | **Total** | **2,098,220** | **100%** | **2,300,875** | **100%** | [Mobile Advertising Services](index=16&type=section&id=Mobile%20Advertising%20Services) Mobile advertising service revenue decreased by 9.1% year-on-year, primarily due to an 8.9% reduction in mobile game distribution revenue to RMB 1.977 billion as advertisers cut spending, alongside a 20.6% decline in mobile application distribution revenue due to fewer promotions Mobile Advertising Services Revenue Breakdown (RMB Thousand) | Ad Type | 2023 Revenue | % of Total Revenue | 2022 Revenue | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Mobile Game Distribution | 1,976,573 | 98.9% | 2,169,988 | 98.8% | | Mobile Application Distribution | 21,178 | 1.1% | 26,748 | 1.2% | | **Total** | **1,997,751** | **100%** | **2,196,736** | **100%** | [Online Video Product Distribution Services](index=17&type=section&id=Online-video%20Distribution%20Services) Revenue from online video product distribution services was RMB 56.6 million, a 33.0% year-on-year decrease, primarily focusing on finance, entertainment, and film sectors - Online video distribution business revenue in 2023 was **RMB 56.6 million**, a **33.0% decrease** compared to 2022[66](index=66&type=chunk)[69](index=69&type=chunk) [Game Co-publishing Services](index=17&type=section&id=Game%20Co-publishing%20Services) Game co-publishing service revenue was RMB 4.3 million, a 21.8% year-on-year decrease, with the company co-publishing 55 mobile games in China by the end of 2023 - Game co-publishing service revenue in 2023 was **RMB 4.3 million**, a **21.8% decrease** year-on-year[68](index=68&type=chunk)[70](index=70&type=chunk) [Cost, Profit, and Expense Analysis](index=18&type=section&id=Cost,%20Profit,%20and%20Expenses) In 2023, cost of sales decreased by 9.3% to RMB 1.875 billion in line with revenue decline, gross profit decreased by 4.8% to RMB 223 million, but gross margin slightly increased from 10.2% to 10.6%, leading to a turnaround with a profit of RMB 22 million compared to a RMB 129 million loss in 2022, mainly due to a significant reduction in goodwill impairment loss - Cost of sales decreased by **9.3%** to **RMB 1.875 billion**, consistent with the revenue decline trend[72](index=72&type=chunk)[77](index=77&type=chunk) - Gross profit decreased by **4.8%** to **RMB 223 million**, but gross margin improved from **10.2% to 10.6%**, primarily due to reduced intangible asset amortization and higher gross margin from software maintenance services[73](index=73&type=chunk)[74](index=74&type=chunk)[78](index=78&type=chunk) - Selling and distribution expenses increased by **33.0%** year-on-year to **RMB 25.8 million** due to increased marketing and advertising expenses[76](index=76&type=chunk)[80](index=80&type=chunk) - Goodwill impairment loss significantly decreased from **RMB 155 million** in 2022 to **RMB 2.4 million** in 2023[84](index=84&type=chunk)[90](index=90&type=chunk) - Achieved a full-year profit of **RMB 22 million**, turning around from a **RMB 129 million loss** in 2022[98](index=98&type=chunk)[103](index=103&type=chunk) [Non-HKFRS Measures](index=20&type=section&id=Non-HKFRS%20Measures) Under Non-HKFRS measures, the company's adjusted EBITDA for 2023 was RMB 65.63 million, a 24.7% year-on-year decrease, and adjusted net profit was RMB 32.51 million, down 32.9%, with these metrics excluding the impact of non-operating items like share-based payment expenses and goodwill impairment Non-HKFRS Measures Reconciliation Table (RMB Thousand) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Profit/(Loss) for the Year** | **21,996** | **(128,558)** | | Add: Depreciation | 7,942 | 6,682 | | Add: Amortization of intangible assets | 2,553 | 7,229 | | Add: Finance costs | 10,009 | 7,696 | | Add: Income tax expense | 12,616 | 17,105 | | Add: Share-based payment expenses | 8,149 | 22,192 | | Add: Goodwill impairment loss | 2,361 | 154,786 | | **Adjusted EBITDA** | **65,626** | **87,132** | | **Adjusted Net Profit** | **32,506** | **48,420** | [Financial Position and Key Ratios](index=23&type=section&id=Financial%20Position%20and%20Key%20Ratios) As of the end of 2023, the company's total assets were RMB 1.974 billion, total equity was RMB 1.405 billion, cash and bank balances decreased to RMB 534.9 million, bank borrowings increased to RMB 303.5 million, while the current ratio slightly decreased from 3.4 to 3.2 and the debt-to-asset ratio slightly increased from 28.2% to 28.8%, maintaining a sound financial position, though adjusted net profit margin decreased from 2.1% to 1.5% Key Financial Position Indicators (RMB Thousand) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 534,899 | 612,551 | -12.7% | | Bank Borrowings | 303,500 | 260,000 | 16.7% | | Net Current Assets | 1,231,656 | 1,254,605 | -1.8% | | Total Equity | 1,404,976 | 1,372,824 | 2.3% | Key Financial Ratios | Ratio | 2023 | 2022 | | :--- | :--- | :--- | | Current Ratio (times) | 3.2 | 3.4 | | Debt-to-Asset Ratio (%) | 28.8% | 28.2% | | Adjusted Net Profit Margin (%) | 1.5% | 2.1% | Directors and Senior Management This section provides information on the composition and roles of the company's board of directors and senior management team Report of the Directors This section details the board's review of the company's business operations, financial performance, and corporate governance for the year [Business and Financial Summary](index=33&type=section&id=Business%20and%20Financial%20Summary) The company's main business involves Android-based mobile advertising, online video distribution, game co-publishing, and software maintenance services, with the top five customers contributing 37.8% of revenue and the top five suppliers accounting for 80.1% of total cost of sales in 2023, while the board resolved not to declare a final dividend for the year, with distributable reserves of approximately RMB 1.02 billion - The company primarily engages in Android content distribution services, including mobile advertising, online video product distribution, game co-publishing, and software maintenance services[190](index=190&type=chunk)[196](index=196&type=chunk) - The Board of Directors resolved not to recommend a final dividend for the year ended December 31, 2023[192](index=192&type=chunk)[198](index=198&type=chunk) - In 2023, the top five customers accounted for **37.8%** of total revenue, and the top five suppliers accounted for **80.1%** of total cost of sales[217](index=217&type=chunk)[218](index=218&type=chunk)[223](index=223&type=chunk) [Use of Proceeds](index=35&type=section&id=Use%20of%20Proceeds) As of December 31, 2023, the net proceeds of approximately RMB 171.2 million from the company's 2018 IPO and approximately RMB 157.8 million from the 2021 placing have both been fully utilized as planned, primarily for developing existing business lines and strengthening digital infrastructure - As of the end of 2023, the net proceeds of approximately **RMB 171.2 million** from the 2018 IPO have been fully utilized for the purposes disclosed in the prospectus[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) - As of the end of 2023, the net proceeds of approximately **RMB 157.8 million** from the 2021 placing have been fully utilized as planned[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) [Share Incentive Schemes](index=47&type=section&id=Share%20Incentive%20Schemes) The company adopted two share incentive schemes in 2016 and 2019, with 62.5 million shares granted under the 2016 plan and approximately 8.1 million unexercised as of year-end 2023, and 91.74 million shares granted under the 2019 plan with approximately 28.14 million unexercised, while no new awards were granted in 2023, and the unused post-IPO share option scheme was terminated in April 2023 - The 2016 Share Incentive Scheme has granted **62.5 million shares**, with **8,096,235 shares** vested but unexercised as of the end of 2023[311](index=311&type=chunk)[314](index=314&type=chunk) - The 2019 Share Incentive Scheme has granted **91.738 million shares**, with **28,137,000 shares** unexercised as of the end of 2023[330](index=330&type=chunk)[333](index=333&type=chunk) - The company terminated its "Post-IPO Share Option Scheme" on April 20, 2023, which had not granted any options since its adoption[292](index=292&type=chunk) [Connected Transactions and Contractual Arrangements (VIE Structure)](index=56&type=section&id=Connected%20Transactions%20and%20Contractual%20Arrangements%20%28VIE%20Structure%29) Due to Chinese legal restrictions on foreign investment in specific internet businesses, the company controls its main operating entities in China (Huanju Shidai and Shanghai Chile) through a series of contractual arrangements (VIE structure), enabling it to obtain most economic benefits and exercise effective control, with these entities contributing 94.3% of the Group's total revenue in 2023, and independent non-executive directors and auditors have reviewed and confirmed the compliance and effectiveness of these arrangements - To circumvent Chinese restrictions on foreign investment in specific internet businesses, the Group controls its consolidated affiliated entities, "Huanju Shidai" and "Shanghai Chile," through contractual arrangements (VIE structure)[345](index=345&type=chunk)[348](index=348&type=chunk)[383](index=383&type=chunk) - For the year ended December 31, 2023, the consolidated affiliated entities (Huanju Shidai and Shanghai Chile and their subsidiaries) generated revenue of **RMB 1.979 billion**, accounting for approximately **94.3%** of the Group's total revenue[379](index=379&type=chunk)[381](index=381&type=chunk) - Independent non-executive directors have reviewed the contractual arrangements, confirming that transactions were conducted as stipulated and are in the overall interest of the Group and its shareholders[399](index=399&type=chunk) - The company's auditor has issued a letter regarding the contractual arrangements, confirming no matters were found to suggest transactions were not approved by the Board or did not comply with relevant agreements[403](index=403&type=chunk)[406](index=406&type=chunk) Corporate Governance Report This section outlines the company's corporate governance practices and compliance with relevant codes and regulations Independent Auditor's Report This section presents the independent auditor's opinion on the fairness and accuracy of the company's consolidated financial statements [Auditor's Opinion and Key Audit Matters](index=90&type=section&id=Auditor's%20Opinion%20and%20Key%20Matters) Auditor Elite Partners CPA Limited issued an unmodified opinion on the company's 2023 consolidated financial statements, affirming they present a true and fair view of the Group's financial position and performance, with key audit matters including goodwill impairment assessment and expected credit loss provisions for accounts receivable, where the auditor reviewed management's methodologies, key assumptions, and disclosure adequacy - The auditor believes the consolidated financial statements present a true and fair view of the Group's consolidated financial position as of December 31, 2023, and its financial performance and cash flows for the year then ended, in accordance with Hong Kong Financial Reporting Standards[565](index=565&type=chunk)[567](index=567&type=chunk) - Key Audit Matter One: Goodwill impairment assessment. As of the end of 2023, the carrying amount of goodwill before impairment was approximately **RMB 34.8 million**, with an impairment of **RMB 2.361 million** recognized this year. The auditor assessed the reasonableness of management's valuation methods and key assumptions (e.g., future cash flows, growth rates, discount rates)[572](index=572&type=chunk)[573](index=573&type=chunk) - Key Audit Matter Two: Provision for expected credit losses on accounts receivable. Accounts receivable constitute a significant portion of total assets, and measuring their expected credit losses (ECL) involves significant judgment. The auditor assessed management's processes, controls, and the judgments and estimates used to determine the provision[579](index=579&type=chunk)[580](index=580&type=chunk) Consolidated Financial Statements This section presents the company's complete set of consolidated financial statements, including the statement of profit or loss, financial position, and cash flows [Consolidated Statement of Profit or Loss](index=97&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In 2023, the Group's total revenue was RMB 2.098 billion, down 8.8% year-on-year, with gross profit at RMB 223 million, down 4.8%, but due to a significant reduction in goodwill impairment loss, the company achieved a turnaround with a profit for the year of RMB 22 million, compared to a RMB 129 million loss in 2022, and basic earnings per share of RMB 0.01 Consolidated Statement of Profit or Loss Key Data (RMB Thousand) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Revenue | 2,098,220 | 2,300,875 | | Gross Profit | 223,268 | 234,475 | | Goodwill Impairment Loss | (2,361) | (154,786) | | Profit/(Loss) Before Tax | 34,612 | (111,453) | | **Profit/(Loss) for the Year** | **21,996** | **(128,558)** | | Profit/(Loss) Attributable to Owners of the Company | 15,488 | (129,537) | | Basic Earnings/(Loss) Per Share | RMB 0.01 | (RMB 0.09) | [Consolidated Statement of Financial Position](index=99&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2023, the Group's total assets were RMB 1.974 billion, a slight increase from RMB 1.911 billion in the previous year, with total liabilities at RMB 569 million and total equity at RMB 1.405 billion, maintaining a sound financial structure with net current assets of RMB 1.232 billion Consolidated Statement of Financial Position Key Data (RMB Thousand) | Item | 2023 | 2022 | | :--- | :--- | :--- | | **Non-current Assets** | **178,181** | **125,474** | | **Current Assets** | **1,795,549** | **1,785,626** | | **Total Assets** | **1,973,730** | **1,911,100** | | **Current Liabilities** | **563,893** | **531,021** | | **Non-current Liabilities** | **4,861** | **7,255** | | **Total Liabilities** | **568,754** | **538,276** | | **Total Equity** | **1,404,976** | **1,372,824** | [Consolidated Statement of Cash Flows](index=103&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2023, the Group experienced a net cash outflow from operating activities of RMB 65.31 million, compared to a net inflow of RMB 9.37 million in the previous year, with net cash outflow from investing activities of RMB 29.85 million and net cash inflow from financing activities of RMB 76.67 million, resulting in cash and cash equivalents at year-end of RMB 521.87 million, a decrease from RMB 538.22 million at the beginning of the year Consolidated Statement of Cash Flows Key Data (RMB Thousand) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | (65,314) | 9,368 | | Net Cash Flow Used in Investing Activities | (29,854) | (19,394) | | Net Cash Flow from Financing Activities | 76,670 | 137,271 | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | **(18,498)** | **127,245** | | Cash and Cash Equivalents at Beginning of Year | 538,224 | 401,102 | | **Cash and Cash Equivalents at End of Year** | **521,874** | **538,224** | Notes to the Financial Statements This section provides detailed explanations and breakdowns of the figures presented in the consolidated financial statements [Note 6: Segment Information](index=144&type=section&id=Note%206.%20SEGMENT%20INFORMATION) The Group operates in four reportable segments: mobile advertising services, online video product distribution services, game co-publishing services, and software maintenance services, with mobile advertising services being the largest revenue and profit contributor in 2023, generating RMB 1.998 billion in revenue and RMB 193 million in segment results, while online video distribution services contributed RMB 17.56 million, and the vast majority of the Group's revenue and non-current assets are located in mainland China 2023 Segment Results (RMB Thousand) | Segment | Revenue | Cost of Sales | Segment Results | | :--- | :--- | :--- | :--- | | Mobile Advertising Services | 1,997,751 | (1,804,741) | 193,010 | | Online Video Product Distribution Services | 56,583 | (39,024) | 17,559 | | Game Co-publishing Services | 4,314 | – | 4,314 | | Software Maintenance Services | 39,572 | (31,187) | 8,385 | | **Total** | **2,098,220** | **(1,874,952)** | **223,268** | [Note 18: Goodwill](index=163&type=section&id=Note%2018.%20GOODWILL) As of the end of 2023, the Group's goodwill carrying amount was RMB 32.44 million, with an impairment of RMB 2.361 million recognized for the online video product distribution CGU this year, a significant reduction from RMB 155 million in 2022, and no impairment was found for the software maintenance services CGU, with impairment tests based on value-in-use method using independent professional valuations - As of the end of 2023, the carrying amount of goodwill was **RMB 32.44 million**, down from **RMB 34.8 million** at the beginning of the year[931](index=931&type=chunk) - An impairment of **RMB 2.361 million** was recognized for the online video product distribution CGU this year, primarily due to delayed collections and decreased revenue in this business[934](index=934&type=chunk)[941](index=941&type=chunk) [Note 22: Accounts Receivable](index=175&type=section&id=Note%2022.%20ACCOUNTS%20RECEIVABLE) As of the end of 2023, total accounts receivable increased to RMB 681 million from RMB 601 million in the previous year, with a loss allowance of RMB 56.87 million, and the aging analysis shows that accounts receivable within 3 months constitute the largest portion at RMB 493 million, while management believes the credit quality of overdue but not impaired accounts receivable has not significantly changed, posing minimal risk Accounts Receivable Aging Analysis (Net of Loss Allowance, RMB Thousand) | Aging | 2023 | 2022 | | :--- | :--- | :--- | | Within 3 months | 492,772 | 344,049 | | 3 to 12 months | 180,783 | 245,806 | | 1 to 2 years | 7,209 | 11,404 | | **Total** | **680,764** | **601,259** | - The loss allowance for accounts receivable increased from **RMB 49.72 million** at the beginning of the year to **RMB 56.87 million** at year-end, with an impairment loss of **RMB 18.97 million** recognized this year[992](index=992&type=chunk) [Note 30: Share-based Payment Expenses](index=189&type=section&id=Note%2030.%20SHARE-BASED%20PAYMENTS%20EXPENSES) The company implemented 2016 and 2019 Share Incentive Schemes (RSU plans), with a total of 36.23 million unexercised RSUs under both plans as of the end of 2023, and 36.39 million vested RSUs transferred to employees during 2023, resulting in a total share-based payment expense of RMB 8.15 million for the year Restricted Share Units (RSU) Movement | Item | 2023 (Number of Units) | 2022 (Number of Units) | | :--- | :--- | :--- | | Unexercised at Beginning of Year | 72,622,275 | 57,968,233 | | Granted During the Year | – | 40,080,000 | | Vested RSUs Transferred to Employees | (36,389,040) | (25,425,958) | | **Unexercised at End of Year** | **36,233,235** | **72,622,275** | | Exercisable at End of Year | 36,233,235 | 26,547,678 |

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 2,098,220 thousand, a decrease of 8.8% compared to RMB 2,300,875 thousand in 2022[3] - Gross profit for the same period was RMB 223,268 thousand, down 4.8% from RMB 234,475 thousand in the previous year[3] - Adjusted EBITDA for 2023 was RMB 65,626 thousand, reflecting a decline of 24.7% from RMB 87,132 thousand in 2022[3] - Adjusted net profit decreased by 32.9% to RMB 32,506 thousand from RMB 48,420 thousand year-on-year[3] - The company reported a net profit of RMB 21,996 thousand for the year, a significant recovery from a loss of RMB 128,558 thousand in 2022[9] - Basic and diluted earnings per share for the year were RMB 0.01, compared to a loss of RMB 0.09 per share in the previous year[9] - The company reported a net profit of RMB 15,488,000 for the year ended December 31, 2023, compared to a net loss of RMB 111,453,000 in the previous year[21] - Total comprehensive loss for the year was RMB 24,144,000, which includes a foreign exchange difference of RMB 2,148,000[18] Assets and Liabilities - Total assets increased by 3.3% to RMB 1,973,730 thousand from RMB 1,911,100 thousand in 2022[3] - Total liabilities rose by 5.7% to RMB 568,754 thousand compared to RMB 538,276 thousand in the previous year[3] - Current ratio decreased to 3.2 from 3.4 in the previous year[3] - Total equity increased by 2.3% to RMB 1,404,976 thousand from RMB 1,372,824 thousand in 2022[11] - The company’s total equity attributable to owners was RMB 1,319,230,000 as of December 31, 2023, up from RMB 1,293,445,000 in the previous year[18] - The company’s accumulated losses amounted to RMB 589,160,000 as of December 31, 2023, compared to RMB 604,648,000 in the previous year[18] - The company’s financial costs increased to RMB 10,009,000 from RMB 7,696,000 in the previous year[21] - The company’s cash flow from operating activities was negatively impacted by an increase in accounts receivable of RMB 98,478,000[21] Cash Flow and Investments - Operating cash flow for the year was a net outflow of RMB 65,314,000, a decrease from a net inflow of RMB 9,368,000 in the previous year[21] - Net cash flow from investing activities was RMB (29,854,000), compared to RMB (19,394,000) in 2022, indicating increased investment outflows[22] - Cash and cash equivalents at the end of 2023 were RMB 521,874,000, a decrease from RMB 538,224,000 at the end of 2022[22] - Financing activities generated a net cash flow of RMB 76,670,000, down from RMB 137,271,000 in the previous year[22] - The company made a prepayment of RMB (25,131,000) for the acquisition of subsidiaries, significantly higher than RMB (2,584,000) in 2022[22] Revenue Breakdown - Mobile advertising service revenue was RMB 1,997,751,000, down 9.0% from RMB 2,196,736,000 in the previous year[31] - Software maintenance service revenue increased to RMB 39,572,000 from RMB 14,102,000, showing a growth of 180.5%[31] - Revenue from online video product distribution decreased by 33.0% from RMB 84.5 million in 2022 to RMB 56.6 million in 2023[61] - Revenue from game operation services decreased by 21.8% from RMB 5.5 million in 2022 to RMB 4.3 million in 2023[62] - Revenue from mobile advertising services decreased by 9.1% from RMB 2,196.7 million in 2022 to RMB 1,997.8 million in 2023 due to a reduction in the number of mobile games promoted[56] Expenses - Research and development expenses decreased by 6.4% from RMB 86.2 million in 2022 to RMB 80.7 million in 2023[68] - Sales and distribution expenses increased by 33.0% from RMB 19.4 million in 2022 to RMB 25.8 million in 2023 due to increased marketing and advertising expenses[67] - Administrative expenses decreased by 4.5% from RMB 52.8 million in 2022 to RMB 50.4 million in 2023, primarily due to a reduction in professional service costs[71] - Other expenses and losses increased from RMB 5.3 million in 2022 to RMB 6.0 million in 2023, mainly due to higher employee-related settlement costs[72] Impairments and Provisions - The company recognized a goodwill impairment loss of RMB 2,361,000 during the year, compared to RMB 154,786,000 in the previous year[21] - The company reported an accounts receivable impairment loss of approximately RMB 19.0 million in 2023 due to provisions for general and specific credit losses[69] - The provision for losses on accounts receivable was RMB 56,869,000 in 2023, up from RMB 49,723,000 in 2022, indicating a rise of approximately 14.5%[44] Strategic Initiatives - The company plans to enhance its AI advertising technology and expand its global business, particularly in the Apple iOS ecosystem and Huawei's HarmonyOS[55] - The company aims to strengthen its partnerships and hold multiple technology development meetings to enhance its influence in the industry[55] - The company organized over 100 industry seminars and exchange activities in 2023 to improve communication with ecosystem participants[52] Shareholder Returns - The company did not declare or pay any dividends for the year ended December 31, 2023, consistent with 2022[39] - The company did not recommend any final dividends for the year ended December 31, 2023[102] Future Outlook - The annual general meeting is scheduled for July 24, 2024, with a notice to be published in accordance with listing rules[114] - No significant events affecting the group have occurred since the end of the financial year on December 31, 2023[118]

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份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。 WANKA ONLINE INC. 萬 咖 壹 聯 有 限 公 司 * （於開曼群島註冊成立的有限公司） （股票代號：1762） 有關二零二二年年報之補充公告 茲提述萬咖壹聯有限公司（「本公司」）截至二零二二年十二月三十一日止年度之年報（「二零二 二年年報」）。除另有界定者外，本公告所用詞彙與二零二二年年報所界定者具有相同涵義。 除二零二二年年報中「董事會報告—股份獎勵計劃—二零一九年股份激勵計劃」一節所披露之資料 外，本公司根據香港聯合交易所有限公司上市規則（「上市規則」）第 17.07(1)(c)條就二零一九年 股份激勵計劃補充以下資料。有關根據上市規則第 17.07(1)(c)條須披露之其他資料，請參閱二零二 二年年報。 緊隨二零二二年四月二十八日授出受限制股份單位當日前（即二零二二年四月二十七日），於聯交 所所報本公司股份之收市價為每股股份 0.415 港元。 上述補充資料概不影響二零二二年年報所 ...

Financial Performance - Total revenue for the first half of 2023 was RMB 1,047.2 million, a decrease of 11.5% compared to RMB 1,183.9 million in the same period of 2022[12]. - Gross profit decreased by 12.7% year-on-year to RMB 132.5 million[12]. - Profit after tax fell by 26.7% year-on-year to RMB 43.0 million[12]. - Revenue from the mobile advertising business amounted to RMB 1,025.9 million, representing a decrease of 9.2% on a period-on-period basis[16]. - Revenue for the six months ended June 30, 2023, decreased by 11.5% to RMB 1,047.2 million from RMB 1,183.9 million in the same period of 2022[28]. - Mobile advertising revenue decreased by 9.2% from RMB 1,130.0 million for the six months ended June 30, 2022, to RMB 1,025.9 million for the same period in 2023[30]. - Revenue from online-video distribution services dropped by 87.3% to RMB 5.2 million in the first half of 2023, down from RMB 41.1 million in the corresponding period of 2022[43]. - Game co-publishing service revenue decreased from RMB 2.3 million for the six months ended June 30, 2022, to RMB 1.7 million for the same period in 2023[45]. - Adjusted EBITDA for the first half of 2023 was RMB 72.3 million, down 23.1% from RMB 94.0 million in the same period of 2022[28]. - Profit for the period decreased by 26.7% to RMB 43.0 million in the first half of 2023, compared to RMB 58.7 million in 2022[28]. Operational Challenges - Domestic smartphone shipments decreased by 7% year-on-year, indicating a prolonged consumer replacement cycle[11]. - The mobile distribution industry is facing increasingly fierce competition for channel resources[11]. - The number of mobile games marketed decreased, leading to a decline in mobile advertising revenue[39]. - The company believes the current performance challenges are necessary for sustaining growth and development[11]. Strategic Initiatives - The company expanded its distribution channels to include Apple and iQIYI in 2023[16]. - The company is committed to optimizing mobile distribution services to enhance customer experience and satisfaction[11]. - Strategic focus remains on improving operational efficiency and expanding service coverage[12]. - The focus for the second half of 2023 is to expand business scale among MHA members and accelerate economies of scale in new channels[22]. - The company aims to enhance AI placement technologies to make them more automated and intelligent, alongside researching generative AI technologies for creative material production[22]. - Multiple salon events were organized for Quick App developers to address challenges and discuss new commercialization models[20]. - The company is committed to improving the community ecosystem and ensuring mutual development within the industry[22]. - There is a focus on in-depth cooperation with mobile game customers, providing precise placement services and high-quality operation strategies[19]. - The overall strategy includes adapting to customers' evolving needs and providing higher quality services in a more efficient manner[22]. Financial Position - Cash and bank balances decreased by 10.3% from RMB 612.6 million as of December 31, 2022, to RMB 549.6 million as of June 30, 2023[91]. - Bank borrowings decreased by 19.5% from RMB 260.0 million as of December 31, 2022, to RMB 209.4 million as of June 30, 2023[91]. - Total equity increased by 3.9% from RMB 1,372.8 million as of December 31, 2022, to RMB 1,426.0 million as of June 30, 2023[91]. - Net current assets increased to RMB 1,307.7 million as of June 30, 2023, compared to RMB 1,254.6 million as of December 31, 2022, driven by an increase in accounts receivable and prepayments[98][101]. - The current ratio improved from 3.4 as of December 31, 2022, to 3.6 as of June 30, 2023, attributed to increased accounts receivable and decreased bank borrowings[108][115]. - The gearing ratio decreased from 28.2% as of December 31, 2022, to 26.3% as of June 30, 2023, primarily due to an increase in total assets[109][116]. - The adjusted net profit margin slightly decreased from 5.9% for the six months ended June 30, 2022, to 5.1% for the six months ended June 30, 2023, mainly due to increased finance costs[110][117]. Share Incentive Schemes - The 2016 Share Incentive Scheme has granted a total of 62,500,000 restricted share units (RSUs) as of December 31, 2022, with no RSUs granted during the first half of 2023[157]. - The 2016 Share Incentive Scheme is valid for ten years from March 31, 2016, and does not allow for further grants due to its scheme limit[156]. - The company terminated the Post-IPO Share Option Scheme on April 20, 2023, as no options were granted under this scheme since its adoption[150]. - The purpose of the 2016 Share Incentive Scheme is to attract, motivate, and retain skilled personnel by providing equity ownership opportunities[154]. - The company has adopted both the 2016 and 2019 Share Incentive Schemes to reward employees and management[149]. - As of December 31, 2022, the company granted RSUs representing 91,738,000 shares under the 2019 Share Incentive Scheme[172]. - No RSUs were granted or agreed to be granted under the 2019 Share Incentive Scheme during the six months ended June 30, 2023[172]. - The total number of RSUs exercised during the reporting period was 9,551,651[165]. - The maximum number of Shares available for grant under the Scheme Mandate Limit was 152,574,335, representing 10% of the total Shares in issue as of June 9, 2023[175]. - The average exercise price for the RSUs granted is HK$0.183[163][164]. Corporate Governance - The Group has complied with all applicable corporate governance code provisions as of June 30, 2023[191]. - The Board is responsible for ensuring effective risk management and internal control systems are in place[199]. - The Audit Committee reviews risk management practices on a half-yearly basis and the effectiveness of these systems annually[199]. - The internal audit team reports directly to the Audit Committee, ensuring oversight of risk management[199]. - The Company aims to manage key risks rather than eliminate them, providing reasonable assurance against material misstatement or loss[199].

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份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 WANKA ONLINE INC. 萬 咖 壹 聯 有 限 公 司 * （於開曼群島註冊成立的有限公司） （股票代號：1762） 截至二零二三年六月三十日止六個月之中期財務業績公告 萬咖壹聯有限公司（「本公司」，連同其附屬公司及合併聯屬實體統稱「本集團」） 董事（「董事」）會（「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 月的未經審核簡明綜合中期財務業績。本公告列載本公司二零二三年中期報告 （「中期報告」）全文，並符合香港聯合交易所有限公司證券上市規則有關中期業 績公告的披露規定。中期報告的印刷版本將於二零二三年九月三十日或之前寄 發予本公司股東，並可於其時在聯交所網站( www.hkexnews.hk)及本公司網站 ( www.wankaonline.com)上閱覽。 ...

Corporate Recognition and Awards - Wanka Huanju, a subsidiary of the Group, was recognized as a high-growth enterprise in the second "Fengming Plan" of Chaoyang District, Beijing[18]. - Wanka Huanju was awarded the 2022 (Industry) Influential Brand Award at the 11th CFS, and Mr. GAO Dinan received the 2022 Outstanding Influential Entrepreneur Award[27]. - The company received the "Best TMT Company" award at the 7th Zhitong Caijing Listed Companies Selection[32]. - The company was recognized as the "Enterprise with Potential Value of the Year" at the 2022 EDGE AWARDS by TMTPOST[33]. Financial Performance - Total revenue for 2022 was RMB2,300.9 million, representing an increase of 9.7% compared to RMB2,098.2 million in 2021[36]. - Gross profit decreased by 11.0% year-on-year to RMB234.5 million[36]. - The company reported a loss after tax of RMB128.6 million for the year[36]. - Revenue from the mobile advertising business reached RMB2,196.7 million, an increase of 9.6% compared to the previous year[40]. - Revenue from online-video distribution services was RMB84.5 million in 2022, slightly down from RMB85.1 million in 2021[56]. - Revenue from game co-publishing services decreased to RMB5.5 million in 2022 from RMB8.0 million in 2021[56]. - Total revenue for the year ended December 31, 2022, was RMB2,300.9 million, compared to RMB2,098.2 million in 2021, reflecting a growth of approximately 9.6%[52]. - Gross profit for 2022 was RMB234.5 million, down from RMB263.3 million in 2021, indicating a decline of about 10.9%[52]. - The company recorded a loss of RMB 128.6 million in 2022, compared to a profit of RMB 62.3 million in 2021[97]. - Adjusted EBITDA for 2022 was RMB87.1 million, down 28.5% from RMB121.8 million in 2021[110]. Revenue Breakdown - Revenue from mobile advertising increased by 9.6% from RMB2,005.1 million in 2021 to RMB2,196.7 million in 2022 due to an increase in the number of mobile games advertised[56]. - Mobile advertising revenue increased from RMB 1,938.1 million in 2021 to RMB 2,170.0 million in 2022, representing a growth of RMB 231.9 million or 12.0%[64]. - Revenue from mobile app distribution decreased significantly by 60.2%, from RMB 67.0 million in 2021 to RMB 26.7 million in 2022[64]. - Game co-publishing services saw a revenue decline of 31.3%, from RMB 8.0 million in 2021 to RMB 5.5 million in 2022[71]. Expenses and Costs - Cost of sales increased by 12.6% from RMB 1,834.9 million in 2021 to RMB 2,066.4 million in 2022, driven by higher distribution fees[75]. - Selling and distribution expenses increased by 29.3% from RMB 15.0 million in 2021 to RMB 19.4 million in 2022, mainly due to higher marketing and advertising costs[78]. - Administrative expenses increased by 14.0% from RMB 46.3 million in 2021 to RMB 52.8 million in 2022, attributed to higher professional service expenses and staff costs[86]. - Other expenses and losses surged from RMB 1.1 million in 2021 to RMB 160.1 million in 2022, primarily due to an impairment provision of approximately RMB 154.8 million related to goodwill from the acquisition of Shanghai ChiLe[87]. Research and Development - The number of Quick App developers exceeded 30,000 in 2022, with specialized groups formed for research and development[44]. - Research and development costs increased to RMB86.2 million in 2022, up from RMB67.0 million in 2021, representing a rise of approximately 28.7%[52]. - Research and development expenses rose by 28.7% from RMB 67.0 million in 2021 to RMB 86.2 million in 2022, mainly due to an increase in the number of R&D staff and related expenses[84]. Management and Strategy - The company appointed Ms. Jiang Yu as CEO and Executive Director, bringing over 16 years of experience in the technology industry[170]. - The company has a strong management team with diverse backgrounds in technology, finance, and business development, enhancing its strategic capabilities[173]. - The management team emphasizes the importance of digital economy and mobile internet strategies in their future outlook[179]. - The company aims to leverage big data and digital consumer behavior insights to optimize its business models[181]. - The management team is actively exploring potential mergers and acquisitions to accelerate growth and market expansion[172]. Assets and Equity - Total assets as of December 31, 2022, were RMB1,911.1 million, an increase from RMB1,845.4 million in 2021[54]. - Total equity decreased to RMB1,372.8 million in 2022 from RMB1,390.9 million in 2021[54]. - Cash and bank balances increased by 37.7% to RMB612.6 million as of December 31, 2022, from RMB444.9 million in 2021[114]. - Bank borrowings rose by 51.5% to RMB260.0 million as of December 31, 2022, compared to RMB171.6 million in 2021[119]. - Net current assets increased by 10.2% to RMB1,254.6 million as of December 31, 2022, from RMB1,138.3 million in 2021[120]. Corporate Governance - The company is committed to continuous improvement in corporate governance and operational efficiency[186]. - The company is committed to maintaining high standards of corporate governance and compliance[200].

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 或完整性亦不發表聲明，並明確表示概不就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。 WANKA ONLINE INC. 萬 咖 壹 聯 有 限 公 司 * （於開曼群島註冊成立的有限公司） （股票代號：1762） 截至二零二二年十二月三十一日止年度之財務業績公告 年度業績摘要 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 收益 2,300,875 2,098,198 9.7% 毛利 234,475 263,316 -11.0% 母公司擁有人應佔年內（虧損）╱溢利 (129,537) 62,297 -307.9% 經調整EBITDA(1) 87,132 121,838 -28.5% 經調整淨溢利(2) 48,420 80,905 -40.2% 於十二月三十一日 二零二二年 二零二一年 變動 人民幣千元 人民幣千元 ...

Financial Performance - Total revenue for the first half of 2022 amounted to RMB1,183.9 million, representing an increase of 16.6% from RMB1,015.2 million for the corresponding period in 2021[20]. - Gross profit increased by 7.1% on a period-on-period basis to RMB151.7 million[20]. - Operating profit increased by 2.4% on a period-on-period basis to RMB78.4 million[20]. - Profit after tax increased by 3.8% on a period-on-period basis to RMB58.7 million[20]. - Revenue from mobile advertising amounted to RMB 1,130.0 million, representing a 17.4% increase year-on-year[25]. - Revenue from online video distribution and game co-publishing services was RMB 41.1 million and RMB 2.3 million, respectively[25]. - Mobile advertising revenue increased by 17.4% to RMB 1,130.0 million for the six months ended June 30, 2022, up from RMB 962.7 million in the prior year[43]. - Revenue from online-video distribution services decreased by 11.6% to RMB 41.1 million, down from RMB 46.5 million in the same period of 2021[57]. - Revenue from game co-publishing services decreased to RMB 2.3 million from RMB 5.9 million, representing a decline of 61.7%[44]. - Adjusted EBITDA for the period was RMB 94.0 million, reflecting a 7.9% increase from RMB 87.1 million in the prior year[39]. - Adjusted net profit increased by 9.6% to RMB 69.4 million, compared to RMB 63.3 million in the same period of 2021[39]. Business Strategy and Operations - The company continued to strengthen adaptability and resilience to stabilize business operations amid pandemic conditions[19]. - Increased and deepened communications with Android-based ecosystem participants to promote industry standards[19]. - The company believes coordinated advancements with ecosystem participants will facilitate healthier ecological development[19]. - The company aims to sustain growth in the Android-based ecosystem despite challenging circumstances[19]. - The performance improvement is attributed to experiences accumulated over two years of operations amid the pandemic[20]. - The company is focused on empowering the Android-based ecosystem through service provision[19]. - The company plans to enhance its service system for alliances and continue investments in research and development to provide more accurate and efficient services[28]. - The Quick App technology is expected to expand its application in smart vehicles, with collaborations anticipated with more automotive brands[27]. - In the second half of 2022, the company will focus on promoting cooperation with automotive enterprises and in-vehicle application developers to enhance service quality for smart vehicle consumers[28]. - The company aims to explore new vertical sectors while optimizing its business strategies[31]. Financial Position and Assets - Cash and bank balances increased by 8.1% to RMB480.8 million as at 30 June 2022, compared to RMB444.9 million as at 31 December 2021[88][89]. - Bank borrowings increased by 13.5% from RMB171.6 million as at 31 December 2021 to RMB194.8 million as at 30 June 2022[88]. - Current assets grew by 4.8% to RMB1,648.96 million as at 30 June 2022, compared to RMB1,572.88 million as at 31 December 2021[88]. - Total equity increased by 5.4% from RMB1,390.91 million as at 31 December 2021 to RMB1,466.29 million as at 30 June 2022[88]. - The company's net current assets increased to RMB 1,205.5 million as of June 30, 2022, compared to RMB 1,138.3 million as of December 31, 2021, driven by higher cash and accounts receivable[96]. - The current ratio improved to 3.7 as of June 30, 2022, from 3.6 as of December 31, 2021, due to increases in accounts receivable and cash[107]. - The gearing ratio decreased to 23.6% as of June 30, 2022, from 24.6% as of December 31, 2021, mainly due to an increase in total assets[107]. Shareholder Information - Mr. Gao Dinan and Mr. Zheng Wei each held a long position of 475,940,800 shares, representing approximately 31.19% of the Company[120][122]. - Mr. Nie Xin held a long position of 1,587,000 shares, representing approximately 0.10% of the Company[123]. - The total number of shares in issue as of June 30, 2022, was 1,525,743,350[126]. - The company granted 62,500,000 restricted share units (RSUs) to 76 grantees under the 2016 Share Incentive Scheme as of June 30, 2022[143]. - The purpose of the 2016 Share Incentive Scheme is to incentivize directors, senior management, and employees for their contributions to the company[139]. - The 2016 Share Incentive Scheme was approved on January 6, 2016, and amended on May 24, 2018[139]. - The total number of shares held by Korea Investment Partners Co., Ltd. and Korea Investment Holdings Co., Ltd. includes 98,231,500 and 6,059,930 shares respectively[139]. Governance and Compliance - The Company has complied with all applicable code provisions set out in the CG Code for the six months ended June 30, 2022, except for the deviation regarding the separation of the roles of Chairman and Chief Executive Officer[173]. - The Company believes that having the same individual serve as both Chairman and Chief Executive Officer ensures consistent leadership and effective strategic planning[173]. - The Audit Committee reviews the effectiveness of the risk management and internal control systems on an annual basis, ensuring adequate measures are in place[178]. - The Company has established a risk management system that outlines roles, responsibilities, and relevant policies to address potential risks[185]. - The management conducts an annual fraud and bribery risk assessment, which is reviewed and approved by the Audit Committee[184]. - The Company plans to provide ongoing training programs regarding relevant PRC laws and regulations to its Directors and employees[184]. - The Audit Committee assists the Board in supervising the overall risk status of the Company and evaluating changes in major risks[186]. - The Company will continue to regularly review and monitor its corporate governance practices to ensure compliance with the CG Code[173]. Employee and Director Information - The Group had 233 employees as of June 30, 2022, with remuneration determined based on experience, qualifications, and market conditions[194]. - Ms. Jiang Yu appointed as executive director effective July 20, 2022, with over 15 years of experience in the technology industry[200]. - Mr. Yu Limin appointed as independent non-executive director, member of the Audit Committee and Nomination Committee, effective July 20, 2022, with over 20 years of experience in financial management and investment[200].