Core Viewpoint - The company possesses a unique ability to create hit products in the traditional advantageous ancient-style RPG female-oriented game sector, while maintaining a long-term operational strategy, resulting in stable revenue performance from titles like "Floating Life for the Emperor" and "Lingyun Nuo" [1][2] Game Performance - The recent game "Violent Chef" has shown impressive performance, currently ranking first on the iOS free game chart, with plans for increased user acquisition to enhance its long-term development and contribution to revenue and profit [1][3] - The game features a differentiated cooking gameplay combining "Chinese cuisine kitchen party + restaurant casual management," appealing to a broad audience [1][3] Product Pipeline and Market Expansion - The company is actively expanding its product categories, including male-oriented games and overseas markets, with a rich pipeline expected to yield multiple game tests in Q3/Q4 [2][5] - The company has improved its publishing system, focusing on ROI in project initiation and distribution, leading to successful low-cost, high-return games like "Ink Sword Jianghu" and "Lingyun Nuo" [2][5] Cultural and Brand Integration - The company has successfully enhanced market penetration and user engagement through diverse brand collaboration strategies, creating a unique "culture + consumption" ecosystem [2] - Collaborations with cultural landmarks and consumer brands have strengthened the cultural depth of its IPs and increased foot traffic to physical locations [2] Financial Forecast - Revenue is projected to improve gradually, with expected revenues of 1.45 billion and 1.76 billion yuan for 2025 and 2026, respectively, reflecting year-on-year growth of 25% and 21% [5] - Adjusted net profits are forecasted to be 85 million and 175 million yuan for the same years, indicating stable profitability [5]

Core Viewpoint - The article highlights the enduring appeal of party games as a social necessity, emphasizing the success of "Friendship Time" and its new game "Chaotic Cooking" as a key driver for stock performance and market interest [1][12]. Company Summary - "Friendship Time" (6820.HK) has seen a significant stock increase of 27.27%, reaching 1.12 HKD, marking a 100% rise this year, outperforming the Hang Seng Index [1][3]. - The launch of "Chaotic Cooking" has been pivotal, with the game achieving over 800 million pre-registrations and topping the free game charts shortly after its release [8][12]. - The game targets a younger demographic, particularly female players, with its cute characters and engaging social features, marking a strategic shift for the company [12][14]. Industry Summary - The party game sector has gained popularity, with user spending, downloads, and active users all increasing, particularly with a revenue growth of 84.4% in 2023 [13]. - "Chaotic Cooking" combines fast-paced competitive elements with slower simulation gameplay, appealing to a broad audience and enhancing social interaction among players [6][14]. - Despite the competitive landscape with established titles like "Egg Party" and "Dream Star," there remains room for new entrants like "Chaotic Cooking" to carve out market space through unique gameplay and cultural integration [14].

Investment Rating - The report maintains a "Positive" investment rating for the media and internet industry [4] Core Viewpoints - Hong Kong's introduction of the "Stablecoin Regulation Draft" on May 30 marks a significant step in the digital asset sector, potentially positioning Hong Kong as an international Web3 and digital finance hub, which may also aid in the internationalization of the Renminbi and the development of offshore financial services [4] - The upcoming summer blockbuster season is highlighted, with a focus on the performance of quality content products, including new game launches and film releases [4] Summary by Sections Industry Performance - From May 26 to May 30, 2025, the Shanghai Composite Index decreased by 0.03%, while the Shenzhen Component Index fell by 0.91%. The media sector, however, saw a positive change of 1.74%, ranking 6th among all industries [13][14] Game Sector - The launch of quality products continues to significantly contribute to company performance, as seen with the game "Chaotic Chef" from Friendship Time, which boosted its market value after its release on May 28 [6] - Recommendations include focusing on leading gaming companies exploring AI+ gaming paradigms, as well as monitoring the performance of new game product cycles [6] Film Sector - The summer film season is approaching, with key films like "Liao Zhai: Lan Ruo Si" and "Chang'an's Lychee" being scheduled for release, which is expected to drive steady growth in box office revenues [6] Card and Trendy Toys - The sector shows high growth potential, with companies increasingly focusing on the "Guzi Economy" and expanding into trendy toy markets [7] Internet Sector - Major companies like Tencent and Alibaba have reported stable business development, emphasizing the optimization of business efficiency through AI [8] AI Applications - Companies embracing new technologies with data, user, and application advantages are recommended for continued observation, as AI applications are expected to undergo a paradigm shift [9] State-Owned Publishing - State-owned media companies are actively pursuing mergers and acquisitions, with some exploring new business models in education [9] Market Overview - The report notes that the media industry continues to experience an upward trend, suggesting ongoing investment in new channels and content directions [10]

Core Viewpoint - The mobile game "Cooking Party" developed by Friendship Time has officially launched its public beta, generating significant interest in the capital market due to its strong user engagement and market performance [1][11]. Group 1: Game Features and Mechanics - "Cooking Party" features a unique multiplayer cooperation mode, immersive cooking experiences, and a variety of character configurations, quickly gaining attention in the gaming community [3][6]. - The game incorporates a competitive "chaotic" mode where players must quickly switch ingredients and manage cooking times, enhancing the excitement and unpredictability of gameplay [3][4]. - In addition to cooking competitions, the game introduces simulation management gameplay, allowing players to upgrade from chefs to restaurant managers, thus diversifying the gaming experience [4][6]. Group 2: Target Audience and Market Positioning - The game targets a female audience while also appealing to a broader demographic through its engaging characters and gameplay, creating a "breaking the circle" effect [6][12]. - The integration of food culture and regional culinary elements strengthens the game's cultural relevance and enhances player engagement [6][9]. Group 3: Marketing and Collaborations - On its first day of public testing, "Cooking Party" announced collaborations with popular brands and institutions, enhancing its appeal through special in-game events and unique content [7][9]. - The game plans to collaborate with over 30 food and beverage brands, creating a diverse ecosystem of activities and brand interactions [7][9]. Group 4: Performance Metrics and Future Outlook - The game has shown promising metrics, with over one million users on its first day and a high level of engagement reflected in its rankings across various platforms [1][11]. - The party game genre has seen significant growth, with a reported 84.4% increase in user spending in 2023, indicating a strong market potential for "Cooking Party" [12][11]. - The game has received a score of 8.0 on TapTap, with over 800,000 pre-registrations, validating its market potential and sustainability [12][11]. Group 5: Technological Innovations - The game utilizes AI to enhance player experience by optimizing level interactions and providing feedback for game balance, showcasing the company's commitment to technological advancement [14][16]. - Future updates will include new seasons, user-generated content, and continuous iteration based on player feedback, ensuring the game remains fresh and engaging [14][16].

Investment Rating - The report does not provide a specific investment rating for the company [7] Core Insights - The launch of the new game "暴吵萌厨" on May 28, 2025, has shown strong performance, topping download charts across multiple platforms during its pre-download phase [1][2] - The game has received positive market feedback, ranking first on the iOS free chart for three consecutive days and third overall, indicating strong player engagement and social sharing [2] - The company has a strategic focus on expanding its portfolio with various mini-games and is actively developing multiple projects for both domestic and overseas markets [3] Financial Review and Commentary - The company has experienced fluctuating revenues over the past four years, with revenues recorded at 1.62 billion, 1.52 billion, 1.06 billion, and 1.16 billion respectively for the years 2021 to 2024, showing a recovery in 2024 with a 10.1% year-on-year increase [4] - Net profits have also varied, with figures of 275 million, 25 million, -138 million, and -49 million for the same years, indicating a significant reduction in losses in 2024 [4] Outlook for 2025 - The successful launch of "暴吵萌厨" sets a positive tone for the company's fiscal year 2025, with expectations for revenue growth and profitability improvement if the company can leverage its strengths in product development and market expansion [5] - The company is focusing on diversifying its product matrix with female-oriented games and mini-games, aiming to enhance its competitive position in the gaming market [5]

Financial Performance - The company reported a revenue of $500 million for the fiscal year 2023, representing a 20% increase compared to the previous year[1]. - Total revenue for 2023 was RMB 1,056,033 thousand, a decrease of 30.8% compared to 2022[11]. - Gross profit for 2023 was RMB 702,405 thousand, down 32.7% from RMB 1,044,114 thousand in 2022[11]. - The company reported a net loss of RMB 138,120 thousand for 2023, compared to a profit of RMB 25,111 thousand in 2022[11]. - The total revenue for the year ended December 31, 2024, was approximately RMB 1,162.8 million, representing a year-on-year growth of about 10.1%[20]. - The net loss for the year was approximately RMB 48.9 million, narrowing by about 64.6% compared to the previous year[20]. - Adjusted net loss for the year was approximately RMB 42.8 million, narrowing by about 67.8% year-on-year[20]. - Game revenue accounted for 99.9% of total revenue in 2024, amounting to RMB 1,162.1 million, which is a 10.1% increase from RMB 1,055.4 million in 2023[54]. - Gross profit for the year ended December 31, 2024, was RMB 813.5 million, a 15.8% increase from RMB 702.4 million in 2023, with a gross margin of 70.0%, up 3.5 percentage points from 66.5%[58]. User Growth and Market Expansion - User data showed a growth of 1 million active users, reaching a total of 10 million active users by the end of Q4 2023[1]. - Market expansion plans include entering three new international markets by Q3 2024, aiming for a 15% increase in user base[1]. - The company aims to deepen its market presence in both female-oriented and male-oriented gaming segments, targeting diverse user groups[13]. - Revenue from mainland China reached RMB 897.5 million, accounting for 77.2% of total game revenue, up from 68.3% in 2023, representing a 24.6% year-on-year increase[55]. Product Development and Innovation - New product launches included two major game titles, which are projected to contribute an additional $50 million in revenue in 2024[1]. - The company plans to launch multiple new games in 2024, including "墨劍江湖" and several lightweight games, to expand its product matrix[13]. - The launch of "Floating Life Memories" in January 2024 and "Ink Sword Jianghu" in July 2024 contributed significantly to revenue growth, with a sequential revenue increase of approximately 20.7% in the first half and 21.0% in the second half of 2024[20]. - The company is focusing on integrating AI technology across its development, publishing, and operations processes to enhance efficiency and user experience[14]. - The company is focusing on the development of an AI productivity engine to automate various aspects of game production, significantly reducing labor costs and production cycles[44]. Financial Strategy and Shareholder Value - The board approved a share buyback program worth $20 million to enhance shareholder value[1]. - The company has adopted a dividend policy, considering factors such as operating performance, cash flow, and future prospects when determining dividend levels[141]. - The board does not recommend the payment of dividends for the year ending December 31, 2024, consistent with the previous year[164]. Corporate Governance and Management - The company has a strong management team with over 20 years of experience in the gaming industry, including key figures like Mr. Sun Bo, who is the Executive Director and Vice President[92]. - The company has established a strong governance structure with independent directors responsible for monitoring the board and providing independent advice[96]. - The board consists of 6 members, including 3 executive directors and 3 independent non-executive directors[112]. - The company has established a risk management and internal control system to manage risks associated with achieving business objectives, ensuring reasonable assurance against significant misstatements or losses[144]. Corporate Social Responsibility - The company has strengthened its commitment to corporate social responsibility, ensuring user data protection and actively participating in educational support initiatives in remote areas[17]. - The company has implemented environmental protection measures and encourages employees to conserve resources[169]. - The board is committed to integrating environmental, social, and governance (ESG) principles into business operations, overseeing related risks and opportunities[147]. Strategic Focus and Future Outlook - The company continues to focus on a "premium, diversified, and global" strategy, enhancing user engagement through frequent updates and localized content[21]. - The company aims to deepen its strategic layout in the coming year, focusing on innovation, technology integration, and industry ecosystem collaboration[17]. - The company plans to continue its global development strategy, focusing on regional depth and category breakthroughs in game offerings[51].

Company and Industry Summary Company Overview - The company is involved in the gaming industry, focusing on AI applications in game development and user experience enhancement [1][2][3][4][5][6]. Key Points and Arguments AI Integration and Development - The company has made significant advancements in AI technology over the past two years, aiming to improve user experience in games through AI-generated content and player assistance [1][3][4]. - AI is being utilized to create in-game assets and marketing materials, reducing the reliance on traditional art teams and streamlining production processes [2][4][5]. Product Performance and Market Strategy - The company has conducted two external tests for its new product, "爆炒农厨," which has shown promising retention data, indicating it may be one of the best-performing products in the company's history [7]. - The product is designed to have a low entry barrier for users, with expectations for strong long-term revenue generation [8]. - The company plans to officially launch "爆炒农厨" in Q2, aligning with a strategy to target a younger audience during the summer season [8][9]. Financial Outlook - The company reported a strong performance in Q1, with revenue growth driven by new game launches and stable performance from existing titles [11]. - For the full year of 2025, the company anticipates robust revenue growth, supported by the upcoming launches and a strong foundation from Q1 results [12]. - Sales expenses are expected to decrease compared to the previous year, as new product launches will not require as high an investment as prior years [10]. Game Lifecycle and User Engagement - The company is focused on maintaining the long-term viability of its mini-games, with successful examples showing stable revenue streams over extended periods [13][14]. - The company has observed that its games, such as "多拉拉生殖剂," have maintained strong performance metrics, indicating effective lifecycle management [14][15]. Cost Management and Profitability - The company is implementing strict cost controls for 2025, with expectations for a significant reduction in sales expenses while maintaining profitability [10][12]. - There is a strong expectation for the company to resume dividend payments in the future, aiming for a payout ratio of 30% to 50% once financial stability is achieved [20][21]. Future Product Development - The company is actively preparing for the launch of several new products, including "西飞传" and the overseas version of "默契江湖," indicating a robust product pipeline for the upcoming year [22]. Additional Important Content - The company emphasizes a strategic approach to AI, opting not to compete directly with larger firms but instead leveraging existing technologies to enhance its own offerings [16][18]. - The management is committed to continuous improvement and innovation in game development, ensuring that user feedback is integrated into future iterations of their products [17].

Financial Performance - For the fiscal year ending December 31, 2024, the company reported revenue of RMB 1,162,786,000, representing a 10.1% increase from RMB 1,056,033,000 in 2023[5] - Gross profit for the same period was RMB 813,522,000, reflecting a 15.8% increase compared to RMB 702,405,000 in 2023[5] - The company achieved a significant reduction in loss before tax, reporting a loss of RMB 35,834,000, down 50.9% from RMB 72,928,000 in the previous year[5] - The net loss for the year was RMB 48,856,000, a 64.6% improvement from RMB 138,120,000 in 2023[5] - The adjusted net loss, excluding share-based compensation expenses, was RMB 42,842,000, a 67.8% decrease from RMB 132,954,000 in the prior year[5] - The total revenue for the year ended December 31, 2024, was approximately RMB 1,162.8 million, representing a year-on-year growth of about 10.1%[18] - The net loss for the year was approximately RMB 48.9 million, narrowing by about 64.6% compared to the same period last year[18] - Adjusted net loss for the year was approximately RMB 42.8 million, narrowing by about 67.8% year-on-year[18] - The company reported a total comprehensive loss of RMB (46,586,000) for the year, improving from RMB (131,781,000) in the previous year[57] - The company reported a loss attributable to ordinary shareholders of RMB 48,856,000 for 2024, compared to a loss of RMB 138,120,000 for 2023[75] Revenue Drivers - Revenue growth was primarily driven by the launch of "Floating Life: Memories of Linglong" and "Ink Sword Jianghu," along with significant contributions from mini-games like "Lingyun Nuo H5" and "Dulala Promotion Record H5" which entered the top 50 in WeChat mini-games and top 30 in Douyin mini-games[19] - The company achieved a quarter-on-quarter revenue growth of approximately 20.7% in the first half of 2024 and about 21.0% in the second half of 2024[19] - Game revenue for 2024 was RMB 1,162.1 million, accounting for 99.9% of total revenue, reflecting a 10.1% year-over-year increase from RMB 1,055.4 million[95] Product Development and Strategy - The company plans to enhance its product matrix by launching various games targeting different user demographics, including female-oriented ancient style and male-oriented martial arts games[7] - The integration of AI technology into game development and operations is a key focus, aiming to improve efficiency and user experience across the entire process[8] - The company plans to continue deepening its strategy of "refinement, diversification, and globalization," focusing on product innovation and technological integration[14] - The company maintains a long-term operational strategy, continuously updating content and engaging in high-frequency version iterations to enhance user experience[21] - The company is actively developing multiple small game projects, including "熹妃传H5," which launched in March 2025, and several others currently in testing, with overseas versions of "杜拉拉升职记" and "凌云诺" set to launch between March and April 2025[40] Cost Management and Efficiency - The company is optimizing its organizational structure and enhancing marketing strategies to reduce costs and improve operational efficiency[10] - Research and development expenses decreased to RMB 292,731,000 in 2024 from RMB 345,993,000 in 2023, indicating a reduction of approximately 15.4%[55] - Employee costs, including salaries and benefits, amounted to RMB 314,062 thousand in 2024, down from RMB 360,705 thousand in 2023, a reduction of about 12.9%[68] - Selling and marketing expenses for 2024 were approximately RMB 557.0 million, an increase of RMB 126.2 million or 29.3% from RMB 430.8 million in 2023, primarily due to promotional expenses for new products[101] - Administrative expenses for 2024 were approximately RMB 41.8 million, a decrease of RMB 8.5 million or 16.9% from RMB 50.3 million in 2023[104] AI and Technological Integration - The AI strategy focuses on "AI + gaming," aiming to enhance the gaming industry through technological innovation and improve player experiences by building a comprehensive AI application system covering development, publishing, operations, and management[41] - The company is developing an AI tool matrix to automate various artistic processes, significantly reducing labor costs and production cycles in art and music generation[42] - AI-driven game interaction is being restructured using deep learning technology, allowing for adaptive level design and NPC interactions based on player behavior, enhancing overall gaming experience[46] Corporate Governance and Compliance - The company has established a corporate governance framework in accordance with the corporate governance code, with a deviation noted regarding the separation of roles between the chairman and the CEO[159] - The audit committee, consisting of three independent non-executive directors, has reviewed the company's audited consolidated results for the year ending December 31, 2024, confirming compliance with applicable accounting principles and sufficient disclosures[166] - The company has ensured that all directors have complied with the standards of the securities trading code as of the year ending December 31, 2024[162] Future Outlook and Plans - The company plans to focus on market expansion and new product development in the upcoming year[55] - The company aims to enhance its competitive position through strategic acquisitions and partnerships in the upcoming fiscal year[66] - The company is committed to a global development strategy, focusing on regional depth and category breakthroughs to create culturally distinctive and globally appealing games[53] Share Incentive Plan - The company has issued a total of 2,180,850,000 shares with a par value of RMB 0.00001 as of December 31, 2024[83] - The board of directors has approved the share incentive plan to align the interests of participants with the company's long-term value creation[144] - The share incentive plan is subject to a cap where the total shares granted cannot exceed 10% of the total issued shares as of the adoption date[146] - The plan allows for the granting of shares to directors, senior and middle management, key technical personnel, and major employees who contribute to the group[141] Social Responsibility and Sustainability - The company actively integrates environmental, social, and governance issues into its management framework, promoting sustainable development in response to national carbon neutrality and energy-saving policies[48] - In 2024, the company will continue to contribute to charitable causes, focusing on education, animal rescue, and environmental protection, among others[49] - Continuous improvements in user information security are being made, with a focus on data safety and strict compliance with global regulations to ensure user privacy[51]

Financial Performance - The company reported a significant increase in revenue, achieving a total of $X million for the first half of 2024, representing a Y% growth compared to the same period last year[2]. - The company reported a net profit margin of I%, reflecting improved cost management and operational efficiencies[2]. - Total revenue for the six months ended June 30, 2024, was approximately RMB 526.1 million, a decrease of 15.2% compared to the same period in 2023, but a quarter-on-quarter increase of 20.7%[127]. - The net loss for the period was approximately RMB 72.3 million, narrowing by 10.6% compared to the same period in 2023[127]. - Game revenue accounted for 99.91% of total revenue at RMB 525.6 million, down 15.23% from RMB 620.1 million in the previous year[137]. - Gross profit decreased by 12.7% to RMB 360.3 million, while gross margin increased from 66.5% to 68.5% due to a higher proportion of high-margin channels[140]. - Sales and marketing expenses increased by 4.1% to RMB 287.3 million, primarily due to high promotional costs for the new product "Floating Life Memory Candy"[141]. - R&D expenses decreased by 4.5% to RMB 152.8 million, attributed to reduced spending on sound and animation and lower share-based compensation for R&D staff[142]. - Administrative expenses decreased by 27.5% to RMB 18.1 million, mainly due to reduced consulting fees and personnel-related expenses[143]. User Engagement and Product Development - User data showed a total of Z million active users on the platform, marking an increase of A% year-over-year[2]. - New product launches are anticipated to contribute an additional D million in revenue, with a focus on enhancing user engagement[2]. - The company launched the female-oriented game "Floating Life: Memories of Linglong" on January 2, 2024, which contributed to revenue growth[127]. - The game "Lingyun Nuo" generated significant revenue with monthly earnings exceeding RMB 10 million for several months[127]. - The company is focusing on diversifying its product offerings, including ancient-style female lead games and exploring male-oriented game markets[126]. - The company aims to enhance user engagement through frequent version updates and localized content for overseas markets[129]. - The flagship product "Floating Life: Memories of Linglong" received recommendations from major platforms and entered the Top 50 iOS game sales chart in mainland China[129]. - The company launched several new games, including "墨劍江湖," which quickly entered the Top 50 of the iOS game sales chart in mainland China shortly after its release on July 19, 2024[132]. - The company is actively developing multiple small game projects, with "杜拉拉升職記" successfully entering the Top 100 of the WeChat mini-game sales chart[134]. - The company has completed the development of several games for Huawei's HarmonyOS, integrating into the Harmony ecosystem[129]. Strategic Initiatives - The company provided guidance for the next quarter, projecting revenue growth of B% and an expected user base increase of C million[2]. - Market expansion efforts are underway, targeting F new regions, which are expected to drive further growth in user acquisition[2]. - The company is exploring potential mergers and acquisitions to enhance its market position and diversify its product offerings[2]. - Strategic partnerships are being formed to leverage synergies and improve service delivery, aiming for a G% increase in operational efficiency[2]. - The company aims to implement a global development strategy, focusing on game localization and customized products for overseas markets[135]. - The company is collaborating with various brands and cultural institutions to enhance its product offerings and market presence, including partnerships for themed events and products[130]. Sustainability and Governance - The management emphasized a commitment to sustainability, with plans to reduce carbon emissions by H% over the next five years[2]. - The company has established a comprehensive environmental, social, and governance (ESG) framework to promote sustainable development and corporate social responsibility[134]. - The company is committed to user data security and privacy protection, adhering to relevant laws and regulations in all operating regions[134]. - The company has adopted the corporate governance code and has complied with its provisions, except for a specific deviation regarding the roles of the chairman and CEO[177]. - The company has established a securities trading code for directors and confirmed compliance by all directors for the six months ending June 30, 2024[178]. Shareholder Information - As of June 30, 2024, Mr. Jiang Xiaohuang holds 1,286,602,500 shares, accounting for approximately 59.00% of the total issued share capital[176]. - Major shareholder Jiang Xiaohuang holds 1,282,516,500 shares, representing 58.81% of the total shares[188]. - The total number of issued shares as of June 30, 2024, was 2,180,850,000 shares[184]. - The company has implemented a share incentive plan approved on September 14, 2020, aimed at aligning the interests of participants with the company's long-term value creation[190][191]. - The company’s controlling shareholder Jiang Xiaohuang has indirectly gifted 80,000,000 shares, approximately 3.7% of the total issued shares, as part of the share incentive plan[195]. - The board is restricted from granting more than 10% of the total issued shares under the share incentive plan as of the adoption date[196]. - The company has not purchased, sold, or redeemed any of its listed securities during the six months ending June 30, 2024[182].

Financial Performance - The company's revenue for the six months ended June 30, 2024, was approximately RMB 526.1 million, a decrease of 15.2% compared to RMB 620.3 million in the same period of 2023[1]. - Gross profit for the same period was RMB 360.3 million, down 12.7% from RMB 412.6 million in 2023[1]. - The net loss for the period was approximately RMB 72.3 million, which narrowed by 10.6% compared to a loss of RMB 80.9 million in 2023[1]. - The company reported an operating loss of RMB 79,254 thousand, compared to an operating loss of RMB 14,437 thousand in the previous year, indicating a significant increase in losses[16]. - The company reported a basic loss per share of RMB (0.03) for the six months ended June 30, 2024, compared to RMB (0.04) for the same period in 2023, with weighted average shares outstanding of 2,116,111 thousand shares[35]. - The company reported a financial asset fair value change of RMB 6,728 thousand, compared to a loss of RMB 1,977 thousand in the previous year[16]. - The total assets as of June 30, 2024, were RMB 909,320 thousand, a decrease from RMB 1,047,816 thousand at the end of 2023[20]. - The net asset value decreased to RMB 1,128,161 thousand as of June 30, 2024, from RMB 1,203,562 thousand at the end of 2023, representing a decline of 6.3%[22]. - The total equity decreased by 6.3% from RMB 1,203,562 thousand at the end of 2023 to RMB 1,128,161 thousand as of June 30, 2024[22]. - The company's cost of sales decreased by 20.2% to approximately RMB 165.8 million for the six months ended June 30, 2024, down from RMB 207.7 million for the same period in 2023[51]. Revenue Sources - Revenue from self-developed games was RMB 511,246 thousand, down 14.4% from RMB 597,047 thousand in the previous year[25]. - Revenue from overseas customers was RMB 129,398 thousand, a decline of 27.1% from RMB 177,582 thousand in the same period last year[27]. - Game revenue accounted for 99.91% of total revenue at RMB 525.6 million, down 15.23% from RMB 620.1 million in the previous year[49]. - Domestic market revenue was RMB 396.2 million, representing 75.4% of total game revenue, a decrease of 10.46% from RMB 442.5 million in the prior year[50]. - Overseas market revenue was RMB 129.4 million, accounting for 24.6% of total game revenue, down 27.13% from RMB 177.6 million in the previous year[50]. Game Development and Launches - The revenue growth in the reporting period was primarily driven by the launch of the simplified Chinese version of "Floating Life: Memories of Linglong" on January 2, 2024, and the revenue increase from the mini-game "Lingyun Nuo" which generated over RMB 10 million in monthly flow for several months[3]. - The company has successfully launched the male-oriented game "Mo Jian Jiang Hu" in 2024, marking a breakthrough in exploring male gaming markets[2]. - The game "Floating Life Remembering Linglong" was launched on January 2, 2024, and entered the Top 50 of the iOS game sales chart in mainland China[7]. - The game "Ink Sword Jianghu" was launched on July 19, 2024, and quickly entered the Top 50 of the iOS game sales chart in mainland China[10]. - The game "Chaotic Cute Chef" is set for a new round of testing in August 2024, focusing on cooperative gameplay and cooking simulation[12]. - The company is actively developing various small game projects, with "Dulala's Promotion" successfully entering the Top 100 of the WeChat mini-game sales chart[13]. Strategic Initiatives - The company is committed to a long-term operational strategy, continuously iterating on versions, updating content, and conducting operational activities to extend product life cycles and enhance product vitality[6]. - The company is enhancing its R&D and innovation capabilities, focusing on cutting-edge technologies like AIGC, and exploring AI+ applications in the gaming industry to improve efficiency and reduce costs[5]. - The company plans to enhance R&D and operational capabilities, focusing on the integration of new technologies like AIGC to drive long-term growth[15]. - The company aims to optimize its personnel structure and establish a multi-tiered compensation system to improve cost control and efficiency[15]. - The company is committed to maintaining compliance with Hong Kong Financial Reporting Standards in its financial reporting practices[23]. Marketing and Localization - The company aims to provide localized game content and promotional materials to better attract and retain local players in different regions[6]. - The game has partnered with the China Academy of Art to create cultural products, including Jiangnan lanterns and new-style hairpins, enhancing its cultural engagement[7]. - "Floating Life Remembering Linglong" will collaborate with the drama "Long Moon Embers" for a promotional event on July 2, 2024[7]. - The game "Floating Life for You" has been launched in multiple regions, including North America and Southeast Asia, and is part of key cultural export projects[8]. Share Incentive Plan - As of June 30, 2024, the company purchased 5,158,000 ordinary shares under the share incentive plan, compared to none for the same period in 2023[44]. - A total of 3,437,600 restricted shares have vested as of June 30, 2024, with 6,138,800 restricted shares remaining unvested[47]. - The company established a trust to manage the restricted shares awarded under the share incentive plan, with a total of 80 million shares reserved for this purpose[45]. - The fair value of restricted shares granted to employees ranged from HKD 0.96 to HKD 1.99 per share, with varying vesting periods from 1 to 49 months[46]. - The share incentive plan allows for the granting of shares to eligible participants, with a limit of 1% of the total issued shares in any 12-month period without shareholder approval[76]. Corporate Governance - The company has adopted the corporate governance code and has complied with its provisions as of June 30, 2024, except for deviation from provision C.2.1[81]. - The company has established an audit committee, which includes independent non-executive directors, to oversee financial reporting and risk management[84]. - The audit committee reviewed the unaudited consolidated interim financial statements for the six months ended June 30, 2024[84]. - The company has established sufficient checks and balances in its governance structure[81]. - The chairman and CEO roles are currently held by the same individual, which the board believes is in the best interest of the company and its shareholders[81]. Future Outlook - Future outlook includes plans to expand into new markets, targeting a 15% increase in market share over the next fiscal year[90]. - The company is investing in new product development, with a budget allocation of $50 million for R&D in the upcoming year[88]. - A strategic acquisition is planned, aiming to enhance the company's technology capabilities and expand its product offerings[89]. - The company has set a revenue guidance of $200 million for the next quarter, representing a 20% increase compared to the previous quarter[90]. - User data indicates a 30% increase in mobile game downloads, reflecting strong market demand[88]. - The company is focusing on enhancing its digital platform, with an expected 40% increase in user retention rates due to new features[89]. - The board of directors has approved a share reward plan, which is expected to incentivize key management and improve performance[90]. - The company aims to achieve a 10% reduction in operational costs through efficiency improvements in the next fiscal year[88].