GAMEONE(HK:08282)2020-03-31 08:57Financial Performance - For the fiscal year ended December 31, 2019, the company recorded a net loss of approximately HKD 2.0 million, a significant decrease from a net loss of approximately HKD 24.6 million in the same period of 2018, primarily due to tighter control over service costs, selling expenses, and administrative expenses [10][15]. - The group's revenue decreased by approximately 23.9% from about HKD 105.4 million in 2018 to approximately HKD 80.2 million for the year ended December 31, 2019, primarily due to a reduction in game operation revenue by about HKD 25.2 million [20]. - Revenue from licensed games accounted for 73.9% of total revenue in 2019, down from 88.3% in 2018, while revenue from self-developed or co-developed games increased to 23.9% from 9.2% [21]. - Gross profit increased by approximately 6.9% to about HKD 23.1 million in 2019, with the gross profit margin rising by approximately 8.3 percentage points to 28.8% [25]. - The group recorded a loss of approximately HKD 2.0 million for the year ended December 31, 2019, a significant improvement from a loss of approximately HKD 24.6 million in 2018 [30]. - The company reported a loss before tax of HKD 1,963,000 for 2019, improving from a loss of HKD 24,634,000 in 2018 [188]. - Total revenue for the year ended December 31, 2019, was HKD 80,180,000, a decrease of 23.9% compared to HKD 105,447,000 in 2018 [188]. - Total assets as of December 31, 2019, were HKD 62,461,000, down from HKD 68,488,000 in 2018, representing a decrease of 8.3% [188]. - Total liabilities decreased to HKD 17,324,000 in 2019 from HKD 21,132,000 in 2018, a reduction of 18.5% [188]. - The net asset value as of December 31, 2019, was HKD 45,137,000, down from HKD 47,356,000 in 2018 [188]. Cost Management - The cost of services provided decreased by approximately 31.9% to about HKD 57.1 million for the year ended December 31, 2019, from about HKD 83.9 million in 2018 [24]. - Administrative expenses decreased by approximately 26.2% to about HKD 12.7 million for the year ended December 31, 2019, primarily due to reductions in employee costs and legal and professional fees [28]. - The total employee cost for the year ended December 31, 2019, was approximately HKD 20.0 million, a decrease from approximately HKD 22.0 million in 2018 [45]. Market Strategy - The company aims to expand its market share in the mobile gaming industry through organic growth and strategic partnerships, focusing on investing selectively in game developers, development teams, and other gaming operators and distributors [11][16]. - The company plans to enhance its brand awareness by associating its brand with high-quality games and attractive gaming experiences, investing in talent, expanding its game development team, and upgrading software and hardware to meet increasing technical demands [11]. - The company intends to introduce more quality licensed games and focus on mobile gaming to strengthen its market positioning and enhance marketing efforts [16]. - The company operates primarily in the Hong Kong and Taiwan markets, utilizing its game distribution platform and third-party distribution platforms to operate and publish self-developed and co-developed games [15]. Corporate Governance - The company has a strong emphasis on compliance and corporate governance, overseen by non-executive directors [63]. - The company is committed to maintaining high standards of corporate governance and compliance [63]. - The board has adopted the corporate governance code and has complied with all applicable provisions during the year ended December 31, 2019 [81]. - The board is responsible for overseeing the management of the company and ensuring alignment with shareholder interests [83]. - The company has appointed three independent non-executive directors, constituting over one-third of the board [87]. - The independent non-executive directors have confirmed their independence according to the criteria set out in the GEM Listing Rules [87]. - The board has reviewed the corporate governance policies and is satisfied with their effectiveness [83]. - The company has established a code of conduct for securities trading by directors, with no violations reported during the review period [82]. - The company is focused on creating long-term value for shareholders through effective governance practices [80]. - The company has established three board committees: the Remuneration Committee, the Nomination Committee, and the Audit Committee, to oversee specific areas of the company's affairs [93]. Risk Management - The board is responsible for monitoring the risk management and internal control systems, which are designed to manage risks rather than eliminate them [127]. - The company appointed Zhiwei Management Consultants Limited to independently review and assess the effectiveness of its risk management and internal control systems, with recommendations adopted by the board [128]. - The company has established a corporate governance framework for risk management, following the COSO framework, to effectively manage various risks [131]. - The risk register is maintained to track identified major risks and is updated at least annually to ensure proactive risk management [132]. - The company has no internal audit department currently but will continue to review the need for one at least annually [135]. Shareholder Communication - The company has adopted a shareholder communication policy to ensure timely and equal access to information for shareholders and potential investors [136]. - Multiple channels have been established for communication with shareholders, enhancing engagement with existing shareholders and potential investors [137]. - The company will hold its annual general meeting on May 8, 2020, to discuss key matters with shareholders [100]. Environmental Compliance - The company has maintained compliance with all relevant environmental laws and regulations throughout the year ending December 31, 2019 [140]. - The company has adopted green initiatives and measures in its daily operations, including resource recycling and energy-saving practices [140]. Dividend Policy - The company has a dividend policy that considers financial performance, shareholder equity, and future capital requirements before proposing any dividends [119]. - The company did not recommend the distribution of a final dividend for the year ended December 31, 2019, consistent with the previous year [146]. - The company will continue to review its dividend policy and retains the discretion to update or modify it at any time, with no legal obligation to declare dividends [121].