Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 545,294,000, a decrease of 30.3% compared to RMB 782,764,000 in 2023[4] - Gross profit for the same period was RMB 252,062,000, down 20.7% from RMB 318,054,000 in the previous year[4] - Adjusted net loss increased by 109.3% to RMB 21,102,000 from RMB 10,081,000 year-on-year[4] - Adjusted EBITDA showed a loss of RMB 23,070,000, an increase of 87.9% compared to RMB 12,279,000 in 2023[4] - The company's revenue for the fiscal year ending December 31, 2024, was RMB 545.3 million, a decrease of 30.3% compared to RMB 782.8 million for the fiscal year ending December 31, 2023[17] - The average quarterly active accounts decreased to 6.3 million in 2024, down 13.7% from 7.3 million in 2023[14] - The average quarterly paying accounts fell to 0.8 million in 2024, a decline of 27.3% from 1.1 million in 2023[14] - The average revenue per paying account was RMB 163.0 in 2024, down 7.4% from RMB 176.1 in 2023[14] - The gross profit for the fiscal year ending December 31, 2024, was RMB 252.1 million, compared to RMB 318.1 million in 2023, with a gross margin of 46.2% in 2024, up from 40.6% in 2023[21] - The company's operating loss for the fiscal year ending December 31, 2024, was RMB 42.8 million, compared to an operating loss of RMB 55.1 million in 2023[15] - The company reported a net loss of RMB 27.96 million for the fiscal year ending December 31, 2024, compared to a net loss of RMB 31.4 million in 2023[16] - The net loss for the year ended December 31, 2024, was RMB 28.0 million, compared to a net loss of RMB 31.4 million for the year ended December 31, 2023, reflecting an improvement[33] - The adjusted net loss for the year ended December 31, 2024, was RMB 21.1 million, an increase of 109.3% from RMB 10.1 million for the year ended December 31, 2023[34] Assets and Liabilities - Non-current assets rose to RMB 819,906,000 in 2024 from RMB 585,242,000 in 2023, indicating a significant increase[5] - Total assets decreased to RMB 1,875,051,000 in 2024 from RMB 1,920,099,000 in 2023[5] - Total liabilities as of December 31, 2024, were RMB 275.966 million, compared to RMB 269.064 million as of December 31, 2023, resulting in a debt-to-asset ratio of 15%[35] - Cash and cash equivalents as of December 31, 2024, were RMB 495.7 million, a decrease from RMB 966.0 million as of December 31, 2023[36] - The company had no bank loans or other borrowings as of December 31, 2024[38] - Current liabilities increased from RMB 239,218,000 to RMB 264,636,000, an increase of approximately 10.6%[52] - Total liabilities increased slightly from RMB 269,064,000 to RMB 275,966,000, an increase of approximately 2.7%[52] - The company reported a total equity of RMB 1,599,085,000, down from RMB 1,651,035,000, a decrease of about 3.2%[52] Revenue Breakdown - Revenue from mainland China was RMB 509,892,000, down 32.5% from RMB 755,855,000 in 2023, while revenue from regions outside mainland China increased to RMB 35,402,000 from RMB 26,909,000[60] - The online entertainment business contributed 71.5% of total revenue in 2024, down from 82.6% in 2023[61] - The top three virtual worlds contributing to revenue were: Aobi Island mobile game (27.9%), Aoqi Legend (24.6%), and Aoqi Legend mobile game (19.0%) for the year ended December 31, 2024[62] Expenses - Sales and marketing expenses for the year ended December 31, 2024, were RMB 57.5 million, a decrease of 9.7% from RMB 63.7 million for the year ended December 31, 2023, primarily due to reduced employee benefits expenses[22] - Administrative expenses for the year ended December 31, 2024, were RMB 57.8 million, a decrease of 24.1% from RMB 76.2 million for the year ended December 31, 2023, mainly due to reduced employee benefits related to restricted share units[23] - Research and development expenses for the year ended December 31, 2024, were RMB 177.0 million, a decrease of 23.4% from RMB 231.1 million for the year ended December 31, 2023, primarily due to reduced employee benefits expenses[24] - The total administrative and R&D expenses amounted to RMB 585,544,000 in 2024, down from RMB 835,762,000 in 2023, indicating a reduction of 30.0%[63] Employee and Shareholder Information - Employee costs for the year ended December 31, 2024, amounted to approximately RMB 281.0 million, representing 51.5% of the company's revenue, compared to RMB 359.4 million and 45.9% in 2023[45] - The company has 644 full-time employees as of December 31, 2024, with 51.2% in research and development roles[45] - The board has proposed a special dividend of HKD 0.012 per share for the year ended December 31, 2023, subject to shareholder approval[47] - A special dividend of HKD 0.012 per share has been proposed for the fiscal year ending December 31, 2024, subject to shareholder approval[91] Future Plans and Strategies - The company plans to enhance product competitiveness by focusing on game segments and integrating traditional Chinese culture into core IPs[12] - The company is actively preparing multiple products for future release and aims to strengthen its overseas presence[12] - There are currently no major investment or acquisition plans, but the company will continue to seek new business development opportunities[44] Tax and Compliance - The company has recognized a deferred tax liability for Chinese withholding tax on undistributed profits amounting to approximately RMB 1,224,512,000 as of December 31, 2024, compared to RMB 1,197,103,000 for the previous year[73] - Guangzhou Baitian and Guangzhou Tianti, both recognized as "high-tech enterprises," are eligible for a preferential income tax rate of 15% for the year ended December 31, 2024[68][69] - The company has applied for super deductions for qualified R&D expenses, allowing a deduction of 175% for tax purposes, which may impact future taxable profits[72] - The company’s income tax provision in Hong Kong for the year ended December 31, 2024, was calculated based on a two-tiered profits tax system, with the first RMB 2 million of profits taxed at 8.25% and profits above that taxed at 16.5%[72] Governance and Compliance - The company has adopted the corporate governance code and confirmed compliance with all provisions, except for the separation of the roles of Chairman and CEO[87][88] - The company has established written guidelines for employee securities trading, ensuring no violations were detected during the fiscal year ending December 31, 2024[86] - The annual general meeting is scheduled for June 27, 2025, with a suspension of share transfer registration from June 24 to June 27, 2025[90] - The company’s annual report for the fiscal year ending December 31, 2024, will be available on its website and the Hong Kong Stock Exchange website[92]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任 何責任。 動 （於開曼群島註冊成立的有限公司） （股份代號：2100） 百奧家庭互動有限公司（「百奧」或「本公司」，連同其附屬公司及其於中國的控制實體統 稱「本集團」）董事會（「董事會」）茲通告謹定於二零二五年三月二十七日（星期四）舉行董 事會會議，以考慮及通過本集團截至二零二四年十二月三十一日止年度之全年業績及 建議之特別股息（如有），以及處理其他事項。 承董事會命 百奧家庭互動有限公司 主席、首席執行官兼執行董事 戴堅 香港，二零二五年三月十四日 於本公告日期，本公司執行董事為戴堅先生、吳立立先生及李沖先生；本公司獨立非執行董事為劉千里女士、 王慶博士、馬肖風先生及蔚成先生。 董事會會議召開日期 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任 何責任。 動 （於開曼群島註冊成立的有限公司） （股份代號：2100） 公 告 — 續訂持續關連交易 背景資料 茲提述本公司日期為二零二四年二月一日及二零二四年六月二十八日的公告，內容有 關本公司與騰訊集團就手遊平台相關服務及支付相關服務訂立的持續關連交易。 持續關連交易協議 董事會欣然宣佈，於二零二五年一月二十日，本公司已同意續訂本集團與騰訊集團訂 立的多項現有協議項下的持續關連交易。 二零二五年奧奇傳說手遊合作協議的期限為三年，自二零二五年二月一日起計至二零 二八年一月三十一日止。 二零二五年廣州百田 — 微信支付服務協議的期限為一年，自二零二五年二月二十四 日起計至二零二六年二月二十三日止。 上市規則的涵義 於本公告日期，騰訊間接佔本公司已發行股本總額約11.37%，且根據上市規則第十四 A章，騰訊（及其聯繫人，包括騰訊計算機及財付通）為本公司關連人士。因此，本集 團與騰訊集團之間的交易構成本公司的持續關連 ...

（於開曼群島註冊成立的有限公司） （股份代號：2100） 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任 何責任。 動 百奧家庭互動有限公司 主席、首席執行官及執行董事 戴堅 香港，二零二四年十二月十日 於本公告日期，本公司執行董事為戴堅先生、吳立立先生及李沖先生；本公司獨立非執行董事為劉千里女士、 王慶博士、馬肖風先生及蔚成先生。 更改香港主要營業地點的地址 百奧家庭互動有限公司（「百奧」或「本公司」）董事會（「董事會」）謹此宣佈，由二零二五 年一月十日起，本公司於香港的主要營業地點的地址將更改為香港銅鑼灣希慎道33號利 園一期19樓1912室。本公司的電話號碼、傳真號碼及網站均維持不變。 承董事會命 ...

Financial Performance - Revenue for the first half of 2024 was RMB 272,284 thousand, a decrease of 39.6% compared to RMB 450,609 thousand in 2023[7] - Gross profit for the same period was RMB 125,490 thousand, down 25.8% from RMB 169,229 thousand in 2023[7] - Operating loss narrowed to RMB 25,675 thousand from RMB 38,905 thousand, a reduction of 34.0% year-over-year[7] - Adjusted net loss increased to RMB 9,770 thousand, a significant rise of 209.9% compared to RMB 3,153 thousand in 2023[7] - Total revenue for the six months ended June 30, 2024, was RMB 272,284,000, a decrease of 39.6% from RMB 450,609,000 in the same period last year[52] - Online entertainment business revenue was RMB 272.1 million, also down 39.6% from RMB 450.5 million year-on-year, primarily due to the natural decline in older games and no new game launches during the reporting period[52] - Gross profit for the six months ended June 30, 2024, was RMB 125.5 million, down from RMB 169.2 million for the same period in 2023, with a gross margin increase to 46.1% from 37.6%[54] - Adjusted net loss for the period was RMB 9.8 million, compared to a loss of RMB 3.2 million in the previous year[51] - The total comprehensive loss for the period was RMB (14,908) thousand, compared to RMB (19,988) thousand in the previous period, indicating an improvement in financial performance[93] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 1,886,560 thousand, a slight decrease from RMB 1,920,099 thousand at the end of 2023[9] - Total liabilities as of June 30, 2024, were RMB 275.1 million, with a debt-to-asset ratio of 15%, compared to 14% as of December 31, 2023[67] - Cash and cash equivalents totaled RMB 821.2 million as of June 30, 2024, down from RMB 966.0 million as of December 31, 2023[68] - The company had no bank loans or other borrowings as of June 30, 2024[70] - The company reported a decrease in cash and cash equivalents to RMB 821,188 thousand as of June 30, 2024, down from RMB 1,244,088 thousand at the beginning of the year, representing a decline of approximately 34%[94] - The company’s total liabilities increased, impacting the overall financial leverage and risk profile, although specific figures were not disclosed in the provided data[93] Research and Development - The company has significantly increased its investment in R&D, focusing on cutting-edge technologies such as AI, automation programming, and 3D modeling, which has improved project efficiency and quality[14] - Research and development expenses decreased by 21.2% to RMB 99.6 million for the six months ended June 30, 2024, compared to RMB 126.4 million for the same period in 2023[56] - The company plans to enhance its core IP competitive advantages and continue exploring AI technology to empower product development in the second half of 2024[47] Market Strategy and Development - The company continues to focus on high-quality game content development, particularly in female-oriented and pet collection game segments[11] - Future strategies include leveraging unique IP strategies to create innovative products aimed at young users[6] - For the second half of 2024, the company plans to deepen its focus on its core gaming segments and expand both domestically and internationally, enhancing game content and cultural integration[15] - The company aims to continuously invest in R&D to strengthen its technical and operational capabilities, thereby solidifying its market position in niche segments[15] - The gaming industry is experiencing a moderate recovery, with improved confidence due to the normalization of game license issuance, leading to new growth opportunities for companies with strong R&D capabilities[46] Employee and Management - The company had 699 full-time employees as of June 30, 2024, with 54.6% in R&D roles[76] - Employee costs for the six months ended June 30, 2024, were approximately RMB 151.6 million, representing 55.7% of the revenue, compared to RMB 206.4 million and 45.8% in the same period of 2023[76] - The total remuneration for key management personnel was HKD 3,785 million, a decrease from HKD 4,647 million in the previous period, representing a decline of approximately 18.5%[154] Shareholder Information - A special dividend of HKD 0.012 per share was approved for the year ended December 31, 2023, equivalent to approximately RMB 0.011[79] - The company declared a special dividend of HKD 0.012 per ordinary share for the six months ended June 30, 2024, totaling RMB 31,453,000, down from RMB 39,038,000 in 2023, a decrease of 19.4%[127][128] - As of June 30, 2024, the total number of issued ordinary shares remained at 2,872,844,000, with 153,239,936 shares held under the restricted share unit plan[165] Corporate Governance and Compliance - The audit committee has reviewed the interim financial information and confirmed compliance with International Accounting Standard 34[157] - The company has adopted the corporate governance code as per the listing rules, ensuring high standards of ethics and transparency[159] Risk Management - The group faces multiple financial risks, including market risk, credit risk, and liquidity risk, which are detailed in the annual financial statements[104] - The management has made significant judgments and estimates regarding the application of accounting policies, which may differ from actual results[102] Other Information - The company has no significant contingent liabilities as of June 30, 2024, and December 31, 2023[155] - The company has not reported any significant new product launches or technological advancements during the reporting period, focusing instead on operational adjustments[93] - The company continues to seek new business development opportunities[75]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 272,284 thousand, a decrease of 39.6% compared to RMB 450,609 thousand in the same period last year[1]. - Gross profit for the same period was RMB 125,490 thousand, down 25.8% from RMB 169,229 thousand year-on-year[1]. - Adjusted net loss increased by 209.9% to RMB 9,770 thousand from RMB 3,153 thousand in the previous year[1]. - The net loss for the six months ended June 30, 2024, was RMB 14.9 million, compared to a net loss of RMB 19.9 million in the same period last year[10]. - The company reported a net loss of RMB 14.9 million for the first half of 2024, compared to a net loss of RMB 19.9 million in the same period of 2023[41]. - Adjusted net loss for the six months ended June 30, 2024, was RMB 9.8 million, an increase of 206.3% from RMB 3.2 million for the same period in 2023[25]. - Basic loss per share improved to RMB (0.0055) in 2024 from RMB (0.0075) in 2023, indicating a 26.7% reduction in loss per share[70]. - The company reported a loss attributable to shareholders of RMB 14,908,000 for the six months ended June 30, 2024, compared to a loss of RMB 19,988,000 for the same period in 2023, representing a 25.8% improvement[70]. User Engagement and Product Development - The company maintained a focus on user-centric R&D and continued to enhance its product matrix, particularly in female-oriented and pet collection games[3]. - The core self-developed IP "Aoki Legend" showed continuous revenue growth, demonstrating strong vitality with new content updates receiving positive player feedback[3]. - The company launched the "AI Smart Assistant" in the game "Aobi Island: Dream Kingdom," enhancing user experience and reducing labor costs in customer service[4]. - The company aims to integrate traditional Chinese cultural elements into its games, enhancing user engagement and market reputation[4]. - Future strategies include a continued focus on AI technology to enhance product development and operational capabilities[6]. Market and Industry Trends - The gaming industry is experiencing a gradual recovery, supported by improved policies and a stable market environment, creating new growth opportunities for companies with strong R&D capabilities[5]. - The company plans to accelerate its international market expansion, with multiple products currently in active development and testing[6]. Operational Metrics - The average quarterly active accounts as of June 30, 2024, were approximately 5.7 million, a decrease of 24.0% compared to 7.5 million in the same period last year[8]. - The average quarterly paying accounts as of June 30, 2024, were approximately 0.8 million, down 33.3% from 1.2 million year-over-year[8]. - The average revenue per paying account for the six months ended June 30, 2024, was approximately RMB 164.6, down 12.8% from RMB 188.7 year-over-year[8]. Expenses and Cost Management - Research and development expenses for the six months ended June 30, 2024, were RMB 99.6 million, a decrease of 21.2% from RMB 126.4 million year-over-year[17]. - Selling and marketing expenses for the six months ended June 30, 2024, were RMB 20.2 million, down 50.1% from RMB 40.5 million in the previous year[15]. - Administrative expenses for the six months ended June 30, 2024, were RMB 32.0 million, a decrease of 23.6% from RMB 41.9 million year-over-year[16]. - Employee costs for the first half of 2024 amounted to approximately RMB 151.6 million, representing 55.7% of the company's revenue, compared to RMB 206.4 million and 45.8% in the same period of 2023[35]. - Distribution costs and payment processing fees dropped to RMB 97,219,000 in 2024 from RMB 210,369,000 in 2023, reflecting a decrease of 53.8%[60]. Assets and Liabilities - Total liabilities as of June 30, 2024, were RMB 275.1 million, with a debt-to-asset ratio of 15%, up from 14% as of December 31, 2023[27]. - Cash and cash equivalents as of June 30, 2024, totaled RMB 821.2 million, down from RMB 966.0 million as of December 31, 2023[28]. - Non-current assets increased to RMB 628.5 million as of June 30, 2024, from RMB 585.2 million as of December 31, 2023[42]. - Current assets decreased to RMB 1,258.1 million as of June 30, 2024, from RMB 1,334.9 million as of December 31, 2023[42]. - Total liabilities decreased to RMB 254.8 million as of June 30, 2024, from RMB 275.1 million as of December 31, 2023[43]. Dividends and Shareholder Returns - The company approved a special dividend of HKD 0.012 per share for the year ending December 31, 2023, equivalent to approximately RMB 0.011[37]. - The company declared a special dividend of HKD 0.012 per ordinary share for the six months ended June 30, 2024, down from HKD 0.015 in 2023, resulting in total dividends of approximately RMB 31,453,000 compared to RMB 39,038,000 in the previous year, a decrease of 19.4%[72][73]. - The company did not declare any interim dividend for the six months ended June 30, 2024, consistent with the previous year[81]. Compliance and Financial Reporting - The audit committee reviewed the interim financial statements and confirmed compliance with International Accounting Standard 34 for the six months ended June 30, 2024[77]. - The group will adopt revised International Financial Reporting Standards starting January 1, 2024, with no significant impact expected on the group's financial statements[46]. - The group anticipates that the new standards effective from January 1, 2025, and January 1, 2026, will not have a significant impact on its interim consolidated financial information[47].

Financial Performance - For the fiscal year ending December 31, 2023, the company's revenue was RMB 782.8 million, a decrease of 16.6% compared to RMB 937.8 million for the fiscal year ending December 31, 2022[28]. - The gross profit for the fiscal year 2023 was RMB 318.1 million, down from RMB 360.6 million in 2022, reflecting a decline in profitability[3]. - The operating loss for 2023 was RMB 55.1 million, compared to a loss of RMB 37.1 million in 2022, indicating a worsening financial performance[3]. - The adjusted net loss for the year was RMB 10.1 million, a significant decrease from a profit of RMB 61.7 million in the previous year[3]. - The income tax expense for the year ended December 31, 2023, was RMB 8.0 million, compared to an income tax benefit of RMB 7.7 million for the year ended December 31, 2022[35]. - The adjusted net loss for the year ended December 31, 2023, was RMB 10.1 million, compared to an adjusted net profit of RMB 61.7 million for the year ended December 31, 2022[37]. - The net financial income for the year ended December 31, 2023, was RMB 33.0 million, compared to RMB 39.7 million for the year ended December 31, 2022[59]. - The online entertainment business costs for the year ended December 31, 2023, were RMB 464.6 million, a decrease of 19.6% from RMB 578.0 million for the year ended December 31, 2022[55]. - The average quarterly paying accounts for the virtual world as of December 31, 2023, were approximately 1.1 million, a decrease of about 31.3% compared to the year ended December 31, 2022[52]. - The company reported a cash reserve of RMB 464.85 million as of December 31, 2023, down from RMB 492.63 million in 2022[97]. Strategic Focus and Innovation - The company plans to continue focusing on its core segments and enhance product innovation and R&D capabilities to strengthen its market position[19]. - The company aims to integrate traditional Chinese culture into its games, expanding its international user base through localized versions of its products[20]. - The company is exploring the application of generative AI technology to improve game development efficiency and enhance its competitive edge in the market[21]. - The company will increase investment in independent game development and seek breakthroughs in the application of AIGC technology in the gaming industry for 2024[22]. - The company plans to launch multiple products in the global market, including the 3D multiplayer pet RPG mobile game "Aola Star 2" in the domestic market[51]. - The company is committed to exploring new strategies for market expansion and product development to enhance its competitive position in the gaming industry[104]. - The company aims to innovate comprehensively in gameplay, user experience, and storyline content to provide a better experience for users[198]. - The company continues to respond to the increasing market demand for high-quality content[198]. Shareholder and Governance Information - The company has a significant shareholder, Dai Jian, holding 687,944,180 shares, representing 23.95% of the total equity[133]. - Wu Lili, another major shareholder, owns 365,596,180 shares, accounting for 12.73% of the total equity[133]. - Li Chong holds 114,816,360 shares, which is 4.00% of the total equity, along with an additional 15,000,000 shares from a restricted share unit plan[133]. - TMF (Cayman) Ltd. holds 1,193,824,720 shares, representing 41.56% of the total issued share capital[163]. - DAE Holding Investments Limited and Stmoritz Investment Limited each hold 687,944,180 shares, accounting for 23.95% of the total issued share capital[163]. - Tencent Holdings Limited owns 326,063,280 shares, which is 11.35% of the total issued share capital[177]. - The board of directors has confirmed the independence of all independent non-executive directors as of the report date[146]. - The board of directors will review the dividend policy periodically to ensure it aligns with the company's financial health[113]. - The company has not entered into any management contracts related to the management of the group’s business[155]. - There are no known changes in director information that require disclosure under the listing rules[149]. Dividend Policy and Financial Management - The board proposed a special dividend of HKD 0.012 per share, subject to shareholder approval at the annual general meeting on June 26, 2024[90]. - The company has adopted a dividend policy since December 20, 2018, allowing the board discretion in declaring dividends based on various financial factors[91]. - The company’s financial performance and cash flow status are critical factors in determining dividend declarations[92]. - The company has maintained a dividend policy that requires sufficient cash reserves to meet operational needs and future growth[112]. - The company has a comprehensive financial risk management policy outlined in its annual report[109]. Operational Highlights - The company operates a range of online virtual worlds, including multiple popular game titles, contributing to its overall business strategy[24]. - The company has engaged in cross-brand collaborations with 11 IPs and brands during the year, significantly increasing user engagement and brand influence[48]. - The company has not experienced any significant disputes with suppliers or customers during the fiscal year ending December 31, 2023[100]. - The company has no significant contingent liabilities, guarantees, or lawsuits against it as of December 31, 2023[43]. - There were no purchases, redemptions, or sales of any listed securities by the company or any member of the group during the fiscal year ending December 31, 2023[120]. - The company has not made any charitable donations during the fiscal year ending December 31, 2023[121]. - The company has not disclosed any significant transactions or arrangements involving directors or their close associates during the fiscal year ending December 31, 2023[124]. Restricted Share Unit Plans - The company has adopted various restricted share unit plans to incentivize directors and employees[168]. - The effective period of the pre-IPO restricted share unit plan was until September 30, 2023, and it was terminated on March 3, 2023[169]. - The post-IPO restricted share unit plan allows for a maximum of 2% of the company's issued share capital to be awarded to any participant[187]. - The post-IPO restricted share unit plan was terminated on June 27, 2023, and replaced by the 2023 restricted share unit plan[185]. - The company has granted 10,000,000 restricted share units to Dai Jian, which are now fully vested[159]. - Li Chong has been granted 15,000,000 restricted share units, with 47.5% of them having vested as of December 31, 2023[160]. - The total number of restricted share units that can be granted under the pre-IPO plan is capped at 188,733,600 shares[169]. - As of December 31, 2023, the company held 75,015,620 shares under the pre-IPO restricted share unit plan and 22,802,000 shares under the new restricted share unit plan[184]. - The company has appointed Huiju Trust Co., Ltd. as the trustee for managing the restricted share unit plans[187]. - The board of directors has the authority to adjust and redefine the vesting schedule and criteria for the restricted share units[187].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market index [5]. Core Views - The company's financial performance in 2023 was under pressure due to the absence of new game launches and the natural decline in revenue from existing games. The total revenue for 2023 was 783 million, a year-over-year decrease of 16.6%, with a net loss attributable to shareholders of 31 million, compared to a profit of 10 million in the previous year [3][9]. - The company is focusing on product development and has seven games in the pipeline, with "Aola Star 2" expected to launch within the year. This game is anticipated to leverage its existing fan base and enhance user engagement [4][9]. - The company is restructuring its global publishing team to accelerate its overseas expansion, with plans to release international versions of existing games and prepare new titles for foreign markets [4][9]. Financial Summary - The company reported a sales cost of 465 million in 2023, down 19.6% year-over-year, leading to a gross margin increase to 40.6%. The average quarterly active users were 7.3 million, a decrease of 27.7% year-over-year, while the average revenue per paying user increased by 15.9% to 176.1 [3][10]. - The revenue projections for 2024-2026 are 1,004 million, 1,104 million, and 1,187 million respectively, with expected net profits of 23 million, 35 million, and 54 million. The earnings per share (EPS) are projected to be 0.01, 0.01, and 0.02 respectively, with corresponding P/E ratios of 27, 18, and 12 [9][10].

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 782,764 thousand, a decrease of 16.6% compared to RMB 938,759 thousand in 2022[10] - Gross profit for the same period was RMB 318,054 thousand, down 11.8% from RMB 360,628 thousand in the previous year[10] - Operating loss (non-IFRS measure) increased to RMB 55,126 thousand from RMB 37,082 thousand, representing a 48.7% increase in losses[10] - Adjusted net loss for the year was RMB 10,081 thousand, a significant decline of 116.3% compared to a profit of RMB 61,744 thousand in 2022[10] - Adjusted EBITDA for the year was RMB (12,279) thousand, down 132.8% from RMB 37,485 thousand in the previous year[10] - The company reported a loss of RMB 31.4 million for the year ended December 31, 2023, compared to a profit of RMB 10.3 million for the year ended December 31, 2022[60] - Basic and diluted loss per share for 2023 was RMB 0.0117, compared to earnings of RMB 0.0039 in 2022[82] - The net loss attributable to shareholders was RMB 31,478,000, compared to a profit of RMB 10,167,000 in the previous year[82] Assets and Equity - Total assets as of December 31, 2023, were RMB 1,920,099 thousand, a decrease from RMB 2,056,267 thousand in 2022[13] - Total equity decreased to RMB 1,651,035 thousand from RMB 1,698,084 thousand year-over-year[13] - Cash and cash equivalents (excluding bank overdrafts) were RMB 966,042,000, down from RMB 1,303,711,000 in 2022[85] - The company’s short-term deposits increased to RMB 261.8 million as of December 31, 2023, from RMB 110.0 million as of December 31, 2022[63] Revenue Sources and Market Performance - The online entertainment business revenue was RMB 782.5 million, down 16.6% from RMB 937.8 million, primarily due to the natural decline of older games and no new game launches during the year[36] - The contribution of major virtual worlds to total revenue was 82.6% in 2023, compared to 76.5% in 2022, indicating an increase in reliance on key products[113] - The top revenue-generating game, "Aobi Island Mobile," accounted for 35.9% of total revenue in 2023, down from 40.3% in 2022[114] - The average quarterly active accounts for the online virtual world decreased to approximately 7.3 million, a decline of about 27.7% compared to the previous year[23] - The average quarterly paying accounts were approximately 1.1 million, down about 31.3% year-over-year[29] - The average revenue per paying account increased to RMB 176.1, reflecting a growth of approximately 15.9% year-over-year[24] Expenses and Cost Management - The cost of sales for the year ended December 31, 2023, was RMB 464.7 million, a decrease of 19.6% from RMB 578.1 million for the previous year[37] - Employee costs for the year ended December 31, 2023, were approximately RMB 359.4 million, accounting for 45.9% of the revenue, compared to RMB 392.6 million and 41.8% of revenue for the year ended December 31, 2022[76] - Total administrative and R&D expenses amounted to RMB 835,762,000 in 2023, compared to RMB 979,876,000 in 2022, showing a reduction of approximately 14.7%[111] - Research and development expenses increased by 0.5% to RMB 231.1 million for the year ended December 31, 2023, compared to RMB 230.0 million for the previous year[43] Taxation and Financial Position - The income tax expense for the year ended December 31, 2023, was RMB 8.0 million, compared to an income tax benefit of RMB 7.7 million for the previous year[52] - The company benefited from a 15% preferential income tax rate as a "High-tech Enterprise" for the year ended December 31, 2023[125] - The company recognized deferred tax assets related to unutilized tax losses amounting to RMB 368,842 thousand as of December 31, 2023, up from RMB 161,433 thousand in 2022[122] Dividends and Shareholder Information - The company declared a special dividend of HKD 0.015 per share for the year ending December 31, 2022, which was paid on July 20, 2023[79] - The board proposed a special dividend of HKD 0.012 per share for the year ending December 31, 2023, pending shareholder approval on June 26, 2024[79] - Dividends paid for the year 2023 were RMB 36,968,000, compared to RMB 45,087,000 in 2022, a decrease of about 18.1%[148] Future Outlook and Strategic Initiatives - The company plans to enhance its game development capabilities by exploring AIGC technology to meet diverse user needs more efficiently[21] - The company aims to continue enriching its product matrix by integrating Chinese cultural elements into its games for a global audience[22] - The company has no significant future plans for major investments or acquisitions as of December 31, 2023, but will continue to seek new business development opportunities[74]

Financial Performance - Revenue for the first half of 2023 reached RMB 450,609 thousand, representing a 55.6% increase compared to RMB 289,641 thousand in the same period of 2022[50]. - Gross profit for the same period was RMB 169,229 thousand, up 43.7% from RMB 117,738 thousand year-over-year[50]. - The adjusted net loss decreased to RMB 3,153 thousand, a 59.8% improvement from RMB 7,834 thousand in the previous year[50]. - The company reported an adjusted EBITDA loss of RMB 10,485 thousand, which is 41.8% better than the loss of RMB 18,002 thousand in the prior year[50]. - The net loss for the six months ended June 30, 2023, was RMB 19.9 million, a significant improvement from a net loss of RMB 39.9 million in the same period of 2022[1]. - The total comprehensive loss for the six months ended June 30, 2023, was RMB 19.91 million, compared to RMB 39.85 million for the same period in 2022[66]. - The company's revenue for the six months ended June 30, 2023, was RMB 450.6 million, an increase of 55.6% compared to RMB 289.6 million for the same period in 2022[85]. - The adjusted net loss for the six months ended June 30, 2023, was RMB 3.15 million, an improvement from RMB 7.83 million for the same period in 2022[66]. Assets and Liabilities - The company reported a total asset of RMB 2,002,313 thousand as of June 30, 2023, a decrease of 2.6% from RMB 2,056,267 thousand as of December 31, 2022[35]. - The total liability amounted to RMB 344,349 thousand, a decrease of 3.9% from RMB 358,183 thousand in the previous period[35]. - Non-current assets were reported at RMB 463,364 thousand, a slight decrease from RMB 476,709 thousand in the previous period[35]. - Current assets totaled RMB 1,538,949 thousand, down from RMB 1,579,558 thousand as of December 31, 2022[35]. - Total liabilities as of June 30, 2023, were RMB 344.3 million, down from RMB 358.2 million as of December 31, 2022[98]. - The company's cash and cash equivalents (excluding bank overdrafts) were RMB 1,244,089 thousand as of June 30, 2023, down from RMB 1,303,711 thousand at the end of 2022, a decrease of approximately 4.5%[169]. Research and Development - As of June 30, 2023, the company employed 777 R&D personnel, accounting for approximately 81.4% of its workforce, focusing on high-quality game development[53]. - Research and development expenses for the six months ended June 30, 2023, were RMB 126.4 million, an increase of 20.4% from RMB 104.9 million in the same period of 2022[90]. - The company plans to enhance its game development capabilities and explore better applications of AIGC technology in game development[38]. - Future strategies include continuous investment in R&D and the application of AIGC technology to improve game quality and development efficiency[53]. Market Strategy - The company maintained a focus on three key gaming segments: female-oriented games, pet collection and nurturing games, and ACG (Anime, Comic, and Games) games, aiming to strengthen its market position[36]. - The company aims to expand both domestic and overseas markets while continuously investing in independent game development[38]. - The company emphasized its commitment to developing high-quality IP games to enhance user experience and engagement[36]. - The company aims to enhance its IP influence and provide unique user experiences through cultural and creative integrations[55]. Employee and Corporate Governance - The management expressed gratitude to employees, partners, and investors for their ongoing support and trust[55]. - The total employee costs amounted to RMB 206.4 million, representing 45.8% of the revenue, compared to RMB 201.0 million and 69.4% in the same period of 2022[25]. - The total contributions to the employee social insurance plan in the first half of 2023 were approximately RMB 37.3 million, an increase from RMB 30.8 million in the first half of 2022[25]. - The company has not been involved in any significant litigation or arbitration matters as of June 30, 2023[80]. Financial Risks and Management - The group faces multiple financial risks, including market risk (primarily currency risk), credit risk, and liquidity risk[199]. - The financial risk management section indicates that the interim consolidated financial information does not include all financial risk management data required for annual financial statements[183]. - There have been no changes to the risk management department or any risk management policies since December 31, 2022[200]. Corporate Social Responsibility - The company is committed to corporate social responsibility and promoting traditional Chinese culture through innovative gaming experiences[55].