IDREAMSKY(01119)2024-09-05 08:39Financial Performance - Revenue for the first half of 2024 was RMB 845,223 thousand, a decrease of 23.8% compared to RMB 1,109,811 thousand in the same period of 2023[5]. - Gross profit for the first half of 2024 was RMB 291,786 thousand, down 42% from RMB 502,066 thousand in the first half of 2023[5]. - The adjusted profit for the period was RMB 3,297 thousand, a significant decline from RMB 199,150 thousand in the same period of 2023[5]. - For the six months ended June 30, 2024, the company reported a loss of RMB 109.3 million compared to a profit of RMB 40.6 million for the same period in 2023[25]. - Adjusted profit for the period was RMB 3.3 million, a significant decrease from RMB 199.15 million in the prior year, representing a decline of approximately 98.3%[26]. - EBITDA for the six months ended June 30, 2024, was RMB 11.72 million, down from RMB 150.55 million in the same period of 2023, indicating a decline of about 92.2%[26]. - The company incurred a net loss from continuing operations of RMB 109,279,000, compared to a profit of RMB 52,576,000 in the prior year[66]. - The net loss attributable to equity holders for the period was RMB 109,817,000, compared to a profit of RMB 40,712,000 in the same period last year[66]. - The total comprehensive loss for the period amounted to RMB 104,238,000, compared to a comprehensive income of RMB 59,662,000 in the prior year[66]. Revenue Breakdown - Game revenue contributed 97.3% of total revenue, amounting to RMB 822.2 million, down 22.8% year-on-year from RMB 1,065.1 million[17]. - Revenue from Tencent Group for services provided decreased to RMB 25.87 million in the first half of 2024 from RMB 57.31 million in the same period of 2023[152]. - Game revenue and information service revenue amounted to RMB 822,238 thousand and RMB 17,618 thousand respectively, down from RMB 1,065,088 thousand and RMB 40,516 thousand in 2023, representing a decline of 22.8% and 56.5%[92]. Expenses and Costs - Cost of revenue decreased by 8.9% to RMB 553.4 million, but as a percentage of revenue, it increased from 54.8% to 65.5%[19]. - Sales and marketing expenses decreased by 23.4% to RMB 77.8 million, representing 9.2% of revenue, slightly up from 9.1%[20]. - General and administrative expenses increased by 20.0% to RMB 50.4 million, rising from 3.8% to 6.0% of revenue[21]. - R&D expenses rose by 8.7% to RMB 153.3 million, accounting for 18.1% of revenue, up from 12.7%[22]. - The cost of revenue, sales and marketing expenses, general and administrative expenses, R&D expenses, and impairment losses on intangible assets totaled RMB 834,870 thousand, a decrease of 6.5% from RMB 893,279 thousand in the previous year[95]. Cash Flow and Liquidity - The company's cash and cash equivalents increased by 42.9% to approximately RMB 272.2 million as of June 30, 2024, compared to RMB 190.4 million at the end of 2023[30]. - Operating cash flow for the six months ended June 30, 2024, was RMB 33,864 thousand, a decrease of 86.2% compared to RMB 245,540 thousand for the same period in 2023[70]. - Financing activities generated a net cash inflow of RMB 135,184 thousand, a significant improvement from a net outflow of RMB (81,351) thousand in the previous year[70]. - The total cash and cash equivalents at the end of the period reached RMB 272,178 thousand, up 43.1% from RMB 190,211 thousand at the end of the same period last year[70]. Assets and Liabilities - Total assets increased to RMB 3,791,526 thousand as of June 30, 2024, up from RMB 3,707,673 thousand at the end of 2023, representing a growth of approximately 2.26%[68]. - Total liabilities increased to RMB 2,153,989 thousand, up from RMB 1,964,446 thousand, reflecting a growth of about 9.63%[68]. - The company's equity attributable to owners decreased to RMB 1,539,509 thousand from RMB 1,645,737 thousand, a decline of approximately 6.43%[69]. - The company's borrowings increased to RMB 1,240,710 thousand from RMB 966,424 thousand, reflecting a rise of about 28.3%[68]. Game Development and User Engagement - The user base for the "Dream Series" games has grown steadily, with "Dream Garden" revenue increasing by 14% year-on-year[6]. - "Subway Surfers" has maintained its popularity for 11 years, launching 8 new versions in 2024 and achieving over 200 million total exposures across platforms[6]. - The "Mecha Squad" game, launched in January 2024, ranked TOP 6 in the shooting category on mainstream Android channels within six months[7]. - The Fanbook community's user base increased by over 30% compared to the end of 2023, with high-quality creators growing sixfold[6]. - AI technology is being utilized to enhance production and operational efficiency, improving user service quality[6]. Shareholder and Corporate Governance - The company has adopted the corporate governance code as per the listing rules to ensure accountability and protect shareholder interests[39]. - The company did not declare any interim dividends for the six months ended June 30, 2024, consistent with the previous year[41]. - The company repurchased a total of 3,444,800 shares at a total cost of HKD 5,963,668 during the six months ended June 30, 2024[43]. - The company has adopted a ten-year share incentive plan on May 18, 2023, allowing for a total of 28,207,966 shares to be granted, representing 2% of the issued share capital as of the adoption date[54]. Future Outlook and Strategic Initiatives - The company is focusing on long-term operations of classic games and continuous introduction of high-quality overseas games to support cash flow[6]. - The company aims to enhance core competitiveness and expand the global reach of "Kara Bichu," targeting young competitive gamers while exploring new market opportunities[13]. - The company plans to use the proceeds from the placement of 119,850,400 shares at HKD 2.15 per share for key product R&D and overseas expansion, as well as general working capital[64]. - Future outlook includes potential market expansion and new product development initiatives[166].