Financial Performance - The group reported a net profit of RMB 3,073,508 thousand for the six months ended June 30, 2023, compared to RMB 4,007,621 thousand in the same period of 2022, reflecting a decrease of approximately 23.2%[18]. - The total revenue for the six months ended June 30, 2023, was RMB 3,126,091 thousand, down from RMB 4,061,114 thousand in the previous year, indicating a decline of about 23.0%[18]. - The company reported a profit attributable to shareholders of RMB 190,349,000 for the six months ended June 30, 2023, compared to a loss of RMB 109,915,000 in the same period of 2022[45]. - The basic earnings per share for the company was RMB 0.10 for the six months ended June 30, 2023, compared to a loss per share of RMB 0.06 in the previous year[45]. - The total comprehensive income for the half-year, after tax, amounted to RMB 226,784 thousand, compared to a loss of RMB 69,285 thousand in the previous period[163]. - The profit attributable to the owners of the company was RMB 224,549 thousand, a significant increase from a loss of RMB 68,132 thousand in the same period last year[163]. - The company reported a diluted earnings per share of RMB 0.10, compared to a loss per share of RMB 0.06 in the previous period[162]. Revenue and Costs - Revenue for the six months ended June 30, 2023, was RMB 3,126,091 thousand, a decrease of 23.0% compared to RMB 4,061,114 thousand for the same period in 2022[83]. - Gross profit for the same period was RMB 1,330,586 thousand, reflecting a 23.0% decline from RMB 1,728,010 thousand year-on-year[83]. - The group's sales cost for the reporting period was approximately RMB 1,795.5 million, down 23.0% from RMB 2,333.1 million in the same period of 2022, mainly due to reduced revenue[102]. - The cost of goods sold for the period was RMB 102,504 thousand, a substantial increase from RMB 2,035 thousand in the previous year, indicating a significant rise in operational costs[1]. - Employee benefits expenses were RMB 330,010 thousand, down from RMB 388,240 thousand, reflecting a decrease of about 15.0%[1]. Cash Flow and Liquidity - For the six months ended June 30, 2023, the net cash inflow from operating activities was RMB 162,305 thousand, a decrease from RMB 380,711 thousand in the same period of 2022, representing a decline of approximately 57.4%[1]. - The net cash outflow from investing activities was RMB 93,324 thousand, compared to RMB 190,957 thousand in the previous year, indicating a reduction of about 51.1%[1]. - The net cash outflow from financing activities was RMB 3,222 thousand, significantly improved from RMB 41,274 thousand in the same period of 2022, reflecting a decrease of approximately 92.2%[1]. - The company experienced a net increase in cash and cash equivalents of RMB 65,759 thousand, compared to an increase of RMB 148,480 thousand in the same period of 2022, indicating a decline of approximately 55.7%[1]. - The company’s cash and cash equivalents at the beginning of the period were RMB 1,634,708 thousand, down from RMB 1,993,306 thousand in the previous year, representing a decrease of about 18.0%[1]. - The company maintains a current ratio of 4.7 and a debt ratio of 0.2 as of June 30, 2023, indicating strong liquidity and low leverage[141]. Assets and Liabilities - The company's net book value as of June 30, 2023, was RMB 66,029,000, an increase from RMB 62,779,000 as of December 31, 2022[37]. - The total fair value of financial assets as of June 30, 2023, was RMB 1,468,294,000, compared to RMB 1,477,848,000 as of December 31, 2022[58]. - As of June 30, 2023, total liabilities stood at RMB 865,107 thousand, an increase from RMB 808,172 thousand as of December 31, 2022[165]. - The total equity and liabilities amounted to RMB 4,959,703 thousand, compared to RMB 4,660,614 thousand at the end of the previous year[165]. - The company reported restricted cash totaling RMB 92,248,000 as of June 30, 2023, with RMB 72,895,000 frozen due to regulatory investigations[63]. Financial Assets and Investments - The fair value of non-current financial assets increased to RMB 162,841 thousand as of June 30, 2023, from RMB 155,367 thousand at the beginning of the year, representing a growth of approximately 4.8%[7]. - The group classified financial assets at fair value, with first-level assets being investments in listed company shares and second-level assets being financial products with net value quotes from financial institutions[5]. - The group’s investment in financial products primarily comes from banks and financial institutions in China, with fair value changes recorded in the consolidated income statement[5]. - The group reported a fair value gain of RMB 43,524 thousand from financial assets measured at fair value through profit or loss for the six months ended June 30, 2023[32]. - The group’s financial risk management includes the use of observable market data for valuation techniques, minimizing reliance on specific entity estimates[4]. Operational Strategies and Innovations - The company continues to enhance the "Inke Live" platform ecosystem and optimize operational strategies to improve profitability in live streaming[90]. - The company is focusing on product innovation and expanding its social product matrix to meet diverse user needs[90]. - The company plans to maintain a proactive approach to refine existing product business models while exploring global development opportunities[96]. - The company has successfully validated business models for several projects in its innovation matrix since 2022, particularly in the short drama sector[97]. - The group aims to explore overseas opportunities and accelerate business model validation in the global social business market, leveraging its experience in audio-visual social interactions[107]. - The group plans to harness technological advancements, particularly in AIGC, to innovate in the interactive social and entertainment sectors, targeting areas like AI music and the metaverse[108]. Employee and Administrative Expenses - The company has implemented a systematic training program to enhance employee skills and support sustainable development, with 1,552 full-time employees as of June 30, 2023[149]. - The group's administrative expenses decreased by 83.8% to approximately RMB 100.1 million from RMB 616.7 million in the same period of 2022, primarily due to the absence of goodwill impairment provisions[123]. Dividends and Shareholder Returns - The company did not declare or pay any dividends for the periods ended June 30, 2023, and 2022[47]. - The company did not declare any interim dividends during the reporting period[174].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 3,126.1 million, a decrease of 23.0% compared to the same period in 2022[2] - Gross profit for the six months ended June 30, 2023, was RMB 1,330.6 million, a decrease of 23.0% compared to the same period in 2022[2] - Operating profit for the six months ended June 30, 2023, was RMB 202.0 million, a significant increase of 641.3% compared to the same period in 2022[2] - The company recorded a profit of approximately RMB 192.6 million, a turnaround from a loss of RMB 111.1 million in the same period last year[36] - Adjusted net profit, which excludes non-cash share-based compensation expenses, was RMB 205.7 million, compared to RMB 402.2 million in the previous year[38] - Revenue for the period was RMB 3.13 billion, with a gross profit of RMB 1.33 billion, down from RMB 4.06 billion and RMB 1.73 billion respectively in the previous year[46] - Operating profit was RMB 202.0 million, a significant increase from RMB 27.2 million in the same period last year[46] - The company's comprehensive income attributable to equity holders was RMB 224.5 million, compared to a loss of RMB 68.1 million in the previous year[48] - The company's revenue for the reporting period was approximately RMB 3,126.1 million, a decrease of 23.0% compared to RMB 4,061.1 million in the same period last year, but a sequential increase of 38.4%[58] - The company's gross profit for the reporting period was approximately RMB 1,330.6 million, a decrease of 23.0% compared to RMB 1,728.0 million in the same period last year, with the gross margin remaining stable at 42.6%[60] - The company reported a net profit attributable to shareholders of RMB 226.8 million for the first half of 2023, compared to a net loss of RMB 69.3 million in the same period of 2022[79] - Basic earnings per share were RMB 0.10 for the first half of 2023, compared to a loss per share of RMB 0.06 in the same period of 2022[81] - Net profit attributable to owners of the company was RMB 190,349 thousand in H1 2023, compared to a loss of RMB 109,915 thousand in H1 2022[117] - Basic earnings per share were RMB 0.10 in H1 2023, versus a loss per share of RMB 0.06 in H1 2022[117] User Metrics - Monthly active users (MAU) for the six months ended June 30, 2023, were 28,094 thousand, a decrease of 5.7% compared to the same period in 2022[3] - Average revenue per user (ARPU) for the six months ended June 30, 2023, was RMB 18.5, a decrease of 18.5% compared to the same period in 2022[3] Expenses and Costs - Sales and marketing expenses for the six months ended June 30, 2023, increased by 11.3% to RMB 962.0 million compared to the same period in 2022[28] - Administrative expenses for the six months ended June 30, 2023, decreased by 83.8% to RMB 100.1 million compared to the same period in 2022, primarily due to the absence of goodwill impairment provisions[29] - R&D expenses for the six months ended June 30, 2023, decreased by 24.3% to RMB 142.5 million compared to the same period in 2022, mainly due to optimization of employee structure[31] - Capital expenditures for the six months ended June 30, 2023, were approximately RMB 20.3 million, compared to RMB 7.6 million in the same period in 2022[20] - Income tax expenses decreased by 61.3% to approximately RMB 34.7 million, down from RMB 89.7 million in the previous year, primarily due to a decrease in net operating profit[35] Investments and Financial Assets - The company's financial assets at fair value through profit or loss as of June 30, 2023, were approximately RMB 1,468.3 million, slightly down from RMB 1,477.8 million as of December 31, 2022[7] - The company's share of profits from equity-accounted investments was approximately RMB 14.2 million, a significant improvement from a loss of RMB 53.8 million in the same period last year, representing a 126.3% increase[34] Cash and Liquidity - Cash and cash equivalents increased to RMB 1,717.5 million as of June 30, 2023, up from RMB 1,634.7 million as of December 31, 2022, with RMB 1,565.8 million denominated in RMB and RMB 151.7 million in other currencies (primarily USD)[72] - Restricted cash balance was RMB 72.9 million as of June 30, 2023, with RMB 26.1 million unfrozen after the balance sheet date[72] - Approximately RMB 72.9 million of the company's bank deposits were frozen due to investigations by local regulators, with RMB 26.1 million subsequently unfrozen after the balance sheet date[42] Business Strategy and Growth - The company continues to enhance its live streaming platform ecosystem, improving operational strategies and product iteration efficiency, leading to increased profitability in the live streaming business[49] - The company is expanding its offline presence for its dating brand, focusing on 90s singles, and has successfully organized large-scale dating events to enhance brand influence and fulfill corporate social responsibility[51] - The company's short drama business has achieved rapid growth in market size and user base, positioning its products in the top tier of the industry[52] - The company plans to explore new opportunities in overseas markets, focusing on audio-video social interactions and aiming to expand user scale and product penetration[54] - The company is leveraging AI and AIGC technologies to innovate in interactive social, AI music, AI scripts, AI operations, digital live streaming, and the metaverse, aiming to transform the entertainment industry[55] Assets and Liabilities - The company's total assets as of June 30, 2023, were RMB 4,959.7 million, with current assets totaling RMB 3,875.3 million and non-current assets at RMB 1,084.4 million[62] - The company's current ratio (current assets to current liabilities) was 4.7 as of June 30, 2023, with a debt-to-equity ratio (total liabilities to total equity) of 0.2[70] - Trade receivables were primarily denominated in RMB, with credit terms ranging from 1 to 3 months[103] - Accounts payable increased to RMB 463.2 million as of June 30, 2023, up from RMB 444.7 million as of December 31, 2022[104] - Trade receivables decreased to RMB 58,066 thousand as of June 30, 2023, from RMB 64,059 thousand as of December 31, 2022[122] Revenue Breakdown - Total revenue for the first half of 2023 was RMB 3,126,091 thousand, a decrease from RMB 4,061,114 thousand in the same period of 2022[114] - Value-added services revenue dropped to RMB 2,314,679 thousand in H1 2023 from RMB 3,912,337 thousand in H1 2022[114] - Content services revenue, newly reported in 2023, amounted to RMB 472,199 thousand[114] - Other revenue increased to RMB 339,213 thousand in H1 2023 from RMB 148,777 thousand in H1 2022[114] Corporate Governance and Compliance - The company maintained high corporate governance standards, with the Chairman and CEO roles held by the same individual, which the Board believes benefits the group's management[133] - The company has established an audit committee in accordance with Listing Rule 3.21 and the Corporate Governance Code[135] - The audit committee consists of two independent non-executive directors, Mr. Cui Dawei and Dr. Li Hui, and one non-executive director, Mr. Liu Xiaosong, with Mr. Cui Dawei serving as the chairman[135] - The announcement is issued by the order of the board of directors of Inkeverse Group Limited, with Mr. Feng Yousheng as the chairman and executive director[137] Reporting and Disclosure - The interim results announcement is available on the Hong Kong Exchanges and Clearing Limited website (www.hkexnews.hk) and the company's website (www.inkeverse.com)[136] - The interim report for the six months ended June 30, 2023, will be sent to shareholders and published on the Hong Kong Exchanges and Clearing Limited website and the company's website in due course[136] - The company adopted new and revised accounting standards during the reporting period, with no significant changes in major judgments and estimates compared to the previous year[113] - The company did not declare or pay any dividends for the periods ending June 30, 2023, and June 30, 2022[121] Equity and Shareholder Information - Total equity attributable to shareholders increased to RMB 4,088.1 million as of June 30, 2023, from RMB 3,853.7 million as of December 31, 2022[85]

User Metrics and Revenue Performance - Monthly average active users (MAU) decreased by 37.6% to 26,712 thousand in 2022 compared to 42,802 thousand in 2021[9] - Average revenue per user per month (ARPU) increased by 10.1% to RMB 19.7 in 2022 from RMB 17.9 in 2021[9] - Total revenue decreased to RMB 6,319,321 thousand in 2022 from RMB 9,175,595 thousand in 2021, a decline of 31.1%[18] - Revenue decreased by 31.1% to RMB 6,319.3 million in 2022 compared to RMB 9,175.6 million in 2021[52] - The company's revenue in 2022 was approximately RMB 6,319.3 million, a decrease of 31.1% compared to RMB 9,175.6 million in 2021, primarily due to intensified industry competition and more cautious operational strategies[32] Profitability and Losses - Gross profit decreased to RMB 2,546,492 thousand in 2022 from RMB 3,305,099 thousand in 2021, a decline of 22.9%[18] - Net loss for the year was RMB 168,459 thousand in 2022 compared to a net profit of RMB 433,009 thousand in 2021[18] - Gross profit decreased by 23.0% from RMB 3,305.1 million in 2021 to RMB 2,546.5 million in 2022, with the gross profit margin increasing from 36.0% to 40.3% due to refined operational strategies and product structure optimization[34] - The company recorded a net loss of approximately RMB 168.5 million in 2022, a decrease of 138.9% compared to a net profit of RMB 433.0 million in 2021[38] - Net loss attributable to shareholders was RMB 168.5 million in 2022, a 138.9% decline from a net profit of RMB 433.0 million in 2021[52] - Adjusted net profit decreased to RMB 387.7 million in 2022 from RMB 482.5 million in 2021, including a goodwill impairment loss of RMB 512.8 million[61] Assets and Liabilities - Total assets decreased to RMB 4,660,614 thousand in 2022 from RMB 5,238,392 thousand in 2021, a decline of 11.0%[18] - Total liabilities decreased to RMB 808,172 thousand in 2022 from RMB 1,307,244 thousand in 2021, a decline of 38.2%[18] - The company's current ratio improved to 4.6 in 2022 from 3.1 in 2021, and the debt-to-equity ratio decreased to 0.2 from 0.3, indicating optimized asset structure[81] - Cash and cash equivalents stood at RMB 1,634.7 million as of December 31, 2022, compared to RMB 1,993.3 million in 2021, with RMB 1,321.3 million denominated in CNY and RMB 313.4 million in other currencies (primarily USD)[81] - Financial assets at fair value through profit or loss totaled RMB 1,477.8 million in 2022, up from RMB 972.8 million in 2021, with significant increases in fund investments[83] Operational Strategies and Innovations - The company continued to optimize the "Inke Live" platform ecosystem, enhancing the host incubation and growth system, and improving user experience[11] - The company signed a digital human "Yingying" and explored new formats such as virtual live streaming[11] - The company focused on the "interactive entertainment" field, exploring new application scenarios and improving operational efficiency[10] - The company will continue to invest in emerging technologies such as AI, smart technology, and communications to drive product innovation and create new growth opportunities[27] Expenses and Costs - Sales and promotion expenses decreased by 37.6% from RMB 2,214.4 million in 2021 to RMB 1,381.3 million in 2022, accounting for 21.9% of revenue compared to 24.1% in 2021[34] - Administrative expenses surged by 221.0% to RMB 774.3 million, primarily due to a goodwill impairment provision of RMB 512.8 million for Social Network Technology Co., Ltd.[56] - R&D expenses decreased by 6.6% from RMB 416.0 million in 2021 to RMB 388.7 million in 2022, primarily due to reduced employee costs[76] - Other net losses increased from RMB 44.9 million in 2021 to RMB 46.7 million in 2022, mainly due to increased fair value losses on financial assets at fair value through profit or loss[77] - Net financial income decreased by 56.2% from RMB 16.7 million in 2021 to RMB 7.3 million in 2022, driven by reduced fixed deposits and bank cash balances[78] Overseas Expansion and Market Strategy - The company's overseas business has shown rapid growth, with initial validation of a commercial closed-loop in certain regions[24] - The company plans to accelerate the expansion of its offline matchmaking business in other cities, following the successful establishment of stores in Beijing and Shanghai[23] - The company will focus on expanding overseas markets, leveraging its competitive barriers in the pan-entertainment sector and replicating successful domestic business models[26] Financial Instruments and Investments - The company's financial asset impairment losses increased from RMB 8.4 million in 2021 to RMB 50.2 million in 2022, mainly due to expected credit impairment losses on other receivables and trade receivables[35] - The company's share of losses from associates and joint ventures accounted for using the equity method was approximately RMB 51.2 million in 2022, compared to RMB 0.4 million in 2021[37] - Financial assets at fair value through profit or loss increased to RMB 1,477.8 million in 2022, including RMB 1,322.5 million in wealth management products[63] - Investments in financial products are primarily for treasury management purposes, aiming to maximize returns on unused funds while ensuring sufficient liquidity for business needs[83] Share Repurchases and Equity Plans - The company repurchased 563,000 shares on March 28, 2022, at a price range of HKD 1.50 to HKD 1.52, with a total cost of HKD 847,490[136] - The company repurchased 300,000 shares on March 29, 2022, at a price range of HKD 1.54 to HKD 1.56, with a total cost of HKD 464,640[136] - The company granted 60 million stock options on May 28, 2021, representing approximately 3.0% of the issued shares as of the report date[138] - The stock options granted on May 28, 2021, have a vesting schedule of 25% on May 28, 2022, 50% on May 28, 2023, 75% on May 28, 2024, and 100% on May 28, 2025[140] - The total number of shares available for issuance under the Restricted Share Unit (RSU) plan is 100,778,200, representing approximately 5.2% of the company's issued share capital as of the report date[143] - The company repurchased a total of 863,000 shares on the stock exchange at a total cost of HKD 1,312,130, with the highest price paid per share being HKD 1.56 and the lowest being HKD 1.50[156][157] - The total number of shares available for issuance under the share option plan is 201,556,400, representing approximately 10.4% of the company's issued share capital as of the report date[162] - The remaining term of the share option plan is approximately five years and three months[162] - The company's restricted share unit plan allows for the issuance of shares to directors, senior management, and employees, with a total of 289,307,258 and 271,990,069 shares available for grant under all share plans as of January 1, 2022, and December 31, 2022, respectively[173] - No restricted share units were granted under the 2022 restricted share unit plan during the year ended December 31, 2022[172] - The trustee purchased a total of 27,600,000 shares on the Hong Kong Stock Exchange during the year ended December 31, 2022[186] - The weighted average closing price of shares before the vesting date was HKD 1.38 per share[188] - The 2022 Restricted Share Unit Plan allows for the grant of up to 96,872,100 shares, representing approximately 5.0% of the company's issued share capital as of the report date[192] - The 2022 Restricted Share Unit Plan has a remaining term of approximately nine years and two months[192] - No new shares were granted under the share option plan, restricted share unit plan, or 2022 Restricted Share Unit Plan during the year ended December 31, 2022[194] - The vesting schedule for restricted share units includes multiple tranches with varying percentages and dates, such as 50% vesting on February 1, 2019, and 25% vesting on August 1, 2019[188] - The 2022 Restricted Share Unit Plan aims to incentivize and retain skilled and experienced personnel by offering them the opportunity to own equity in the company[190] - The company's Remuneration Committee has reviewed and confirmed that the terms of the share option plan, restricted share unit plan, and 2022 Restricted Share Unit Plan remain valid and applicable[193] - The 2022 Restricted Share Unit Plan was adopted by the board on May 12, 2022, and will operate alongside other existing or future share incentive plans[189] - The vesting notice will confirm the extent to which vesting criteria, conditions, and schedules have been met, as well as the number of shares involved[191] Corporate Governance and Compliance - The company has complied with all relevant Chinese laws and regulations and holds all necessary licenses, approvals, and permits for its operations in China[130] - The company has no significant legal or regulatory violations during the reporting period and maintains compliance with environmental and occupational health and safety laws[124][125] - The company's board has the discretion to allocate profits to reserves for various purposes, including addressing claims, liabilities, or balancing dividends[106] - The company has not recognized any provisions for ongoing investigations, as no present obligation is likely to arise based on legal counsel's opinion[84] - The company has not mortgaged any assets as of December 31, 2022[85] Employee and Talent Management - The company has 1,531 full-time employees, with 515 dedicated to technology and R&D[86] - The company has implemented a systematic talent training and development program to enhance employee skills and support sustainable growth[107] Market and Competitive Challenges - The company faces uncertainties in acquiring and retaining users cost-effectively, operating in a competitive market, and navigating regulatory challenges in the live streaming and internet industries[104][105] - The company faces uncertainties related to negative publicity regarding its business model, platform content, or management, which could impact its future prospects[130] Shareholder and Dividend Policy - The company does not recommend paying a final dividend for the fiscal year ending December 31, 2022[110] - The company's board reviewed the dividend policy during the year and deemed it effective[149] - The company focuses on maximizing shareholder returns and aims to achieve sustainable growth by concentrating on its core business[129] Supply Chain and Procurement - The company's largest supplier accounted for approximately 2.3% of total procurement in 2022, while the top five suppliers collectively accounted for about 8.1% of total procurement[128] - The company's supply chain includes independent third-party suppliers, with no significant beneficial interests held by directors, their close associates, or major shareholders in the top five suppliers[128] Shareholder Structure and Ownership - Mr. Feng Yousheng holds 358,798,000 shares through Fantastic Live Holdings Limited, representing an approximate 18.51% stake in the company[199] - Mr. Feng Yousheng also holds 30,000,000 unexercised share options under the company's share option scheme[198] - Mr. Liu Xiaosong indirectly holds a 70.11% stake in Shenzhen Kua Tonglian Technology Co., Ltd., which owns 22.51% of Duomi Online[198] - Mr. Liu Xiaosong directly holds a 28.71% stake in Duomi Online, which owns 250,000,000 shares through Feiyang Hong Kong Limited[198] - Mr. Hou Guangling holds 80,409,000 shares through Horizon Live Holdings Limited, representing an approximate 4.15% stake in the company[199] - Mr. Hou Guangling also holds 20,000,000 unexercised share options under the company's share option scheme[198] Financial Statements and Notes - The company's property, plant, and equipment changes during the year are detailed in the consolidated financial statements note 15[151] - The company's share capital changes during the year are detailed in the consolidated financial statements note 26[152] - The combined total revenue of Beijing Milaiwu, Canchen Yingchao, and Lingxiao Lansheng for the year ended December 31, 2022, was approximately RMB 7,279.2 million[200] - The combined total assets of Beijing Milaiwu, Canchen Yingchao, and Lingxiao Lansheng as of December 31, 2022, were approximately RMB 1,881.4 million[200] - Canchen Yingchao and Lingxiao Lansheng had no substantial business operations during the year ended December 31, 2022[200] Miscellaneous - The company's donations for the year ended December 31, 2022, amounted to RMB 1.4 million[154] - The company's functional currency is USD, while its subsidiaries in China operate in RMB, and it manages foreign exchange risk through natural hedging and forward contracts[85] - The company's largest customer accounted for approximately 0.19% of total revenue, while the top five customers accounted for 0.54% of total revenue in 2022[102] - The company operates primarily in China, engaging in mobile live-streaming platform services, including value-added telecommunications, internet culture, online audiovisual, and performance brokerage services[123]

Financial Performance - The company's revenue for 2022 was approximately RMB 6,319.3 million, a decrease of 31.1% compared to RMB 9,175.6 million in 2021, primarily due to intensified industry competition and a more cautious operational strategy[2]. - Gross profit decreased from approximately RMB 3,305.1 million in 2021 to approximately RMB 2,546.5 million in 2022, representing a decline of 23.0%, while the gross profit margin increased from 36.0% in 2021 to 40.3% in 2022[3]. - The net loss for the year was RMB 168,459 thousand, compared to a profit of RMB 433,009 thousand in 2021, indicating a significant decline in profitability[9]. - The basic loss per share attributable to shareholders was RMB (0.09), compared to earnings of RMB 0.22 per share in the previous year[10]. - The total comprehensive loss for the year amounted to RMB (90,711) thousand, a significant decrease from RMB 423,822 thousand in 2021[1]. - Operating loss for the year was RMB (46,987) thousand, compared to an operating profit of RMB 457,010 thousand in 2021[7]. - Revenue for the year ended December 31, 2022, was RMB 6,367,267 thousand, a decrease of 27% from RMB 8,750,402 thousand in 2021[45]. - The adjusted net profit for 2022 was RMB 387.7 million, down from RMB 482.5 million in 2021, after accounting for share-based compensation and goodwill impairment[87]. - The group's net loss for the year was approximately RMB 168.5 million, a decrease of 138.9% compared to a profit of RMB 433.0 million in 2021[86]. - The group's other income decreased by 37.9% from RMB 76.8 million in 2021 to RMB 47.6 million in 2022, primarily due to a reduction in tax refunds[79]. Assets and Liabilities - The total equity as of December 31, 2022, was RMB 3,852,442 thousand, a decrease from RMB 3,931,148 thousand in 2021[12]. - Total liabilities decreased from RMB 1,307,244 thousand in 2021 to RMB 808,172 thousand in 2022, reflecting a reduction in financial obligations[12]. - The total assets as of December 31, 2022, were RMB 4,660,614 thousand, a decrease from RMB 5,238,392 thousand as of December 31, 2021[155]. - The group's non-current assets totaled RMB 1,147,847 thousand as of December 31, 2022, down from RMB 1,719,104 thousand in 2021[155]. - The company had a total of RMB 444,680 thousand in trade payables as of December 31, 2022, down from RMB 669,342 thousand in 2021[25]. Impairments and Expenses - The company reported a net financial asset impairment loss of RMB (50,248) thousand, compared to RMB (8,379) thousand in the previous year[7]. - The company incurred goodwill and other intangible asset impairment of RMB 518,661 thousand in 2022, compared to RMB 15,916 thousand in 2021[45]. - The group's administrative expenses increased by 221.0% from approximately RMB 241.2 million in 2021 to approximately RMB 774.3 million in 2022, primarily due to a goodwill impairment provision of approximately RMB 512.8 million related to Social Network Technology Co., Ltd.[94]. - Employee benefits expenses for 2022 were RMB 781,045 thousand, a decrease of 9% from RMB 857,871 thousand in 2021[45]. - The company reported a profit tax expense of RMB 77,608 thousand for 2022, up 92% from RMB 40,313 thousand in 2021[21]. User Metrics and Market Strategy - Monthly average active users decreased to 26,712 thousand, a decline of 37.6% from 42,802 thousand in 2021, while monthly average revenue per user increased by 10.1% to RMB 19.7[117]. - The company plans to expand its offline matchmaking services in more cities, leveraging the recovery of the macro economy[121]. - The group is focusing on expanding its overseas market presence, leveraging successful domestic experiences and adapting to local cultures and practices[108]. - The group aims to enhance user experience and profitability through refined operations and innovative content on its "Yingke Live" platform[105]. - The group is exploring new business models, including virtual live streaming, to capture user demand and enhance platform interactivity[107]. Research and Development - Research and development expenses decreased by 6.6% from RMB 416.0 million in 2021 to RMB 388.7 million in 2022, primarily due to reduced employee costs[77]. - The group is focused on the iteration and development of emerging technologies such as AI and communication, aiming to accelerate the launch of competitive new products[109]. - The group is focusing on innovative product development in response to emerging demands in the entertainment sector, particularly around audio-visual interaction[123]. Governance and Compliance - The company has complied with all applicable provisions of the corporate governance code during the year ended December 31, 2022[30]. - The company has adopted a new restricted share unit plan as of May 12, 2022, but no restricted share units were granted under this plan by December 31, 2022[28]. - The company has adopted the standards set forth in the Listing Rules Appendix 10 regarding the conduct of securities transactions by directors, confirming compliance for the year ended December 31, 2022[177]. - The board believes that having the same person serve as both chairman and CEO is beneficial for the group's management[181]. - The company has a diverse board composition, including two executive directors, one non-executive director, and three independent non-executive directors, ensuring a balance of power and authority[181].

Financial Performance - Total revenue for the first half of 2022 was approximately RMB 4,061.1 million, a year-on-year increase of 0.7% compared to RMB 4,032.2 million in the same period of 2021[12]. - Adjusted net profit for the first half of 2022 was approximately RMB 402.2 million, representing a significant increase of 150.8% compared to RMB 160.3 million in the same period of 2021[12]. - The company reported a net loss of approximately RMB 111.1 million for the first half of 2022, a decline of 178.0% compared to a profit of RMB 142.3 million in the same period of 2021[12]. - Gross profit for the first half of 2022 was RMB 1,728.0 million, reflecting a year-on-year increase of 22.8% from RMB 1,406.7 million in the same period of 2021[12]. - The group's revenue for the six months ended June 30, 2022, was approximately RMB 4,061.1 million, an increase of 0.7% compared to RMB 4,032.2 million for the same period in 2021[28]. - The group's gross profit for the same period was approximately RMB 1,728.0 million, representing a 22.8% increase from RMB 1,406.7 million in 2021, with a gross margin improvement from 34.9% to 42.6%[30]. - The net loss attributable to the company’s owners for the six months was RMB 109,915 thousand, compared to a profit of RMB 123,076 thousand in the same period last year[65]. - The total expenses for the six months ended June 30, 2022, were RMB 4,027,619 thousand, an increase from RMB 3,933,665 thousand in the same period of 2021, reflecting a rise of approximately 2.4%[124]. User Engagement - The number of monthly active users decreased by 35.8% year-on-year to 29,799 thousand from 46,428 thousand in the same period of 2021[14]. - The average revenue per user (ARPU) increased by 44.6% year-on-year to RMB 22.7 from RMB 15.7 in the same period of 2021[14]. Strategic Focus - The company plans to focus on the overseas entertainment sector in the second half of 2022, leveraging operational experience to penetrate new markets[17]. - The group plans to focus on expanding overseas markets, having already launched reading and social products in regions like Europe, America, and Southeast Asia[24]. - The group aims to explore the metaverse ecosystem further, with plans to develop more immersive interactive entertainment scenarios in the second half of 2022[25]. - The company underwent a brand upgrade in June 2022, rebranding to Inkeverse Group Limited to enter the metaverse market[16]. - The company aims to enrich and upgrade its products with metaverse elements and quickly enter the emerging Web3.0 field[17]. Expenses and Cost Management - Sales and marketing expenses decreased by 14.6% to approximately RMB 864.5 million, down from RMB 1,012.2 million in the previous year[31]. - Administrative expenses increased significantly by 561.0% to approximately RMB 616.7 million, primarily due to goodwill impairment of RMB 486.0 million[32]. - The sales cost for the six months ended June 30, 2022, was approximately RMB 2,333.1 million, a decrease of 11.1% from RMB 2,625.5 million in the previous year, resulting in a sales cost percentage of 57.4%[29]. - Research and development expenses were RMB 188,199 thousand, a decrease of 7.3% from RMB 202,914 thousand in the previous year[63]. - The company incurred a significant increase in advertising and promotion expenses, totaling RMB 836,394 thousand for the six months ended June 30, 2022, down from RMB 989,957 thousand in the same period of 2021, a decrease of about 15.5%[124]. Cash and Financial Position - As of June 30, 2022, the group had cash and cash equivalents of approximately RMB 2,163.2 million, an increase from RMB 1,993.3 million as of December 31, 2021[46]. - The group's current ratio was 4.0 and the debt ratio was 0.3 as of June 30, 2022, compared to 3.1 and 0.3 respectively as of December 31, 2021[45]. - The group’s capital expenditure for the six months ended June 30, 2022, was approximately RMB 7.6 million, significantly lower than RMB 218.6 million for the same period in 2021[52]. - The total cash and cash equivalents at the end of June 30, 2022, reached RMB 2,163,185 thousand, compared to RMB 1,093,607 thousand at the end of June 30, 2021, indicating a growth of approximately 97.7%[79]. - The company paid income tax of RMB 68,225 thousand in the first half of 2022, which is significantly higher than RMB 21,060 thousand in the same period of 2021[76]. - The company reported a net cash outflow from investing activities of RMB 190,957 thousand for the six months ended June 30, 2022, compared to RMB 233,395 thousand in the same period of 2021[78]. - The company incurred a loss of RMB 99,039 thousand in accumulated losses as of June 30, 2022, compared to RMB 281,429 thousand as of June 30, 2021[74]. Financial Assets and Liabilities - As of June 30, 2022, the group had financial assets at fair value through profit or loss amounting to approximately RMB 1,160.5 million, up from RMB 972.8 million as of December 31, 2021[47]. - The fair value changes of financial assets are recorded in the consolidated income statement under "other losses, net"[97]. - The total liabilities decreased to RMB 1,010,001 thousand from RMB 1,307,244 thousand, indicating a reduction of 22.7%[70]. - The company's total liabilities for accounts payable decreased to RMB 306,651,000 from RMB 499,141,000[161]. - The company’s total liabilities decreased to RMB 3,873,173 thousand as of June 30, 2022, from RMB 3,644,875 thousand as of January 1, 2022[74]. Shareholder Information - The company did not declare an interim dividend for the six months ended June 30, 2022[60]. - The company did not declare or pay any dividends for the periods ended June 30, 2022, and 2021[136]. - The company repurchased shares amounting to RMB 15,778 thousand in the first half of 2022, compared to RMB 3,627 thousand in the same period of 2021[79]. - The weighted average number of ordinary shares issued was 1,857,624,000 shares for the six months ended June 30, 2022, slightly down from 1,869,020,000 shares in 2021[133]. - The diluted loss per share was RMB (0.06) for the six months ended June 30, 2022, compared to earnings of RMB 0.07 per share in the previous year[133]. Management and Governance - The total compensation for key management personnel was RMB 4,522,000 for the six months ended June 30, 2022, compared to RMB 4,929,000 for the same period in 2021, showing a decrease of approximately 8.2%[180]. - The company has no management contracts related to its business during the reporting period[193]. - The company aims to align the interests of its employees with its own through the stock option and restricted share unit plans[194].

Financial Data and Key Metrics Changes - The total revenue for the first half of 2022 reached 4.06 billion RMB, remaining stable compared to the previous year [2][12] - Adjusted net profit for the same period was 400 million RMB, representing a 150% increase year-on-year [2][14] - Gross margin improved to 42.6%, up from 34.9% in the previous year [14] Business Line Data and Key Metrics Changes - The social segment accounted for approximately 70% of total revenue, showing an increase, while the live streaming segment decreased to about 22% [12] - Overseas revenue grew to 8.6 million RMB, a 40% increase year-on-year, although it remains a small portion of total revenue [13] Market Data and Key Metrics Changes - The company is focusing on expanding its overseas market presence, particularly in Southeast Asia and the Middle East, with ongoing product development in these regions [9][19] - The company has observed a shift in user preferences, particularly among younger demographics, leading to new product offerings in social and dating services [6][7] Company Strategy and Development Direction - The strategic focus is on leveraging social advantages to enhance metaverse technology and create diverse social scenarios [4][5] - The company aims to deepen its overseas market penetration while optimizing domestic operations, anticipating a contraction in domestic business by 20-30% [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and the impact of the pandemic on operations, emphasizing a cautious approach to growth [2][23] - The company is optimistic about the long-term potential of the metaverse, despite its current early-stage development [10][20] Other Important Information - The company maintains a healthy cash position of 2.16 billion RMB, which will support future investments in overseas and metaverse initiatives [15][24] - A significant non-cash impairment charge of 500 million RMB was recorded, affecting administrative expenses but not cash flow [14] Q&A Session Summary Question: What are the future strategies for the social business segment? - Management indicated that adjustments were made due to economic conditions, focusing on enhancing user experience and monetization strategies in the social segment [17] Question: What is the current status of overseas products? - The company is in the process of refining product prototypes for overseas markets, with several new products expected to launch soon [19] Question: How does the company view the development of the metaverse market? - Management expressed a cautious but optimistic outlook, emphasizing the need for patience and continued exploration of new technologies [20][21] Question: What are the revenue and profit outlooks for the second half of the year? - The company anticipates a revenue contraction of 20-30% for the year, focusing resources on overseas markets [23] Question: Why is the company not considering share buybacks or dividends despite having substantial cash reserves? - Management explained that the focus is on investing in overseas expansion and metaverse initiatives rather than returning cash to shareholders at this time [24]

Financial Performance - Total revenue for the year ended December 31, 2021, was RMB 9,175.6 million, representing an 85.4% increase year-on-year[10] - Net profit for the year was RMB 433.0 million, reflecting a year-on-year increase of 113.1%[16] - Gross profit for the year was RMB 3,305.1 million, with a gross margin of approximately 36%[10] - Operating profit amounted to RMB 457.0 million, showing a substantial increase from RMB 54.7 million in the previous year[10] - The company's revenue for 2021 was approximately RMB 9,175.6 million, an increase of 85.4% compared to RMB 4,949.4 million in 2020, driven by the successful expansion of its product matrix and commercialization efforts[42] - Gross profit increased by 176.1% from RMB 1,197.1 million in 2020 to RMB 3,305.1 million in 2021, with the gross margin improving from 24.2% to 36.0%[44] - Operating profit surged by 735.0% from RMB 54.7 million in 2020 to RMB 457.0 million in 2021, with the operating margin increasing from 1.1% to 5.0%[52] - Net profit for the year was approximately RMB 433.0 million, a 113.1% increase from RMB 203.2 million in 2020[55] User Engagement - Monthly average active users reached 42.80 million, up 17.4% compared to the previous year[14] - Average revenue per user (ARPU) increased to RMB 17.9, a significant rise of 58.4% year-on-year[14] - The matchmaking app "Duiyuan" achieved over 20 million matches in the year, with active matchmakers exceeding 10,000[25] Revenue Sources - Revenue from social products amounted to RMB 5,743.9 million, accounting for 62.6% of total revenue[24] - The live streaming and matchmaking products generated revenues of RMB 2,563.2 million and RMB 614.1 million, respectively, representing 27.9% and 6.7% of total revenue[19] Research and Development - Research and development expenses were RMB 415.9 million, up from RMB 334.4 million in 2020[10] - The group is committed to increasing R&D investment in cutting-edge technologies such as AI and audio-visual interaction[31] - Research and development expenses increased by 24.4% from RMB 334.4 million in 2020 to RMB 416.0 million in 2021, representing 4.5% of revenue, down from 6.8%[47] Market Strategy - The company plans to continue expanding its market presence and investing in new technologies and products[10] - The group plans to continue its matrix product strategy in 2022, focusing on immersive user experiences and expanding into both online and offline social interactions[20] - The group aims to enhance its overseas market presence by leveraging its leading technology and innovative business models[29] Financial Position - Total assets as of December 31, 2021, were RMB 5,238.4 million, compared to RMB 4,669.6 million in 2020[10] - The company reported a net asset value of RMB 3,931.1 million, an increase from RMB 3,543.6 million in the previous year[10] - The company's cash and cash equivalents as of December 31, 2021, amounted to approximately RMB 1,993.3 million, up from RMB 1,360.3 million in 2020, indicating a growth of 47.3%[61] Expenses and Costs - The cost of sales rose from RMB 3,752.3 million in 2020 to RMB 5,870.5 million in 2021, an increase of 56.5%, while the cost as a percentage of revenue decreased from 75.8% to 64.0%[43] - Selling and promotional expenses rose by 211.9% from RMB 709.9 million in 2020 to RMB 2,214.4 million in 2021, accounting for 24.1% of revenue, up from 14.3%[45] Compliance and Governance - The board confirmed compliance with all significant aspects of contract arrangements as of December 31, 2021[77] - The group has adhered to all relevant laws and regulations, with no significant violations reported during the review year[102] - The company has successfully maintained compliance with all relevant Chinese laws and regulations, obtaining all necessary licenses and approvals for its operations[110] Employee Management - The group had a total of 2,297 full-time employees, with 893 in technology and R&D, and 371 in business operations[76] - The management emphasizes effective talent management as a foundation for long-term success, offering competitive salaries and benefits to retain employees[103] - The group has a robust internal training program aimed at attracting, developing, and retaining talent[103] Shareholder Matters - The group did not recommend the payment of a final dividend for the year ended December 31, 2021[80] - The company has adopted a dividend policy that allows for the declaration of dividends based on available profits and reserves[117] - The company aims to maximize shareholder returns by focusing on core business for sustainable growth[108] Stock Options and Incentives - The company granted a total of 60 million stock options, equivalent to approximately 3.0% of the issued shares as of the report date[134] - The exercise price for the stock options is set at HKD 3.9 per share, which is higher than the closing price of HKD 2.26 on the grant date[137] - The vesting schedule for the stock options indicates that 25% will vest on May 28, 2022, and 100% will vest by May 28, 2025[139] Environmental and Social Responsibility - The group reported a significant focus on environmental policies, with no major health, safety, or environmental risks faced during the year ending December 31, 2021[101] - The group has implemented measures to promote environmental friendliness in the workplace, including paper recycling and water-saving initiatives[101]

Financial Performance - For the six months ended June 30, 2021, the company reported revenue of approximately RMB 4,032.2 million, an increase of 83.1% compared to RMB 2,202.6 million for the same period in 2020[13]. - The company's net profit for the same period was approximately RMB 142.3 million, representing a year-on-year growth of 94.3% from RMB 73.2 million[18]. - Revenue from social products amounted to approximately RMB 2,690.7 million, accounting for 66.7% of total revenue for the first half of 2021[18]. - Value-added services revenue for the same period was approximately RMB 3,921.2 million, up 81.1% from RMB 2,165.1 million year-on-year[31]. - Gross profit for the six months ended June 30, 2021, was approximately RMB 1,406.7 million, a 190.5% increase from RMB 484.2 million in the same period of 2020, with a gross margin rising from 22.0% to 34.9%[33]. - The company's revenue for the six months ended June 30, 2021, was approximately RMB 4,032.2 million, an increase of 83.1% compared to RMB 2,202.6 million in the same period of 2020[31]. - The net profit for the six months ended June 30, 2021, was approximately RMB 142.3 million, compared to RMB 73.2 million in the same period of 2020[43]. - Adjusted net profit for the same period was approximately RMB 153.4 million, up from RMB 82.6 million year-on-year[44]. - The total comprehensive income for the six months ended June 30, 2021, was RMB 119,572 thousand, which includes a profit of RMB 123,076 thousand[75]. - The company reported a basic earnings per share of RMB 0.07, up from RMB 0.04 in the previous year, indicating improved shareholder returns[67]. User Engagement and Product Development - The average monthly active users reached 46,428, a 40.8% increase from 32,974 in the same period last year[15]. - The "Kaihai" middle platform system has enhanced the company's ability to develop and commercialize products efficiently, reducing management costs and improving operational efficiency[20]. - The company has successfully transitioned from a single product to a matrix of products driving revenue growth, supported by advanced technology and a mature team[18]. - The "Duiyuan" app for matchmaking has established a strong reputation, facilitating over one million online matches each month[19]. - The "Jimu" app, targeting post-95 social trends, consistently ranks among the top interest-based social platforms[19]. - The company aims to expand its social product matrix to cover more users and markets, driving continuous revenue growth[26]. - The introduction of new social scenarios, including the opening of offline bars, is expected to enhance user engagement and drive business growth[24]. Expenses and Investments - Sales and marketing expenses increased by 293.9% to approximately RMB 1,012.2 million, primarily due to increased investment in the social product matrix[34]. - Research and development expenses rose by 25.9% to approximately RMB 202.9 million, reflecting the company's commitment to enhancing its social product offerings[36]. - The group's capital expenditure for the six months ended June 30, 2021, was approximately RMB 218.6 million, significantly higher than RMB 2.6 million for the same period in 2020[55]. - The company incurred share-based payment expenses of RMB 11,120 thousand for the six months ended June 30, 2021[75]. - The total expenses for the six months ended June 30, 2021, amounted to RMB 3,933,665 thousand, compared to RMB 2,203,724 thousand in the previous year, representing an increase of about 78%[113]. Cash Flow and Financial Position - As of June 30, 2021, the group's cash and cash equivalents amounted to approximately RMB 1,093.6 million, a decrease from RMB 1,360.3 million as of December 31, 2020[48]. - The company's cash and cash equivalents decreased to RMB 1,093,607 thousand from RMB 1,360,333 thousand, reflecting changes in liquidity management[70]. - The net cash generated from operating activities for the six months ended June 30, 2021, was RMB 7,550 thousand, compared to a net cash used of RMB (14,967) thousand in the same period of 2020[77]. - The net cash used in investing activities for the six months ended June 30, 2021, was RMB (233,395) thousand, compared to RMB 288,899 thousand generated in the same period of 2020[79]. - The financing activities resulted in a net cash outflow of RMB (37,558) thousand for the six months ended June 30, 2021, compared to RMB (100,000) thousand in the same period of 2020[80]. Assets and Liabilities - The total assets as of June 30, 2021, amounted to RMB 4,777,781 thousand, compared to RMB 4,669,619 thousand at the end of 2020, showing a growth in asset base[70]. - The total liabilities stood at RMB 1,132,906 thousand, slightly up from RMB 1,126,066 thousand, indicating stable financial leverage[72]. - The group confirmed a provision of RMB 5.0 million related to disputes with certain users on its online platform[48]. - Trade receivables as of June 30, 2021, amounted to RMB 29,467 thousand, a decrease from RMB 53,774 thousand as of December 31, 2020, representing a decline of 45.5%[138]. - Accounts payable as of June 30, 2021, totaled RMB 400,462 thousand, a decrease from RMB 476,259 thousand as of December 31, 2020, indicating a reduction of 15.9%[141]. Shareholder Information - As of June 30, 2021, Mr. Feng holds 388,798,000 shares, representing approximately 19.37% of the company's equity[189]. - Mr. Liu has a controlled interest in 250,000,000 shares, accounting for about 12.46% of the total equity[189]. - Mr. Hou owns 187,155,000 shares, which is approximately 9.33% of the company's equity[189]. - The total shares held by Fantastic Live Holdings Limited amount to 358,798,000, representing 17.88% of the equity[195]. - The total shares held by Doumi Online amount to 250,000,000, which is 12.46% of the equity[195].

Financial Performance - Total revenue for the year reached approximately RMB 4.949 billion, representing a year-on-year growth of 51.4%[15] - Net profit for the year was RMB 203.2 million, an increase of 285% compared to the previous year[15] - Adjusted net profit for the year was RMB 220 million, reflecting a year-on-year growth of 208.9%[15] - The company's revenue for 2020 was approximately RMB 4,949.4 million, an increase of 51.4% compared to RMB 3,268.6 million in 2019, driven by rapid growth in innovative product revenue[30] - Gross profit increased by 34.6% from RMB 889.5 million in 2019 to RMB 1,197.1 million in 2020, while the gross margin decreased from 27.2% to 24.2%[32] - Operating profit increased by 19.0% from approximately RMB 46.0 million in 2019 to approximately RMB 54.7 million in 2020, while the percentage of operating profit to total revenue decreased from 1.4% in 2019 to 1.1% in 2020[40] - The company recorded a profit of approximately RMB 203.2 million in 2020, a significant increase of 285.0% compared to approximately RMB 52.8 million in 2019[44] User Engagement and Market Growth - Monthly active users reached 36.47 million, a 22% increase from 29.81 million in 2019[12] - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[77] - User retention rates improved to 85%, up from 80% last year, indicating stronger customer loyalty[77] - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[77] Product Development and Innovation - Revenue from innovative products accounted for 41.8% of total revenue, amounting to approximately RMB 2.1 billion[15] - The company plans to launch several innovative products in 2021, which are expected to drive business growth[15] - The management team emphasized the importance of innovation, with plans to launch at least three new products in the upcoming year[77] - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[77] Expenses and Cost Management - The cost of sales increased by 57.7% from RMB 2,379.1 million in 2019 to RMB 3,752.3 million in 2020, with the cost of sales as a percentage of revenue rising from 72.8% to 75.8%[31] - Selling and promotional expenses rose by 43.2% from RMB 495.8 million in 2019 to RMB 709.9 million in 2020, with these expenses accounting for 14.3% of total revenue, down from 15.2% in 2019[33] - Administrative expenses increased by 30.0% from approximately RMB 170.4 million in 2019 to approximately RMB 221.6 million in 2020, while the percentage of administrative expenses to total revenue decreased from 5.2% in 2019 to 4.5% in 2020[34] - The company has initiated a cost-cutting strategy projected to save $10 million annually[77] Research and Development - Research and development expenses for the year were RMB 334.4 million, slightly up from RMB 330.8 million in 2019[7] - R&D expenses slightly increased by 1.1% from approximately RMB 330.8 million in 2019 to approximately RMB 334.4 million in 2020, with the percentage of R&D expenses to total revenue decreasing from 10.1% in 2019 to 6.8% in 2020[35] - The company will maintain its focus on technological research and development, particularly in AI and 5G, to enhance user experience[19] Strategic Plans and Investments - The company is actively seeking investment and acquisition opportunities that align with its strategic layout and have user or revenue potential[20] - A strategic acquisition of a smaller tech firm is anticipated to close by Q3 2024, expected to add $20 million in annual revenue[77] - The company aims to increase investment in existing products to expand market share and improve competitiveness in their respective segments[19] Shareholder Returns and Dividends - The company did not recommend the payment of a final dividend for the year ended December 31, 2020[73] - The board of directors did not recommend the distribution of a final dividend for the year ending December 31, 2020[110] - The company has adopted a dividend policy that allows for the declaration of dividends based on available profits and reserves, without exceeding the board's recommended amount[111] Financial Position and Assets - Total assets increased to RMB 4.670 billion, up from RMB 4.462 billion in 2019[8] - Cash and cash equivalents increased to approximately RMB 1,360.3 million as of December 31, 2020, from approximately RMB 603.9 million as of December 31, 2019[52] - Total financial assets at fair value through profit or loss decreased from approximately RMB 1,791.6 million as of December 31, 2019, to approximately RMB 1,210.1 million as of December 31, 2020[53] - The company has not held any short-term or long-term bank borrowings or other loans as of December 31, 2020[167] Compliance and Governance - The company has complied with all relevant Chinese laws and regulations, obtaining all necessary licenses and approvals for its operations[104] - The company has confirmed the independence of its independent non-executive directors as of December 31, 2020[137] - There were no significant disputes with suppliers, customers, or other stakeholders during the review period[103] Operational Structure - The company operates a mobile live streaming platform and is involved in providing value-added telecommunications services, internet cultural services, and online audiovisual program services[178] - Due to Chinese laws restricting foreign ownership in certain internet cultural activities, the company has established variable interest entity (VIE) structures for its social and e-commerce businesses[179] - The company has created two independent VIE structures to manage its online social and e-commerce businesses, allowing for tailored business strategies and resource allocation[183]

Revenue Performance - For the six months ended June 30, 2020, the group's revenue was approximately RMB 2,202.6 million, an increase of 48.3% compared to RMB 1,485.6 million in the same period of 2019[14] - During the same period, live streaming business revenue increased by 53.5% to approximately RMB 2,165.1 million from RMB 1,410.2 million in 2019[14] - The revenue from the Inke APP was approximately RMB 1,387 million, accounting for 62.95% of total revenue during the reporting period[9] - Innovative products generated approximately RMB 807 million in revenue, representing 36.63% of total revenue[9] - The group reported total revenue of RMB 2,202,636 thousand for the six months ended June 30, 2020, compared to RMB 1,485,571 thousand for the same period in 2019, representing a year-over-year increase of approximately 48.3%[42] - Revenue for the six months ended June 30, 2020, was RMB 2,202,636,000, an increase of 48.2% compared to RMB 1,485,571,000 for the same period in 2019[100] Profitability - The group recorded a net profit of approximately RMB 73.2 million for the six months ended June 30, 2020, compared to a loss of approximately RMB 27.5 million in the same period of 2019[26] - Adjusted profit for the period was approximately RMB 82.6 million, compared to an adjusted loss of approximately RMB 10.9 million in the prior year[27] - Gross profit for the period was RMB 484,241 thousand, up from RMB 430,777 thousand in the previous year, indicating a gross margin improvement[43] - Operating profit for the six months was RMB 52,270 thousand, a significant recovery from an operating loss of RMB 66,485 thousand in the same period last year[43] - The net profit attributable to equity holders of the company was RMB 73,265 thousand, compared to a loss of RMB 26,344 thousand in the prior year, marking a turnaround in profitability[46] - The company reported a profit attributable to owners of the company of RMB 73,265,000 for the six months ended June 30, 2020, compared to a loss of RMB 26,344,000 in the same period of 2019[110] Expenses and Costs - The sales cost for the six months ended June 30, 2020, increased by 62.9% to approximately RMB 1,718.4 million, with the sales cost as a percentage of revenue rising from 71.0% in 2019 to 78.0%[16] - Sales and promotion expenses decreased by 19.8% to approximately RMB 257.0 million, primarily due to reduced outdoor advertising amid the COVID-19 pandemic[18] - Administrative expenses decreased by 28.8% to approximately RMB 67.2 million, mainly due to impairment losses incurred by certain subsidiaries in the prior period[19] - Research and development expenses increased by 5.3% to approximately RMB 161.1 million, driven by advancements in 5G and AI technologies[20] - Total expenses for the six months ended June 30, 2020, were RMB 2,203,724,000, an increase of 35.7% from RMB 1,622,812,000 in 2019[102] Cash Flow and Financial Position - Cash and cash equivalents amounted to approximately RMB 780.8 million as of June 30, 2020, up from RMB 603.9 million as of December 31, 2019[29] - The group had financial assets at fair value through profit or loss totaling approximately RMB 1,742.2 million as of June 30, 2020, down from RMB 1,791.6 million at the end of 2019[33] - The company reported a net cash flow from operating activities of RMB 1,387,000, compared to RMB 6,774,000 in the same period of 2019, indicating a decrease of approximately 79.5%[58] - The company experienced a net cash outflow from investing activities of RMB 14,967,000 for the six months ended June 30, 2020, compared to a net inflow of RMB 6,069,000 in the same period of 2019[58] - The financing activities resulted in a net cash outflow of RMB 100,000,000 for the six months ended June 30, 2020, compared to a net outflow of RMB 74,893,000 in the same period of 2019, reflecting an increase of approximately 33.5%[61] - The total cash and cash equivalents at the end of the period were RMB 780,821,000, a decrease from RMB 826,156,000 at the end of the same period in 2019[61] Corporate Governance and Compliance - The company has complied with all provisions of the corporate governance code during the six months ended June 30, 2020[193] - The board consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring a balanced power structure[195] - The audit committee, chaired by an independent non-executive director, has reviewed the interim results and confirmed compliance with applicable accounting principles[198] - The company has adopted the standard code of conduct for directors' securities transactions and confirmed compliance for the six months ending June 30, 2020[197] - The company is committed to maintaining high standards of corporate governance and will continue to review its practices[196] Strategic Initiatives - The company plans to continue expanding its interactive social product matrix to cover more users and markets, aiming for sustained revenue growth[12] - The group will focus on investment and acquisition opportunities in vertical fields and emerging interactive social needs[12] - The company aims to enhance operational efficiency through governance structure optimization and management system improvements[12] - The group has established a strategic partnership with Asia Television for the 2020 Miss Asia Pageant, enhancing its influence in the Asia-Pacific region[10] - The company is committed to continuous technological investment and innovation, keeping pace with trends in 5G and AI to enhance user experience[13] Market and Industry Impact - The impact of COVID-19 on the live streaming industry was relatively minor during the reporting period, despite significant disruptions in other sectors[75] - The company has adopted the optional exemption for accounting treatment of lease modifications related to COVID-19 as of June 1, 2020[73] Shareholder Information - The company’s major shareholders include Feng Yusheng with a 17.88% stake, Liu Xiaosong with 12.46%, and Hou Guangling with 8.33%[169] - Fantastic Live Holdings Limited holds 358,798,000 shares, representing 17.88% of the total shares[176] - The company repurchased a total of 40,924,000 shares at a total cost of HKD 44,851,180, with a maximum price of HKD 1.37 per share[189] - No interim dividend was declared for the six months ended June 30, 2020[192] Financial Risks and Management - The company continues to face various financial risks, including market risk, credit risk, and liquidity risk[76] - The company has not made any changes to its risk management policies since December 31, 2019[77]