7ROAD(00797)2023-09-12 09:03Financial Performance - For the six months ended June 30, 2023, the company recorded total revenue of approximately RMB 443.7 million, representing an increase of approximately 117.0% compared to RMB 204.5 million for the same period in 2022[11]. - The profit for the period attributable to owners of the company was approximately RMB 130.5 million, reflecting a decrease of approximately 45.7% compared to RMB 240.4 million for the same period in 2022[12]. - Gross profit for the six months ended June 30, 2023, was approximately RMB 322.5 million, an increase of approximately 433.0% compared to RMB 60.5 million for the same period in 2022[65]. - Operating profit for the six months ended June 30, 2023, was approximately RMB 145.6 million, a decrease from RMB 306.0 million for the same period in 2022[58]. - Profit for the period was approximately RMB 130.4 million, down from RMB 240.3 million for the same period in 2022[58]. - Total comprehensive income for the period was RMB 131,188,000, compared to RMB 242,652,000 in the prior year, a decline of 45.9%[185]. - Earnings per share for the period attributable to owners of the Company was RMB 0.051, down from RMB 0.093 in the previous year[182]. Market Overview - The global gaming market size was estimated to be US 92.6 billion in 2023, with a year-on-year increase of 0.8%[14]. - China's gaming market recorded actual sales revenue of RMB 144.263 billion from January to June 2023, representing a year-on-year decrease of 2.39% but a period-to-period increase of 22.2%[15]. - The number of game players in China reached a record high of approximately 668 million from January to June 2023[15]. - The gaming industry is expected to continue developing steadily, with the number of players projected to increase to nearly 3.8 billion by 2026, and the market size reaching US$ 2,124.7 billion[14]. Revenue Breakdown - In the first half of 2023, the Group generated revenue from online games of approximately RMB 356.8 million, representing a year-on-year increase of 118.4% compared to RMB 163.4 million in the same period of 2022[25]. - Revenue from the Group's cloud business in the first half of 2023 was approximately RMB 79.4 million, a year-on-year increase of 101.6% from RMB 39.4 million in the same period of 2022[26]. - Game business revenue was approximately RMB 356.8 million, reflecting an increase of approximately 118.4% compared to RMB 163.4 million for the same period in 2022, primarily driven by the new game "DDTank Adventure" launched at the end of 2022[59]. Expenses and Investments - Research and development expenses amounted to approximately RMB 98.0 million, representing an increase of approximately 118.8% compared to RMB 44.8 million for the same period in 2022[71]. - Selling and marketing expenses were approximately RMB 24.6 million, an increase of approximately 103.4% compared to RMB 12.1 million for the same period in 2022[73]. - Administrative expenses totaled approximately RMB 35.0 million, reflecting an increase of approximately 34.1% compared to RMB 26.1 million for the same period in 2022[72]. - Total capital expenditure for the six months ended June 30, 2023, was approximately RMB 9.1 million, a significant decrease of about 94.9% from RMB 179.5 million in the same period of 2022[89]. Cash Flow and Liquidity - Cash generated from operations increased significantly to RMB 230,455,000 in 2023 from RMB 30,529,000 in 2022, representing a growth of 654%[200]. - Net cash generated from operating activities rose to RMB 220,956,000 in 2023, compared to RMB 24,375,000 in 2022, marking an increase of 805%[200]. - Current liabilities decreased to RMB 370,916,000 from RMB 454,827,000, indicating improved liquidity management[188]. Legal Proceedings - The Group is involved in a legal proceeding with claims amounting to approximately RMB 11.7 million related to a game cooperative development agreement[115]. - The court ruled that Qianhai Huanjing must refund approximately RMB 6.6 million to the plaintiff, with the case still awaiting a verdict in the second trial[117]. - Qianhai Huanjing filed a lawsuit against Proficient City Limited (PCL) in March 2021, claiming approximately RMB 69.6 million related to intellectual property rights for the online game Wartune[119]. Employee and Shareholder Information - As of June 30, 2023, the Group had 442 full-time employees, with 65% in R&D, 19% in Operations, and 16% in Administration[109]. - Mr. Meng Shuqi holds 528,854,000 shares, representing 19.20% of the total issued share capital of 2,753,200,000 shares as of June 30, 2023[130]. - The interests of Directors and chief executives in the Company's shares and debentures as of June 30, 2023, are documented in compliance with regulatory requirements[128]. Future Plans and Strategies - The Group aims to enhance user value by leveraging the interactive and social attributes of games, focusing on overseas market expansion[26]. - The Group plans to release the overseas version of "Wartune H5" globally in the fourth quarter of 2023, following promising user data from North America[30]. - The Group plans to launch several new games in the second half of 2023, including "DDTank Adventure" and "Wartune H5" overseas edition, with the latter expected to be released globally in Q4 2023[37].