Revenue Growth - Revenue for the six months ended June 30, 2023, increased to RMB 1,017.8 million, a growth of 64.2% compared to RMB 619.8 million for the same period in 2022[3] - The revenue from board games surged to RMB 923.2 million, marking an increase of approximately 104.3% from RMB 451.8 million in the same period last year[6] - Sales revenue from virtual items reached approximately RMB 963.9 million, a 100.7% increase from RMB 480.2 million year-over-year[7] - The company's total revenue for the six months ended June 30, 2023, was approximately RMB 1,017.8 million, an increase of about 64.2% compared to RMB 619.8 million for the same period in 2022[12] - Total revenue for the six months ended June 30, 2023, was RMB 1,017,834 thousand, a significant increase from RMB 619,786 thousand in the same period of 2022, representing a growth of approximately 64.3%[43] - Revenue from self-developed games reached RMB 960,029 thousand, compared to RMB 477,900 thousand in the previous year, indicating an increase of about 100.5%[43] - Revenue from third-party games was RMB 3,894 thousand, up from RMB 2,333 thousand, showing a growth of approximately 67.0%[43] Profitability - The adjusted net profit for the same period rose to RMB 413.2 million, reflecting a 73.3% increase from RMB 238.5 million in the prior year[8] - The overall net profit margin improved to 39.7% for the six months ended June 30, 2023, compared to 38.2% in the same period of 2022[3] - Net profit for the six months ended June 30, 2023, was approximately RMB 404.3 million, representing a 70.6% increase from RMB 236.9 million in the same period of 2022[22] - The company's adjusted net profit, excluding share-based compensation, was approximately RMB 413.2 million, a 73.3% increase from RMB 238.5 million in the previous year[23] - The group's pre-tax profit from continuing operations for the six months ended June 30, 2023, was RMB 404,845,000, compared to RMB 237,010,000 for the same period in 2022, reflecting a growth of 70.8%[52] User Engagement - Monthly active users decreased to 25,068 from 38,707 year-over-year, while daily active users fell to 4,404 from 6,288[6] - The average revenue per paying user (ARPPU) for virtual items increased significantly to RMB 289, up from RMB 82 in the previous year[6] - The company reported a significant increase in monthly active users, reaching 1.5 million, representing a 25% year-over-year growth[68] - Daily active users have increased to 500,000, showing a 30% rise from the last quarter[68] - The average revenue per paying user (ARPPU) for the quarter was $15, indicating a 10% increase compared to the previous quarter[67] Expenses and Costs - The company's gross profit increased by 59.1% to approximately RMB 635.7 million, with a slight decrease in gross margin from 64.5% to 62.5%[14] - Research and development expenses rose by 47.7% to approximately RMB 73.8 million, primarily due to an increase in the number of R&D personnel and their salaries[19] - Sales and distribution expenses decreased by 10.8% to approximately RMB 73.4 million, attributed to reduced promotional and advertising expenses[17] - Administrative expenses increased by 63.5% to approximately RMB 60.7 million, primarily due to higher salaries for administrative staff[18] - The cost of sales increased by 73.6% to approximately RMB 382.1 million, driven by overall revenue growth and increased new media costs[13] Future Strategies - The company plans to strengthen its competitive advantage in the board game sector and enhance research and operational management levels in the second half of 2023[9] - Future strategies include continuous investment in product iteration and user experience, as well as active expansion into overseas gaming markets[9] - The company plans to launch two new games in Q4 2023, aiming to expand its market presence and attract more users[69] - The management provided a revenue guidance of $50 million for the next quarter, reflecting a 20% growth expectation[69] - The company is exploring potential acquisitions to further expand its market share in the gaming industry[69] Financial Position - The total cash and bank balance increased from approximately RMB 1.1 billion as of December 31, 2022, to approximately RMB 1.4 billion as of June 30, 2023, due to increased cash surplus from operating profits[25] - As of June 30, 2023, the current ratio was 4.2, down from 5.8 as of December 31, 2022[25] - As of June 30, 2023, the debt-to-equity ratio was 0.6%, down from 0.8% as of December 31, 2022[26] - The company reported a total current asset value of approximately RMB 1,934.6 million as of June 30, 2023, compared to RMB 1,534.3 million as of December 31, 2022[34] - Trade receivables amounted to RMB 179,332,000, an increase from RMB 161,763,000 as of December 31, 2022, representing an increase of approximately 10.8%[54] Compliance and Governance - The company has implemented a real-name authentication system and anti-addiction measures in compliance with regulations for protecting minors[8] - The company’s board of directors confirmed compliance with corporate governance codes during the reporting period[62] - The company has adopted new accounting standards effective January 1, 2023, but these changes did not impact the interim financial data[39] - There were no significant changes in accounting policies that would affect the financial performance or position of the company[39] - The company has not disclosed any information regarding the impact of international tax reforms on its financial statements, as it does not fall under the scope of the relevant legislation[39]

Financial Performance - Total revenue for Zengame Technology increased by 19.9% to approximately RMB 1,767.5 million in 2022 from RMB 1,473.9 million in 2021[9]. - Net profit rose by 36.0% to approximately RMB 680.3 million in 2022 compared to RMB 500.3 million in 2021[11]. - Adjusted net profit (excluding share-based compensation) increased by 38.2% to approximately RMB 695.0 million in 2022 from RMB 503.0 million in 2021[11]. - Gross profit margin improved to 64.4% in 2022 from 61.4% in 2021, reflecting a 3.0 percentage point increase[9]. - Earnings per share rose by 38.8% to RMB 0.68 in 2022 from RMB 0.49 in 2021[9]. - Revenue from virtual goods sales reached approximately RMB 1,541.8 million, up 47.8% from RMB 1,043.0 million in 2021[22]. - Revenue from self-developed games reached RMB 926.2 million in 2022, with a gross margin of 60.5%, compared to RMB 556.9 million and 53.8% in 2021[28]. - Other income rose by 76.8% from approximately RMB 32.1 million in 2021 to approximately RMB 56.7 million in 2022, primarily due to increased income from interest-bearing assets and government subsidies[29]. - The sales cost for the year ended December 31, 2022, was approximately RMB 629.5 million, an increase of about 10.7% from RMB 568.6 million in 2021[26]. User Engagement - Monthly active users decreased to 35,967 thousand in 2022 from 43,237 thousand in 2021, representing a decline of approximately 16%[16]. - Daily active users decreased to 5,810 thousand in 2022 from 6,890 thousand in 2021, reflecting a decline of about 16%[16]. - Monthly paying users for virtual items increased to 1,015 thousand in 2022 from 951 thousand in 2021, showing an increase of approximately 7%[16]. - Average revenue per paying user (ARPPU) for virtual items rose significantly from RMB 88 in 2021 to RMB 133 in 2022, an increase of approximately 51%[16]. - User retention rates improved to 85%, up from 80% in the previous year[164]. Strategic Focus - The flagship product "Finger Sichuan Mahjong" achieved the highest ranking in the iOS best-selling list for card games in China[11]. - The company focused on enhancing user retention and in-game payment rates through product innovation and marketing strategies[11]. - Zengame Technology plans to reduce investment in hyper-casual games and allocate more resources to the innovation and optimization of key card games[11]. - The company plans to continue focusing on classic card and casual games in both domestic and overseas markets, enhancing product development and innovation capabilities[12]. - The group plans to enhance R&D capabilities and actively explore overseas gaming markets in 2023[20]. Compliance and Regulations - The company has implemented real-name authentication and anti-addiction measures in response to new regulations aimed at protecting minors[12]. - The company is committed to ensuring compliance with relevant laws and regulations across all game products, enhancing user privacy protection measures[12]. - The group has not encountered any regulatory interference regarding the adoption of the 指尖互动娱乐架构合约, allowing the financial performance of 指尖互动娱乐 to be consolidated into the group's financial results[133]. - The company has not encountered any regulatory interference in adopting the Zenyou Shenzhen framework agreements[112]. Corporate Governance - The board of directors includes three executive directors and three independent non-executive directors, with changes in the board noted since the mid-year report[59][60]. - The company has adopted a dividend policy without a preset payout ratio, allowing the board to recommend dividends based on financial conditions and operational needs[47]. - The company has established three committees: the audit committee, remuneration committee, and nomination committee, each with specific written terms of reference[191]. - The board of directors is responsible for leading and monitoring the company, ensuring effective internal controls and risk management systems[187]. - The company has received annual confirmations of independence from all independent non-executive directors, affirming their status[185]. Shareholder Information - The company proposed a final dividend of HKD 0.21 per share for the year ended December 31, 2022, totaling HKD 215.9 million[47]. - As of December 31, 2022, the company had distributable reserves of RMB 59.1 million and total borrowings of approximately RMB 13.5 million, an increase from RMB 9.1 million as of December 31, 2021[52]. - The company has not entered into any related party transactions that require disclosure under the Listing Rules for the year ended December 31, 2022[108]. - The company has maintained at least 25% of its issued share capital held by the public as required by listing rules[157]. Employee Information - Total employee compensation for the year ended December 31, 2022, was approximately RMB 242.7 million, an increase of 41.1% from RMB 172.0 million in 2021[106]. - The average number of employees increased by 28.6% in 2022 compared to 2021, reaching approximately 524 employees[106]. - The company has maintained good working relationships with employees, with no significant labor disputes reported during the year[106]. Future Outlook - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[172]. - New product launches are expected to contribute an additional $20 million in revenue in the next fiscal year[171]. - The company is investing $5 million in research and development for new technologies aimed at enhancing user experience[167]. - A strategic acquisition of a smaller tech firm is anticipated to close by Q3 2023, expected to add $10 million in annual revenue[166]. - The company has set a performance guidance of 10% revenue growth for the upcoming fiscal year[168].

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 1,767,456,000, representing a year-on-year increase of 19.9% from RMB 1,473,958,000 in 2021[2] - Gross profit increased to RMB 1,137,984,000, with a gross margin of 64.4%, up from 61.4% in the previous year[2] - Net profit for the year was RMB 680,256,000, reflecting a 36.0% increase compared to RMB 500,343,000 in 2021[2] - Revenue from the sale of virtual items was approximately RMB 1.54 billion, representing a 47.8% increase from approximately RMB 1.00 billion in the previous year[11] - The adjusted net profit (excluding share-based payments) rose to RMB 694,975,000, a 38.2% increase from RMB 503,003,000 in 2021[2] - The company's gross profit increased by 25.7% to approximately RMB 1.10 billion, with a gross margin of 64.4%, up from 61.4% in the previous year[13] - The company's net profit for the year ended December 31, 2022, was approximately RMB 680.3 million, an increase of about 36.0% compared to RMB 500.3 million for the year ended December 31, 2021[22] - The adjusted net profit for the year ended December 31, 2022, was approximately RMB 695.0 million, reflecting a 38.2% increase from approximately RMB 503.0 million in the previous year[23] - The total income tax expense for the year was RMB 80,373,000 in 2022, down from RMB 98,493,000 in 2021, indicating a decrease of 18.4%[51] - The basic earnings attributable to equity holders of the parent for 2022 were RMB 680,783,000, up from RMB 500,343,000 in 2021, representing a growth of 36%[54] User Metrics - Monthly active users decreased to 35,967,000 from 43,237,000, while daily active users fell to 5,810,000 from 6,890,000[6] - The number of monthly paying users for virtual items rose to 1,015,000, up from 951,000, with ARPPU increasing from RMB 88 to RMB 133[6] - Cumulative registered players reached approximately 1.4 billion by December 31, 2022, up from 1.3 billion in the previous year[7] Revenue Sources - Revenue from board games increased by approximately 60.7%, from RMB 918,000,000 in 2021 to RMB 1,474,900,000 in 2022[6] - Revenue from self-developed games reached RMB 1,531,283 thousand in 2022, up from RMB 1,034,814 thousand in 2021, indicating a growth of about 47.9%[43] Expenses and Investments - Research and development expenses rose by 35.8% to approximately RMB 125.7 million, primarily due to an increase in the number of R&D personnel and their salaries[18] - Sales and distribution expenses increased by 17.4% to approximately RMB 206.3 million, mainly due to promotions for virtual items and increased sales personnel compensation[16] - The company’s administrative expenses increased by 35.8% to approximately RMB 88.0 million, attributed to increased office space and personnel costs[17] - The company plans to continue investing in R&D to enhance product development capabilities and innovation[9] Financial Position - Total cash and bank balances increased from approximately RMB 1 billion as of December 31, 2021, to approximately RMB 1.1 billion as of December 31, 2022, primarily due to increased cash reserves from operating profits[23] - Current assets as of December 31, 2022, were approximately RMB 1.5 billion, with current liabilities of approximately RMB 262.7 million, resulting in a current ratio of 5.8[24] - The company’s total assets less current liabilities amounted to RMB 1,787.96 million as of December 31, 2022, compared to RMB 1,250.37 million in 2021[32] - Non-current liabilities decreased from RMB 25,147 thousand in 2021 to RMB 22,199 thousand in 2022, a reduction of approximately 11.5%[33] - Net asset value increased significantly from RMB 1,225,222 thousand in 2021 to RMB 1,765,760 thousand in 2022, representing a growth of about 44%[33] - Total equity rose from RMB 1,225,222 thousand in 2021 to RMB 1,765,760 thousand in 2022, marking an increase of approximately 44%[33] Corporate Governance - The audit committee confirmed compliance with applicable accounting principles and standards for the fiscal year ending December 31, 2022[81] - The company has adopted the corporate governance code as per the Stock Exchange Listing Rules Appendix 14, ensuring transparency and accountability to shareholders[78] - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and internal controls[80] - All directors confirmed adherence to the standard code of conduct for securities trading during the fiscal year ending December 31, 2022[79] - The company aims to maintain high standards of corporate governance through continuous review and monitoring of its practices[78] - The company has a dual leadership structure with the same individual serving as both Chairman and CEO, which is believed to enhance unified leadership[78] Shareholder Information - The proposed final dividend per ordinary share for 2022 is HKD 0.21, compared to HKD 0.15 in 2021, reflecting an increase of 40%[52] - The proposed final dividend for the year ended December 31, 2022, is HKD 0.21 per share, totaling HKD 215.9 million, compared to HKD 0.15 per share in 2021[76] - The company had 1,027,731,687 shares issued and fully paid as of December 31, 2022, compared to 1,017,444,000 shares in 2021, reflecting an increase of 1.1%[72] Compliance and Reporting - The financial statements were prepared in accordance with the Hong Kong Financial Reporting Standards, ensuring compliance with local accounting regulations[35] - The group adopted revised Hong Kong Financial Reporting Standards for the first time in the current financial year, which may impact the financial reporting practices[38] - The annual performance announcement and annual report for the fiscal year ending December 31, 2022, will be published on the Stock Exchange and the company's website[84] - The company reported no significant impact on its financial position or performance due to the adoption of new accounting standards effective from January 1, 2022[39] Employee Information - The total employee compensation for the year ended December 31, 2022, was RMB 242.7 million, a 41.1% increase from RMB 172.0 million in 2021[75] - The company had approximately 524 employees as of December 31, 2022, an increase from 490 employees in 2021[75]

Financial Performance - Revenue for the first half of 2022 reached RMB 619.8 million, a 39.5% increase from RMB 444.2 million in the same period of 2021[20] - Gross profit for the same period was RMB 399.6 million, reflecting a 39.4% increase from RMB 286.6 million year-on-year[20] - The net profit for the first half of 2022 was RMB 236.9 million, a 62.5% increase from RMB 145.7 million in the same period of 2021[20] - The company's total revenue for the six months ended June 30, 2022, was approximately RMB 619.8 million, an increase of about 39.5% from RMB 444.2 million for the same period in 2021[25] - The net profit for the six months ended June 30, 2022, rose to approximately RMB 236.9 million, reflecting a growth of about 62.5% from RMB 145.7 million in the same period of 2021[25] - Adjusted net profit (excluding share-based payments) increased to approximately RMB 238.5 million, up about 62.8% from RMB 146.4 million year-on-year[25] - Total comprehensive income for the period was RMB 239,049 thousand, compared to RMB 144,294 thousand in the previous year[80] - Basic and diluted earnings per share for the period were RMB 0.24, compared to RMB 0.14 in the same period of 2021[79] User Metrics - The number of cumulative registered players increased to 1,383,225, up from 1,203,373 in the previous year, representing a growth of approximately 14.9%[22] - Monthly active users decreased to 38,707 from 44,443, indicating a decline of about 13.0% year-on-year[22] - The average revenue per paying user (ARPPU) rose to RMB 82, an increase of 26.2% from RMB 65 in the same period of 2021[22] Revenue Sources - The revenue from virtual goods sales was approximately RMB 480.2 million, a significant increase of 112.0% compared to RMB 226.5 million in the previous year[24] - Revenue from self-developed games reached RMB 477,900 thousand, up from RMB 221,068 thousand in the previous year, indicating an increase of about 116%[96] - Revenue from third-party games decreased to RMB 2,333 thousand from RMB 5,447 thousand, reflecting a decline of approximately 57.3%[96] - Revenue from in-game information services decreased to approximately RMB 139.6 million, down about 35.9% from RMB 217.7 million in the previous year, primarily due to reduced income from card games[30] Game Development and Strategy - The flagship product "Finger Sichuan Mahjong" ranked first in the iOS best-selling chart for board games in China during the first half of 2022[24] - The company launched two new games targeting overseas markets in the first half of 2022, expanding its product offerings[24] - The company reduced its investment in hyper-casual games and delisted 15 games to focus on high-quality game development[23] - The company plans to focus on R&D investment, enhancing player experience, and exploring overseas gaming market opportunities in the second half of 2022[27] Expenses and Costs - The cost of sales for the six months ended June 30, 2022, was approximately RMB 220.1 million, an increase of about 39.7% from RMB 157.6 million in the same period of 2021[32] - Sales and distribution expenses rose by 69.8% to approximately RMB 82.3 million for the six months ended June 30, 2022, from RMB 48.4 million in 2021[36] - Research and development expenses increased by 32.7% to approximately RMB 50.0 million for the six months ended June 30, 2022, compared to RMB 37.7 million in 2021[38] Compliance and Governance - The company confirmed compliance with applicable accounting principles and standards for the six months ended June 30, 2022[52] - The board reviewed the overall compliance with the structural contracts and found that the group has adhered to all significant aspects[56] - The audit committee, consisting of three independent non-executive directors, confirmed the adequacy of disclosures in the interim results[52] Shareholder Information - As of June 30, 2022, the company had a total of 1,016,958,187 shares issued[61] - The company’s directors and senior management held significant equity interests, with Mr. Ye Sheng owning 22.78% of the company[61] - The company adopted a restricted share unit plan to incentivize directors, senior management, and employees, issuing a total of 62,561,080 shares under this plan[71] - The stock option plan was adopted on March 28, 2019, to provide eligible individuals with opportunities to acquire personal shares, enhancing their contributions to the group's performance and growth[72] Financial Position - Cash and bank balances increased slightly to approximately RMB 709.9 million as of June 30, 2022, from RMB 644.7 million as of December 31, 2021[45] - The current ratio improved to 8.1 as of June 30, 2022, compared to 6.0 as of December 31, 2021[45] - The company reported a foreign exchange gain of RMB 115 thousand for the period, compared to a loss of RMB 1,526 thousand in the previous year[80] - The company’s retained earnings as of June 30, 2022, stand at RMB 591,797,000[84] Investments and Acquisitions - The company had no significant investments or acquisitions planned as of June 30, 2022[47] - The company incurred a loss of RMB 9,231,000 from fair value gains for the first half of 2022, compared to a loss of RMB 5,017,000 in the previous year[86] Market and Regulatory Environment - The company is closely monitoring developments related to foreign investment laws and regulations, which have not impacted its business as of the report date[57] - The company expects to maintain its qualification as a "high-tech enterprise," which allows for a preferential tax rate of 15%[103]