BOYAA(HK:00434)2021-04-23 10:32Financial Performance - In 2020, Boyaa Interactive recorded revenue of approximately RMB 351.5 million, an increase of about 8.5% compared to 2019, primarily due to increased online gaming activity during the COVID-19 pandemic[15]. - The company reported an unaudited adjusted loss of approximately RMB 45.1 million for 2020, compared to an adjusted profit of approximately RMB 34.2 million in 2019, largely due to the economic downturn caused by the pandemic[16]. - Excluding non-operating one-time factors, the adjusted profit for 2020 would have increased by approximately 10.3% year-on-year, mainly due to the increase in revenue[16]. - The company reported a loss of approximately RMB 45.1 million for 2020, compared to a profit of approximately RMB 34.2 million in 2019, with a significant increase in loss in Q4 2020 compared to Q3 2020 by approximately 2,674.7%[25]. - Revenue for Q4 2020 was approximately RMB 77.6 million, a decrease of about 0.9% compared to RMB 78.3 million in Q4 2019[50]. - Mobile game revenue increased to approximately RMB 45.9 million, up about 5.0% from RMB 43.7 million in the same period last year[50]. User Engagement Metrics - The number of paying players decreased by approximately 29.6% from about 0.3 million in Q4 2019 to about 0.2 million in Q4 2020[27]. - Daily active users fell by approximately 36.5% from about 2.6 million in Q4 2019 to about 1.6 million in Q4 2020[27]. - Monthly active users decreased by approximately 37.2% from about 7.1 million in Q4 2019 to about 4.5 million in Q4 2020[27]. - The number of paying players decreased to 235,000 in 2020 from 334,000 in 2019, representing a decline of 29.6%[106]. - Daily active users fell to 1,626,000 in 2020, down 36.5% from 2,561,000 in 2019[106]. - Monthly active users decreased to 4,493,000 in 2020, a drop of 37.2% compared to 7,149,000 in 2019[106]. Cost and Expenses - The cost of revenue increased by approximately 6.4% to RMB 109.2 million in 2020 from RMB 102.7 million in 2019[34]. - Selling and marketing expenses increased by approximately 17.9% to RMB 24.6 million in 2020, representing about 7.0% of revenue, up from 6.4% in 2019[37]. - Administrative expenses rose by approximately 3.2% to RMB 121.3 million in 2020 from RMB 117.6 million in 2019[39]. - Cost of revenue rose to approximately RMB 27.2 million, an increase of about 5.2% from RMB 25.9 million in Q4 2019[51]. - Selling and marketing expenses increased by approximately 14.4% to RMB 6.6 million, up from RMB 5.7 million in Q4 2019[53]. - Administrative expenses rose to approximately RMB 34.3 million, a 10.4% increase from RMB 31.1 million in the same period last year[56]. Assets and Equity - The total assets of the company as of the end of 2020 were RMB 2,333.2 million, a decrease from RMB 2,393.2 million in 2019[24]. - The company's total equity decreased from RMB 2,110.2 million in 2019 to RMB 2,046.8 million in 2020[24]. - The company's non-current assets decreased from RMB 1,318.3 million in 2019 to RMB 1,158.0 million in 2020[24]. Investments and Financial Products - The fair value of equity investments classified as other comprehensive income increased to approximately RMB 67.2 million, up from RMB 45.2 million in the previous year[71]. - The fair value of investments measured at fair value through profit or loss as of December 31, 2020, was approximately RMB 708.0 million, a decrease of 29.0% from RMB 997.4 million as of December 31, 2019[72]. - The fair value loss recorded for investments measured at fair value through profit or loss was approximately RMB 140.6 million for the year ended December 31, 2020, representing a 132.8% increase compared to a loss of RMB 60.4 million for the year ended December 31, 2019[72]. - The group held bank wealth management products totaling approximately RMB 373.8 million as of December 31, 2020[90]. - The investment in the "Tianlibao" wealth management product from Industrial and Commercial Bank of China had an initial investment of RMB 200 million, with a fair value of RMB 215.3 million, representing 9.2% of the group's total assets[90]. - The "e Ling Tong" wealth management product from Industrial and Commercial Bank of China had an initial investment of RMB 128.5 million, with a fair value of RMB 136.9 million, representing 5.9% of the group's total assets[90]. Regulatory Compliance and Corporate Governance - The company plans to continue strict compliance with Chinese laws and regulations while focusing on high-quality intellectual competitive online games and events in 2021[19]. - The company has complied with all relevant Chinese laws and regulations, obtaining all necessary licenses and approvals for its operations in China during the fiscal year ending December 31, 2020[123]. - The company has established a system to prevent minors from becoming addicted to online games, in compliance with recent regulatory requirements[124]. - The company maintains close contact with relevant Chinese regulatory authorities to ensure compliance with contractual arrangements and applicable laws[118]. - The company has adopted internal procedures to ensure compliance with regulatory requirements in both domestic and overseas markets[118]. Employee and Operational Insights - The company has a total of 279 full-time employees, with 223 involved in game development and operations[83]. - The total employee costs for the year ended December 31, 2020, amounted to approximately RMB 82.7 million, accounting for about 32.4% of the total expenses[84]. - The company has a strong focus on employee development, offering various training programs and incentive measures to motivate its workforce[125]. - The company has implemented measures to manage risks associated with its expanding scale and business, including cost control and talent retention[118]. Shareholder and Dividend Information - The group did not recommend the payment of a final dividend for the year ended December 31, 2020[131]. - The group repurchased a total of 6,050,000 shares at a total cost of HKD 4,212,350 during the year ended December 31, 2020[147]. - The group canceled a total of 10,875,000 repurchased shares during the year ended December 31, 2020, reducing the issued share capital accordingly[147]. - The board has the authority to declare and distribute dividends based on the group's financial performance and cash flow situation[136]. - The group has a dividend policy that requires maintaining sufficient cash reserves for future growth and operational needs[135]. Risk Factors - The company faces significant risks, including reliance on the Texas Hold'em series, which accounted for over 65% of past revenues[112]. - The company must continuously improve existing games and enhance player experience to retain and attract users[112]. - The company relies heavily on social media and third-party payment providers for revenue generation, making these relationships critical[112]. - Regulatory changes in China could severely impact the company's contractual arrangements and operational rights[112]. Board and Management Changes - Independent non-executive director Mr. Sun Zihua resigned from the board effective July 16, 2020, with no disagreements with the board[196]. - Mr. Kong Fanwei was appointed as an independent non-executive director and member of the audit, nomination, and remuneration committees effective July 16, 2020[196]. - One-third of the directors are required to retire and be eligible for re-election at each annual general meeting, including Ms. Tao Ying and Mr. Zhang Yilin[197].