IDREAMSKY(HK:01119)2025-04-24 12:37Financial Performance - Total revenue for 2024 was RMB 1,513,644 thousand, a decrease of 21.0% compared to 2023[9] - Gross profit for 2024 was RMB 426,789 thousand, representing a gross margin of 28.2%[9] - The company reported a loss before tax of RMB 574,117 thousand for 2024, compared to a loss of RMB 470,357 thousand in 2023[9] - The company reported a revenue of RMB 1,513,644 thousand for the year ended December 31, 2024, a decrease of 21% compared to RMB 1,916,473 thousand in 2023[23] - Gross profit for the same period was RMB 426,789 thousand, down from RMB 673,461 thousand, reflecting a decline in gross margin[23] - The operating loss increased to RMB 345,360 thousand in 2024 from RMB 175,291 thousand in 2023, indicating a worsening operational performance[23] - The company reported a net loss from continuing operations of RMB 544,604 thousand for the year ended December 31, 2024, compared to a loss of RMB 456,830 thousand in 2023[23] - Annual loss increased from RMB 456.8 million in 2023 to RMB 544.6 million in 2024, with adjusted annual loss for 2024 at RMB 30.3 million compared to adjusted profit of RMB 139.6 million in 2023[38] - EBITDA for 2024 was RMB (406,921) thousand, compared to RMB (78,497) thousand in 2023, indicating a worsening operational performance[43] - Adjusted EBITDA for 2024 was RMB 56,368 thousand, down from RMB 308,773 thousand in 2023, reflecting a decline in profitability[43] Assets and Liabilities - The total assets decreased to RMB 3,590,220 thousand in 2024 from RMB 3,707,673 thousand in 2023[10] - The total liabilities increased to RMB 2,134,852 thousand in 2024, up from RMB 1,964,446 thousand in 2023[10] - Total borrowings rose to approximately RMB 1,070.1 million in 2024, up from RMB 966.4 million in 2023, indicating increased leverage[44] - Current ratio decreased to 0.90 in 2024 from 1.07 in 2023, suggesting a decline in short-term financial health[45] - Debt ratio increased to 59.5% in 2024 from 53.0% in 2023, indicating a higher proportion of debt relative to total assets[45] Revenue Breakdown - Game revenue, which constitutes 96.2% of total revenue, fell by 21.3% from RMB 1,849.1 million in 2023 to RMB 1,455.9 million in 2024, primarily due to a significant shift in revenue structure[25] - Information services revenue decreased from RMB 61.8 million in 2023 to RMB 49.5 million in 2024, attributed to a strategic reduction in in-app advertising to enhance user experience[27] - Total cost of revenue for the year ended December 31, 2024, was RMB 1,086.9 million, a decrease of 12.6% from RMB 1,243.0 million in 2023, but the cost as a percentage of revenue increased from 64.9% to 71.8%[28] Game Development and Launches - The company successfully launched the global version of the PC game "Kara Bichu" in 2024, enhancing its self-developed game portfolio[12] - "Subway Surfers" maintained a top ten position in revenue rankings, with in-game payment rates increasing by 40% to a five-year high[13] - "Mecha Squad" achieved a cumulative global revenue of USD 1 billion, ranking among the top five in the mech shooting game category in 2024[13] - The newly launched "Legendary Store" in December 2024 exceeded revenue expectations compared to its overseas counterparts, validating the company's innovative model[13] - The average payment amount of daily active users for "Dream Garden" increased by over 10% year-on-year, reaching a historical high[13] - Daily active users for the game "Kara Bichu" increased by 42% following the collaboration with the popular Japanese IP, leading to a 5% rise in user online duration[14] - The international version of "Kara Bichu" launched on November 22, 2024, quickly topped the Steam platform's "New Releases" and "Top Free Games" charts within 2 hours[15] - The company plans to launch a new casual gameplay mode on March 25, 2025, with a goal of enhancing game reputation and user engagement[15] Cost Management - Sales and marketing expenses decreased by 14.8% from RMB 230.6 million in 2023 to RMB 196.5 million in 2024, due to improved customer acquisition efficiency[29] - Research and development expenses decreased from RMB 240.0 million in 2023 to RMB 165.2 million in 2024, with the percentage of revenue dropping from 12.5% to 10.9%[31] - Impairment losses on intangible assets decreased by 56.9% from RMB 23.2 million in 2023 to RMB 10.0 million in 2024[32] - Net impairment losses on financial assets were RMB 185.7 million in 2024, down from RMB 232.3 million in 2023, influenced by economic conditions affecting customer payment capabilities[33] Shareholder and Equity Information - The company has a total of 1,689,850,345 shares issued as of December 31, 2024[88] - Executive director Chen Xiangyu holds 27,947,600 shares directly, representing approximately 1.65% of the company's equity[88] - Chen Xiangyu also has an interest in 239,154,722 shares through a controlled corporation, accounting for about 14.15% of the company's equity[88] - The company has a total of 86,270,450 restricted share units available under the pre-IPO restricted share unit plan, representing 5.18% of the total shares issued[101] - During the year ending December 31, 2024, a total of 5,664,953 restricted share units were vested to employees, while 397,238 units remained unvested[104] Corporate Governance and Compliance - The company has confirmed the independence of its independent non-executive directors according to the listing rules[77] - The company has no directors with interests in any competing businesses that could affect its operations[85] - The company has a commitment to high standards of corporate governance, as detailed in its annual report[177] - The auditor for the reporting period is PwC, which has audited the financial statements prepared in accordance with International Financial Reporting Standards[179] - The company has not changed its auditor in the past three years, indicating stability in its financial oversight[180] Social Responsibility and Community Engagement - The company provided a total of RMB 99,000 in donations to support students in need through the "Walk Together" charity project, engaging 1,870 participants[169] - The company actively participated in social responsibility initiatives, including planting 1,100 trees valued at nearly RMB 400,000 as part of the "Green Guangdong" campaign[168] Employee Information - Total employee count increased to 852 as of December 31, 2024, up from 797 in the previous year[69] - Total salary expenses (excluding share-based payments) for the year ended December 31, 2024, were RMB 189 million, a decrease of 11.50% compared to the previous year[69] - The company has implemented various social security plans and housing provident fund contributions for employees in China, with contributions calculated as a percentage of basic salary[176] - The company provides targeted training programs for employees, including customer service and compliance management training, to enhance professional skills[176] Related Party Transactions - Tencent is a major shareholder and has ongoing business collaborations with the company, including multiple continuous related party transaction agreements[136] - The independent non-executive directors and auditors have confirmed that the ongoing related party transactions are conducted in the ordinary course of business and on normal commercial terms[151] - The company has not engaged in any non-exempt related party transactions during the reporting period[135] Future Plans and Strategies - The company aims to expand its global market presence by launching mobile and console versions of its games in 2025[15] - The agreements are part of a strategy to leverage Tencent's extensive product offerings to enhance the company's digital entertainment products and marketing efforts[144]