网龙(00777) - 2019 - 中期财报

Revenue Performance - The company's revenue for the first half of 2019 reached RMB 2,672,500,000, representing an 8.2% year-on-year growth[4] - Revenue from the gaming business was RMB 1,575,800,000, accounting for 59.0% of total revenue, with a year-on-year increase of 51.6%[4] - Revenue from the education business was RMB 1,048,500,000, representing 39.2% of total revenue, but decreased by 24.2% year-on-year[4] - The gaming business revenue for the first half of 2019 increased by 51.6% year-on-year, reaching RMB 1,575,800,000[9] - Mobile game revenue surged by 76.2%, while PC game revenue recorded a strong growth of 47.5% year-on-year[9] - The overseas market also performed well, with revenue growth of 52.1% year-on-year[9] - The flagship IP "Magic Domain" saw a total revenue increase of 56.5% year-on-year, driven by marketing efforts and new content releases[9] - The education business revenue for the first half of 2019 was RMB 1,048,500,000, a decrease of 24.2% year-on-year; excluding irregular tender income, it grew by 4.7%[11] - Online and mobile game revenue for the six months ended June 30, 2019, was RMB 1,575,849,000, compared to RMB 1,039,346,000 in 2018, indicating a significant increase[100] - Education revenue, including sales of educational equipment and related services, was RMB 1,048,529,000 for the six months ended June 30, 2019, down from RMB 1,384,074,000 in 2018[100] Profitability and Financial Performance - Gross profit amounted to RMB 1,865,000,000, reflecting a 33.0% year-on-year growth[4] - The company’s attributable profit surged to RMB 421,000,000, more than doubling from RMB 200,700,000 in the first half of 2018, marking a 109.7% increase[7] - Operating profit increased significantly to RMB 480,363,000, compared to RMB 211,679,000 in the previous year, marking a growth of 126.7%[58] - Net profit for the period was RMB 375,486,000, a substantial increase of 111.1% from RMB 177,742,000 in 2018[58] - Basic earnings per share rose to RMB 79.66, compared to RMB 37.63 in the same period last year, reflecting a growth of 111.5%[59] - The company reported a profit of RMB 375,486,000 for the six months ended June 30, 2019, compared to RMB 177,742,000 for the same period in 2018, representing a year-over-year increase of approximately 111.1%[65] Cash Flow and Liquidity - Operating cash inflow was RMB 420,300,000, compared to an outflow of RMB 156,700,000 in the same period last year[4] - The group maintains sufficient cash reserves and credit commitments from major financial institutions to meet short-term and long-term liquidity needs, with minimal liquidity risk[21] - Cash and cash equivalents, including bank balances, reached RMB 1,674,425,000, up from RMB 1,483,352,000 in the previous year[60] - Operating cash flow before changes in working capital was RMB 680,925,000, significantly up from RMB 327,234,000 in the previous year, indicating strong operational performance[65] - The company reported a net cash outflow from investing activities of RMB 255,651,000, an improvement from RMB 341,920,000 in the previous year, suggesting better cash management[66] Market Strategy and Expansion - The company plans to launch an online tutoring service (AskMo) in the upcoming academic year to monetize user traffic on the Edmodo platform[7] - The company is implementing a large-scale market strategy for Promethean products in China, recently winning a significant order in Fuzhou[8] - The group plans to expand its online tutoring services and has significant tender opportunities in emerging markets like Egypt, Russia, and Turkey[12] - Future outlook remains positive with expectations of continued revenue growth and market expansion strategies being discussed[58] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[108] Shareholder Information and Dividends - The interim dividend declared for the six months ended June 30, 2019, is HKD 0.15 per share, an increase from HKD 0.10 per share in 2018[32] - The company will suspend shareholder registration from September 12 to September 13, 2019, for the purpose of dividend distribution[33] - The company reported a dividend payable of RMB 69,998,000 as of June 30, 2019, compared to no dividends payable in the previous year[61] - The interim dividend is expected to be paid on or before October 18, 2019[32] Employee and Talent Management - As of June 30, 2019, the total number of employees in the group was 6,122, with R&D accounting for 3,479 employees[22] - In the first half of 2019, the group recruited 530 new talents, primarily focusing on elite professionals in the gaming and education sectors[23] - The group conducted a total of 189 training sessions in the first half of 2019, with 8,181 participants[25] - The group has implemented a differentiated compensation strategy to ensure competitive salaries for core positions, continuously reviewing and optimizing the compensation structure[24] - The total employee costs for the period amounted to RMB 897,921,000, up from RMB 832,610,000 in the previous year, reflecting a year-on-year increase of approximately 7.8%[1] Corporate Governance and Compliance - The company has adopted a set of corporate governance standards in compliance with the Listing Rules throughout the review period[53] - The audit committee reviewed the interim financial results for the six months ended June 30, 2019, ensuring compliance with applicable accounting standards[53] - The company confirmed compliance with the trading standards set out in the Listing Rules during the six months ended June 30, 2019[49] Asset Management and Investments - The total assets as of June 30, 2019, amounted to RMB 3,939,048,000, an increase from RMB 3,354,915,000 at the end of 2018[60] - The company invested RMB 258,692,000 in property, plant, and equipment during the six months ended June 30, 2019, compared to RMB 250,104,000 in the same period of 2018, indicating continued investment in infrastructure[66] - The company recognized a goodwill impairment of RMB 12,534,000, indicating challenges in certain business segments[65] - The company has invested in new technologies and product development, although specific figures were not disclosed in the conference call[58] Financial Instruments and Fair Value - The company has chosen to account for the convertible preferred shares as financial liabilities measured at fair value through profit or loss[152] - The fair value of convertible preferred shares was RMB 95,651,000 as of June 30, 2019, down from RMB 108,904,000 at the end of 2018, reflecting a decrease of 12.3%[191] - The expected discount rates for cash flow valuation of convertible preferred shares ranged from 14.28% to 23.87%[191] Acquisitions and Strategic Partnerships - The acquisition of Edmodo, Inc. was completed for a total value of $137,500,000, consisting of $15,000,000 in cash and the issuance of 112,560,245 Series B shares[48] - The net identifiable assets acquired from Edmodo amounted to RMB 95,714,000, resulting in goodwill of RMB 64,444,000 generated from the acquisition[169] - The group sold its entire equity interest in Beijing Qihang Interactive Network Technology Co., Ltd. for RMB 400,000 on April 20, 2019, to focus on other business areas[172]