ARCHOSAUR GAMES(HK:09990)2020-09-28 08:45Financial Performance - Archosaur Games reported a revenue of approximately $50 million for the first half of 2020, representing a year-over-year increase of 25%[1]. - The company achieved a net profit margin of 15%, with net profit reaching around $7.5 million during the same period[1]. - Revenue for the six months ended June 30 reached RMB 601.9 million, an increase of 89.6% compared to RMB 317.5 million in the same period last year[25]. - Gross profit for the same period was RMB 453.4 million, reflecting a 67.9% increase from RMB 270.1 million[25]. - Operating profit surged to RMB 69.8 million, a remarkable increase of 402.2% from RMB 13.9 million year-on-year[25]. - Adjusted net profit for the period was RMB 151.6 million, representing a staggering increase of 1,195.7% compared to RMB 11.7 million in the previous year[25]. - The company reported a net loss of RMB 787,199 thousand for the six months ended June 30, 2020, compared to a net loss of RMB 95,525 thousand in the same period of 2019[128]. - The basic and diluted loss per share for the period was RMB (2.46), compared to RMB (0.27) in the same period of the previous year[128]. - The company incurred a total comprehensive loss of RMB 787,462 thousand for the six months ended June 30, 2020[146]. User Engagement and Market Expansion - User engagement metrics showed a 30% increase in daily active users (DAUs), reaching 1.5 million users by the end of June 2020[1]. - Archosaur Games plans to launch two new MMORPG titles in the second half of 2020, aiming to capture a larger market share in the gaming industry[1]. - The company is expanding its market presence in Southeast Asia, targeting a 20% growth in user base in that region by the end of 2021[1]. - The company aims to expand its market presence in Europe, America, and Southeast Asia with new regional versions of existing games[28]. - Revenue from overseas markets reached RMB 406,568,000 for the six months ended June 30, 2020, compared to RMB 109,093,000 in 2019, indicating a significant growth in international sales[179]. Research and Development - Archosaur Games has allocated $10 million for research and development of new gaming technologies and features to enhance user experience[1]. - Research and development expenses rose to RMB 227.6 million, up 17.9% from RMB 193.0 million[25]. - The company plans to launch 8 new mobile games from 2020 to 2022, including titles like "Under the Hongtu" and "Dream New World" expected in Q4 2020[32]. - The company is focused on enhancing its engine technology and research capabilities[114]. Financial Management and Investments - The company generated 67.5% of its total revenue from overseas markets, reflecting a growth of 272.6% compared to the previous year[43]. - Cash generated from operating activities for the six months ended June 30, 2020, was RMB 277.9 million, a 152.2% increase from RMB 110.2 million in the same period of 2019[60]. - Cash used in investing activities for the six months ended June 30, 2020, was RMB 12.2 million, a decrease of 93.1% from RMB 176.9 million in the same period of 2019[61]. - The company reported a foreign exchange gain of RMB 4,369 thousand during the period[149]. - The company invested RMB 1,598,550 thousand in financial products measured at fair value through profit or loss during the reporting period[149]. Corporate Governance and Management - The company has established an audit committee to oversee financial reporting and governance practices[119]. - The CEO, Li Qing, is responsible for the overall management and strategic direction of the company[113]. - The company has a strong management team with extensive experience in finance and business development[116]. - The independent non-executive directors provide oversight and independent judgment to the board[110]. - The company has complied with all applicable corporate governance code provisions, except for the separation of roles between the chairman and CEO[97]. Share Capital and IPO - On July 15, 2020, the company successfully completed its IPO, issuing 187,400,000 shares at HKD 11.60 per share, increasing the group's net asset value[75]. - The overallotment option was fully exercised on August 11, 2020, resulting in an additional issuance of 28,110,000 shares at the same price of HKD 11.60 per share[78]. - As of the mid-term report date, the total issued share capital was 815,510,000 shares, with the overallotment shares representing a percentage of the total issued capital[82]. - Mr. Li Qing holds 278,329,802 shares, representing approximately 34.13% of the company's issued share capital[81]. - Perfect World Interactive and its related entities collectively hold 138,593,999 shares, accounting for approximately 16.99% of the issued share capital[81]. Taxation and Financial Strategy - The company expects to maintain a preferential corporate income tax rate of 15% due to its status as a high-tech enterprise[194]. - The company recorded a tax credit of RMB 6,676 thousand for the six months ended June 30, 2020, compared to a tax expense of RMB (4,798) thousand in the same period of 2019[191]. - The company has recognized a deferred tax asset of RMB 11.8 million related to its software enterprise status, reflecting its ongoing tax strategy[195].