联众(06899) - 2025 - 年度业绩

Annual Performance Announcement This section serves as the introductory announcement for the company's annual performance Financial Highlights The company's revenue decreased by 12.4% to RMB 88,996 thousand in FY2023, with loss attributable to owners widening by 76.5% to RMB (62,765) thousand | Metric | 2023 (RMB thousands) | 2022 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 88,996 | 101,559 | (12.4 %) | | Loss for the year attributable to owners of the Company | (62,765) | (35,560) | 76.5 % | | Basic loss per share (continuing and discontinued operations) | (5.90) | (3.31) | 78.2 % | | Diluted loss per share (continuing and discontinued operations) | (5.90) | (3.31) | 78.2 % | | Basic loss per share (continuing operations) | (7.27) | (1.30) | 459.2 % | | Diluted loss per share (continuing operations) | (7.27) | (1.30) | 459.2 % | Business Review In 2023, the Company continued to cultivate existing businesses and actively expand into new areas amidst a complex environment, achieving growth in PC and mobile games and successfully venturing into MCN live streaming - Domestic business in China developed steadily and healthily, with "Our Lobby" and mobile game businesses maintaining continuous growth[5] - Progress was made in new segments like MCN live streaming, building a high-quality in-house streamer lineup with millions of user followers and establishing partnerships with platforms like Kuaishou and Douyin[5][6][7] - The Company continued to pursue overdue accounts receivable and historical investments, recovering a significant amount of assets left by former management[8] Financial Performance Analysis The Group's loss significantly widened in FY2023, primarily due to increased fair value losses on financial assets, impairment losses under the expected credit loss model, and decreased revenue Overview In 2023, the loss attributable to owners of the Company increased by 76.5% to RMB 62.8 million, compared to RMB 35.6 million in 2022 - Loss attributable to owners of the Company increased by 76.5% to RMB 62.8 million[9] - The increase in loss was primarily due to fair value changes in financial assets at FVTPL and impairment losses under the expected credit loss model, net of reversals and expenses incurred from recovering historical accounts receivable[9] Revenue In 2023, the Group's revenue was RMB 89.0 million, a decrease of RMB 12.6 million from RMB 101.6 million in 2022 | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Revenue | 89.0 | 101.6 | (12.6) | - The decrease in revenue was mainly due to the recognition of a significant amount of deferred revenue in 2022[10] Cost of Revenue and Gross Margin In 2023, cost of revenue increased to RMB 44.1 million, leading to a slight decrease in gross margin from 59.4% in 2022 to 50.4% | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Cost of revenue | 44.1 | 41.2 | 2.9 | | Gross margin | 50.4% | 59.4% | (9.0) percentage points | - The decrease in gross margin was primarily due to the recognition of a significant amount of deferred revenue in 2022[11] Other Income In 2023, other income increased to RMB 7.2 million, a rise of RMB 4.7 million from RMB 2.5 million in 2022, mainly driven by increased franchise fee income and income from providing chess and card game venues | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Other income | 7.2 | 2.5 | 4.7 | - The increase in other income was mainly due to increased franchise fee income and income from providing chess and card game venues[12] Other Gains and Losses In 2023, the Group recorded other losses of RMB 3.5 million, a decrease of RMB 10.5 million from other gains of RMB 7.0 million in 2022, primarily due to impairment losses on property, plant and equipment and right-of-use assets | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Other gains and losses | (3.5) | 7.0 | (10.5) | - Other losses were primarily due to impairment losses on property, plant and equipment and right-of-use assets[13] Selling and Marketing Expenses In 2023, selling and marketing expenses were RMB 14.0 million, a year-on-year decrease of 29.6%, mainly due to reduced promotional and marketing activities during the year | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and marketing expenses | 14.0 | 19.9 | (29.6 %) | - The decrease in expenses was mainly due to reduced promotional and marketing activities during the year[14] Administrative Expenses In 2023, administrative expenses were RMB 44.0 million, a slight decrease of RMB 2.0 million from RMB 46.0 million in 2022 | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Administrative expenses | 44.0 | 46.0 | (2.0) | Research and Development Expenses In 2023, research and development expenses were RMB 15.8 million, an increase of 5.3% from RMB 15.0 million in 2022 | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Research and development expenses | 15.8 | 15.0 | 5.3 % | Fair Value Changes in Financial Assets at FVTPL In 2023, fair value change losses on financial assets at FVTPL significantly increased to RMB 31.4 million, compared to RMB 1.3 million in 2022, primarily due to unforeseen market changes and losses recorded by historical investee companies | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Fair value change loss | (31.4) | (1.3) | (30.1) | - The increase in loss was mainly due to unforeseen changes in market conditions and losses recorded by historical investee companies from prior years[17] Impairment Losses under Expected Credit Loss Model In 2023, the Group recorded impairment losses of RMB 11.1 million under the expected credit loss model, compared to a reversal of impairment losses of RMB 7.5 million in 2022, reflecting management's expectation that future cash flows are insufficient to recover the carrying amount | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Impairment losses/(reversal) | (11.1) | 7.5 | (18.6) | - The increase in impairment losses is due to management's expectation that future cash flows are insufficient to recover the carrying amount[18] Loss Attributable to Owners of the Company In 2023, the loss attributable to owners of the Company was RMB 62.8 million, a significant increase from RMB 35.6 million in 2022, mainly due to decreased revenue and other income, increased fair value losses on financial assets, and impairment losses under the expected credit loss model | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Loss attributable to owners of the Company | (62.8) | (35.6) | (27.2) | - The increase in loss was primarily due to decreased revenue and other income, increased fair value change losses on financial assets at FVTPL, and impairment losses under the expected credit loss model[19] Income Tax Expense In 2023, the Group's income tax expense was RMB 42 thousand, compared to no income tax expense in 2022 | Metric | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Income tax expense | 42 | 0 | Liquidity and Sources of Funding and Borrowings The Group's total bank balances and cash significantly decreased, and the current ratio dropped from 9.64 in 2022 to 2.21 in 2023, indicating a notable tightening of liquidity | Metric | December 31, 2023 (RMB millions) | December 31, 2022 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Total bank balances and cash | 35.5 | 87.3 | (51.8) | | Current assets | 73.4 | 681.8 | (608.4) | | Current liabilities | 33.2 | 70.7 | (37.5) | | Current ratio | 2.21 | 9.64 | (7.43) | | Debt-to-equity ratio | 0 | 0 | 0 | - The Group intends to primarily fund its future expansion, investments, and business operations through internal resources[22] Investments and Asset Changes The Group made no significant investments or acquisitions in 2023, but financial assets at FVTPL decreased, and deemed disposal of AGAE Group and disposal of Leyou Zhihe occurred, altering the asset structure Significant Investments For the year ended December 31, 2023, the Group had no significant investments - No significant investments were made in 2023[23] Significant Acquisitions For the year ended December 31, 2023, the Group had no significant acquisitions - No significant acquisitions were made in 2023[24] Financial Assets at Fair Value Through Profit or Loss (FVTPL) As of December 31, 2023, the Group's financial assets at FVTPL were RMB 26.5 million, a decrease from RMB 45.8 million in 2022, primarily invested in unlisted equity to supplement its game portfolio, explore new business opportunities, and expand its scale | Metric | December 31, 2023 (RMB millions) | December 31, 2022 (RMB millions) | | :--- | :--- | :--- | | Financial assets at FVTPL | 26.5 | 45.8 | - Investment objectives include supplementing the game portfolio, exploring business ecosystem-related new business opportunities, and gaining expertise and scale through external financial sources[25] - Investments are primarily in selected start-ups (engaged in game or intellectual sports related technology R&D) and private equity funds[25] Changes in Financial Assets at FVTPL The balance of financial assets at FVTPL was RMB 26,469 thousand in 2023, mainly affected by fair value change losses of RMB 31,442 thousand and transfers in due to disposal of a subsidiary of RMB 12,821 thousand | Change Item | RMB thousands | | :--- | :--- | | Balance as at January 1, 2023 | 45,846 | | Transferred in due to disposal of a subsidiary | 12,821 | | Disposal | (756) | | Fair value changes recognized in profit or loss | (31,442) | | Fair value as at December 31, 2023 | 26,469 | Significant Disposals The Group lost control over Allied Gaming & Entertainment Inc. (AGAE) on January 1, 2023, and completed the disposal of a 40% equity interest in Leyou Zhihe to AGAE Group on October 31, 2023, retaining a 10% interest - The Group lost control over AGAE on January 1, 2023, and a deemed disposal of AGAE occurred[27] - The disposal of a 40% equity interest in Leyou Zhihe to AGAE Group was completed on October 31, 2023, for a consideration of USD 7.0 million, with a 10% equity interest retained post-disposal[28] Pledge of Assets As of December 31, 2023 and 2022, the Group had no pledged assets - The Group had no pledged assets as of December 31, 2023 and 2022[29] Contingent Liabilities As of December 31, 2023, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of December 31, 2023[30] Operations and Risks The Group primarily operates in China, with most transactions settled in RMB, resulting in no significant foreign exchange risk; total employee remuneration expenses decreased by 19.4% in 2023, and the company continued to recover historical accounts receivable Foreign Exchange Risk The Group primarily operates in China, with most transactions settled in RMB, thus posing no significant foreign exchange risk in 2023 - The Group primarily operates in China, with most transactions settled in RMB, resulting in no significant foreign exchange risk[31] Employee Remuneration and Policies As of December 31, 2023, the Group had 67 employees, with total remuneration expenses of RMB 33.7 million, a 19.4% decrease from 2022 | Metric | 2023 (RMB millions) | 2022 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total employee remuneration expenses | 33.7 | 41.8 | (19.4 %) | - As of December 31, 2023, the Group had 67 employees[32] Recovery of Historical Accounts Receivable/Assets In 2023, the Company's current board and management continued to pursue non-performing assets left by former management, recovering RMB 1.1 million in related amounts | Metric | 2023 (RMB millions) | 2022 (RMB millions) | | :--- | :--- | :--- | | Historical accounts receivable/asset recovery amount | 1.1 | 11.4 | - The Company will continue to exert its utmost efforts to recover relevant historical accounts receivable and investments, and pursue legal liabilities of relevant parties[33] Subsequent Events and Future Plans No significant events occurred after the year ended December 31, 2023, and there are no other future plans for significant investments or capital assets Events After the Reporting Period Ended December 31, 2023 Other than those disclosed in this announcement, no significant events occurred after the year ended December 31, 2023 - No significant events occurred after the reporting period end[34] Future Plans for Significant Investments or Capital Assets Other than those disclosed in this announcement, the Group has no other plans for significant investments or capital assets - The Group has no other future plans for significant investments or capital assets[35] Audit Opinion and Management Response The independent auditor issued a qualified opinion on the Group's 2023 consolidated financial statements, primarily concerning the timing of recognition for USD 430,000 (approximately RMB 3,087,000) in collection service fees; both management and the Audit Committee respect the auditor's professional judgment and have formulated a remediation plan to strengthen internal controls Details of Qualified Opinion The auditor issued a qualified opinion on the Group's 2023 consolidated financial statements, solely related to the timing of recognition for approximately USD 430,000 (approximately RMB 3,087,000) in collection service fees paid to a debt collection company and its consulting partners, due to a lack of sufficient and appropriate audit evidence to determine the proper period for expense recognition - The auditor issued a qualified opinion on the 2023 consolidated financial statements, concerning the timing of recognition for approximately USD 430,000 (RMB 3,087,000) in collection service fees[36] - The qualified opinion is due to a lack of sufficient and appropriate audit evidence to determine the proper period for expense recognition[36] Management's View on Qualified Opinion Management acknowledges the audit scope limitation due to the lack of verifiable evidence to allocate services to respective reporting periods and agrees with the auditor's professional judgment, having strengthened communication with the Audit Committee and reviewed accounting and internal control procedures to prevent similar occurrences in future reporting periods - Management acknowledges the lack of verifiable evidence to allocate services to respective reporting periods, leading to an audit scope limitation[37] - Management has strengthened communication procedures with the Audit Committee and rigorously reviewed accounting and internal control procedures to prevent similar occurrences in future reporting periods[38] Audit Committee's View on Qualified Opinion The Audit Committee has reviewed and concurred with the auditor's qualified opinion, deeming it necessary and limited to a potential impact on 2024 comparative financial information, with no carry-forward impact on consolidated financial statements for 2024 and subsequent years - The Audit Committee confirms and concurs with the independent auditor's opinion based on their professional and independent assessment[39] - The qualified opinion is limited to the potential impact on the comparative financial information for 2024, with no carry-forward impact on the consolidated financial statements for 2024 and subsequent years[39] Group's Action Plan to Address Qualified Opinion The Group has developed and implemented a systematic remediation plan, with the assistance of an independent internal control consultant, to address the control deficiencies that led to the audit issue, ensuring no recurrence in future reporting periods and enhancing financial reporting reliability - The Group has developed and implemented a systematic remediation plan to address the control deficiencies that led to the audit issue[40] - The Group is confident that, apart from the impact on 2024 comparative figures, the matter leading to the qualified opinion will not have any subsequent impact on the financial position, financial performance, and related disclosures for 2024 and subsequent years[41] Corporate Governance and Other Information The Company is committed to maintaining stringent corporate governance policies, has complied with the Listing Rules' Corporate Governance Code and Model Code for Securities Transactions by Directors, and the Audit Committee has reviewed the annual results; no listed securities were purchased, sold, or redeemed by the Company or its subsidiaries in 2023 Compliance with Corporate Governance Code For the year ended December 31, 2023, the Company complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The Company has complied with the applicable provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[43] Compliance with Model Code for Securities Transactions by Directors The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules, and all directors confirmed strict compliance with the code for the year ended December 31, 2023 - All directors confirmed strict compliance with the Model Code as stipulated in Appendix C3 to the Listing Rules[44] Audit Committee The Audit Committee comprises three independent non-executive directors, with Mr. Zhang Li as chairman, and is primarily responsible for reviewing and overseeing the financial reporting process and internal control systems, having reviewed the Group's audited consolidated results for 2023 - The Audit Committee comprises three independent non-executive directors, with Mr. Zhang Li as chairman[45] - The Audit Committee has reviewed the Group's audited consolidated results for the year ended December 31, 2023[46] Scope of Work by Dahua The Group's auditor, Dahua CPA Limited, has agreed that the figures in the preliminary announcement's consolidated financial statements are consistent with the audited consolidated financial statements, but their work does not constitute an assurance engagement, thus no opinion or assurance conclusion was made on the preliminary announcement - The auditor, Dahua CPA Limited, has agreed that the financial figures in the preliminary announcement are consistent with the audited consolidated financial statements[47] - Dahua CPA Limited's work does not constitute an assurance engagement, therefore no opinion or assurance conclusion was made on the preliminary announcement[47] Summary of Independent Auditor's Report The independent auditor issued a qualified opinion on the Group's 2023 consolidated financial statements, primarily concerning the timing of recognition for USD 430,000 (approximately RMB 3,087,000) in collection service fees, due to insufficient and appropriate audit evidence - The independent auditor issued a qualified opinion on the Group's consolidated financial statements[48] - The qualified opinion primarily concerns the timing of recognition for approximately USD 430,000 (RMB 3,087,000) in collection service fees, due to a lack of sufficient and appropriate audit evidence[49] Purchase, Sale or Redemption of the Company's Listed Securities For the year ended December 31, 2023, 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 as of that date - During 2023, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[51] - As of December 31, 2023, the Company held no treasury shares[52] Significant Litigation Matters The Group is involved in two significant litigations: an arbitration and lawsuit against Kuaishun Trading Limited and its guarantor Ms. Fu for loan default, and a convertible bond arbitration against Spoville Co., Ltd.; the Kuaishun loan case is ongoing, while the Spoville case has received recognition and enforcement from a Korean court, with asset inquiries underway Kuaishun Trading Limited Loan The Company initiated arbitration proceedings with the Hong Kong Arbitration Tribunal against Kuaishun Trading Limited and its guarantors, Merit Horizon Limited and Ms. Fu Qiang, for loan default, claiming no less than HKD 97,948,090.47, and also filed a civil lawsuit with the High Court; the arbitration is ongoing, with no final award yet - The Company provided loans totaling HKD 62,484,799 to Kuaishun Trading Limited, with Merit Horizon Limited subsequently assuming repayment responsibility and Ms. Fu Qiang providing a guarantee[53] - The Company initiated arbitration with the Hong Kong Arbitration Tribunal for default on the Merit Horizon loan agreement, claiming no less than HKD 97,948,090.47[54] - The Company filed a civil lawsuit in the Hong Kong High Court against Liangzhi, Ms. Fu, and Mr. Gao, alleging breach of fiduciary duties[55] Arbitration Proceedings Against Spoville Co., Ltd. The Company initiated arbitration with the International Court of Arbitration of the International Chamber of Commerce against Spoville Co., Ltd. and its major shareholder Mr. Seung-Hwan Oh for convertible bond default, obtaining a final award on March 20, 2023, requiring Spoville and Mr. Seung-Hwan Oh to jointly pay principal, interest, and legal fees; a Korean court has ruled for recognition and enforcement, and asset inquiries are ongoing - The International Court of Arbitration of the International Chamber of Commerce ruled that Spoville and Mr. Seung-Hwan Oh shall jointly pay the Company KRW 2,184,541,667 in convertible bond principal and interest, along with legal and arbitration costs[57][60] - The Company applied to the Korean court for enforcement of the ICC arbitration award, which was accepted and a ruling issued, agreeing to the recognition and enforcement of the arbitration award[58] - The Korean court has issued an asset disclosure order based on the Company's application, and further asset inquiries are underway[58] Final Dividend The Board of Directors does not recommend the payment of any final dividend for the year ended December 31, 2023 - The Board of Directors does not recommend the payment of a final dividend for 2023[59] Consolidated Financial Statements This section contains the Group's Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position for the year ended December 31, 2023, and detailed notes to the financial statements, covering key financial information such as accounting policies, prior period adjustments, revenue, segment reporting, discontinued operations, loss per share, receivables and payables, bank loans, share capital, disposal of subsidiaries, and other litigation and arbitration Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the Group's revenue, costs, expenses, losses, and other comprehensive income for continuing and discontinued operations for 2023 and 2022, reflecting the loss and total comprehensive loss attributable to owners of the Company | Metric | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Continuing Operations | | | | Revenue | 88,996 | 101,559 | | Cost of revenue | (44,111) | (41,221) | | Gross profit | 44,885 | 60,338 | | Other income | 7,186 | 2,489 | | Other gains and losses | (3,457) | 7,041 | | Selling and marketing expenses | (13,978) | (19,941) | | Administrative expenses | (43,963) | (46,037) | | Share-based payment expenses | (1,548) | (6,660) | | Research and development expenses | (15,753) | (15,040) | | Finance costs | (335) | (335) | | Share of loss of associates | (5,394) | (260) | | Fair value changes in financial assets at FVTPL | (31,442) | (1,329) | | Fair value changes in investment properties | (1,360) | — | | Impairment losses/(reversal) under expected credit loss model, net | (11,108) | 7,504 | | Loss before income tax | (76,267) | (12,230) | | Income tax expense | (42) | — | | Loss for the year from continuing operations | (76,309) | (12,230) | | Discontinued Operations | | | | Profit/(loss) for the year from discontinued operations | 15,825 | (71,135) | | Loss for the year | (60,484) | (83,365) | | Other comprehensive (loss)/income for the year | | | | Exchange differences on translation of overseas operations | — | 51,292 | | Exchange differences on translation of overseas operations of associates | 3,771 | — | | Reclassification of cumulative other reserves on cessation of discontinued operations | (26,933) | — | | Reclassification of cumulative translation reserve on cessation of overseas discontinued operations | (25,676) | — | | Total comprehensive loss for the year | (109,322) | (32,073) | | Loss for the year attributable to owners of the Company | (62,765) | (35,560) | | Total comprehensive loss attributable to owners of the Company | (111,603) | (7,264) | | Basic loss per share (RMB cents) | | | | Continuing and discontinued operations | (5.90) | (3.31) | | Continuing operations | (7.27) | (1.30) | Consolidated Statement of Financial Position This statement presents the Group's assets, liabilities, and equity as of December 31, 2023, December 31, 2022, and January 1, 2022, reflecting the composition and changes in non-current assets, current assets, current liabilities, and non-current liabilities | Metric | December 31, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, plant and equipment | — | 18,429 | | Right-of-use assets | — | 21,207 | | Investment properties | 1,540 | 2,900 | | Interests in associates | 86,028 | 1,240 | | Digital assets | — | 344 | | Intangible assets | — | 1,879 | | Financial assets at FVTPL | 26,469 | 45,846 | | Deferred tax assets | 10 | — | | Total non-current assets | 114,047 | 91,845 | | Current Assets | | | | Inventories | 478 | 549 | | Trade and other receivables | 37,468 | 74,701 | | Financial assets at FVTPL | — | — | | Certificates of deposit | — | 484,602 | | Restricted bank balances | — | 34,614 | | Cash and cash equivalents | 35,462 | 87,289 | | Total current assets | 73,408 | 681,755 | | Current Liabilities | | | | Trade and other payables | 27,502 | 57,326 | | Contract liabilities | 3,696 | 1,289 | | Lease liabilities | 1,922 | 11,128 | | Bank loans | — | 1,000 | | Income tax liabilities | 50 | — | | Total current liabilities | 33,170 | 70,743 | | Net current assets | 40,238 | 611,012 | | Total assets less current liabilities | 154,285 | 702,857 | | Non-current Liabilities | | | | Lease liabilities | 3,377 | 47,599 | | Deferred tax liabilities | 2 | — | | Other payables | 17 | — | | Total non-current liabilities | 3,396 | 47,599 | | Net assets | 150,889 | 655,258 | | Equity | | | | Share capital | 335 | 335 | | Reserves | 161,497 | 272,192 | | Equity attributable to owners of the Company | 161,832 | 272,527 | | Non-controlling interests | (10,943) | 382,731 | | Total equity | 150,889 | 655,258 | Notes to the Consolidated Financial Statements This section provides detailed notes to the consolidated financial statements, explaining the basis of preparation, accounting policies, prior period adjustments, revenue composition, segment information, discontinued operations, loss per share calculation, receivables and payables, bank loans, share capital changes, disposal of subsidiaries, and other litigation and arbitration General Information and Basis of Preparation The Company is an investment holding company primarily engaged in developing and operating online chess and card games, and organizing intellectual sports and program production; on January 1, 2023, the Company lost control over AGAE, whose e-sports business and Leyou Zhihe's casual mobile game business are presented as discontinued operations - The Company primarily engages in developing and operating online chess and card games, and organizing and broadcasting online and offline intellectual sports, competitions, and TV programs and content[65] - The Company lost control over AGAE on January 1, 2023, and its e-sports business is presented as a discontinued operation[67] - The Group disposed of a 40% equity interest in Leyou Zhihe to AGAE Group, and Leyou Zhihe's business is also presented as a discontinued operation[67] Adoption of New and Revised International Financial Reporting Standards This year, several new and revised International Financial Reporting Standards were first applied, with amendments to "Disclosure of Accounting Policies" impacting financial statement disclosures but not significantly affecting financial position or performance; IFRS 18 "Presentation and Disclosure in Financial Statements" will be effective in 2027 and is expected to affect the presentation of the statement of profit or loss and future financial statement disclosures - This year, new and revised standards such as IFRS 17 Insurance Contracts and Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies were first applied[68] - Amendments to "Disclosure of Accounting Policies" impacted the accounting policy disclosures in the Group's consolidated financial statements but had no significant impact on financial position or performance[70] - IFRS 18 Presentation and Disclosure in Financial Statements will be effective for annual periods beginning on or after January 1, 2027, and is expected to affect the presentation of the statement of profit or loss and future financial statement disclosures[73] Prior Period Adjustments The Company discovered that certain expenses from prior periods were not properly recorded, leading to the restatement of consolidated financial statements for 2021 and 2022, primarily involving the recognition of legal advisory expenses, AGAE directors' severance payments, debt collection service fees, and consulting service fees - The Company discovered that certain expenses from prior periods were not properly recorded, and has restated the consolidated financial statements for 2021 and 2022[75] - Key adjustments include the recognition of legal fees of RMB 5,007,000 for 2021 and severance payments of RMB 2,800,000 for 2022[81][82] - Adjustments also include the recognition of accrued debt collection service fees of RMB 4,250,000 and a reversal of impairment losses of RMB 2,000,000 for 2022, as well as consulting service fees of RMB 901,000[82][83] Revenue Continuing operations revenue in 2023 was RMB 88,996 thousand, with online game revenue accounting for RMB 76,286 thousand and online advertising service revenue for RMB 12,710 thousand; most revenue is recognized at a point in time | Revenue Source | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Online game revenue | 76,286 | 84,556 | | Online advertising service revenue | 12,710 | 17,003 | | Total Revenue | 88,996 | 101,559 | | Timing of Revenue Recognition | | | | At a point in time | 80,169 | 93,343 | | Over time | 8,827 | 8,216 | Segment Reporting The primary operating decision-maker initially designated Leyou Group's online chess and card business and AGAE Group's e-sports business as operating and reportable segments; with AGAE Group's business now classified as discontinued operations, only entity-wide disclosures, major customer, and geographical information are presented - The primary operating decision-maker initially designated Leyou Group's online chess and card business and AGAE Group's e-sports business as operating and reportable segments[87] - As AGAE Group's business has been classified as a discontinued operation, only entity-wide disclosures, major customer, and geographical information are currently presented[88] | Region | 2023 Revenue (RMB thousands) | 2022 Revenue (RMB thousands) | 2023 Non-current Assets (RMB thousands) | 2022 Non-current Assets (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | China | 88,996 | 101,559 | 5,415 | 19,582 | | United States | — | — | 82,153 | 25,593 | | Other | — | — | — | 824 | | Total | 88,996 | 101,559 | 87,568 | 45,999 | Other Income Other income from continuing operations in 2023 was RMB 7,186 thousand, a significant increase from RMB 2,489 thousand in 2022, primarily due to growth in franchise fee income from discontinued operations, software sales income, and income from providing chess and card game venues | Income Source | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Franchise fee income from discontinued operations | 1,484 | 1,074 | | Software sales to discontinued operations | 1,981 | — | | Loan interest income | 440 | 525 | | Bank interest income | 93 | 134 | | Government grants | 144 | 714 | | Income from providing chess and card game venues | 3,011 | — | | Miscellaneous income | 33 | 19 | | Total | 7,186 | 2,489 | Other Gains and Losses Continuing operations recorded other losses of RMB 3,457 thousand in 2023, compared to gains of RMB 7,041 thousand in 2022, mainly due to impairment losses on property, plant and equipment and right-of-use assets, partially offset by gains from write-off of other payables | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Net foreign exchange gains | 166 | 56 | | Write-off of other payables | 7,774 | 13 | | Impairment loss on property, plant and equipment | (2,074) | — | | Impairment loss on right-of-use assets | (5,610) | — | | Impairment loss on intangible assets | (589) | — | | Reversal of impairment loss on prepayments/(impairment loss) | 547 | (795) | | Gain on lease modification | 205 | 6 | | Gain on deregistration of a subsidiary | 136 | — | | Gain on deemed acquisition of interest in an associate | — | 3,762 | | Total | (3,457) | 7,041 | Discontinued Operations The Group recognized a deemed disposal of AGAE Group on January 1, 2023, resulting in a loss of RMB 46,895 thousand; concurrently, the disposal of a 40% equity interest in Leyou Zhihe generated a gain of RMB 60,191 thousand, with its business also classified as discontinued operations - The Group lost control over AGAE on January 1, 2023, and its business has been separately presented as a discontinued operation and deemed disposal[94] | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Loss for the year from discontinued AGAE Group operations | — | (71,837) | | Loss on disposal of AGAE | (46,895) | — | | Total AGAE Group Loss | (46,895) | (71,837) | | Profit for the period/year from Leyou Zhihe operations | 2,529 | 702 | | Gain on disposal of Leyou Zhihe | 60,191 | — | | Total Leyou Zhihe Gain | 62,720 | 702 | Loss for the Year The loss for the year from continuing operations in 2023 was primarily influenced by factors such as staff costs, depreciation, amortization, and auditor's remuneration; total staff costs were RMB 33,694 thousand, and auditor's remuneration was RMB 2,538 thousand | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Lease expenses related to short-term leases | 274 | 566 | | Auditor's remuneration (audit services) | 2,538 | 2,356 | | Total depreciation | 4,839 | 5,117 | | Total staff costs | 33,694 | 41,824 | | Amortization of intangible assets | 1,160 | 1,392 | | Net foreign exchange gains | (166) | (56) | Dividends The directors do not recommend the payment of a final dividend for the year ended December 31, 2023 - The directors do not recommend the payment of a final dividend for 2023[99] Loss Per Share In 2023, basic loss per share from continuing operations was RMB (7.27) cents, and basic loss per share from continuing and discontinued operations was RMB (5.90) cents; basic earnings per share from discontinued operations was RMB 1.37 cents, with no assumption of share option/warrant exercise for diluted earnings/loss per share calculation | Metric | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Loss for the year attributable to owners of the Company used for basic loss per share calculation | (62,765) | (35,560) | | Less: Profit/(loss) for the year from discontinued operations | (14,561) | 21,561 | | Loss used for basic loss per share calculation from continuing operations | (77,326) | (13,999) | | Basic loss per share (RMB cents) | | | | Continuing operations | (7.27) | (1.30) | | Continuing and discontinued operations | (5.90) | (3.31) | | Discontinued operations | 1.37 | (2.01) | Trade and Other Receivables As of December 31, 2023, total trade and other receivables were RMB 37,468 thousand, a significant decrease from RMB 74,701 thousand in 2022; the ageing analysis of trade receivables shows RMB 728 thousand overdue for more than 1 year; prepaid advertising expenses were settled via a set-off agreement due to an unlaunched game, and a significant impairment provision was made for loans and interest receivables | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables (net) | 763 | 12,185 | | Prepayments (net) | 9,107 | 17,577 | | Other receivables and deposits (net) | 9,745 | 18,329 | | Loans and interest receivables (net) | 17,853 | 26,610 | | Total | 37,468 | 74,701 | | Trade Receivables Ageing | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 578 | 3,164 | | 31 to 60 days | 99 | 8,232 | | 61 to 90 days | 20 | 132 | | 91 to 180 days | 18 | 744 | | 181 to 365 days | 43 | 148 | | Over 1 year | 728 | 854 | | Total | 1,486 | 13,274 | - Prepaid advertising expenses of RMB 8,000,000 were offset against amounts due to a former acting chief executive officer via a set-off agreement due to the game not being launched[108][109] - A significant impairment provision of RMB 52,520 thousand was made for loans and interest receivables in 2023[104] Trade and Other Payables As of December 31, 2023, total trade and other payables were RMB 27,502 thousand, a significant decrease from RMB 57,326 thousand in 2022; the credit period for trade payables is typically 30 to 90 days, with RMB 3,072 thousand overdue for more than 1 year | Item | December 31, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 4,137 | 13,679 | | Other payables and accrued expenses | 9,593 | 15,083 | | Staff costs and accrued benefits | 4,654 | 15,218 | | Amounts due to former acting chief executive officer | — | 7,807 | | Amounts due to an associate | 4,328 | — | | Accrued collection service fees | 2,250 | 2,250 | | Accrued consulting service fees | 656 | 901 | | VAT and other taxes payable | 1,884 | 2,388 | | Total | 27,502 | 57,326 | | Trade Payables Ageing | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 961 | 7,804 | | 31 to 60 days | 36 | 2,360 | | 61 to 90 days | 30 | 222 | | 91 to 180 days | 23 | 237 | | 181 to 365 days | 15 | 501 | | Over 1 year | 3,072 | 2,555 | | Total | 4,137 | 13,679 | Bank Loans As of December 31, 2023, the Group had no bank loans, compared to RMB 1,000 thousand in 2022, which was unsecured and bore a fixed annual interest rate of 3.65% | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Bank loans | — | 1,000 | - The 2022 bank loan was unsecured, bore a fixed annual interest rate of 3.65%, and was guaranteed by an independent third party[115] Share Capital The Company's authorized share capital consists of 10,000,000,000 ordinary shares, with 1,077,799,887 issued and fully paid shares, equivalent to RMB 335 thousand in par value; as of December 31, 2023, the Company held 2,200,000 shares through a trustee | Item | Number of Shares | Par Value (USD thousands) | Equivalent Par Value (RMB thousands) | | :--- | :--- | :--- | :--- | | Authorized ordinary shares | 10,000,000,000 | 500 | — | | Issued and fully paid ordinary shares | 1,077,799,887 | 55 | 335 | - As of December 31, 2023, the Company held 2,200,000 shares of its own through a trustee[116] Disposal of Subsidiaries The Group recognized a deemed disposal of AGAE Group on January 1, 2023, resulting in a disposal loss of RMB 46,895 thousand; concurrently, the disposal of a 40% equity interest in Leyou Zhihe to AGAE Group generated a disposal gain of RMB 60,191 thousand - The Group recognized a deemed disposal of AGAE Group on January 1, 2023, resulting in a disposal loss of RMB 46,895 thousand[117][118] - The disposal of a 40% equity interest in Leyou Zhihe to AGAE Group for a consideration of USD 7,000,000 (approximately RMB 50,245 thousand) generated a disposal gain of RMB 60,191 thousand[119] Other Litigation/Arbitration The Group is involved in an arbitration by Mr. Wu Guoliang against AGAE and a lawsuit by Knighted Pastures, LLC against AGAE and its directors; Mr. Wu's arbitration is in the discovery phase, involving approximately USD 645,000 transferred to an escrow account; the Knighted lawsuit was dismissed by the court, but Knighted filed a second lawsuit alleging breach of fiduciary duties, which AGAE will actively defend - Mr. Wu Guoliang filed an arbitration case with the American Arbitration Association regarding USD 1,000,000 owed by AGAE, which is currently in the discovery phase, with a hearing scheduled for early November 2025[120][121] - Approximately USD 645,000 has been transferred to an escrow account pending the conclusion of Mr. Wu's arbitration against AGAE[121] - Knighted Pastures, LLC filed a second lawsuit against AGAE and its directors, alleging breach of fiduciary duties, which AGAE will actively defend[124] Publication of Annual Results Announcement and Annual Report This annual results announcement has been published on the website of The Stock Exchange of Hong Kong Limited and the Company's website, and the annual report will be published on the aforementioned websites in due course - The annual results announcement has been published on the website of The Stock Exchange of Hong Kong Limited and the Company's website[127] - The Group's annual report for the year ended December 31, 2023, will be published on the aforementioned websites in due course[127] Continued Suspension of Trading The Company's shares have been suspended from trading on the Stock Exchange since March 28, 2024, and will remain suspended until the Company fulfills all resumption guidance, rectifies the issues leading to the suspension, and fully complies with the Listing Rules - Trading in shares has been suspended on the Stock Exchange since 9:07 a.m. on Thursday, March 28, 2024[128] - Trading will remain suspended until the Company fulfills all resumption guidance, rectifies the issues leading to its suspension, and fully complies with the Listing Rules[128] Board Information This announcement is issued by Mr. Lu Jingsheng, Chairman and Executive Director, on behalf of the Board; as of the announcement date, the Board comprises Executive Directors Mr. Lu Jingsheng and Ms. Xu Jin; Non-executive Directors Ms. Gao Liping and Ms. Yu Bing; and Independent Non-executive Directors Mr. Ma Shaohua, Mr. Zhang Li, and Mr. Dai Bing - This announcement is issued by Mr. Lu Jingsheng, Chairman and Executive Director, on behalf of the Board[129] - The Board members include Executive Directors Mr. Lu Jingsheng, Ms. Xu Jin; Non-executive Directors Ms. Gao Liping, Ms. Yu Bing; and Independent Non-executive Directors Mr. Ma Shaohua, Mr. Zhang Li, Mr. Dai Bing[129]