BOYAA(HK:00434)2019-09-26 12:10Financial Performance - In Q2 2019, Boyaa Interactive recorded revenue of approximately RMB 803 million, a decrease of about 35.5% compared to the same period in 2018[34]. - For the first half of 2019, the company reported revenue of approximately RMB 1,605 million, down approximately 43.5% year-on-year[34]. - The adjusted net profit for Q2 2019 was approximately RMB 232 million, a decrease of about 68.1% compared to Q2 2018[35]. - The adjusted net profit for the first half of 2019 was approximately RMB 635,000, down approximately 59.2% year-on-year[35]. - The company's profit attributable to owners for the three months ended June 30, 2019, was approximately RMB 23.0 million, a decrease of about 67.9% from RMB 71.8 million in 2018[51]. - For the six months ended June 30, 2019, the profit attributable to owners was RMB 63,114 thousand, down 58.9% from RMB 153,778 thousand in the same period of 2018[196]. - The net profit for the six months ended June 30, 2019, was RMB 63,114 thousand, down 59.0% from RMB 153,778 thousand in the previous year[194]. - The total comprehensive income attributable to owners for the six months ended June 30, 2019, was RMB 55,402 thousand, down 48.7% from RMB 108,000 thousand in the same period of 2018[196]. User Engagement - The number of paying users decreased by 17.8% from approximately 480,000 in Q1 2019 to about 400,000 in Q2 2019[36]. - Daily active users fell by 8.7% from approximately 2.6 million in Q1 2019 to 2.4 million in Q2 2019[36]. - Monthly active users decreased by 10.3% from approximately 8.3 million in Q1 2019 to about 7.4 million in Q2 2019[36]. Cost and Expenses - The cost of revenue for the same period was approximately RMB 26.3 million, down about 26.5% from RMB 35.8 million in 2018[40]. - Gross profit for the three months ended June 30, 2019, was approximately RMB 54.0 million, a decrease of about 39.1% from RMB 88.6 million in 2018[41]. - The gross margin for the three months ended June 30, 2019, was approximately 67.2%, compared to 71.2% for the same period in 2018[42]. - Sales and marketing expenses for the three months ended June 30, 2019, were approximately RMB 4.3 million, a decrease of about 49.3% from RMB 8.4 million in 2018[43]. - Administrative expenses for the same period were approximately RMB 27.8 million, down about 16.3% from RMB 33.2 million in 2018[45]. Investments and Financial Assets - The company made a cumulative investment of RMB 300.0 million in the Jiaxing Boya Spring Thunder Equity Investment Partnership, representing 99.0% of the total committed capital, with a fair value of approximately RMB 321.6 million as of June 30, 2019[78]. - The investment portfolio of Jiaxing Boya is primarily focused on the information technology sector (58.7%), agricultural technology (32.1%), and online gaming (9.2%), with no profits distributed from these investments as of June 30, 2019[85]. - The fair value of financial assets measured at fair value through profit or loss was approximately RMB 1,313.6 million, a decrease from RMB 1,409.0 million as of December 31, 2018, reflecting a decline of about 6.8%[75]. - The realized/unrealized fair value gains from financial assets measured at fair value through profit or loss for the six months ended June 30, 2019, were approximately RMB 4.9 million, significantly lower than RMB 47.4 million for the same period in 2018, indicating a decrease of approximately 89.7%[75]. Corporate Governance and Compliance - The company has implemented corporate governance measures to address any potential conflicts of interest between the group and its directors[118]. - The company has introduced independent non-executive directors to review and monitor compliance with contractual arrangements[118]. - The company is closely monitoring updates to the Foreign Investment Law to ensure compliance with all relevant laws and regulations[125]. - The company has taken steps to mitigate risks associated with contractual arrangements and potential tax implications[120]. - The group may face significant uncertainties regarding the legality and effectiveness of contractual arrangements under the new Foreign Investment Law[124]. Shareholder Information - Major shareholders include Zhang Wei with approximately 34.08% ownership and Cantrust (Far East) Limited with approximately 39.13% ownership[135]. - As of June 30, 2019, the company has issued 722,520,301 shares[132]. - The company has a stock option plan approved post-IPO, which has a remaining term of about 4 years and 4 months as of June 30, 2019[141]. - The company has implemented a Restricted Share Unit (RSU) plan approved by the board on September 17, 2013, aimed at incentivizing directors, senior management, and employees to contribute to the group's future development and expansion[146]. Cash and Liquidity - Cash and cash equivalents as of June 30, 2019, amounted to approximately RMB 818.6 million, an increase from RMB 390.3 million as of December 31, 2018[72]. - The company had no short-term or long-term bank borrowings as of June 30, 2019, indicating a strong liquidity position[79]. - The company reported a potential impact on its financial position due to the freezing of cash reserves amounting to RMB 350 million, which remains uncertain as of the report date[187]. Future Plans and Strategies - The company plans to enhance market research and innovate game play to improve player experience and expand overseas markets[37]. - The company plans to utilize internal resources and sustainable growth for expansion, investment, and operational financing[68]. - The company anticipates that the acquisitions will further enhance its game product offerings and expand its overseas market share[96].