Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 116,204,000, an increase of 68.5% compared to RMB 68,975,000 for the same period in 2023[2] - Gross profit for the same period was RMB 41,467,000, representing a decrease of 4.5% from RMB 43,420,000 in 2023[2] - Profit before tax decreased by 76.4% to RMB 3,184,000 from RMB 13,488,000 in the previous year[2] - Net profit attributable to the owners of the company was RMB 3,457,000, down 69.9% from RMB 11,479,000 in 2023[2] - Adjusted net profit was RMB 4,031,000, a decrease of 62.3% compared to RMB 10,681,000 in the same period last year[2] - The net profit for the period was RMB 2,731,000, a decrease of about RMB 8.8 million or 76.5% from RMB 11.5 million for the same period in 2023[40] - Basic and diluted earnings per share for the period were RMB 0.01, down from RMB 0.02 in the previous year, reflecting a decline of 50%[59] - The gross profit margin decreased to 35.7% for the six months ended June 30, 2024, compared to 53.2% for the year ended December 31, 2023[52] - The adjusted net profit margin was 2.4% for the six months ended June 30, 2024, down from 6.6% for the year ended December 31, 2023[52] - The return on equity (ROE) was 0.7% for the six months ended June 30, 2024, compared to 3.2% for the year ended December 31, 2023[52] Revenue Breakdown - The company's digital services revenue for the six months ended June 30, 2024, reached RMB 108,014 thousand, a 94.2% increase from RMB 55,633 thousand for the same period in 2023[16] - The revenue from enterprise digital services was RMB 108,014 thousand, while the revenue from industry digital services was RMB 8,190 thousand for the same period[68] - Revenue from physical goods procurement and delivery services increased by RMB 49.8 million, contributing significantly to the overall revenue growth[18] - Revenue from virtual goods procurement and delivery services was RMB 32.0 million for the six months ended June 30, 2024, representing approximately 29.6% of total digital services revenue[24] - Revenue from the company's private domain traffic marketing services was RMB 22.9 million, making up 92.2% of total revenue for this segment as of June 30, 2024[24] - Revenue from telecom recharge services generated RMB 7.1 million, accounting for 22.1% of total revenue from virtual goods procurement and delivery services[24] Cost and Expenses - The cost of sales rose significantly by 191.8% to RMB 74.7 million for the six months ended June 30, 2024, from RMB 25.6 million in the same period of 2023[31] - Sales and distribution expenses increased by approximately RMB 7.0 million or 179.5% to about RMB 10.9 million for the six months ended June 30, 2024, from RMB 3.9 million for the same period in 2023[35] - Administrative expenses rose by approximately RMB 0.7 million or 5.0% to about RMB 14.6 million for the six months ended June 30, 2024, compared to RMB 13.9 million for the same period in 2023[36] - Research and development expenses increased by approximately RMB 0.9 million or 9.6% to about RMB 10.3 million for the six months ended June 30, 2024, from RMB 9.4 million for the same period in 2023[37] - Financing costs rose by approximately RMB 1.6 million or 177.8% to about RMB 2.5 million for the six months ended June 30, 2024, compared to RMB 0.9 million for the same period in 2023[38] Market and Business Strategy - The Chinese advertising market is expected to recover in 2024, with over 90% of advertisers anticipating new product launches[4] - The company plans to launch a new product, the "Color Ticket Experience Voucher," to meet customer marketing objectives in 2024[4] - The company focuses on providing "online and offline integration" solutions to enhance customer digital transformation and marketing service operations[8] - The company aims to enhance private traffic for enterprises through its digital marketing service platform, including virtual and physical goods procurement and delivery services[10] - The company plans to focus on AI digital lottery stores in the second half of 2024, targeting private traffic from lottery operators and stores[15] - The company aims to explore opportunities in financial services and telecommunications sectors to enhance its core business capabilities[11] Client and Supplier Relationships - The company has secured 39 enterprise clients, including 19 from the financial services and institutions sector, indicating a diverse client base[11] - The top five customers accounted for 57.3% and 69.2% of the company's revenue for the periods ending June 30, 2024, and June 30, 2023, respectively, with the largest customer contributing 30.2% and 31.1%[50] - The top five suppliers represented 80.3% and 73.8% of the total cost of sales for the periods ending June 30, 2024, and June 30, 2023, respectively, with the largest supplier accounting for 36.6% and 58.8%[51] Financial Position and Liquidity - The company's cash and cash equivalents decreased from RMB 186.5 million as of December 31, 2023, to RMB 118.9 million as of June 30, 2024, a reduction of RMB 67.6 million[47] - The company's debt-to-asset ratio as of June 30, 2024, was 40.7%, up from 39.8% as of December 31, 2023[46] - The company has interest-bearing borrowings of approximately RMB 162.3 million, compared to RMB 156.2 million as of December 31, 2023[46] - The company maintained a prudent treasury policy, ensuring a healthy liquidity position throughout the review period[54] Corporate Governance and Compliance - The company has adhered to corporate governance codes and has not repurchased any listed securities during the reporting period[85] - The audit committee has reviewed the unaudited financial statements and confirmed compliance with applicable listing rules[87] - The company emphasizes the importance of independent non-executive directors in its governance structure[97] Future Outlook - The company plans to focus on lottery marketing tickets in the second half of 2024 to capture growth opportunities in welfare and sports lottery sales[83] - The company aims to expand its market share in the digital lottery services sector, leveraging its strong R&D capabilities to develop software and hardware solutions[84] - The company will prioritize strategic investments to maximize synergies across business segments and enhance its supply chain through e-commerce solutions[85] - The company is committed to improving operational efficiency and simplifying capital allocation in response to ongoing economic challenges[83]

Revenue Performance - Revenue from marketing and promotion services decreased by 27.6%, from approximately RMB211.5 million for the year ended 31 December 2022 to approximately RMB153.1 million for the year ended 31 December 2023, accounting for 80.1% of total revenue[4][17] - Revenue from advertisement placement services amounted to RMB4.9 million and RMB14.1 million for the years ended 31 December 2023 and 2022, representing 3.2% and 6.7% of marketing and promotion services revenue, respectively[6][19] - Revenue from advertisement distribution services was RMB38.1 million and RMB133.7 million for the years ended 31 December 2023 and 2022, accounting for 24.9% and 63.2% of marketing and promotion services revenue, respectively[7] - Revenue from virtual goods sourcing and delivery services increased to RMB68.4 million in 2023 from RMB54.8 million in 2022, representing approximately 44.7% and 25.9% of marketing and promotion services revenue, respectively[8] - Revenue from advertising agents decreased by 61.1% from RMB 173.3 million in 2022 to RMB 68.0 million in 2023, accounting for 44.4% of total revenue[174] - Revenue from enterprises increased by 122.2% from RMB 38.2 million in 2022 to RMB 85.1 million in 2023, representing 55.6% of total revenue[174] - Total revenue for the year ended December 31, 2023, was RMB 153.1 million, a decrease of 27.6% compared to RMB 211.5 million in 2022[174] Cost and Expenses - The cost of sales decreased by RMB 33.7 million or 27.4% from RMB 123.1 million in 2022 to RMB 89.4 million in 2023[177] - The cost of customer acquisition for promotional and advertising services (excluding tangible goods procurement and delivery services) decreased by 53.1% from approximately RMB 101.1 million in 2022 to approximately RMB 47.4 million in 2023[177] - The proportion of customer acquisition costs to total sales costs was approximately 53.0% in 2023, down from 82.1% in 2022[177] - Administrative expenses increased by approximately RMB16.0 million, or 86.0%, from approximately RMB18.6 million for the year ended 31 December 2022 to approximately RMB34.6 million for the year ended 31 December 2023[24] - Research and development expenses increased by approximately RMB2.1 million, or 11.1%, from approximately RMB18.9 million for the year ended 31 December 2022 to approximately RMB21.0 million for the year ended 31 December 2023[27] - Sales and distribution expenses increased by approximately RMB4.8 million, or 60.0%, from approximately RMB8.0 million for the year ended 31 December 2022 to approximately RMB12.8 million for the year ended 31 December 2023[40] Profitability - Profit for the year decreased by approximately RMB55.9 million, or 81.7%, from approximately RMB68.5 million for the year ended 31 December 2022 to approximately RMB12.6 million for the year ended 31 December 2023[29] - Adjusted net profit for the year was approximately RMB21.7 million, down from RMB81.2 million in the previous year[47] - The gross profit margin improved to 53.2% for the year ended 31 December 2023, up from 52.0% in the previous year[61] - The net profit margin decreased to 6.6% in 2023 from 26.7% in 2022, reflecting challenges in profitability[61] Debt and Liquidity - As of 31 December 2023, the Group had interest-bearing borrowings of RMB156.2 million, compared to RMB38.0 million as of 31 December 2022, indicating a significant increase in debt levels[51] - The current ratio decreased to 2.4 times as of 31 December 2023, down from 3.7 times in 2022, indicating a decline in liquidity[61] - The gearing ratio increased to 39.8% in 2023 from 12.9% in 2022, suggesting a higher level of financial leverage[61] - The company's debt-to-equity ratio was 39.8% as of December 31, 2023, up from 12.9% as of December 31, 2022[81] - The actual interest rates on borrowings ranged from 2.8% to 5.0% as of December 31, 2023, compared to 3.6% to 5.5% the previous year[81] Strategic Initiatives - The company aims to diversify its business and penetrate targeted marketing segments through technical support in its IT solution services[11] - The company is conducting due diligence for a potential acquisition of Shanghai Maichun Brand Management Co., Ltd. to expand its supplier and customer base[37] - The company plans to acquire companies in marketing and related industries, with 14.9% of IPO proceeds allocated for this purpose, to be utilized by December 31, 2023[101] - The company intends to develop its SaaS enterprise marketing service platform, with 6.3% of IPO proceeds allocated for this initiative, to be utilized by December 31, 2024[101] - The company is actively negotiating for the potential acquisition of a PRC-based e-commerce solutions provider to enhance its goods sourcing and delivery services[188] Future Outlook - Future plans include enhancing marketing and promotion services, particularly in the lottery industry, to significantly increase the buyer base by connecting offline stores to online platforms[96][97] - The company aims to invest more in advertising solutions to help clients monetize existing user traffic and expand its operational and customer base through independent R&D of virtual goods procurement and delivery platforms[98] - The company plans to utilize the remaining unutilized proceeds according to its strategic plans[124] - The company aims to expand its services to include the delivery of physical goods for e-commerce operators[126] Human Resources - The number of full-time employees increased to 257 as of 31 December 2023, up from 181 in 2022[31] - Total staff costs for the year ended 31 December 2023 amounted to approximately RMB49.5 million, an increase of 24% from RMB39.9 million in 2022[49] Management and Leadership - Mr. Zhang has over 11 years of experience in sales and marketing of telecom value-added services, contributing to the company's strategic direction[139] - Mr. Xia has served in various roles within the group, including Vice President of Hangzhou Rego from July 2020 to December 2023, indicating a strong leadership presence[141] - Ms. Hu has over 13 years of experience in innovative product research and development, focusing on smart kitchen systems since 2014, which aligns with the company's product innovation strategy[146] - Mr. Chen was appointed as an executive director on January 1, 2024, bringing extensive experience in venture capital and media, which may influence future investment strategies[143] - Mr. Fan, with a background in the PLA and experience in enterprise management, was appointed as an executive director, potentially enhancing operational efficiency[156] Corporate Information - The company has a stock code of 02422, indicating its listing status and potential for investment opportunities[152] - The principal banks associated with the company include Industrial Bank Co., Limited and China Construction Bank Corporation, which may provide financial support for future projects[152] - The company website is http://www.regopimc.com, serving as a platform for investor relations and corporate information dissemination[152]

Financial Performance - For the fiscal year ended December 31, 2023, the company's revenue decreased by 25.5% to RMB 191,062,000 compared to RMB 256,591,000 in 2022[3]. - Gross profit for the same period fell by 23.8% to RMB 101,667,000 from RMB 133,458,000 in the previous year[3]. - The company's profit before tax dropped significantly by 81.6% to RMB 14,899,000, down from RMB 81,172,000 in 2022[3]. - Net profit attributable to the owners of the company decreased by 81.7% to RMB 12,558,000 compared to RMB 68,503,000 in the prior year[3]. - Adjusted net profit also saw a decline of 73.3%, falling to RMB 21,713,000 from RMB 81,200,000[3]. - Total revenue decreased by RMB 65.5 million or 25.5% to RMB 191.1 million for the year ended December 31, 2023, reflecting a reduction in revenue from marketing and promotion services by RMB 58.5 million[37]. - Net profit decreased by approximately RMB 55.9 million or 81.7% from about RMB 68.5 million for the year ended December 31, 2022, to about RMB 12.6 million for the year ended December 31, 2023[48]. - The net profit for the year was RMB 12.56 million, down from RMB 68.50 million in the previous year, indicating a decrease of about 82%[162]. Revenue Breakdown - Revenue from marketing and promotional services decreased by 27.6% to approximately RMB 153.1 million, accounting for 80.1% of total revenue[17]. - Online marketing revenue constituted 97.6% of total marketing and promotional services revenue, amounting to RMB 149,369,000[19]. - Revenue from virtual goods procurement and delivery services for the year ended December 31, 2023, was RMB 68.4 million, representing approximately 44.7% of the marketing and promotion services revenue, up from RMB 54.8 million or 25.9% in 2022[24]. - The revenue from tangible goods procurement and delivery services was RMB 18.6 million, accounting for about 12.1% of the marketing and promotion services revenue for the year ended December 31, 2023[27]. - Revenue from IT solution services decreased by 15.5% to RMB 38.0 million for the year ended December 31, 2023, down from RMB 45.0 million in 2022, primarily due to the uncertain regulatory environment in the online gaming industry[36]. - Revenue from lottery-related software systems and equipment solutions was RMB 32,132 million, showing a year-on-year increase of 16.8%[101]. - Revenue from telecom recharge services increased to RMB 21.4 million in 2023, accounting for 31.2% of total revenue from virtual goods procurement and delivery services[117]. Expenses and Costs - Sales costs decreased by RMB 33.7 million or 27.4% to RMB 89.4 million for the year ended December 31, 2023, primarily due to a significant reduction in customer acquisition costs[38]. - Sales and distribution expenses increased by approximately RMB 4.8 million or 60.0% to about RMB 12.8 million for the year ended December 31, 2023, mainly due to the acquisition of ASMKT[42]. - Administrative expenses increased by approximately RMB 16.0 million or 86.0% from about RMB 18.6 million for the year ended December 31, 2022, to about RMB 34.6 million for the year ended December 31, 2023[43]. - R&D expenses rose by approximately RMB 2.1 million or 11.1% from about RMB 18.9 million for the year ended December 31, 2022, to about RMB 21.0 million for the year ended December 31, 2023[44]. - Financing costs increased by approximately RMB 1.0 million or 62.5% from RMB 1.6 million in 2022 to RMB 2.6 million in 2023, driven by new bank loans for business expansion[130]. Assets and Liabilities - As of December 31, 2023, the company had bank borrowings of approximately RMB 156.2 million, an increase from RMB 38.0 million as of December 31, 2022[54]. - The company's debt-to-asset ratio was 39.8% as of December 31, 2023, compared to 12.9% as of December 31, 2022[54]. - Total assets increased to RMB 637.38 million in 2023 from RMB 399.70 million in 2022, representing a growth of approximately 59.6%[81]. - Total liabilities increased significantly, with bank borrowings rising to RMB 156.18 million from RMB 38 million, marking an increase of approximately 312%[164]. Strategic Initiatives - The company acquired 100% of the shares of ASMKT, enhancing its capabilities in virtual goods procurement and delivery services[7]. - The company plans to focus on expanding its market share in welfare and sports lottery sectors in 2024[11]. - Continued investment in lottery-related software and hardware development is aimed at enhancing operational efficiency and market presence across various provinces in China[12]. - The company plans to utilize lottery marketing vouchers as a marketing tool to engage potential clients in 2024[96]. - The company aims to increase its market share in the lottery industry through partnerships with national lottery management centers[93]. - The company is focusing on expanding its service offerings to e-commerce platform operators for physical goods delivery[191]. Compliance and Financial Reporting - The company anticipates that the application of all revised Hong Kong Financial Reporting Standards will not have a significant impact on the consolidated financial statements in the foreseeable future[200]. - The revised standards will come into effect for annual periods beginning on or after January 1, 2024, and January 1, 2025, respectively[200]. - The company is committed to maintaining transparency and accuracy in financial reporting amidst these changes[200]. - The company will continue to monitor the implications of these standards on its financial reporting practices[200].

Revenue Performance - Total revenue for the first half of 2023 was RMB 68,975,000, a decrease of 36.5% compared to RMB 108,591,000 in the same period of 2022[25]. - Revenue from marketing and promotion services was RMB 55,067,000, accounting for 79.8% of total revenue, down from 84.6% in the previous year[25]. - Revenue from virtual goods sourcing and delivery services increased to RMB 28,145,000, representing 40.8% of total revenue, compared to 23.6% in the same period last year[25]. - Revenue from IT solutions services was RMB 13,905,000, which is 20.2% of total revenue, compared to 15.4% in the previous year[25]. - Revenue from lottery-related software systems and equipment solutions increased to RMB 13,339,000, representing 19.4% of total revenue, up from 7.4% in the same period last year[25]. - Revenue from advertising agents decreased to RMB 28,456,000, accounting for 51.7% of marketing and promotion services revenue, down from 80.5% in the previous year[18]. - Revenue from enterprises increased to RMB 26,611,000, representing 48.3% of marketing and promotion services revenue, up from 19.5% in the previous year[18]. - Revenue from marketing and promotion services decreased by 40.0%, from approximately RMB 91.9 million for the six months ended June 30, 2022, to approximately RMB 55.1 million for the period ended June 30, 2023[28]. - Overall revenue decreased by approximately 36.5% for the six months ended June 30, 2023, compared to the same period in 2022, primarily due to a decline in advertisement placement and distribution services[38]. - Revenue from online marketing services accounted for 99.9% of total revenue from marketing and promotion services for the six months ended June 30, 2023, amounting to RMB 55.1 million[32]. Strategic Acquisitions and Plans - The company acquired 100% equity interest in ASMKT on May 31, 2023, to enhance its capabilities in virtual goods sourcing and delivery[15]. - The company plans to expand the type of virtual goods and customer base in the second half of 2023 following the acquisition of ASMKT[15]. - The company aims to maximize cross-segment synergies from strategic investments in marketing and lottery-related software solutions[20]. - The company plans to expand its market presence among the Welfare Lottery and Sports Lottery in the second half of 2023[42]. - The company will continue to develop lottery-related software and hardware to facilitate digital transformation in lottery shops[43]. - The company plans to develop a SaaS enterprise marketing service platform to enhance marketing channels and operational efficiency in lottery retail stores[54]. - The investment in Mingzhi aims to strengthen the company's market presence in the Sports Lottery sector[51]. - The company will focus on strategic investments to maximize synergies across its segments in promotion and marketing services[45]. - The company launched lottery marketing tickets in December 2022, targeting large-scale sales platform customers[48]. Financial Performance and Margins - The gross margin increased from 52.9% for the six months ended June 30, 2022, to 63.0% for the six months ended June 30, 2023, primarily due to higher profit margins from IT solutions and virtual goods services[57]. - Gross profit margin improved from 52.9% in the first half of 2022 to 63.0% in the first half of 2023, primarily due to higher margins in IT solution services[92]. - Net profit margin decreased to 16.6% in the first half of 2023 from 26.7% in the previous year[175]. - Adjusted net profit margin under HKFRS measures fell to 15.8% from 31.6% year-on-year[175]. - Profit for the period decreased by approximately RMB 16.9 million, or 59.5%, from RMB 28.4 million in 2022 to RMB 11.5 million in 2023[118]. - The adjusted net profit for the six months ended June 30, 2023, was RMB 10.9 million, down 63.6% from RMB 29.9 million in the prior year[121]. Cost Management - Total cost of sales decreased by RMB 25.6 million, or 50.0%, from RMB 51.1 million for the six months ended June 30, 2022, to RMB 25.6 million for the same period in 2023[73]. - Traffic acquisition costs decreased from approximately RMB 45.3 million for the six months ended June 30, 2022, to approximately RMB 21.6 million for the same period in 2023, representing a reduction of 52.3%[73]. - Selling and distribution expenses decreased by 17.9% from approximately RMB 4.8 million in 2022 to RMB 3.9 million in 2023[96]. - Administrative expenses increased by approximately RMB 6.9 million, or 98.6%, from RMB 7.0 million in 2022 to RMB 13.9 million in 2023, primarily due to higher employee benefits and professional fees[113]. - Research and development expenses increased by 24.9% from approximately RMB 7.5 million in 2022 to approximately RMB 9.4 million in 2023, attributed to a higher number of employees focused on platform upgrades[98]. Customer and Supplier Concentration - The top five customers accounted for 69.2% of the Group's revenue for the six months ended June 30, 2023, with the largest customer contributing 31.1%[153]. - The top five suppliers represented 73.8% of the total costs of sales for the same period, with the largest supplier accounting for 58.8%[153]. Employee and Financial Ratios - The Group had 215 full-time employees as of June 30, 2023, with the majority based in Hangzhou and Xi'an, China[140]. - Total employee costs for the Group amounted to approximately RMB 20.7 million for the six months ended June 30, 2023, compared to RMB 19.3 million for the same period in 2022, reflecting an increase of 7.2%[124]. - As of June 30, 2023, the Group's gearing ratio was 29.6%, up from 12.9% as of December 31, 2022[148]. - The Group's bank borrowings increased to approximately RMB 90 million as of June 30, 2023, compared to RMB 38 million as of December 31, 2022[149]. - Current ratio decreased to 2.6 times as of June 30, 2023, compared to 3.7 times at the end of 2022[175]. Cash Flow and Capital Commitments - Cash and cash equivalents decreased by RMB 38.6 million from RMB 186.8 million as of December 31, 2022, to RMB 148.2 million as of June 30, 2023, primarily due to the cash consideration paid for the acquisition of ASMKT amounting to RMB 41.8 million[150]. - The Group had capital commitments of RMB 10 million as of June 30, 2023, related to the acquisition of ASMKT[153].

[Performance Summary](index=1&type=section&id=Performance%20Summary) The company experienced a significant decline in revenue and profit for H1 2023, with adjusted net profit decreasing by 63.6% and no interim dividend declared [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2023, the company's total revenue decreased by 36.5% to RMB 68.98 million, gross profit declined by 24.4% to RMB 43.42 million, and profit attributable to owners significantly fell by 59.6% to RMB 11.48 million, with adjusted net profit (non-HKFRS measure) decreasing by 63.6% and no interim dividend declared Financial Highlights (RMB thousands) | Metric | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 68,975 | 108,591 | -36.5% | | Gross Profit | 43,420 | 57,458 | -24.4% | | Profit Before Income Tax | 13,488 | 34,085 | -60.4% | | Profit Attributable to Owners | 11,479 | 28,427 | -59.6% | | Adjusted Net Profit | 10,872 | 29,880 | -63.6% | - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2023[49](index=49&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's operational performance, financial results, and strategic outlook for the reporting period [Business Review and Outlook](index=2&type=section&id=Business%20Review%20and%20Outlook) The company is actively diversifying its business from traditional marketing and promotion services to IT solutions, virtual goods procurement and delivery, and lottery-related businesses, having acquired ASMKT to enhance virtual goods delivery and increased investment in the lottery sector, with future focus on lottery marketing, SaaS platform development, and cross-segment synergies [Business Review](index=2&type=section&id=Business%20Review) During the reporting period, the company diversified its business through organic growth and external acquisitions, including acquiring ASMKT for virtual goods procurement and delivery, investing in Mingzhi and Caipingfang while developing data management systems to expand into the lottery industry, and extending services to tangible goods and IT solutions - On May 31, 2023, the Group acquired **100%** equity interest in Zaiyingduan Network Technology (ASMKT) to leverage its technological R&D advantages in virtual goods procurement and delivery, promoting the company's related business development in China[24](index=24&type=chunk)[51](index=51&type=chunk) - The company expanded virtual goods delivery services to the lottery industry, investing in "Mingzhi" for sports lottery software solutions and "Caipingfang" for welfare lottery agency sales, aiming to expand market share and establish a nationwide lottery system[36](index=36&type=chunk)[38](index=38&type=chunk)[54](index=54&type=chunk) - The company continues to focus on lottery-related software and hardware R&D, developing a data management system for lottery operations to enhance operational efficiency[39](index=39&type=chunk) - Service scope expanded to procurement and delivery of tangible products (primarily daily necessities) by the end of June 2023, expected to contribute revenue starting in H2 2023[37](index=37&type=chunk) [Future and Outlook](index=4&type=section&id=Future%20and%20Outlook) Looking ahead, the company will focus on lottery marketing vouchers to capitalize on sales growth opportunities, plans to develop a SaaS enterprise marketing service platform initially for lottery retail stores to enhance operational efficiency, and will continue prioritizing strategic investments to maximize cross-segment synergies and support business diversification - In H2 2023, the company will focus on lottery marketing vouchers to seize lottery sales growth opportunities and expand market share[78](index=78&type=chunk)[170](index=170&type=chunk) - Plans include developing a SaaS enterprise marketing service platform, initially covering lottery retail stores to improve their operational efficiency and cross-sell other services[77](index=77&type=chunk) - Will continue to prioritize strategic investments, maximizing cross-segment synergies between promotion marketing and lottery-related solutions, and supporting business diversification[79](index=79&type=chunk)[194](index=194&type=chunk) [Financial Performance Review](index=5&type=section&id=Financial%20Performance%20Review) During the reporting period, the company's overall revenue decreased by 36.5% year-on-year, primarily due to reduced advertising placement and distribution service revenue; despite the revenue decline, gross profit margin increased from 52.9% to 63.0% due to a higher proportion of high-margin businesses and lower traffic acquisition costs, though administrative expenses surged by 98.6%, leading to a 59.5% sharp decline in profit for the period [Revenue Analysis](index=5&type=section&id=Revenue%20Analysis) Total revenue decreased by 36.5% from RMB 109 million in the prior period to RMB 69 million, primarily due to a 40.0% decline in marketing and promotion services, with advertising placement and distribution services significantly impacted by market weakness and increased competition; however, virtual goods procurement and delivery services revenue grew by 10.0% to RMB 28.1 million, and lottery-related IT solutions revenue increased by 65.8% to RMB 13.3 million, partially offsetting the advertising downturn Revenue by Business Segment (RMB thousands) | Business Segment | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Marketing and Promotion Services** | **55,067** | **91,854** | **-40.0%** | | - Advertising Placement Services | 1,371 | 5,451 | -74.8% | | - Advertising Distribution Services | 21,802 | 56,690 | -61.6% | | - Virtual Goods Procurement and Delivery | 28,145 | 25,583 | +10.0% | | **IT Solution Services** | **13,905** | **16,689** | **-16.7%** | | - Lottery-Related Solutions | 13,339 | 8,047 | +65.8% | | - Mobile Game and Software Development | 566 | 8,642 | -93.5% | | **Total Revenue** | **68,975** | **108,591** | **-36.5%** | - The decline in advertising placement and distribution service revenue was primarily due to reduced client marketing budgets caused by a weak Chinese consumer market and intensified industry competition[68](index=68&type=chunk)[91](index=91&type=chunk)[113](index=113&type=chunk) - The total GMV for virtual goods procurement and delivery services increased from **RMB 477 million** to **RMB 728 million**, primarily benefiting from an expanded product portfolio from 92 to 776 items and the acquisition of ASMKT[73](index=73&type=chunk)[92](index=92&type=chunk)[110](index=110&type=chunk) [Cost and Gross Profit Analysis](index=11&type=section&id=Cost%20and%20Gross%20Profit%20Analysis) Cost of sales significantly decreased by 50.0% year-on-year to RMB 25.6 million, primarily due to a 52.3% reduction in traffic acquisition costs; gross profit margin notably improved from 52.9% to 63.0%, driven by effective cost control and an increased revenue contribution from higher-margin IT solutions and virtual goods businesses - Total cost of sales decreased by **50.0%** from **RMB 51.1 million** to **RMB 25.6 million**[1](index=1&type=chunk) - Traffic acquisition cost, the largest component of cost of sales (**84.4%**), decreased by **52.3%** from **RMB 45.3 million** to **RMB 21.6 million**[1](index=1&type=chunk) - Gross profit margin increased from **52.9%** to **63.0%**, primarily due to an increased proportion of high-margin IT solution services and higher revenue contribution from virtual goods procurement and delivery services recognized on a net basis[30](index=30&type=chunk) [Operating Expenses and Other Income/Expenses Analysis](index=12&type=section&id=Operating%20Expenses%20and%20Other%20Income%2FExpenses%20Analysis) During the reporting period, operating expenses significantly increased, with administrative expenses surging by 98.6% year-on-year to RMB 13.9 million due to higher staff welfare and professional fees for maintaining listing status, R&D expenses growing by 24.9% to RMB 9.4 million for platform system development, while sales and distribution expenses decreased by 17.9%, and other income sharply declined by 58.5% due to reduced government grants Operating Expenses (RMB millions) | Item | H1 2023 (RMB millions) | H1 2022 (RMB millions) | YoY Change | | :--- | :--- | :--- | :--- | | Sales and Distribution Expenses | 3.9 | 4.8 | -17.9% | | Administrative Expenses | 13.9 | 7.0 | +98.6% | | Research and Development Expenses | 9.4 | 7.5 | +24.9% | - The increase in administrative expenses was primarily due to a **RMB 2.9 million** increase in staff welfare expenses, a **RMB 1.0 million** increase in directors' remuneration, and a **RMB 1.5 million** increase in professional fees for maintaining listing status, driven by business development[6](index=6&type=chunk) - Other income decreased by **58.5%** from **RMB 6.6 million** to **RMB 2.8 million**, mainly due to a **RMB 5.0 million** reduction in government grants[4](index=4&type=chunk) [Profitability Analysis](index=13&type=section&id=Profitability%20Analysis) The company's profitability significantly weakened due to declining revenue and surging administrative expenses, with profit for the period decreasing by 59.5% year-on-year to RMB 11.5 million; adjusted net profit (excluding listing expenses and exchange differences) was RMB 10.9 million, a 63.6% year-on-year decrease, and income tax expense fell by 64.5% due to reduced taxable profit - Profit for the period decreased by **59.5%** from **RMB 28.4 million** in the prior period to **RMB 11.5 million**[11](index=11&type=chunk) Reconciliation of Adjusted Net Profit (RMB thousands) | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners | 11,479 | 28,427 | | Add: Listing Expenses | – | 1,453 | | Add: Translation Differences | (607) | – | | **Adjusted Net Profit** | **10,872** | **29,880** | - Income tax expense decreased by **64.5%** from **RMB 5.7 million** to **RMB 2.0 million**, primarily due to a reduction in taxable profit[10](index=10&type=chunk) [Liquidity, Capital Resources, and Investments](index=15&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Investments) This section details the company's financial liquidity, capital structure, and significant investment activities, including the use of IPO proceeds [Financial Position and Capital Structure](index=15&type=section&id=Financial%20Position%20and%20Capital%20Structure) As of June 30, 2023, the company's financial position remained acceptable, though liquidity tightened, with cash and cash equivalents decreasing to RMB 148 million due to acquisition payments, and bank borrowings increasing to RMB 90 million to support business expansion, raising the gearing ratio from 12.9% to 29.6%, while the capital structure has seen no significant changes since listing - Cash and cash equivalents decreased from **RMB 187 million** at the end of 2022 to **RMB 148 million**, primarily due to the cash consideration of **RMB 41.8 million** paid for the ASMKT acquisition[23](index=23&type=chunk) - Interest-bearing bank borrowings increased from **RMB 38 million** at the end of 2022 to **RMB 90 million**[20](index=20&type=chunk)[22](index=22&type=chunk) - The gearing ratio increased from **12.9%** at the end of 2022 to **29.6%**[22](index=22&type=chunk)[99](index=99&type=chunk) - The company's capital structure has not undergone significant changes since its listing[121](index=121&type=chunk) [Significant Investments and Acquisitions](index=16&type=section&id=Significant%20Investments%20and%20Acquisitions) During the reporting period, the company's most significant investment was the acquisition of 100% equity interest in Zaiyingduan Network Technology (ASMKT) on May 31, 2023, aimed at leveraging ASMKT's technological advantages in virtual goods procurement and delivery to expand related businesses in China, with an outstanding capital commitment of RMB 10 million for this acquisition as of period-end - On May 31, 2023, the Group acquired **100%** equity interest in ASMKT, a company primarily engaged in loyalty marketing services through virtual goods procurement and delivery[24](index=24&type=chunk)[51](index=51&type=chunk) - As of June 30, 2023, the Group had a capital commitment of **RMB 10 million** for the remaining consideration of the ASMKT acquisition, to be settled on or before March 31, 2024[25](index=25&type=chunk) [Use of Proceeds from Initial Public Offering](index=31&type=section&id=Use%20of%20Proceeds%20from%20Initial%20Public%20Offering) The company listed in October 2022, raising net proceeds of approximately HKD 101 million; as of June 30, 2023, HKD 60.2 million has been utilized primarily for developing marketing channels, expanding supplier base, and acquisitions, with HKD 40.5 million remaining unutilized and expected to be fully deployed by December 31, 2024, as planned Use of IPO Proceeds and Utilization (HKD millions) | Purpose | Allocated Amount (HKD millions) | Utilized Amount (HKD millions) | Unutilized Balance (HKD millions) | | :--- | :--- | :--- | :--- | | Development and Expansion of Online Marketing Channels | 42.5 | 24.7 | 17.8 | | Development and Expansion of Supplier Base | 26.9 | 15.8 | 11.1 | | Acquisition of Marketing and Related Industry Companies | 15.0 | 15.0 | – | | Development and Operation of SaaS Platform | 6.3 | – | 6.3 | | General Working Capital | 10.0 | 4.7 | 5.3 | | **Total** | **100.7** | **60.2** | **40.5** | - The remaining unutilized net proceeds are expected to be fully utilized on or before December 31, 2024[178](index=178&type=chunk) [Other Important Information](index=14&type=section&id=Other%20Important%20Information) This section covers key operational details including major customer and supplier concentration, employee information, and a summary of key financial ratios [Major Customers and Suppliers](index=17&type=section&id=Major%20Customers%20and%20Suppliers) The company exhibits high reliance on its major customers and suppliers, with the top five customers accounting for 69.2% of total revenue and the largest customer contributing 31.1%, while the top five suppliers represented 73.8% of total cost of sales and the largest supplier 58.8% during the reporting period - For the six months ended June 30, 2023, the top five customers accounted for **69.2%** of total revenue, with the largest customer contributing **31.1%**[27](index=27&type=chunk) - For the six months ended June 30, 2023, the top five suppliers accounted for **73.8%** of total cost of sales, with the largest supplier contributing **58.8%**[28](index=28&type=chunk) [Employees and Remuneration](index=14&type=section&id=Employees%20and%20Remuneration) As of June 30, 2023, the company had 215 full-time employees, with total staff costs for the reporting period approximately RMB 20.7 million, an increase from RMB 19.3 million in the prior year, and while an employee share option scheme was adopted for incentives, no options were granted during the period - As of June 30, 2023, the company had **215** full-time employees[14](index=14&type=chunk) - For the six months ended June 30, 2023, total staff costs (including directors' remuneration) were approximately **RMB 20.7 million**[18](index=18&type=chunk) - The company adopted a share option scheme in July 2022, but no share options were granted during the reporting period[19](index=19&type=chunk) [Key Financial Ratios](index=17&type=section&id=Key%20Financial%20Ratios) Compared to the end of 2022, the company's financial ratios showed mixed performance, with gross profit margin improving from 52.0% to 63.0%, but net profit margin, adjusted net profit margin, return on equity, and return on total assets all significantly declined, while liquidity ratios decreased and the gearing ratio sharply rose from 12.9% to 29.6%, indicating increased leverage Key Financial Ratios | Ratio | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Profitability Ratios** | | | | Gross Profit Margin | 63.0% | 52.0% | | Net Profit Margin | 16.6% | 26.7% | | Return on Equity | 3.8% | 23.0% | | **Liquidity Ratios** | | | | Current Ratio | 2.6x | 3.7x | | **Capital Adequacy Ratios** | | | | Gearing Ratio | 29.6% | 12.9% | [Condensed Consolidated Financial Statements](index=20&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2023, including the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, and related notes, prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=20&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the company's revenue, costs, various expenses, profit before tax, and profit for the period, showing revenue of RMB 68.98 million, cost of sales of RMB 25.56 million, gross profit of RMB 43.42 million, and profit for the period of RMB 11.48 million Consolidated Statement of Profit or Loss Summary (RMB thousands) | Item | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 68,975 | 108,591 | | Cost of Sales | (25,555) | (51,133) | | **Gross Profit** | **43,420** | **57,458** | | Administrative Expenses | (13,898) | (6,981) | | Research and Development Expenses | (9,385) | (7,513) | | **Profit Before Income Tax** | **13,488** | **34,085** | | Income Tax Expense | (2,009) | (5,658) | | **Profit for the Period** | **11,479** | **28,427** | [Interim Condensed Consolidated Statement of Financial Position](index=21&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the company's assets, liabilities, and equity as of June 30, 2023, showing total assets of RMB 462 million, total liabilities of RMB 156 million, and net assets of RMB 305 million, with non-current assets increasing due to goodwill and current liabilities rising due to increased bank borrowings Consolidated Statement of Financial Position Summary (RMB thousands) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Non-Current Assets** | 57,664 | 35,599 | | **Current Assets** | 403,931 | 364,101 | | **Total Assets** | **461,595** | **399,700** | | **Current Liabilities** | 152,772 | 97,476 | | **Non-Current Liabilities** | 3,504 | 4,763 | | **Total Liabilities** | **156,276** | **102,239** | | **Net Assets/Total Equity** | **305,319** | **297,461** | [Notes to Financial Statements](index=23&type=section&id=Notes%20to%20Financial%20Statements) The notes provide detailed information on the basis of financial statement preparation, accounting policies, segment information, revenue breakdown, and tax matters, highlighting that the company primarily operates in China with three reporting segments (marketing and promotion services, IT solution services, and others), most revenue derived from mainland Chinese customers, and certain subsidiaries benefiting from a 15% preferential tax rate as high-tech enterprises - The interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[127](index=127&type=chunk) - The Group has three reporting segments: (i) Marketing and Promotion Services; (ii) IT Solution Services; and (iii) Others[154](index=154&type=chunk) - Certain subsidiaries of the Group operating in China are certified as "High-Tech Enterprises" and are subject to a preferential corporate income tax rate of **15%**[141](index=141&type=chunk)

Financial Performance - Total revenue increased by 16.9% in 2022, reaching RMB 256.6 million compared to RMB 219.5 million in 2021[10] - Gross profit rose by 21.1% to RMB 133.5 million in 2022, up from RMB 110.2 million in 2021[10] - Profit before income tax increased by 41.8% to RMB 81.2 million, with profit attributable to owners of the company rising by 37.0% to RMB 68.5 million[10] - Other income increased by approximately 83.5% from RMB 7.4 million in 2021 to RMB 13.5 million in 2022, mainly due to an increase in government subsidies[59] - Revenue for the year ended December 31, 2022, was RMB 256.6 million, representing a 16.8% increase from RMB 219.5 million in 2021[191] - Gross profit for 2022 was RMB 133.5 million, up 21.1% from RMB 110.2 million in 2021[191] - Profit for the year attributable to owners of the company was RMB 68.5 million, an increase of 37.0% compared to RMB 50.0 million in 2021[191] Revenue Breakdown - Revenue from marketing and promotion services grew by 29.4% to RMB 211.5 million, accounting for 82.4% of total revenue[19] - Online marketing services revenue reached RMB 208.9 million, representing 98.7% of total revenue from marketing and promotion services in 2022[20] - Revenue from advertisement distribution services reached RMB 133,711,000, accounting for 52.1% of total revenue, up from RMB 107,921,000 in 2021[174] - Revenue from virtual goods sourcing and delivery services increased to RMB 54,777,000, representing a growth of 21.3% year-on-year[174] - Revenue from IT solutions services decreased by 19.2%, from RMB 55.7 million in 2021 to RMB 45.0 million in 2022, primarily due to delays caused by the COVID-19 pandemic[53] - Revenue from advertisement placement services amounted to RMB 14.1 million in 2022, up from RMB 6.2 million in 2021, representing 6.7% of marketing and promotion services revenue[47] - Revenue from advertising distribution services increased from RMB 107.9 million in 2021 to RMB 133.7 million in 2022, accounting for 63.2% of marketing and promotion services revenue[49] Cost and Expenses - Traffic acquisition costs rose by 39.3% to RMB 105.7 million, constituting approximately 85.8% of total cost of sales in 2022[29] - Research and development expenses increased by 1.4% to approximately RMB 18.9 million in 2022[37] - Selling and distribution expenses decreased by approximately RMB 1.6 million, or 16.8%, from RMB 9.6 million in 2021 to RMB 8.0 million in 2022, primarily due to reduced travel and entertainment expenses[85] - Administrative expenses increased by approximately RMB 4.7 million, or 34.0%, from RMB 13.9 million in 2021 to RMB 18.6 million in 2022, mainly due to higher intermediary service fees and professional fees[87] - Finance costs increased by approximately 143.0%, from RMB 0.7 million in 2021 to RMB 1.6 million in 2022, due to higher interest expenses from increased bank borrowings[63] - Income tax expenses increased by approximately RMB 5.4 million, or 74.9%, from about RMB 7.2 million in 2021 to approximately RMB 12.7 million in 2022, with the effective tax rate rising from 12.7% to 15.6%[89] Customer and Supplier Dynamics - The number of customers for advertisement distribution services increased from 9 in 2021 to 16 in 2022, contributing to revenue growth[23] - The number of customers for advertisement placement services increased from 159 in 2021 to 180 in 2022[47] - The top five customers accounted for 66.7% of the revenue for the year ended December 31, 2022, down from 71.5% in 2021, with the largest customer contributing 42.1% of the revenue[80] - The total costs of sales from the top five suppliers represented 77.4% for the year ended December 31, 2022, compared to 74.2% in 2021, with the largest supplier accounting for 61.4% of total costs[81] Strategic Plans and Future Outlook - The company plans to expand online marketing channels and supplier base in 2023, along with potential acquisitions in the marketing sector[6] - The company aims to enhance its lottery business by expanding sales points and establishing new business relationships, particularly focusing on Zhejiang Province[122] - The company aims to strengthen synergies between its marketing services, lottery solutions, and the tobacco industry to enhance user acquisition and retention[123] - The company will increase investment in advertising solutions development to help clients monetize existing user traffic[124] - The reopening of Chinese borders in January 2023 is expected to boost retail sales, positively impacting the company's business[125] - The company will continue to develop its SaaS enterprise marketing platform to adapt to rapid changes in customer advertising needs[125] - The company has maintained stable business relationships with clients and aims to further expand its comprehensive marketing solutions capabilities[125] - The company is committed to strategic investments and acquisitions to enhance its product portfolio and develop future business in the sports and public welfare lottery sectors[122] - The company will closely monitor its liquidity position to ensure sufficient financial resources are available to meet its funding needs[119] Capital and Shareholder Information - The company raised total net proceeds of HK$100.7 million from its IPO on 17 October 2022, after deducting related expenses[113] - The Group's employee costs totaled approximately RMB 39.9 million for the year ended December 31, 2022, up from RMB 33.3 million in 2021[94] - As of December 31, 2022, the Group had interest-bearing borrowings of RMB 38.0 million, an increase from RMB 21.1 million as of December 31, 2021, with the largest portion being unsecured and unguaranteed[72] - As of December 31, 2022, the Group had lease liabilities of RMB 351,000, compared to nil in 2021[72] - The Company adopted a share option scheme on July 27, 2022, to incentivize eligible persons for their contributions, although no options were granted during the year[95] Market and Economic Conditions - The company plans to continue monitoring macroeconomic and socio-political developments that could impact its business in the PRC[164] - The impact of COVID-19 in early 2022 led to a decline in online advertising spending compared to the previous quarter[193] - The company aims to continue expanding its online marketing services as a key growth driver[196]

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。 本公告載有涉及風險及不明確因素的前瞻性陳述。除過往事實陳述以外的所 有陳述均為前瞻性陳述。該等陳述涉及已知及未知的風險、不明確因素及其他 因素，當中部分並非本公司所能控制，且可導致實際業績、表現或成果與該等 前瞻性陳述所明示或暗示者存在重大差異。 閣下不應依賴前瞻性陳述作為未 來事件的預測。本公司概不承擔任何更新或修訂任何前瞻性陳述的責任，無論 是否由於新資料、未來事件或其他因素所致。 Rego Interactive Co., Ltd （潤歌互動有限公司） （於開曼群島註冊成立的有限公司） （股份代號：2422） 截 至2022年12月31日 止 年 度 全 年 業 績 公 告 潤歌互動有限公司董事會欣然宣佈本公司及其附屬公司截至2022年12月31日 止年度的經審核綜合財務業績，連同截至2021年12月31日止年度的比較數字如 下。年度業績已經本公司審核委員會審閱。 於本公告內，凡提及「我們」均指 ...