BOYAA(HK:00434)2020-09-18 09:00Revenue and Profitability - In Q2 2020, the company recorded revenue of approximately RMB 954 million, an increase of about 18.8% compared to RMB 803 million in Q2 2019[18]. - For the first half of 2020, the company achieved revenue of approximately RMB 1,885 million, reflecting a year-on-year increase of about 17.4%[18]. - The company reported an adjusted loss of approximately RMB 255 million in Q2 2020, a reduction of about 209.9% compared to the same period in 2019[19]. - The adjusted loss for the first half of 2020 was approximately RMB 136 million, a decrease of about 121.3% year-on-year[19]. - The company's gross profit for the three months ended June 30, 2020, was approximately RMB 67.4 million, representing a year-on-year increase of about 24.9% from approximately RMB 54.0 million in the same period of 2019[25]. - The company's gross profit for the six months ended June 30, 2020, was approximately RMB 132.6 million, representing a year-on-year increase of about 21.5% from approximately RMB 109.2 million in the same period of 2019[40]. - The company reported a loss attributable to owners of approximately RMB 13.6 million for the six months ended June 30, 2020, a decrease of about 121.5% compared to a profit of RMB 63.1 million in the same period of 2019[49]. User Metrics - The number of paying players decreased by 32.3% from approximately 430,000 in Q1 2020 to about 290,000 in Q2 2020[20]. - Daily active users fell by 12.8% from approximately 2.5 million in Q1 2020 to 2.2 million in Q2 2020[20]. - Monthly active users decreased by 22.4% from approximately 7.8 million in Q1 2020 to about 6.1 million in Q2 2020[20]. Expenses and Costs - For the three months ended June 30, 2020, the company's revenue cost was approximately RMB 28.0 million, an increase of about 6.4% compared to approximately RMB 26.3 million for the same period in 2019[24]. - Sales and marketing expenses for the three months ended June 30, 2020, were approximately RMB 6.1 million, a year-on-year increase of about 43.3% from approximately RMB 4.3 million in the same period of 2019[27]. - Administrative expenses for the three months ended June 30, 2020, were approximately RMB 31.2 million, an increase of about 12.5% compared to approximately RMB 27.8 million for the same period in 2019[29]. - The company experienced a significant increase in marketing and administrative expenses, totaling RMB 70,663,000 and RMB 59,150,000 respectively for the six months ended June 30, 2020[167]. Financial Position - The company's debt-to-asset ratio as of June 30, 2020, was 12.0%, slightly up from 11.8% as of December 31, 2019[53]. - As of June 30, 2020, the company had fixed deposits of approximately RMB 728.3 million, an increase from RMB 388.2 million as of December 31, 2019[54]. - Cash and cash equivalents amounted to approximately RMB 326.2 million as of June 30, 2020, down from RMB 487.3 million as of December 31, 2019[55]. - Total assets amounted to RMB 2,388,119 thousand, a slight decrease from RMB 2,393,155 thousand as of December 31, 2019[170]. - Total liabilities increased from RMB 282,912 thousand to RMB 286,372 thousand, with current liabilities rising from RMB 270,089 thousand to RMB 274,985 thousand[172]. - The net current assets improved from RMB 1,456,092 thousand to RMB 1,567,212 thousand, indicating a stronger liquidity position[172]. Investments and Acquisitions - The company has invested a total 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 203.8 million as of June 30, 2020[62]. - The company recorded a fair value loss of approximately RMB 71.1 million on investments measured at fair value through profit or loss for the six months ended June 30, 2020, compared to a fair value gain of RMB 4.9 million for the same period in 2019[60]. - The company reported a total of RMB 335,200 thousand in new acquisitions during the reporting period[195]. Corporate Governance and Compliance - The company complied with the Corporate Governance Code as of June 30, 2020, ensuring a balance of power and authority within the board[150]. - The board consists of two executive directors and three independent non-executive directors, ensuring a significant level of independence[150]. - The company is closely monitoring updates to the 2019 Foreign Investment Law to ensure compliance[104]. - The company has a trust structure that includes various stakeholders, ensuring diversified ownership[113]. Employee Incentives - The company aims to attract and retain skilled personnel through the restricted share unit plan, enhancing its future development and expansion efforts[123]. - The total number of options granted under the post-IPO share option plan and the post-IPO share option plan is 12,900,672[132]. - The company has appointed a trustee to manage and allocate restricted share units (RSUs) under the RSU plan, allowing for the issuance of shares to facilitate the exercise of RSUs[128]. Taxation - Income tax expenses for the six months ended June 30, 2020, were approximately RMB 14.0 million, an increase of about 47.6% from RMB 9.5 million for the same period in 2019[48]. - The actual income tax rate for Boya Shenzhen was 15% for the six months ended June 30, 2020, consistent with the previous year[100]. - Both Boya Shenzhen and Boya China benefit from a reduced income tax rate of 15%, which will not adversely affect the group's operating performance, particularly net profit and profit margin[100]. Cash Flow - Cash flow from operating activities increased to RMB 72,173 thousand for the six months ended June 30, 2020, compared to RMB 37,673 thousand in the same period of 2019, representing an increase of 91.5%[178]. - Cash used in investing activities amounted to RMB 224,842 thousand, a significant increase from cash inflow of RMB 203,336 thousand in the previous year[178]. - The company reported a significant reduction in restricted bank deposits, which were RMB 91,449 thousand in the previous year, indicating a strategic shift in cash management[178].