XD INC(HK:02400)2023-09-26 08:35Revenue and Profitability - Revenue for the first half of 2023 reached RMB 1,753,102 thousand, a 10.0% increase from RMB 1,594,037 thousand in the same period of 2022[11]. - The company's total revenue for the six months ended June 30, 2023, was RMB 1,753.1 million, compared to RMB 1,594.0 million for the same period in 2022, marking a year-on-year increase[28]. - As of June 30, 2023, the company's game revenue increased by 2.1% year-on-year to RMB 1,149.9 million, with online game revenue rising by 3.7% to RMB 1,080.1 million[29]. - The information services segment saw a revenue increase of 29.0% year-on-year to RMB 603.2 million, driven by an increase in new game launches in the Chinese market[33]. - The company reported a net profit of RMB 102.8 million for the period, a significant turnaround from a net loss of RMB 381.4 million in the previous year[44]. - Adjusted profit attributable to equity holders was RMB 112.98 million, compared to a loss of RMB 342.50 million in the first half of 2022[50]. - Gross profit increased by 32.5% to RMB 1,037.3 million, with a gross margin of 59.2%, up from 50.9% in the previous year[38]. - Operating profit for the six months was RMB 122,693 thousand, a turnaround from an operating loss of RMB 406,427 thousand in the previous year[112]. - The total comprehensive income for the six months ended June 30, 2023, was RMB 114,440,000, compared to a loss of RMB 332,822,000 in the same period of 2022, representing a significant turnaround[113]. User Engagement and Game Performance - Average monthly active users for online games decreased by 13.5% to 13,269 thousand compared to 15,346 thousand in the previous year[12]. - Average monthly paying users for online games decreased by 9.2% to 1,389 thousand from 1,530 thousand year-on-year[12]. - TapTap's average monthly active users for the Chinese version decreased by 18.6% to 33,967 thousand, while the international version saw a 20.5% decline to 7,135 thousand[12]. - The launch of "Torchlight: Infinite" and "T3 Arena" contributed to user growth, offsetting declines from "Sausage Man" and other titles[18]. - The top five games by revenue contribution included "Sausage Man," "Ragnarok M," "Torchlight: Infinite," "Ulala," and "Shen Xian Dao (HD)"[18]. - The average monthly active users (MAUs) for the TapTap China version app decreased by 18.6% year-on-year to 34.0 million as of June 30, 2023, but rebounded to 39.3 million in July 2023[24]. Cost Management and Expenses - The company maintains a disciplined cost control strategy, which has helped return to profitability in the first half of 2023[16]. - The company's cost of revenue decreased by 11.7% year-on-year to RMB 715.8 million for the six months ended June 30, 2023[34]. - Sales and marketing expenses decreased by 18.2% to RMB 330.4 million, primarily due to cost-cutting measures[39]. - R&D expenses fell by 19.6% to RMB 527.8 million, attributed to a reduction in employee benefits and a decrease in the number of R&D staff from 1,387 to 1,143[40]. - General and administrative expenses decreased by 2.6% to RMB 101.8 million, mainly due to a reduction in back-office staff[41]. - Total expenses for the six months ended June 30, 2023, were RMB 1,673.944 million, down from RMB 1,975.768 million in 2022, indicating a decrease of approximately 15.3%[165]. Financial Position and Investments - Cash and cash equivalents increased to RMB 3.30 billion as of June 30, 2023, up from RMB 3.10 billion at the end of 2022[51]. - The company's short-term investments amounted to RMB 428.17 million, with an annualized return rate between 2.35% and 3.86%[52]. - The debt-to-asset ratio improved to 58.1% as of June 30, 2023, down from 60.3% at the end of 2022[53]. - The company has no significant investments, acquisitions, or disposals as of June 30, 2023[54]. - The company has allocated RMB 556.5 million from share placement proceeds to enhance R&D capabilities and game portfolio, with no funds utilized yet[67]. - The company reported a foreign currency translation gain of RMB 8,774,000 for the period, compared to a gain of RMB 48,183,000 in the previous year[113]. - Total assets as of June 30, 2023, amounted to RMB 4,803,884,000, slightly up from RMB 4,796,054,000 at the end of 2022[116]. - Non-current liabilities decreased to RMB 177,205,000 from RMB 2,019,899,000, reflecting a significant reduction in long-term debt[117]. - The equity attributable to equity holders of the company increased to RMB 2,017,394,000 from RMB 1,888,329,000, indicating a strengthening of the company's financial position[116]. Shareholder Information and Stock Options - The company granted a total of 852,678 stock options on July 6, 2023, under its stock option plan adopted on June 25, 2021[68]. - The company’s chairman and CEO, Huang Yimeng, holds 157,605,000 shares, representing 32.80% of the total issued shares as of June 30, 2023[77]. - The stock option plan does not attach performance targets, aligning the interests of participants with those of the company and its shareholders[90]. - The total number of shares that can be issued under the stock option plan is 48,020,663 shares, accounting for 10% of the issued shares[92]. - The maximum number of shares that may be issued under the stock option plan cannot exceed 10% of the issued shares as of the adoption date, totaling 48,043,070 shares[87]. - The company has a stock option plan that was adopted on June 25, 2021, with a remaining term of approximately 8 years as of June 30, 2023[85]. Future Plans and Strategic Focus - The company plans to further integrate AIGC technology into game development to enhance content production efficiency and user service capabilities[16]. - The company plans to launch new games, including "Sword of Convallaria" in Q4 2023, and "GoGo Muffin" in late 2023 or early 2024[20]. - The company aims to enhance its international version team and focus on targeted version development and operations in key overseas markets[25]. - The company plans to continue focusing on market expansion and new product development to drive future growth[118]. - The company plans to reinvest its cumulative undistributed profits of RMB 1,348 million in its Chinese subsidiaries for further business expansion, with no dividends declared to foreign shareholders in the foreseeable future[172].