Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 103.91 million, a decrease of 9.3% compared to RMB 114.91 million in 2021[6]. - Gross profit for the same period was RMB 16.05 million, representing a gross margin of 15.4%[6]. - The net loss for the year was RMB 86 million, slightly improved from a loss of RMB 86.82 million in 2021[6]. - Adjusted net loss, excluding listing expenses and trade receivables impairment, was RMB 65.61 million, compared to RMB 71.87 million in 2021[6]. - Revenue for the fiscal year 2022 decreased by approximately RMB 11.0 million or 9.6% to about RMB 103.9 million from RMB 114.9 million in fiscal year 2021, primarily due to a decline in mobile game revenue by approximately RMB 44.3 million[12]. - The company's loss for fiscal year 2022 was approximately RMB 86.0 million, slightly narrowing from a loss of RMB 86.8 million in fiscal year 2021, attributed to increased gross profit and reduced selling and distribution expenses[13]. - Total revenue decreased by 9.6% from RMB 114.9 million in 2021 to RMB 103.9 million in 2022[150]. - Revenue from mobile games declined by 43.0% from RMB 103.0 million in 2021 to RMB 58.7 million in 2022[151]. - Revenue from digital media content distribution increased by 68.0% from RMB 11.9 million in 2021 to RMB 20.0 million in 2022[151]. - The newly developed game product supply business generated revenue of approximately RMB 25.2 million in 2022[152]. Assets and Liabilities - Total assets decreased to RMB 115.68 million in 2022 from RMB 173.92 million in 2021, a decline of 33.4%[8]. - Total equity fell to RMB 54.35 million in 2022, down 60.8% from RMB 138.51 million in 2021[8]. - Non-current assets decreased significantly to RMB 28.81 million from RMB 57.11 million in 2021, a drop of 49.5%[8]. - Current liabilities increased to RMB 42.51 million in 2022, up from RMB 32.57 million in 2021, an increase of 30.0%[8]. Strategic Plans and Market Development - The company plans to focus on new product development and market expansion strategies in the upcoming year[10]. - The company plans to enhance its mobile game development and operations, and expand its digital media content distribution business in collaboration with leading media platforms[17]. - The company aims to accelerate the market expansion of its new game product supply business and actively explore overseas markets to improve revenue generation capabilities[17]. - The company will focus on integrating artificial intelligence technology into its operations, enhancing game engine development, and exploring new business models[16]. - The company is committed to maintaining the stability of its overall business while actively pursuing diversification strategies to enhance profitability[19]. - The company expresses confidence in overcoming challenges and achieving better results in the future[20]. - The company plans to increase investment in game engine development and game publishing operations, aiming to enhance competitiveness and explore new business models[141]. - The company is closely monitoring overseas market opportunities and has accelerated strategic cooperation to promote overseas business development[137]. Corporate Governance - The board of directors has undergone significant changes, with multiple appointments and resignations effective May 23, 2022[2][3]. - The board consists of seven directors, including two executive directors, two non-executive directors, and three independent non-executive directors[183]. - The company has maintained compliance with all applicable corporate governance codes during the fiscal year 2022[176]. - The board is responsible for key decisions including overall strategy, budget approval, and risk management systems[179]. - All directors have access to relevant information and independent professional advice when necessary[178]. - The company has established formal and informal channels for independent non-executive directors to express their opinions openly[187]. - Each director received training to ensure understanding of the company's operations and regulatory responsibilities[190]. - The company has purchased appropriate liability insurance for directors and senior officers against legal claims[194]. - The nomination committee oversees the appointment and succession planning of directors[188]. - The company has a balanced board composition to ensure effective independent judgment[181]. Shareholder Information - The company did not recommend any final dividend for the fiscal year 2022, consistent with the previous fiscal year[28]. - As of December 31, 2022, the company's distributable reserves amounted to approximately RMB 23.0 million[33]. - Major shareholders include Ms. An Fenghua and Infinities Cayman, each holding 280,498,495 shares, representing 51.37% of total shares[49]. - Mr. Tan Bing holds 48,592,274 shares, accounting for 8.9% of total shares[49]. - The company has not purchased, sold, or redeemed any of its listed securities during the fiscal year 2022[37]. - There were no known tax benefits for shareholders due to shareholding[32]. Risks and Compliance - The company may face significant consequences if the Chinese government deems its contractual arrangements for mobile gaming operations non-compliant with applicable laws[96]. - There is a risk of losing access to important assets if any of the consolidated entities declare bankruptcy or face liquidation[100]. - The company anticipates higher tax rates and potential additional tax liabilities due to its contractual arrangements, which could reduce net profit margins[101]. - Changes in China's preferential tax policies may lead to increased tax liabilities for the company[103]. - The company is committed to maintaining its subsidiaries' qualifications for preferential tax rates to continue enjoying tax benefits[103]. - The board closely monitors developments in applicable Chinese laws and regulations to ensure compliance and control by Chinese investors[97]. - Potential conflicts of interest may arise between the shareholders and the company, which could lead to unfavorable modifications to agreements[105]. Related Party Transactions - The company has ongoing related party transactions with Chengdu Electric Bus Trading Co., Ltd. for the supply of gaming products from August 1, 2022, to December 31, 2024[59]. - The independent non-executive directors confirmed that the related party transactions are conducted in the ordinary course of business and on fair commercial terms[65]. - The independent auditor has not identified any issues that would lead them to believe the disclosed related party transactions were not approved by the board[66]. - The transactions under the game product supply agreement are subject to the disclosure and independent shareholder approval requirements due to applicable percentage ratios exceeding 25%[63]. - The company has complied with the applicable disclosure requirements under the listing rules regarding the related party transactions[66]. Operational Efficiency - The company has implemented various business processes, approval systems, and risk control management systems to enhance operational efficiency[73]. - The integrated affiliate's administrative management system has been established to select experienced personnel for key management positions[73]. - The company is committed to protecting the integrity of the integrated affiliate's assets and ensuring compliance with operational guidelines[79]. Employee and Compensation - The company has a defined contribution retirement plan for all employees, with no forfeited contributions used to offset current contribution levels[52]. - The company has not entered into any management and administrative contracts concerning the majority of its business during the fiscal year 2022[116].

Financial Performance - The company reported a basic loss attributable to ordinary equity holders of RMB 84,445,000 for the year ended December 31, 2022, compared to RMB 85,056,000 for the previous year[7]. - The group reported a pre-tax loss of RMB 86,000,000 for 2022, slightly improved from a loss of RMB 86,822,000 in 2021[27]. - The company reported a net loss of approximately RMB 86.0 million for the fiscal year 2022, a slight improvement from a net loss of RMB 86.8 million in fiscal year 2021[61]. - The basic and diluted loss per share attributable to ordinary shareholders for the year ended December 31, 2022, was RMB (15.5) cents, compared to RMB (15.6) cents in 2021, showing a slight improvement[110]. - Total equity as of December 31, 2022, was RMB 54,347,000, down from RMB 138,513,000 in 2021, reflecting a significant decrease of approximately 60.8%[116]. Revenue and Sales - The group's revenue for the year 2022 was RMB 103,910,000, a decrease of 9.3% compared to RMB 114,914,000 in 2021[27]. - Revenue for the fiscal year 2022 decreased to approximately RMB 103.9 million, a decline of RMB 11.0 million or 9.6% from RMB 114.9 million in fiscal year 2021[35]. - Revenue from mobile gaming dropped by approximately RMB 44.3 million or 43.0% to about RMB 58.7 million in fiscal year 2022[47]. - Revenue from digital media content increased by approximately RMB 8.1 million or 68.0% to about RMB 20.0 million in fiscal year 2022[48]. - Total revenue from customer contracts was RMB 103,910,000, representing a decrease from RMB 114,914,000 in the previous fiscal year[71]. Expenses and Costs - The group's cost of sales for 2022 was RMB 87,865,000, down from RMB 100,523,000 in 2021, reflecting a reduction of 12.6%[18]. - Selling and distribution expenses decreased by approximately RMB 13.9 million or 68.2% to about RMB 6.5 million for the fiscal year ending December 31, 2022[75]. - Administrative expenses increased by approximately RMB 1.4 million or 6.5% to about RMB 23.6 million for the fiscal year ending December 31, 2022[76]. - Research and development expenses increased by approximately RMB 0.1 million or 0.4% to approximately RMB 37.5 million for the year ended December 31, 2022, primarily due to continued investment in mobile game development[97]. Trade Receivables - Trade receivables as of December 31, 2022, amounted to RMB 65,651,000, an increase from RMB 60,351,000 as of December 31, 2021[9]. - The net impairment of trade receivables increased to RMB 20,388,000 in 2022 from RMB 14,948,000 in 2021, representing a rise of 36.5%[18]. - Trade receivables aged over 365 days amounted to RMB 15,422,000 in 2022, a decrease of 48.9% from RMB 30,301,000 in 2021[24]. - The company aims to strictly control outstanding receivables to minimize credit risk, with overdue balances reviewed regularly by senior management[9]. Government Support and Subsidies - The company received government subsidies totaling RMB 2.4 million for the year ended December 31, 2021, related to COVID-19 support measures[16]. - Interest income for the year was RMB 373,000, while government subsidies amounted to RMB 304,000, a decrease from RMB 2,444,000 in the previous year[134]. Business Strategy and Development - The group has expanded its business segments to include game product supply for partners, aiming to enhance business scale[29]. - The group is focusing on deepening mobile game development and stable expansion of digital media marketing[29]. - The company plans to accelerate the launch of multiple co-developed mobile games and actively expand into overseas advertising markets in 2023[40]. - The company aims to establish a more comprehensive supply system for game products and enhance profitability by expanding partnerships with suppliers[41]. - The company plans to accelerate the development of overseas markets and strengthen strategic partnerships to enhance business growth[60]. Compliance and Governance - The company has maintained compliance with all applicable corporate governance codes during the fiscal year 2022[13]. - The group has consolidated financial statements prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance with local regulations[142]. Employee and Operational Metrics - The total number of employees as of December 31, 2022, was 89, with total employee costs approximately RMB 14.9 million for the year ended December 31, 2022[106]. - The company's management team and board expressed gratitude for the continuous support from shareholders, employees, and business partners[3]. Market Conditions and Challenges - The company faces challenges in the mobile gaming market, including reliance on distribution channels and potential delays in payments from settlement agents[88]. - The average monthly paying users decreased from approximately 29,300 in fiscal year 2021 to about 23,600 in fiscal year 2022, primarily due to the economic downturn caused by the pandemic[44]. - The group anticipates significant economic recovery in China, driven by the development of the digital economy over the next decade[31].

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 43,197,000, representing a 38.4% increase compared to RMB 31,201,000 in the same period of 2021[9]. - The company reported a net loss of RMB 35,187,000, which is a 105.4% increase in losses compared to RMB 17,132,000 in the previous year[9]. - Gross profit decreased significantly to RMB 872,000, down 89.5% from RMB 8,339,000 year-on-year[9]. - The group recorded a loss of approximately RMB 35.2 million in the first half of 2022, compared to a loss of approximately RMB 17.1 million in the first half of 2021, an increase of approximately RMB 18.1 million[24]. - The company incurred a loss before tax of RMB 35,090,000, compared to a loss of RMB 17,026,000 in the previous year, reflecting an increase in losses of approximately 106.5%[98]. - The net loss for the period was RMB 35,187,000, which is more than double the loss of RMB 17,132,000 reported in the same period last year, marking an increase of approximately 105.9%[101]. - The group reported a basic loss attributable to equity holders of the parent of RMB 33,664,000 for the six months ended June 30, 2022, compared to RMB 17,398,000 for the same period in 2021[155]. Assets and Liabilities - Total assets as of June 30, 2022, were RMB 132,111,000, a decrease of 24.0% from RMB 173,922,000 as of December 31, 2021[10]. - Current assets fell by 28.2% to RMB 83,923,000 from RMB 116,809,000 year-on-year[10]. - Total equity decreased by 27.0% to RMB 101,070,000 from RMB 138,513,000 as of December 31, 2021[10]. - Non-current liabilities were RMB 2,558,000, down 10.0% from RMB 2,841,000 year-on-year[10]. - Trade receivables as of June 30, 2022, amounted to RMB 57,668,000, a decrease from RMB 60,351,000 as of December 31, 2021[160]. - Total liabilities decreased from RMB 32,568,000 to RMB 28,483,000, a decline of around 12.5%[104]. - The total equity attributable to owners of the parent decreased from RMB 129,212,000 to RMB 93,292,000, a decline of approximately 27.8%[107]. Revenue Sources - The majority of revenue is derived from the sale of virtual items in multiplayer mobile games, consistent with the business strategy disclosed in the 2021 annual report[14]. - Mobile game revenue rose from approximately RMB 24.9 million in the first half of 2021 to approximately RMB 40.3 million in the first half of 2022, an increase of 61.8%[35]. - Revenue from mobile game development and operation reached RMB 40,017 thousand, up from RMB 24,875 thousand, representing a growth of 60.7% year-over-year[140]. User Metrics - The number of paying users increased by 78.3% from 41.4 thousand in the first half of 2021 to 73.8 thousand in the first half of 2022[28]. - Average monthly paying users rose from approximately 6.9 thousand in the first half of 2021 to approximately 12.3 thousand in the first half of 2022, also an increase of 78.3%[28]. - Average revenue per paying user (ARPPU) decreased by 9.1% from RMB 542.3 in the first half of 2021 to RMB 493.0 in the first half of 2022[29]. Expenses and Costs - Sales cost increased to approximately 98.0% of total revenue in the first half of 2022, up from 73.3% in the first half of 2021, due to intensified competition in the gaming industry[37]. - Research and development expenses decreased from approximately RMB 13.0 million in the first half of 2021 to approximately RMB 5.5 million in the first half of 2022, a reduction of 57.7%[42]. - The cost of sales for the six months ended June 30, 2022, was RMB 42,325 thousand, which is an increase of 85.0% compared to RMB 22,862 thousand in 2021[149]. Cash Flow and Financial Position - Cash and cash equivalents were approximately RMB 11.5 million as of June 30, 2022, compared to RMB 12.1 million as of December 31, 2021, remaining relatively stable[51]. - Cash used in operating activities amounted to RMB 6,877,000, a significant improvement from RMB 32,219,000 in the previous year, reflecting a reduction in cash outflow of approximately 78.7%[116]. - The net cash flow from financing activities was RMB 4,718,000, up from RMB 3,209,000 in the prior year, representing an increase of about 46.9%[116]. - The company recorded a decrease in cash and cash equivalents of RMB 1,808,000, a notable improvement compared to a decrease of RMB 30,908,000 in the same period last year[116]. Corporate Governance and Compliance - The company maintained compliance with corporate governance codes throughout the reporting period[92]. - The company has not engaged in any share buybacks or repurchases during the first half of 2022[85]. - The company did not recommend any interim dividend for the first half of 2022, consistent with the previous year[93]. Market and Strategic Focus - The company continues to focus on providing a diverse content portfolio, primarily through mobile games and electronic magazines[14]. - The company plans to expand its multiplayer mobile game development and operations while also entering overseas markets, focusing on casual games and social software[19]. - The domestic mobile game market is expected to gradually return to a growth phase following the normalization of regulations and issuance of game licenses[19]. - The group anticipates significant development opportunities in the overseas market, with potential for increased revenue from self-developed games[19]. Related Party Transactions - The company is subject to ongoing related party transactions due to its agreement with Chengdu Bus, which exceeds 25% in applicable percentage ratios[64]. - The group recognized a deferred tax asset related to tax losses carried forward, amounting to RMB 16,853,000 as of June 30, 2022[165].

Financial Performance - The company reported revenue of RMB 114.914 million for the year ended December 31, 2021, a decrease of 32.5% from RMB 170.179 million in 2020[9]. - Gross profit for the same period was RMB 14.391 million, down 74.1% from RMB 55.638 million in 2020[9]. - The company recorded a net loss of RMB 86.822 million for 2021, compared to a profit of RMB 1.023 million in 2020[9]. - The group's revenue decreased by approximately RMB 55.3 million or 32.5% from about RMB 170.2 million in the fiscal year ending December 31, 2020, to about RMB 114.9 million in the fiscal year ending December 31, 2021[19]. - Gross profit fell by approximately RMB 41.2 million or 74.1%, from about RMB 55.6 million in the fiscal year ending December 31, 2020, to about RMB 14.4 million in the fiscal year ending December 31, 2021[19]. - Revenue from mobile game development and operation decreased by approximately RMB 51.2 million, while revenue from digital media content distribution decreased by approximately RMB 5.4 million[19]. - The company incurred a net loss of RMB 30.902 million during the same period[124]. - The company reported a net loss of approximately RMB 86.8 million for the fiscal year 2021, compared to a profit of RMB 1.0 million in fiscal year 2020[178]. Assets and Equity - Total assets decreased to RMB 173.922 million in 2021 from RMB 255.169 million in 2020, representing a decline of 31.8%[13]. - The company's total equity also fell to RMB 138.513 million in 2021, down 38.8% from RMB 226.262 million in 2020[13]. - Non-current assets decreased to RMB 57.113 million in 2021 from RMB 74.162 million in 2020, a drop of 22.9%[13]. - As of December 31, 2021, the company had distributable reserves of approximately RMB 762 million[40]. Market and Regulatory Environment - The ongoing impact of the COVID-19 pandemic has significantly affected the company's profitability and customer preferences[18]. - In 2021, only 755 game licenses were issued by the National Press and Publication Administration, a significant drop from 1,405 in 2020, indicating a tightening regulatory environment[22]. - The company plans to shift focus from single-player mobile game development to multiplayer mobile game development due to changing player preferences since the second quarter of 2020[23]. - The company faces risks related to foreign ownership restrictions in the mobile gaming sector under current Chinese laws[127]. - The board closely monitors developments in applicable Chinese laws and regulations to ensure compliance and control by Chinese investors[129]. - The company may face significant consequences if the contractual arrangements are deemed invalid under Chinese law[127]. Research and Development - The company invested in research and development to launch various new games, particularly focusing on multiplayer mobile games[18]. - Research and development expenses increased by approximately RMB 23.3 million, while sales and distribution expenses rose by RMB 19.1 million[178]. Shareholder Structure and Governance - The total number of shares issued by the company is at least 25% held by the public as of the report date[46]. - The company confirmed that all independent non-executive directors have maintained their independence as per the listing rules[52]. - The company’s board of directors includes a mix of executive and non-executive members, ensuring diverse governance[49]. - The ownership structure indicates significant control by a few key individuals, with Mr. Liang, Mr. Lu, and Ms. Su being recognized as acting in concert[64]. - The equity stakes of the major shareholders reflect a concentrated ownership structure, which may impact corporate governance and strategic decisions[68]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange and complied with all applicable provisions during the fiscal year 2021[168]. Business Strategy - The company aims to diversify its product offerings, especially in the multiplayer mobile gaming sector[18]. - The company completed the acquisition of 392,560,053 shares, representing approximately 71.90% of the total issued share capital, with no intention to expand or divest existing operations[23]. - The company remains optimistic about future growth opportunities, anticipating a rapid recovery once game licenses are resumed[23]. Revenue Sources and Customer Base - The company generated most of its revenue from the sale of virtual items in multiplayer mobile games during the fiscal year 2021[176]. - The company has not relied on any single customer, with transactions from any single customer not exceeding 10% of total revenue in fiscal year 2021[162]. - The largest supplier accounted for approximately 20.2% of the company's cost of revenue, while the top five suppliers accounted for 67.8%[164]. Compliance and Legal Matters - The company has complied with all disclosure requirements under the Listing Rules regarding connected transactions[84]. - The company has not entered into any management or administrative contracts concerning the majority of its business during the fiscal year 2021[151]. - The company has not established any equity-related agreements during the fiscal year 2021[171]. - The group has received exemptions from the Stock Exchange regarding strict compliance with announcement and independent shareholder approval requirements for transactions under the contractual arrangements[142].

Financial Performance - The company's revenue for the first half of 2021 was approximately RMB 31.2 million, a decrease of RMB 68.6 million or 68.7% compared to RMB 99.8 million in the first half of 2020[9]. - Gross profit for the first half of 2021 was RMB 8.3 million, down 73.0% from RMB 30.9 million in the same period last year[9]. - The company recorded a loss of approximately RMB 17.1 million in the first half of 2021, a decline of RMB 24.3 million or 337.5% compared to a profit of RMB 7.2 million in the first half of 2020[15]. - The company's revenue decreased from approximately RMB 998 million in the first half of 2020 to approximately RMB 312 million in the first half of 2021, a decline of about 68.7%[23]. - Gross profit fell from approximately RMB 309 million in the first half of 2020 to approximately RMB 83 million in the first half of 2021, a decrease of about 73.0%[23]. - The company recorded a loss of approximately RMB 171 million in the first half of 2021, compared to a profit of approximately RMB 72 million in the first half of 2020, a decline of about 337.5%[24]. - The net loss for the first half of 2021 was approximately RMB 17.1 million, compared to a profit of approximately RMB 7.2 million in the first half of 2020[50]. - The total comprehensive loss for the period amounted to RMB (18,183) thousand, compared to a gain of RMB 8,459 thousand in the same period of 2020[124]. Assets and Liabilities - Non-current assets as of June 30, 2021, were RMB 70.3 million, a decrease of 5.2% from RMB 74.2 million as of December 31, 2020[10]. - Total assets decreased by 7.7% to RMB 235.5 million as of June 30, 2021, compared to RMB 255.2 million at the end of 2020[10]. - Cash and cash equivalents decreased from approximately RMB 47.2 million as of December 31, 2020, to approximately RMB 15.5 million as of June 30, 2021[52]. - Total liabilities decreased to RMB 20,995,000 from RMB 26,743,000, a reduction of 21.6%[127]. - Net assets decreased to RMB 211,379,000 from RMB 226,262,000, a decrease of 6.6%[130]. - The company’s equity attributable to owners decreased to RMB 196,746,000 from RMB 215,195,000, a decline of 8.5%[130]. Revenue Sources - Revenue from mobile games dropped from approximately RMB 90.5 million in the first half of 2020 to approximately RMB 24.9 million in the first half of 2021, a decrease of about RMB 65.6 million or 72.5%[35]. - Digital media content distribution revenue fell from approximately RMB 9.3 million in the first half of 2020 to approximately RMB 6.3 million in the first half of 2021, a decline of about RMB 3.0 million or 32.2%[36]. - Revenue from mobile game development and operation was RMB 24,875,000, down 72.5% from RMB 90,329,000 in the previous year[158]. User Engagement - The number of paying players dropped significantly from 1,681,000 in the first half of 2020 to 41,400 in the first half of 2021, a decrease of 97.5%[28]. - Average monthly paying users decreased from approximately 280,200 in the first half of 2020 to 6,900 in the first half of 2021, also a decline of 97.5%[28]. - Average revenue per paying user (ARPPU) increased from approximately RMB 60.07 in the first half of 2020 to RMB 542.29 in the first half of 2021, an increase of 802.8%[29]. Operational Challenges - The company faced operational disruptions due to the COVID-19 pandemic, delaying the launch of a new multiplayer mobile game until June 2021[16]. - The decline in revenue was primarily due to a significant drop in earnings from mobile game development and operations, which decreased by approximately RMB 655 million[23]. - The company faced risks including new policies affecting the mobile gaming industry and reliance on distribution channels, which could adversely impact operations and financial performance[68]. Strategic Initiatives - The company aims to become a leading digital entertainment content provider, with the mobile gaming market in China projected to grow from RMB 239.6 billion in 2020 to RMB 432.1 billion by 2025, representing a CAGR of 12.5%[16]. - The company plans to actively seek collaborative opportunities to stabilize and diversify revenue streams in response to increasing industry competition and regulatory changes[16]. - The company plans to accelerate the development and launch of new multiplayer mobile games, with three additional titles expected to be released in 2021[23]. - The company aims to enhance its competitiveness in the multiplayer mobile gaming sector by launching new titles and adapting to changing player preferences[23]. Research and Development - Research and development expenses increased by approximately RMB 102 million in the first half of 2021 compared to the same period in 2020, reflecting a rise of 369.9%[32]. - Research and development expenses increased significantly to RMB 12,980 thousand, compared to RMB 2,762 thousand in the same period last year, reflecting a focus on new product development[110]. Shareholder Information - As of June 30, 2021, major shareholders held 61.85% of the company's shares, indicating significant insider ownership[71]. - The major shareholders collectively own 86.02% of the capital contribution in Guangzhou Jiuzun, as per the second confirmation letter of concerted action[78]. - The board is unaware of any arrangements that may lead to a change in control of the company in the future[87].

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].