[Financial Summary](index=1&type=section&id=Financial%20Summary) [Income Statement Summary](index=1&type=section&id=Income%20Statement%20Summary) The company's H1 2023 revenue significantly increased by 55.6% year-over-year, with gross profit up 43.7%, while operating and net losses narrowed considerably, and adjusted net loss decreased by nearly 60% Income Statement Summary (RMB thousands) | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 450,609 | 289,641 | +55.6% | | Gross Profit | 169,229 | 117,738 | +43.7% | | Operating Loss | (38,905) | (61,884) | -37.1% (Loss narrowed) | | Adjusted Net Loss | (3,153) | (7,834) | -59.8% (Loss narrowed) | | Adjusted EBITDA | (10,485) | (18,002) | -41.8% (Loss narrowed) | [Balance Sheet Summary](index=2&type=section&id=Balance%20Sheet%20Summary) As of June 30, 2023, the company's total assets were RMB 2.002 billion, slightly down from the end of 2022, with total liabilities at RMB 344 million and total equity at RMB 1.658 billion, maintaining a stable financial structure Balance Sheet Summary (RMB thousands) | Indicator | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 463,364 | 476,709 | | Current assets | 1,538,949 | 1,579,558 | | **Total Assets** | **2,002,313** | **2,056,267** | | **Equity and Liabilities** | | | | Total Equity | 1,657,964 | 1,698,084 | | Total Liabilities | 344,349 | 358,183 | | **Total Equity and Liabilities** | **2,002,313** | **2,056,267** | [Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) [Business Overview](index=3&type=section&id=Business%20Overview) In H1 2023, Baio continued to deepen its focus on female-oriented, pet collection, and ACG game genres, enhancing brand reputation through IP collaborations and cultural integration, while actively expanding overseas markets and applying AIGC technology for efficiency and cost reduction - The company's core value proposition focuses on IP companionship, immersive experience, and casual social interaction, targeting female-oriented, pet collection and nurturing, and ACG game segments[32](index=32&type=chunk) - Cross-industry collaborations with Fangsuo Bookstore, Guangdong Lion Dance, and CCTV Animation integrated traditional culture with games, enhancing IP brand reputation and market popularity[32](index=32&type=chunk) - Actively expanding overseas markets, *Food Fantasy* has launched multi-language versions and achieved good rankings in several countries, while the company also uses AIGC technology to assist product development and distribution for efficiency and cost reduction[43](index=43&type=chunk) [Industry Trends](index=4&type=section&id=Industry%20Trends) In H1 2023, China's game market showed signs of recovery, with user scale reaching a new high, but domestic sales revenue slightly decreased year-over-year, while overseas market self-developed game revenue declined due to economic downturn and increased competition - China's game user base reached **668 million**, a **0.35% YoY increase**, setting a new historical high[27](index=27&type=chunk) - In H1 2023, China's domestic game market sales revenue was **RMB 144.26 billion**, a **2.39% YoY decrease**[44](index=44&type=chunk) - Self-developed game overseas market sales revenue was **USD 8.21 billion**, an **8.72% YoY decrease**, mainly due to decreased overseas user consumption willingness and increased marketing costs[44](index=44&type=chunk) [Outlook for H2 2023](index=4&type=section&id=Outlook%20for%20H2%202023) For H2, Baio will continue to focus on core game genres, increase R&D investment, explore AIGC applications, and plan to launch a rich product pipeline globally, including *Aola Star 2*, while preparing for the overseas release of *Aobi Island: Dreamland* - The company plans to successively launch a rich product pipeline to the global market in the future[34](index=34&type=chunk) - New game *Aola Star 2* was released and opened for pre-registration in H1[34](index=34&type=chunk) - Actively preparing to launch the overseas version of *Aobi Island: Dreamland*[34](index=34&type=chunk) [Operating Data](index=5&type=section&id=Operating%20Data) In H1 2023, the company's core operating metrics showed strong performance, with quarterly active accounts and quarterly paying accounts both increasing by approximately 20% year-over-year, and average revenue per paying user (ARPU) also growing by 26.6% Operating Data | Operating Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Average Quarterly Active Accounts (Millions) | 7.5 | 6.3 | +19.0% | | Average Quarterly Paying Accounts (Millions) | 1.2 | 1.0 | +20.0% | | Average Revenue Per Quarterly Paying Account (RMB) | 188.7 | 149.1 | +26.6% | - Operating data growth is primarily attributed to the excellent performance of the new mobile game *Aobi Island Mobile*, launched in H2 2022, which maintained high popularity in H1 2023[47](index=47&type=chunk) [Overall Business and Financial Performance](index=6&type=section&id=Overall%20Business%20and%20Financial%20Performance) In H1 2023, total revenue increased by 55.6% year-over-year to RMB 451 million, mainly contributed by the new game *Aobi Island Mobile*, and despite a slight decrease in gross margin to 37.6% due to higher revenue sharing, effective expense control significantly narrowed both operating and net losses - Online entertainment business revenue was **RMB 451 million**, a **55.6% YoY increase**, primarily due to the outstanding performance of the new game *Aobi Island Mobile*[40](index=40&type=chunk) - Gross margin decreased from **40.6%** in the prior period to **37.6%**, mainly due to a higher proportion of revenue generated from mobile games distributed by third parties, which have higher revenue sharing ratios[56](index=56&type=chunk) - Research and development expenses increased by **20.4% YoY** to **RMB 126 million**, reflecting the company's continuous investment in enhancing internal game development capabilities[59](index=59&type=chunk) - Loss for the period narrowed from **RMB 39.9 million** in the prior period to **RMB 20 million**[70](index=70&type=chunk) - Adjusted net loss significantly narrowed from **RMB 7.8 million** in the prior period to **RMB 3.2 million**[84](index=84&type=chunk) [Liquidity and Capital Resources](index=10&type=section&id=Liquidity%20and%20Capital%20Resources) The company primarily relies on cash flow from operating activities to meet working capital needs, maintaining a stable financial position with approximately RMB 1.453 billion in cash, cash equivalents, and time deposits as of June 30, 2023, no bank loans, and a healthy debt-to-asset ratio of 17% Cash, Cash Equivalents, and Deposits (RMB millions) | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and Cash Equivalents (RMB millions) | 1,244.1 | 1,303.7 | | Short-term Deposits (RMB millions) | 163.7 | 110.0 | | Long-term Deposits (RMB millions) | 45.0 | 95.0 | | **Total (RMB millions)** | **1,452.8** | **1,508.7** | - As of June 30, 2023, the Group had no bank loans or other borrowings[16](index=16&type=chunk) - The debt-to-asset ratio (total liabilities/total assets) remained at **17%**, consistent with the end of 2022[22](index=22&type=chunk) [Capital Expenditures and Investments](index=12&type=section&id=Capital%20Expenditures%20and%20Investments) In H1 2023, total capital expenditures were RMB 52.6 million, a significant increase from RMB 5 million in the prior period, primarily for construction in progress and other long-term assets, with no other major investment or acquisition plans currently, but a continuous search for new business opportunities Capital Expenditures (RMB thousands) | Capital Expenditure Item | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | | :--- | :--- | :--- | | Payments for construction in progress and other long-term assets | 50,300 | 2,949 | | Purchase of intangible assets | 1,253 | 1,085 | | Purchase of property and equipment | 1,067 | 930 | | **Total** | **52,620** | **4,964** | - The Group currently has no specific plans regarding other significant investments or acquisitions of major capital assets or other businesses[6](index=6&type=chunk) [Employees and Staff Costs](index=13&type=section&id=Employees%20and%20Staff%20Costs) As of June 30, 2023, the company had 955 full-time employees, with R&D personnel accounting for the largest proportion at 58.4%, and total staff costs in H1 were approximately RMB 206 million, representing 45.8% of total revenue, a significant decrease from 69.4% in the prior period, demonstrating operating leverage from revenue growth Employee Distribution by Function | Function | Number of Employees | Percentage of Total | | :--- | :--- | :--- | | R&D | 557 | 58.4% | | R&D Business | 220 | 23.0% | | Sales and Marketing | 92 | 9.6% | | General and Administrative | 61 | 6.4% | | Business | 25 | 2.6% | | **Total** | **955** | **100%** | - For the six months ended June 30, 2023 and 2022, staff costs were approximately **RMB 206.4 million** and **RMB 201.0 million**, respectively, accounting for **45.8%** and **69.4%** of our revenue for those periods[77](index=77&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2023, however, the company paid a special dividend for the year ended December 31, 2022, approved at the AGM, on July 20, 2023 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2023[79](index=79&type=chunk) - The company paid a special dividend of **HKD 0.015 per share** for the year ended December 31, 2022, on July 20, 2023[91](index=91&type=chunk) [Interim Condensed Consolidated Financial Statements](index=15&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Income Statement](index=15&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) This section details the consolidated income statement for the six months ended June 30, 2023, consistent with the management discussion, showing revenue of RMB 451 million, loss for the period of RMB 19.91 million, and basic and diluted loss per share of RMB 0.0075 Interim Condensed Consolidated Income Statement (RMB thousands) | Item (RMB thousands) | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | | Revenue | 450,609 | 289,641 | | Gross Profit | 169,229 | 117,738 | | Operating Loss | (38,905) | (61,884) | | Loss before income tax | (17,845) | (41,893) | | Loss for the period | (19,913) | (39,851) | | Basic and diluted loss per share (RMB) | (0.0075) | (0.0152) | [Interim Condensed Consolidated Statement of Comprehensive Income](index=16&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the comprehensive income, where, due to the absence of other comprehensive income items during the reporting period, the total comprehensive loss for the period was consistent with the loss for the period, both amounting to RMB 19.91 million - For the six months ended June 30, 2023, the company had no other comprehensive income items, thus the total comprehensive loss for the period was equal to the loss for the period, amounting to **RMB 19,913 thousand**[94](index=94&type=chunk)[95](index=95&type=chunk) [Interim Condensed Consolidated Balance Sheet](index=17&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheet) This section details the assets, liabilities, and equity as of June 30, 2023, with total assets at RMB 2.002 billion, current assets at RMB 1.539 billion, total liabilities at RMB 344 million, and total equity at RMB 1.658 billion Interim Condensed Consolidated Balance Sheet (RMB thousands) | Item (RMB thousands) | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 463,364 | 476,709 | | Current assets | 1,538,949 | 1,579,558 | | **Total Assets** | **2,002,313** | **2,056,267** | | **Equity** | | | | **Total Equity** | **1,657,964** | **1,698,084** | | **Liabilities** | | | | Non-current liabilities | 42,564 | 52,574 | | Current liabilities | 301,785 | 305,609 | | **Total Liabilities** | **344,349** | **358,183** | [Notes to the Financial Statements](index=19&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the basis of preparation, significant accounting policies, risk management, segment information, taxation, loss per share, and dividends, supplementing and explaining the consolidated financial statements [Accounting Policies](index=19&type=section&id=Accounting%20Policies) The accounting policies for this interim financial information are consistent with prior years, with new and revised standards mandatorily adopted this period having no significant impact, and future effective standards not expected to have a significant impact - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[115](index=115&type=chunk) - The Group has assessed and confirmed that new and revised standards effective for the first time in this interim period have had no significant impact on the Group[125](index=125&type=chunk) [Financial Risk Management and Financial Instruments](index=20&type=section&id=Financial%20Risk%20Management%20and%20Financial%20Instruments) The Group faces market risk (primarily currency risk), credit risk, and liquidity risk, with no changes in risk management policies since the end of 2022, and manages liquidity risk by maintaining sufficient cash reserves while disclosing the fair value estimation hierarchy for financial instruments - The Group's business activities expose it to various financial risks: market risk (primarily currency risk), credit risk, and liquidity risk[129](index=129&type=chunk) - There have been no changes in the risk management department or any risk management policies since December 31, 2022[130](index=130&type=chunk) [Segment Information](index=23&type=section&id=Segment%20Information) The Group has two operating segments: online entertainment business and other businesses, with online entertainment being the core and contributing almost all revenue, primarily from mainland China, and *Aobi Island Mobile* being the largest single game contributor during the reporting period Revenue by Segment (RMB thousands) | Segment | H1 2023 Revenue (RMB thousands) | | :--- | :--- | | Online Entertainment Business | 450,527 | | Other Businesses | 82 | | **Total** | **450,609** | Revenue by Region (RMB thousands) | Region | H1 2023 Revenue (RMB thousands) | | :--- | :--- | | Mainland China | 425,220 | | Outside Mainland China | 25,389 | | **Total** | **450,609** | - *Aobi Island Mobile* was the largest revenue-contributing game, accounting for **38.8%** of total revenue[162](index=162&type=chunk) [Income Tax (Expense) / Credit](index=25&type=section&id=Income%20Tax%20%28Expense%29%20%2F%20Credit) Some key subsidiaries qualify as "High-tech Enterprises" enjoying a 15% preferential income tax rate, and qualified subsidiaries engaged in R&D activities are entitled to a 200% super deduction for R&D expenses under national policies - Key subsidiaries Guangzhou Baitian and Guangzhou Tianti qualify as "High-tech Enterprises" and enjoy a **15%** preferential income tax rate[170](index=170&type=chunk) - Starting from 2023, enterprises engaged in R&D activities can deduct **200%** of their R&D expenses as deductible tax expenses (super deduction)[172](index=172&type=chunk) [Loss Per Share](index=28&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2023, basic loss per share was RMB 0.0075, a significant narrowing from RMB 0.0152 in the prior period, with diluted loss per share being the same as basic loss per share due to the anti-dilutive effect of potential ordinary shares Loss Per Share | Indicator | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Loss attributable to shareholders of the Company (RMB thousands) | (19,998) | (39,928) | | Weighted average number of ordinary shares outstanding | 2,665,958,981 | 2,626,702,445 | | Basic loss per share (RMB) | (0.0075) | (0.0152) | - No adjustment was made to basic loss per share when calculating diluted loss per share as potential ordinary shares had an anti-dilutive effect[179](index=179&type=chunk) [Other Disclosures](index=31&type=section&id=Other%20Disclosures) [Audit Committee and Review of Financial Statements](index=31&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Statements) The company's Audit Committee reviewed the adopted accounting principles and practices and the unaudited interim condensed consolidated financial information for the six months ended June 30, 2023, which was also reviewed by the company's auditor in accordance with relevant standards - The Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial information for the six months ended June 30, 2023, and is satisfied that it was prepared in accordance with International Accounting Standard 34[189](index=189&type=chunk) [Compliance with Corporate Governance Code](index=31&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) During the reporting period, the company complied with all applicable code provisions of the Corporate Governance Code in Appendix 14 of the Listing Rules, with the only deviation being the roles of Chairman and CEO held by the same person, an arrangement the Board believes ensures consistent leadership and does not impair the balance of power - Except for a deviation from code provision C.2.1, the company has complied with all applicable corporate governance code provisions[191](index=191&type=chunk) - The roles of Chairman and Chief Executive Officer are currently held by Mr. Dai Jian, an arrangement the Board believes ensures consistent leadership for the Group, and the existing Board structure ensures a balance of power[191](index=191&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2023, the Group did not purchase, sell, or redeem any of the company's listed securities - For the six months ended June 30, 2023, the Group did not purchase, sell, or redeem any of the Company's listed securities[148](index=148&type=chunk)

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 938.76 million, representing a 6.2% increase from RMB 883.91 million in 2021[10] - Gross profit decreased by 10.0% to RMB 360.63 million in 2022, down from RMB 400.56 million in 2021[10] - The company reported an operating loss of RMB 37.08 million for 2022, compared to an operating profit of RMB 29.71 million in 2021, marking a 224.8% decline[10] - Adjusted net profit for 2022 was RMB 61.74 million, a decrease of 22.0% from RMB 79.18 million in 2021[10] - Adjusted EBITDA fell by 64.6% to RMB 37.49 million in 2022, down from RMB 105.83 million in 2021[10] - The financial performance reflects challenges in operational efficiency and profitability, necessitating strategic adjustments moving forward[10] User Engagement and Market Presence - The total registered users for the company's major titles have exceeded 100 million, indicating strong user engagement[8] - The company maintained a stable operational performance despite a challenging environment, focusing on enhancing its IP recognition and leadership in the gaming sector[16] - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[109] - The average quarterly active accounts reached approximately 10.1 million, a 1% increase from the previous year, primarily driven by the successful launch of the new mobile game "Aobi Island" in Q3 2022[49] Strategic Focus and Product Development - The company aims to continue focusing on three game segments: female-oriented, pet collection and nurturing, and ACG (Anime, Comic, and Games) games, leveraging its IP development strategy[8] - The company plans to enhance its product offerings to provide unique IP upgrade experiences for younger users[8] - The company plans to deepen its focus on three core value propositions: "IP companionship, immersive experience, and easy social interaction" in 2023[21] - The company aims to increase investment in R&D to enhance its game development capabilities and launch more high-quality games to meet global user demands[21] - The company continues to explore innovative and diverse game content through cross-industry collaborations, targeting younger audiences[17] International Strategy and Cultural Integration - The company has established a strong presence in both domestic and international markets, including regions like Hong Kong, Taiwan, Japan, South Korea, and Europe[8] - The international strategy has yielded results, with mobile games launched in multiple overseas markets, enhancing brand recognition and cultural exchange[18] - The company is committed to integrating traditional Chinese culture into its game content, aiming to enrich user experience and promote cultural values globally[21] - The company emphasizes integrating Chinese cultural elements into its games, aiming to provide innovative and beneficial entertainment content to users globally[46] Financial Position and Assets - Total assets as of December 31, 2022, reached RMB 2,056,267 thousand, an increase from RMB 1,994,342 thousand in 2021, reflecting a growth of approximately 3.1%[14] - Non-current assets increased to RMB 476,709 thousand in 2022 from RMB 442,420 thousand in 2021, marking a growth of about 7.1%[14] - Total equity amounted to RMB 1,698,084 thousand in 2022, slightly down from RMB 1,682,640 thousand in 2021, indicating a decrease of approximately 0.9%[14] - The total liabilities as of December 31, 2022, were RMB 358,183 thousand, up from RMB 311,702 thousand in 2021, representing an increase of approximately 14.9%[14] Research and Development - Research and development expenses rose by 32.7% to RMB 230.0 million from RMB 173.3 million, reflecting the company's strategy to enhance internal game development capabilities[61] - The R&D budget has been increased by 10% to support the development of new technologies and products[121] Shareholder and Employee Information - The company plans to continue granting restricted share units to incentivize employees[93] - As of December 31, 2022, the company had a total of 1,050 full-time employees, with R&D accounting for 55.3% of the workforce[92] - Total employee costs for the year ended December 31, 2022, were approximately RMB 392.6 million, representing 41.8% of the company's revenue[92] Dividends and Shareholder Returns - A special dividend of HKD 0.015 per share (approximately RMB 0.013) has been proposed for the year ended December 31, 2022, pending shareholder approval[97] - The company reported a special dividend of HKD 0.015 per share for the fiscal year ending December 31, 2022, subject to shareholder approval[133] Acquisitions and Future Plans - A strategic acquisition of a tech startup is anticipated to enhance the company's product offerings and is expected to close by Q3 2024[119] - The company has no significant contingent liabilities or guarantees as of December 31, 2022[88] - There are currently no specific plans for major investments or acquisitions, but the company will continue to seek new business development opportunities[90]

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） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 全 年 業 績 公 告 百奧家庭互動有限公司（「百奧」或「本公司」或「我們」）董事（「董事」）會（「董事會」）欣然 公佈以下本公司、其附屬公司及其於中華人民共和國（「中國」）的控制實體（「本集團」） 截至二零二二年十二月三十一日止年度的經審計綜合業績連同去年之比較數字： 財務摘要 利潤表概要 截至十二月三十一日止年度 二零二二年 二零二一年 同比變化 人民幣千元 人民幣千元 % 收入 938,759 883,908 6.2% 毛利 360,628 400,559 (10.0%) 經營（虧損）╱利潤 (37,082) 29,706 (224.8%) 非國際財務報告準則 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 289,641 thousand, a decrease of 44% compared to RMB 519,887 thousand in 2021[26]. - Gross profit for the same period was RMB 117,738 thousand, down 51% from RMB 240,221 thousand in 2021[26]. - The company reported an operating loss of RMB 61,884 thousand, compared to a profit of RMB 56,995 thousand in the previous year, marking a 209% decline[26]. - Adjusted net loss for the period was RMB 7,834 thousand, a significant decrease from a profit of RMB 69,295 thousand in 2021, representing a 111% decline[26]. - Adjusted EBITDA for the first half of 2022 was a loss of RMB 18,002 thousand, down 120% from RMB 90,914 thousand in the same period last year[26]. - The net loss attributable to shareholders for the period was RMB 39,928 thousand, compared to a profit of RMB 46,289 thousand in the same period of 2021[141]. - The company did not declare any interim dividend for the six months ended June 30, 2022, consistent with the previous year[128]. - The company recorded an operating loss of RMB 61.9 million for the six months ended June 30, 2022, compared to an operating profit of RMB 57.0 million in the prior year[96]. - Adjusted net loss for the six months ended June 30, 2022, was RMB 7.8 million, a decrease of 111.3% compared to a net profit of RMB 69.3 million for the same period in 2021[102]. Assets and Liabilities - Total assets as of June 30, 2022, were RMB 1,946,988 thousand, a slight decrease from RMB 1,994,342 thousand as of December 31, 2021[31]. - Total liabilities as of June 30, 2022, were RMB 317.3 million, while total assets were RMB 1,946.99 million, resulting in a debt-to-asset ratio of 16%[106]. - Cash and cash equivalents amounted to RMB 1,174.6 million as of June 30, 2022, down from RMB 1,429.2 million at the end of 2021[107]. - Total liabilities increased from RMB 311,702 thousand to RMB 317,269 thousand, an increase of about 1.8%[148]. - The company’s share premium decreased from RMB 1,106,699 thousand to RMB 1,076,454 thousand, a decrease of about 2.7%[155]. - The company reported a decrease in lease liabilities from RMB 79,352,000 as of December 31, 2021, to RMB 70,147,000 as of June 30, 2022[181]. Market and Business Strategy - The company continues to focus on three major gaming segments: female-oriented games, pet battle games, and ACG (Anime, Comic, and Games) games[23]. - The gaming market in China has shown signs of slowing down, with a slight decline in market size, while mobile gaming remains dominant[34]. - The company aims to enhance its IP development strategy to create innovative gaming products that provide upgraded experiences for users[35]. - The company has expanded its gaming business beyond mainland China, successfully launching games in regions such as Hong Kong, Macau, Taiwan, Japan, South Korea, Singapore, Malaysia, and Europe and the United States[39]. - The company plans to focus on three gaming segments: female-oriented games, pet collection and nurturing, and "2D" games in the second half of 2022[43]. - The company aims to integrate more traditional Chinese culture into its game content, providing innovative and beneficial gaming experiences to users globally[43]. Research and Development - Research and development expenses increased to RMB 105.0 million, representing 36% of revenue, compared to 16% of revenue last year[76]. - The company has invested in product R&D and talent acquisition to optimize game graphics, gameplay, and operations, laying a solid foundation for continued development in the gaming sector[40]. - The company continues to enhance its game content and R&D capabilities, focusing on the Z generation users and maintaining stable operational performance and user reputation[36]. - The company emphasizes user-centric content creation, integrating traditional Chinese culture into games to showcase Chinese characteristics and wisdom[61]. User Engagement and Market Response - The average quarterly active accounts decreased to 6.3 million, a decline of 48.4% compared to 12.2 million in the same period last year[72]. - The average quarterly paying accounts fell to 1.0 million, down 52.4% from 2.1 million year-on-year[73]. - The average revenue per paying account for the quarter reflects the company's ability to monetize its user base effectively[57]. - The core mobile and web games operations remain stable, with successful titles like "Food Fantasy," "Aola Star," and "Aoqi Legend" receiving positive user and market feedback[59]. - The mobile game "Aobi Island: Dream Kingdom," derived from the classic IP "Aobi Island," was officially launched in mainland China on July 12, 2022, with over 300 million registered users accumulated over 13 years[43]. Awards and Recognition - The company received the "Best Small and Medium Market Capitalization Company" award at the 6th Golden Hong Kong Stock Awards in January 2022[40]. - The company received recognition at the 7th Blackstone Awards, winning three awards including "Outstanding Cooperative Company of the Year" and "Most Anticipated Game" for "Aola Star"[65]. Financial Risks and Management - The company continues to face multiple financial risks, including market risk, credit risk, and liquidity risk[175]. - The company aims to maintain sufficient cash and cash equivalents for daily operations, reflecting its strategy to ensure financial flexibility[177]. - The company has not experienced any significant changes in risk management policies since December 31, 2021[176].

Financial Performance - Total revenue for the year 2021 was RMB 883.9 million, a decrease of 21.7% from RMB 1,129.0 million in 2020[12] - Gross profit for 2021 was RMB 400.6 million, down from RMB 429.3 million in 2020, reflecting a gross margin of approximately 45.3%[12] - Adjusted net profit for 2021 was RMB 79.2 million, compared to RMB 289.2 million in 2020, indicating a decline of 72.6%[13] - Adjusted EBITDA for 2021 was RMB 105.8 million, significantly lower than RMB 317.1 million in 2020, representing a decrease of 66.7%[13] - The operating profit for 2021 was RMB 29.7 million, a significant drop from RMB 281.6 million in 2020[12] - The net profit for the year was RMB 26.9 million, a decrease from RMB 273.2 million in the previous year, representing 3.0% of total revenue[63] - Adjusted EBITDA for the year was RMB 105.8 million, down from RMB 317.1 million in 2020, representing 12.0% of total revenue[65] User Engagement and Market Strategy - The company has accumulated over 300 million registered users since its inception, indicating strong user engagement[10] - The company reported a significant increase in quarterly active accounts, reaching a total of 1.5 million, representing a 25% year-over-year growth[40] - Average revenue per paying account for the quarter was $15, indicating a 10% increase compared to the previous quarter[40] - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in user acquisition by the end of the next fiscal year[40] - The company aims to leverage its IP development strategy to create engaging products for younger users, enhancing user experience and satisfaction[10] Business Operations and Segments - The company plans to continue focusing on three major gaming segments: female-oriented, pet battle, and ACG (Anime, Comic, and Games) games[10] - The company has terminated its retail business, which has been classified as discontinued operations, impacting overall revenue figures[12] - The company aims to focus on three game segments: female-oriented games, pet battle games, and ACG (Anime, Comic, and Games) games in 2022[26] - The company plans to integrate more traditional Chinese cultural elements into its games to promote Chinese culture globally[26] Financial Position and Assets - In 2021, the total assets of the company were RMB 1,994,342 thousand, a decrease of 4.15% from RMB 2,080,884 thousand in 2020[17] - The total equity of the company was RMB 1,682,640 thousand in 2021, a decrease of 2.99% from RMB 1,734,329 thousand in 2020[17] - The company reported a total liability of RMB 311,702 thousand in 2021, down 10.05% from RMB 346,555 thousand in 2020[17] - Cash and cash equivalents, including bank cash and cash on hand, totaled RMB 1,429.2 million as of December 31, 2021, compared to RMB 1,382.0 million as of December 31, 2020[94] Research and Development - The company continues to enhance its R&D investment across various aspects, including creativity, technology, and talent[25] - Research and development expenses were RMB 173.3 million, accounting for 19.6% of total revenue, compared to 9.4% in 2020[60] - The company aims to increase R&D investment to enhance its game development capabilities and meet rising user expectations for game quality[48] Corporate Governance and Shareholder Value - The board has approved a share buyback program worth $10 million to enhance shareholder value[40] - The company maintains a flexible dividend policy, with no predetermined payout ratio, allowing for adjustments based on financial performance and cash flow[160] - The board of directors has the discretion to declare dividends based on various factors, including financial performance and future capital needs[160] Market Recognition and Awards - The company has been recognized in the industry, being included in the MSCI China All Shares Small Cap Index in 2021[25] - The mobile game "Aobi Island: Dream Kingdom" received multiple industry awards prior to its launch, indicating strong market anticipation[25] - The mobile game "Aola Star" received multiple industry awards, reflecting market recognition of the company's game content[44] Management and Leadership - Mr. Wu has over 21 years of experience in the information technology industry and has been a director of Guangdong Altronic since March 2013[122] - Mr. Li, a co-founder of the group, has been the Chief Operating Officer since September 2009 and has over 21 years of experience in the information technology sector[126] - The company’s chief technology officer has over 22 years of experience in the IT industry, contributing to product design and development[147] Social Responsibility and Sustainability - The company is committed to corporate social responsibility and aims to provide a healthy gaming environment for youth, aligning with government policies on gaming[48] - The company emphasizes sustainability efforts to minimize environmental impact while promoting social and corporate governance[155]

００Ί ○○ 百奥家庭互動有限公司 hteractive Limited ( 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ) 股份代號：2100 中期報告 2021 目錄 24 5 7 10 15 29 30 31 32 34 36 37 61 公司資料 公司簡介 財務摘要 主席報告 釋義及詞彙 管理層討論與分析 中期財務資料的審閱報告 中期簡明合併利潤表 中期簡明合併綜合收益表 中期簡明合併資產負債表 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 其他資料 公司資料 | --- | --- | |-----------------------|------------------------------------| | | | | 董事會 | 公司秘書 | | 執行董事 | 劉綺華女士 | | 戴堅先生 （主席） | | | 吳立立先生 | 授權代表 | | 李沖先生 | 吳立立先生 | | 王曉東先生 | 戴堅先生 | | 獨立非執行董事 | 核數師 | | 劉千里女士 | 羅兵咸永道會計師事務所 | | 王慶博士 | 執業會計師及註冊公眾利益實體核數師 | | ...

００Ί 00 百奥家庭互動有限公司 ( 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ) 股份代號: 2100 年度報告 2020 | --- | --- | |----------------------------------|-------| | | | | 公司資料 公司簡介 | 2 4 | | 財務摘要 | 5 | | 主席報告 | 7 | | 釋義及詞彙 | 10 | | 管理層討論與分析 | 15 | | 董事及高級管理層履歷 | 29 | | 董事會報告 | 34 | | 企業管治報告 | 60 | | 二零二零年度環境、社會及管治報告 | 71 | | 獨立核數師報告 | 137 | | 合併利潤表 | 142 | | 合併綜合收益表 | 144 | | 合併資產負債表 | 145 | | 合併權益變動表 | 147 | | 合併現金流量表 | 149 | | 財務報表附註 | 150 | 目錄 公司資料 | --- | --- | |-------------------|-------| | | | | 董事會 執行董事 | | | 戴堅先生 （主席） | | | 吳立立先生 ...

００Ί ○○ 百奥家庭互動有限公司 hteractive Limited ( 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ) 股份代號：2100 中期報告 2020 目錄 24 5 7 10 15 29 30 31 32 34 36 37 60 公司資料 公司簡介 財務摘要 主席報告 釋義及詞彙 管理層討論與分析 中期財務資料的審閱報告 中期簡明合併利潤表 中期簡明合併綜合收益表 中期簡明合併資產負債表 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 其他資料 公司資料 | --- | --- | |-----------------------|------------------------------------| | | | | 董事會 | 公司秘書 | | 執行董事 | 劉綺華女士 | | 戴堅先生 （主席） | | | 吳立立先生 | 授權代表 | | 李沖先生 | 吳立立先生 | | 王曉東先生 | 戴堅先生 | | 獨立非執行董事 | 核數師 | | 劉千里女士 | 羅兵咸永道會計師事務所 | | 王慶博士 | 執業會計師及註冊公眾利益實體核數師 | | ...

００Ί 00 百奥家庭互動有限公司 ( 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ) 股份代號: 2100 年度報告 2019 | --- | --- | |----------------------------------|-------| | | | | 公司資料 公司簡介 | 2 4 | | 財務摘要 | 5 | | 主席報告 | 7 | | 釋義及詞彙 | 9 | | 管理層討論與分析 | 14 | | 董事及高級管理層履歷 | 29 | | 董事會報告 | 34 | | 企業管治報告 | 62 | | 二零一九年度環境、社會及管治報告 | 74 | | 獨立核數師報告 | 127 | | 合併利潤表 | 132 | | 合併綜合收益表 | 134 | | 合併資產負債表 | 135 | | 合併權益變動表 | 137 | | 合併現金流量表 | 139 | | 財務報表附註 | 140 | 目錄 公司資料 | --- | --- | |-------------------|-------| | | | | 董事會 執行董事 | | | 戴堅先生 （主席） | | | 吳立立先生 | ...

００Ί ○○ 百奥家庭互動有限公司 hteractive Limited ( 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ) 股份代號：2100 STORE CHANGE 中期報告 2019 目錄 24 5 7 9 14 26 27 29 30 32 34 35 64 公司資料 公司簡介 財務摘要 主席報告 釋義及詞彙 管理層討論與分析 中期財務資料的審閱報告 中期簡明合併利潤表 中期簡明合併綜合收益表 中期簡明合併資產負債表 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 其他資料 公司資料 | --- | --- | |--------------------------------|-------------------------| | | | | 董事會 | 公司秘書 | | 執行董事 | 劉綺華女士 | | 戴堅先生 （主席） | | | 吳立立先生 | 授權代表 | | 李沖先生 | | | | 吳立立先生 | | 王曉東先生 | 戴堅先生 | | 獨立非執行董事 | 核數師 | | 劉千里女士 | 羅兵咸永道會計師事務所 | | 王慶博士 | 執業會計師 ...