Financial Performance - The company achieved a revenue of RMB 1.287 billion in 2021, representing a year-on-year growth of 66.8%[5] - Adjusted net profit for the year was RMB 511.55 million, an increase of 22.3% compared to the previous year[5] - The company reported a revenue of approximately RMB 1,287.7 million and a gross profit of RMB 958.8 million for the year ended December 31, 2021, representing an increase of approximately 66.8% and 61.9% year-over-year, respectively[9] - The company's profit attributable to owners increased by approximately 28.1% to RMB 500.7 million from RMB 390.8 million in 2020[22] - The company reported a net profit of RMB 500,713,000 for the year ended December 31, 2021, compared to RMB 497,139,000 in the previous year, representing an increase of approximately 0.35%[153] - Total revenue for the year ended December 31, 2021, was RMB 1,287,722 thousand, representing a 66.5% increase from RMB 772,034 thousand in 2020[146] - Gross profit for 2021 was RMB 958,828 thousand, up from RMB 592,088 thousand in 2020, indicating a gross margin improvement[146] User Engagement and Growth - The company reported 9.06 million daily active users (DAU), a growth of 20.4% year-on-year, and 15.48 million paying users, which is a significant increase of 176.7%[7] - The number of Daily Active Users (DAUs) increased to 9,055,550, a growth of 20.4% compared to the previous year[10] - The number of paying users reached 15,475,277, marking a significant increase of 176.7% year-over-year[10] - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[33] - User retention rates improved to 80%, up from 70% last year, indicating stronger customer loyalty[34] Research and Development - Research and development expenses increased by 61.6% in 2021, focusing on enhancing game development and technical infrastructure[7] - The company invested approximately RMB 97 million in research and development in 2021, a 61.7% increase from RMB 60 million in 2020[10] - The company is investing $10 million in research and development for innovative gaming technologies over the next two years[37] Market Expansion and Strategy - The company plans to expand its game offerings by launching more casual games and localizing gameplay variants to cover the entire country[11] - The company plans to expand its overseas product offerings in regions such as Hong Kong, Macau, Taiwan, Europe, the United States, Southeast Asia, and the Middle East in 2022[11] - The company plans to explore opportunities for strategic acquisitions or partnerships with local small and medium-sized mobile game developers to enhance game-related resources and operational capabilities[31] - The company plans to continue implementing growth strategies to solidify its leading position in the localized mobile card game industry in China for 2022[47] Financial Position and Equity - The total equity of the company reached RMB 1.440 billion by the end of 2021, up from RMB 949.35 million in 2020[6] - As of December 31, 2021, the company had cash and cash equivalents of approximately RMB 1,125.2 million, an increase from RMB 732.7 million as of December 31, 2020[26] - The company's total assets reached RMB 1,487,074 thousand, compared to RMB 956,453 thousand in 2020, marking a substantial growth in the asset base[148] - The company reported a net asset value of RMB 1,211,306 thousand, significantly higher than RMB 728,850 thousand in the previous year[148] Expenses and Costs - Sales costs rose by approximately 82.8% to about RMB 328.9 million in 2021 from RMB 179.9 million in 2020, primarily due to increased commissions paid to third-party distribution channels[14] - Selling and marketing expenses surged by approximately 162.4% to RMB 317.3 million, driven by increased advertising efforts[18] - Administrative expenses rose by approximately 84.0% to RMB 99.3 million, primarily due to increased employee benefits and professional service fees[19] Corporate Governance - The board consists of nine directors, including five executive directors and four independent non-executive directors[108] - The company has adopted the corporate governance code and has complied with applicable provisions during the reporting period[105] - The board is collectively responsible for guiding and supervising the company's affairs, including strategy formulation and monitoring execution, as well as ensuring effective internal controls and risk management systems[112] Shareholder Information - The company has maintained a public float of over 25% of its issued share capital as of the report date[102] - The company has not purchased, sold, or redeemed any of its listed securities during the year ended December 31, 2021[101] - The company’s independent auditor confirmed that there are no annual caps required for related party transactions for the year ended December 31, 2021[79] Risks and Compliance - The company faces several risks related to contractual arrangements, including potential non-compliance with Chinese laws, which could lead to severe consequences such as the annulment of agreements[75] - The introduction of the new Foreign Investment Law creates uncertainties regarding its interpretation and impact on the company's structure and operations[75] - The group primarily depends on self-generated user traffic but also utilizes various third-party game distribution channels, including major mobile manufacturers and online app stores, to promote its games[46] Revenue Recognition - The company recognizes revenue upon the transfer of control of goods or services to customers, with performance obligations being fulfilled at a point in time or over time depending on specific criteria[166] - The group’s revenue from self-developed mobile games comes from virtual token and private game room card sales, with revenue recognized when customers use these tokens and cards[169] - Deferred revenue is recorded as a liability until customers consume the virtual tokens and private game room cards, reflecting the group's responsibility to provide services[169] Charitable Contributions - The company has committed RMB 20 million in charitable donations in response to social responsibilities during various crises, including the COVID-19 pandemic[8] - The company made charitable donations of approximately RMB 5 million during the reporting period[97]

Financial Performance - For the six months ended June 30, 2021, the company's revenue and gross profit were RMB 557.4 million and RMB 422.7 million, representing an increase of approximately 44.0% and 44.8% compared to the same period last year[7]. - The adjusted net profit for the six months was approximately RMB 315.6 million, a rise of about 45.1% compared to RMB 217.6 million for the same period in 2020[7]. - The company's revenue for the six months ended June 30, 2021, was approximately RMB 557.4 million, an increase of 44.0% compared to RMB 387.2 million for the same period in 2020[11]. - The gross profit rose by 44.8% to approximately RMB 422.7 million, with a slight increase in gross margin from 75.4% to 75.8%[13]. - The net profit attributable to the company's owners increased by approximately 54.0% to RMB 310.7 million for the six months ended June 30, 2021[20]. - The net profit for the period was RMB 310,089 thousand, up 54% from RMB 201,719 thousand in the previous year[34]. - Basic earnings per share increased to RMB 24.92 from RMB 16.23, representing a 53% growth[34]. User Engagement - The Daily Active Users (DAUs) increased to 7,950,871, a growth of 32.3% year-over-year, while the number of paying users reached 6,276,333, up 30.3% from the previous year[8]. - Daily Active Users (DAUs) significantly increased due to enhanced game development and promotional activities, contributing to higher player engagement and in-game purchases[11]. Game Development and Offerings - The company launched 11 new Mahjong game variants and 8 new Poker game variants in the first half of 2021, expanding its game offerings significantly[7]. - Continued focus on improving and upgrading existing casual games, particularly fishing games, to enhance player experience and retention[9]. - The company is committed to developing HTML5 versions of its games and other potential mini-programs to connect with various HTML5-supported social platforms and websites[9]. Marketing and Advertising - The company plans to further enhance its advertising revenue by collaborating with other platform operators and optimizing ad placements within its games[9]. - Sales and marketing expenses increased by approximately 40.8% to RMB 75.5 million, primarily due to heightened marketing efforts to attract and retain players[16]. - The company plans to invest in marketing activities and partnerships with international game distribution channels to expand its overseas market presence[10]. Research and Development - Significant investments were made in research and development, with total expenses related to technical staff benefits, server costs, and outsourced development amounting to RMB 48.5 million for the first half of 2021[9]. - The group has been utilizing a tax policy allowing for a 175% deduction on R&D expenses, which has positively impacted its taxable income calculations[50]. Financial Position - As of June 30, 2021, the group had cash and cash equivalents of approximately RMB 955.5 million, up from RMB 732.7 million as of December 31, 2020[25]. - The capital expenditure for the six months ended June 30, 2021, was approximately RMB 16.5 million, an increase from RMB 9.7 million for the same period in 2020[27]. - The group had no short-term or long-term bank borrowings as of June 30, 2021, and the debt-to-asset ratio was zero[26]. - The total employee costs for the six months ended June 30, 2021, were approximately RMB 46.8 million, a decrease from RMB 50.2 million in the same period of 2020[30]. - The group aims to utilize internal resources and sustainable growth for funding its expansion and business operations[24]. Strategic Acquisitions - The company is actively seeking acquisition opportunities, having acquired a 40% stake in Jilin Xinyue Network Technology Co., which expanded its local market presence[10]. - The group plans to explore opportunities for strategic acquisitions or collaborations with local small and medium-sized mobile game developers to enhance game-related resources[29]. Share Incentive Plan - The company issued 79,276,000 new shares under the share incentive plan, representing 6.31% of the total shares issued[73]. - The company aims to retain and incentivize employees through the share incentive plan, which is effective for 10 years from June 6, 2019[71]. - The company confirmed that 50% of the shares granted under the share incentive plan will vest on the listing date, with the remaining 50% vesting quarterly thereafter[74]. Corporate Governance - The board believes that having the same person serve as both chairman and CEO is beneficial for the company's management[110]. - The company has complied with the corporate governance code during the reporting period, with a noted exception regarding the separation of roles for chairman and CEO[110]. Future Outlook - The company will continue to leverage its game development experience in China to launch games suitable for overseas players in various regions[10]. - The company anticipates that Jilin Xinyue's forecasted profits will not fall below the guaranteed profits for the years ending December 31, 2021, and 2022[59].

Financial Performance - The company's revenue for the year ended December 31, 2020, was approximately RMB 772.0 million, an increase of about 36.6% compared to RMB 564.9 million in 2019[7]. - Gross profit for the same period was approximately RMB 592.1 million, reflecting a growth of about 33.9% from RMB 442.3 million in 2019[10]. - Adjusted net profit for 2020 was approximately RMB 417.8 million, up 36.2% from RMB 306.8 million in 2019[10]. - The company reported a revenue of approximately RMB 772.0 million and a gross profit of RMB 592.1 million for the year ended December 31, 2020, representing an increase of about 36.6% and 33.9% year-over-year, respectively[12]. - The adjusted net profit attributable to the company's owners for the year ended December 31, 2020, was approximately RMB 417.8 million, an increase of 36.2% from approximately RMB 306.8 million in 2019[29]. - The company's profit before tax increased by approximately 86.7% to about RMB 460.6 million, representing 59.7% of total revenue[24]. - Net profit attributable to the company's owners rose by approximately 89.0% to about RMB 390.8 million[26]. - The company reported a total comprehensive income of RMB 388,752 thousand for 2020, compared to RMB 206,788 thousand in 2019, showing an increase of 88.0%[195]. - The company’s net assets increased to RMB 949,352 thousand in 2020 from RMB 616,577 thousand in 2019, reflecting a growth of 54.0%[196]. User Engagement and Growth - The total number of registered players reached 259,793,180, a 59.0% increase from the previous year[10]. - Daily Active Users (DAUs) increased to 7,521,912, representing a growth of 33.3% compared to 2019[10]. - The number of paying players reached 5,592,374, an increase of 35.0% year-over-year[10]. - Significant growth in DAUs was noted in central provinces such as Shaanxi, Henan, Shandong, and Hebei[10]. - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[39]. Marketing and Strategic Plans - The company plans to strengthen its regional marketing efforts in 2021, particularly in local provinces to increase DAUs and market share[10]. - Focus will be on consolidating market share in Jiangsu, Zhejiang, and Shanghai in 2021[10]. - In 2021, the company plans to enhance advertising revenue by collaborating with platform operators to integrate in-game advertising slots[14]. - The company aims to expand its game portfolio and improve player retention by developing additional localized game variants and increasing its market presence in regions like Jiangsu, Zhejiang, and Shanghai[14]. - The company plans to launch three new game titles in the upcoming year, aiming to capture a larger market share[39]. Financial Management and Investments - As of December 31, 2020, the company had cash and cash equivalents of approximately RMB 732.7 million, up from RMB 502.4 million as of December 31, 2019[31]. - The company's capital expenditure for the year ended December 31, 2020, was approximately RMB 160.7 million, significantly higher than RMB 48.2 million for the year ended December 31, 2019[33]. - The company is actively seeking acquisition opportunities, including a 40% stake acquisition in Jilin Xinyue Network Technology Co., Ltd. for RMB 150 million[15]. - The company intends to fund its expansion and operations through internal resources and sustainable growth[30]. - The company has completed a strategic acquisition of a smaller gaming studio for $5 million to enhance its product offerings[39]. Corporate Governance and Compliance - The company is committed to high standards of corporate governance to protect shareholder interests and enhance corporate value[114]. - The board consists of nine directors, including five executive directors and four independent non-executive directors[119]. - Independent non-executive directors ensure that the company's regulatory reports meet high standards and maintain balance within the board through effective independent judgment[124]. - The company has maintained compliance with relevant Chinese laws and regulations, obtaining all necessary licenses and approvals for its operations[48]. - The company has established a board diversity policy to enhance the skills, knowledge, and experience of board members, ensuring no discrimination based on race, age, gender, or religion[132]. Environmental and Social Responsibility - The company reported a total greenhouse gas emissions of 123.05 tons CO2 equivalent for the year 2020, with direct emissions from vehicles at 12.59 tons and indirect emissions from electricity at 110.46 tons[155]. - The company has committed to replacing all existing electronic equipment with energy-efficient devices by the end of 2021, contributing to its sustainability goals[154]. - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and understanding of business performance and strategy[144]. - The company promotes resource efficiency through measures such as automatic shutdown of electronic devices after hours and monthly monitoring of utility usage[159]. - The company has implemented measures to reduce water usage, including installing automatic faucets in restrooms[158]. Risks and Challenges - The group faces risks related to player retention and attraction, as well as the performance of its existing game portfolio[50]. - The company faces several risks related to contractual arrangements, including potential non-compliance with Chinese laws, which could lead to severe consequences such as the annulment of agreements[82]. - The implementation of the new Foreign Investment Law introduces uncertainties regarding its interpretation and impact on the company's structure and operations[82]. - The group relies on third-party payment providers, primarily WeChat Pay and Alipay, to facilitate in-game purchases, which exposes the group to risks associated with payment transmission stability[51]. Shareholder Information - The company declared a final dividend of RMB 0.1593 per ordinary share, equivalent to HKD 0.1892, subject to shareholder approval[103]. - The company has maintained a public float of over 25% as required by listing rules[110]. - The company has confirmed no related party transactions that require independent shareholder approval as of December 31, 2020[86]. - The company’s major shareholders include Beijing Chuangxin Yizhou Investment Management Co., Ltd., which also holds 72,312,000 shares, equating to 5.76% of the equity[95].

Financial Performance - For the year ended December 31, 2019, the company's revenue was approximately RMB 565.0 million, representing an increase of about 28.5% compared to the previous year[10]. - The gross profit for the same period was approximately RMB 442.3 million, reflecting a growth of approximately 31.5% year-over-year[10]. - The adjusted net profit, excluding share-based payment expenses of approximately RMB 82.2 million and listing expenses of RMB 17.8 million, was about RMB 306.8 million, an increase of approximately 32.1% from RMB 232.2 million in 2018[10]. - The company reported a revenue of approximately RMB 565.0 million and a gross profit of approximately RMB 442.3 million for the year ended December 31, 2019, representing an increase of about 28.5% and 31.5% respectively compared to the previous year[13]. - The total profit and comprehensive income for the year decreased by approximately 4.5% from RMB 216.5 million in 2018 to RMB 206.8 million in 2019[28]. - The profit margin declined from approximately 49.3% in 2018 to 36.6% in 2019, primarily due to increased costs and expenses related to share-based payments and significant business growth[28]. - The company’s net profit for the year ended December 31, 2019, was RMB 384,755 thousand, an increase from RMB 177,967 thousand in 2018, representing a growth of 116.2%[197]. - The company reported a total comprehensive income of RMB 206,788 thousand for the year 2019, compared to RMB 204,091 thousand in 2018, indicating a slight increase of 0.8%[197]. User Metrics - The total registered players reached 163,403,629 as of December 31, 2019, marking an increase of approximately 68.3% from the previous year[10]. - Daily Active Users (DAUs) increased to 5,644,751, up approximately 8.4% compared to the previous year[10]. - The number of paying players reached 4,142,772, which is an increase of approximately 28.4% year-over-year[10]. - Following the COVID-19 outbreak in December 2019, the group experienced a significant increase in DAUs and sales of virtual tokens and private game room cards in the first two months of 2020 due to more people staying at home[58]. Assets and Equity - Non-current assets amounted to RMB 79.0 million as of December 31, 2019, compared to RMB 17.3 million in 2018[8]. - Current assets increased to RMB 649.7 million in 2019 from RMB 279.5 million in 2018[8]. - The total equity of the company was RMB 616.6 million as of December 31, 2019, compared to RMB 212.7 million in 2018[8]. - Cash and cash equivalents as of December 31, 2019, amounted to approximately RMB 502.4 million, up from RMB 218.2 million in 2018[33]. - The company’s total equity increased to RMB 616,577,000 in 2019 from RMB 212,735,000 in 2018, representing a growth of 200.0%[196]. Expenses and Costs - Sales and marketing expenses increased by approximately 110.5% to about RMB 98.2 million in 2019, driven by higher advertising and in-game promotion expenditures[23]. - Administrative expenses rose by approximately 41.2% to about RMB 36.8 million in 2019, mainly due to an increase in personnel and professional service fees[24]. - The total employee cost for the year ended December 31, 2019, was approximately RMB 159.1 million, up from RMB 60.2 million in 2018, representing an increase of 164%[38]. - The increase in employee costs was mainly due to share-based payment expenses of approximately RMB 82.2 million[38]. Game Development and Offerings - The company successfully launched 38 new Mahjong variants and 14 new Poker variants in 2019, expanding its game offerings significantly[13]. - The company plans to launch nearly 100 new localized Mahjong variants, 35 new poker variants, and 13 new casual games in 2020 to expand its business coverage[18]. - The company aims to maintain its leading position in the localized mobile card game market in China, leveraging technological advancements and increasing internet connectivity[13]. Advertising and Revenue Streams - The company confirmed advertising revenue of approximately RMB 61.8 million in 2019, with promotional activities leading to a decrease of about 8.8% in revenue from private game room cards compared to the same period in 2018[13]. - Advertising revenue accounted for approximately 10.9% of total revenue in 2019, with virtual currency sales, private game room cards, and third-party mobile game distribution contributing approximately 47.0%, 34.7%, and 7.4% respectively[18]. - The company plans to further enhance advertising revenue by collaborating with other platform operators to integrate in-game advertising slots and utilizing data analytics to optimize ad placement strategies[15]. Corporate Governance - The company has adopted the corporate governance code as per the listing rules, ensuring compliance since the listing date[119]. - The board consists of eight directors, including five executive directors and three independent non-executive directors as of December 31, 2019[124]. - All independent non-executive directors have confirmed their independence according to the listing rules[125]. - The company maintains high standards of corporate governance to protect shareholder interests and enhance corporate value[119]. Environmental and Social Responsibility - The company has implemented measures to improve resource efficiency, including training on water and electricity conservation and promoting double-sided printing[162]. - The company strictly adheres to all relevant workplace health and safety laws, including the Labor Law of the People's Republic of China, ensuring a safe working environment for employees[167]. - The company promotes a paperless office and encourages employees to reduce paper usage, aligning with its waste management principles[160]. - The company has established a supplier code of conduct to ensure compliance with environmental, social, and governance standards, requiring suppliers to adhere to ethical business practices[171]. Strategic Plans and Future Outlook - The company is actively seeking potential collaborations or acquisition opportunities with small to medium-sized mobile game developers to enhance its game-related resources and operational capabilities[13]. - The company believes the impact of the COVID-19 pandemic on its business will be limited, as it has seen a significant increase in DAUs and sales of virtual tokens and private game room cards in the first two months of 2020[15]. - In 2020, the group plans to continue implementing growth strategies to solidify its leading position in the localized mobile card game industry in China[59].

[Company Information](index=3&type=section&id=公司資料) Provides key corporate details including registration, stock code, board members, auditor, and headquarters [Company Basic Information](index=3&type=section&id=2.1%20公司基本信息) Homeland Interactive Technology Ltd., registered in Cayman Islands with stock code 3798, details its board, auditor, and China headquarters - Company Name: Homeland Interactive Technology Ltd - Stock Code: **3798**[1](index=1&type=chunk)[4](index=4&type=chunk) - Registered in: Cayman Islands[1](index=1&type=chunk)[4](index=4&type=chunk) - Chairman and CEO: Mr. Wu Chengze[4](index=4&type=chunk) - Auditor: Deloitte Touche Tohmatsu[4](index=4&type=chunk) - China Headquarters: 7A, Huijin Building, No. 77 Tainan Road, Siming District, Xiamen[4](index=4&type=chunk) [Business Overview and Outlook](index=5&type=section&id=業務概覽及展望) Reviews the company's performance as a leading mobile board game developer and outlines future growth strategies [Business Review](index=5&type=section&id=3.1%20業務回顧) Homeland Interactive, a leading localized mobile board game developer, achieved significant revenue and profit growth in H1 2019, expanding its game portfolio and user base - The Group is a leading localized mobile board and card game developer and operator in China, specializing in localized Mahjong and poker games, developing and operating casual games, and distributing third-party mobile games[7](index=7&type=chunk) - As of June 30, 2019, the Group had developed and operated **482** localized Mahjong variations, **38** poker game variations, and **5** casual games, and distributed **7** third-party mobile games[7](index=7&type=chunk) H1 2019 Key Financial Performance | Metric | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Growth (%) | | :----------- | :-------------------- | :-------------------- | :--------------- | | Revenue | 266.5 | 212.0 | 25.7% | | Gross Profit | 205.1 | 167.5 | 22.5% | | Adjusted Net Profit | 144.6 | 110.3 | 31.1% | - As of June 30, 2019, cumulative registered players reached **123,377,190** persons, an increase of **27.1%** from December 31, 2018; DAUs increased to **5,505,360** persons, up **5.8%**; and paying players reached **3,951,669** persons, up **22.5%** from full-year 2018[8](index=8&type=chunk) - The Company's shares successfully listed on the Main Board of the Hong Kong Stock Exchange on July 4, 2019, laying the foundation for the Group's development[8](index=8&type=chunk) [Business Outlook](index=6&type=section&id=3.2%20業務展望) The Group plans to expand its game portfolio, enhance R&D, strengthen marketing, and pursue M&A opportunities for future growth - Further develop and optimize the game portfolio, expanding geographical coverage nationwide (excluding Taiwan, Tibet, Qinghai, Xinjiang, Shanghai, Guangzhou, and Shenzhen), and launching more casual games[9](index=9&type=chunk) - Continue to strengthen R&D and technical infrastructure, particularly enhancing game features, improving player experience, and developing HTML5 versions and other potential mini-programs[9](index=9&type=chunk) - Strengthen marketing capabilities and enhance brand image, including investing in promotional activities, social media advertising, third-party platform advertising, and sponsoring game competitions[9](index=9&type=chunk) - Continue to seek potential cooperation or acquisition opportunities with small and medium-sized mobile game developers and operators to increase game-related resources and market experience[9](index=9&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=管理層討論與分析) Analyzes the Group's financial performance, liquidity, capital expenditure, and human resources for the period [Financial Review](index=7&type=section&id=4.1%20財務回顧) H1 2019 revenue grew by 25.7% to RMB 266.5 million, but increased costs and expenses led to a slight 2.3% decrease in profit before tax - Revenue increased by **25.7%** from **RMB 212.0 million** in H1 2018 to approximately **RMB 266.5 million** in H1 2019, primarily due to an expanded game portfolio and increased third-party mobile game distribution[10](index=10&type=chunk) Revenue Composition Change (H1 2019 vs H1 2018) | Revenue Source | H1 2019 % | H1 2018 % | | :----------------------- | :-------- | :-------- | | Virtual Tokens | 53.7% | 49.6% | | Private Game Room Cards | 36.3% | 50.4% | | Third-Party Mobile Game Distribution | 10.0% | 0% | - Cost of sales increased by **38.0%** to **RMB 61.4 million**, mainly due to a **RMB 13.4 million** increase in commissions paid to third-party distribution channels and payment providers, and a **RMB 5.7 million** increase in employee benefit expenses[11](index=11&type=chunk) - Gross profit increased by **22.5%** to **RMB 205.1 million**, but the gross profit margin decreased from **79.0%** to **77.0%**, primarily due to increased commissions from greater use of third-party distribution channels[12](index=12&type=chunk) - Other income significantly increased by approximately **10.5 times** to **RMB 22.9 million**, mainly from **RMB 9.8 million** in advertising revenue and **RMB 8.5 million** in offline promotional marketing service income[14](index=14&type=chunk) - Selling and marketing expenses increased by **94.6%** to **RMB 46.9 million**, primarily due to an **RMB 11.3 million** increase in advertising expenses and an **RMB 10.1 million** increase in in-game promotion expenses[16](index=16&type=chunk) - Administrative expenses increased by **264.9%** to **RMB 40.5 million**, primarily due to **RMB 26.5 million** in share-based payment expenses[17](index=17&type=chunk) - Profit before income tax decreased by **2.3%** to **RMB 126.4 million**, with its percentage of total revenue falling from **61.0%** to **47.4%**, mainly impacted by increased costs, expenses, and listing expenses[18](index=18&type=chunk) - Profit and total comprehensive income for the period decreased by **1.2%** to **RMB 104.1 million**, with the profit margin decreasing from **49.7%** to **39.1%**[20](index=20&type=chunk) [Non-IFRS Measures — Adjusted Net Profit](index=9&type=section&id=4.2%20非國際財務報告準則計量%20—%20經調整純利) Adjusted net profit, excluding listing expenses and share-based payments, increased by 31.1% in H1 2019, reflecting core business performance Adjusted Net Profit Calculation (H1 2019 vs H1 2018) | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :------------------- | :------------------ | :------------------ | | Profit for the period | 104,134 | 105,422 | | Add: Listing-related expenses | 14,019 | 4,905 | | Add: Share-based payment expenses | 26,457 | — | | **Adjusted Net Profit** | **144,610** | **110,327** | - Excluding listing-related expenses and share-based payment expenses, adjusted net profit for H1 2019 was approximately **RMB 144.6 million**, an increase of **31.1%** compared to H1 2018[22](index=22&type=chunk) [Liquidity and Capital Resources](index=10&type=section&id=4.3%20流動資金及資本來源) The Group maintains strong liquidity, primarily funded by operating cash flow, with RMB 340.5 million in cash and zero debt-to-equity ratio - The Group primarily funds its operations with cash generated from operating activities and intends to finance expansion through internal resources and sustainable growth[24](index=24&type=chunk) - As of June 30, 2019, cash and cash equivalents were approximately **RMB 340.5 million**, a significant increase from approximately **RMB 218.2 million** as of December 31, 2018[25](index=25&type=chunk) - Except for lease liabilities of **RMB 11.087 million**, the Group had no short-term or long-term bank borrowings, resulting in a **zero debt-to-equity ratio**[26](index=26&type=chunk)[27](index=27&type=chunk) - The Group currently does not hedge foreign currency transactions, but the Board will monitor related risks[25](index=25&type=chunk) - A special interim dividend of **RMB 177.0 million** was paid to founders in July 2019[25](index=25&type=chunk) [Capital Expenditure](index=11&type=section&id=4.4%20資本開支) Capital expenditure significantly increased to RMB 3.2 million in H1 2019, primarily for office equipment, vehicles, renovations, and game software rights - For the six months ended June 30, 2019, capital expenditure was approximately **RMB 3.2 million**, a significant increase from approximately **RMB 0.7 million** in the same period of 2018[28](index=28&type=