CMGE(HK:00302)2025-11-05 14:19Impairment and Write-offs - The company recognized a trade receivables impairment of approximately RMB 175.8 million due to delayed payments from third-party distribution channels amid a challenging market environment[5]. - The company confirmed a financial asset impairment of approximately RMB 79.73 million, primarily related to a game development agreement with a Chengdu developer, which has led to a lawsuit for the return of prepaid amounts[6]. - The company recognized a write-off of prepaid expenses amounting to approximately RMB 211.8 million due to unforeseen issues during game development, affecting over 20 prepaid contracts[10]. - The total impairment included RMB 101.0 million in prepaid minimum guarantees, RMB 100.8 million in prepaid royalties, and RMB 10.0 million in prepaid investments[11]. - The company recorded goodwill impairments of approximately RMB 529.9 million for Wenmo Interactive and RMB 16.8 million for Shanghai Zhujing due to poor performance during the reporting period[12]. - Impairment of intangible assets related to "仙劍世界" amounts to approximately RMB 157.7 million, while other intangible assets impairment totals about RMB 53.9 million[15]. - The impairment of other intangible assets primarily includes unamortized prepaid royalties, which were not fully amortized due to early market exit of 11 games[18]. - The board believes the impairment amounts are fair and reasonable based on independent valuation standards and management's assessments[20]. Revenue and Performance Adjustments - The revenue growth rate for the cash-generating unit of 文脈互動 has been revised down to 2%-157%, compared to the previous range of 16%-213%[13]. - The revenue growth rate for 上海洲競's cash-generating unit has been adjusted to zero, down from a previous range of 5%-44%[14]. - The flagship game "仙劍世界" performed poorly in tests conducted in June and December 2024, resulting in a significant reduction in profit forecasts[16]. - The game "全民街籃" has not met testing expectations, leading to significant losses, and has been transferred to a third-party partner for adjustments and publishing[14]. - The game "城主天下" launched in November 2023 is expected to perform poorly in 2024, while the launch of "代號：主公" has been canceled[13]. Financial Assets and Valuation - The company reported a total of RMB 1,367.0 million in prepaid expenses as of December 31, 2024, including RMB 737.6 million in prepaid royalties and RMB 443.3 million in prepaid minimum guarantees[9]. - The valuation of the game technology developed by 上海凡影 is based on a discounted cash flow method, reflecting all business risks[17]. Stock Options - The unexercised stock options as of December 31, 2024, were priced at HKD 2.81, HKD 1.95, and HKD 1.15 for options granted on March 29, 2021, January 20, 2023, and April 24, 2024, respectively[21].