Revenue and Profitability - Revenue for the six months ended June 30, 2024, was RMB 277.8 million, an increase of 13.3% from RMB 245.1 million in the same period of 2023[9]. - Gross profit for the same period was RMB 114.8 million, slightly down from RMB 116.0 million year-on-year[9]. - Profit before tax was RMB 5.2 million, a significant improvement from a loss of RMB 14.6 million in the prior year[9]. - The company reported a profit for the period of RMB 3.4 million, compared to a loss of RMB 12.8 million in the previous year[9]. - Adjusted profit for the period was RMB 17.7 million, recovering from a loss of RMB 2.9 million in the same period last year[9]. - Revenue increased by 13.4% from RMB 245.1 million for the six months ended June 30, 2023, to RMB 277.8 million for the six months ended June 30, 2024, driven by growth in digital marketing services, online games publishing, and other digital content services[26]. - Revenue from digital marketing services increased by 28.9% from RMB 121.5 million for the six months ended June 30, 2023, to RMB 156.6 million for the six months ended June 30, 2024, attributed to a rebound in advertising demand[26]. - The company reported a total comprehensive income for the period of RMB 2,055,000, recovering from a loss of RMB 14,777,000 in 2023[90]. User Engagement and Market Expansion - The cumulative registered users of Easou Reading products reached 45.4 million as of June 30, 2024, with an average monthly active user count of 26.3 million[14]. - Monthly paying users under the paid reading model were 22.3 thousand, representing a ratio of 0.1% to monthly active users[14]. - The company aims to explore the market potential of online reading and expand overseas markets, introducing new literary content formats such as short videos[17]. - The company plans to explore additional business opportunities to apply the Easou Recommendation Engine in other scenarios[3]. Research and Development - In the first half of 2024, the company invested RMB 17.6 million in R&D for intelligent recommendation technology[12]. - The company will continue to increase R&D investments to enhance the capabilities of the Easou AI Recommendation Engine, focusing on key projects including integrated intelligent recommendation systems and high-concurrency performance tuning[17]. - The company is investing 15.0% of net proceeds (HK$6.1 million) to enhance R&D capabilities for the Easou Recommendation Engine, expected to be utilized by the fourth quarter of 2027[55]. Financial Position and Assets - Total assets increased by 24.8% from RMB 505.4 million as of December 31, 2023, to RMB 630.8 million as of June 30, 2024, primarily due to increases in cash and cash equivalents, trade receivables, and financial assets[35]. - Total liabilities rose by 39.2% from RMB 126.1 million as of December 31, 2023, to RMB 175.5 million as of June 30, 2024, mainly due to increased bank borrowings and accruals[35]. - Total equity increased by 20.0% from RMB 379.3 million as of December 31, 2023, to RMB 455.3 million as of June 30, 2024[35]. - Cash and cash equivalents increased by 59.7% from RMB 89.1 million as of December 31, 2023, to RMB 142.3 million as of June 30, 2024, primarily due to proceeds from the Global Offering and increased bank borrowings[40]. Shareholder Structure and Corporate Governance - The company was listed on the Main Board of the Stock Exchange on June 7, 2024, issuing 14,802,500 ordinary shares at an offer price of HK$5.80 per share, resulting in net proceeds of approximately HK$40.70 million[53]. - The company holds a 32.49% interest in its issued share capital through Mr. Wang, the founder of a discretionary trust[61]. - The roles of the chairman and the chief executive officer are performed by the same individual, Mr. Wang, which the Board believes enhances responsiveness and effectiveness[47]. - The company aims to maintain a high level of corporate governance and has complied with all applicable code provisions since the Listing Date[47]. Cost Management - Cost of sales increased by 26.4% from RMB 129.0 million for the six months ended June 30, 2023, to RMB 163.1 million for the six months ended June 30, 2024, primarily due to rising costs in digital marketing services[27]. - Selling and distribution expenses decreased by 8.1% from RMB 74.8 million to RMB 68.8 million, accounting for approximately 30.5% and 24.8% of total revenue for the respective periods[32]. - Administrative expenses increased by 15.9% from RMB 19.9 million to RMB 23.1 million, primarily due to higher listing expenses, representing about 8.1% and 8.3% of total revenue[34]. Strategic Initiatives and Future Plans - The company plans to launch two additional card games overseas in the second half of 2024, following the launch of one card game in the first half[21]. - The company will leverage the Easou Recommendation Engine to expand the scale of its digital marketing services through its proprietary advertising platform, Win Ads[18]. - The company is actively exploring recommendation scenarios for other digital content types, including music and videos, to achieve new business growth points[24]. - The company aims to relaunch online games publishing services in overseas markets, with 15.0% of net proceeds (HK$6.1 million) expected to be utilized by the third quarter of 2026[57]. Compliance and Reporting - The Audit Committee has reviewed the Group's 2024 interim results and confirmed compliance with applicable accounting standards and requirements[51]. - The Group's financial information is presented in Renminbi (RMB) and all values are rounded to the nearest thousand (RMB'000) except when otherwise indicated[101]. - The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial information are consistent with those applied in the Group's annual consolidated financial statements for the year ended 31 December 2023[103].
宜搜科技(02550) - 2024 - 中期财报