FEIYU(HK:01022)2020-04-20 04:13Financial Performance - Total revenue for 2019 was RMB 112,851,000, a decrease from RMB 188,133,000 in 2016, representing a decline of approximately 40%[26] - Gross profit for 2019 was RMB 78,070,000, compared to RMB 130,949,000 in 2016, indicating a decrease of about 40%[26] - The company reported a pre-tax loss of RMB 87,311,000 for 2019, an improvement from a loss of RMB 117,192,000 in 2018[26] - The net loss attributable to equity holders of the parent for 2019 was RMB 80,342,000, compared to a loss of RMB 107,508,000 in 2018, indicating a reduction in losses[26] - The company reported a net loss of RMB 88.7 million for the year, a reduction of approximately 25.8% compared to the previous year[69] - Net loss for the year decreased by approximately 25.8% from RMB 119.5 million to RMB 88.7 million, with losses attributable to equity holders of the parent decreasing by approximately 25.3%[92] Assets and Equity - Total assets as of December 31, 2019, were RMB 730,730,000, down from RMB 1,325,790,000 in 2015, reflecting a decline of approximately 45%[27] - Total equity decreased to RMB 509,735,000 in 2019 from RMB 1,070,443,000 in 2015, a reduction of about 52%[27] - Total equity as of December 31, 2019, was approximately RMB 509.7 million, down from RMB 578.0 million, primarily due to the recognized loss for the year[97] Revenue Breakdown - The company's total revenue for the year ended December 31, 2019, increased by 35.6% to RMB 112.9 million, driven by online game distribution, licensing, and advertising revenue growth[34] - The total revenue from game operations was approximately RMB 59.2 million, a decrease of about 14.1% compared to RMB 69.0 million in 2018, primarily due to existing RPG games reaching the end of their life cycles[53] - Online game distribution revenue surged approximately 3,185.6% to about RMB 30.9 million, driven by the launch of several new games[74] - Licensing and intellectual property-related income increased by approximately 53.1% to about RMB 10.5 million, mainly due to a one-time licensing fee from the HTML5 version of "Gods and Demons"[75] - Advertising revenue rose to approximately RMB 11.4 million, an increase of about 85.3%, attributed to a partnership with Toutiao[75] User Engagement and Game Development - The cumulative registered users for mobile RPG and online RPG games reached approximately 55.1 million and 172.1 million, respectively, with casual games achieving around 562.8 million downloads[34] - The average monthly active users (MAU) for mobile RPG, online RPG, and casual games were approximately 33,000, 9,000, and 98,000, respectively, with corresponding average revenue per paying user (ARPPU) of RMB 75.2, RMB 142.6, and RMB 5.9[34] - The average monthly active users (MAU) for RPG mobile games decreased from approximately 51,000 in 2018 to 33,000 in 2019, attributed to the termination of several mobile RPG games[62] - The average revenue per paying user (ARPPU) for online RPG games increased from RMB 121.6 in 2018 to RMB 142.6 in 2019, mainly due to the maturity of the "Xianxia Dao" online version[63] - The company aims to enhance user engagement through various in-game promotions, regular updates for quality games, and excellent customer service[64] Market Strategy and Future Outlook - The company plans to focus on new product development and market expansion strategies in the upcoming fiscal year[29] - Future outlook includes potential mergers and acquisitions to enhance market presence and technological capabilities[29] - The company aims to seek growth opportunities in overseas markets through patent issuance and third-party game development[32] - The company plans to launch two new games in mid-2020 and a sequel to the "Defense of the Carrot" series, along with expanding licensing activities[32] - The company is actively monitoring the impact of the COVID-19 pandemic on its operations and financial condition, with no significant impact identified as of the report date[46] Operational Risks and Compliance - The company faces several operational risks, including compliance with new gaming industry policies and reliance on third-party distribution platforms[41] - The company ensures compliance with relevant laws and regulations affecting its business operations, including gaming regulations and corporate governance standards[184] Investment and Financial Management - The company has adopted a prudent cash and financial management policy, with cash generally deposited in banks primarily denominated in RMB, HKD, and USD[100] - The company has a diversified investment portfolio, with no less than 50% of total investments allocated to risk-free or capital-protected investments[106] - The company has not engaged in foreign currency hedging transactions but continuously monitors and manages foreign currency risks[100] Employee and Corporate Governance - The employee count is 387, with 60.4% in development, 19.4% in operations, and 0.8% in sales and marketing[171] - The company has implemented various long-term incentive plans for directors and senior management, including stock options and restricted share units[172] - Feiyu's environmental, social, and governance (ESG) strategies are overseen by the board, ensuring effective risk management measures are in place[198] Awards and Recognition - The company has received multiple awards, including the Golden Joystick Award for the most anticipated mobile online game for "Tianxia Chang'an" and the Tencent Game Creative Competition Gold Award for "Kaji Adventure Team" in 2019[193] - Feiyu has filed for 12 new software copyrights and obtained 5 new patents, indicating a strong focus on research and development[193]