HOMELAND ITL(03798)2020-04-27 12:06Financial Performance - For the year ended December 31, 2019, the company's revenue was approximately RMB 565.0 million, representing an increase of about 28.5% compared to the previous year[10]. - The gross profit for the same period was approximately RMB 442.3 million, reflecting a growth of approximately 31.5% year-over-year[10]. - The adjusted net profit, excluding share-based payment expenses of approximately RMB 82.2 million and listing expenses of RMB 17.8 million, was about RMB 306.8 million, an increase of approximately 32.1% from RMB 232.2 million in 2018[10]. - The company reported a revenue of approximately RMB 565.0 million and a gross profit of approximately RMB 442.3 million for the year ended December 31, 2019, representing an increase of about 28.5% and 31.5% respectively compared to the previous year[13]. - The total profit and comprehensive income for the year decreased by approximately 4.5% from RMB 216.5 million in 2018 to RMB 206.8 million in 2019[28]. - The profit margin declined from approximately 49.3% in 2018 to 36.6% in 2019, primarily due to increased costs and expenses related to share-based payments and significant business growth[28]. - The company’s net profit for the year ended December 31, 2019, was RMB 384,755 thousand, an increase from RMB 177,967 thousand in 2018, representing a growth of 116.2%[197]. - The company reported a total comprehensive income of RMB 206,788 thousand for the year 2019, compared to RMB 204,091 thousand in 2018, indicating a slight increase of 0.8%[197]. User Metrics - The total registered players reached 163,403,629 as of December 31, 2019, marking an increase of approximately 68.3% from the previous year[10]. - Daily Active Users (DAUs) increased to 5,644,751, up approximately 8.4% compared to the previous year[10]. - The number of paying players reached 4,142,772, which is an increase of approximately 28.4% year-over-year[10]. - Following the COVID-19 outbreak in December 2019, the group experienced a significant increase in DAUs and sales of virtual tokens and private game room cards in the first two months of 2020 due to more people staying at home[58]. Assets and Equity - Non-current assets amounted to RMB 79.0 million as of December 31, 2019, compared to RMB 17.3 million in 2018[8]. - Current assets increased to RMB 649.7 million in 2019 from RMB 279.5 million in 2018[8]. - The total equity of the company was RMB 616.6 million as of December 31, 2019, compared to RMB 212.7 million in 2018[8]. - Cash and cash equivalents as of December 31, 2019, amounted to approximately RMB 502.4 million, up from RMB 218.2 million in 2018[33]. - The company’s total equity increased to RMB 616,577,000 in 2019 from RMB 212,735,000 in 2018, representing a growth of 200.0%[196]. Expenses and Costs - Sales and marketing expenses increased by approximately 110.5% to about RMB 98.2 million in 2019, driven by higher advertising and in-game promotion expenditures[23]. - Administrative expenses rose by approximately 41.2% to about RMB 36.8 million in 2019, mainly due to an increase in personnel and professional service fees[24]. - The total employee cost for the year ended December 31, 2019, was approximately RMB 159.1 million, up from RMB 60.2 million in 2018, representing an increase of 164%[38]. - The increase in employee costs was mainly due to share-based payment expenses of approximately RMB 82.2 million[38]. Game Development and Offerings - The company successfully launched 38 new Mahjong variants and 14 new Poker variants in 2019, expanding its game offerings significantly[13]. - The company plans to launch nearly 100 new localized Mahjong variants, 35 new poker variants, and 13 new casual games in 2020 to expand its business coverage[18]. - The company aims to maintain its leading position in the localized mobile card game market in China, leveraging technological advancements and increasing internet connectivity[13]. Advertising and Revenue Streams - The company confirmed advertising revenue of approximately RMB 61.8 million in 2019, with promotional activities leading to a decrease of about 8.8% in revenue from private game room cards compared to the same period in 2018[13]. - Advertising revenue accounted for approximately 10.9% of total revenue in 2019, with virtual currency sales, private game room cards, and third-party mobile game distribution contributing approximately 47.0%, 34.7%, and 7.4% respectively[18]. - The company plans to further enhance advertising revenue by collaborating with other platform operators to integrate in-game advertising slots and utilizing data analytics to optimize ad placement strategies[15]. Corporate Governance - The company has adopted the corporate governance code as per the listing rules, ensuring compliance since the listing date[119]. - The board consists of eight directors, including five executive directors and three independent non-executive directors as of December 31, 2019[124]. - All independent non-executive directors have confirmed their independence according to the listing rules[125]. - The company maintains high standards of corporate governance to protect shareholder interests and enhance corporate value[119]. Environmental and Social Responsibility - The company has implemented measures to improve resource efficiency, including training on water and electricity conservation and promoting double-sided printing[162]. - The company strictly adheres to all relevant workplace health and safety laws, including the Labor Law of the People's Republic of China, ensuring a safe working environment for employees[167]. - The company promotes a paperless office and encourages employees to reduce paper usage, aligning with its waste management principles[160]. - The company has established a supplier code of conduct to ensure compliance with environmental, social, and governance standards, requiring suppliers to adhere to ethical business practices[171]. Strategic Plans and Future Outlook - The company is actively seeking potential collaborations or acquisition opportunities with small to medium-sized mobile game developers to enhance its game-related resources and operational capabilities[13]. - The company believes the impact of the COVID-19 pandemic on its business will be limited, as it has seen a significant increase in DAUs and sales of virtual tokens and private game room cards in the first two months of 2020[15]. - In 2020, the group plans to continue implementing growth strategies to solidify its leading position in the localized mobile card game industry in China[59].