ARCHOSAUR GAMES(09990)2024-03-22 09:23Game Development and Strategy - As of December 31, 2023, the company launched 20 premium mobile games across over 170 markets, supporting 14 languages[6] - The company emphasizes a core strategy of premiumization and globalization, aiming to create leading games across various genres for a superior online entertainment experience[13] - The company is actively developing new titles, including "Three Kingdoms Heroes: Honghu Dominance," which has completed its first paid test and is progressing well[23] - The company is collaborating with Epic Games on Unreal Engine 5 technology, with a project code-named "Odin" under development[12] - The company is leveraging Unreal Engine 5 technology for future game development, enhancing product quality and user experience[39] - The company plans to launch 8 new game products globally from 2024 to 2026, including MMORPG, SLG, and strategy card games[65] - The company plans to continue its strategy of product diversification, with new titles such as a Chinese-style RPG and a strategy game based on a well-known IP[32] - Project Odin, an MMORPG+ game based on the "Dragon Tribe" series, is scheduled for production in 2025[69] Financial Performance - The company's revenue for 2023 reached RMB 908.5 million, a 55.5% increase from RMB 584.1 million in 2022[26] - Gross profit for 2023 was RMB 650.4 million, reflecting a 53.5% increase compared to RMB 423.6 million in the previous year[26] - The net loss for the year was RMB 315.6 million, a 58.9% improvement from a loss of RMB 768.5 million in 2022[26] - Revenue for the year ended December 31, 2023, was RMB 908.5 million, an increase of 55.5% compared to RMB 584.1 million for the same period in 2022[46] - Revenue generated from mainland China was RMB 592.1 million, a significant increase of 230.2% from RMB 179.3 million in the previous year[48] - Adjusted net loss for the year was RMB 282.9 million, a reduction from RMB 731.9 million in the previous year, attributed to increased revenue and controlled R&D costs[55] - The total revenue from game publishing and operations for the year ended December 31, 2023, was RMB 709.3 million, an increase of 105.4% from RMB 345.4 million for the year ended December 31, 2022[71] - Revenue from external customers in mainland China was RMB 592,142,000, a significant increase of 230.5% compared to RMB 179,352,000 in 2022[167] User Engagement and Market Reach - The total registered user base for the 13 games currently in operation exceeds 150 million, with 2 games generating over RMB 4 billion in cumulative revenue[18] - The game "Dragon Tribe Fantasy" has achieved cumulative revenue exceeding RMB 4.4 billion and has over 44 million registered users globally[19] - The game "Dragon Tribe Fantasy" generated over RMB 2 billion in cumulative revenue outside of mainland China as of December 31, 2023[33] - Cumulative registered users for "Shining Bright" exceeded 12 million as of December 31, 2023[63] - Cumulative revenue for "Under the Hongtu" surpassed RMB 1.6 billion, with over 7.3 million registered users[64] - Four games have achieved cumulative revenue between RMB 1 billion and RMB 3 billion, showcasing the company's successful product portfolio[18] - The existing game "Dreaming of the Sword Immortal" has achieved over RMB 4 billion in global cumulative revenue as of December 31, 2023[42] Cost Management and Expenses - Research and development expenses for the year ended December 31, 2023, decreased by 22.0% to RMB 582.2 million from RMB 746.3 million for the year ended December 31, 2022[77] - Sales and marketing expenses for the year ended December 31, 2023, decreased by 2.2% to RMB 274.5 million from RMB 280.6 million for the year ended December 31, 2022[78] - Administrative expenses for the year ended December 31, 2023, decreased by 2.9% to RMB 105.1 million from RMB 108.2 million for the year ended December 31, 2022[79] - Employee benefit expenses decreased to RMB 589,812,000 from RMB 730,874,000, a reduction of 19.4%[172] Cash Flow and Investments - Operating cash outflow for the year was RMB 79.5 million, a decrease of 84.5% from RMB 514.5 million in the previous year[59] - The net cash used in investing activities for the year ended December 31, 2023, was RMB 589.1 million, compared to RMB 85.7 million for the year ended December 31, 2022[88] - The net cash used in operating activities for the year ended December 31, 2023, was RMB (79.5) million, compared to RMB (514.5) million for the year ended December 31, 2022, representing an improvement of 84.5%[117] - The company reported a net cash outflow from financing activities of RMB 19.2 million for the year ended December 31, 2023, a decrease of 83.8% from RMB 118.3 million for the year ended December 31, 2022[119] - The total capital expenditure for the years ended December 31, 2023, and 2022, was RMB 4.4 million and RMB 40.6 million, respectively, reflecting a decrease of 89.2% due to reduced purchases of intangible assets[121] Corporate Governance and Future Plans - The board of directors is reviewing the effectiveness of the corporate governance structure to assess the need for separating the roles of Chairman and CEO[129] - The company is taking a more cautious approach in identifying suitable acquisition and investment targets due to global economic uncertainties[127] - The company has delayed the expected timeline for utilizing net proceeds for strategic acquisitions and investments in entertainment and technology sectors to July 2024, primarily due to the need for more time to identify suitable IP[101] - The company plans to utilize the remaining net proceeds from the global offering for enhancing development capabilities and expanding the game portfolio, with 40% allocated to this purpose, amounting to RMB 943.5 million[100] Taxation and Compliance - The effective tax rate for taxable profits in Hong Kong is 16.5% for the years ended December 31, 2023, and 2022[196] - The company’s taxable profits in China are subject to a tax rate of 25% for the years ended December 31, 2023, and 2022[197] - Tianjin Zulong Technology Co., Ltd. has renewed its high-tech enterprise status, allowing it to enjoy a preferential income tax rate of 15% from November 2023 to November 2026[198] - Beijing Fantasy Mermaid Technology Co., Ltd. has also renewed its high-tech enterprise status, granting it a 15% preferential income tax rate from December 2022 to December 2025[199] - A new policy effective from 2023 allows companies engaged in R&D activities to claim 200% of their R&D expenses as an excess deduction when determining taxable profits[200]