Financial Performance - For the year ended December 31, 2020, the company reported revenue of RMB 170,179,000, a decrease of 22.4% from RMB 219,194,000 in 2019[9] - Gross profit for 2020 was RMB 55,638,000, down 30.1% from RMB 79,572,000 in the previous year[9] - The net profit for the year was RMB 1,023,000, a significant decline from RMB 41,208,000 in 2019, representing a decrease of 97.5%[9] - Adjusted net profit, excluding listing expenses and trade receivables impairment, was RMB 15,089,000, down 69.6% from RMB 49,552,000 in 2019[9] - The group's revenue decreased from approximately RMB 2,192 million for the year ended December 31, 2019, to approximately RMB 1,702 million for the year ended December 31, 2020, a decline of RMB 490 million or 22.4%[19] - Gross profit fell from approximately RMB 796 million for the year ended December 31, 2019, to approximately RMB 556 million for the year ended December 31, 2020, a decrease of RMB 240 million or 30.1%[19] - Revenue from single-player mobile games dropped significantly by approximately 83.3% in the fiscal year 2020, primarily due to the impact of COVID-19 and subsequent quarantine measures[19] - Revenue from multiplayer mobile games increased by approximately RMB 648 million, representing a growth of about 103.8% compared to the same business line in the previous year[19] Assets and Equity - Total assets increased to RMB 255,169,000 in 2020, up from RMB 191,552,000 in 2019, reflecting a growth of 33.2%[13] - Total equity rose to RMB 226,262,000, a 80.5% increase from RMB 125,396,000 in the previous year[13] - Non-current assets significantly increased to RMB 74,162,000 from RMB 6,196,000 in 2019, indicating a growth of 1,194.5%[13] Strategic Plans and Market Focus - The company plans to continue investing in research and development for mobile games, adapting to changing customer preferences due to the COVID-19 pandemic[18] - The company has expanded its product offerings to include a diverse range of digital media content, including mobile games and electronic magazines[17] - The company aims to enhance its market presence through the development of high-quality mobile games and multiplayer gaming experiences[17] - The company plans to shift its focus from single-player mobile game development to multiplayer mobile game development and operations in 2021 due to changing player preferences[23] Shareholder and Governance Structure - Mr. Liang holds 126,632,022 shares in JLCY SAGA, representing approximately 23.19% of the company's equity after the completion of the global offering[72] - Mr. Lu and Ms. He hold 99.90% and 0.10% of LIHIH SAGA, respectively, with the company expected to hold 105,527,993 shares, accounting for about 19.33% of the company's equity post-offering[73] - The major shareholders collectively hold 86.02% of the capital injection in Guangzhou Jiuzun, indicating significant control over the entity[66] - The company JLCY SAGA is controlled by Mr. Liang, who is recognized as having beneficial ownership of 86,022 shares, which is 86.02% of the total[71] - The total number of shares held by JLCY SAGA after the global offering is projected to be 337,688,008, representing 61.85% of the equity[71] - The company has a significant number of shares under controlled entities, with various shareholders holding substantial percentages, ensuring a strong governance structure[71] Compliance and Legal Matters - The company is closely monitoring developments in Chinese laws and regulations to ensure compliance and maintain control by Chinese investors[145] - The group may face increased tax liabilities due to changes in tax policies, which could reduce net profit margins[152] - The company has several subsidiaries that qualify for preferential tax rates under Chinese tax laws, which may help mitigate tax expenses[153] - There are risks associated with contractual arrangements that may not provide effective operational control compared to direct ownership[132] - The company is taking measures to ensure that its business structure complies with applicable Chinese laws to avoid potential legal issues[145] Shareholder Agreements and Rights - The irrevocable share purchase agreement grants the foreign-invested enterprise exclusive rights to purchase all or part of Guangzhou Jiuzun's shares, with the ability to transfer this purchase right to third parties without consent[98] - The equity pledge agreement ensures that shareholders pledge all their shares in Guangzhou Jiuzun as collateral for the management fees owed to the foreign-invested enterprise[107] - The exclusive licensing agreement for intellectual property is valid for 10 years, with a requirement for renewal upon expiration[117] - The shareholders' voting rights entrustment agreement allows the foreign-invested enterprise to act as the exclusive agent for exercising shareholder rights without needing consent from the shareholders[118] Stock Options and Customer Base - The stock option plan allows for a maximum of 54,600,000 shares to be granted, which is 10% of the total issued shares as of the report date[193] - Each participant in the stock option plan is limited to a maximum of 1% of the issued shares within any 12-month period[194] - The company does not rely on any single customer, ensuring a diversified customer base[200]

45 Jiu Zun Digital Interactive Entertainment Group Holdings Limited 九尊數字互娛集團控股有限公司 (於開曼群島註冊成立的有限公司) 股份代號：1961 中期報 目 公司資料 財務摘要 主席報告書 管理層討論與分析 其他資料 中期簡明合併損益表 中期簡明合併全面收益表 中期簡明合併財務狀況表 中期簡明合併權益變動表 中期簡明合併現金流量表 中期簡明合併財務資料附註 2 4 5 7 15 22 23 24 26 27 29 釋義 48 公司資料 | --- | --- | |----------------------------|-----------------------------| | | | | 董事會 | 公司秘書 | | 執行董事 | 徐穎德先生 | | 呂建先生(主席兼首席執行官) | | | 梁俊華先生 | 合規顧問 | | 非執行董事 | 力高企業融资有限公司 | | 蘇少萍女士 | 香港 | | 徐穎德先生 | 中 環 | | | 皇后大道中 29 號 | | 獨立非執行董事 | 華人行 16樓 1601 室 | | 趙俊 ...

Financial Performance - The company's revenue increased by approximately RMB 76.2 million or 53.3% to RMB 219.2 million for the year ended December 31, 2019, compared to RMB 143.0 million for the previous year[10]. - Gross profit rose by approximately RMB 17.3 million or 27.7% to RMB 79.6 million for the year ended December 31, 2019, from RMB 62.3 million in the previous year[15]. - The company reported a net profit of RMB 41.2 million for the year ended December 31, 2019, down from RMB 51.7 million in the previous year[10]. - The adjusted net profit increased from approximately RMB 38.9 million in 2018 to approximately RMB 49.6 million in 2019, a growth of RMB 10.7 million or 27.2%[144]. - The effective tax rate increased from 12.0% in 2018 to 25.2% in 2019, primarily due to non-deductible listing expenses and withholding tax on retained earnings[170]. - The total employee cost for the year ended December 31, 2019, was approximately RMB 8.6 million, with 64 full-time employees primarily located in Guangzhou[180]. Assets and Equity - Non-current assets increased to RMB 6.2 million in 2019 from RMB 0.7 million in 2018[12]. - Total assets rose to RMB 191.6 million in 2019, compared to RMB 162.7 million in 2018[12]. - Total equity increased to RMB 125.4 million in 2019 from RMB 84.4 million in 2018[12]. - As of December 31, 2019, the total assets amounted to RMB 192,076,000[104]. Revenue Sources - Revenue from mobile game development and operations increased by RMB 98.9 million, partially offset by a decrease of RMB 24.1 million in revenue from digital media content distribution[15]. - The company plans to focus on the development and operation of single-player and multiplayer mobile games in 2020, with the launch of multiple new titles including "Dream Edge" and "Fire Dragon Slayer" expected in Q2 2020[20]. - The company anticipates that revenue from multiplayer mobile game development and operation will become a larger portion of its overall revenue in 2020[20]. Shareholder Information - As of December 31, 2019, the major shareholders hold significant stakes, with Mr. Liang, Mr. Lu, and Ms. Su each holding 61.85% of the shares through controlled corporations[50]. - Mr. Xu holds 3.08% of the shares, representing his stake in AE Majoris Tech[52]. - The company has a total of 86.02% capital contribution in Guangzhou Jiu Zun, held collectively by the directors[54]. - The major shareholders are required to disclose their interests in accordance with the Securities and Futures Ordinance, ensuring transparency[59]. Governance and Compliance - The company has established a governance framework that includes provisions for the appointment and termination of directors[46]. - The independent non-executive directors have also been appointed for an initial term of three years, effective from the listing date[46]. - The board consists of seven directors, including two executive directors, two non-executive directors, and three independent non-executive directors[195]. - The board has complied with listing rules by appointing at least three independent non-executive directors, constituting at least one-third of the board members[198]. Market Outlook - The market size of online digital entertainment media in China is projected to grow from RMB 212.6 billion in 2013 to RMB 615.6 billion in 2018, representing a compound annual growth rate (CAGR) of 23.7%[16]. - From 2018 to 2022, the market size is expected to continue growing at a CAGR of 24.2%, reaching RMB 1,446.4 billion by 2022[16]. - The company is focused on enhancing its R&D capabilities and product competitiveness in a challenging gaming industry environment[15]. Operational Challenges - The company continues to maintain its operational capabilities despite uncertainties arising from the COVID-19 outbreak, ensuring financial viability for at least the coming year[19]. - The group faces risks related to the immature development of the mobile gaming market in China, including regulatory changes and reliance on distribution channels[182]. Dividends and Reserves - The board proposed a final cash dividend of HKD 0.0252 per share for the year ended December 31, 2019[31]. - As of December 31, 2019, the company's distributable reserves amounted to approximately RMB 188 million, with RMB 12.36 million recommended for the final dividend[37]. Contractual Arrangements - The company has established a series of contractual arrangements with Guangzhou Jiuzun to exert management control and enjoy all economic benefits[71]. - The management service contract grants exclusive rights to the foreign-invested enterprise for all rights, ownership, and intellectual property developed by Guangzhou Jiuzun[81]. - The irrevocable stock purchase agreement allows the foreign-invested enterprise to purchase all or part of Guangzhou Jiuzun's shares without needing consent from shareholders[85]. Risk Management - The company has implemented measures to mitigate risks associated with contractual arrangements and potential tax liabilities[110]. - The company is closely monitoring current and future applicable Chinese laws and regulations to ensure compliance and maintain control by Chinese investors[106].