GAMEONE(08282)2024-03-21 14:02Financial Performance - For the fiscal year ending December 31, 2023, the company recorded a net loss of approximately HKD 33.0 million, compared to a net loss of HKD 11.1 million in the same period of 2022, indicating a significant increase in losses[13]. - The decrease in revenue from licensed mobile games led to a reduction in gross profit by HKD 9.4 million in 2023[13]. - Administrative expenses increased by HKD 11.7 million in 2023 due to rising employee costs and office supplies[13]. - The company recognized an impairment loss of approximately HKD 5.6 million on intangible assets for the fiscal year ending December 31, 2023[13]. - The company recorded a net loss of approximately HKD 33.0 million for the fiscal year ending December 31, 2023, compared to a net loss of approximately HKD 11.1 million in the same period of 2022, primarily due to decreased revenue from licensed mobile games and increased administrative expenses[18][28]. - Revenue increased by approximately 19.2% from about HKD 91.3 million in 2022 to approximately HKD 108.8 million in 2023, mainly driven by increased income from software and technology services in mainland China[22]. - The gross profit decreased by approximately 40.0% from about HKD 23.5 million in 2022 to approximately HKD 14.1 million in 2023, with a gross margin of approximately 12.9%, down from 25.7% in the previous year[24]. - Software service revenue accounted for 61.9% of total revenue in 2023, increasing from 32.5% in 2022, while revenue from game operations and publishing dropped to 37.3% from 63.1%[23]. - Administrative expenses rose by approximately 69.0% from about HKD 16.8 million in 2022 to approximately HKD 28.4 million in 2023, primarily due to increased employee costs and office supplies[27]. - The cost of services provided increased by approximately 39.7% from about HKD 67.8 million in 2022 to approximately HKD 94.7 million in 2023, influenced by rising costs associated with software services in mainland China[22]. Corporate Governance - The company has established a corporate governance framework that aligns with the GEM Listing Rules, ensuring accountability and transparency[71]. - The board of directors is responsible for formulating business strategies, reviewing and monitoring the group's performance, and approving financial statements and annual budgets[83]. - The company has maintained a female representation of approximately 20.0% on the board level as of December 31, 2023[76]. - The board has implemented a whistleblowing policy since 2019, ensuring that any confirmed cases are reported to the board and audit committee[73]. - The company has adopted an anti-bribery and anti-corruption policy since 2019, which includes guidelines on gifts, hospitality, and reporting mechanisms for suspected corruption[73]. - The board's diversity policy has been reviewed annually since 2019 to ensure independent viewpoints are obtained[73]. - The company has committed to maintaining high standards of business ethics and corporate governance across all operations[79]. - The company has a shareholder communication policy in place since 2019 to maintain effective dialogue with shareholders[73]. - The company has been compliant with the corporate governance code as of the report date, with minor deviations noted[71]. - The independent non-executive directors play a crucial role in providing impartial opinions on the company's strategy and performance, ensuring the interests of all shareholders are considered[87]. - The company has provided training for all directors, ensuring they attended at least one course related to good corporate governance practices during the year ending December 31, 2023[95]. - The company has appointed three independent non-executive directors, meeting the GEM listing rules requirements[87]. - The chairman and CEO roles are held by the same individual, which the board believes ensures consistency in strategy planning and execution[94]. - The independent non-executive directors' independence is evaluated annually by the nomination committee and the board[89]. - The board of directors has established three committees: the Remuneration Committee, the Nomination Committee, and the Audit Committee, each with defined written terms of reference[96]. - The Remuneration Committee held one meeting in the fiscal year ending December 31, 2023, to review the remuneration of directors and senior management, finding it fair and reasonable[100]. - The Nomination Committee also held one meeting during the fiscal year to review and recommend the re-election of directors[104]. - The Audit Committee conducted four meetings in the fiscal year to review the financial performance for 2022 and 2023, ensuring compliance with applicable accounting standards and regulations[107]. - The company has adhered to GEM Listing Rules regarding the composition of the Audit Committee, which includes independent non-executive directors with appropriate professional qualifications[105]. - The board meetings and committee meetings were regularly held to discuss and approve the company's financial and operational performance[108]. - The board has reviewed the corporate governance policy and is satisfied with its effectiveness[83]. - The company has appointed an external service provider for company secretarial services, ensuring compliance and effective communication between the board and management[117]. - The company secretary has completed no less than 15 hours of relevant professional training to update skills and knowledge as of December 31, 2023[118]. Risk Management - The company has established an enterprise risk management framework to identify, assess, and respond to various risks, following the COSO framework[145]. - The company’s risk management and internal control systems were reviewed annually, with no significant issues identified, indicating their effectiveness and adequacy[138]. - The board considers various factors, including liquidity, tax implications, and regulatory restrictions, when declaring dividends[136]. - The company has established a risk register to track all identified major risks, which is updated at least annually following a risk assessment[147]. - The internal audit department continuously reviews the risk management and internal control systems covering all major business areas[148]. - The company’s risk management initiatives are continuously conducted by management, with the effectiveness of the risk management framework evaluated at least annually[147]. - The board is responsible for monitoring the effectiveness of the risk management and internal audit functions through the audit committee[145]. Shareholder and Capital Management - The company announced a rights issue on November 21, 2023, to raise approximately HKD 13.2 million by issuing 12,000,000 shares at a subscription price of HKD 1.10 per share[33]. - The net proceeds from the rights issue, after deducting expenses, are approximately HKD 12.2 million[33]. - The intended use of the proceeds includes HKD 6.1 million for developing and operating cybersecurity business, but only HKD 0.5 million has been utilized to date[34]. - General operating funds were allocated HKD 2.0 million, with only HKD 1.1 million spent so far[34]. - The company's debt-to-asset ratio as of December 31, 2023, is approximately 53.5%, up from 30.5% in the previous year[41]. - The total employee cost for the year ending December 31, 2023, reached approximately HKD 24.3 million, an increase from HKD 15.6 million in the previous year[48]. - The company has no short-term or long-term bank borrowings as of December 31, 2023[40]. - The company has established a dividend policy that considers financial performance, shareholder equity, and operational capital needs before proposing any dividend payments[29]. - The board will continuously review the dividend policy and retains the discretion to update or modify it at any time, without any legal obligation to declare dividends[133]. - The company reported no final dividend for the year ended December 31, 2023, compared to zero HKD per share in 2022[160]. - The total distributable reserves available to the company's owners as of December 31, 2023, amounted to approximately HKD 8,796,000, down from approximately HKD 11,186,000 in 2022[171]. - The company has maintained the public float required by GEM listing rules as of the report date[197]. - All independent non-executive directors have confirmed their independence according to GEM listing rules[199]. Business Operations - The company’s main business involves providing software services, internet security technology services, and big data analysis services to customers in China[158]. - The company has signed contracts with several banks in mainland China for its cybersecurity technology services, contributing to revenue growth[14]. - The company aims to expand its market share in mainland China by leveraging its headquarters in Hangzhou for deeper market research[14]. - The company has established its headquarters in Linping District, Hangzhou, Zhejiang Province, which was recognized as a headquarters enterprise by the Hangzhou government in 2023[14]. - The company has not entered into any related party transactions that require disclosure under the GEM Listing Rules for the year ended December 31, 2023[170]. - The company has not made any charitable donations for the year ended December 31, 2023, consistent with the previous year[165]. - The company has not entered into any management or administrative contracts regarding its overall or any major business as of December 31, 2023[185]. - The company defines gaming operation customers as any paying user who purchases game tokens, virtual items, or upgrade features, with users counted separately across different platforms[172]. - E-commerce customers are defined as businesses purchasing strategic planning, technical support, content creation, and promotion services, facilitating precise marketing and sales growth on popular social e-commerce platforms[172]. - Cybersecurity customers are businesses paying for services such as firewall configuration, intrusion detection and defense, data encryption, and security vulnerability assessments, indicating a high demand for information security and data protection[172]. - The top five customers accounted for approximately 55.6% of the total revenue, with the largest customer contributing about 31.5%[174]. - The top five suppliers represented around 61.3% of the total procurement amount, with the largest supplier accounting for approximately 22.0%[174]. Shareholder Structure - As of December 31, 2023, Liu Yi holds 39.69% of the shares through Topliu Limited, while Huang Jianying holds 16.87% as a beneficial owner[188]. - Topliu Limited holds 14,288,677 shares, representing 39.69% of the company's equity[191]. - Ms. Sun Li holds 6,071,625 shares through spousal rights, accounting for 16.87% of the company's equity[191]. - Nineyou International Limited, Heartland Investment Limited, and Baishang Limited each hold 1,836,718 shares, each representing 5.10% of the company's equity[191]. - The company's compensation policy includes fixed components (base salary) and variable components (discretionary bonuses and other rewards), considering factors such as experience, responsibilities, individual performance, and overall market conditions[181]. - The company’s board of directors is subject to rotation, with one-third of the directors required to retire at each annual general meeting, ensuring compliance with governance standards[175].