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，概不就因本公告全部或任何部分內容而產生或 因依賴該等內容而引致的任何損失承擔任何責任。 本公告僅供參考，並不構成收購、購買或認購本公司證券的邀請或要約。 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） 於二零二五年二月二十四日（聯交所交易時段結束后），本公司作為發行人與配售代理訂立 配售協議，據此，配售代理有條件同意以盡力基準按配售價 0.177 港元配售最多 300,000,000 股配售股份，並將收取配售股份總配售價 0.5%的配售佣金。 根據一般授權配售新股份 配售股份將根據股東週年大會上授予董事的一般授權配發及發行。 配售代理 國元證券經紀（香港）有限公司 日期： 二零二五年二月二十四日（交易時段後） 訂約方： 配售代理有條件同意以盡力基準按配售價 0.177 港元配售最多 300,000,000 股配售股份，並 將收取配售股份總配售價 0.5%的配售佣金。配售佣金乃由本公司與配售代理經參考現行市 況、配售事項規模及 ...

Financial Performance - The company reported a basic earnings per share of 0.03 RMB for the six months ending June 30, 2024, based on a weighted average of 1,503,026,599 shares[9]. - The company reported a total of 44,875,000 RMB in profit attributable to owners for the period, consistent across both basic and diluted earnings per share calculations[9]. Accounts Receivable - The company clarified that the accounts receivable aging analysis for the year ended December 31, 2023, shows a total of 680,764 thousand RMB, with 387,617 thousand RMB being current and 285,938 thousand RMB overdue between 3 to 12 months[6]. - The company indicated that the accounts receivable not overdue amounted to 387,617 thousand RMB as of December 31, 2023, compared to 344,022 thousand RMB as of December 31, 2022, reflecting an increase[6]. - The company stated that the financial assets overdue for more than 90 days did not show significant credit risk or default risk based on historical payment records[4]. - The company emphasized that financial assets overdue for more than one year would significantly increase credit risk[4]. Share Capital and Treasury Shares - The total issued shares as of June 30, 2024, were 1,504,510,115, with 21,233 thousand shares held in treasury[10]. - The company clarified that the number of treasury shares as of December 31, 2023, should be 36,233 thousand shares, not the previously reported 61,371 thousand shares[10]. - The number of treasury shares held by Wanka Alliance Limited and Wanka Legend Limited as of December 31, 2023, was 8,096,235 shares and 28,137,000 shares, respectively[17]. - The number of treasury shares as of December 31, 2022, was corrected to 72,622,000 shares, not the 79,181,000 shares reported in the 2023 annual report[14]. - The total number of ordinary shares as of December 31, 2023, was 1,489,510,115 shares, not the 1,525,743,350 shares disclosed in the 2023 annual report[17]. - The total issued ordinary shares as of January 1, 2022, was 1,427,695,117 shares, not the 1,485,663,350 shares disclosed in the 2023 annual report[16]. Compliance and Internal Controls - The company plans to ensure compliance in disclosures for the year ending December 31, 2024, following the recent changes in auditors[6]. - The company appointed a financial reporting director in September 2024 to oversee financial reporting and accounting matters, enhancing compliance with financial reporting standards[21]. - The company will improve its internal review policies and procedures for financial reporting to ensure accuracy and compliance with disclosure requirements[24]. Errors and Corrections - The company acknowledged an error in the aging analysis disclosure in the 2023 annual report, which did not affect other financial data[6]. - As of June 30, 2023, the number of restricted stock units granted to employees was 10,410,443 shares, contrary to the 0 shares reported in the 2024 interim report[13]. - As of December 31, 2023, the number of restricted stock units granted to employees was 36,389,040 shares, instead of the 0 shares reported in the 2023 annual report[17]. - As of June 30, 2023, the total number of ordinary shares was 1,463,531,518 shares, not the 1,525,743,350 shares disclosed in the 2024 interim report[13]. - The company confirmed that the disclosures regarding its issued share capital do not affect the consolidated financial statements of the group[20].

萬咖壹聯有限公司* ( 于開曼群島註冊成立的有限公司 （股票代號：1762） 有關成立有限合夥企業之須予披露交易 成立有限合夥制投資基金 於二零二五年二月七日（交易時段後），普通合夥人與有限合夥人就於中國重慶市江北區成立有 限合夥制投資基金訂立有限合夥協議。根據有限合夥協議，歡聚時代（為其中一名有限合夥人） 同意以人民幣50,000,000元（相當於約54,000,000港元）的資本承諾認購有限合夥企業的有限合 夥權益。 上市規則的涵義 根據上市規則第14章，訂立有限合夥協議構成一項交易。 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，概不就因本公告全部或任何部分內容而產生或因依賴該 等內容而引致的任何損失承擔任何責任。 WANKA ONLINE INC. 日期 由於有關有限合伙協議的最高百分比率超過5%但低於25%，故訂立有限合伙協議及其項下擬進行 的交易構成本公司的須予披露交易，須遵守上市規則第14章項下的申報及公告規定，但獲豁免遵 守股東批准規定。 成立有限合夥制投資基金 董事會欣然宣佈，於二零二五年二月七日（交易時段後），普通 ...

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，概不就因本公告全部或任何部分內容而產生或因依賴該 等內容而引致的任何損失承擔任何責任。 WANKA ONLINE INC. 董事會欣然宣佈，於二零二五年一月二十六日，歡聚時代及合營公司（於本公告日期為歡聚時代的 直接全資附屬公司）就向合營公司注資，與合營夥伴訂立注資協議。根據注資協議，合營夥伴同意 以現金注資人民幣49,000,000元（相當於約52,920,000港元）認購合營公司49%股權。 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） 合營夥伴注資之須予披露交易 合營夥伴注資 由於注資完成後歡聚時代於合營公司的股權百分比由100%減少至51%，故根據上市規則第14.29條， 注資協議項下擬進行的交易構成視作出售合營公司股權。 由於有關注資的最高百分比率超過5%但低於25%，故訂立注資協議及其項下擬進行的交易構成本公 司的須予披露交易，須遵守上市規則第14章項下的申報及公告規定，但獲豁免遵守股東批准規定。 注資事項的完成須待訂約方就若干先 ...

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 * （股票代號：1762） （於開曼群島註冊成立的有限公司） 公司秘書及授權代表之變動 萬咖壹聯有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此宣佈張世澤先生（「張先生」） 由於工作安排變動已辭任本公司公司秘書（「公司秘書」）及不再擔任香港聯合交易所有限公司 （「聯交所」）證券上市規則（「上市規則」）第 3.05條項下本公司之授權代表，自二零二四年十一月 十五日起生效。張先生已確認彼與董事會並無意見不合，亦無其他事宜須促請本公司股東及聯交所 垂注。 董事會欣然宣佈，自二零二四年十一月十五日起生效，雷美嘉女士（「雷女士」）已獲委任為公司秘 書及上市規則第 3.05 條項下本公司之授權代表。 雷女士，畢業於香港中文大學，取得工商管理學士學位，彼為香港會計師公會會員。雷女士現為邁 力企業服務有限公司的董事總經理。自二零一七年四月二十一 ...

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） 更換核數師 本公告由萬咖壹聯有限公司（「本公司」，連同其附屬公司及合併聯屬實體統稱「本集團」）董事會 （「董事會」）根據《香港聯合交易所有限公司（「聯交所」）證券上市規則》第 13.51(4)條發佈。 核數師之辭任 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. 董事會進一步宣佈，根據審核委員會之建議，已議決委任中匯安達會計師事務所有限公司（「中匯 安達」）為本公司新任核數師，自二零二四年十月二十五日起生效，以填補開元信德辭任後之空缺， 並留任直至本公司下屆股東週年大會結束為止。 審核委員會於評估中匯安達為本公司核數師的資格和合適性時考慮了多項因素，包括但不限於（i） 其能力及質素，包括核數經驗、行業知識及技術能力；（ii）其過往服務往績記錄所展示的服務質素 及承諾；（iii）其審核建議；（iv）其獨立性及客觀性；（v）其市 ...

. 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]