Corporate Governance - The company maintains a high level of corporate governance, adhering to principles of integrity, accountability, transparency, independence, diligence, and fairness[23] - The board of directors is responsible for leadership, internal control, and overseeing the company's business, strategic decisions, and performance[24] - The company has four main board committees: Audit Committee, Nomination Committee, Remuneration Committee, and Risk Management Committee, each operating within its terms of reference[38] - The company's board of directors complies with the requirement to appoint at least three independent non-executive directors, with one possessing the necessary professional qualifications in accounting or financial management[28] - The company emphasizes the importance of board independence for effective corporate governance and decision-making, ensuring that independent opinions and recommendations are communicated to the board[32] - The company's Board of Directors consists of 7 members, including 2 executive directors, 2 non-executive directors, and 3 independent non-executive directors, ensuring strong independence[45] - The company's Audit Committee is composed of 3 members, with Mr. Zhu Lin serving as the Chairman, responsible for reviewing financial statements and overseeing internal controls and risk management systems[58] - The company's Nomination Committee considers diversity in terms of gender, age, cultural and educational background, industry experience, technical and professional skills, and tenure when recommending candidates for the Board[59] - The company's Board of Directors held 5 meetings during the year, with all directors attending all meetings, and the meeting minutes were recorded in detail and distributed to directors for review[54] - The company's independent non-executive directors attended all relevant Board meetings where they had no material interest, ensuring proper governance and decision-making[57] - The company's directors participated in various training programs, including updates on listing rules, directors' duties, and ESG reporting guidelines, to enhance their knowledge and skills[47] - The company's board of directors includes executive directors Li Qing (Chairman) and Bai Wei, non-executive directors Liu Ming and Lu Xiaoyin, and independent non-executive directors Bai Kun, Zhu Lin, and Ding Zhiping[97] Financial Performance - Revenue for 2022 decreased to RMB 584.1 million, a 36.5% decline compared to RMB 920.8 million in 2021[124] - Gross profit for 2022 was RMB 423.6 million, down 40.6% from RMB 713.5 million in 2021[124] - R&D expenses increased to RMB 746.3 million in 2022, up 5.8% from RMB 705.6 million in 2021[124] - Operating loss for 2022 widened to RMB 771.4 million, compared to an operating loss of RMB 289.4 million in 2021[124] - Adjusted net loss for 2022 was RMB 731.9 million, compared to an adjusted net loss of RMB 237.7 million in 2021[124] - Revenue for 2022 decreased by 36.6% to RMB 584.1 million compared to RMB 920.8 million in 2021[169] - Gross profit for 2022 decreased by 40.6% to RMB 423.6 million compared to RMB 713.5 million in 2021[169] - R&D expenses increased by 5.8% to RMB 746.3 million in 2022 compared to RMB 705.6 million in 2021[169] - Sales and marketing expenses increased by 13.5% to RMB 280.6 million in 2022 compared to RMB 247.2 million in 2021[169] - Operating loss for 2022 increased by 166.6% to RMB 771.4 million compared to RMB 289.4 million in 2021[169] - Net loss for 2022 increased by 153.4% to RMB 768.5 million compared to RMB 303.3 million in 2021[169] - Adjusted net loss for 2022 increased by 207.9% to RMB 731.9 million compared to RMB 237.7 million in 2021[169] - Total assets in 2022 were RMB 2,953.3 million, a decrease from RMB 3,518.1 million in 2021[153] - Total liabilities in 2022 were RMB 363.1 million, slightly higher than RMB 351.7 million in 2021[153] - Total equity in 2022 was RMB 2,590.2 million, down from RMB 3,166.4 million in 2021[153] - The company's distributable reserves amounted to RMB 6,243.3 million as of December 31, 2022[69] - The company's reserves and changes in reserves are detailed in the consolidated financial statements notes 25 and 33(b) on pages 153 and 167 of the annual report[68] - The company's consolidated financial performance for the year ended December 31, 2022, is detailed on pages 85-168 of the annual report[61] Share Repurchase and Dividends - The company repurchased a total of 12,616,370 shares in 2022, with a total repurchase price of HKD 61,261,899.90[33] - The company repurchased a total of 12,616,370 shares at a total cost of HKD 61,261,899.90 during the year, with 5,732,000 shares yet to be canceled as of December 31, 2022[69] - The company's Board of Directors resolved not to recommend any final dividend for the year ended December 31, 2022[62] Global Offering and Proceeds Utilization - The net proceeds from the global offering amounted to approximately HKD 2,358.5 million, with 40% allocated to enhancing development capabilities and expanding the game portfolio[77][79] - As of December 31, 2022, approximately HKD 2,028.3 million of the net proceeds from the global offering had been utilized[80] - The company plans to use the remaining net proceeds for strategic acquisitions and investments in the upstream and downstream of the industry value chain, with an expected utilization period from January 2023 to July 2023[79] - The company plans to temporarily place unused net proceeds in short-term interest-bearing instruments such as liquid fixed-income securities, short-term bank deposits, short-term low-risk financial products, or money market instruments with licensed commercial banks or other recognized financial institutions[94] - The original expected timeline for utilizing net proceeds for strategic acquisitions, investments in the upstream and downstream industry value chain, and expanding IP reserves was July 2022, but delays occurred due to unspecified reasons[95] Game Development and Performance - The company launched 19 mobile games by the end of 2022, available in over 170 regions with 14 language versions[154] - The game "以閃亮之名" topped the iOS free game charts in Hong Kong, Macau, Taiwan, Singapore, and Malaysia on its launch day in July 2022[155] - "以閃亮之名" ranked 2nd, 3rd, and 4th in the iOS game bestseller charts in Hong Kong, Macau, and Taiwan respectively within one month of launch[156] - The game "以閃亮之名" topped the Japanese iOS free game chart on its launch day in December 2022[156] - The company is developing a new SLG game "三國群英傳" based on a well-known IP, currently in the testing phase[158] - A strategy card game based on the "龍族" IP (Project E) is planned for future release[158] - The company aims to expand its product categories and explore multi-platform development[157] - The company has launched 19 high-quality mobile games in over 170 regional markets, with 13 games in operation and over 140 million global registered users[172] - 1 game has generated over RMB 4 billion in global cumulative revenue, 3 games over RMB 3 billion, and 6 games over RMB 1 billion[172] - The company has 5 games developed using Unreal Engine 4 and is among the first Chinese companies to explore Unreal Engine 5, positioning itself for future competitive advantages[163] - 《Shining Nikki》 achieved over RMB 100 million in revenue in Mainland China by the report date[173] - 《Shining Nikki》 generated over RMB 10 million in revenue on its first day of launch in Mainland China[173] - 《Shining Nikki》 ranked No. 1 on the iOS free game chart in Mainland China for four consecutive days after its launch[173] - 《Shining Nikki》 secured top 5 positions in the iOS game bestseller charts across Hong Kong, Macau, and Taiwan after updates[173] - 《Shining Nikki》 entered the top 20 of Japan's iOS game bestseller chart within two weeks of its launch[173] - 《Avatar: Reborn》 is expected to launch globally in 2023, combining MMORPG and shooting elements[175][184] - 《Shining Nikki》 has obtained dual-platform (mobile and PC) game licenses in Mainland China, indicating plans for multi-platform expansion[183] - The company plans to expand into PC and console platforms for future game projects, focusing on action and shooting genres[186] - 《Shining Nikki》 will be launched in Europe, America, and Southeast Asia following its success in Mainland China and other regions[173] - The company is exploring the integration of MMORPG with action and shooting elements in future game developments[184] - The game "Life Makeover" has demonstrated strong performance in overseas markets, reflecting the company's commitment to globalization[187] - The game "Three Kingdoms Tactics" achieved a cumulative revenue of over RMB 1.4 billion and registered over 6.9 million users by December 31, 2022[199] - The company continues to benefit from stable performance of classic games such as "Dream Zhu Xian" and "World of Kings 3D"[200] Global Strategy and Market Expansion - The company's global strategy focuses on "global distribution" as a prerequisite for product development, ensuring products are easily accepted by global players[187] - The company signed an exclusive agency and operation agreement with Tencent Shanghai and Shenzhen Tencent Tianyou for the promotion and operation of authorized games in South Korea[133] - The company entered into an exclusive, non-transferable licensing agreement with Tencent Penguin on June 18, 2022, to adapt, develop, publish, and operate a game based on the original work "Dragon Clan" and use related animation content[103] Technology and Innovation - The company utilizes Unreal Engine 4 and Unreal Engine 5, developed by Epic Games, for game development[120] - The company is actively exploring the application of AI in game development, particularly in areas like NPC creation and immersive experiences[192] Environmental, Social, and Governance (ESG) - The company's environmental policies and performance are detailed in the Environmental, Social, and Governance Report for the year ended December 31, 2022[66] Shareholder Information - The company's share transfer registration will be suspended from June 13, 2023, to June 16, 2023, to determine eligibility for attending and voting at the Annual General Meeting[63] - As of December 31, 2022, Perfect World Interactive Entertainment Co., Ltd. held 16.46% of the company's shares[109] - The company's shares are listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 700), and as of December 31, 2022, a subsidiary held 17.09% of the company's shares[116] Procurement and Suppliers - The largest supplier accounted for 15.7% of the company's total procurement, while the top five suppliers accounted for 40.8% of total procurement in 2022[4] Employee Information - The company has a total of 1,200 full-time employees as of December 31, 2022, with 78% in R&D and 12% in publishing and operations[190] Challenges and Future Outlook - The company faced challenges in 2022 due to slower-than-expected recovery in the global economy and underperformance of a product launched in the first half of the year[128] - The company remains committed to leveraging its technical advantages and international expansion to maintain its leading position in the competitive gaming industry[128]

Financial Performance - The financial performance of the group was impacted in the short term due to the optimization and adjustment of the development and launch schedule of certain games, as well as underperformance of a product launched in the first half of the year[45]. - The year 2022 was characterized by challenges and changes, with a slow recovery of the global economy in the post-pandemic era[45]. - The company reported a revenue of RMB 584.1 million for the year ended December 31, 2022, a decrease of 36.6% compared to RMB 920.8 million in 2021[65]. - Gross profit for the same period was RMB 423.6 million, reflecting a decline of 40.6% from RMB 713.5 million in the previous year[65]. - The company incurred an operating loss of RMB 771.4 million, which is an increase of 166.6% from the operating loss of RMB 289.4 million in 2021[65]. - The adjusted net loss for the year was RMB 731.9 million, a significant increase of 207.9% from RMB 237.7 million in 2021[65]. - The company reported a net loss of RMB 768,547,000 for the year ended December 31, 2022, compared to a net loss of RMB 303,325,000 for the previous year, representing an increase in loss of approximately 153.5%[182]. - Total comprehensive loss for the year was RMB 560,183,000, compared to RMB 379,862,000 in the prior year, indicating a year-over-year increase of about 47.5%[182]. Research and Development - Research and development expenses rose by 5.8% to RMB 746.3 million, compared to RMB 705.6 million in 2021[65]. - The company aims to leverage its strong technological advantages and deepen research in game development, operation, and iteration upgrades to better meet changing market demands[45]. - The company is exploring the application of artificial intelligence in game development, enhancing gameplay experience through advanced AI tools[77]. Market Strategy and Expansion - The group is committed to international expansion and aims to steadily improve its integrated research and operation structure to enhance its competitive position in the industry[45]. - The company believes it can create greater development potential and value in the rapidly changing domestic and international markets[45]. - The company aims for global expansion, ensuring products are designed for worldwide acceptance from the incubation stage, as demonstrated by the successful overseas launch of "Shining Name"[72]. - The company has a strong presence in the Asia-Pacific market, particularly in Hong Kong, Macau, and Southeast Asia, and has made significant inroads into the Japanese and Korean markets in 2022[51]. Game Development and Launches - The company launched 19 premium mobile games as of December 31, 2022, supporting 14 languages across over 170 markets[66]. - The game "以闪亮之名" launched in July 2022 achieved top rankings in the iOS free game charts in Hong Kong, Macau, Taiwan, Singapore, and Malaysia on its first day[46]. - The company plans to launch "Avatar: Reckoning" in 2023, which combines MMORPG and shooting elements, leveraging the success of the "Avatar" franchise with over $2 billion in global box office revenue[48]. - The company is actively developing new games, including the SLG game "Three Kingdoms Heroes" and a strategy card game based on the popular IP "Dragon Tribe" (Project E)[70]. - The game "In the Name of the Shining" launched in multiple regions, achieving top rankings on iOS free game charts in Hong Kong, Macau, Taiwan, Singapore, Malaysia, and Japan on its first day[83]. - The game "Dragon Tribe Fantasy" has generated cumulative revenue exceeding RMB 4.2 billion and has over 42 million registered users as of December 31, 2022[110]. Financial Management and Position - The company has adopted a prudent financial management policy to ensure a robust financial position, considering available financial resources and operational cash needs[159]. - The company’s total assets decreased to RMB 2,953,356,000 as of December 31, 2022, down from RMB 3,518,070,000 in 2021, reflecting a decline of approximately 16.1%[184]. - Cash and cash equivalents at year-end were RMB 1,232,999,000, a decrease from RMB 1,672,338,000 at the beginning of the year, representing a reduction of about 26.3%[186]. - The company’s operating cash flow showed a net outflow of RMB 514,535,000 for the year, worsening from a net outflow of RMB 151,752,000 in the previous year[186]. - The company has implemented measures to ensure employee safety during the COVID-19 pandemic, including online meetings and remote work[118]. Employee and Compensation - As of December 31, 2022, the total number of full-time employees was approximately 1,200, with 78% in research and development[53]. - Employee compensation and benefits costs were approximately RMB 730.9 million for the year ended December 31, 2022, compared to RMB 644.8 million for the year ended December 31, 2021[143]. - Sales and marketing expenses increased by 13.5% to RMB 280.6 million, primarily due to higher employee compensation[99]. Share Repurchase and Equity - The company repurchased a total of 12,616,370 shares throughout 2022, with a total repurchase cost of RMB 61,261,899.90[176]. - The board believes that share repurchases can enhance the company's net asset value and improve return on equity, benefiting both the company and its shareholders[199]. - The company’s equity attributable to owners decreased to RMB 2,590,229,000 from RMB 3,166,385,000, marking a decline of approximately 18.1%[185].

Tencent Games Cooperation Framework Agreement - The renewal of the Tencent Games Cooperation Framework Agreement allows Tencent to provide promotional and advertising services, issue games on Tencent's platform, and exclusively operate the group's games until December 31, 2025[1]. - The group has established annual caps for the ongoing related transactions under the renewed agreements, effective from January 1, 2023, to December 31, 2025[1]. - The maximum applicable percentage for transactions under the renewed Tencent Games Cooperation Framework Agreement exceeds 5%, requiring independent shareholder approval[5]. - The group will hold a special general meeting to seek independent shareholder approval for the proposed annual caps for 2023, 2024, and 2025[6]. - Proposed annual caps for transactions under the renewed Tencent gaming cooperation framework agreement are set at RMB 27.23 million, RMB 22.73 million, and RMB 18.09 million for the years ending December 31, 2023, 2024, and 2025 respectively[39]. - The company has not exceeded the annual caps for transactions under the Tencent gaming cooperation framework agreement as of December 31, 2021, and does not expect to exceed them in the future[34]. - The company will appoint Tencent to exclusively publish and operate several self-developed games in designated regions, enhancing operational efficiency and market reach[42]. - The fee arrangements for exclusive publishing and operation will include fixed licensing fees, revenue/profit sharing, and performance bonuses based on game success[44]. - The proposed annual caps for the Tencent Games Cooperation Framework Agreement for the years ending December 31, 2023, 2024, and 2025 are RMB 814.21 million, RMB 494.09 million, and RMB 308.68 million respectively[56]. - The company believes that collaboration with Tencent in game operations will significantly enhance its market expansion efforts in both China and overseas[119]. Shareholder Structure - Tencent and Perfect World Group are major shareholders, holding approximately 17.09% and 16.46% of the company's issued shares, respectively[3]. - Tencent Group is a major shareholder of the company, and independent shareholders exclude Tencent and its associates[160]. Marketing and Advertising Strategy - The company anticipates increased marketing and advertising investments to expand its gaming player base, reflecting a strategic focus on user acquisition[39]. - Tencent is recognized as one of China's leading advertising platforms, which is expected to enhance the company's game market exposure significantly[29]. - The company will engage Tencent as a distribution channel to publish its games on Tencent's platforms, leveraging Tencent's extensive user base to attract paying players[40]. - The company has established a strategy to optimize marketing effectiveness by partnering with Tencent at the early stages of game development[57]. Cloud Services - The agreements include provisions for cloud services provided by Tencent Cloud, which is a wholly-owned subsidiary of Tencent[1]. - The cloud services provided by Tencent Cloud include cloud computing, data storage, CDN services, and AI products, with a commitment to 24/7 support[63]. - The company will ensure that the service fees paid to Tencent Cloud are competitive and in line with market rates through independent assessments[65]. - The company has transitioned part of its server and computing infrastructure to cloud service providers since 2015, becoming one of the few game publishers in China to integrate cloud technology into its gaming infrastructure[72]. Perfect World Group Cooperation - The company renewed the game cooperation framework agreement with Perfect World Group on November 4, 2022, which was originally established on June 10, 2020[157]. - The collaboration with Perfect World Group is expected to leverage each other's competitive advantages in game development, utilizing proprietary IP rights suitable for adaptation into mobile or PC games[85]. - The proposed annual caps for the next three years under the renewed Perfect World game cooperation framework agreement are RMB 6.58 million, RMB 6.10 million, and RMB 5.47 million for the years ending December 31, 2023, 2024, and 2025, respectively[84]. - The company has not exceeded the annual caps for the past two years under the Perfect World game cooperation framework agreement, and it is expected that the transaction amounts will not exceed the annual caps for the year ending December 31, 2022[79]. Financial Oversight and Compliance - The company’s independent non-executive directors and risk management committee will review related party transactions annually to ensure they are conducted on fair and reasonable terms[122]. - The company’s financial department is responsible for monitoring related party transactions and ensuring they remain within the annual limits[120]. - The independent board committee has been established to provide opinions to independent shareholders regarding the renewed Tencent Game Cooperation Framework Agreement[131]. - The company has engaged an independent financial advisor to assist the independent board committee and independent shareholders[131]. - The company is committed to ensuring compliance with the Hong Kong Stock Exchange listing rules in its operations and transactions[158]. Intellectual Property and Game Development - The company emphasizes the importance of intellectual property rights in its gaming development strategy, particularly in relation to the "Dragon Tribe" literary series[156]. - Tencent Group will grant the company several IP rights for adaptation and development into games, which will be promoted and operated in designated regions[100]. - The pricing policy for licensing fees and revenue sharing will be determined based on the quality and popularity of the original IP, as well as market comparables[103]. - The company expects to leverage Tencent's competitive advantages in game development to attract more potential players through related animations and videos[110]. - The company has made significant progress in developing mobile MMORPGs, SLGs, and female-oriented games, positioning itself as a pioneer in the Chinese mobile gaming industry[119].

Financial Performance - Archosaur Games Inc. reported a revenue of approximately $50 million for the first half of 2022, representing a year-over-year increase of 25%[2]. - Revenue for the six months ended June 30, 2022, was RMB 329.8 million, a decrease of 40.4% compared to RMB 553.8 million in the same period of 2021[21]. - Gross profit for the same period was RMB 242.8 million, down 45.0% from RMB 441.1 million year-on-year[21]. - The company reported an operating loss of RMB 304.1 million, a significant increase of 246.8% compared to an operating loss of RMB 87.7 million in the previous year[21]. - Adjusted net loss for the period was RMB 279.8 million, a significant increase of 494.1% compared to RMB 47.1 million in the same period of 2021[21]. - The net loss for the period was RMB 308,857 thousand, compared to a net loss of RMB 85,835 thousand in the previous year, representing an increase of 259.5%[115]. - The company recorded revenue of RMB 329.8 million for the six months ended June 30, 2022, a decrease of 40.4% compared to RMB 553.8 million for the same period in 2021[42]. - The total comprehensive loss for the six months ended June 30, 2022, was RMB (199,408) thousand, compared to RMB (112,680) thousand for the same period in 2021, reflecting a worsening financial performance[124]. User Growth and Market Expansion - The company’s user base grew to 10 million active users, a 15% increase compared to the previous period[2]. - Archosaur Games Inc. anticipates a revenue growth of 30% for the second half of 2022, driven by new game launches and market expansion strategies[2]. - Archosaur Games Inc. plans to expand its market presence in Southeast Asia, targeting a 20% increase in user acquisition in that region by the end of 2022[2]. - Cumulative registered users for the 12 operational games exceeded 140 million globally[24]. - The company has launched a new game that has already attracted 1 million downloads within the first month of release[2]. Research and Development - The company is investing $5 million in research and development for new gaming technologies and features to enhance user experience[2]. - Research and development expenses increased by 8.8% to RMB 367.1 million from RMB 337.3 million year-on-year[21]. - The company is launching a new SLG mobile game titled "Age of Chaos," which has received positive feedback during its testing phases in both mainland China and overseas markets[37]. - The company plans to launch 10 new games across various genres from 2022 to 2024, including MMORPGs, SLGs, and strategy card games[28]. Strategic Initiatives - The company is exploring potential mergers and acquisitions to enhance its portfolio and market share, with a focus on companies in the gaming sector[2]. - The company has established partnerships with major gaming platforms to increase distribution and visibility of its products[2]. - The company aims to leverage its partnerships with Tencent and its strong IPs to enhance the market performance of its new games[35]. Financial Management - The gross profit margin for the first half of 2022 was reported at 60%, indicating strong cost management and operational efficiency[2]. - Cash used in operating activities was RMB 241.6 million for the six months ended June 30, 2022, compared to RMB 75.6 million in the same period of 2021, an increase of 219.6%[63]. - Cash used in investing activities was RMB 96.2 million for the six months ended June 30, 2022, a decrease of 75.3% from RMB 389.3 million in the same period of 2021[64]. - Cash used in financing activities increased to RMB 88.4 million for the six months ended June 30, 2022, compared to RMB 20.4 million in the same period of 2021, an increase of 333.3%[65]. Employee and Compensation - As of June 30, 2022, the company employed approximately 1,469 full-time employees, with about 79.44% being R&D personnel[72]. - Employee compensation and benefits costs for the six months ended June 30, 2022, were approximately RMB 370.9 million, compared to RMB 297.7 million for the same period in 2021, representing a year-over-year increase of 24.5%[72]. - The company is committed to providing competitive and fair compensation and benefits to its employees, continuously improving its compensation and incentive policies through market research[74]. Shareholder Information - The total issued share capital of the company is approximately 811,863,000 shares[85]. - Mr. Li Qing holds a controlled interest in 280,849,802 shares, representing 34.59% of the company's issued share capital[84]. - Tencent holds a controlled interest in 137,698,399 shares, representing 16.96% of the company's issued share capital[84]. - The company repurchased a total of 4,497,000 shares at a total cost of HKD 32,598,640 during the six months ended June 30, 2022[95]. Corporate Governance - The company has complied with all applicable corporate governance code provisions, except for C.2.1 and C.5.7[98]. - The board will continue to review the effectiveness of its corporate governance structure[99]. - The audit committee has reviewed the unaudited interim financial information for the six months ended June 30, 2022, with no objections to the accounting treatment[106]. Market Challenges - The decline in revenue is attributed to the normal lifecycle of older games and underperformance of a new game launched in mainland China in the first half of 2022[48]. - The company has maintained a stable operational environment during the COVID-19 pandemic, with no significant adverse impact on financial performance[43].

Financial Performance - Archosaur Games Inc. reported a significant increase in revenue, achieving a total of $150 million for the fiscal year 2021, representing a 25% year-over-year growth[1]. - The company’s net profit for 2021 was $45 million, a 35% increase from the previous year, showcasing improved profitability[1]. - The gross margin for the year was reported at 60%, reflecting efficient cost management and strong sales performance[1]. - The company reported a revenue of RMB 1.5 billion for the fiscal year ending December 31, 2021, representing a year-over-year increase of 20%[26]. - The earnings guidance for 2022 is set at a revenue growth of 25%, projecting total revenue to reach RMB 1.875 billion[26]. - Revenue for the year ended December 31, 2021, was RMB 920.8 million, a decrease of 23.8% compared to RMB 1,208.8 million in 2020[62]. - Adjusted net loss for the year was RMB 237.7 million, compared to a profit of RMB 218.8 million in 2020, representing a 208.6% change[62]. - The company reported an operating loss of RMB 289.4 million in 2021, compared to an operating profit of RMB 83.1 million in 2020[40]. User Engagement and Growth - The company’s active user base reached 10 million, with a 15% increase compared to the previous year, indicating strong user engagement and retention[1]. - User engagement metrics showed a 15% increase in active users, reaching 10 million by the end of 2021[26]. - The total number of global cumulative users for the 11 operating games exceeded 130 million as of December 31, 2021[66]. - The game "Dragon Tribe Fantasy" generated cumulative revenue exceeding RMB 3.8 billion, with nearly 40 million registered users[66]. - The game "Under the Hongtu" achieved cumulative revenue of over RMB 1 billion and had over 6.2 million registered users by the end of 2021[67]. Research and Development - The company is investing heavily in R&D, allocating approximately $30 million, which is 20% of its total revenue, to develop new technologies and enhance existing game features[1]. - The company has allocated RMB 200 million for research and development of new technologies, focusing on enhancing gaming experiences with Unreal Engine 5[26]. - Research and development expenses increased to RMB 705.6 million in 2021, up 30.6% from RMB 540.4 million in 2020[40]. - The company is leveraging advanced technology, having successfully applied the latest version of Unreal Engine 4 to its current development products and is researching Unreal Engine 5 for future game development[57]. Market Expansion and Strategy - Archosaur Games Inc. provided a positive outlook for the next fiscal year, projecting a revenue growth of 20% to $180 million, driven by new game releases and market expansion strategies[1]. - Archosaur Games Inc. plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[1]. - Market expansion efforts include entering Southeast Asian markets, targeting a 10% market share within two years[26]. - The company is exploring potential acquisitions to enhance its portfolio, with a budget of $50 million earmarked for strategic investments in complementary gaming companies[1]. - The company is exploring strategic acquisitions to enhance its portfolio, with a budget of up to RMB 500 million for potential targets[26]. Product Development and Launches - Archosaur Games Inc. launched two new games in Q4 2021, which contributed to a 30% increase in user acquisition during the launch period[1]. - The company plans to launch three new game titles in 2022, aiming for a revenue contribution of RMB 300 million from these titles within the first year[26]. - The anticipated release of the game "Noah's Heart" was delayed to 2022 to enhance game quality and player experience[47]. - Upcoming titles such as "Noah's Heart," "Avatar: Reckoning," and "In the Name of Shining" are expected to perform well in 2022[61]. - The company plans to launch 11 new games across various genres from 2022 to 2024[70]. Employee and Operational Insights - The company has expanded its workforce, adding 158 R&D personnel and 86 publishing and operations staff, increasing total employees from approximately 1,200 to about 1,500[55]. - Employee compensation and benefits costs amounted to RMB 644.8 million for the year ended December 31, 2021, compared to RMB 483.7 million for the previous year[124]. - The company is committed to providing competitive and fair compensation and benefits to employees, with regular performance evaluations conducted quarterly[124]. - The company has implemented measures to ensure employee safety during the COVID-19 pandemic, which has not significantly impacted its business operations or financial performance[88]. Sustainability and Corporate Responsibility - Archosaur Games Inc. emphasized its commitment to sustainability, aiming to reduce operational carbon emissions by 25% over the next three years[1]. - The company has implemented environmental policies and measures to reduce energy consumption and waste[142]. Shareholder and Financial Management - The board has approved a share buyback program of up to RMB 100 million to enhance shareholder value[26]. - The company repurchased a total of 2,871,000 shares at a total cost of HKD 24,637,550 during the year ended December 31, 2021[146]. - The company does not recommend the payment of any final dividend for the year ended December 31, 2021[137]. - The company plans to utilize the remaining net proceeds based on future market conditions, with expected timelines for various allocations[130].

Financial Performance - The company reported a revenue of RMB 500 million for the first half of 2021, representing a 25% increase compared to the same period last year[3]. - Revenue for the six months ended June 30, 2021, was RMB 553.8 million, a decrease of 8.0% from RMB 601.9 million in 2020[23]. - Gross profit for the same period was RMB 441.1 million, down 2.7% from RMB 453.4 million[23]. - The company reported a net loss of RMB 85.8 million, a significant decrease of 89.1% from RMB 787.2 million in 2020[23]. - The adjusted net loss was RMB 47.1 million, compared to a profit of RMB 151.6 million in the same period last year, reflecting a 131.1% decline[23]. - The total comprehensive loss for the period was RMB 112,680 thousand, compared to RMB 787,462 thousand in the same period last year, reflecting a reduction in overall losses[108]. - The net loss attributable to the owners of the company was RMB 85,835 thousand, compared to a loss of RMB 787,199 thousand in the same period last year, showing a significant improvement[107]. - Basic loss per share improved to RMB (0.11) from RMB (2.46) year-over-year[177]. User Engagement and Market Expansion - User engagement metrics showed a 30% increase in daily active users (DAUs) year-over-year, reaching 1.2 million[3]. - The total number of registered users reached 10 million, reflecting a 15% increase from the previous year[3]. - Market expansion efforts include targeting Southeast Asia, with plans to localize content for regional audiences[3]. - The company plans to launch two new games in Q4 2021, aiming to capture a larger share of the mobile gaming market[3]. - The company plans to launch multiple MMORPG, SLG, and other types of mobile games globally in the second half of 2021 and throughout 2022[29]. Research and Development - The company is investing RMB 100 million in research and development for new gaming technologies and features[3]. - Research and development expenses increased by 48.2% to RMB 337.3 million from RMB 227.6 million[23]. - The company is focused on developing next-generation premium mobile games and has established a research and development layout with studios in Beijing, Shanghai, Chengdu, and Changchun[24]. - The Shanghai studio has begun to attract high-end R&D and publishing talent, with several core personnel already on board[24]. Financial Position and Cash Flow - Cash used in operating activities was RMB 75.6 million, a decrease of 127.2% compared to cash generated of RMB 277.9 million in the same period of 2020[58]. - Cash used in investing activities increased to RMB 389.3 million, a rise of 3,091.0% from RMB 12.2 million in 2020, primarily due to investments in funds and upstream/downstream companies[59]. - Cash used in financing activities was RMB 20.4 million, down 91.7% from RMB 244.8 million in 2020, mainly due to dividend payments made in 2020[60]. - The company’s cash and cash equivalents decreased significantly due to substantial investments in financial products and property, plant, and equipment[120]. - The ending cash and cash equivalents as of June 30, 2021, were RMB 2,543,334 thousand, a decrease from RMB 3,055,711 thousand at the beginning of the period[123]. Strategic Partnerships and Acquisitions - A new partnership with Tencent is expected to enhance distribution channels and increase user acquisition[3]. - The company is exploring potential acquisitions to enhance its game portfolio and expand its market presence[3]. - The company plans to actively expand its self-developed and self-published business system in vertical fields based on accumulated overseas publishing experience[25]. Corporate Governance and Shareholder Information - The company has complied with all applicable code provisions of the corporate governance code, except for the separation of the roles of chairman and CEO[93]. - As of June 30, 2021, the major shareholder, Mr. Li Qing, holds 34.19% of the company's issued share capital, amounting to 278,799,802 shares[79]. - Tencent holds a 16.88% stake in the company, equivalent to 137,698,399 shares as of June 30, 2021[79]. - The company maintained sufficient public float during the six months ending June 30, 2021[96]. Future Outlook - Future guidance indicates expected revenue growth of 20% for the second half of 2021, driven by new product launches and marketing strategies[3]. - The company anticipates that the expansion into various mobile game genres will lead to a more stable and sustained contribution to revenue over time[34]. - The company expects to continue benefiting from tax incentives for high-tech enterprises, maintaining a reduced corporate income tax rate of 15%[173].

祖龙娱 ARCHOSAUR GA (Incorporated in the Cayman Islands with limited liability) ( 於開曼群島註冊成立的有限公司 ) Stock Code 股份代號 : 9990 ANNUAL REPORT 年報 祖龙娱乐有限公司 Archosaur Games Inc. THINNING ugus month minute manufacture . antinungan . · . i · . " . . . . and and the county of the county 0.000 . 0 . . . . . . . . . . . 1 . · . . . . . . . 目錄 頁次 釋義 02 公司資料 07 財務概要 09 主席致辭 11 財務表現摘要 15 管理層討論與分析 16 董事會報告 26 董事及高級管理層履歷詳情 49 企業管治報告 54 獨立核數師報告 65 綜合損益表 71 綜合全面收益表 72 綜合資產負債表 73 綜合權益變動表 75 綜合現金流量表 77 綜合財務報表附註 79 \\\\\\\\\\\ . Inte ...

Financial Performance - Archosaur Games reported a revenue of approximately $50 million for the first half of 2020, representing a year-over-year increase of 25%[1]. - The company achieved a net profit margin of 15%, with net profit reaching around $7.5 million during the same period[1]. - Revenue for the six months ended June 30 reached RMB 601.9 million, an increase of 89.6% compared to RMB 317.5 million in the same period last year[25]. - Gross profit for the same period was RMB 453.4 million, reflecting a 67.9% increase from RMB 270.1 million[25]. - Operating profit surged to RMB 69.8 million, a remarkable increase of 402.2% from RMB 13.9 million year-on-year[25]. - Adjusted net profit for the period was RMB 151.6 million, representing a staggering increase of 1,195.7% compared to RMB 11.7 million in the previous year[25]. - The company reported a net loss of RMB 787,199 thousand for the six months ended June 30, 2020, compared to a net loss of RMB 95,525 thousand in the same period of 2019[128]. - The basic and diluted loss per share for the period was RMB (2.46), compared to RMB (0.27) in the same period of the previous year[128]. - The company incurred a total comprehensive loss of RMB 787,462 thousand for the six months ended June 30, 2020[146]. User Engagement and Market Expansion - User engagement metrics showed a 30% increase in daily active users (DAUs), reaching 1.5 million users by the end of June 2020[1]. - Archosaur Games plans to launch two new MMORPG titles in the second half of 2020, aiming to capture a larger market share in the gaming industry[1]. - The company is expanding its market presence in Southeast Asia, targeting a 20% growth in user base in that region by the end of 2021[1]. - The company aims to expand its market presence in Europe, America, and Southeast Asia with new regional versions of existing games[28]. - Revenue from overseas markets reached RMB 406,568,000 for the six months ended June 30, 2020, compared to RMB 109,093,000 in 2019, indicating a significant growth in international sales[179]. Research and Development - Archosaur Games has allocated $10 million for research and development of new gaming technologies and features to enhance user experience[1]. - Research and development expenses rose to RMB 227.6 million, up 17.9% from RMB 193.0 million[25]. - The company plans to launch 8 new mobile games from 2020 to 2022, including titles like "Under the Hongtu" and "Dream New World" expected in Q4 2020[32]. - The company is focused on enhancing its engine technology and research capabilities[114]. Financial Management and Investments - The company generated 67.5% of its total revenue from overseas markets, reflecting a growth of 272.6% compared to the previous year[43]. - Cash generated from operating activities for the six months ended June 30, 2020, was RMB 277.9 million, a 152.2% increase from RMB 110.2 million in the same period of 2019[60]. - Cash used in investing activities for the six months ended June 30, 2020, was RMB 12.2 million, a decrease of 93.1% from RMB 176.9 million in the same period of 2019[61]. - The company reported a foreign exchange gain of RMB 4,369 thousand during the period[149]. - The company invested RMB 1,598,550 thousand in financial products measured at fair value through profit or loss during the reporting period[149]. Corporate Governance and Management - The company has established an audit committee to oversee financial reporting and governance practices[119]. - The CEO, Li Qing, is responsible for the overall management and strategic direction of the company[113]. - The company has a strong management team with extensive experience in finance and business development[116]. - The independent non-executive directors provide oversight and independent judgment to the board[110]. - The company has complied with all applicable corporate governance code provisions, except for the separation of roles between the chairman and CEO[97]. Share Capital and IPO - On July 15, 2020, the company successfully completed its IPO, issuing 187,400,000 shares at HKD 11.60 per share, increasing the group's net asset value[75]. - The overallotment option was fully exercised on August 11, 2020, resulting in an additional issuance of 28,110,000 shares at the same price of HKD 11.60 per share[78]. - As of the mid-term report date, the total issued share capital was 815,510,000 shares, with the overallotment shares representing a percentage of the total issued capital[82]. - Mr. Li Qing holds 278,329,802 shares, representing approximately 34.13% of the company's issued share capital[81]. - Perfect World Interactive and its related entities collectively hold 138,593,999 shares, accounting for approximately 16.99% of the issued share capital[81]. Taxation and Financial Strategy - The company expects to maintain a preferential corporate income tax rate of 15% due to its status as a high-tech enterprise[194]. - The company recorded a tax credit of RMB 6,676 thousand for the six months ended June 30, 2020, compared to a tax expense of RMB (4,798) thousand in the same period of 2019[191]. - The company has recognized a deferred tax asset of RMB 11.8 million related to its software enterprise status, reflecting its ongoing tax strategy[195].