INFINITIES TECH(HK:01961)2020-04-20 11:14Financial Performance - The company's revenue increased by approximately RMB 76.2 million or 53.3% to RMB 219.2 million for the year ended December 31, 2019, compared to RMB 143.0 million for the previous year[10]. - Gross profit rose by approximately RMB 17.3 million or 27.7% to RMB 79.6 million for the year ended December 31, 2019, from RMB 62.3 million in the previous year[15]. - The company reported a net profit of RMB 41.2 million for the year ended December 31, 2019, down from RMB 51.7 million in the previous year[10]. - The adjusted net profit increased from approximately RMB 38.9 million in 2018 to approximately RMB 49.6 million in 2019, a growth of RMB 10.7 million or 27.2%[144]. - The effective tax rate increased from 12.0% in 2018 to 25.2% in 2019, primarily due to non-deductible listing expenses and withholding tax on retained earnings[170]. - The total employee cost for the year ended December 31, 2019, was approximately RMB 8.6 million, with 64 full-time employees primarily located in Guangzhou[180]. Assets and Equity - Non-current assets increased to RMB 6.2 million in 2019 from RMB 0.7 million in 2018[12]. - Total assets rose to RMB 191.6 million in 2019, compared to RMB 162.7 million in 2018[12]. - Total equity increased to RMB 125.4 million in 2019 from RMB 84.4 million in 2018[12]. - As of December 31, 2019, the total assets amounted to RMB 192,076,000[104]. Revenue Sources - Revenue from mobile game development and operations increased by RMB 98.9 million, partially offset by a decrease of RMB 24.1 million in revenue from digital media content distribution[15]. - The company plans to focus on the development and operation of single-player and multiplayer mobile games in 2020, with the launch of multiple new titles including "Dream Edge" and "Fire Dragon Slayer" expected in Q2 2020[20]. - The company anticipates that revenue from multiplayer mobile game development and operation will become a larger portion of its overall revenue in 2020[20]. Shareholder Information - As of December 31, 2019, the major shareholders hold significant stakes, with Mr. Liang, Mr. Lu, and Ms. Su each holding 61.85% of the shares through controlled corporations[50]. - Mr. Xu holds 3.08% of the shares, representing his stake in AE Majoris Tech[52]. - The company has a total of 86.02% capital contribution in Guangzhou Jiu Zun, held collectively by the directors[54]. - The major shareholders are required to disclose their interests in accordance with the Securities and Futures Ordinance, ensuring transparency[59]. Governance and Compliance - The company has established a governance framework that includes provisions for the appointment and termination of directors[46]. - The independent non-executive directors have also been appointed for an initial term of three years, effective from the listing date[46]. - The board consists of seven directors, including two executive directors, two non-executive directors, and three independent non-executive directors[195]. - The board has complied with listing rules by appointing at least three independent non-executive directors, constituting at least one-third of the board members[198]. Market Outlook - The market size of online digital entertainment media in China is projected to grow from RMB 212.6 billion in 2013 to RMB 615.6 billion in 2018, representing a compound annual growth rate (CAGR) of 23.7%[16]. - From 2018 to 2022, the market size is expected to continue growing at a CAGR of 24.2%, reaching RMB 1,446.4 billion by 2022[16]. - The company is focused on enhancing its R&D capabilities and product competitiveness in a challenging gaming industry environment[15]. Operational Challenges - The company continues to maintain its operational capabilities despite uncertainties arising from the COVID-19 outbreak, ensuring financial viability for at least the coming year[19]. - The group faces risks related to the immature development of the mobile gaming market in China, including regulatory changes and reliance on distribution channels[182]. Dividends and Reserves - The board proposed a final cash dividend of HKD 0.0252 per share for the year ended December 31, 2019[31]. - As of December 31, 2019, the company's distributable reserves amounted to approximately RMB 188 million, with RMB 12.36 million recommended for the final dividend[37]. Contractual Arrangements - The company has established a series of contractual arrangements with Guangzhou Jiuzun to exert management control and enjoy all economic benefits[71]. - The management service contract grants exclusive rights to the foreign-invested enterprise for all rights, ownership, and intellectual property developed by Guangzhou Jiuzun[81]. - The irrevocable stock purchase agreement allows the foreign-invested enterprise to purchase all or part of Guangzhou Jiuzun's shares without needing consent from shareholders[85]. Risk Management - The company has implemented measures to mitigate risks associated with contractual arrangements and potential tax liabilities[110]. - The company is closely monitoring current and future applicable Chinese laws and regulations to ensure compliance and maintain control by Chinese investors[106].