XD INC(02400)2024-03-28 04:01Revenue and Profitability - Revenue for the year ended December 31, 2023, was RMB 3,389,144 thousand, a decrease of 1.2% compared to RMB 3,430,936 thousand in 2022[2] - Gross profit increased by 12.7% to RMB 2,068,370 thousand from RMB 1,835,259 thousand in the previous year[2] - The adjusted loss for the year was RMB 9,406 thousand, significantly reduced by 98.1% from RMB 494,256 thousand in 2022[2] - As of December 31, 2023, the company's game business revenue decreased by 14.7% year-on-year to RMB 2,091.7 million[16] - The revenue from online games fell by 15.1% to RMB 1,961.5 million, primarily due to decreased income from titles like "Sausage Man" and "Ulala"[16] - The revenue from paid games decreased by 2.5% to RMB 120.6 million, attributed to a decline in existing titles[16] - The gross profit for the gaming segment was RMB 976,138 thousand, resulting in a gross margin of 47%, while the platform segment achieved a gross profit of RMB 1,092,232 thousand with a gross margin of 84%[53] - The total revenue recognized at a point in time was RMB 2,292,354 thousand for the year ended December 31, 2023, compared to RMB 1,799,699 thousand in 2022[56] User Metrics - Average monthly active users for online games decreased by 23.3% to 12,446 thousand from 16,224 thousand in 2022[3] - Average monthly paying users for online games decreased by 16.9% to 1,307 thousand from 1,573 thousand in 2022[3] - The TapTap platform's average monthly active users for the Chinese version decreased by 13.6% to 35,810 thousand from 41,451 thousand in 2022[3] - The average MAUs for the TapTap international version decreased by 36.6% to 5.8 million, mainly due to reduced marketing efforts and the impact of popular games[13] Cost Management - The cost of revenue decreased by 17.2% year-on-year to RMB 1,320.8 million[19] - Game business revenue cost decreased by 16.6% to RMB 1,115.5 million for the year ended December 31, 2023, primarily due to reduced revenue sharing and commissions from game developers and distribution platforms[21] - TapTap platform revenue cost decreased by 20.3% to RMB 205.2 million for the year ended December 31, 2023, mainly due to a reduction in bandwidth and server hosting costs[22] - Sales and marketing expenses decreased by 6.2% to RMB 865.2 million for the year ended December 31, 2023, due to cost-cutting measures[24] - R&D expenses decreased by 20.9% to RMB 1,015.7 million for the year ended December 31, 2023, attributed to reduced employee benefits and a decrease in the number of R&D personnel[25] - General and administrative expenses decreased by 3.9% to RMB 224.6 million for the year ended December 31, 2023, mainly due to a reduction in back-office staff[26] Financial Performance - Net loss for the year ended December 31, 2023, was RMB 65.4 million, significantly reduced from a net loss of RMB 574.0 million in the previous year[29] - Adjusted EBITDA for the year ended December 31, 2023, was RMB 158.4 million, compared to an adjusted EBITDA loss of RMB 353.0 million in the previous year[31] - The company reported a basic and diluted loss per share of RMB 0.18 for the year ended December 31, 2023, compared to RMB 1.17 in the previous year, showing a reduction in loss per share[40] Assets and Liabilities - The company's cash and cash equivalents, along with short-term investments, increased to RMB 3,206,821 thousand as of December 31, 2023, from RMB 3,098,084 thousand as of December 31, 2022[35] - The asset-liability ratio decreased to 57.6% as of December 31, 2023, down from 60.3% as of December 31, 2022, indicating improved financial stability[37] - Total assets decreased from RMB 4,796,054 thousand in 2022 to RMB 4,409,442 thousand in 2023, representing a decline of approximately 8.1%[41] - Total liabilities decreased from RMB 2,890,405 thousand in 2022 to RMB 2,540,691 thousand in 2023, representing a reduction of approximately 12.1%[43] - The company reported a significant decrease in property, plant, and equipment from RMB 96,211 thousand in 2022 to RMB 43,693 thousand in 2023, a decline of about 54.6%[41] Future Plans and Developments - The launch of new games such as "Torchlight: Infinite" and "T3 Arena" is expected to drive future revenue growth despite a decline in the main game "Sausage Man" revenue[5] - The company plans to further utilize AIGC technology to enhance content production efficiency and user service capabilities[5] - The company aims to launch the "Ragnarok M" original version server in the first half of 2024 to improve player experience[8] - The company plans to launch multiple new games in both domestic and international markets in 2024, expanding its product lines[10] Corporate Governance and Compliance - The audit committee has reviewed the audited consolidated financial statements for the year ended December 31, 2023, confirming compliance with applicable accounting principles and standards[90] - The company has adopted a corporate governance code and has complied with all applicable provisions, except for the separation of the roles of Chairman and CEO[88] - The company has confirmed that all directors have complied with the standard code for securities trading as of December 31, 2023[89] Convertible Bonds and Financial Instruments - The company issued convertible bonds with a total principal amount of USD 280 million at an annual interest rate of 1.25%, maturing on April 12, 2026[74] - The company plans to redeem all unexercised convertible bonds totaling $159,600,000 on April 12, 2024, as per the bondholders' request[87] - The company repurchased convertible bonds with a principal amount of USD 55 million in November and December 2023, with a liability portion of RMB 383 million and a difference of RMB 6 million recognized as "other losses" in the comprehensive income statement[77]