[Fiscal Year 2024 Operating and Financial Summaries](index=1&type=section&id=Fiscal%20Year%202024%20Operating%20and%20Financial%20Summaries) This section provides an overview of Scienjoy's strong financial performance in fiscal year 2024, highlighting significant profitability growth and strategic global expansion initiatives [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strong 2024 performance with significant profit growth, strategic global expansion in MENA, and future focus on AIGC technologies - The company achieved significant growth in profitability, with gross profit rising by **27.4%** and income from operations by **78.5%** year-over-year, demonstrating effective conversion of paying users into profit[4](index=4&type=chunk) - Scienjoy is actively pursuing a global expansion strategy, using Dubai as a strategic hub to launch promotional initiatives in the high-potential Middle East and North Africa (MENA) region[4](index=4&type=chunk)[13](index=13&type=chunk) - Future strategic priorities include expanding the company's global presence and increasing investment in cutting-edge Artificial Intelligence Generated Content (AIGC) technologies across its product ecosystem[5](index=5&type=chunk) - The company reported a significant financial turnaround, achieving a net income of **RMB 26.7 million** in 2024, an improvement of approximately **RMB 60 million** from the net loss in 2023[5](index=5&type=chunk) [Key Financial & Operating Metrics Summary](index=1&type=section&id=Key%20Financial%20%26%20Operating%20Metrics%20Summary) Scienjoy's 2024 financial summary shows decreased revenues but substantial profitability improvements, including a shift to net income and strengthened cash position Fiscal Year 2024 Key Financial Highlights (vs. 2023) | Metric | FY 2024 (RMB million) | FY 2023 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Revenues | 1,363.4 | 1,464.9 | -6.9% | | Gross Profit | 245.4 | 192.7 | +27.4% | | Income from Operations | 40.7 | 22.8 | +78.5% | | Net (Loss) Income | 26.7 | (35.0) | +RMB 61.7M | | Net (Loss) Income Attributable to Shareholders | 39.7 | (30.8) | +RMB 70.5M | | Adjusted Net (Loss) Income Attributable to Shareholders | 50.3 | (11.7) | +RMB 62.0M | - As of December 31, 2024, cash and cash equivalents increased to **RMB 252.5 million (US$34.6 million)**, up **RMB 47.1 million** from **RMB 205.5 million** at the end of 2023[6](index=6&type=chunk) [Fiscal Year 2024 Financial Results](index=2&type=section&id=Fiscal%20Year%202024%20Financial%20Results) This section details Scienjoy's 2024 financial performance, covering revenue, cost of revenues, operating expenses, and net income drivers [Revenues](index=2&type=section&id=Revenues) Total revenues for fiscal year 2024 decreased to **RMB 1,363.4 million**, primarily due to a decline in paying users amidst a competitive market Revenue and Paying User Comparison (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues (RMB million) | 1,363.4 | 1,464.9 | -6.9% | | Total Paying Users | 494,652 | 557,692 | -11.3% | [Cost of Revenues and Gross Profit](index=2&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Profit) Reduced cost of revenues, driven by lower sharing fees and user acquisition costs, significantly increased gross profit by **27.4%** and gross margin to **18.0%** - Cost of revenues decreased to **RMB 1,117.9 million** from **RMB 1,272.1 million** in 2023, mainly due to a **RMB 123.7 million** decrease in revenue sharing fees and a **RMB 26.5 million** decrease in user acquisition costs[8](index=8&type=chunk) Gross Profit and Margin (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Gross Profit (RMB million) | 245.4 | 192.7 | +27.4% | | Gross Margin | 18.0% | 13.2% | +4.8 p.p. | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses increased by **20.5%** to **RMB 204.7 million**, driven by a significant surge in sales and marketing for global expansion, and higher R&D and credit loss provisions Operating Expenses Breakdown (FY 2024 vs. FY 2023) | Expense Category (RMB million) | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Sales and Marketing | 7.0 | 1.4 | +420.2% | | General and Administrative | 76.6 | 75.6 | +1.4% | | Research and Development | 90.5 | 75.1 | +20.4% | | Provision for Credit Losses | 30.6 | 17.9 | +71.2% | | **Total Operating Expenses** | **204.7** | **169.9** | **+20.5%** | - The significant increase in sales and marketing expenses was primarily due to activities related to new subsidiaries in Dubai as part of the company's global expansion initiative[13](index=13&type=chunk) [Income from Operations and Other Items](index=2&type=section&id=Income%20from%20Operations%20and%20Other%20Items) Income from operations increased by **78.5%** to **RMB 40.7 million**, bolstered by a **RMB 6.1 million** gain on marketable securities and significantly reduced investment losses - Income from operations grew to **RMB 40.7 million (US$5.6 million)**, an increase of **78.5%** from **RMB 22.8 million** in 2023[11](index=11&type=chunk) - The company recorded a gain of **RMB 6.1 million** on marketable securities, a reversal from a **RMB 9.0 million** loss in the prior year[15](index=15&type=chunk) - Investment loss decreased substantially to **RMB 5.7 million** in 2024 from **RMB 31.3 million** in 2023[16](index=16&type=chunk) [Net Income and Earnings Per Share](index=3&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) Scienjoy achieved a significant turnaround with a net income of **RMB 26.7 million** in 2024, resulting in a basic EPS of **RMB 0.96** and adjusted basic EPS of **RMB 1.22** Net Income and EPS (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net (Loss) Income (RMB million) | 26.7 | (35.0) | | Net (Loss) Income Attributable to Shareholders (RMB million) | 39.7 | (30.8) | | Basic (Loss) Earnings Per Share (RMB) | 0.96 | (0.76) | | Adjusted Basic (Loss) Earnings Per Share (RMB) | 1.22 | (0.29) | - Adjusted net income attributable to the Company's shareholders was **RMB 50.3 million**, an increase of **RMB 62.0 million** from an adjusted net loss of **RMB 11.7 million** in 2023[18](index=18&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents Scienjoy's consolidated financial statements, including balance sheets and statements of operations, detailing the company's financial position and performance [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2024, Scienjoy's balance sheet shows total assets of **RMB 1,405.2 million**, increased cash, reduced liabilities, and total shareholders' equity of **RMB 1,199.1 million** Selected Balance Sheet Items (As of Dec 31, 2024 vs. 2023) | Item (RMB thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | 252,540 | 205,465 | | Total current assets | 544,644 | 576,977 | | **Total Assets** | **1,405,185** | **1,448,464** | | Total current liabilities | 160,769 | 234,121 | | **Total Liabilities** | **219,869** | **298,737** | | **Total Shareholders' Equity** | **1,199,094** | **1,150,564** | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20%28LOSS%29%20INCOME) The consolidated statement of operations for 2024 confirms **RMB 1,363.4 million** in revenue, **RMB 245.4 million** gross profit, and a net income of **RMB 26.7 million** Consolidated Statement of Operations Highlights (FY 2024 vs. FY 2023) | Item (RMB thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Total revenue | 1,363,384 | 1,464,871 | | Gross profit | 245,442 | 192,726 | | Income from operations | 40,719 | 22,808 | | Net (loss) income | 26,683 | (34,976) | | Net (loss) income attributable to the Company's shareholders | 39,685 | (30,788) | [Non-GAAP Financial Measures and Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their U.S. GAAP equivalents [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures, such as adjusted net income, to supplement U.S. GAAP results, providing enhanced insight into core financial performance by excluding specific items - Adjusted net income is defined as net income adjusted for change in fair value of contingent consideration, change in fair value of warrant liability, and share-based compensation[22](index=22&type=chunk) - The company presents non-GAAP measures to enhance understanding of its financial performance, but they should not be considered superior to or a substitute for financial information prepared in accordance with U.S. GAAP[22](index=22&type=chunk) [Reconciliations of Non-GAAP Results](index=8&type=section&id=Reconciliations%20of%20Non-GAAP%20Results) This section provides a reconciliation from GAAP net income to non-GAAP adjusted net income, showing a **RMB 39.7 million** GAAP net income adjusted to **RMB 50.3 million** non-GAAP net income for 2024 Reconciliation of GAAP to Non-GAAP Net Income (RMB thousands) | Description | 2024 | 2023 | | :--- | :--- | :--- | | **Net (loss) income attributable to the Company's shareholders (GAAP)** | **39,685** | **(30,788)** | | Change in fair value of contingent consideration | - | (5,624) | | Change in fair value of warrants liability | - | 170 | | Share based compensation | (10,579) | (13,637) | | **Adjusted net (loss) income attributable to the Company's shareholders (Non-GAAP)** | **50,264** | **(11,697)** |

Revenue Generation and User Engagement - The company relies heavily on a single monetization model, primarily generating revenue from virtual gifts purchased by users, which poses a risk if this model fails to diversify [46]. - Revenue growth is dependent on maintaining and increasing the paying user base and revenue per paying user; any decline could materially affect financial results [44]. - The user base's growth and engagement are critical, as a smaller or less active user base could lead to reduced spending on virtual gifts [44]. - The company relies on revenue from virtual gift sales, and its ability to monetize services depends on user engagement and broadcaster retention [59]. - The company has experienced a decline in revenue due to competitive pressures in China's mobile live streaming market, highlighting the challenges of converting non-paying users to paying users [60]. - The company must continuously innovate and diversify its content offerings to prevent decreasing viewership and user engagement [47]. - The company has adjusted its revenue sharing fee policy to increase the sharing percentage for broadcasters after a previous decrease led to significant departures [54]. Risks and Challenges - The company faces significant risks in retaining top broadcasters, whose content is crucial for user engagement and revenue generation [50]. - There is a potential for legal disputes with competing platforms that could impact the retention of top broadcasters and user engagement [52]. - The company must continue to attract and retain top broadcasters to maintain its user base, which may lead to increased costs if competitors offer higher compensation [97]. - The company faces high entry barriers in the entertainment live streaming industry, competing against established platforms for user traffic and quality broadcasters [63]. - The company faces potential liabilities for user-generated content that may violate PRC laws, which could result in fines or other disciplinary actions [89][91]. - The company faces risks related to litigation, which could be costly and time-consuming, potentially affecting business operations [114]. - Negative publicity regarding the company or its services could harm its brand and reputation, impacting growth prospects [117]. Regulatory Environment - The company is subject to various risks related to doing business in China, including regulatory uncertainties and potential penalties [41]. - The company must navigate regulatory challenges in China, including the need to maintain various licenses and approvals to operate legally [74]. - The evolving regulatory environment in China poses uncertainties that could materially affect the company's operations and financial condition [96][99]. - The company is subject to regulatory compliance regarding personal data protection, and any perceived failures could lead to legal actions and reputational damage [104]. - The company may face regulatory actions or sanctions from PRC governmental authorities due to uncertainties in the interpretation of M&A Rules for overseas offerings [195]. - The Data Security Law and Personal Information Protection Law impose strict obligations on data handling, with potential fines up to RMB 10 million for violations [198][199]. Financial Performance and Projections - In the fiscal year ended December 31, 2023, total revenues decreased by 25% compared to the fiscal year ended December 31, 2022, and further decreased by 7% in the fiscal year ended December 31, 2024, primarily due to a decrease in the number of paying users [60]. - The company expects costs and expenses to continue to increase as it implements new operational and financial systems, requiring substantial management efforts and significant additional expenditures [57]. - The company acknowledges that its past growth may not be indicative of future performance due to the rapidly evolving market and limited operating history [60]. Operational Dependencies - The company relies on independent third-party distributors for selling virtual currency, with four distributors accounting for 34.2%, 14.9%, 13.9%, and 10.0% of accounts receivable as of December 31, 2022 [94]. - As of December 31, 2023, three independent third-party distributors accounted for 30.3%, 24.8%, and 12.1% of the company's accounts receivable, indicating a reliance on a few key distributors for revenue [94]. - The company relies on third-party online payment platforms like China UnionPay, WeChat Pay, and Alipay for a significant portion of its revenue, and any disruptions in these services could adversely affect payment collection and revenue [122]. - The company relies on dividends from PRC subsidiaries for cash flow, and any restrictions on these dividends could hinder business operations [163]. Corporate Structure and Compliance - The company operates through Variable Interest Entities (VIEs) due to PRC laws restricting foreign ownership, which introduces uncertainties regarding compliance and operational control [144]. - The PRC Foreign Investment Law, effective January 1, 2020, defines foreign investment but leaves uncertainties regarding the treatment of VIEs [151]. - The latest "negative list" prohibits foreign investment in certain internet-related services, impacting the company's operations through VIEs [152]. - The company relies on contractual arrangements with VIEs for operational control, which may not be as effective as direct ownership [154]. - Potential conflicts of interest with VIE shareholders may disrupt operations and affect financial conditions [156]. Technology and Security - The company relies heavily on the performance of its IT systems, and any disruptions could materially affect user satisfaction and retention [100]. - The company has developed a robust content monitoring system, but it cannot detect every incident of inappropriate content due to the vast amount of user-generated content [91]. - The company is dependent on third-party services for data storage and encryption, and disruptions in these services could adversely impact operations [107]. - As of the date of the annual report, the company has not experienced any material incidents of security breaches, but vulnerabilities remain a concern [102]. Market and Competitive Landscape - The company monitors key performance metrics such as registered users, active users, and paying users, but these metrics may overstate the actual number of unique users due to potential duplicate accounts and fraudulent registrations [120]. - The company experiences seasonal fluctuations in user engagement, with active users typically peaking in the last quarter of the year and declining during the Chinese New Year [128]. - The company may need to invest significantly in research and development to keep pace with rapid technological changes in the Internet industry, which could impact its financial performance [98].

Group 1 - Stella-Jones Inc. announced the appointment of Wesley Bourland as Senior Vice-President and Chief Operating Officer, effective April 14, 2025 [1] - Mr. Bourland has extensive experience in operations, having served as COO for a leading hardwood lumber supplier and held various leadership roles in a steel structures manufacturer [3][4] - He is a trained Mechanical Engineer with a Bachelor of Science from the University of Texas at Austin, and will focus on manufacturing, strategic planning, and process optimization [5] Group 2 - Eric Vachon, President and CEO of Stella-Jones, expressed enthusiasm for Mr. Bourland's appointment, highlighting his results-driven leadership and ability to drive operational excellence [6][7] - Stella-Jones is a leading North American manufacturer of products essential for electrical distribution, transmission, and railway transportation systems [8] - The company supplies treated wood utility poles and railway ties to major electrical utilities and railroad operators across North America [8]

Core Points - Stella-Jones Inc. will hold a conference call to discuss its first quarter results on May 7, 2025, at 8:00 AM Eastern Daylight Time [1] - The press release regarding the conference call will be published before market opens on the same day [2] - The annual meeting of shareholders will also take place on May 7, 2025, at 11:00 AM Eastern Daylight Time, in a hybrid format [3] - Registered shareholders and duly appointed proxyholders will have the opportunity to participate, ask questions, and vote during the meeting [5] - Stella-Jones' 2024 Annual Report is now available on the company's website [6] Company Overview - Stella-Jones Inc. is a leading North American manufacturer focused on infrastructure products essential for electrical distribution and railway transportation systems [7] - The company supplies treated wood utility poles to major electrical utilities and treated wood railway ties to Class 1, short line, and commercial railroad operators [7] - Additionally, Stella-Jones manufactures and distributes premium treated residential lumber and accessories for outdoor applications, primarily servicing Canadian customers [7]

Core Insights - Stella-Jones Inc. reported continued sales and EBITDA growth for the fourth quarter and the year ended December 31, 2024, demonstrating the strength of its business model and customer-centric approach [2][3] - The company achieved a quarterly dividend increase for the 21st consecutive year, reflecting confidence in long-term business fundamentals [3][21] - The outlook for 2025 remains positive, driven by the need to strengthen North America's aging electrical grid and opportunities in railway ties [3] Financial Highlights - Fourth quarter sales reached CAD 730 million, a 6% increase from CAD 688 million in Q4 2023 [4] - Annual sales for 2024 totaled CAD 3,469 million, up 5% from CAD 3,319 million in 2023 [9] - Operating income for 2024 was CAD 503 million, with an EBITDA of CAD 633 million, representing an EBITDA margin of 18.2% [14][15] - Net income for Q4 2024 was CAD 52 million, or CAD 0.93 per share, compared to CAD 56 million, or CAD 0.98 per share in Q4 2023 [8][15] Segment Performance - Utility poles sales accounted for 53% of Q4 2024 sales, totaling CAD 385 million, a slight increase from CAD 383 million in Q4 2023 [11] - Railway ties sales increased by 15% in Q4 2024, reaching CAD 193 million, driven by higher Class 1 volumes [11] - Residential lumber sales grew by 12% in Q4 2024, totaling CAD 93 million, reflecting favorable pricing and higher sales volumes [11] Capital Allocation and Shareholder Returns - The company generated strong operating cash flow of CAD 408 million in 2024 and returned CAD 153 million to shareholders [16] - The quarterly dividend was increased by 11% to CAD 0.31 per share, payable on April 18, 2025 [21] - Stella-Jones has committed to returning over CAD 500 million to shareholders from 2023 to 2025 [19] Financial Position - As of December 31, 2024, Stella-Jones maintained a net debt-to-EBITDA ratio of 2.6x, slightly above the target range [17] - The company had available liquidity of CAD 802 million, indicating a strong financial position [17] - Total assets increased to CAD 4,103 million in 2024, up from CAD 3,708 million in 2023 [27]

Core Viewpoint - Stella-Jones Inc. is a leading manufacturer of pressure-treated wood products in North America, focusing on infrastructure essential for electrical distribution, transmission, and railway transportation systems [3]. Company Overview - Stella-Jones Inc. (TSX: SJ) supplies major electrical utilities and telecommunication companies with wood utility poles, and provides railway ties and timbers to North America's Class 1, short line, and commercial railroad operators [3]. - The company also produces industrial products such as timbers for railway bridges, crossings, construction, marine and foundation pilings, and coal tar-based products [3]. - Additionally, Stella-Jones manufactures and distributes premium treated residential lumber and accessories for outdoor applications, with a significant portion of its business dedicated to Canadian customers through a national manufacturing and distribution network [3].

Company Overview - Stella-Jones Inc. is a leading North American manufacturer of pressure-treated wood products, focusing on infrastructure essential for electrical distribution and railway transportation systems [4] - The company supplies major electrical utilities and telecommunication companies with wood utility poles, and provides railway ties and timbers to North America's Class 1, short line, and commercial railroad operators [4] - Stella-Jones also manufactures industrial products such as timbers for railway bridges, crossings, construction, marine and foundation pilings, and coal tar-based products [4] - The company distributes premium treated residential lumber and accessories to Canadian and American retailers, with a significant portion of its business dedicated to servicing Canadian customers through a national manufacturing and distribution network [4] Upcoming Events - A conference call for investors and analysts is scheduled for February 27, 2025, at 10:00 AM Eastern Standard Time [2] - A press release will be published before the market opens on the day of the conference call [3] - A web recording of the meeting will be available from 1:00 PM EST on February 27, 2025, until 11:59 PM EST on March 6, 2025 [3]

Core Viewpoint - Scienjoy Holding Corporation reported significant financial improvements for the nine months ended September 30, 2024, including a substantial increase in income from operations and net income, despite a slight decline in total revenues compared to the previous year [1][3][20]. Financial Performance - Total revenues decreased to RMB1,012.5 million (US$144.3 million) for the nine months ended September 30, 2024, down from RMB1,036.6 million in the same period of 2023 [2][7]. - Gross profit increased by 29.6% to RMB179.6 million (US$25.6 million) for the nine months ended September 30, 2024, compared to RMB138.6 million in the same period of 2023 [2][9]. - Income from operations surged by 313.7% to RMB35.3 million (US$5.0 million) for the nine months ended September 30, 2024, up from RMB8.5 million in the same period of 2023 [3][14]. - Net income was RMB34.2 million (US$4.9 million) for the nine months ended September 30, 2024, a significant turnaround from a net loss of RMB37.3 million in the same period of 2023 [20][21]. Shareholder Returns - Net income attributable to the Company's shareholders was RMB42.7 million (US$6.1 million) for the nine months ended September 30, 2024, compared to a net loss of RMB34.7 million in the same period of 2023 [4][21]. - Adjusted net income attributable to the Company's shareholders was RMB50.8 million (US$7.2 million) for the nine months ended September 30, 2024, a significant increase from an adjusted net loss of RMB22.0 million in the same period of 2023 [5][22]. Operational Insights - The increase in average revenue per paying user (ARPPU) contributed to the gross profit growth, indicating effective conversion of high-quality paying users into profit [6][9]. - The Company is focusing on global expansion, particularly in the Dubai market, and investing in AI-Generated Content technologies to enhance user experiences [6][11]. Cost Management - Cost of revenues decreased to RMB832.9 million (US$118.7 million) for the nine months ended September 30, 2024, down from RMB898.0 million in the same period of 2023 [8]. - Total operating expenses increased by 11.0% to RMB144.3 million (US$20.6 million) for the nine months ended September 30, 2024, compared to RMB130.0 million in the same period of 2023 [10]. Future Outlook - The Company expects total net revenues to be in the range of RMB300 million to RMB330 million in the fourth quarter of 2024, reflecting current market and operational conditions [24].

Group 1 - Scienjoy Holding Corporation, a leader in interactive entertainment in China, will participate in the LD Micro Main Event XVII from October 28-30, 2024, in Los Angeles [1][2] - The company's presentation is scheduled for October 29, 2024, at 3:00 p.m. PST and will be available via a live webcast [2] - Scienjoy aims to shape a metaverse lifestyle using AI-powered technology to create immersive experiences for global audiences [3] Group 2 - The company will conduct one-on-one meetings with investors on October 29 and 30, 2024 [2] - Interested parties can register to watch the presentation through the provided webcast link [2] - Scienjoy is listed on Nasdaq and focuses on redefining entertainment through meaningful connections [3]

Core Viewpoint - Scienjoy Holding Corporation reported solid growth in revenue and gross profit for the first half of fiscal year 2024, driven by strategic initiatives focused on global expansion and metaverse innovation, despite a decrease in net income primarily due to changes in the fair value of investments in marketable securities [4][5]. Financial Performance Summary Second Quarter 2024 - Total revenues increased by 3.2% to RMB374.8 million (US$51.6 million) compared to RMB363.2 million in the same period of 2023 [2][6]. - Gross profit rose by 28.3% to RMB64.7 million (US$8.9 million) from RMB50.4 million in the same period of 2023 [2][7]. - Income from operations surged by 148.0% to RMB28.6 million (US$3.9 million) from RMB11.5 million in the same period of 2023 [2][10]. - Net income decreased by 60.6% to RMB33.4 million (US$4.6 million) from RMB84.9 million in the same period of 2023, attributed to changes in fair value of investments [2][13]. First Half 2024 - Total revenues increased by 3.6% to RMB691.1 million (US$95.1 million) from RMB667.4 million in the same period of 2023 [3][15]. - Gross profit increased by 30.1% to RMB117.8 million (US$16.2 million) from RMB90.5 million in the same period of 2023 [3][16]. - Income from operations rose by 136.5% to RMB38.9 million (US$5.3 million) from RMB16.4 million in the same period of 2023 [3][18]. - Net income decreased by 54.3% to RMB36.2 million (US$5.0 million) from RMB79.3 million in the same period of 2023, primarily due to changes in fair value of investments [3][21]. Cost and Expense Management - Cost of revenues decreased by 0.6% to RMB573.3 million (US$78.9 million) for the first half of 2024, primarily due to a significant reduction in user acquisition costs [15]. - Total operating expenses increased by 6.5% to RMB78.9 million (US$10.9 million) for the first half of 2024, with notable increases in research and development expenses [16][17]. Strategic Initiatives - The company is focusing on the metaverse industry and integrating AI technologies into its platform, SJ-Verse, to enhance user engagement and content personalization [4][5]. - Partnerships with local creators and service providers in Dubai are aimed at building a culturally resonant metaverse ecosystem [4][5]. Outlook - The company expects total net revenues for the third quarter of 2024 to be in the range of RMB303 million to RMB323 million, reflecting current market conditions [24].