BOYAA(HK:00434)2021-09-17 09:02Financial Performance - In Q2 2021, the company recorded revenue of approximately RMB 966 million, a 13.7% increase from Q1 2021 and a 1.2% increase year-over-year[18]. - For the first half of 2021, the company reported revenue of approximately RMB 1,815 million, a decrease of about 3.7% compared to the same period in 2020[18]. - The adjusted net profit for Q2 2021 was approximately RMB 52 million, compared to an adjusted net loss of RMB 161 million in Q1 2021[19]. - The adjusted net profit for Q2 2021 increased by 49.2% compared to Q1 2021, primarily due to the increase in revenue[19]. - The adjusted net loss for the first half of 2021 was approximately RMB 110 million, a reduction of about 19.3% compared to the same period in 2020[19]. - For the three months ended June 30, 2021, the company's revenue was approximately RMB 96.6 million, a year-on-year increase of about 1.2% compared to RMB 95.4 million for the same period in 2020[24]. - Gross profit for the three months ended June 30, 2021, was approximately RMB 65.1 million, a decrease of about 3.5% from RMB 67.4 million in 2020[26]. - The gross margin for the three months ended June 30, 2021, was approximately 67.4%, down from 70.7% in the same period of 2020[27]. - The company recorded a net profit attributable to owners of approximately RMB 5.2 million for the three months ended June 30, 2021, compared to a loss of RMB 25.5 million in the same period of 2020[35]. - For the six months ended June 30, 2021, the company's revenue was approximately RMB 181.5 million, a year-on-year decrease of about 3.7% from RMB 188.5 million in 2020[38]. - The gross profit for the six months ended June 30, 2021, was approximately RMB 122.7 million, a decrease of about 7.5% from RMB 132.6 million in 2020[41]. - The gross margin for the six months ended June 30, 2021, was approximately 67.6%, down from 70.4% in the same period of 2020[42]. - The company reported a net profit of approximately RMB 35.3 million for the three months ended June 30, 2021, excluding the impact of non-operating one-time factors[35]. User Metrics - The number of paying players decreased by approximately 13.2% from about 280,000 in Q1 2021 to about 240,000 in Q2 2021[21]. - Daily active users decreased by approximately 9.1% from about 1.5 million in Q1 2021 to 1.4 million in Q2 2021[21]. - Monthly active users decreased by approximately 9.6% from about 4.4 million in Q1 2021 to about 4.0 million in Q2 2021[21]. Expenses and Costs - The cost of revenue for the same period was approximately RMB 31.5 million, representing a year-on-year increase of about 12.6% from RMB 28.0 million in 2020[25]. - Administrative expenses decreased by approximately 33.2% to RMB 20.9 million for the three months ended June 30, 2021, compared to RMB 31.2 million in 2020[29]. - Sales and marketing expenses for the six months ended June 30, 2021, were approximately RMB 142 million, an increase of about 26.6% compared to RMB 112 million for the same period in 2020, primarily due to increased advertising and promotional activities[43]. - Administrative expenses for the six months ended June 30, 2021, were approximately RMB 426 million, a decrease of about 28.0% compared to RMB 592 million for the same period in 2020, mainly due to reduced professional service fees[44]. Investments and Financial Position - As of June 30, 2021, the company had fixed deposits of approximately RMB 961.8 million, an increase from RMB 725.6 million as of December 31, 2020[55]. - The fair value of investments measured at fair value through other comprehensive income was approximately RMB 643 million as of June 30, 2021, down from RMB 672 million as of December 31, 2020[58]. - The fair value of investments measured at fair value through profit or loss was approximately RMB 6,322 million as of June 30, 2021, compared to RMB 7,080 million as of December 31, 2020, with a fair value loss of approximately RMB 702 million for the six months ended June 30, 2021[60]. - The company made investments totaling RMB 48.0 million in financial products with a licensed bank in China, which were fully redeemed by June 30, 2021[61]. - The company has invested RMB 300.0 million in a limited partnership, accounting for 99.0% of the total committed capital, with a fair value of approximately RMB 33.0 million as of June 30, 2021[62]. - The fair value of two financial products purchased from the Industrial and Commercial Bank of China was approximately RMB 218.8 million and RMB 138.9 million as of June 30, 2021[64]. - The company's total capital expenditure for the six months ended June 30, 2021, was approximately RMB 9.0 million, compared to RMB 2.9 million for the same period in 2020[66]. - The company reported frozen funds amounting to approximately RMB 671,758,000 as of June 30, 2021, due to a court ruling in mainland China[148]. Corporate Governance and Compliance - The board consists of two executive directors and three independent non-executive directors, ensuring strong independence[142]. - The audit committee, composed of three independent non-executive directors, reviewed the unaudited interim financial statements for the six months ended June 30, 2021[147]. - The company has complied with the Corporate Governance Code, with a deviation regarding the nomination committee chair being an executive director[141]. - The company is committed to maintaining high standards of corporate governance and will continue to review its governance status[142]. - The group has implemented corporate governance measures to address any potential conflicts of interest between the group and its directors[93]. Shareholder Information - As of June 30, 2021, the company had issued 710,876,301 shares[107]. - Mr. Dai Zhikang holds 36,500,000 shares, representing approximately 5.13% of the company's equity[105]. - Mr. Zhang Wei is the founder of a trust holding 246,237,474 shares, accounting for approximately 34.64% of the company's equity[111]. - Cantrust (Far East) Limited holds 282,737,474 shares, representing approximately 39.77% of the company's equity[111]. - Boyaa Global Limited holds 176,572,474 shares, which is about 24.84% of the company's equity[111]. - Emily Technology Limited owns 69,665,000 shares, accounting for approximately 9.80% of the company's equity[111]. Taxation and Legal Matters - The actual income tax rate for Boya Shenzhen for the six months ended June 30, 2021, was 15%, consistent with the previous year[97]. - Boya China also renewed its "High-tech Enterprise" qualification, maintaining a 15% preferential tax rate for the period from January 1, 2019, to December 31, 2021[97]. - The group is closely collaborating with tax advisors to ensure timely tax filings and satisfactory responses to any inquiries from Chinese tax authorities[98]. - The group may face increased income tax liabilities due to differing tax rates between Boya China and Boya Shenzhen, potentially impacting overall performance[96]. Risk Management - The company maintains a cautious approach towards its investment portfolio in light of uncertainties in the online gaming and information technology sectors due to the COVID-19 pandemic[76]. - The group has established measures to mitigate risks associated with contractual arrangements and ensure compliance with applicable laws and regulations[89]. - If Boya Shenzhen were to declare bankruptcy or face liquidation, the group could lose access to significant assets essential for its operations[94]. Share Options and Employee Compensation - The total number of share options and restricted share units granted and unexercised amounted to 10,722,886[125]. - The total number of share options granted under the post-IPO share option plan was 6,082,429, with a total of 5,722,429 remaining unexercised[125]. - The company has a ten-year exercise period for each share option granted under the post-IPO share option plan[129]. - The company did not propose any interim dividend for the six months ended June 30, 2021[138].