CMGE(HK:00302)2024-08-28 14:59Financial Performance - The company's revenue for the six months ended June 30, 2024, was RMB 1,233.3 million, a decrease of 19.7% compared to RMB 1,535.4 million in the same period of 2023[2]. - The net loss for the period was RMB 241.1 million, compared to a profit of RMB 50.995 million in the previous year, primarily due to investment impairments and non-operating expenses totaling RMB 175.8 million[3]. - Total revenue for the six months ending June 30, 2024, was RMB 1,233.3 million, a decrease of approximately 19.7% from RMB 1,535.4 million for the same period in 2023[26][29]. - The adjusted net loss attributable to the parent company for the six months ending June 30, 2024, was RMB 236.2 million, compared to a profit of RMB 56.8 million in the same period of 2023[27]. - The group's pre-tax profit/loss shifted from a profit of RMB 42.6 million for the six months ended June 30, 2023, to a loss of RMB 210.6 million for the six months ended June 30, 2024[45]. - The total comprehensive loss for the six months ended June 30, 2024, was RMB 228.7 million, compared to a comprehensive income of RMB 86.5 million in the same period of 2023[54]. - The group's net loss for the period transitioned from a profit of RMB 51.0 million to a loss of RMB 241.1 million[47]. User Engagement - Average monthly active users decreased to 14,392 thousand from 15,627 thousand year-over-year, while average monthly paying users fell to 1,027 thousand from 1,132 thousand[5]. - The mobile game "Douluo Dalu: Shrek Academy" launched in Hong Kong, Macau, and Taiwan on August 22, 2024, achieving first place on the Apple Store free chart and fourth on the sales chart in Hong Kong, and seventh in Taiwan within the first week[22]. Game Development and Releases - The company plans to launch multiple new games in the second half of 2024, which are expected to improve operational performance[3]. - The mobile game "Doupo Cangqiong: Pinnacle Duel" was delayed to June 2024, while "Douluo Dalu: Reverse Time" is now scheduled for September 2024[3]. - The company's self-developed game based on the "Xianjian Qixia Zhuan" IP, "Xianjian World," is set to launch in 2024[3]. - The game "Xianjian World," developed by the company's Man Tian Xing Studio, has received dual licenses for PC and mobile platforms in June 2023, after over three years of development[11]. - The company plans to launch the mobile game "Douluo Dalu: Reversal of Time" in September 2024, which has a development investment of RMB 200 million and features high-quality graphics and unique gameplay mechanics[19]. - The company plans to launch new games including "Code: FA" and "Xiao Ge Chui Zi" in the second half of 2024, and "True: Dynasty Warriors" in Japan[22]. Revenue Streams - Game publishing revenue accounted for 81.1% of total revenue in the first half of 2024, amounting to RMB 999.9 million, compared to 79.3% in the same period of 2023[29]. - The company's IP licensing revenue for the first half of 2024 reached approximately RMB 107.1 million, representing a year-on-year growth of 79.0%[15]. - The company generated RMB 1,056,960 thousand in revenue from the mainland China market, which accounted for approximately 85.7% of total revenue[65]. - The company's revenue from intellectual property licensing was RMB 107,081 thousand, an increase from RMB 59,806 thousand in the previous year, representing an increase of approximately 79.1%[62][67]. Cost Management - Total sales costs decreased by approximately 15.6% from RMB 1,019.2 million for the six months ended June 30, 2023, to RMB 860.6 million for the six months ending June 30, 2024[31]. - Gross profit decreased by 27.8% from RMB 516.2 million for the six months ended June 30, 2023, to RMB 372.8 million for the six months ending June 30, 2024, with a gross margin decline from 33.6% to 30.2%[33]. - Sales and distribution expenses increased by 23.5% from RMB 120.3 million for the six months ended June 30, 2023, to RMB 148.6 million for the six months ending June 30, 2024[36]. - Marketing expenses rose significantly to RMB 136.0 million, accounting for 11.0% of total revenue, compared to RMB 100.9 million and 6.5% in the previous period[36]. Strategic Initiatives - The company is applying generative AIGC technology to reduce game development costs and enhance efficiency, particularly in art production and NPC behavior generation[14]. - A strategic collaboration with Guangzhou Super Competitive Investment Co., Ltd. aims to leverage offline and online resources to enhance player engagement and expand the game's reach[16]. - The company aims to enhance its IP matrix across various sectors including games, literature, and entertainment experiences, targeting young consumers interested in traditional Chinese culture[25]. - The company has initiated operations for the "Xianjian" immersive project in Chongqing in December 2023, with plans to start operations in Hangzhou and Changzhou in July 2024[24]. Financial Position - As of June 30, 2024, the group's current assets were approximately RMB 2,068.5 million, with current liabilities of about RMB 1,241.4 million, resulting in a current ratio of 1.67[48]. - The group's total equity attributable to owners of the parent was RMB 5,493.4 million as of June 30, 2024, compared to RMB 5,694.8 million as of December 31, 2023[57]. - The group's non-current assets totaled RMB 4,779.2 million as of June 30, 2024, a slight decrease from RMB 4,873.6 million as of December 31, 2023, with goodwill valued at RMB 1,042.5 million[55]. Corporate Governance - The company has complied with the corporate governance code, except for the separation of the roles of Chairman and CEO, which are currently held by the same individual[94]. - All directors confirmed compliance with the trading standards for securities during the period from January 1 to June 30, 2024[95]. - The audit committee reviewed the unaudited consolidated financial statements and discussed matters related to audit, risk management, and internal controls[96].