XD INC(02400)2024-09-26 08:32Revenue and Profitability - Revenue for the first half of 2024 reached RMB 2,220,567 thousand, a 26.7% increase from RMB 1,753,102 thousand in the same period of 2023[8]. - Adjusted EBITDA for the first half of 2024 was RMB 319.3 million, representing a 72.7% year-over-year growth[12]. - Game business revenue increased by 29.3% year-over-year, driven by the successful launch of new self-developed games[12]. - The revenue from online games was RMB 1,425.9 million, accounting for 64.2% of total revenue, compared to RMB 1,080.1 million and 61.6% in the same period last year[24]. - Total revenue for the first half of 2024 was RMB 2,220.6 million, up from RMB 1,753.1 million in the same period last year[24]. - Revenue from online games rose by 32.0% to RMB 1,425.9 million, driven by new games "GoGo Muffin" and "Sword of Convallaria"[26]. - Revenue from paid games decreased by 14.5% to RMB 55.2 million, primarily due to declines in existing paid games[26]. - Gross profit increased by 44.3% to RMB 1,496.8 million, with a gross margin of 67.4%[35]. - Net profit for the six months ended June 30, 2024, was RMB 250.6 million, compared to RMB 102.8 million for the same period in 2023, representing a year-on-year increase of 143.1%[36]. - The operating profit for the six months ended June 30, 2024, was RMB 270.5 million, up from RMB 122.7 million in the same period of 2023[37]. User Engagement and Game Development - Average monthly active users (MAU) for the TapTap China version app grew by 27.3% year-over-year, reaching 43.2 million[12]. - The new self-developed game "Heartopia" achieved over 25 million downloads in its first month after launch in July 2024[12]. - Average monthly active users for online games decreased by 28.1% to 9,534 thousand compared to 13,269 thousand in the previous year[9]. - Average monthly paying users for online games decreased by 21.4% to 1,092 thousand from 1,389 thousand in the previous year[9]. - The existing game portfolio includes 20 online games and 33 paid games as of June 30, 2024[13]. - The company continues to focus on providing high-quality games and supporting developers in creating and distributing games[12]. - "GoGo Muffin," launched in January 2024, has been well-received and is expected to expand to multiple overseas markets in the second half of 2024[14]. - The company is focusing on stabilizing its game development business and has three online games currently in development[16]. Financial Position and Investments - Cash and cash equivalents as of June 30, 2024, were RMB 2,163.5 million, down from RMB 3,206.8 million as of December 31, 2023[41]. - The debt-to-asset ratio as of June 30, 2024, was 42.9%, a decrease from 57.6% as of December 31, 2023[43]. - The company had no significant investments or acquisitions during the six months ended June 30, 2024[44]. - The company completed the acquisition of a 35% stake in X.D. GLOBAL (HK) LIMITED for an initial consideration of 60.0 million during the reporting period[48]. - All outstanding convertible bonds with a principal amount of $159.6 million were redeemed by June 30, 2024[48]. Expenses and Cost Management - Total revenue cost increased by 1.1% to RMB 723.8 million, with game business costs decreasing by 1.8% to RMB 595.4 million[30][32]. - Sales and marketing expenses surged by 110.4% to RMB 695.3 million, mainly due to promotional costs for new games[35]. - R&D expenses decreased by 20.5% to RMB 419.5 million, attributed to project restructuring and a reduction in R&D personnel from 1,143 to 997[35]. - General and administrative expenses increased by 35.9% year-on-year to RMB 138.3 million for the six months ended June 30, 2024, primarily due to an increase in share-based compensation expenses of RMB 31.8 million[36]. Shareholder Information and Stock Options - As of June 30, 2024, the total number of issued shares was 480,639,093[67]. - Mr. Huang holds 157,605,000 shares, representing 32.79% of the company's total shares[63]. - Mr. Dai holds 53,545,000 shares, representing 11.14% of the company's total shares[63]. - The company has implemented a stock option plan since June 25, 2021, to incentivize and reward contributors[61]. - The stock option plan allows for a maximum of 48,043,070 shares to be issued, which is 10% of the shares in issue as of the adoption date[86]. - The total number of shares available for issuance under the stock option plan as of the report date is 47,780,636 shares, representing 9.75% of the issued shares[90]. Regulatory Compliance and Corporate Governance - The company has implemented system upgrades to prevent minors from becoming addicted to online games, in compliance with regulations in mainland China[58]. - The company has adhered to all applicable corporate governance codes, except for the separation of the roles of Chairman and CEO[57]. - The audit committee has reviewed the unaudited consolidated financial statements for the six months ending June 30, 2024[60]. Future Outlook and Strategic Plans - The company plans to release several new paid games in the second half of 2024, including "Hero's Adventure" and "Enter the Gungeon"[17]. - The company is focusing on market expansion, with plans to increase its presence in key regions, aiming for a 20% growth in user base by the end of 2024[97]. - Research and development efforts are being intensified, with an investment of 1,509,315 million allocated for new technologies and product innovations[97]. - The company has outlined a strategic plan for potential acquisitions to enhance its market position, targeting a 15% increase in market share by 2025[97].