友谊时光(06820) - 2025 - 中期业绩

Financial Performance Summary The company achieved significant revenue growth and successfully turned a profit for the six months ended June 30, 2025 Summary of Financial Performance for the Six Months Ended June 30, 2025 (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 623,463 | 526,072 | 18.5% | | Gross Profit | 459,113 | 360,287 | 27.4% | | Profit/(Loss) for the Period | 40,713 | (72,328) | 156.3% | Management Discussion and Analysis This section provides an overview of the company's operations, financial results, and strategic initiatives for the reporting period Overview FriendTimes, a leading integrated mobile game developer and operator based in Suzhou, focuses on high-quality products, expanding into female-oriented games and overseas markets, and promoting Chinese traditional culture - The company is positioned as a leading integrated mobile game developer, publisher, and operator in China, focusing on content and premium games[6] - The company actively explores broad user segments, mini-game platforms, and overseas markets, aiming to integrate and disseminate Chinese traditional culture globally through its games[7] - The company has successfully launched several core products, including "Legend of Empress," "Fate of the Empress," and "Ling Yun Nuo," which are highly popular among users[6] Performance Review For the six months ended June 30, 2025, total revenue was approximately RMB 623.5 million, an 18.5% year-on-year increase, with profit for the period at approximately RMB 40.7 million, successfully turning a loss into profit, primarily due to new game revenue, higher gross margin channel contribution, and reduced R&D and selling expenses Key Financial Indicators for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 623.5 | 526.1 | 18.5% | | Profit for the Period | 40.7 | (72.3) | 156.3% | - Performance growth is primarily attributed to increased revenue from new games, especially mini-games "Du Lala's Promotion" and "Ling Yun Nuo"[8] - The increased proportion of high-margin channel revenue drove gross margin growth by approximately 5 percentage points, while R&D and selling expense ratios both decreased, collectively contributing to profit growth[8] Business Review The company adheres to a "premium, diversified, and globalized" strategy, continuously enriching product categories and enhancing player experience through technological innovation, particularly the "AI+Game" strategy, and cultural integration, successfully integrating multiple games into the Huawei HarmonyOS ecosystem for long-term operation and global expansion - The company adheres to a "premium, diversified, and globalized" strategy, expanding into multiple game categories including ancient style, Xianxia, Wuxia, modern workplace, casual competitive, and mini-games[9] - The company integrates excellent traditional Chinese culture into its game products with the concept of "digital empowerment of culture, innovation-driven inheritance," and disseminates it through cross-industry integration and global deployment[10] - The company adopts an "AI+Game" strategic direction, building an AI application system covering R&D, publishing, operations, and enterprise management, with multiple games completing Huawei HarmonyOS native application development[11] - The company implements a long-term operation strategy, extending product lifecycles through high-frequency version iterations, content updates, operational activities, and IP collaborations, while conducting differentiated and localized operations for overseas users[12] Baochao Mengchu "Baochao Mengchu" launched its open beta on May 28, 2025, quickly topping various app store charts as a multiplayer cooperative real-time competitive kitchen party mobile game, and continues to update content through brand collaborations and themed seasons - "Baochao Mengchu" launched its open beta on May 28, 2025, as a multiplayer cooperative real-time competitive kitchen party mobile game, quickly topping charts on Apple App Store, Huawei, and Xiaomi[13][14] - The game continuously updates content through brand collaborations with "Wangzai Xiaomantou" and China Academy of Art, launching Season 1 "Human World Fireworks," Season 2 "Forest of Elves" in partnership with Ele.me, and Season 3 "Origin of Lanruo" featuring a Liao Zhai adventure theme[14][15][16] Du Lala's Promotion The mini-game version of "Du Lala's Promotion" performed exceptionally well, reaching Top 50 on WeChat Mini Game bestseller list and Top 30 on Douyin Mini Game popularity list, also attracting a large number of Korean players through localized operations - The mini-game version of "Du Lala's Promotion" performed exceptionally well, reaching Top 50 on WeChat Mini Game bestseller list and Top 30 on Douyin Mini Game popularity list[17] - The game successfully attracted a large number of Korean players through in-depth localized operations in overseas markets, reaching Top 30 on the Korean iOS game bestseller list[17] - On June 11, 2025, "Du Lala's Promotion" launched a collaboration event with "Legend of Empress," coinciding with "Legend of Empress"'s tenth anniversary[18] Fu Sheng Yi Ling Long "Fu Sheng Yi Ling Long," launched on January 2, 2024, is the company's flagship female-oriented ancient style product, featuring a "sweet romance & detective" dual-core open world, and has maintained stable revenue through frequent updates and long-term user acquisition efforts across multiple global regions - "Fu Sheng Yi Ling Long" launched its open beta on January 2, 2024, as the company's flagship female-oriented ancient style product, building an open world with "sweet romance & detective" as its dual core[19] - The game has been launched in multiple regions globally, including Hong Kong, Macau, Taiwan, South Korea, Japan, North America, and Southeast Asia, and was selected as a key national cultural export project[19] - During the reporting period, the game maintained stable product revenue through high-frequency version updates at least twice a month and long-term user acquisition campaigns[19] Other Mini-Games Mini-games, with their convenient access, fragmented gameplay, and lightweight experience, help the company tap into new user segments, with "Ling Yun Nuo" and "Legend of Empress" performing notably well during the reporting period - Mini-games, due to their convenient access, fragmented gameplay, and lightweight experience, help the company tap into new user segments[20] - During the reporting period, the company launched multiple mini-game products, with "Ling Yun Nuo" and "Legend of Empress" showing outstanding performance[20] Shareholder Returns Since its listing, the company has distributed over RMB 750 million in cash dividends, increased shareholdings through a share award scheme to demonstrate confidence in its value, and controlling shareholder Mr. Jiang Xiaohuang has pledged not to reduce his stake in the next 12 months - Since its listing, the company has cumulatively distributed cash dividends totaling over RMB 750 million to shareholders, significantly exceeding the net proceeds from its listing of RMB 434 million[21] - The company continuously purchased shares in the open market through its share award scheme, with a cumulative total representing approximately 3.7% of the company's total issued share capital[21] - Controlling shareholder Mr. Jiang Xiaohuang voluntarily committed not to sell any company shares directly or indirectly held by him through the Stock Exchange's open market within the next 12 months starting from July 17, 2025[21] Future Outlook The company plans to deepen its integrated R&D and operations, strengthen technological development and refined operations, accelerate AI technology implementation, and steadfastly pursue a global development path to build a matrix of premium games with cultural characteristics and global appeal - The company's game pipeline includes "Code: Lover," "Code: Flower," "Code: Relic," and "Code: MX," which are currently under development and testing[22] - Future plans include deepening integrated R&D and operations, strengthening core technology R&D capabilities and refined operational systems, and accelerating the implementation of AI technology applications and innovative experiments[22] - The company will steadfastly implement a global development strategy, practicing a "regional deep cultivation + category breakthrough" approach to build a matrix of premium games[22] Social Responsibility The company actively fulfills its corporate social responsibility by integrating Environmental, Social, and Governance (ESG) issues into corporate management, and through charitable activities, minor protection measures, and network content and data security management, it is committed to building a healthy and harmonious online and offline ecosystem - The company actively fulfills its corporate social responsibility, integrating ESG issues into its corporate management framework and engaging in charitable activities[23] - The company practices social responsibility in various areas, including educational assistance, animal rescue, red education, environmental protection, and epidemic prevention and control, and supports the "Pomegranate Seed Project" at Sanhe Primary School in Ergune City, Inner Mongolia[24] - The company has established systems for network content security, data security, and account management, strictly adhering to relevant legal norms to protect users' personal privacy[24] - Regarding minor protection, the company strictly follows national policies, with all games fully integrated with real-name authentication, anti-addiction systems, age-appropriate reminders, and restrictions on low-age consumption[25] Consolidated Financial Statements This section presents the company's consolidated financial statements, including the income statement, statement of comprehensive income, and statement of financial position Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the company's consolidated statement of profit or loss shows increased revenue, significantly improved gross profit, and a successful return to profit for the period, reversing the loss from the prior year Consolidated Statement of Profit or Loss for the Six Months Ended June 30, 2025 (RMB thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 623,463 | 526,072 | | Cost of sales | (164,350) | (165,785) | | Gross profit | 459,113 | 360,287 | | Net other income | 14,065 | 23,719 | | Selling and marketing expenses | (292,062) | (287,321) | | Research and development expenses | (131,831) | (152,831) | | General and administrative expenses | (17,837) | (18,108) | | Operating profit/(loss) | 31,448 | (74,254) | | Finance costs | (1,424) | (1,731) | | Fair value changes of financial assets at fair value through profit or loss | 20,560 | 6,728 | | Profit/(loss) before tax | 50,584 | (69,257) | | Income tax | (9,871) | (3,071) | | Profit/(loss) for the period | 40,713 | (72,328) | | Basic and diluted earnings/(loss) per share (RMB) | 0.02 | (0.03) | Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company's consolidated statement of profit or loss and other comprehensive income shows a positive profit for the period, with total other comprehensive income also turning positive, reflecting an overall improvement in financial condition Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Six Months Ended June 30, 2025 (RMB thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(loss) for the period | 40,713 | (72,328) | | Other comprehensive income for the period | | | | Items that will not be reclassified subsequently to profit or loss: | | | | Exchange differences on translation of the Company’s financial statements | (1,065) | 308 | | Exchange differences on translation of financial statements of its subsidiaries outside Mainland China that may be reclassified subsequently | (173) | 1,455 | | Other comprehensive income for the period | (1,238) | 1,763 | | Total comprehensive income for the period | 39,475 | (70,565) | Consolidated Statement of Financial Position As of June 30, 2025, the company's consolidated statement of financial position shows growth in both total assets and net assets, with stable net current assets, reflecting an expansion of the company's asset base and a strengthening of its financial foundation Consolidated Statement of Financial Position as of June 30, 2025 (RMB thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 211,487 | 220,499 | | Intangible assets | 3,308 | 3,240 | | Right-of-use assets | 7,890 | 7,063 | | Financial assets at fair value through profit or loss | 113,475 | 95,659 | | Other receivables | 7,591 | 7,591 | | Deferred tax assets | – | 5,412 | | Fixed deposits | 193,082 | 184,761 | | Total non-current assets | 536,833 | 524,225 | | Current assets | | | | Contract costs | 3,822 | 1,987 | | Financial assets at fair value through profit or loss | 281,612 | 204,241 | | Trade and other receivables | 85,138 | 84,537 | | Pledged bank deposits | 1,843 | 1,903 | | Restricted cash | 3,780 | 3,464 | | Cash and cash equivalents | 137,846 | 334,825 | | Fixed deposits | 364,839 | 247,294 | | Total current assets | 878,880 | 878,251 | | Current liabilities | | | | Trade and other payables | 91,830 | 86,038 | | Bank borrowings | 110,424 | 149,420 | | Contract liabilities | 15,708 | 10,543 | | Current tax | 1,430 | 1,428 | | Lease liabilities | – | 675 | | Total current liabilities | 220,065 | 247,431 | | Net current assets | 658,815 | 630,820 | | Total assets less current liabilities | 1,195,648 | 1,155,045 | | Non-current liabilities | | | | Contract liabilities | 4,969 | 4,854 | | Deferred tax liabilities | – | 34 | | Net assets | 1,190,760 | 1,150,076 | | Equity and reserves | | | | Share capital | 154 | 154 | | Reserves | 1,190,606 | 1,149,922 | | Total equity | 1,190,760 | 1,150,076 | Notes to the Unaudited Interim Financial Report This section provides detailed notes to the unaudited interim financial report, covering the basis of preparation, revenue breakdown, profit before tax, income tax, earnings per share, financial assets, receivables, payables, equity, reserves, and dividends Basis of Preparation This interim financial report is prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants, authorized for issue on August 28, 2025, and adopts the same accounting policies as the 2024 annual financial statements - This interim financial report is prepared in accordance with the Hong Kong Listing Rules and Hong Kong Accounting Standard 34 "Interim Financial Reporting," and was authorized for issue on August 28, 2025[33] - The report adopts the same accounting policies as the 2024 annual financial statements, requiring management's judgment, estimates, and assumptions[33][34] - This interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[35] Revenue For the six months ended June 30, 2025, the company's total revenue was RMB 623,463 thousands, primarily from the publishing of self-developed games, with Mainland China contributing the majority of revenue and overseas market revenue slightly decreasing Revenue from Contracts with Customers by Business Line for the Six Months Ended June 30, 2025 (RMB thousands) | Business Line | 2025 | 2024 | | :--- | :--- | :--- | | Revenue from publishing self-developed games by the Group | 603,909 | 511,246 | | Revenue from publishing self-developed games through IP licensing arrangements and others | 19,554 | 14,826 | | Total Revenue | 623,463 | 526,072 | Revenue by Geographical Location for the Six Months Ended June 30, 2025 (RMB thousands) | Geographical Location | 2025 | 2024 | | :--- | :--- | :--- | | Mainland China | 499,335 | 396,674 | | Overseas | 124,128 | 129,398 | | Total Revenue | 623,463 | 526,072 | Profit/(Loss) Before Tax For the six months ended June 30, 2025, the company's profit before tax was RMB 50,584 thousands, a significant improvement from the loss in the prior year, primarily influenced by changes in staff costs and other items like depreciation and amortization Staff Costs for the Six Months Ended June 30, 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Salaries, bonuses and other benefits | 121,625 | 135,778 | | Equity-settled share-based payments | 2,105 | 365 | | Contributions to defined contribution plans | 23,757 | 23,746 | | Total Staff Costs | 147,487 | 159,889 | Other Items for the Six Months Ended June 30, 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 9,332 | 12,002 | | Depreciation of right-of-use assets | 543 | 543 | | Amortisation of intangible assets | 1,184 | 1,091 | | Impairment loss recognised on trade and other receivables | 744 | 23 | Income Tax For the six months ended June 30, 2025, the company's income tax expense was RMB 9,871 thousands, a substantial increase from the prior year, mainly due to the recognition of current tax as profit for the period turned positive Income Tax for the Six Months Ended June 30, 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current tax: Underprovision in prior years | 4,425 | – | | Deferred tax: Reversal of temporary differences | 5,446 | 3,071 | | Total Income Tax | 9,871 | 3,071 | Earnings/(Loss) Per Share For the six months ended June 30, 2025, the company's basic and diluted earnings per share were RMB 0.02, successfully reversing the loss per share of RMB 0.03 in the prior year, reflecting a significant improvement in the company's profitability Earnings/(Loss) Per Share for the Six Months Ended June 30, 2025 | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(loss) attributable to equity holders of the Company (RMB thousands) | 40,713 | (72,328) | | Weighted average number of ordinary shares in issue (thousands of shares) | 2,101,172 | 2,116,111 | | Basic earnings/(loss) per share (RMB) | 0.02 | (0.03) | - The diluted earnings per share presented are the same as the basic earnings per share, as no potentially dilutive ordinary shares were issued[48] Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, the company's total financial assets at fair value through profit or loss amounted to RMB 395,087 thousands, an increase from December 31, 2024, primarily comprising current wealth management products and listed equity securities investments, as well as non-current limited partnership and unlisted equity securities investments Financial Assets at Fair Value Through Profit or Loss as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current | | | | Investments in wealth management products | 227,430 | 169,757 | | Investments in listed equity securities | 54,182 | 34,484 | | Non-current | | | | Investments in limited partnerships | 108,475 | 90,659 | | Investments in unlisted equity securities | 5,000 | 5,000 | | Total | 395,087 | 299,900 | Trade and Other Receivables As of June 30, 2025, the company's net trade and other receivables amounted to RMB 92,729 thousands, a slight increase from December 31, 2024, with net trade receivables at RMB 74,180 thousands, and most receivables due within three months Trade and Other Receivables as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 74,936 | 66,311 | | Less: Loss allowance | (756) | (12) | | Net trade receivables | 74,180 | 66,299 | | Deposits and prepayments | 1,675 | 2,109 | | Recoverable VAT | 5,337 | 7,285 | | Recoverable income tax | 2,625 | 7,071 | | Other receivables | 8,912 | 9,364 | | Total | 92,729 | 92,128 | Ageing Analysis of Trade Receivables as of June 30, 2025 (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 74,179 | 66,235 | | Over 3 months but less than 1 year | 757 | 76 | | Less: Loss allowance | (756) | (12) | | Net Trade Receivables | 74,180 | 66,299 | Trade and Other Payables As of June 30, 2025, the company's total trade and other payables amounted to RMB 91,830 thousands, an increase from December 31, 2024, primarily consisting of trade payables and accrued salaries, with all amounts expected to be settled within one year Trade and Other Payables as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 56,019 | 38,102 | | Accrued salaries | 28,112 | 42,602 | | Other payables and accrued expenses | 7,699 | 5,334 | | Total | 91,830 | 86,038 | Ageing Analysis of Trade Payables as of June 30, 2025 (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 55,954 | 37,300 | | Over 3 months but less than 6 months | 59 | 791 | | Over 6 months but less than 12 months | 4 | 3 | | Over 1 year | 2 | 8 | | Total | 56,019 | 38,102 | Share Capital, Reserves and Dividends As of June 30, 2025, the company's share capital remained unchanged, and the Board did not recommend an interim dividend; the company continued to repurchase shares through a share award scheme and granted restricted shares to eligible employees to incentivize talent and promote long-term development - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[55] - For the six months ended June 30, 2025, the company acquired 1,420,000 ordinary shares through its share award scheme for share grants[56] - As of June 30, 2025, a total of 85,070,600 restricted shares had been granted to eligible employees under the share award scheme without consideration, of which 4,978,800 shares have vested and 9,040,000 shares remain unvested[58] Financial Review This section provides a detailed financial review, including revenue, cost of sales, gross profit, operating expenses, finance costs, income tax, profit for the period, liquidity, capital expenditure, gearing ratio, contingent liabilities, employees, and significant investments Revenue For the six months ended June 30, 2025, the company's revenue was approximately RMB 623.5 million, an 18.5% year-on-year increase, primarily driven by the strong performance of mini-games such as "Du Lala's Promotion" and "Ling Yun Nuo"; domestic market revenue grew by 26.0%, accounting for 80.1% of total game revenue, while overseas market revenue slightly decreased Game Revenue by Activity for the Six Months Ended June 30, 2025 (RMB thousands) | Activity | 2025 | Percentage | 2024 | Percentage | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Game revenue | 623,309 | 99.98% | 525,607 | 99.91% | 18.6% | | Others | 154 | 0.02% | 465 | 0.09% | –66.8% | | Total Revenue | 623,463 | 100.00% | 526,072 | 100.00% | 18.5% | Game Revenue by Regional Market for the Six Months Ended June 30, 2025 (RMB thousands) | Regional Market | 2025 | Percentage | 2024 | Percentage | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic market | 499,181 | 80.1% | 396,209 | 75.4% | 26.0% | | Overseas market | 124,128 | 19.9% | 129,398 | 24.6% | -4.1% | | Game Revenue | 623,309 | 100.0% | 525,607 | 100.0% | 18.6% | Cost of Sales For the six months ended June 30, 2025, the company's cost of sales was approximately RMB 164.4 million, a year-on-year decrease of approximately 0.9%, primarily due to a lower revenue sharing ratio after the launch of mini-games - Cost of sales decreased by approximately 0.9% year-on-year to RMB 164.4 million, primarily due to a decrease in the revenue sharing ratio after the launch of mini-games[64] Gross Profit and Gross Profit Margin For the six months ended June 30, 2025, the company's gross profit increased by approximately 27.4% to RMB 459.1 million, and the gross profit margin rose from 68.5% to 73.6%, primarily benefiting from an increased proportion of high-margin channel revenue Gross Profit and Gross Profit Margin for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 459.1 | 360.3 | 27.4% | | Gross Profit Margin | 73.6% | 68.5% | 5.1 percentage points | - Gross profit margin growth primarily benefited from an increased proportion of high-margin channel revenue[65] Selling and Marketing Expenses For the six months ended June 30, 2025, the company's selling and marketing expenses were approximately RMB 292.1 million, a slight year-on-year increase of approximately 1.7% Selling and Marketing Expenses for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 292.1 | 287.3 | 1.7% | Research and Development Expenses For the six months ended June 30, 2025, the company's research and development expenses were approximately RMB 131.8 million, a year-on-year decrease of approximately 13.7%, primarily due to reduced expenses related to R&D personnel and audio-visual animation Research and Development Expenses for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Research and Development Expenses | 131.8 | 152.8 | -13.7% | - Research and development expenses decreased primarily due to reduced expenses related to R&D personnel and audio-visual animation[67] General and Administrative Expenses For the six months ended June 30, 2025, the company's general and administrative expenses were approximately RMB 17.8 million, a slight year-on-year decrease of approximately 1.5% General and Administrative Expenses for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 17.8 | 18.1 | -1.5% | Finance Costs For the six months ended June 30, 2025, the company's finance costs were approximately RMB 1.4 million, a year-on-year decrease of approximately RMB 0.3 million, primarily due to a reduction in financing cost rates Finance Costs for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Change (RMB millions) | | :--- | :--- | :--- | :--- | | Finance Costs | 1.4 | 1.7 | -0.3 | - Finance costs decreased primarily due to a reduction in financing cost rates[69] Income Tax Expense For the six months ended June 30, 2025, the company's income tax expense was approximately RMB 9.9 million, a year-on-year increase of approximately RMB 6.8 million, primarily due to the current period's profit turning positive, leading to increased current income tax expense Income Tax Expense for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Change (RMB millions) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 9.9 | 3.1 | 6.8 | - Income tax expense increased primarily because profit for the reporting period was positive, leading to increased current income tax expense[70] Profit for the Period For the six months ended June 30, 2025, the company's profit for the period was approximately RMB 40.7 million, a significant increase of approximately 156.3% compared to a loss of RMB 72.3 million in the prior year, successfully achieving a turnaround from loss to profit Profit for the Period for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Profit/(Loss) for the Period | 40.7 | (72.3) | 156.3% | Liquidity and Capital Resources As of June 30, 2025, the company's current liabilities to net assets ratio was approximately 0.18, with cash and cash equivalents of approximately RMB 137.8 million; during the reporting period, operating activities generated net cash inflow, while investing and financing activities resulted in net cash outflows Net Cash Flow for the Six Months Ended June 30, 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 32,855 | (116,276) | | Net cash (used in)/generated from investing activities | (188,195) | 163,936 | | Net cash (used in)/generated from financing activities | (40,621) | 8,660 | | Net change in cash and cash equivalents | (195,961) | 56,320 | | Cash and cash equivalents at beginning of period | 334,825 | 396,216 | | Effect of foreign exchange rate changes | (1,018) | 168 | | Cash and cash equivalents at June 30 | 137,846 | 452,704 | - As of June 30, 2025, the company's current liabilities to net assets ratio was approximately 0.18 (December 31, 2024: 0.22)[72] - As of June 30, 2025, the company had cash and cash equivalents of approximately RMB 137.8 million[72] Operating Activities This section details the cash flows generated from or used in the company's operating activities Cash Flow from Operating Activities for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 32.9 | (116.3) | Investing Activities This section outlines the cash flows used in or generated from the company's investing activities Cash Flow from Investing Activities for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Net cash (used in)/generated from investing activities | (188.2) | 163.9 | - Net cash outflow from investing activities primarily included RMB 760.3 million paid for the purchase of investments at fair value through profit or loss, and RMB 209.3 million paid for the purchase of fixed deposit investments[76] - Net cash inflow from investing activities primarily came from proceeds of RMB 690.7 million from the redemption of investments at fair value through profit or loss, and proceeds of RMB 88.2 million from the redemption of fixed deposit investments[76] Financing Activities This section presents the cash flows used in or generated from the company's financing activities Cash Flow from Financing Activities for the Six Months Ended June 30, 2025 (RMB millions) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Net cash (used in)/generated from financing activities | (40.6) | 8.7 | - Net cash outflow from financing activities primarily included RMB 79.3 million for repayment of unsecured bank borrowings and RMB 38.9 million from obtaining unsecured bank borrowings[77] Capital Expenditure For the six months ended June 30, 2025, the company's capital expenditure totaled RMB 2,943 thousands, primarily for the purchase of equipment, intangible assets (copyrights, software, and IP licenses), and right-of-use assets Capital Expenditure for the Six Months Ended June 30, 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Equipment | 320 | 178 | | Intangible assets | 1,253 | 1,526 | | Right-of-use assets | 1,370 | – | | Total | 2,943 | 1,704 | Gearing Ratio and Capital Structure As of June 30, 2025, the company's gearing ratio decreased to 9.3% from 13.0% on December 31, 2024, and bank borrowings also reduced to RMB 110.4 million, indicating an optimized capital structure Gearing Ratio and Bank Borrowings as of June 30, 2025 | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 9.3% | 13.0% | | Bank Borrowings Balance (RMB millions) | 110.4 | 149.4 | - The company's share capital remained unchanged at 2,180,850,000 shares[79] Contingent Liabilities As of June 30, 2025, the company had no significant unrecorded contingent liabilities or guarantees - As of June 30, 2025, the company had no significant unrecorded contingent liabilities or any guarantees[80] Employees and Remuneration Policy As of June 30, 2025, the company had 895 employees, all based in China, with remuneration policies determined by employee performance, work experience, and market salary levels; no significant labor disputes occurred during the reporting period Number of Employees as of June 30, 2025 | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 895 | 887 | - Employee remuneration policies are determined based on employee performance, work experience, and prevailing market salary levels[81] - No significant labor disputes occurred during the reporting period[81] Reorganization and Material Investments For the six months ended June 30, 2025, the company did not undertake any reorganization or material investments - For the six months ended June 30, 2025, the company did not undertake any reorganization or material investments[82] Financial Assets This section provides an overview of the company's financial assets, including wealth management products, limited partnership investments, stock and money market fund investments, significant acquisitions and disposals, off-balance sheet arrangements, asset pledges, and foreign exchange risk Wealth Management Products As of June 30, 2025, the company's wealth management products are primarily issued by commercial banks in Mainland China, including principal-protected floating-rate and medium-to-low risk non-principal-protected floating-rate products, with three structured deposits each exceeding 5% of total assets Wealth Management Products Exceeding 5% of Total Assets as of June 30, 2025 (RMB millions) | Product Name | Bank Name | Subscribed Principal | Product Type & Risk Rating | Expected Yield | Fair Value as of June 30, 2025 | % of Total Assets | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Structured Deposit | Shanghai Pudong Development Bank Suzhou Wuzhong Sub-branch | 30 | Principal-protected floating-rate closed-end, low risk | 0.85%~2.2% | 30.13 | 6.37% | | Structured Deposit | Shanghai Pudong Development Bank Suzhou Wuzhong Sub-branch | 20 | Principal-protected floating-rate closed-end, low risk | 0.85%~2.2% | 20.06 | 6.37% | | Structured Deposit | Shanghai Pudong Development Bank Suzhou Wuzhong Sub-branch | 40 | Principal-protected floating-rate closed-end, low risk | 0.7%~2.05% | 40.05 | 6.37% | - The company's wealth management products are issued by listed commercial banks in Mainland China, including principal-protected floating-rate and medium-to-low risk non-principal-protected floating-rate products[85] Limited Partnership Investments As of June 30, 2025, the company, as a limited partner, invested in six venture capital partnerships, which in turn invest in innovative and growth-oriented enterprises at early or growth stages, or those with IPO potential, with Suzhou Yongxin Rongyao Venture Capital Partnership exceeding 5% of total assets Limited Partnership Investments Exceeding 5% of Total Assets as of June 30, 2025 (RMB millions) | Partnership Name | Fund Nature | Investment Amount | Investment Proportion | Investment Scope | Fair Value as of June 30, 2025 | % of Total Assets | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Suzhou Yongxin Rongyao Venture Capital Partnership (Limited Partnership) | Comprehensive Fund | 5.0 | 0.83% | Focuses on growth-stage innovative enterprises in the pan-intelligent manufacturing industry | 4.9 | 7.24% | - The company invested in six venture capital partnerships, where the fair value of investments did not exceed 5% of total assets or meet disclosure requirements at the time of investment[86] Stock and Money Market Fund Investments As of June 30, 2025, the company's stock investments are all in actively traded stocks, and money market fund investments are low-risk products within securities investment funds, with the fair value of both not exceeding 5% of the Group's total assets - As of June 30, 2025, the company's stock investments are all in actively traded stocks, with fair value not exceeding 5% of total assets[92] - As of June 30, 2025, the company's money market fund investments are low-risk products within securities investment funds, with fair value not exceeding 5% of total assets[92] - The company has established standardized capital and investment management policies, regularly reviewing investment portfolios and policies to monitor and control potential risks[92] Material Acquisitions and Disposals of Assets For the six months ended June 30, 2025, and up to the date of this announcement, the company had no material acquisitions or disposals of assets - For the six months ended June 30, 2025, and up to the date of this announcement, the company had no material acquisitions or disposals of assets[88] Off-Balance Sheet Arrangements The company has no and does not intend to enter into any off-balance sheet arrangements, nor has it entered into any financial guarantees or other commitments to guarantee third-party payment obligations - The company has no and does not intend to enter into any off-balance sheet arrangements, nor has it entered into any financial guarantees or other commitments[89] Pledge of Assets As of June 30, 2025, some of the company's subsidiary borrowings are pledged by fixed deposits of other subsidiaries, with a pledged amount of RMB 60.0 million Asset Pledge Situation as of June 30, 2025 (RMB millions) | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Pledged amount of fixed deposits | 60.0 | 60.0 | Foreign Exchange Risk The company's transactions denominated in currencies other than RMB are mostly in USD and HKD, and the management team closely monitors foreign exchange risk and will consider appropriate prudent measures - The company's transactions denominated in currencies other than RMB are mostly in USD and HKD[91] - The management team closely monitors foreign exchange risk and will consider appropriate prudent measures[91] Other Information This section covers other relevant information, including post-reporting period events, interim dividends, share transactions, the share award scheme, compliance with corporate governance codes, public float, the audit committee, and the publication of interim results and report Events After Reporting Period No significant events have occurred since June 30, 2025, up to the date of this announcement - No significant events have occurred since June 30, 2025, up to the date of this announcement[93] Interim Dividend The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[94] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[95] - As of June 30, 2025, the company held no treasury shares[95] Share Award Scheme The company adopted a share award scheme on September 14, 2020, to incentivize and retain talent and promote long-term development, with shares gratuitously granted by controlling shareholder Mr. Jiang Xiaohuang as a reserve and managed by a trustee; as of June 30, 2025, 9,040,000 shares remain unvested - The share award scheme aims to improve the incentive system, align the interests of eligible participants with those of the Group, and attract and retain talent[97] - The shares for the scheme include 80,000,000 shares gratuitously granted by controlling shareholder Mr. Jiang Xiaohuang and 91,434,000 shares cumulatively purchased under the scheme[101] - As of June 30, 2025, a total of 9,040,000 shares remain unvested[107] - The term of the share award scheme is ten years from the adoption date, or an earlier termination date determined by an authorized representative, whichever is earlier[103] Compliance with Corporate Governance Code For the six months ended June 30, 2025, the company complied with the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Jiang Xiaohuang, which the Board believes helps maintain policy continuity and operational efficiency, with sufficient balance of power and safeguards in place - The company has complied with the code provisions set out in the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Jiang Xiaohuang[108] - The Board believes that Mr. Jiang's dual role helps maintain the continuity of the company's policies and operational efficiency and stability, and that sufficient balance of power and appropriate safeguards have been established[108][109] Compliance with Model Code for Securities Transactions by Directors Upon inquiry with all Directors, each Director confirmed compliance with the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules for the six months ended June 30, 2025 - Upon inquiry with all Directors, each Director confirmed compliance with the Model Code for Securities Transactions by Directors during the reporting period[110] - The company also established employee stock trading guidelines equivalent to the Model Code for employees who may possess unpublished price-sensitive information, with no violations found[110] Sufficient Public Float As of the date of this announcement, at least 25% of the company's total issued shares are held by the public, in compliance with Listing Rules requirements - As of the date of this announcement, at least 25% of the company's total issued shares are held by the public, in compliance with Listing Rules requirements[111] Audit Committee The Audit Committee, comprising three independent non-executive Directors with Mr. Zhu Wei as Chairman, is responsible for advising on external auditor appointments, reviewing financial statements, overseeing internal controls and risk management systems, and has reviewed this interim financial report - The Audit Committee comprises three independent non-executive Directors: Mr. Zhu Wei (Chairman), Mr. Zhang Jinsong, and Ms. Tang Haiyan[112] - The primary responsibilities of the Audit Committee include advising on the appointment of external auditors, reviewing financial statements, and overseeing internal control and risk management systems[112] - The Audit Committee has reviewed and discussed the Group's unaudited consolidated interim financial statements for the six months ended June 30, 2025, and met with the auditors[113] Publication of Interim Results and 2025 Interim Report This interim results announcement has been published on the HKEXnews website and the company's website, and the 2025 Interim Report containing all required information will be dispatched to shareholders and published on the website in due course - This interim results announcement has been published on the HKEXnews website (www.hkexnews.hk) and the company's website (www.friendtimes.net)[114](index=114&type=chunk) - The 2025 Interim Report, containing all information required by Appendix D2 of the Listing Rules, will be dispatched to shareholders who requested printed corporate communications and published on the website in due course[114] Definitions This section provides definitions for key terms used in this announcement - This section provides definitions for key terms used in this announcement, including "Adoption Date," "AI," "APP," "App Store," "Audit Committee," "Auditors," "Award," "Awarded Shares," "Board," "Chief Executive Officer," "Corporate Governance Code," "Chairman," "China," "Company," "Controlling Shareholder," "Directors," "Eligible Participant," "Group," "HKFRSs," "Hong Kong," "HK$," "Mini-game," "IP," "Listing," "Listing Date," "Listing Rules," "Macau," "Model Code," "Prospectus," "Remuneration Committee," "RMB," "Selected Participant," "Scheme Rules," "Senior Management," "Shares," "Shareholders," "Share Award Scheme," "Stock Exchange," "Subsidiary," "Taiwan," "TapTap," "Trust," "Trust Deed," and "Trustee"[115][116][117][118]