LINEKONG(HK:08267)2025-09-26 08:30Web3 and Cryptocurrency Focus - The company has established Web3 as a strategic focus since 2024, aiming for breakthroughs in investment, application, and computing power services[12]. - As of the end of the reporting period, the company holds 92.0692 units of Bitcoin, 943.6293 units of Ethereum, and 6,091.7000 units of Solana, with unrealized gains of approximately $7.5 million[14]. - The company announced the establishment of the LK Crypto division in July 2025, which will manage all Web3 and cryptocurrency-related businesses[15]. - The implementation of the Hong Kong Stablecoin Ordinance on August 1, 2025, has established a licensing system for stablecoin issuers, enhancing the regulatory framework for virtual asset activities[12]. - The company aims to further increase its cryptocurrency holdings to achieve stable asset preservation and appreciation amid market volatility[14]. - The company is focusing on compliance construction to meet the strict requirements of the Stablecoin Ordinance, which includes anti-money laundering and investor protection measures[15]. - The company is leveraging Hong Kong's policy advantages to participate in more innovative project investments and collaborations in the Web3 space[15]. - The company is committed to optimizing its investment portfolio in compliance with regulations to enhance market trust and reduce risks[12]. - The company is strategically positioned to capitalize on emerging technologies and strengthen its competitive business layout in the Web3 sector[14]. Gaming Business Performance - The gaming business reported a 5.8% year-over-year increase in overseas revenue, demonstrating improved brand recognition and user loyalty[20]. - As of June 30, 2025, the company operates 15 online games, ensuring stable cash flow through refined operations and user engagement[23]. - The gaming business will focus on product innovation, market expansion, and technology upgrades to drive growth and competitiveness in the second half of 2025[22]. - The company aims to explore new gameplay and mechanisms in gaming, incorporating market trends and user preferences to inject new momentum into business growth[23]. Financial Performance Overview - Revenue for the six months ended June 30, 2025, decreased by approximately 51.5% to RMB 28.5 million from RMB 58.8 million for the same period in 2024[38]. - Game business revenue contributed approximately RMB 17.1 million, a decrease of 26.6% or RMB 6.2 million compared to the same period in 2024[41]. - Film and television business revenue was approximately RMB 11.4 million, down about 67.9% or RMB 24.1 million from RMB 35.5 million in the same period in 2024[41]. - Gross profit for the six months ended June 30, 2025, was approximately RMB 5.4 million, down about 63.3% from RMB 14.7 million in the same period in 2024[43]. - Gross margin for the six months ended June 30, 2025, was approximately 18.9%, a decrease of about 6.1% from 25.0% in the same period in 2024[43]. - Operating loss for the six months ended June 30, 2025, was approximately RMB 8.4 million, compared to an operating loss of RMB 13.2 million for the same period in 2024, reflecting improved cost control[49]. - The company incurred a loss of RMB 12,764,000 during the period, compared to a profit of RMB 11,429,000 in the previous period, indicating a shift in financial performance[160]. Investment and Capital Expenditures - The company invested in EcoPowX, focusing on environmentally friendly solutions for AI computing and Bitcoin network power supply, with equipment installation completed and awaiting final testing[18]. - Total capital expenditures for the six months ended June 30, 2025, were approximately RMB 65.9 million, an increase from RMB 43.9 million for the same period in 2024, including significant investments in cryptocurrencies and financial assets[56]. - The company invested RMB 56,358,000 in intangible assets during the period, compared to RMB 41,927,000 in the same period last year, representing a 34.4% increase in investment[161]. Shareholder and Equity Information - The total number of issued shares as of June 30, 2025, was 368,024,964[75]. - Major shareholder Zhu Li holds 107,346,040 shares, representing 29.17% of the company's equity[80]. - Wangfeng Management Limited, as a beneficial owner, holds 66,576,160 shares, representing 18.09% of the company's equity[80]. - The total employee compensation for the six months ended June 30, 2025, was approximately RMB 13.5 million, a decrease from RMB 21.2 million for the same period in 2024, with 64 employees as of the reporting date[60]. Restricted Share Units and Stock Options - A total of 31,889,287 restricted share units have been granted and remain unexercised as of June 30, 2025[88]. - The board approved an extension of the validity period for all granted restricted stock units by an additional ten years, effective from March 20, 2024[93]. - The company has a stock option plan approved on November 20, 2014, with various grants made at different exercise prices ranging from HKD 0.335 to HKD 8.10[112]. - The total number of stock options available for grant under the stock option plan as of June 30, 2025, is 0, as the plan expires on December 29, 2024[124]. Corporate Governance and Compliance - The company believes it complies with the corporate governance code, except for a deviation regarding the separation of the roles of Chairman and CEO[145]. - The group has not made any changes to its risk management policies as of June 30, 2025[175]. - The group expects no significant impact from new standards and amendments that will come into effect in the foreseeable future[172].