Summary of the Conference Call Company Overview - The conference call involved **Zulong Entertainment**, focusing on their recent developments and product updates [1][2]. Industry Insights - The company is actively engaged in the **gaming industry**, particularly in the **MMORPG** (Massively Multiplayer Online Role-Playing Game) and **card game** segments [3][4]. Key Points and Arguments 1. **Product Development and Innovation**: - The company is leveraging its experience with the **Unreal Engine** to enhance mobile game performance, aiming to match console quality [2]. - Continuous integration of **AI** technologies to improve creative processes, user interaction, and cost management [2]. 2. **Game Portfolio and Performance**: - The company has established a strong position in **female-oriented games** and has successfully launched new titles in the **SLG** (Simulation Game) and **strategy card game** categories [3]. - The game **"Shining in the Name"** has maintained a strong performance, achieving over **16 million users** and consistently ranking in the top ten of the iOS sales charts [4][5]. 3. **User Engagement and Retention**: - The company has implemented various marketing strategies, including collaboration between development and publishing teams, to build a loyal fan base for female-oriented games [3]. - The recent launch of **"Dragon Tribe: Castle Gate"** has received positive feedback, with strong sales performance shortly after its release [5][10]. 4. **Talent and Resource Management**: - As of mid-2020, the company had approximately **1,000 employees**, with **80%** in R&D and **12%** in publishing and operations [4]. 5. **Market Trends and User Behavior**: - The company is observing changes in consumer spending habits due to macroeconomic factors but believes that the gaming sector remains resilient in terms of user engagement and spending [19][20]. - The company is adapting its strategies to maintain user interest and revenue stability amidst these changes [19]. 6. **Financial Performance**: - The company reported a revenue increase from **CNY 170 million** in the first half of last year to **CNY 240 million** in the first half of this year, indicating a healthy growth trajectory [21][22]. - The company is also focusing on cost management and marketing investments to ensure sustainable growth [22]. 7. **Future Outlook**: - The company plans to continue expanding its game portfolio, with upcoming titles in the MMORPG and card game genres, and is optimistic about their long-term performance [8][14]. - There are plans for further product testing and updates, with a commitment to share timely information with investors [24]. Additional Important Content - The company is considering share buyback plans to reinforce market confidence and demonstrate commitment to its business strategy [23]. - The management team expressed gratitude for investor support and emphasized ongoing communication regarding future developments [24].

Summary of the Conference Call for Zulong Entertainment Company Overview - **Company**: Zulong Entertainment - **Industry**: Gaming and Entertainment Key Points and Arguments Recent Developments - Zulong Entertainment has been actively updating its product offerings and strategies, focusing on innovative gameplay and technology integration, particularly in mobile gaming [1][2] - The company is advancing the application of the U15 engine in 2D projects, aiming to enhance mobile game performance to match that of console games [2] Product Performance - The MMORPG segment remains a core strength, with successful launches in various game categories, including SLG and card games [2][3] - The game "Shining" has achieved over 16 million global users and continues to show strong performance with consistent updates and user engagement strategies [4][5] - The newly launched game "Dragon Tribe: The Gate of Cards" has performed well, quickly climbing the charts in the free and sales categories shortly after its release [5][19] User Engagement and Marketing Strategies - The company has implemented a comprehensive marketing strategy that includes user-generated content (UGC) to enhance player engagement and retention [8][9] - Continuous updates and new content releases are planned to maintain user interest and attract new players [10][20] Future Product Pipeline - Upcoming projects include "Odin," a next-generation MMORPG, which is expected to launch in 2025-2026, leveraging popular IPs to enhance market appeal [7][26] - The company is also focusing on developing a diverse product lineup that includes both mobile and PC games, ensuring a broad market reach [27][29] Market Trends and Insights - The gaming industry is witnessing a shift towards more immersive and interactive experiences, with AI integration being explored for enhancing player interactions [16][17] - The demand for female-oriented games is on the rise, indicating a shift in player demographics and preferences [15][16] Financial Performance - The company reported a stable revenue stream from existing titles, with a focus on maintaining long-term player engagement through regular updates and community interaction [4][9] - The profitability and lifecycle of games are being closely monitored, with strategies in place to extend the longevity of new releases [19][20] Additional Important Content - The company is committed to refining its game development processes based on player feedback and market analysis, ensuring that new titles meet evolving consumer expectations [24][30] - Zulong Entertainment is also exploring cross-platform capabilities to enhance user experience and accessibility [26][27] This summary encapsulates the key insights and developments discussed during the conference call, highlighting Zulong Entertainment's strategic direction and market positioning within the gaming industry.

Financial Performance - Archosaur Games reported a revenue of approximately $50 million for the first half of 2024, representing a year-over-year increase of 25%[1]. - Revenue for the six months ended June 30, 2024, was RMB 439.4 million, representing a 9.2% increase from RMB 402.3 million in the same period of 2023[17]. - Gross profit increased to RMB 321.7 million, up 8.1% from RMB 297.7 million year-on-year[17]. - Operating loss improved to RMB 154.0 million, a 36.3% reduction compared to RMB 241.9 million in the prior year[17]. - Net loss for the period was RMB 134.0 million, down 42.5% from RMB 233.0 million in the same period of 2023[17]. - Adjusted net loss for the six months ended June 30, 2024, was RMB 120.4 million, a decrease from RMB 214.9 million in the same period of 2023, reflecting improved total revenue and controlled R&D costs[42]. - The company reported a total comprehensive loss for the six months ended June 30, 2024, was RMB 116,623 thousand, compared to RMB 163,798 thousand for the same period in 2023, showing an improvement of approximately 29%[99]. User Growth and Market Expansion - The company achieved a user base growth of 15%, reaching 10 million active users across its gaming platforms[1]. - Archosaur Games plans to expand its market presence in Southeast Asia, targeting a 30% increase in user acquisition in that region by the end of 2024[1]. - As of June 30, 2024, the global cumulative user count for "In the Name of the Shining" exceeded 16 million[21]. Game Development and Launches - Archosaur Games is actively developing two new titles expected to launch in Q4 2024, which are projected to contribute an additional $10 million in revenue[1]. - The company plans to launch two new games, "Dragon Tribe: Castle Gate" and "Step Wind," in September 2024, aiming to enhance its product matrix and growth opportunities[19]. - The company plans to launch seven new game products globally from the second half of 2024 to 2026, including "Dragon Tribe: Kassel Gate" and "Treading Wind" in 2024[23]. - The game "Dragon Tribe: Kassel Gate" launched on September 12, 2024, topped the iOS App Store free game chart on its first day and remained in the top ten for several days[25]. Financial Management and Cost Control - The company reported a gross margin of 60% for the first half of 2024, indicating strong cost management and operational efficiency[1]. - Research and development expenses decreased by 11.7% to RMB 264.1 million from RMB 299.2 million in the previous year[17]. - Sales and marketing expenses increased by 5.0% to RMB 172.7 million, compared to RMB 164.4 million in the same period of 2023[35]. - The total expenses for the six months ended June 30, 2024, were RMB 598,955,000, a decrease from RMB 620,571,000 in 2023, indicating a reduction of 3.5%[136]. Strategic Initiatives - The company has allocated $5 million for research and development of new gaming technologies, focusing on enhancing user experience and engagement[1]. - Archosaur Games is exploring potential acquisition opportunities to bolster its portfolio and expand its market share in the gaming industry[1]. - The company is committed to sustainability initiatives, aiming to reduce its carbon footprint by 10% by the end of 2024 through various operational improvements[1]. Shareholder Information and Corporate Governance - The company’s major shareholders include Mr. Li Qing, holding 35.35% of the issued share capital, and Mr. Bai Wei, holding 1.93%[60]. - The company has complied with all applicable corporate governance code provisions, except for the separation of the roles of chairman and CEO[78]. - The audit committee consists of three members, including independent directors, ensuring oversight of financial reporting[89]. Cash Flow and Financial Position - Cash used in operating activities for the six months ended June 30, 2024, was RMB 68.3 million, down 57.5% from RMB 160.6 million in the same period of 2023, primarily due to increased cash inflows from gaming operations[45]. - Cash generated from investing activities for the six months ended June 30, 2024, was RMB 112.7 million, compared to cash used of RMB 336.5 million in the same period of 2023, mainly due to the maturity of previously purchased financial assets[46]. - The company’s total liabilities increased to RMB 5,359,684 thousand as of June 30, 2024, compared to RMB 5,200,000 thousand as of January 1, 2024, reflecting an increase of approximately 3.1%[98]. Employee and Compensation Information - The company employed approximately 1,017 full-time employees as of June 30, 2024, with about 77.58% being R&D personnel[53]. - The total employee compensation and benefits cost for the six months ended June 30, 2024, was approximately RMB 274.6 million, down from RMB 303.2 million in the same period of 2023[53]. - Total remuneration for key management personnel for the six months ended June 30, 2024, was RMB 11,272 thousand, a decrease of 23.0% from RMB 14,785 thousand in the same period of 2023[194]. Financial Risks and Management - The group faces various financial risks, including market risk, credit risk, and liquidity risk, which should be considered alongside the 2023 financial statements[110]. - The management team is closely monitoring foreign exchange risk exposure and will take prudent measures as necessary[54]. - The company has not incurred any significant foreign exchange losses, indicating effective management of currency risk[54].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部份內容而產生或因依 賴該等內容而引致的任何損失承擔任何責任。 ARCHOSAUR GAMES INC. 祖龍娛樂有限公司 （於開曼群島註冊成立的有限公司） （股份代號：9990） 截至2024年6月30日止六個月的中期業績公告 祖龍娛樂有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此公佈本公司及其 附屬公司（統稱「本集團」）截至2024年6月30日止六個月的未經審核綜合中期業績 （「業績公告」）如下。 本集團截至2024年6月30日止六個月的中期業績已經審核委員會審閱並由本公司 獨立核數師羅兵咸永道會計師事務所根據國際審計與鑒證準則理事會頒佈的國際 審閱準則第2410號「由實體的獨立核數師執行中期財務資料審閱」審閱。 1 財務表現摘要 附註： | --- | --- | --- | --- | |------------------------------------------------------|------------------------- ...

Summary of the Conference Call Company and Industry Involved - The conference call is related to **Zulong Entertainment**, a company in the **media and entertainment industry** [1]. Core Points and Arguments - The call is hosted by **Debon Securities Research Institute**, indicating a focus on investment strategies and market analysis [1]. - A disclaimer is provided stating that the call serves only Debon Securities Research Institute clients and does not constitute investment advice, emphasizing the importance of independent investment decisions and risk management [1]. Other Important but Possibly Overlooked Content - All participants are muted at the beginning of the call, which suggests a structured format for the presentation [1].

Summary of the Conference Call Company and Industry Involved - The conference call is related to **Zulong Entertainment** and the **media and internet industry**. Core Points and Arguments - The call began with a **disclaimer** stating that the meeting is intended for **Debon Securities Research clients** and does not constitute investment advice, emphasizing the need for participants to make their own investment decisions and bear the associated risks [1]. Other Important but Possibly Overlooked Content - The call was initiated with participants in a **mute state**, indicating a structured approach to the meeting [1].

Summary of the Conference Call Company and Industry Involved - The conference call is related to **Zulong Entertainment**, a company in the **media and entertainment industry**. Core Points and Arguments - The call began with a **disclaimer** stating that the meeting is intended for **Debon Securities Research clients** and does not constitute investment advice, emphasizing that participants should make their own investment decisions and bear the associated risks [1]. Other Important but Possibly Overlooked Content - The call was initiated with all participants on **mute**, indicating a structured approach to the meeting [1].

Corporate Governance - The company has established four main board committees: Audit Committee, Nomination Committee, Remuneration Committee, and Risk Management Committee, each operating according to its terms of reference[17] - The Audit Committee consists of three members, with Mr. Zhu Lin serving as the chairman, responsible for reviewing financial statements and overseeing internal controls and risk management systems[17] - The Nomination Committee evaluates candidates for board appointments based on diversity factors such as gender, age, cultural background, and professional expertise[18] - As of December 31, 2023, the board comprises six male members and one female member, with no quantifiable diversity targets set[21] - The company ensures the independence of the board by establishing mechanisms to convey independent opinions and recommendations for objective decision-making[12] - The chairman holds annual meetings with independent non-executive directors without the presence of executive and non-executive directors[14] - The company has obtained an exemption from strict compliance with Listing Rules 3.28 and 8.17 for its co-company secretary, Ms. Hao Lili[25] - The board reviews and oversees compliance with the company's whistleblowing policy as part of its corporate governance responsibilities[9] - The company has adopted a shareholder communication policy to ensure timely and equal access to relevant information, encouraging shareholder participation in annual general meetings[36][37] Financial Performance and Risk Management - The company has adopted a financial risk management policy to control risks such as tax, currency, and financial reporting risks[28] - The board monitors financial performance and key operational statistics monthly with the assistance of the internal financial reporting department[28] - The company has implemented strict internal procedures to ensure compliance with relevant laws and regulations, continuously reviewing risk management policies and measures[32] - The company's risk management and internal control systems are designed to ensure effective and adequate policy implementation[32] - Revenue for 2023 increased to RMB 908,489 thousand, up 55.5% from RMB 584,121 thousand in 2022[58] - Gross profit for 2023 was RMB 650,407 thousand, a 53.5% increase from RMB 423,620 thousand in 2022[58] - Operating loss for 2023 decreased to RMB 357,029 thousand, a 53.7% improvement from RMB 771,437 thousand in 2022[58] - Net loss for 2023 was RMB 315,561 thousand, a 58.9% improvement from RMB 768,547 thousand in 2022[58] - R&D expenses for 2023 decreased to RMB 582,208 thousand, down 22.0% from RMB 746,364 thousand in 2022[58] - Cash and cash equivalents at the end of 2023 were RMB 555,033 thousand, a 55.0% decrease from RMB 1,232,999 thousand at the end of 2022[71] - The company received RMB 35,800 thousand from borrowings and repaid the same amount in 2023[71] - The company's financial income for 2023 was RMB 51,561 thousand, a 119.2% increase from RMB 23,524 thousand in 2022[58] - The company's financial costs for 2023 decreased to RMB 4,271 thousand, down 33.7% from RMB 6,438 thousand in 2022[58] - The company's net financial income for 2023 was RMB 47,290 thousand, a 176.8% increase from RMB 17,086 thousand in 2022[58] - Adjusted net loss for 2023 was RMB 282.9 million, an improvement from RMB 731.9 million in 2022[107] Revenue and Game Operations - The company's consolidated game publishing and operating revenue for the year ended December 31, 2023, was approximately RMB 709 million, primarily from the sale of in-game virtual items[47] - Revenue from consumable in-game virtual items is recognized upon consumption or expiration, while revenue from durable in-game virtual items is recognized proportionally over the expected player relationship period[47] - The company's independent auditor identified the determination of the expected player relationship period as a key audit matter due to significant judgment and estimation involved[48] - The auditor assessed the accuracy and completeness of key input data used to determine the expected player relationship period, including historical player behavior and churn rates[48] Subsidiaries and Investments - The company holds 100% equity in multiple subsidiaries, including Finger Games Pte. Ltd. (Singapore), Dream Cube Games Limited (Dubai), and Archosaur Games Japan Ltd. (Japan), all established in 2021[75] - The registered capital of Shanghai Huanzhimeng Technology Co., Ltd. is RMB 10,000,000, and it is fully owned by the company, focusing on mobile game development in China[75] - The company's financial products investment increased significantly from RMB 151,115 thousand in 2022 to RMB 433,293 thousand in 2023, with an expected return rate ranging from 2.14% to 6.00%[83] - Preferred stock investments decreased from RMB 14,349 thousand in 2022 to RMB 2,868 thousand in 2023, with expected volatility ranging from 35.80% to 38.89%[83] - Other common stock investments remained stable at around RMB 3,526 thousand in 2022 and RMB 3,528 thousand in 2023, with expected volatility between 51.77% and 54.88%[83] - Private equity and venture capital fund investments decreased from RMB 163,435 thousand in 2022 to RMB 135,935 thousand in 2023[83] - Other fund investments increased slightly from RMB 157,664 thousand in 2022 to RMB 165,176 thousand in 2023[83] - Structural investments decreased from RMB 239,406 thousand in 2022 to RMB 199,617 thousand in 2023[83] - The company controls subsidiaries through contractual arrangements, allowing it to influence variable returns and consolidate financial statements[91] - The company uses the acquisition method to account for business combinations, measuring identifiable assets and liabilities at fair value at the acquisition date[92] - The company has a subsidiary, Tianjin Zulong Technology Co., Ltd., which is consolidated under contractual arrangements[94] Financial Reporting and Accounting Standards - The company's financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the Hong Kong Companies Ordinance[78] - New accounting standards, including IFRS 17 Insurance Contracts and amendments to IAS 1 and IAS 8, became effective from January 1, 2023[80] - The company will adopt new accounting standards and interpretations, including amendments to IAS 1, IFRS 16, and IAS 21, effective from January 1, 2024, and January 1, 2025[87] - The company's financial statements are audited by PricewaterhouseCoopers, a registered public interest entity auditor[102] - The company's financial assets are classified into categories measured at fair value, with changes recognized in other comprehensive income or profit or loss[144] Financial Assets and Valuation - Financial assets measured at fair value totaled RMB 940.4 million as of December 31, 2023[116] - The company had no financial liabilities measured at fair value as of December 31, 2023[115] - Total fair value of financial assets categorized as Level 3 instruments amounted to RMB 729,495 thousand as of December 31, 2022[118] - The company's financial assets include investments in wealth management products (RMB 151,115 thousand), other fund investments (RMB 149,439 thousand), and structured investments (RMB 140,107 thousand) under Level 3 instruments[118] - Non-current financial assets under Level 3 instruments include private equity and venture capital fund investments (RMB 163,435 thousand), structured investments (RMB 99,299 thousand), and preferred stock investments (RMB 14,349 thousand)[118] - The company uses specific valuation techniques such as market quotes, net asset value of investments, and discounted cash flow analysis to determine the fair value of financial instruments[119] Shareholder Information and Company Details - The company's headquarters are located in Beijing, China, with a principal place of business in Hong Kong[105] - The company's shares are traded under the stock code 9990[105] - The company's website is www.zulong.com[105] - Tencent held a 17.23% stake in the company as of December 31, 2023[132] Intangible Assets and Amortization - The company capitalizes costs related to purchased computer software and amortizes them over an estimated useful life of 3 to 15 years[139] - Trademarks and domain names are amortized over an estimated useful life of 5 to 10 years[143] Dividend Policy - The company's dividend payments are determined by the board of directors, considering factors such as actual and expected operating performance, cash flow, financial condition, and future expansion plans[33] Financial Position - Total assets decreased to RMB 2,743.6 million in 2023 from RMB 2,953.3 million in 2022[110] - Total liabilities increased to RMB 409.7 million in 2023 from RMB 363.1 million in 2022[110] - Total equity decreased to RMB 2,333.9 million in 2023 from RMB 2,590.2 million in 2022[110] Revenue and Profit Details - Revenue for 2023 was RMB 908.5 million, a 55.5% increase from RMB 584.1 million in 2022[107] - Gross profit for 2023 was RMB 650.4 million, up 53.5% from RMB 423.6 million in 2022[107] - R&D expenses decreased to RMB 582.2 million in 2023 from RMB 746.3 million in 2022, a 22% reduction[107] - Operating loss improved to RMB 357.0 million in 2023 from RMB 771.4 million in 2022[107]

[Table_Summary] [Table_Title] 大单品驱动增长，关注老牌硬核研发商业务模式升级 [Table_ReportDate] 祖龙娱乐（9990.HK）公司简评报告 | 2024.04.08 [Table_Rank] 评级：买入 核心观点 [Table_Authors] 王建会 传媒互联网首席分析师 SAC 执证编号：S0110522050001 wangjianhui2@sczq.com.cn 李甜露 传媒互联网联席首席分析师 SAC 执证编号：S0110516090001 litianlu@sczq.com.cn 电话：86-10-8115 2690 辛迪 传媒互联网行业分析师 SAC 执证编号：S0110522110003 xindi2022@sczq.com.cn 电话：86-10-8115 2690 [Table_Chart] 市场指数走势（最近 1 年） 祖龙娱乐 恒生指数 -100% -80% -60% -40% -20% 0% 20% 23-0423-0523-0623-0723-0823-0923-1023-1123-1224-0124-0224-03 资料来源：聚源数据 ...

Game Development and Strategy - As of December 31, 2023, the company launched 20 premium mobile games across over 170 markets, supporting 14 languages[6] - The company emphasizes a core strategy of premiumization and globalization, aiming to create leading games across various genres for a superior online entertainment experience[13] - The company is actively developing new titles, including "Three Kingdoms Heroes: Honghu Dominance," which has completed its first paid test and is progressing well[23] - The company is collaborating with Epic Games on Unreal Engine 5 technology, with a project code-named "Odin" under development[12] - The company is leveraging Unreal Engine 5 technology for future game development, enhancing product quality and user experience[39] - The company plans to launch 8 new game products globally from 2024 to 2026, including MMORPG, SLG, and strategy card games[65] - The company plans to continue its strategy of product diversification, with new titles such as a Chinese-style RPG and a strategy game based on a well-known IP[32] - Project Odin, an MMORPG+ game based on the "Dragon Tribe" series, is scheduled for production in 2025[69] Financial Performance - The company's revenue for 2023 reached RMB 908.5 million, a 55.5% increase from RMB 584.1 million in 2022[26] - Gross profit for 2023 was RMB 650.4 million, reflecting a 53.5% increase compared to RMB 423.6 million in the previous year[26] - The net loss for the year was RMB 315.6 million, a 58.9% improvement from a loss of RMB 768.5 million in 2022[26] - Revenue for the year ended December 31, 2023, was RMB 908.5 million, an increase of 55.5% compared to RMB 584.1 million for the same period in 2022[46] - Revenue generated from mainland China was RMB 592.1 million, a significant increase of 230.2% from RMB 179.3 million in the previous year[48] - Adjusted net loss for the year was RMB 282.9 million, a reduction from RMB 731.9 million in the previous year, attributed to increased revenue and controlled R&D costs[55] - The total revenue from game publishing and operations for the year ended December 31, 2023, was RMB 709.3 million, an increase of 105.4% from RMB 345.4 million for the year ended December 31, 2022[71] - Revenue from external customers in mainland China was RMB 592,142,000, a significant increase of 230.5% compared to RMB 179,352,000 in 2022[167] User Engagement and Market Reach - The total registered user base for the 13 games currently in operation exceeds 150 million, with 2 games generating over RMB 4 billion in cumulative revenue[18] - The game "Dragon Tribe Fantasy" has achieved cumulative revenue exceeding RMB 4.4 billion and has over 44 million registered users globally[19] - The game "Dragon Tribe Fantasy" generated over RMB 2 billion in cumulative revenue outside of mainland China as of December 31, 2023[33] - Cumulative registered users for "Shining Bright" exceeded 12 million as of December 31, 2023[63] - Cumulative revenue for "Under the Hongtu" surpassed RMB 1.6 billion, with over 7.3 million registered users[64] - Four games have achieved cumulative revenue between RMB 1 billion and RMB 3 billion, showcasing the company's successful product portfolio[18] - The existing game "Dreaming of the Sword Immortal" has achieved over RMB 4 billion in global cumulative revenue as of December 31, 2023[42] Cost Management and Expenses - Research and development expenses for the year ended December 31, 2023, decreased by 22.0% to RMB 582.2 million from RMB 746.3 million for the year ended December 31, 2022[77] - Sales and marketing expenses for the year ended December 31, 2023, decreased by 2.2% to RMB 274.5 million from RMB 280.6 million for the year ended December 31, 2022[78] - Administrative expenses for the year ended December 31, 2023, decreased by 2.9% to RMB 105.1 million from RMB 108.2 million for the year ended December 31, 2022[79] - Employee benefit expenses decreased to RMB 589,812,000 from RMB 730,874,000, a reduction of 19.4%[172] Cash Flow and Investments - Operating cash outflow for the year was RMB 79.5 million, a decrease of 84.5% from RMB 514.5 million in the previous year[59] - The net cash used in investing activities for the year ended December 31, 2023, was RMB 589.1 million, compared to RMB 85.7 million for the year ended December 31, 2022[88] - The net cash used in operating activities for the year ended December 31, 2023, was RMB (79.5) million, compared to RMB (514.5) million for the year ended December 31, 2022, representing an improvement of 84.5%[117] - The company reported a net cash outflow from financing activities of RMB 19.2 million for the year ended December 31, 2023, a decrease of 83.8% from RMB 118.3 million for the year ended December 31, 2022[119] - The total capital expenditure for the years ended December 31, 2023, and 2022, was RMB 4.4 million and RMB 40.6 million, respectively, reflecting a decrease of 89.2% due to reduced purchases of intangible assets[121] Corporate Governance and Future Plans - The board of directors is reviewing the effectiveness of the corporate governance structure to assess the need for separating the roles of Chairman and CEO[129] - The company is taking a more cautious approach in identifying suitable acquisition and investment targets due to global economic uncertainties[127] - The company has delayed the expected timeline for utilizing net proceeds for strategic acquisitions and investments in entertainment and technology sectors to July 2024, primarily due to the need for more time to identify suitable IP[101] - The company plans to utilize the remaining net proceeds from the global offering for enhancing development capabilities and expanding the game portfolio, with 40% allocated to this purpose, amounting to RMB 943.5 million[100] Taxation and Compliance - The effective tax rate for taxable profits in Hong Kong is 16.5% for the years ended December 31, 2023, and 2022[196] - The company’s taxable profits in China are subject to a tax rate of 25% for the years ended December 31, 2023, and 2022[197] - Tianjin Zulong Technology Co., Ltd. has renewed its high-tech enterprise status, allowing it to enjoy a preferential income tax rate of 15% from November 2023 to November 2026[198] - Beijing Fantasy Mermaid Technology Co., Ltd. has also renewed its high-tech enterprise status, granting it a 15% preferential income tax rate from December 2022 to December 2025[199] - A new policy effective from 2023 allows companies engaged in R&D activities to claim 200% of their R&D expenses as an excess deduction when determining taxable profits[200]