FIRE ROCK(01909)2024-08-29 10:05Financial Performance - For the six months ended June 30, 2024, the company's profit attributable to equity holders was HKD 6.8 million, a significant decrease from HKD 581.7 million for the same period in 2023, primarily due to a one-time non-recurring income from the issuance of promissory notes reported in 2023[11]. - The company's revenue for the six months ended June 30, 2024, was approximately HKD 63.0 million, a decrease of about HKD 1.5 million compared to HKD 64.5 million for the same period in 2023, influenced by market conditions and overall economic status[13]. - The total game revenue for the Asia-Pacific region for the six months ended June 30, 2024, was HKD 62.999 million, representing 100% of the company's total revenue for that period, consistent with the previous year[14]. - Other income significantly decreased to approximately HKD 0.2 million for the six months ended June 30, 2024, from HKD 592.7 million in the same period in 2023, mainly due to a one-time non-recurring income recognized in 2023[18]. - Profit attributable to owners for the six months ended June 30, 2024, was approximately HKD 6.8 million, a significant decrease of about 98.8% from HKD 581.7 million for the same period in 2023, primarily due to the aforementioned one-time income in 2023[23]. - The earnings per share for the six months ended June 30, 2024, was approximately HKD 0.18, compared to HKD 15.15 for the same period in 2023[41]. - The net profit for the period was HKD 14,063 thousand, a significant decrease from HKD 587,640 thousand in the previous year, reflecting a decline of 97.6%[64]. - Basic and diluted earnings per share dropped to HKD 0.18 from HKD 15.15, indicating a substantial decline in profitability[64]. Cost and Expenses - Direct costs for the six months ended June 30, 2024, totaled approximately HKD 10,783,000, a decrease from HKD 11,979,000 for the same period in 2023, primarily due to a reduction in agency distribution costs[15][16]. - Gross profit for the six months ended June 30, 2024, was approximately HKD 52.2 million, compared to HKD 52.6 million for the same period in 2023, with a gross margin increase to 82.9% from 81.4% due to effective cost control[17]. - Promotion costs increased to approximately HKD 26.6 million for the six months ended June 30, 2024, from HKD 25.1 million in the same period in 2023, attributed to higher advertising and promotional expenses[19]. - Administrative expenses decreased by approximately 12.9% to HKD 14.2 million for the six months ended June 30, 2024, down from HKD 16.3 million in the same period in 2023, mainly due to reduced professional fees[21]. Cash Flow and Assets - As of June 30, 2024, the company's cash and cash equivalents were approximately HKD 61.8 million, down from HKD 85.5 million as of December 31, 2023[26]. - The total amount used for acquiring adaptation rights opportunities was HKD 3.6 million, representing 12.5% of the total proceeds utilized[39]. - Non-current assets increased to HKD 67,324 thousand as of June 30, 2024, compared to HKD 51,364 thousand at the end of 2023, representing a growth of 31%[65]. - Cash and cash equivalents decreased to HKD 61,831 thousand from HKD 85,492 thousand, a decline of 27.7%[70]. - Total assets less current liabilities stood at HKD 144,426 thousand, up from HKD 142,568 thousand, indicating a slight increase of 1.3%[66]. - The company’s equity attributable to owners increased to HKD 133,837 thousand from HKD 131,072 thousand, reflecting a growth of 2.1%[66]. Business Strategy and Operations - The company plans to strengthen its business related to third-party licensed game publishing, intellectual property licensing services for enterprises, online marketing, digital support activities, and overseas game operations[11]. - The company is strategically expanding its main business to include more diverse services, including internet application technology and investment businesses[11]. - The company continues to engage in the development of web games, mobile games, and related software, licensing its self-developed games to authorized operators globally[12]. - The company is focusing on enhancing its online marketing and digital support activities as part of its growth strategy[11]. - The company plans to continue expanding its game development and operation services in overseas markets, focusing on enhancing its product offerings and market reach[71]. Governance and Compliance - The company has undergone a review of its interim results by the audit committee, ensuring the accuracy of its financial reporting[10]. - The audit committee has reviewed the unaudited financial statements for the six months ending June 30, 2024, and confirmed compliance with applicable accounting standards and listing rules[58]. - The internal control review identified significant weaknesses and provided corrective recommendations to enhance the internal control system[60]. - The company has established a governance and compliance manual to strengthen integrity and professional conduct standards among employees[61]. - The board has approved a monthly reporting procedure to ensure compliance with corporate governance codes, focusing on financial, operational, and compliance matters[62]. - The internal control consultant recommended expanding conflict of interest reporting requirements to include senior management and employees with significant influence in decision-making processes[63]. - The company is committed to improving the reporting mechanism for operational risks and issues directly to the board[62]. - A clear evaluation mechanism for the qualifications of all directors and senior management personnel is being developed to ensure ongoing assessment of their integrity and capabilities[63]. - The internal control review aims to identify weaknesses in existing policies and procedures related to corporate governance and financial reporting cycles[59]. - The company has engaged a professional internal control consultant to conduct a comprehensive review of its internal control systems[59]. Shareholder Information - Major shareholders include Safron International Limited with 1,310,000,000 shares (34.11%) and Mr. Zhang Yan with 1,566,800,000 shares (40.80%)[46]. - Mr. Zhang Yan's total equity includes 76,800,000 shares (2.00%) as a beneficial owner and 180,000,000 shares (4.69%) through Infinities Investment Pte. Ltd.[47]. - The company has a stock option plan with a total of 192,000,000 shares available for issuance, representing 5% of the issued share capital[49]. - No stock options have been granted since the adoption of the stock option plan on January 24, 2016[50]. - The share award plan adopted on September 12, 2018, has granted 8,496,000 shares to 47 employees, with no further grants made since then[51]. - As of June 30, 2024, there are no unexercised or unvested awards under the share award plan[52]. - There are no competitive interests held by directors or major shareholders in any competing businesses during the reporting period[53]. - The company has not entered into any significant contracts with the controlling shareholder during the reporting period[54]. - No repurchase, sale, or redemption of the company's listed securities occurred in the six months ending June 30, 2024[56]. Other Information - The group sold its entire stake in Lord Metaverse Co., Ltd. for a cash consideration of THB 810,000 (approximately HKD 185,000) in March 2023[34]. - The group has not authorized any plans for significant investments or capital asset acquisitions as of the report date[35]. - The group has no significant contingent liabilities as of June 30, 2024, consistent with the previous year[36]. - The group is actively seeking opportunities to acquire appropriate material adaptation rights but has not reached any specific agreements as of June 30, 2024[40]. - The group has not implemented any foreign currency hedging policies but closely monitors foreign exchange risks[37]. - The group did not report any revenue from individual customers accounting for more than 10% of total revenue[83]. - The group recognized deferred revenue related to in-game purchases from paying players, classified as contract liabilities under HKFRS 15[98]. - The group established a new lease agreement in China during the six months ended June 30, 2024, compared to none in the previous year[92]. - There were no significant events occurring after the reporting period up to the date of this report[103].