GAMEONE(HK:08282)2021-03-31 08:55Financial Performance - The company recorded a net loss of approximately HKD 10.1 million for the fiscal year ending December 31, 2020, compared to a net loss of approximately HKD 2.0 million in the same period of 2019, representing an increase in net loss of about 405%[10]. - Revenue from licensed games and self/co-developed games decreased by approximately 36.0% compared to the same period in 2019, contributing to the increase in net loss[10]. - The company's revenue decreased by approximately 36.0% from about HKD 80.2 million in 2019 to approximately HKD 51.3 million for the year ended December 31, 2020, primarily due to reduced operational income from licensed and self/co-developed games and delays in new game launches[24]. - Revenue from self/co-developed games was HKD 14.2 million (27.6% of total revenue) in 2020, down from HKD 19.2 million (23.9%) in 2019[25]. - Revenue from licensed games was HKD 35.7 million (69.7% of total revenue) in 2020, down from HKD 59.2 million (73.9%) in 2019[25]. - Mobile games generated HKD 43.9 million (85.5% of total revenue) in 2020, compared to HKD 72.3 million (90.1%) in 2019[27]. - The company's gross profit decreased by approximately 53.7% from about HKD 23.1 million in 2019 to approximately HKD 10.7 million in 2020, with a gross margin of about 20.9%, down 7.9 percentage points from 28.8% in 2019[29]. - The total comprehensive loss for the year was HKD 11,086,000, compared to a loss of HKD 2,219,000 in 2019, indicating a worsening financial position[196]. Market Position and Strategy - The company faces intense competition in the gaming industry in Hong Kong and Taiwan, with competitors having stronger financial, technical, and market resources[11]. - The company has secured rights to adapt various popular literature, comics, and animations into games, which is expected to maximize market recognition and acceptance with lower marketing costs[12]. - The company operates and distributes games through its own platform and third-party distribution platforms, including Apple Store and Google Play, enhancing its market position[16]. - The company aims to leverage over a decade of experience in game development, operation, and distribution in the Hong Kong market to stand out among competitors[11]. - The company is focused on integrating upstream and downstream services in the gaming industry value chain to improve its market position[16]. - The company plans to expand its market share in the mobile gaming industry through organic growth and strategic partnerships with game developers and distributors[17]. - The company continues to explore new strategies and opportunities for market expansion in the gaming sector[11]. Corporate Governance - The company is committed to maintaining high levels of corporate governance, which is crucial for gaining and maintaining the trust of shareholders and stakeholders[84]. - The board of directors has adopted the corporate governance code and has complied with all applicable provisions as of December 31, 2020[85]. - The board is responsible for overseeing the management of the company and ensuring operations align with the interests of shareholders and stakeholders[87]. - The board has reviewed the corporate governance policies and is satisfied with their effectiveness[90]. - The company has appointed three independent non-executive directors, constituting over one-third of the board, ensuring a balance of skills and experience[91]. - The board of directors has established three committees: the Remuneration Committee, the Nomination Committee, and the Audit Committee, to oversee specific areas of the company's affairs[97]. - The Remuneration Committee reviewed the remuneration of directors and senior management, concluding that it is fair and reasonable as of the year ending December 31, 2020[98]. - The Audit Committee held four meetings during the year to review the company's financial performance and internal control systems[102]. - The company provided training to all directors, ensuring they attended at least one training course related to good corporate governance practices during the year ending December 31, 2020[95]. - The company has established clear written terms of reference for all committees, which are available on the stock exchange and the company's website[97]. Risk Management - The board is responsible for monitoring the effectiveness of the group's risk management and internal control systems, which are designed to manage risks rather than eliminate them[131]. - The group established its enterprise risk management framework in 2016, following the COSO framework to effectively manage risks[135]. - The risk register is updated at least annually to track identified major risks and actions taken to mitigate them[136]. - The audit committee reviews the effectiveness of the risk management and internal control systems annually[132]. - The board believes that the internal control and risk management systems are effective and adequate based on independent assessments[132]. Financial Position - The company had cash and cash equivalents of approximately HKD 38.2 million as of December 31, 2020, down from HKD 45.0 million in 2019, with no bank borrowings[36]. - As of December 31, 2020, the company's debt-to-asset ratio was approximately 36.7%, an increase from 27.7% as of December 31, 2019[43]. - Total assets as of December 31, 2020, were HKD 53,762,000, down from HKD 62,461,000 in 2019, reflecting a decline of 14.3%[196]. - Total liabilities increased to HKD 19,711,000 in 2020 from HKD 17,324,000 in 2019, representing an increase of 13.8%[196]. - The net current asset value decreased to HKD 29,516,000 in 2020 from HKD 38,332,000 in 2019, a decline of 23.1%[196]. - The company reported that the total reserves available for distribution to shareholders amounted to approximately HKD 32,748,000, down from HKD 34,050,000 in 2019[161]. Employee and Management - The total employee cost for the year ended December 31, 2020, was approximately HKD 17.5 million, down from HKD 20.0 million for the year ended December 31, 2019[49]. - The company employed 53 employees as of December 31, 2020, a decrease from 60 employees as of December 31, 2019[49]. - The management team is composed of individuals with diverse backgrounds and expertise, enhancing the company's strategic capabilities[69]. Shareholder Relations - The company has established a policy for shareholder communication to ensure timely and unbiased access to information for shareholders and potential investors[140]. - The company will hold its annual general meeting on May 10, 2021, where the re-election of directors will be proposed[104]. - The company does not recommend the distribution of a final dividend for the year ended December 31, 2020, maintaining the same stance as in 2019[151]. - The company will continuously review its dividend policy and retains the discretion to update or modify it at any time[125].