LINEKONG(HK:08267)2025-04-25 09:33Financial Performance - The company's revenue for the year ended December 31, 2024, was approximately RMB 146.0 million, an increase of about 7.8% from RMB 135.5 million for the year ended December 31, 2023[51]. - The gaming business contributed approximately RMB 39.8 million in revenue, a decrease of about 43.2% or RMB 30.3 million compared to the previous year, primarily due to the absence of similar licensing income recognized in 2023[51]. - The revenue from custom web series and other income was approximately RMB 106.3 million, an increase of about 62.5% or RMB 40.9 million from RMB 65.4 million in the previous year, mainly due to the recognition of income from "Falling into Our Romance"[51]. - Total revenue for the year ended December 31, 2024, was approximately RMB 146.0 million, an increase of about 7.3% from RMB 135.5 million in 2023[52]. - Revenue from self-developed games was RMB 13.8 million, accounting for 34.8% of total revenue, while revenue from agency games was RMB 26.0 million, accounting for 65.2%[52]. - The company's gross profit margin decreased to 14.7% in 2024 from 25.3% in 2023, reflecting a significant drop in gross profit[50]. - Operating loss for the year was RMB 31.1 million, compared to a loss of RMB 21.4 million in the previous year, representing an increase in losses of 45.3%[50]. - The company reported a net loss of RMB 29.9 million for the year, a 75.9% increase from a net loss of RMB 17.0 million in 2023[50]. - The net loss attributable to owners for the year ended December 31, 2024, was approximately RMB 29.0 million, an increase of about 66.7% from RMB 17.4 million in 2023[63]. - Adjusted net loss for the year ended December 31, 2024, was approximately RMB 13.4 million, a decrease of about 2.9% from RMB 13.8 million in 2023, due to recognized income from "Falling into Our Romance" and further cost reductions[65]. Cryptocurrency Investments - As of December 31, 2024, the company held 102.06568 units of Bitcoin and 818.1345 units of Ethereum, with a total cash consideration of $7.6 million and an estimated fair value of $12.2 million, realizing an unrealized gain of $4.6 million[16]. - The company purchased 54.3479 units of Bitcoin for $4.0 million and sold 51.8 units, realizing a profit of $2.1 million; it also bought 998.39 units of Ethereum for $3.6 million and sold 180.26 units, achieving a profit of $0.025 million[35]. - The company plans to further increase its Bitcoin holdings in response to the approval of spot Bitcoin and Ethereum ETFs and the establishment of strategic Bitcoin reserves in the U.S.[36]. - The company has purchased approximately USD 7.5 million in cryptocurrency during the reporting period[76]. Business Strategy and Focus - The company plans to focus on the third generation of internet business and actively embrace opportunities brought by artificial intelligence technology for business innovation and upgrades in 2025[23]. - The strategic focus will include optimizing investment layouts in cutting-edge technology fields such as cryptocurrency assets and AI agents to create long-term value for the group[23]. - The company aims to continue exploring innovative opportunities in cryptocurrency investment, film, and gaming sectors to create greater value for shareholders, partners, and users[23]. - The company will focus on the third-generation internet business as a strategic priority starting in 2024[33]. - In 2024, the company aims to achieve breakthroughs in three areas: third-generation internet applications, cryptocurrency investments, and providing crypto asset networks and AI computing power services[33]. - The company has fully initiated exploration in third-generation internet business, micro-short video business, and live e-commerce[33]. - The company has acquired a 35% stake in Element, a leading NFT trading market, enhancing its strategic focus on the third-generation internet business[34]. Film and Television Production - The film and television business saw the successful launch of several projects, including the youth romance drama "Falling into Our Heat" and the fantasy drama "Nian Nian Ren Jian Yu," which received widespread market attention[17][18]. - The film division has successfully produced and released several popular youth romance series, achieving 780 million views on Mango TV and a peak popularity score of 21,039 on Tencent[42]. - The film division is focusing on high-quality IP production and collaboration with leading film companies to upgrade its product offerings[43]. - The company has partnered with Tencent Video for the production of the ancient music-themed drama "Ancient Music Wind and Flower Record," which is set to begin production in November 2024[46]. - The company is developing a long drama plan, including the "Blue Harbor Suspense Trilogy Theater," with the first project "Burning Seasons" expected to start production in Q3 2025[46]. Gaming Business - Classic games "Naughty Heaven 1" and "Naughty Heaven 2" were re-released in August and September 2024, providing players with a new gaming experience[23]. - The company has launched two new mobile games, "Naughty Heaven 1" and "Naughty Heaven 2," with over 20 million registered users for the former, emphasizing competitive fairness and traditional Chinese culture[39][40]. - The gaming business will concentrate on self-developed high-quality products and proprietary IP, while the film and television sector will focus on premium IP series[33]. - The company operates 13 online games as of December 31, 2024, aiming to maintain stable operations and cash flow through refined user engagement strategies[40]. - The company is exploring AI technology for smart matching, personalized recommendations, and intelligent NPC behavior simulation to enhance user experience in gaming[41]. Corporate Governance - The board of directors is committed to maintaining high levels of corporate governance to build trust with shareholders and stakeholders[86]. - The board has reviewed and is satisfied with the effectiveness of the corporate governance policies[89]. - The company has complied with GEM listing rules regarding the appointment of independent non-executive directors, with at least three independent directors on the board[92]. - The chairman and CEO roles are held by the same individual, which deviates from the governance code, but the board believes this arrangement benefits the company's strategic direction[94]. - The service contracts for executive directors are typically for three years, with renewals occurring regularly[95]. - The company has established clear guidelines for the management of its operations, ensuring accountability and transparency[88]. - The company has adopted the trading standards for directors as per GEM Listing Rules, confirming compliance for the fiscal year ending December 31, 2024[100]. - The board consists of five directors with a gender ratio of 4:1, including three independent non-executive directors[109]. - The company emphasizes employee diversity, maintaining a gender ratio of 29:28 among all employees[109]. Employee Welfare and Training - The company has implemented a comprehensive employee welfare system, including annual health check-ups and commercial insurance coverage for major illnesses, medical care, and maternity[4.4]. - The company provides annual health check-ups for employees and has established health records to monitor their well-being[185]. - The company has implemented a comprehensive employee training system, offering various training courses to enhance skills and career development[188]. - The company actively listens to employee feedback through various communication channels, ensuring timely responses to concerns and issues[190]. Environmental, Social, and Governance (ESG) - The company is committed to sustainable development and has presented its ESG report to showcase progress and performance in this area[151]. - The company has established an ESG governance framework to enhance management of sustainability, with the board responsible for overseeing significant ESG issues and performance[159]. - The ESG working group is tasked with identifying, assessing, and managing major ESG matters, ensuring compliance with relevant laws and regulations[160]. - The company's greenhouse gas emissions decreased by 41.24% compared to 2023, successfully achieving the set target for that year[171]. - The total paper usage in 2024 decreased by 1.67% compared to 2023, marking the successful achievement of the target set for 2023[176]. - The company has not violated any local environmental laws regarding emissions or waste disposal during the year[169]. - The company has not generated any hazardous waste during its operations and has established measures for the proper disposal of electronic waste[175]. - The company emphasizes energy-saving measures, resulting in a reduction in total energy consumption in 2024 compared to 2023[177]. - The company has adopted high-efficiency electrical appliances and lighting to optimize energy use[178]. - The company has identified climate-related risks and opportunities, integrating them into its enterprise risk management process[181].