[Definitions](index=3&type=section&id=DEFINITIONS) This section provides key terms and abbreviations used throughout the report, ensuring consistent understanding of company entities, industry concepts, financial terms, and related party information [General Definitions](index=3&type=section&id=General%20Definitions) This chapter defines key terms and abbreviations used in the report, covering company entities, industry terms (e.g., 5G, AI, API, H5, oCPC system), financial and legal concepts (e.g., HKFRS, Listing Rules, capitalization issue, RSU scheme), and related party information, ensuring consistent understanding of the report's content - Defined core business-related technical terms such as **"5G"**, **"AI"**, **"API"**, **"H5"**, and **"oCPC system"**, indicating the company's close ties to mobile communication, artificial intelligence, and interactive advertising technologies[7](index=7&type=chunk)[120](index=120&type=chunk) - Clearly identified company entities and their related parties, such as **"the Company"** (Doumob Technology Co., Ltd.), **"Doumob Technology"** (Doumob (Beijing) Technology Co., Ltd.) and its subsidiaries, and major shareholder **"BlueFocus"**[43](index=43&type=chunk)[59](index=59&type=chunk)[7](index=7&type=chunk) - Explained financial and legal concepts such as **"Hong Kong Financial Reporting Standards"**, **"Listing Rules"**, **"capitalization issue"**, and **"Restricted Share Unit Scheme"**, laying the foundation for understanding financial and governance information in the report[99](index=99&type=chunk)[112](index=112&type=chunk)[16](index=16&type=chunk)[133](index=133&type=chunk) [Corporate Information](index=11&type=section&id=CORPORATE%20INFORMATION) This section provides essential details about the company's governance structure, key personnel, and operational contact information [Board and Committees](index=11&type=section&id=Board%20and%20Committees) This chapter details the composition of Doumob Technology Co., Ltd.'s Board of Directors, including executive, non-executive, and independent non-executive directors, and identifies the members and chairs of the Audit, Remuneration, and Nomination Committees, showcasing the core corporate governance structure - The Board of Directors comprises **7 directors**, including **3 executive directors** (Yang Bin, Huang Kewang, Luo Yanhong), **1 non-executive director** (Liu Ailun), and **3 independent non-executive directors** (Chen Yaoguang, Liu Binghai, Wang Yingzhe)[165](index=165&type=chunk) - The company has established an **Audit Committee**, a **Remuneration Committee**, and a **Nomination Committee**, with their respective chairs and members listed, reflecting a structured corporate governance approach[166](index=166&type=chunk) [Company Details](index=12&type=section&id=Company%20Details) This chapter provides detailed information for Doumob Technology Co., Ltd., including authorized representatives, auditors, compliance advisors, legal counsel, company website, registered office, headquarters, principal place of business in Hong Kong, share registrar, and principal bankers, facilitating stakeholders' understanding of the company's operations and contact details - The company is registered in the **Cayman Islands**, headquartered in **Beijing, China**, with a principal place of business in **Hong Kong**, and its stock code is **1917**[172](index=172&type=chunk)[171](index=171&type=chunk) - The auditor is **BDO Limited** (Hong Kong Grant Thornton Certified Public Accountants Limited), and legal counsel includes **William Ji & Co. LLP**[169](index=169&type=chunk) [Financial Performance Highlights](index=15&type=section&id=FINANCIAL%20PERFORMANCE%20HIGHLIGHTS) This section summarizes the company's key financial metrics for the reporting period, indicating significant changes in revenue and profitability [Key Financial Metrics](index=15&type=section&id=Key%20Financial%20Metrics) In FY2019, Doumob Technology's total revenue and profit for the year significantly decreased by 46.3% and 74.7% year-on-year, respectively, yet non-HKFRS adjusted net profit was RMB20.5 million Key Financial Data for FY2019 (Consolidated Statements) | Metric | 2019 (RMB thousands) | 2018 (RMB thousands) | Change Percentage | | :--- | :--- | :--- | :--- | | Revenue | 189,450 | 352,611 | -46.3% | | Profit for the year | 10,915 | 43,163 | -74.7% | | Profit for the year attributable to owners of the Company | 10,917 | 43,219 | -74.7% | | Adjusted Net Profit (1) | 20,475 | 60,759 | -66.3% | (1) Adjusted net profit excludes listing-related expenses. [Five-Year Financial Summary](index=16&type=section&id=FIVE-YEAR%20FINANCIAL%20SUMMARY) This section provides a consolidated overview of the group's financial performance, assets, and liabilities over the past five fiscal years [Results Summary](index=16&type=section&id=Results%20Summary) This chapter provides a five-year performance summary for Doumob Technology and its subsidiaries, showing a significant decline in revenue and profit in 2019, despite profit attributable to owners of the Company growing from 2015-2018 before a sharp drop in 2019 Five-Year Performance Summary of the Group (RMB thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 189,450 | 352,611 | 222,927 | 199,967 | 135,344 | | Profit before income tax credit | 10,601 | 42,866 | 34,414 | 32,422 | 29,809 | | Profit for the year | 10,915 | 43,163 | 34,168 | 24,832 | 21,659 | | Profit for the year attributable to owners of the Company | 10,917 | 43,219 | 34,761 | 23,524 | 21,466 | [Assets and Liabilities Summary](index=16&type=section&id=Assets%20and%20Liabilities%20Summary) This chapter outlines Doumob Technology's asset and liability trends over the past five years, showing growth in total assets and equity attributable to owners, alongside a significant reduction in total liabilities in 2019, indicating an improved financial structure Five-Year Assets and Liabilities Summary of the Group (RMB thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 328,100 | 312,579 | 159,005 | 112,131 | 97,112 | | Total Liabilities | 27,755 | 72,585 | 31,353 | 29,237 | 25,281 | | Equity attributable to owners of the Company | 299,112 | 238,758 | 124,948 | 79,428 | 71,313 | [Chairman's Statement](index=17&type=section&id=CHAIRMAN%27S%20STATEMENT) The Chairman's Statement reviews the company's strategic achievements and challenges in 2019, outlining future directions amidst evolving market conditions [2019 Review and Outlook](index=17&type=section&id=2019%20Review%20and%20Outlook) The Chairman's report reviews Doumob Technology's 2019 milestones, including its successful listing on the HKEX Main Board and the launch of 5G-oriented interactive video cloud platform products, acknowledging intensified market competition and a decelerating operating environment; the company will continue to focus on H5 video interactive products, balancing core and innovative businesses for long-term healthy development and competitive advantage in 5G video interactive advertising - In 2019, the company successfully listed on the **Main Board of the Hong Kong Stock Exchange**, marking a significant milestone in its development[192](index=192&type=chunk) - In 2019, the company launched **H5 video interactive products** and a **short video cloud platform empowerment program**, exploring innovative communication methods like interactive short dramas to embrace the 5G era[194](index=194&type=chunk)[197](index=197&type=chunk) - Despite facing challenges of decelerating market growth and intensified industry competition, the company will continue to focus on **H5 video interactive products** and pursue a **"two-pronged" strategy** of core and innovative businesses to establish a long-term competitive advantage in the video interactive advertising sector[195](index=195&type=chunk)[198](index=198&type=chunk) [Profiles of Directors and Senior Management](index=18&type=section&id=PROFILES%20OF%20DIRECTORS%20AND%20SENIOR%20MANAGEMENT) This section provides detailed biographical information for the company's directors and senior management, outlining their backgrounds, experience, and roles [Board of Directors](index=18&type=section&id=Board%20of%20Directors) This chapter outlines the composition of Doumob Technology's Board of Directors, including the number and names of executive, non-executive, and independent non-executive directors, along with their appointment dates - The Board of Directors currently comprises **seven directors**, including **three executive directors**, **one non-executive director**, and **three independent non-executive directors**[203](index=203&type=chunk)[205](index=205&type=chunk) Board of Directors List | Name | Age | Position | Date of Appointment as Director | | :--- | :--- | :--- | :--- | | Mr. Yang Bin | 41 | Chairman, Executive Director and Co-Chief Executive Officer | March 26, 2018 | | Mr. Huang Kewang | 28 | Executive Director and Co-Chief Executive Officer | September 12, 2019 | | Ms. Luo Yanhong | 48 | Executive Director and Chief Financial Officer | April 17, 2020 | | Mr. Liu Ailun | 28 | Non-Executive Director | January 10, 2020 | | Mr. Chan Yiu Kwong | 55 | Independent Non-Executive Director | February 20, 2019 | | Mr. Liu Binghai | 49 | Independent Non-Executive Director | February 20, 2019 | | Mr. Wang Yingzhe | 49 | Independent Non-Executive Director | February 20, 2019 | [Executive Directors Profiles](index=19&type=section&id=Executive%20Directors%20Profiles) This chapter details the educational background, professional experience, and responsibilities of Doumob Technology's executive directors, including Mr. Yang Bin, Mr. Huang Kewang, Ms. Chen Xiaona, Mr. Zheng Shunqi, Ms. Shi Hui, Ms. ZHOU Zoe, and Ms. Luo Yanhong, also noting resignations and new appointments - Mr. Yang Bin (41) is the Group's Executive Director, Chairman of the Board, and Chief Executive Officer, responsible for overall management, strategic planning, and decision-making, with **over 10 years of experience** in the mobile advertising industry[208](index=208&type=chunk)[210](index=210&type=chunk) - Mr. Huang Kewang (28) was appointed Executive Director and Co-Chief Executive Officer on **September 12, 2019**, having previously served as Doumob Technology's Product Director[217](index=217&type=chunk) - Ms. Luo Yanhong (48) was appointed Executive Director and Chief Financial Officer on **April 17, 2020**, having previously held senior financial management positions in several listed companies[225](index=225&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) - Ms. Chen Xiaona, Mr. Zheng Shunqi, Ms. Shi Hui, and Ms. ZHOU Zoe resigned as executive directors between September 2019 and April 2020, with some reallocated to strategic departments[217](index=217&type=chunk)[219](index=219&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) [Non-Executive Directors Profiles](index=23&type=section&id=Non-Executive%20Directors%20Profiles) This chapter introduces the backgrounds and responsibilities of Doumob Technology's non-executive directors, including Mr. Liu Ailun and Mr. Yang Zhenghong, also noting the resignations of Ms. Wang Ge and Mr. Yang Zhenghong - Mr. Liu Ailun (28) has served as Investment Director at **BlueFocus Data Technology Co., Ltd.** since 2017, which is one of the Company's major shareholders[231](index=231&type=chunk) - Ms. Wang Ge resigned as non-executive director on **January 10, 2020**, and Mr. Yang Zhenghong resigned as non-executive director on **August 30, 2019**[231](index=231&type=chunk)[236](index=236&type=chunk) [Independent Non-Executive Directors Profiles](index=24&type=section&id=Independent%20Non-Executive%20Directors%20Profiles) This chapter details the professional backgrounds and experiences of Doumob Technology's independent non-executive directors, including Mr. Chan Yiu Kwong, Mr. Liu Binghai, and Mr. Wang Yingzhe, who are responsible for overseeing the Board and providing independent judgment - Mr. Chan Yiu Kwong (55) possesses extensive experience in **auditing, business consulting, and corporate management**, having served as an independent non-executive director or executive director for several listed companies[239](index=239&type=chunk) - Mr. Liu Binghai (49) has served as CEO of **Beijing Zhangshangwang Technology Co., Ltd.** since 2010 and as a director of **Zhejiang Daily Interactive Network Technology Co., Ltd.** since 2016[241](index=241&type=chunk) - Mr. Wang Yingzhe (49) is an **executive partner at FenXun Partners**, possessing extensive experience in the legal field[241](index=241&type=chunk) [Senior Management Profiles](index=26&type=section&id=Senior%20Management%20Profiles) This chapter lists Doumob Technology's senior management members, noting that their detailed profiles can be found in the executive directors section, ensuring comprehensive management team information - Senior management members include **Mr. Yang Bin, Mr. Huang Kewang, Ms. ZHOU Zoe, and Ms. Luo Yanhong**, whose detailed profiles are disclosed in the executive directors section[244](index=244&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides an in-depth analysis of the company's operational performance, financial results, and strategic initiatives for the reporting period [Overview and Business Strategy](index=27&type=section&id=Overview%20and%20Business%20Strategy) Doumob Technology, a programmatic mobile advertising technology company, successfully listed on the HKEX in 2019, strategically shifting its focus to high-margin interactive advertising with H5 video interactive products and a short video cloud platform empowerment program to address market competition and embrace the 5G era; despite a decline in total revenue, gross profit margin improved - The company was listed on the **Main Board of the Stock Exchange on March 14, 2019**, a significant milestone in its history[248](index=248&type=chunk) - In 2019, the contribution of **technical services to total revenue significantly increased to 80.2%**, while intermediary services accounted for 19.2%, leading to an overall improvement in the company's gross profit margin[248](index=248&type=chunk) - Total revenue in 2019 **decreased by 46.3%** compared to 2018, primarily due to intensified industry competition, the impact of the China-US trade war, and the company's strategic shift towards interactive advertising while discontinuing some non-interactive advertising businesses[251](index=251&type=chunk) - In June 2019, the company launched **H5 video interactive advertising**, and in August, it introduced a **short video cloud platform empowerment program**, embracing the 5G era with video interactive advertising to create a first-mover advantage for future development[254](index=254&type=chunk) [Financial Performance Analysis](index=29&type=section&id=Financial%20Performance%20Analysis) This chapter provides a detailed analysis of Doumob Technology's financial performance in 2019 compared to 2018, covering revenue, cost of sales, gross profit and margin, various expenses, and income tax credit, along with non-HKFRS adjusted net profit data 2019 vs. 2018 Income Statement Comparison (RMB thousands) | Metric | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-Year Change Percentage | | :--- | :--- | :--- | :--- | | Revenue | 189,450 | 352,611 | -46.3% | | Cost of sales | (137,144) | (269,026) | -49.0% | | Gross profit | 52,306 | 83,585 | -37.4% | | Other income and other gains/(losses) – net | 8,089 | 1,067 | 658.1% | | Selling and distribution expenses | (10,730) | (8,070) | 33.0% | | Administrative expenses | (39,719) | (35,329) | 12.4% | | Profit before income tax credit | 10,601 | 42,866 | -75.3% | | Profit and total comprehensive income for the year | 10,915 | 43,163 | -74.7% | Revenue Breakdown (RMB thousands) | Category | 2019 (RMB thousands) | Percentage of Total Revenue | 2018 (RMB thousands) | Percentage of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Interactive advertising | 161,933 | 85.5% | 226,621 | 64.3% | | — Technical services | 151,931 | 80.2% | 171,580 | 48.7% | | — Intermediary services | 10,002 | 5.3% | 55,041 | 15.6% | | Non-interactive advertising | 26,394 | 13.9% | 123,562 | 35.0% | | — Intermediary services | 26,394 | 13.9% | 123,562 | 35.0% | | Online sales services | 1,123 | 0.6% | 2,428 | 0.7% | | **Total** | **189,450** | **100.0%** | **352,611** | **100.0%** | - Gross profit margin increased from **23.7% in 2018 to 27.6% in 2019**, primarily due to the higher percentage of revenue from interactive advertising provided through technical services, which yields higher profit margins[270](index=270&type=chunk)[271](index=271&type=chunk) Reconciliation of Adjusted Net Profit (RMB thousands) | Metric | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :--- | :--- | | Profit for the year | 10,915 | 43,163 | | Add: Listing-related expenses | 9,560 | 17,596 | | **Adjusted Net Profit** | **20,475** | **60,759** | [Financial Positions and Liquidity](index=33&type=section&id=Financial%20Positions%20and%20Liquidity) This chapter analyzes Doumob Technology's financial position and liquidity, showing growth in total equity and net current assets in 2019, a significant decrease in the gearing ratio, and an increase in cash and cash on hand, indicating a healthy financial status - As of December 31, 2019, total equity was approximately **RMB300.3 million**, an increase of approximately **25.1%** from 2018, primarily due to increased profit from operating activities and proceeds from the global offering[288](index=288&type=chunk) - As of December 31, 2019, net current assets were approximately **RMB233.2 million**, an increase of approximately **8.5%** from 2018, mainly due to an increase in cash and cash equivalents and bank fixed deposits, and a decrease in trade and other payables[289](index=289&type=chunk) Liquidity and Financial Resources (RMB thousands) | Metric | December 31, 2019 (RMB thousands) | December 31, 2018 (RMB thousands) | Change Percentage | | :--- | :--- | :--- | :--- | | Cash and bank balances | 165,932 | 132,912 | 24.8% | | **Total** | **165,932** | **132,912** | **24.8%** | - As of December 31, 2019, the gearing ratio (total debt divided by total assets) was **8.5%**, a significant decrease from **23.2% in 2018**[297](index=297&type=chunk) [Capital Expenditure and Investments](index=34&type=section&id=Capital%20Expenditure%20and%20Investments) This chapter states that Doumob Technology had no significant capital expenditures, investments, acquisitions, or disposals in 2019, indicating the company primarily focused on existing business operations and development during the reporting period - For the year ended December 31, 2019, the company had **no capital expenditure** (2018: RMB245,000)[297](index=297&type=chunk) - For the year ended December 31, 2019, the company had **no significant investments, acquisitions, or disposals**[297](index=297&type=chunk) [Employees and Remuneration](index=35&type=section&id=Employees%20and%20Remuneration) This chapter introduces Doumob Technology's total employee count, total remuneration, and compensation policy, emphasizing that the company determines remuneration based on employee performance, experience, capabilities, and market conditions, while also providing training and retirement benefit plans - As of December 31, 2019, total employee remuneration was approximately **RMB25.4 million**, including directors' emoluments, staff salaries, bonuses, share-based payments, retirement scheme contributions, other social security benefits, and other employee benefits[299](index=299&type=chunk) - The company determines remuneration based on **employee performance, experience, capabilities, and market benchmarks**, and provides targeted training to enhance technical and product knowledge[300](index=300&type=chunk) [Use of Net Proceeds from Global Offering](index=35&type=section&id=Use%20of%20Net%20Proceeds%20from%20Global%20Offering) This chapter details the use of net proceeds from Doumob Technology's global offering and their utilization as of December 31, 2019, primarily for enhancing technological capabilities, market expansion, traffic acquisition, strategic collaborations, and new product development - The net proceeds from the global offering were approximately **HKD27 million**, of which **HKD11,524,000** had been utilized as of December 31, 2019, with the remaining funds expected to be used within the next two years[302](index=302&type=chunk)[304](index=304&type=chunk) Detailed Use of Net Proceeds from Global Offering (HKD thousands) | Use | Percentage (%) | Net Proceeds (HKD thousands) | Amount Utilized as of December 31, 2019 (HKD thousands) | Unutilized Amount (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Enhance algorithm and data mining capabilities and invest in other big data and AI technologies | 20% | 5,400 | 2,668 | 2,732 | | Expand advertiser and media publisher base | 20% | 5,400 | 1,959 | 3,441 | | Invest in traffic acquisition costs for proprietary media publishers | 20% | 5,400 | 2,713 | 2,687 | | Seek strategic cooperation, investments, and acquisitions | 10% | 2,700 | — | 2,700 | | Improve proprietary advertising platform functions and architecture | 10% | 2,700 | 1,270 | 1,430 | | Develop new products | 5% | 1,350 | 755 | 595 | | Expand and train team | 5% | 1,350 | 308 | 1,042 | | Working capital and general corporate purposes | 10% | 2,700 | 1,851 | 849 | | **Total** | **100%** | **27,000** | **11,524** | **15,476** | [Events After Reporting Period](index=36&type=section&id=Events%20After%20Reporting%20Period) This chapter addresses the impact of the COVID-19 pandemic, which erupted in early 2020, on the global business environment, stating that the company will continue to monitor and assess its potential effects on financial position and operating results - Since January 2020, the **COVID-19 pandemic** has erupted, impacting the global business environment; the company will continue to monitor the pandemic's development and assess its impact on financial position and operating results[308](index=308&type=chunk)[309](index=309&type=chunk) [Outlook for 2020](index=37&type=section&id=Outlook%20for%202020) Doumob Technology anticipates continuing to deepen its interactive advertising services in 2020, seizing 5G industry technology trends through technological innovation, enhanced data collection capabilities, short video cloud platform deployment, and diversified development to consolidate market position and enhance commercial value - The company plans to continue developing **interactive advertising services**, fully grasping the underlying technological trends of the 5G industry, continuously innovating product technology, and providing greater value to customers[313](index=313&type=chunk) - Will continuously enhance data collection capabilities by encouraging more advertisers and media publishers to integrate **SDKs, APIs, JavaScript tags, and short video mini-programs**, and utilize the **128-user profile engine** to improve click-through rates and conversion rates[313](index=313&type=chunk) - Committed to **underlying technological innovation in the 5G industry**, deploying a **short video cloud platform**, expanding video interactive advertising business, and exploring a new diversified development pattern of **"culture + technology"** and **"content + channels"**[313](index=313&type=chunk)[314](index=314&type=chunk)[317](index=317&type=chunk) [Corporate Governance Report](index=39&type=section&id=CORPORATE%20GOVERNANCE%20REPORT) This section details the company's corporate governance framework, practices, and compliance with relevant codes and regulations [Corporate Governance Practices](index=39&type=section&id=Corporate%20Governance%20Practices) Doumob Technology is committed to maintaining high corporate governance standards and has established and implemented relevant policies; during the reporting period, the company complied with most provisions of the Corporate Governance Code, with an explanation provided for the non-segregation of Chairman and CEO roles - The company complied with the applicable code provisions of the **Corporate Governance Code** for the FY2019, except for code provision A.2.1 (which states that the roles of chairman and chief executive should be separate)[321](index=321&type=chunk) - The company believes that having Mr. Yang Bin serve as both Chairman and Chief Executive Officer is beneficial for group management, and that the senior management and Board of Directors (including three independent non-executive directors) can effectively counterbalance his power[322](index=322&type=chunk)[324](index=324&type=chunk) [Board of Directors and Meetings](index=40&type=section&id=Board%20of%20Directors%20and%20Meetings) This chapter details the Board's composition, responsibilities, directors' service contracts, meeting frequency, and attendance, emphasizing the Board's commitment to overseeing group business, strategic decisions, and performance, while ensuring directors possess appropriate skills and experience - The Board of Directors comprises **7 directors**, including **3 executive directors, 1 non-executive director, and 3 independent non-executive directors**, with no relationships among directors, possessing the necessary skills and experience for the business[329](index=329&type=chunk) - The Board of Directors holds at least **four meetings annually**, with **5 meetings held in 2019**, ensuring directors have ample time to review meeting documents[347](index=347&type=chunk)[352](index=352&type=chunk) 2019 Board Meeting Attendance | Director Name | Attended/Eligible to Attend | | :--- | :--- | | Mr. Yang Bin | 5/5 | | Mr. Huang Kewang | 2/2 | | Ms. Chen Xiaona | 2/2 | | Mr. Zheng Shunqi | 2/2 | | Ms. Shi Hui | 3/3 | | Ms. ZHOU Zoe | 2/2 | | Ms. Luo Yanhong | 0/0 | | Mr. Liu Ailun | 0/0 | | Ms. Wang Ge | 5/5 | | Mr. Yang Zhenghong | 2/2 | | Mr. Chan Yiu Kwong | 5/5 | | Mr. Liu Binghai | 5/5 | | Mr. Wang Yingzhe | 5/5 | [Board Committees](index=45&type=section&id=Board%20Committees) This chapter details the composition, responsibilities, meeting frequency, and attendance of the Audit, Nomination, and Remuneration Committees, emphasizing their critical roles in corporate governance, including financial reporting, risk management, director appointments, and remuneration policy formulation - The company has established an **Audit Committee, a Nomination Committee, and a Remuneration Committee**, each operating within its terms of reference[358](index=358&type=chunk) - The Audit Committee's primary responsibilities include reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems, and it held **two meetings in 2019**[358](index=358&type=chunk) - The Nomination Committee is responsible for reviewing and assessing the Board's composition and the independence of independent non-executive directors, and for making recommendations on director appointments; it held **two meetings in 2019**[366](index=366&type=chunk)[367](index=367&type=chunk) - The Remuneration Committee is responsible for establishing and reviewing the remuneration policies and structures for directors and senior management, and it held **two meetings in 2019**[377](index=377&type=chunk)[378](index=378&type=chunk) [Securities Transactions and Information Disclosure](index=48&type=section&id=Securities%20Transactions%20and%20Information%20Disclosure) This chapter states that the company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers and established an inside information disclosure framework, ensuring directors and senior management comply with securities trading regulations and disclose inside information in a timely and fair manner - The company has adopted the **Model Code for Securities Transactions by Directors of Listed Issuers**, and all directors confirmed compliance with the code during the reporting period[379](index=379&type=chunk) - The company has a policy for handling and disseminating inside information, ensuring timely processing and release, and has internal controls and reporting systems to identify and assess potential inside information[391](index=391&type=chunk) [Accountability, Audit and Internal Controls](index=49&type=section&id=Accountability%2C%20Audit%20and%20Internal%20Controls) This chapter outlines directors' responsibilities in financial statement preparation, internal controls, and risk management, and mentions external auditor's remuneration and the Board's annual review of the effectiveness of internal control and risk management systems External Auditor's Remuneration (RMB thousands) | Services Provided | Fees Paid/Payable in 2019 (RMB thousands) | | :--- | :--- | | Annual audit services | 1,770 | | Listing audit services | 1,790 | | Non-audit services for interim review | 380 | | **Total** | **3,940** | - The Board of Directors is responsible for maintaining sound and effective internal control and risk management systems, and reviews their effectiveness annually, deeming the existing systems adequate and effective[400](index=400&type=chunk)[403](index=403&type=chunk) - The company has an internal audit function primarily responsible for analyzing and independently assessing risk management and internal control systems, reporting results to the Board at least annually[400](index=400&type=chunk) [Dividend Policy and Constitutional Documents](index=52&type=section&id=Dividend%20Policy%20and%20Constitutional%20Documents) This chapter outlines the considerations for the company's dividend policy and confirms no significant changes to constitutional documents during the reporting period - The company's dividend policy considers the Group's actual and expected financial performance, retained earnings, working capital needs, liquidity position, taxation, and other factors, and is at the **sole discretion of the Board of Directors**[407](index=407&type=chunk) - There were **no significant changes** to the company's constitutional documents during the reporting period and up to the latest practicable date[410](index=410&type=chunk) [Shareholders' Rights](index=53&type=section&id=Shareholders%27%20Rights) This chapter outlines shareholders' rights to requisition an extraordinary general meeting via written petition and the company's procedure for handling shareholder inquiries, aiming to protect shareholder interests and promote effective communication - Shareholders holding **not less than one-tenth of the paid-up share capital** of the Company carrying voting rights have the right to requisition an extraordinary general meeting by written petition[412](index=412&type=chunk)[414](index=414&type=chunk)[419](index=419&type=chunk) - The company has published detailed procedures for shareholders to nominate director candidates on its website and encourages shareholders to submit inquiries to the Board in writing[419](index=419&type=chunk) [Directors' Report](index=55&type=section&id=DIRECTORS%27%20REPORT) This section provides a comprehensive overview of the company's business activities, financial results, corporate governance, and other statutory disclosures for the reporting period [Business Review and Results](index=55&type=section&id=Business%20Review%20and%20Results) The Directors' Report reviews the Group's principal business activities and results for FY2019, confirming the company primarily operates in the mobile advertising industry and noting the decision not to recommend a final dividend - The company's principal businesses are providing **online advertising services and online sales services**, and it was incorporated in the **Cayman Islands on March 26, 2018**[423](index=423&type=chunk) - The Board resolved **not to recommend the payment of any final dividend** for the year ended December 31, 2019[426](index=426&type=chunk) [Share Capital and Reserves](index=56&type=section&id=Share%20Capital%20and%20Reserves) This chapter provides details of changes in the company's share capital and reserves, explains arrangements for suspension of share registration, and confirms the company has no bank borrowings or pre-emptive rights - Details of changes in the company's share capital are set out in **Note 25 to the consolidated financial statements**, and details of changes in reserves are set out on **pages 86 and 167 of this annual report**[436](index=436&type=chunk)[440](index=440&type=chunk) - To determine the identity of shareholders entitled to attend the Annual General Meeting, the company will **suspend share registration from June 4 to June 10, 2020**[433](index=433&type=chunk) - As of December 31, 2019, the company had **no bank borrowings**[442](index=442&type=chunk) [Use of Proceeds and Directors Information](index=58&type=section&id=Use%20of%20Proceeds%20and%20Directors%20Information) This chapter explains the utilization of net proceeds from the global offering, reiterates the Board's composition, directors' service contracts, and principles for determining directors' and senior management's remuneration, while confirming directors have no interests in competing businesses - For the year ended December 31, 2019, the company utilized **HKD11.5 million** of the net proceeds from the global offering, with the remaining approximately **HKD15.5 million** expected to be utilized over the next 3 years[444](index=444&type=chunk) - The Board of Directors currently comprises **7 directors**, including Yang Bin (Chairman and Co-CEO), Huang Kewang (Co-CEO), Luo Yanhong (CFO), among others[445](index=445&type=chunk) - Remuneration for directors and senior management is determined by the Board, referencing the Remuneration Committee's recommendations and considering the Group's operating results, individual performance, and market statistics[463](index=463&type=chunk) - During the year, **no director or their close associates held any interest** in any business that directly or indirectly competes with the Group's business[466](index=466&type=chunk) [Equity-Linked Agreements and Legal Matters](index=61&type=section&id=Equity-Linked%20Agreements%20and%20Legal%20Matters) This chapter details the purpose, grants, and vesting schedule of the Restricted Share Unit Scheme (RSU Scheme), confirming the Group had no significant legal proceedings, loans, guarantees, or other equity-linked agreements during the reporting period - The **Restricted Share Unit Scheme (RSU Scheme)** was adopted on **August 14, 2018**, aiming to incentivize the management team and employees, with RSUs for **133,887,798 underlying shares** granted to **16 employees**[477](index=477&type=chunk)[481](index=481&type=chunk)[483](index=483&type=chunk) RSU Grant Details as of December 31, 2019 | Grantee Name | Number of Underlying Shares for Restricted Share Units | Grant Date | Approximate Percentage of the Company's Issued Share Capital (1) | | :--- | :--- | :--- | :--- | | Huang Kewang | 16,214,269 | August 14, 2018 | 0.70% | | 14 Employees and Consultants | 117,187,158 | August 14, 2018 | 5.1% | (1) Calculated based on the total number of 2,300,000,000 shares in issue as of the date of this Directors' Report. - As of the reporting date, although some RSUs had matured, the company decided to **defer vesting**, thus **no granted restricted share units have vested**[490](index=490&type=chunk) - For the year ended December 31, 2019, the Group was **not involved in any material legal proceedings**, nor did it directly or indirectly provide any loans or guarantees to directors, senior management, controlling shareholders, or their associates[475](index=475&type=chunk)[479](index=479&type=chunk)[480](index=480&type=chunk) [Interests of Directors and Substantial Shareholders](index=64&type=section&id=Interests%20of%20Directors%20and%20Substantial%20Shareholders) This chapter discloses the interests or short positions of directors and substantial shareholders in the company's shares or related shares, as well as arrangements for purchasing shares or debentures, ensuring information transparency Directors' Interests in Securities (as of the date of the Directors' Report) | Director Name | Nature of Interest | Number of Ordinary Shares in which Interests are Held (1) | Approximate Percentage of the Company's Issued Share Capital (2) | | :--- | :--- | :--- | :--- | | Mr. Yang Bin | Interest in controlled corporation | 737,771,914 | 32.08% | | Mr. Yang Bin | Beneficial owner | 210,219,991 | 9.14% | | Mr. Huang Kewang | Beneficial owner | 16,214,269 | 0.70% | (1) All interests shown are long positions. (2) Calculated based on the total number of 2,300,000,000 shares in issue as of the date of this Directors' Report. Interests of Substantial Shareholders (as of the date of the Directors' Report) | Name | Nature of Interest | Number of Ordinary Shares in which Interests are Held (1) | Approximate Percentage of the Company's Issued Share Capital (1) | | :--- | :--- | :--- | :--- | | Evan Global | Beneficial owner | 737,771,914 | 32.08% | | ESOP Holdings | Beneficial owner | 210,219,991 | 9.14% | | Mr. Yang Bin | Interest in controlled corporation | 947,991,905 | 41.22% | | BlueFocus International | Beneficial owner | 328,629,450 | 14.29% | | BlueFocus | Interest in controlled corporation | 328,629,450 | 14.29% | | Chengdu Hongdao | Beneficial owner | 207,618,771 | 9.03% | | Mr. Yang Zhenghong | Interest in controlled corporation; Party to agreement relating to interests in the Company | 207,618,771 | 9.03% | | Hongdao Investment | Party to agreement relating to interests in the Company | 207,618,771 | 9.03% | | Beijing Dongfang Hongdao Asset Management Co., Ltd. | Party to agreement relating to interests in the Company | 207,618,771 | 9.03% | | Summer Holdings | Beneficial owner | 151,797,422 | 6.60% | | Ms. Chen Xiaona | Interest in controlled corporation | 151,797,422 | 6.60% | | Ms. Chen Xiaona | Beneficial owner | 40,189,334 | 1.75% | (1) All interests shown are long positions. - During the year under review, **neither the company, its holding company, nor any of its subsidiaries entered into any arrangements** that would enable directors to acquire benefits by purchasing shares or debentures of the company or any other body corporate[507](index=507&type=chunk) [Major Suppliers and Customers](index=67&type=section&id=Major%20Suppliers%20and%20Customers) This chapter discloses the concentration of the Group's major suppliers and customers, confirming that no directors, close associates, or substantial shareholders hold beneficial interests in them - During the year under review, the Group's **largest customer accounted for 11.8% of total revenue**, and the **five largest customers accounted for 42.6%**[510](index=510&type=chunk) - During the year under review, the Group's **largest supplier accounted for 8.2% of total purchases**, and the **five largest suppliers accounted for 21.2%**[510](index=510&type=chunk) - **No director or their close associates, nor any shareholder holding more than 5% of the company's issued share capital**, had any beneficial interest in the Group's five largest suppliers or five largest customers[511](index=511&type=chunk) [Human Resources and Benefits](index=67&type=section&id=Human%20Resources%20and%20Benefits) This chapter introduces the Group's employee count, departmental distribution, remuneration structure, and benefit plans, including state-managed retirement benefit schemes, reflecting the company's investment in and management of its employees - As of December 31, 2019, the Group employed **113 staff**, with **38 in product development, 21 in sales and marketing, 21 in operations, 9 in media publisher development, and 24 in administration**[513](index=513&type=chunk) - Employee remuneration includes **basic salaries, allowances, bonuses, share options, and other employee benefits**, determined by reference to experience, qualifications, and market conditions[514](index=514&type=chunk) - Employees of the PRC subsidiaries participate in **state-managed retirement benefit schemes** operated by the PRC government, with the company making contributions as required[520](index=520&type=chunk)[522](index=522&type=chunk) [Connected Transactions](index=68&type=section&id=Connected%20Transactions) This chapter details the contractual arrangements established by the company to comply with foreign investment restrictions in China's telecommunications industry, confirming no material changes during the reporting period, and that these arrangements have been annually reviewed by independent non-executive directors and auditors - The company controls consolidated affiliated entities in mainland China through **contractual arrangements** to comply with foreign investment restrictions in the PRC telecommunications industry, enabling the consolidation of these entities' financial results[523](index=523&type=chunk) - The contractual arrangements include a **voting rights proxy agreement, exclusive call option agreement, equity pledge agreement, and exclusive management consulting services agreement**[525](index=525&type=chunk)[526](index=526&type=chunk)[527](index=527&type=chunk)[528](index=528&type=chunk) - For the year ended December 31, 2019, the consolidated affiliated entities generated approximately **RMB1.0 million in revenue** and incurred a **net loss of approximately RMB11.1 million**[534](index=534&type=chunk) - The independent non-executive directors have reviewed the contractual arrangements and confirmed that the transactions comply with relevant regulations, no dividends or other distributions were untransferred to the Group, no new contracts were entered into, renewed, or replicated, and the transactions were conducted on normal commercial terms, fair and reasonable to the Group and shareholders as a whole[544](index=544&type=chunk) [Corporate Governance and Compliance](index=72&type=section&id=Corporate%20Governance%20and%20Compliance) This chapter reiterates the company's commitment to good corporate governance, confirming compliance with relevant Corporate Governance Code provisions during the reporting period, maintenance of sufficient public float, and no change in auditors - The company has adopted the code provisions of the **Corporate Governance Code** and believes it has complied with the relevant provisions during the reporting period[551](index=551&type=chunk) - As of the date of the Directors' Report, the company has maintained the **public float required by the Listing Rules**[549](index=549&type=chunk) - There was **no change of auditors** during the reporting period, and BDO Limited (Hong Kong Grant Thornton Certified Public Accountants Limited) will be recommended for re-appointment[556](index=556&type=chunk) - For the year ended December 31, 2019, the company complied with relevant laws and regulations that have a material impact on the company[557](index=557&type=chunk) [Independent Auditor's Report](index=74&type=section&id=INDEPENDENT%20AUDITOR%27S%20REPORT) This section presents the independent auditor's opinion on the financial statements, highlighting key audit matters and outlining responsibilities [Auditor's Opinion](index=74&type=section&id=Auditor%27s%20Opinion) The independent auditor issued an unmodified opinion on Doumob Technology's 2019 consolidated financial statements, affirming that they present a true and fair view of the Group's financial position, financial performance, and cash flows, in compliance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance - The auditor issued an **unmodified opinion** on the 2019 consolidated financial statements, confirming they present a true and fair view of the Group's financial position, financial performance, and cash flows, and have been properly prepared in accordance with **Hong Kong Financial Reporting Standards** and the **Hong Kong Companies Ordinance**[562](index=562&type=chunk)[564](index=564&type=chunk) [Key Audit Matters](index=75&type=section&id=Key%20Audit%20Matters) This chapter details the matters deemed most significant by the auditor during the audit, including revenue recognition, impairment assessment of contract assets and trade receivables, and impairment of intangible assets related to subscription accounts, along with the audit procedures performed for these matters - **Revenue recognition** was identified as a key audit matter due to revenue being one of the Group's key performance indicators and the inherent risk of management override; audit procedures included assessing internal controls, sampling contracts, comparing sales records with supporting documents, reviewing period-end transactions, and examining journal entries affecting revenue[570](index=570&type=chunk)[574](index=574&type=chunk)[575](index=575&type=chunk)[578](index=578&type=chunk) - **Impairment assessment of contract assets and trade receivables** was identified as a key audit matter due to significant judgment and estimation involved; audit procedures included assessing internal controls, reviewing source documents, testing aging analysis, evaluating recoverability, assessing adjustments to historical loss rates, and evaluating the reasonableness of invoicing forecasts[583](index=583&type=chunk)[584](index=584&type=chunk) - **Impairment of intangible assets related to subscription accounts** was identified as a key audit matter because estimating recoverable amounts involves significant management judgment and complex estimations; audit procedures included evaluating management's impairment assessment, obtaining valuation reports, discussing with valuers, verifying data and assumptions, and performing sensitivity analysis[589](index=589&type=chunk)[592](index=592&type=chunk)[594](index=594&type=chunk) [Responsibilities of Directors and Auditor](index=80&type=section&id=Responsibilities%20of%20Directors%20and%20Auditor) This chapter clarifies directors' responsibilities for preparing true and fair consolidated financial statements and maintaining internal controls, as well as the auditor's responsibilities for obtaining reasonable assurance, identifying material misstatements, and communicating with the audit committee - Directors are responsible for preparing consolidated financial statements that present a true and fair view in accordance with **Hong Kong Financial Reporting Standards** and the **Hong Kong Companies Ordinance**, and for internal controls[597](index=597&type=chunk) - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to communicate with the Audit Committee regarding the audit scope, timing, and significant audit findings[607](index=607&type=chunk)[612](index=612&type=chunk) [Financial Statements and Notes to the Financial Statements](index=84&type=section&id=FINANCIAL%20STATEMENTS%20AND%20NOTES%20TO%20THE%20FINANCIAL%20STATEMENTS) This section presents the company's consolidated financial statements and detailed notes, providing a comprehensive view of its financial position, performance, and cash flows [Consolidated Financial Statements](index=84&type=section&id=Consolidated%20Financial%20Statements) This chapter includes Doumob Technology's FY2019 consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, and consolidated statement of cash flows, providing an overview of the Group's financial performance, position, and cash flows during the reporting period Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Metric | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 189,450 | 352,611 | | Gross profit | 52,306 | 83,585 | | Profit for the year | 10,915 | 43,163 | | Profit attributable to owners of the Company | 10,917 | 43,219 | | Basic earnings per share | RMB0.005 | RMB0.021 | Summary of Consolidated Statement of Financial Position (RMB thousands) | Metric | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :--- | :--- | | Non-current assets | 67,129 | 24,976 | | Current assets | 260,971 | 287,603 | | Current liabilities | 27,755 | 72,585 | | Net current assets | 233,216 | 215,018 | | Net assets | 300,345 | 239,994 | | Total equity | 300,345 | 239,994 | Summary of Consolidated Statement of Cash Flows (RMB thousands) | Cash Flow Category | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 34,312 | 64,115 | | Net cash used in investing activities | (96,095) | (22,964) | | Net cash generated from financing activities | 47,786 | 70,386 | | Net (decrease)/increase in cash and cash equivalents | (13,997) | 111,537 | | Cash and cash equivalents at end of year | 118,915 | 132,912 | [Notes to the Consolidated Financial Statements](index=91&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This chapter provides detailed notes to the consolidated financial statements, explaining significant accounting policies, key accounting estimates and judgments, revenue and segment information, the composition and changes of various financial metrics, as well as related party transactions, capital management, and financial instruments, offering in-depth context for understanding the financial statements - Effective January 1, 2019, the Group adopted **HKFRS 16 Leases**, recognizing most leases as right-of-use assets and lease liabilities, resulting in an increase of **RMB115 thousand** in retained earnings and a decrease of **RMB1 thousand** in non-controlling interests as of January 1, 2019[91](index=91&type=chunk)[93](index=93&type=chunk) Revenue Breakdown (RMB thousands) | Category | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :--- | :--- | | Online advertising services | 188,327 | 350,183 | | Online sales services | 1,123 | 2,428 | | **Total** | **189,450** | **352,611** | - The gross profit margin in 2019 was **27.6%**, higher than **23.7% in 2018**, primarily due to the increased proportion of technical services (especially interactive advertising) in total revenue[270](index=270&type=chunk)[271](index=271&type=chunk) Net Book Value of Intangible Assets (RMB thousands) | Category | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :--- | :--- | | Software | 17,887 | 7,221 | | Subscription accounts | 32,043 | 16,885 | | Film script copyrights | 7,245 | — | | **Total** | **57,175** | **24,106** | - In 2019, **film investments totaled RMB8,500 thousand**, recognized at fair value through profit or loss, with no guaranteed returns[918](index=918&type=chunk) - As of December 31, 2019, net trade receivables were **RMB12,774 thousand** (2018: RMB14,706 thousand), and net contract assets were **RMB60,237 thousand** (2018: RMB121,376 thousand)[925](index=925&type=chunk)[937](index=937&type=chunk) - As of December 31, 2019, the company's issued and fully paid share capital was **RMB1,967 thousand**, and reserves were **RMB44,161 thousand**[964](index=964&type=chunk)[971](index=971&type=chunk) - As of December 31, 2019, key management personnel short-term employee benefits amounted to **RMB3,592 thousand**, and retirement scheme contributions were **RMB305 thousand**[1002](index=1002&type=chunk) - The company controls consolidated affiliated entities in mainland China through **contractual arrangements** to comply with foreign investment restrictions in the PRC telecommunications industry, and these arrangements have been annually reviewed by independent non-executive directors and auditors[523](index=523&type=chunk)[544](index=544&type=chunk) - The **COVID-19 pandemic** erupted in January 2020, and the Group will continue to monitor and assess its impact on financial position and operating results[1085](index=1085&type=chunk)

Financial Performance - Doumob reported a significant increase in revenue, achieving HK$201 million for the interim period, representing a growth of 25% year-over-year[3]. - The company anticipates a revenue guidance of HK$400 million for the next fiscal year, indicating a projected growth of 20%[4]. - The company reported a revenue increase of 25% in the 2019 interim period compared to the 2018 interim period[68]. - Total revenue for the six months ended June 30, 2019, was approximately RMB 132.8 million, representing a decrease of 16.1% compared to the same period in 2018[90]. - Adjusted net profit for the period was RMB 32.1 million, representing a 21.6% increase from RMB 26.4 million in 2018[89]. - Profit for the period attributable to owners of the Company was RMB 23.8 million, an increase of 16.2% from RMB 20.5 million in 2018[89]. User Growth - The user base expanded to 15 million active users, marking a 30% increase compared to the previous year[4]. - User data showed a growth of 15% in active users year-over-year, reaching 1.5 million active users by June 30, 2019[68]. Market Expansion - The company plans to expand its market presence in Southeast Asia, targeting a 15% market share within the next two years[4]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share by the end of 2020[68]. Product Development and Innovation - Doumob is investing in new product development, focusing on artificial intelligence technologies to enhance advertising efficiency[4]. - A new product launch is scheduled for Q4 2019, expected to contribute an additional $10 million in revenue[68]. - The Company launched a new interactive video advertising product in June 2019, integrating interactive advertising with short video, to capitalize on the 5G era[84]. - The company aims to develop new products, with an allocation of approximately HKD 2.7 million for this initiative[200]. Strategic Partnerships and Acquisitions - The company has initiated a strategic partnership with BlueFocus to enhance its advertising solutions[4]. - The company has initiated a strategic partnership with a leading tech firm to enhance its service offerings[68]. - Doumob is exploring potential acquisitions to strengthen its technology capabilities and broaden its service offerings[4]. - The company is exploring potential acquisitions to enhance its technology capabilities, with a budget of $15 million allocated for this purpose[68]. - 10% of proceeds, approximately HKD 2.7 million, will be used to pursue strategic cooperation, investments, and acquisitions[188][191]. Financial Management and Cost Control - The gross profit margin improved to 45%, up from 40% in the previous year, reflecting better cost management[4]. - The gross profit margin improved to 40%, up from 35% in the previous year, indicating better cost management[68]. - The gross profit margin improved from 21.1% in 2018 to 31.5% in 2019, despite a decline in total revenue[83]. - The cost of revenue for the 2019 interim was RMB91.0 million, a decrease of 27.2% compared to the same period in 2018, primarily due to a reduction in the advertising business size[96][100]. - Selling and distribution expenses were RMB4.8 million for the 2019 interim, an increase of 61.2% compared to the corresponding period of 2018, mainly due to higher average salaries for employees[103]. - Administrative expenses totaled RMB18.0 million for the 2019 interim, reflecting a 62.8% increase compared to the same period in 2018, primarily due to non-recurring listing expenses[103]. Cash Flow and Equity - Doumob's cash flow from operations increased by 50%, reaching HK$50 million, providing a solid foundation for future investments[4]. - The Company reported positive net operating cash inflow in the first half of 2019, indicating healthy cash flow management[85]. - As of June 30, 2019, total equity was approximately RMB313.3 million, up from RMB240.0 million as of December 31, 2018, attributed to increased profit from operating activities and share premium[107]. - Net current assets were approximately RMB275.0 million as of June 30, 2019, compared to RMB215.0 million as of December 31, 2018, due to increases in cash and cash equivalents[107]. - Cash and cash equivalents and deposits with banks totaled RMB181.3 million as of June 30, 2019, compared to RMB132.9 million as of December 31, 2018, mainly due to cash generated from operating activities[113]. - The gearing ratio as of June 30, 2019, was 10.8%, down from 23.2% as of December 31, 2018[113]. Research and Development - Research and development expenses increased by 30% to $5 million, reflecting the company's commitment to innovation[68]. - The company plans to strengthen algorithm and data mining capabilities of its programmatic advertising system, allocating 20% of proceeds, approximately HKD 5.4 million, for this purpose[167][173]. - 20% of proceeds, approximately HKD 5.4 million, will be invested to expand the base of advertisers and media publishers[176][179]. - The company intends to invest 20% of proceeds, approximately HKD 5.4 million, in traffic acquisition costs for self-owned media publishers[182][185]. - Another 10% of proceeds, approximately HKD 2.7 million, is allocated to enhance the functionality and architecture of the proprietary advertising platform[194][197].

Financial Performance - Doumob reported a significant increase in revenue, achieving a total of $100 million for the fiscal year, representing a 25% year-over-year growth[1]. - The company reported a significant increase in revenue, achieving a total of $150 million for the fiscal year, representing a 25% year-over-year growth[55]. - For the year ended 31 December 2018, total revenue amounted to approximately RMB352.6 million, representing an increase of approximately 58.2% compared to the year ended 31 December 2017[35]. - The net profit attributable to owners of the Company for the year ended 31 December 2018 was approximately RMB43.2 million, reflecting a growth of 24.3% from RMB34.8 million in 2017[36]. - Adjusted net profit for the year ended 31 December 2018 was approximately RMB60.8 million, an increase of 77.8% compared to the previous year[35]. - Profit and total comprehensive income for the year was RMB 43.2 million, representing an increase of 26.3% compared to 2017[93]. - The company attributed the revenue increase to a strategic shift towards interactive advertising services, resulting in a higher number of new customers[94]. User Growth - The company’s user base expanded to 5 million active users, marking a 40% increase compared to the previous year[2]. - User data showed a growth in active users, reaching 5 million, which is a 40% increase compared to the previous year[56]. Revenue Forecast - Doumob anticipates a revenue growth forecast of 30% for the next fiscal year, projecting total revenue to reach $130 million[3]. - The company has provided guidance for the next fiscal year, projecting revenue growth of 20% to $180 million[57]. - New product launches are expected to contribute an additional $30 million in revenue, with a focus on mobile advertising solutions[58]. Market Expansion - Doumob plans to expand its market presence in Southeast Asia, targeting a 15% market share within the next two years[5]. - Market expansion efforts include entering two new regions, which are projected to increase user acquisition by 15%[60]. - The company plans to expand its market presence in Southeast Asia, targeting a XX% increase in market share by the end of the next fiscal year[18]. Technology Investment - The company is investing heavily in AI technology, allocating $10 million towards research and development in this area[4]. - The company is investing in new technology development, allocating $10 million towards enhancing its advertising platform[59]. - Doumob Technology is investing in the development of new technologies, including an optimized cost per click (oCPC) advertising system to enhance advertising efficiency[18]. Advertising and Engagement - The click-through rate for Doumob's advertisements improved to 5%, up from 3% in the previous year, indicating better user engagement[8]. - The proprietary advertising platform helps media publishers monetize traffic and assists advertisers in maximizing advertising effectiveness[78]. - The interactive advertising format includes advanced features such as games, videos, and audio to enhance user engagement[80]. Strategic Partnerships and Acquisitions - The company has established a strategic partnership with a leading tech firm to enhance its data analytics capabilities, expected to be operational by Q3 2024[9]. - Doumob is exploring potential acquisition opportunities to enhance its data management capabilities, with a budget of $20 million set aside for this purpose[7]. - The company is considering strategic acquisitions to bolster its market position, with a budget of $50 million earmarked for potential targets[61]. Cost Management and Efficiency - Doumob's operational costs have been reduced by 10% due to improved efficiency measures implemented over the past year[10]. - Gross profit for 2018 was RMB 83.6 million, indicating a year-on-year increase of approximately 67.3%, with a gross profit margin of 23.7%[101]. Corporate Governance - The Company has complied with applicable corporate governance code provisions, except for the separation of roles between the chairman and CEO[154]. - The Board consists of nine Directors, including four executive Directors and three independent non-executive Directors, ensuring a significant degree of independence[161]. - The Company has established procedures for Directors to seek independent professional advice at the Company's expense when necessary[168]. Internal Controls and Risk Management - The Board is responsible for maintaining effective internal control and risk management systems to safeguard the Group's assets and shareholders' interests[200]. - The internal audit function conducts independent appraisals of the adequacy and effectiveness of the Company's risk management and internal control systems, reporting findings to the Board at least annually[200].