7ROAD(00797)2024-03-28 12:24Financial Performance - Total revenue for the year ended December 31, 2023, was approximately RMB 627.7 million, an increase of 16.1% compared to the previous year[2] - The company recorded a loss attributable to owners of approximately RMB 146.5 million for the year ended December 31, 2023, a decrease of 151.8% compared to the previous year[2] - The company's total revenue for the year ended December 31, 2023, was approximately RMB 627.7 million, a 16.1% increase compared to the previous year[9] - The company's game business revenue for the year ended December 31, 2023, was approximately RMB 471.8 million, a 10.7% increase compared to the previous year, driven by the game "Dan Dan Tang Adventure"[10] - The company's cloud computing and related cloud services revenue for the year ended December 31, 2023, was approximately RMB 148.1 million, a 39.2% increase compared to the previous year[10] - The company's gross profit for the year ended December 31, 2023, was approximately RMB 383.1 million, a 46.7% increase compared to the previous year, with a gross margin of 61.0%, up 12.7 percentage points[12] - The company's net loss attributable to owners for the year ended December 31, 2023, was approximately RMB 146.5 million, a decrease of 151.8% compared to the same period in 2022[17] - Revenue for the year ended December 31, 2023, increased to RMB 627.732 million, up from RMB 540.630 million in 2022, representing a growth of approximately 16.1%[33] - Gross profit for 2023 was RMB 383.104 million, a significant increase from RMB 261.203 million in 2022, reflecting a 46.7% growth[33] - The company reported a net loss of RMB 144.894 million for 2023, compared to a net profit of RMB 279.606 million in 2022[33] - The company's total comprehensive loss for 2023 was RMB 146.912 million, compared to a total comprehensive income of RMB 285.629 million in 2022[34] - The company's earnings per share (basic and diluted) for 2023 was a loss of RMB 0.0569, compared to a profit of RMB 0.1097 in 2022[33] - The company's attributable loss was RMB 146,461 thousand in 2023, compared to a profit of RMB 282,499 thousand in 2022[52] Expenses and Costs - The company's R&D expenses for the year ended December 31, 2023, were approximately RMB 168.5 million, a 30.1% increase compared to the previous year, due to increased investment in R&D[13] - The company's administrative expenses for the year ended December 31, 2023, were approximately RMB 72.4 million, a 19.6% increase compared to the previous year, mainly due to increased property rental costs[14] - The company's sales and marketing expenses for the year ended December 31, 2023, were approximately RMB 49.8 million, a 56.9% decrease compared to the previous year, as promotional activities stabilized[15] - The company's cost of revenue for the year ended December 31, 2023, was approximately RMB 244.6 million, a 12.5% decrease compared to the previous year, mainly due to reduced game agency and IP amortization costs[11] - Research and development expenses increased to RMB 168.489 million in 2023, up from RMB 129.482 million in 2022, a rise of approximately 30.1%[33] - Employee benefit expenses increased to RMB 185,264 thousand in 2023 from RMB 158,704 thousand in 2022[49] - Promotion and advertising expenses decreased significantly to RMB 49,102 thousand in 2023 from RMB 115,408 thousand in 2022[49] - Financial costs net amounted to a loss of RMB 23,547 thousand in 2023, compared to a loss of RMB 20,178 thousand in 2022[50] - Income tax expense was RMB 4,685 thousand in 2023, compared to RMB 3,783 thousand in 2022[51] Game Business - The global gaming market size in 2023 is estimated at 90.5 billion[4] - The company plans to launch the self-developed game "Dan Dan Tang X" in Q4 2024 and is pre-researching the sequel "Dan Dan Tang 2"[5] - The company's Japanese IP mobile game "Gintama Assembly" obtained a game license in February 2024 and is expected to undergo distribution testing within the year[5] - The company plans to expand its global distribution business, with "Dan Dan Tang Retro Edition" expected to undergo testing in North America, Europe, and other regions starting in Q2 2024[5] - The company's game business revenue for the year ended December 31, 2023, was approximately RMB 471.8 million, a 10.7% increase compared to the previous year, driven by the game "Dan Dan Tang Adventure"[10] - The company's average monthly active users for web games were approximately 0.7 million, with average monthly paying users of 32,300 and average revenue per paying user of RMB 587[7] - The company's average monthly active users for mobile games were approximately 0.7 million, with average monthly paying users of 65,000 and average revenue per paying user of RMB 729[7] - Revenue from self-developed games distributed by the company increased to RMB 356,996 thousand from RMB 165,569 thousand, while revenue from games distributed by other publishers decreased to RMB 112,961 thousand from RMB 151,949 thousand[46] - The company's game portfolio includes network games that can be played on various computer or mobile networks[71] - The company's games include web-based games that can be played directly in a browser without downloading any client or application[72] Cloud Computing Business - The company has signed an agreement to sell an indirect subsidiary responsible for the main part of its cloud computing business[6] - The company's cloud computing and related cloud services revenue for the year ended December 31, 2023, was approximately RMB 148.1 million, a 39.2% increase compared to the previous year[10] - Total revenue for 2023 was RMB 627,732 thousand, up from RMB 540,630 thousand in 2022, with cloud computing and cloud-related services contributing RMB 148,105 thousand, up from RMB 106,367 thousand[46] Capital and Investments - Cash and cash equivalents decreased by 54.1% to approximately RMB 48.1 million as of December 31, 2023, compared to RMB 104.7 million in 2022[18] - Total capital expenditures for the year ended December 31, 2023, were approximately RMB 47.8 million, a decrease of 74.0% compared to RMB 183.8 million in 2022[20] - The company's debt-to-asset ratio decreased to 22.9% as of December 31, 2023, from 28.2% in 2022[20] - The fair value of the company's investment in Shanghai Chaoxin was approximately RMB 383.5 million as of December 31, 2023, representing 16.9% of the company's total assets[23] - The company's total borrowings increased to approximately RMB 231.0 million as of December 31, 2023, compared to RMB 206.9 million in 2022[19] - The company's investment in Shanghai Chaoxin represents a 2.2% indirect stake, with a total capital commitment of RMB 380 million[23] - The company's capital expenditures on servers and other equipment decreased by 97.8% to RMB 4.02 million in 2023 from RMB 183.18 million in 2022[22] - The company's capital expenditures on office furniture and leasehold improvements increased by 164.8% to RMB 1.69 million in 2023 from RMB 639,000 in 2022[22] - The company's total assets decreased to RMB 1,928.117 million as of December 31, 2023, from RMB 1,955.212 million in 2022[35] - Cash and cash equivalents decreased to RMB 48.088 million in 2023, down from RMB 104.747 million in 2022[36] - The company's current liabilities decreased to RMB 349.477 million in 2023, compared to RMB 454.827 million in 2022[36] - Non-current liabilities increased to RMB 290,464 thousand from RMB 170,508 thousand, with lease liabilities at RMB 49,503 thousand, bank and other borrowings at RMB 112,656 thousand, and deferred tax liabilities at RMB 8,349 thousand[38] - Total equity attributable to the company's owners increased to RMB 1,900,609 thousand from RMB 1,751,913 thousand, with retained earnings rising to RMB 780,608 thousand from RMB 633,675 thousand[39] - The company's net current liabilities amounted to RMB 3,221 thousand, with non-refundable contract liabilities of RMB 35,354 thousand[42] - The fair value of financial assets at fair value through profit or loss increased to RMB 884,172 thousand in 2023 from RMB 696,359 thousand in 2022[55] - Total borrowings increased to RMB 231,003 thousand in 2023 from RMB 206,877 thousand in 2022, with secured other borrowings at RMB 181,003 thousand and unsecured bank borrowings at RMB 10,000 thousand[61] - The company entered into financing lease agreements for servers and equipment with a total cash consideration of RMB 256,000 thousand, with a lease term of 48 months and a repurchase option at the end of the lease term[61] - The actual annual interest rate for other borrowings ranges from 8.00% to 8.42%, secured by property, plant, and equipment valued at RMB 202,979 thousand and trade receivables of RMB 15,192 thousand[62] - The company received a bank loan of RMB 40,000 thousand in 2023 with an annual interest rate of 3.80%, secured by property, plant, and equipment valued at RMB 7,816 thousand and right-of-use assets valued at RMB 33,272 thousand[62] - An unsecured bank loan of RMB 10,000 thousand was obtained in 2023 with an annual interest rate of 3.70%, guaranteed by a subsidiary and repayable within one year[62] Corporate Governance and Compliance - The company did not declare or intend to declare any dividends for the year ended December 31, 2023[54] - The company confirmed compliance with the Corporate Governance Code for the year ended December 31, 2023[64] - The audit committee reviewed the annual results for the year ended December 31, 2023, and is composed of three independent non-executive directors[66] - The annual report for the year ended December 31, 2023, will be published on the company's website by the end of April 2024[68] - The company's shares are listed on the Main Board of the Hong Kong Stock Exchange under the stock code 797[70] - The company's board of directors includes executive directors Meng Shuqi, Li Zhengquan, and Yang Cheng, as well as independent non-executive directors Xue Jun, Li Yiqing, and Lyu Zhihao[72] - The company's financial reporting currency is the Chinese Yuan (RMB)[71] - The company has a subsidiary, Shenzhen Seventh Path Technology Co., Ltd., established under Chinese law in 2008[71] - The company has a subsidiary, Shanghai Super Silicon Semiconductor Co., Ltd., established under Chinese law[71] User Metrics and Definitions - Monthly paying users refer to the number of paying users during a specific calendar month[71] - Paying users are defined as registered users who have recharged their game accounts at least once with virtual items purchased from the company during a specified period, regardless of whether the virtual items were consumed[71] Other Financial Information - The company's estimated income tax rate for entities not exempt from tax ranged from 12.5% to 25% for the year ended December 31, 2023[16] - Impairment losses on trade receivables increased significantly to RMB 28,018 thousand from RMB 5,051 thousand, while other receivables impairment losses decreased to RMB 5,608 thousand from RMB 6,395 thousand[46] - Government grants decreased to RMB 3,235 thousand from RMB 6,312 thousand, and VAT refunds from China dropped to RMB 1,847 thousand from RMB 3,621 thousand[47] - Other net gains or losses amounted to a loss of RMB 180,227 thousand in 2023, compared to a gain of RMB 353,160 thousand in 2022[48] - Trade receivables decreased to RMB 169,254 thousand in 2023 from RMB 368,329 thousand in 2022[56] - Trade and other payables decreased to RMB 108,183 thousand in 2023 from RMB 239,241 thousand in 2022[59] - The company did not declare a final dividend for the year ended December 31, 2023, compared to no final dividend declared in the previous year[64]