FORGAME(HK:00484)2024-08-30 10:14Financial Performance - For the first half of 2024, the company reported total revenue of approximately RMB 37.4 million, an increase of 60.1% compared to RMB 23.4 million in the same period last year[3]. - Gross profit decreased by 54.5% to RMB 2.9 million from RMB 6.5 million, indicating challenges in maintaining profitability despite revenue growth[3]. - The net loss for the period increased by 14.2% to RMB 3.7 million from RMB 3.3 million, indicating ongoing financial challenges despite revenue growth[6]. - The group reported a loss attributable to owners of the company of RMB 3,748 thousand for the six months ended June 30, 2024, compared to a loss of RMB 3,281 thousand in 2023, reflecting an increase in losses of approximately 14.3%[23]. - The basic loss per share for the six months ended June 30, 2024, was RMB (0.03), compared to RMB (0.02) for the same period in 2023[40]. Revenue and Expenses - The cost of sales rose by 103.9% to RMB 34.5 million from RMB 16.9 million, attributed to the increase in revenue, particularly in memory and hard disk drive sales[5]. - Sales and marketing expenses surged by 614.0% to RMB 9.6 million from RMB 1.3 million, primarily due to increased employee benefits and promotional costs related to the new gaming business team[5]. - Administrative expenses increased by 33.3% to RMB 18.6 million from RMB 13.9 million, mainly due to higher inventory provisions[5]. - Research and development expenses rose by 9.5% to RMB 24.0 million from RMB 21.9 million, reflecting increased investment in gaming business development[6]. - The adjusted EBITDA for the same period was RMB (32,830,000) (unaudited), a significant decline from RMB 508,000 in 2023[8]. Assets and Equity - As of June 30, 2024, the company's total equity was RMB 576.2 million, down from RMB 590.3 million as of December 31, 2023, primarily due to fair value changes in equity investments[9]. - The company's net current assets decreased to RMB 375.4 million as of June 30, 2024, from RMB 390.2 million as of December 31, 2023, attributed to increased investments[9]. - Cash and cash equivalents totaled RMB 129.3 million as of June 30, 2024, down from RMB 195.9 million as of December 31, 2023, mainly due to increased investments[10]. - The total assets decreased to RMB 629,243 thousand as of June 30, 2024, from RMB 655,765 thousand as of December 31, 2023, a decline of about 4.0%[24]. Investments and Future Plans - The group plans to apply for regulatory licenses for financial services to diversify its business, specifically for Type 4 (advising on securities) and Type 9 (asset management) activities[22]. - The group aims to stabilize and increase gaming revenue while developing its electronic devices and semiconductor business to ensure healthy cash flow[22]. - The company holds a significant investment in Beijing Share Era Technology Co., Ltd., with an investment cost of RMB 4,000,000 and a fair value of RMB 58,291,000, representing 8.85% ownership[16]. Governance and Compliance - The Audit and Compliance Committee consists of three independent non-executive directors, with Mr. Huang Zhi Jian serving as the chairman, ensuring compliance with listing rules[49]. - The company has adhered to the corporate governance code principles, except for the combined role of the Chairman and CEO, which the board believes ensures leadership consistency[47]. - The board will continue to monitor and review the company's corporate governance practices to align with statutory requirements and professional standards[47]. - The company has not taken out insurance to cover potential legal actions against its directors as of the announcement date[47]. Market and Operational Risks - The group faces risks including industry policy and regulatory changes, market saturation, and competition in the gaming sector[21]. - The group intends to strictly control budgets and reduce operating costs to enhance management efficiency and diversify income within controllable risk limits[22].