IGG(00799)2024-04-29 10:41Financial Performance - The company achieved a profit of HKD 73 million in 2023, reversing the losses of the previous two years[6]. - In 2023, IGG's revenue reached HKD 5.3 billion, marking a 15% year-on-year growth, driven by new strategy games and app business[11]. - The company's revenue for the year ended December 31, 2023, was HKD 5,265,911, representing a 15% increase from HKD 4,591,327 in 2022[21]. - The gross profit for the year was HKD 3,919,057, a 24% increase from HKD 3,151,000 in the previous year, with a gross margin of 74%, up from 69%[24]. - The adjusted net profit for the year was HKD 114,987, compared to a loss of HKD 406,025 in 2022[21]. - The investment business yielded over HKD 55 million in profit due to recognized valuation gains from investment targets[17]. - The company reported other net income of HKD 90,369, a significant recovery from a loss of HKD 263,752 in the previous year[25]. - The company’s capital expenditure for the year included HKD 123,138 for office properties and renovations, with a total capital expenditure of HKD 134,926[32]. - The company reported a total distributable reserve of approximately HKD 2.94 billion as of December 31, 2023, which includes share premium and retained earnings[156]. - The board does not recommend any final dividend for the year ending December 31, 2023[155]. Revenue Sources - The mobile application business revenue share increased from less than 5% at the beginning of the year to over 40% by year-end[6]. - The mobile application business has evolved from initial communication apps to a diverse range of content applications, driving significant growth[6]. - The app business generated HKD 580 million, accounting for 11% of total revenue, with over 350 million registered users and around 9.5 million MAU[16]. - The classic game "King of Kingdoms" contributed over HKD 3.1 billion in revenue, while new titles "Doomsday: Last Survivors" and "Viking Rise" generated approximately HKD 700 million and HKD 400 million, respectively[11]. - The game "King of Kingdoms" has contributed approximately HKD 30 billion in revenue since its launch, maintaining its position as a top strategy game[6]. - Two new strategy games, "Doomsday: Last Survivors" and "Viking Rise," have each generated over HKD 100 million in revenue[6]. User Engagement and Growth - The total user base of IGG exceeds 1.7 billion, with monthly active users (MAU) surpassing 25 million[10]. - The game "Doomsday: Last Survivors" has reached a monthly revenue milestone of HKD 82 million, with expectations to rise to HKD 100 million by March 2024[14]. - The company has implemented innovative gameplay features in its new games to enhance user engagement and retention[8]. - The company emphasizes the importance of user experience in gaming, continuously innovating and updating game content to attract and retain users[115]. - The company hosted player interaction events in 16 countries to celebrate the 7th anniversary of "King of Kingdoms," enhancing player engagement[121]. Research and Development - The company established R&D centers in Shanghai and Chengdu to enhance its development capabilities[6]. - The company is actively integrating AI-generated content (AIGC) technology across various operational aspects to improve efficiency[8]. - The company plans to leverage Artificial Intelligence Generated Content (AIGC) technology to enhance efficiency and profitability[18]. - The company plans to continue its long-term operational strategy to ensure stable revenue growth for its new games[8]. Operational Efficiency and Cost Management - Research and development expenses decreased by 28% to HKD 934,852, reflecting ongoing optimization and cost control efforts[28]. - Sales and distribution expenses increased by 57% to HKD 2,665,908, primarily due to concentrated promotions for new games[26]. - The company aims to navigate industry challenges by focusing on continuous improvement and long-term management strategies[8]. Corporate Governance - The company has adhered to the corporate governance code, except for the deviation regarding the separation of the roles of Chairman and CEO, which are currently held by the same individual, Mr. Cai Zongjian[61]. - The board consists of nine members, including five executive directors, one non-executive director, and three independent non-executive directors, ensuring a balance of power and authority[62]. - The board diversity policy was first adopted in September 2013 and has been reviewed annually, with the latest review in March 2022, emphasizing the importance of diversity in board appointments[63]. - The company has confirmed the independence of all independent non-executive directors as of December 31, 2023, in compliance with listing rules[65]. - The audit committee is composed entirely of independent non-executive directors, ensuring unbiased oversight of financial reporting and risk management[76]. Environmental, Social, and Governance (ESG) Initiatives - The company has integrated Environmental, Social, and Governance (ESG) risks into its risk management framework[88]. - The company aims to balance business objectives with stakeholder interests through its ESG policies and practices[96]. - The company has established an ESG working group led by an executive director to oversee ESG strategies and reporting[95]. - The company promotes energy-saving and environmental protection concepts among employees to encourage sustainable living[144]. - The company has established a robust anti-corruption framework, including a dedicated anti-corruption leadership team[110]. Employee Management and Development - The total number of employees decreased to 1,976 as of December 31, 2023, down from 2,503 a year earlier, with total employee-related costs amounting to HKD 1.026 billion compared to HKD 1.3 billion in the previous year[41]. - The overall employee turnover rate is 27%, with a breakdown of 27% for both male and female employees[129]. - 100% of all employees received training, with an average training duration of 44 hours; female employees averaged 57 hours while male employees averaged 38 hours[131]. - The company conducts regular training on workplace issues such as bullying and discrimination to foster a positive work environment[128]. - IGG actively promotes employment opportunities for disabled individuals and collaborates with organizations to support their hiring[127]. Community Engagement and Social Responsibility - The company donated approximately HKD 1.7 million for charitable causes in 2023[139]. - The company supported disaster relief efforts in Turkey and Syria by providing emergency supplies and engaging local players in the initiative[142]. - The company actively participates in community building and social responsibility initiatives[104]. - The company has integrated charitable elements into its games, raising awareness for social causes through in-game events[141]. Shareholder Structure and Equity Management - The company has a significant shareholder structure, with Mr. Cai Zongjian holding 295,559,643 shares, representing 24.91% of the total shares[159]. - The performance incentive shares granted to executives are part of a broader strategy to align interests with shareholders[160]. - The company is actively managing its equity structure to ensure alignment and performance incentives for key personnel[162]. - The overall shareholding percentages indicate a concentrated ownership, which may impact governance and decision-making processes[159]. Compliance and Risk Management - The company emphasizes compliance with local laws and regulations in its global operations, including advertising practices[124]. - The company has established internal policies to ensure proper handling and communication of insider information, with annual training provided to employees[88]. - The company has integrated climate change risks into its risk assessment framework, identifying low overall risk exposure[146]. - The board is responsible for assessing the nature and extent of risks the company is willing to take to achieve its strategic objectives[88].