BINGCHUAN(SZ:300533)2017-08-21 16:00Financial Performance - Total revenue for the first half of 2017 was ¥155,927,635.83, a decrease of 18.53% compared to the same period last year[24]. - Net profit attributable to shareholders was ¥50,503,836.18, down 43.08% year-on-year[24]. - The net cash flow from operating activities was negative at -¥6,579,812.22, a decline of 111.91% compared to the previous year[24]. - The company achieved operating revenue of CNY 155.93 million, a decrease of 18.53% compared to the same period last year[44]. - Net profit for the period was CNY 48.67 million, down 46.11% year-on-year, with net profit attributable to ordinary shareholders decreasing by 43.08% to CNY 50.50 million[44]. - The total comprehensive income for the period was CNY 70,065,453.67, compared to CNY 82,833,181.95 in the previous period, reflecting a decrease of approximately 15.5%[146]. - The company reported a total comprehensive income of 146.36 million yuan for the current period, reflecting a significant increase compared to the previous period[166]. Revenue Sources - The average revenue from self-operated sales accounted for over 95% of the company's total income, highlighting the importance of this operational model[8]. - The main products, including "Yuan Zheng OL," "Long Wu," and "Bu Bai Chuan Shuo," generated a total revenue of ¥150,356,100, accounting for 96.43% of total revenue[31]. - "Yuan Zheng OL" achieved revenue of ¥5,943.45 million, representing 38.12% of total revenue[31]. - "Long Wu" generated revenue of ¥6,937.55 million, making up 44.49% of total revenue[32]. - Revenue from "Expedition OL" was 59,434,514.25 with a year-over-year decrease of 27.88% and a gross margin of 87.77%, down 4.00% from the previous year[50]. - Revenue from "Dragon Martial" was 69,375,468.40, reflecting a year-over-year decrease of 30.13% and a gross margin of 91.46%, down 2.15% from the previous year[50]. - Revenue from "Unbeaten Legend" surged to 21,546,086.68, marking a significant year-over-year increase of 374.66% with a gross margin of 86.71%, up 7.15% from the previous year[50]. Market Trends and Competition - The gaming industry is experiencing rapid diversification, particularly with the growth of mobile games, which is impacting the client game market and increasing competition[5]. - The mobile game market in China saw a revenue increase of 49.8%, reaching ¥561.4 billion in the first half of 2017[35]. - The client game market revenue was ¥319.5 billion, showing a year-on-year growth of 13.7%[35]. - The company anticipates risks related to declining operating performance due to increased competition and changing player preferences in the gaming market[77]. - The company faces new product marketability risks, as the success of new games heavily depends on accurately predicting player preferences and market demand[78]. Investment and Development - The company plans to invest heavily in new game development, which includes significant upfront costs for R&D and server purchases, indicating a high trial-and-error cost[7]. - The company is actively developing new products, with several projects in testing phases, including "Gui Gu Wu Shuang" and "Ying Wu Zhe"[32]. - Research and development expenses amounted to CNY 47.90 million, representing 30.72% of operating revenue, an increase of 28.27% compared to the previous year[41]. - The company has made significant investments in intangible assets, primarily for newly added R&D and office software[36]. - The company plans to expand its mobile game product layout and enhance user experience through continuous innovation and high-quality game development[81]. Operational Challenges - The company reported a significant increase in management expenses by 25.43% to CNY 59.31 million, primarily due to increased R&D investments[48]. - Cash flow from operating activities showed a net decrease of 111.91%, primarily due to rising personnel costs[48]. - The company acknowledges the risk of operational performance decline due to increased competition and changing market demands[5]. - The company faces risks related to core personnel turnover and technology leakage, which are critical in the competitive gaming industry[80]. Governance and Compliance - The company is committed to adhering to the disclosure requirements set by the Shenzhen Stock Exchange for internet gaming businesses[5]. - The company’s financial report is guaranteed to be true, accurate, and complete by its board of directors and senior management[4]. - The company has ensured compliance with legal regulations regarding the use and disclosure of raised funds, with no violations reported[66]. Shareholder Information - The total number of shareholders at the end of the reporting period is 18,956[116]. - Liu Heguo holds 43.84% of the shares, totaling 43,839,225 shares[116]. - The total number of shares is 100,000,000, with 75% being limited sale shares[114]. - The company has a total of 25,000,000 unrestricted shares, representing 25% of total shares[114]. Future Outlook - The company plans to focus on market expansion and new product development in the upcoming quarters[156]. - Future guidance indicates a cautious outlook with expectations of gradual recovery in market conditions[161]. - The company is focusing on improving operational efficiency to mitigate losses and enhance profitability in the future[161].