FEIYU(HK:01022)2024-08-28 10:07Financial Performance - For the six months ended June 30, 2024, the company reported total revenue of RMB 101.8 million, a decrease of 5.7% compared to RMB 107.9 million in the same period of 2023[1][2]. - Gross profit for the same period was RMB 85.6 million, down 9.8% from RMB 94.9 million year-on-year[1][2]. - The company recorded a loss before tax of RMB 1.6 million, compared to a profit of RMB 40.3 million in the previous year, indicating a significant decline in financial performance[1][2]. - Game operation revenue for the six months ended June 30, 2024, was approximately RMB 83.3 million, a decrease of about 8.6% compared to RMB 91.2 million in the same period of 2023[10]. - The company reported a net loss of RMB 1.964 million for the six months ending June 30, 2024, compared to a profit of RMB 40.262 million in the same period of 2023[15]. - The company reported a basic earnings per share of (RMB 1,586,000) for the period, compared to RMB 40,262,000 in the previous year, with a weighted average of 1,733,746,210 shares outstanding[80]. User Engagement and Game Development - The number of new games approved in the first half of 2024 increased compared to the same period last year, reflecting a more favorable regulatory environment[2]. - The company is focusing on developing new HTML5 games, which are expected to enhance user engagement and improve financial performance in the long term[2]. - The "Defend the Carrot" game series continues to generate stable revenue contributions, demonstrating the company's ability to maintain strong user engagement[3][4]. - The company launched seven co-branded "Defend the Carrot" slippers, which have been well received by consumers across major e-commerce platforms and retail stores[4]. - The company plans to launch 8 new HTML5 games in the second half of 2024, starting with "One Step Two Steps" on August 1, 2024[7]. - The company is focusing on long-term operation of "Defend the Carrot 4," which has led to a decrease in immediate revenue generation[10]. - The company continues to implement various in-game promotions and activities to enhance user experience and maintain user interest, which is deemed essential for retaining and expanding active player base[13]. Revenue Streams and Costs - Advertising revenue decreased by approximately 12.1% from RMB 11.0 million in the six months ending June 30, 2023, to RMB 9.6 million in the same period of 2024, primarily due to a focus on long-term game operation[18]. - The total cost of sales increased by 24.0% to RMB 16.2 million for the six months ending June 30, 2024, compared to RMB 13.0 million in the same period of 2023[15]. - Selling and distribution expenses increased by approximately 102.9% from approximately RMB 17.8 million for the six months ended June 30, 2023, to approximately RMB 36.2 million for the six months ending June 30, 2024, mainly due to promotional activities for "Shenxian Dao 3"[22]. - R&D costs were approximately RMB 27.2 million for the six months ending June 30, 2024, a decrease of approximately 1.7% from approximately RMB 27.6 million for the six months ended June 30, 2023[24]. User Metrics - The company reported a total of approximately 235.3 million registered users for RPG mobile and online games, with 173.3 million for online games and 62.0 million for mobile games as of June 30, 2024[11]. - The average Monthly Active Users (MAU) for RPG mobile games was approximately 0.1 million, while the MAU for casual games was about 5.3 million as of June 2024[12]. - For the six months ending June 30, 2024, the average Monthly Active Users (MPU) for online games was approximately 5,000, compared to about 6,000 for the same period in 2023, indicating a decline due to the games entering their expected life cycle's later stage[13]. - The average MPU for mobile RPG games decreased by 80.8% from approximately 313,000 in the six months ending June 30, 2023, to about 60,000 in the same period of 2024, primarily due to the initial high MPU of "Gods and Demons 3" launched in June 2023[13]. Strategic Initiatives - The company is expanding its intellectual property licensing strategy, including the construction of theme parks in various cities[7]. - The company aims to enhance collaboration with leading online platforms and explore brand co-marketing activities with offline chain stores[7]. - The company is leveraging artificial intelligence to enhance operational efficiency and improve game content creation[6]. - The company has initiated discussions for potential acquisitions to strengthen its portfolio and expand its capabilities[96]. Investment and Financial Position - Total equity as of June 30, 2024, was approximately RMB 529.6 million, stable compared to approximately RMB 525.9 million as of December 31, 2023[30]. - As of June 30, 2024, the company held cash resources of approximately RMB 7.6 million, an increase from RMB 7.4 million as of December 31, 2023[32]. - The total bank loans amounted to approximately RMB 92.5 million, a decrease from RMB 95.5 million as of December 31, 2023, with RMB 6.0 million due within one year[32]. - The company has a diversified investment portfolio, with at least 50% of total investments allocated to risk-free or capital-protected investments[33]. - The fair value of debt investments and equity investments designated at fair value through other comprehensive income was approximately RMB 138.1 million, down from RMB 147.0 million as of December 31, 2023[32]. Corporate Governance - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[89]. - The company has adopted standard rules for directors conducting securities transactions, with no violations reported as of June 30, 2024[90]. - The audit committee was established on November 17, 2014, and has been updated several times, with the current members being independent non-executive directors[88].