LINEKONG(HK:08267)2021-08-13 08:43Financial Performance - The company reported a significant reduction in operating losses for the year 2020, leading to increased investment in self-developed games and film and television projects for long-term growth[10]. - The company's revenue decreased by approximately 54.6% from about RMB 107.3 million in the six months ended June 30, 2020, to about RMB 48.7 million in the same period of 2021[23]. - Game business revenue contributed approximately RMB 37.8 million, a decrease of about 47.3% or RMB 35.2 million compared to the same period last year, primarily due to fewer new game releases and the decline of existing games[26]. - The revenue from the film and television business was approximately RMB 9.4 million, a decrease of about 71.4% from approximately RMB 32.9 million in the same period last year, mainly due to seasonal impacts[27]. - The group's gross profit for the six months ended June 30, 2021, was approximately RMB 20.1 million, a decrease of about 46.5% from RMB 37.6 million for the same period in 2020[30]. - The company's net loss for the three months ended June 30, 2021, was RMB 3,608 thousand, compared to a profit of RMB 5,458 thousand in the same period of 2020, marking a significant turnaround[108]. - The company reported a total revenue of RMB 369,544 thousand for the six months ended June 30, 2021, compared to RMB 447,772 thousand for the same period in 2020, indicating a decline of approximately 17.4%[142]. Game Development and Releases - The game business launched new products such as "Naughty Heaven 2" and is conducting internal technical testing on several titles, with a focus on expanding into overseas markets like South Korea, Japan, and North America[10]. - The MMORPG mobile game "Wild Era" is currently in the technical testing phase, with plans for commercial testing in the second half of 2021[13]. - The AVG+RPG female-oriented mobile game "Zhen Huan Chuan: Floating Life Dream" has entered the later stages of development, promising a rich gameplay experience[13]. - The game "Naughty Heaven 2" incorporates elements of traditional Chinese culture, aiming to attract both new and existing players through its unique gameplay and aesthetic[13]. - The company plans to continue developing self-researched games focusing on IP, female-oriented, and casual games while actively expanding into overseas markets[19]. Film and Television Projects - The urban romance drama "You Are Like This, Mr. Gu" achieved over 100 million views within three days of its release on Tencent Video, indicating strong audience engagement[10]. - The company is actively pursuing a matrix layout in its film and television business, with multiple IP projects in script development, enhancing its content portfolio[10]. - The company has launched six excellent drama series and has several high-quality potential works in reserve, focusing on different content segments[15]. - The company has plans for new projects, including the ancient costume adventure web drama "Cloud Sea Legend," expected to start production in 2021[18]. Financial Position and Cash Flow - As of June 30, 2021, the group had cash and cash equivalents of approximately RMB 85.4 million, compared to RMB 84.7 million as of December 31, 2020[44]. - The total assets as of June 30, 2021, amounted to RMB 557,119 thousand, a decrease from RMB 572,434 thousand as of December 31, 2020, representing a decline of approximately 2.9%[98]. - The company reported a net cash inflow from operating activities of RMB 12,778 thousand for the six months ended June 30, 2021, compared to RMB 14,765 thousand for the same period in 2020, representing a decrease of approximately 13.5%[149]. - The company experienced a net cash outflow from investing activities of RMB 7,142 thousand, a significant decrease from a net inflow of RMB 102,833 thousand in the previous year[148]. - The total cash and cash equivalents at the end of the period were RMB 85,379 thousand, down from RMB 161,678 thousand at the end of the previous year, indicating a decrease of approximately 47.3%[150]. Shareholder Dynamics and Ownership Structure - As of June 30, 2021, the total issued share capital was 367,974,964 shares[60]. - Major shareholders include Zhu Li with 21.53% (79,216,540 shares) and Wangfeng Management Limited with 18.09% (66,576,160 shares) as of June 30, 2021[67]. - The ownership structure indicates a high concentration of equity among a few major shareholders, with the top five shareholders holding over 70% of the total shares[70]. - The company is under the control of significant entities, including Fosun International, which holds 72.14% of Fosun Holdings[71]. - The report highlights the importance of understanding shareholder dynamics for future strategic decisions and market positioning[77]. Employee Compensation and Incentives - The company has adopted a share option scheme to incentivize directors and eligible participants, enhancing employee retention and motivation[50]. - The total employee compensation for the six months ended June 30, 2021, was approximately RMB 26.8 million, an increase of 8.1% from RMB 24.8 million for the same period in 2020[49]. - The company has a vesting schedule for options granted, with 25% vesting after 10 months and 100% after 46 months[83]. Risk Management and Financial Instruments - The company did not experience any changes in risk management policies during the six months ending June 30, 2021[162]. - The fair value of financial assets includes RMB 3,000 thousand in financial products and RMB 55,878 thousand in unlisted securities as of June 30, 2021[165]. - The company utilized various valuation methods to determine the fair value of financial instruments, including market quotes and discounted cash flow models[171].