网龙(00777) - 2022 - 中期财报

Cover Information This report is the 2022 interim report of NetDragon Websoft Holdings Limited (Stock Code: 777) - This report is the 2022 interim report of NetDragon Websoft Holdings Limited (Stock Code: 777)[1] Table of Contents The report primarily includes management discussion and analysis, condensed consolidated financial statements, notes to the condensed consolidated financial statements, and other information - The report's main contents include management discussion and analysis, condensed consolidated financial statements, notes to the condensed consolidated financial statements, and other information[5] Management Discussion and Analysis This section provides an overview of the company's performance, highlighting key financial metrics and business segment developments - The company's revenue increased by 26.3% to RMB 4.2 billion in the first half of 2022, with net profit attributable to owners increasing by 31.2% to RMB 565.1 million[9] - Education business achieved record-high revenue growth of 71.2%, while the gaming business saw a 3.9% decline due to domestic pandemic impacts[9] - The Board resolved to declare an interim special dividend of HKD 0.50 per share and an interim dividend of HKD 0.40 per share[9] Financial Summary and Review This section outlines the company's key financial indicators for the first half of 2022, including total revenue, gross profit, operating profit, and profit attributable to owners, with detailed segment-wise changes - In the first half of 2022, the company's revenue increased by 26.3% year-on-year, gross profit increased by 4.0%, and profit attributable to owners increased by 31.2%[6] Financial Summary for the First Half of 2022 Detailed financial data for the first half of 2022, including revenue, gross profit, operating profit, and non-GAAP metrics, with year-on-year comparisons 2022 H1 Financial Summary (RMB) | Indicator | 2022年上半年 (RMB) | 同比增长/减少 | | :--- | :--- | :--- | | Revenue | 4,200,000,000 | +26.3% | | Education Business Revenue | 2,400,000,000 | +71.2% | | Gaming Business Revenue | 1,800,000,000 | -3.9% | | Gross Profit | 2,300,000,000 | +4.0% | | Gaming Business Operating Segment Profit | 1,000,000,000 | -6.2% | | Education Business Operating Segment Loss | (35,700,000) | Narrowed 86.1% | | Operating Profit | 744,600,000 | +7.7% | | Non-GAAP Operating Profit | 854,400,000 | +13.3% | | Profit Attributable to Owners | 565,100,000 | +31.2% | | Non-GAAP Profit Attributable to Owners | 815,800,000 | +44.0% | | Interim Special Dividend and Interim Dividend | HKD 0.50 per share and HKD 0.40 per share | N/A | Segmental Financial Summary This section provides detailed comparative data for revenue, gross profit, gross margin, and operating segment profit (loss) for the gaming and education segments in H1 2022 and H1 2021, highlighting strong growth in education and slight decline in gaming Segmental Financial Summary (RMB Thousand) | Indicator | 2022 H1 Gaming | 2022 H1 Education | 2021 H1 Gaming (Restated) | 2021 H1 Education (Restated) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,775,729 | 2,409,818 | 1,847,548 | 1,407,641 | | Gross Profit | 1,699,076 | 609,687 | 1,765,923 | 431,055 | | Gross Margin | 95.7% | 25.3% | 95.6% | 30.6% | | Operating Segment Profit (Loss) | 1,006,454 | (35,672) | 1,073,223 | (256,327) | - Education business gross margin decreased from 30.6% to 25.3%, primarily due to increased material and shipping costs and price reductions for ActivPanel 7, though Promethean's adjusted gross margin increased by 1.3 percentage points quarter-on-quarter to 29.9% after deducting tariffs[10] Business Review and Outlook This section reviews the company's overall business performance in H1 2022, emphasizing significant growth in the education business and market leadership, while noting short-term challenges in gaming due to macroeconomic factors and active expansion into new IPs and overseas markets - The company achieved significant progress in the first half of 2022, with double-digit growth in both revenue and net profit, driven by efficient business execution and investments in R&D, global sales networks, and talent[9] - The company is committed to maximizing shareholder returns, having declared interim special and interim dividends, and maintaining strong net cash flow to capitalize on future investment opportunities[9] Education Business The education business achieved historic growth in H1 2022, with revenue up 71.2% year-on-year and significantly narrowed operating losses, securing global market leadership in interactive flat panels and launching new products and B2G projects - Education business revenue increased by 71.2% to RMB 2.4 billion, with operating segment loss narrowing by 86.1% to RMB 35.7 million[10] - Global interactive flat panel shipments increased by 71.5% year-on-year, with the company's shipments growing by 82.5% year-on-year and 46.9% quarter-on-quarter, raising market share by 4.1 percentage points quarter-on-quarter to 26.0%, ranking first globally[10] - Launched the new ActivPanel 9 interactive flat panel and signed an exclusive distribution agreement with AI education technology company Merlyn Mind for the US market, expanding SaaS solutions[11] - Advanced B2G national projects, including a contract for 94,000 Promethean panels in the Egyptian market and R&D for China's Ministry of Education's National Smart Education Platform[12] Gaming Business The gaming business experienced a 3.9% year-on-year revenue decline in H1 2022 due to domestic pandemic impacts, but the company is enhancing player engagement through expansions and marketing, while actively developing new IPs, categories, and overseas markets, with future launches including "Eudemons Online 2" and Web3.0 games - Gaming business revenue decreased by 3.9% year-on-year to RMB 1.8 billion, with PC game revenue down 5.2% and mobile game revenue up 3.1% year-on-year[13] - Flagship IP "Eudemons Online" launched four expansion packs, with monthly active users increasing by 34% and average paying users by 65% year-on-year, and "Eudemons Pocket Edition" revenue growing by 7.8%[13] - "Conquer Online" IP performed stably in overseas markets, with revenue in Egypt increasing by 20.8% and in other markets by 57.7% year-on-year[14] - Signed a cooperation agreement for the overseas game version of "The Last Remnant" IP and launched the closed beta of the first Web3.0 game, "Neopets Metaverse"[14] - Upcoming launches in the second half include "Eudemons Online 2" and "Neopets Faerie's Hope," with a rich product pipeline for the future[14] Company Development Milestones and Awards In January 2022, Fujian NetDragon Computer Network Information Technology Company received the "Most Valuable Education Company" award at the 6th Golden Hong Kong Stocks Awards - Fujian NetDragon Computer Network Information Technology Company received the "Most Valuable Education Company" award at the 6th Golden Hong Kong Stocks Awards[14] Liquidity and Capital Resources As of June 30, 2022, the company held approximately RMB 3.9029 billion in cash and bank deposits, with net current assets of approximately RMB 4.0011 billion, a decrease from the end of 2021 Liquidity and Capital Resources (RMB Thousand) | Indicator | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Pledged bank deposits, bank balances and cash | 3,902,900 | 4,356,100 | | Net current assets | 4,001,100 | 4,386,700 | Gearing Ratio As of June 30, 2022, the company's gearing ratio was 0.07, slightly higher than 0.06 at the end of 2021, with an increase in total bank borrowings Gearing Ratio and Bank Borrowings (RMB) | Indicator | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Gearing Ratio | 0.07 | 0.06 | | Total Bank Borrowings | 443,200,000 | 402,900,000 | - Bank borrowings include RMB 105.6 million in floating-rate loans and RMB 337.6 million in fixed-rate loans, mostly secured by subsidiary properties, right-of-use assets, corporate guarantees, and directors' personal guarantees[16] Capital Structure As of June 30, 2022, the company's total equity was approximately RMB 6.7507 billion, a decrease from the end of 2021 Total Equity (RMB) | Indicator | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Equity | 6,750,700,000 | 7,074,600,000 | Contingent Liabilities As of June 30, 2022, and December 31, 2021, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities at the end of the reporting period[18] Significant Investments, Acquisitions and Disposals, and Future Plans for Significant Investments and Capital Assets Except as disclosed in this interim report, as of June 30, 2022, the Group had not undertaken any significant acquisitions, disposals of subsidiaries, associates, and joint ventures, nor did it have other future plans for significant investments and capital assets - During the reporting period, the Group did not undertake any significant investments, acquisitions, or disposals, nor did it have future plans for significant investments[18] Foreign Currency Risk The Group primarily operates in China, the US, and the UK, with monetary assets, liabilities, and transactions mainly denominated in RMB, USD, and GBP; the company currently has no foreign currency hedging policy, but management closely monitors foreign exchange risk - Primary operating locations are China, the US, and the UK, with main denominated currencies being RMB, USD, and GBP[19] - Currently, there is no foreign currency hedging policy, but management closely monitors foreign exchange risk[19] Credit Risk The Group mitigates credit risk from trade receivables by setting credit limits, approval, and monitoring procedures, and assesses credit risk from bank deposits as limited due to high-rated counterparties - Credit risk from trade receivables, contract assets, etc., is mitigated through a dedicated team responsible for credit limits, approval, and monitoring procedures[20] - Credit risk from bank deposits is limited as counterparties are internationally highly-rated or state-owned banks[20] - No significant concentration of credit risk, as risk is diversified across numerous counterparties and customers[20] Liquidity Risk The Group manages liquidity risk by monitoring and maintaining sufficient cash and cash equivalents to fund operations and mitigate cash flow volatility, regularly reviewing liquidity needs and compliance with borrowing covenants, deeming liquidity risk to be minimal - Liquidity risk is managed by maintaining sufficient cash and cash equivalents to fund operations and mitigate cash flow volatility[21] - Regular monitoring of liquidity needs and compliance with borrowing covenants ensures adequate cash reserves and credit facilities[21] - Management assesses liquidity risk as minimal[21] Staff Information As of June 30, 2022, the Group's total headcount was 4,784, a decrease from 4,834 at the end of 2021, though the number of R&D personnel slightly increased Staff Headcount Analysis | Department | June 30, 2022 | December 31, 2021 | June 30, 2021 | | :--- | :--- | :--- | :--- | | R&D | 2,699 | 2,605 | 3,378 | | Sales & Marketing | 1,008 | 1,107 | 1,305 | | Accounting, Finance & General Administration | 835 | 889 | 1,043 | | Production | 242 | 233 | 238 | | Total | 4,784 | 4,834 | 5,964 | Performance Evaluation In H1 2022, the company focused on talent upgrading and attraction, actively engaged in university-enterprise cooperation, and committed to building a "metaverse organization" where everyone participates and shares value, enhancing management efficiency and employee value contribution through digital transformation and timely reward mechanisms - Focused on talent upgrading and attracting outstanding talent in gaming and education, conducting campus recruitment and participating in the Ministry of Education's employment education program[23] - Committed to building a "metaverse organization" where everyone participates and shares value, attracting global talent through metaverse office models and flexible employment[24] - Upgraded corporate culture and management system, with "Openness, Courage, Passion" as core values, and promoted human resources digital transformation[24] - Implemented a timely reward mechanism to encourage innovation and value contribution, and promoted management rejuvenation to identify successor talent[24] - Continuously improved employee welfare and services, strengthened employee care, and strictly implemented corporate responsibility for epidemic prevention and control[24] Staff Training NetDragon University provided specialized and systematic training in H1 2022 to align with the company's strategic development, conducting 33 offline training sessions with 1,478 participants, and accumulating over 100,000 hours of online learning across various fields including blockchain, product design, and game design - NetDragon University provides specialized and systematic training to enhance employees' professional capabilities and align with the company's strategic development[26] - In the first half of 2022, 33 offline training sessions were conducted with 1,478 participants; 101 courses were uploaded to the online platform, with 4,559 participants accumulating 107,643.69 hours of learning[26] - Training content included blockchain engineer training camp, software product design training camp, 99 Lecture Hall, game design appreciation sessions, new employee training, U3D series certification, and design methodology courses[25][27] Corporate Culture The company's corporate culture emphasizes seven core values: "Passion, Learning, Innovation, Striving, Pursuit of Excellence, Fairness, Customer First," aiming to inspire internal motivation, enhance team cohesion, and create value for customers - Passion: Go all out, enjoy work, and spread positive energy[28] - Learning: Stay curious, apply knowledge, reflect, and share willingly[29] - Innovation: Embrace change, explore new methods, and launch new technologies and products[29] - Striving: Actively express opinions, seize opportunities, and unleash inner drive[30] - Pursuit of Excellence: Aim high, strive for perfection, and provide quality products and services to customers[31] - Fairness: Foster a work environment with fair distribution, just procedures, transparent information, and mutual respect[31] - Customer First: Acutely judge customer needs and create value through technology and services[32] Interim Dividends The Board resolved to declare an interim special dividend of HKD 0.50 per share and an interim dividend of HKD 0.40 per share for the six months ended June 30, 2022, totaling HKD 0.90 per share, payable on or about October 31, 2022 2022 H1 Interim Dividends | Dividend Type | Amount per Share (HKD) | | :--- | :--- | | Interim Special Dividend | 0.50 | | Interim Dividend | 0.40 | | Total | 0.90 | - Dividends will be distributed to shareholders whose names appear on the company's register of members on September 14, 2022, and are expected to be paid on or about October 31, 2022[33] Closure of Register of Members To determine eligible shareholders for the interim dividend, the company will suspend registration of members from September 14 to September 15, 2022, with all share transfer documents to be lodged by 4:30 p.m. on September 13, 2022, at the Hong Kong share registrar - The register of members will be closed from September 14 to September 15, 2022[34] - The deadline for lodging share transfer documents is 4:30 p.m. on September 13, 2022[34] Other Information This section covers directors' and major shareholders' interests, share option and award schemes, related party transactions, corporate governance, and other disclosures - Disclosed the interests and short positions of directors, chief executives, and major shareholders in the company's shares[35][40] - Detailed the operation and changes of the share option scheme and share award scheme[45][48] - The company complies with the Corporate Governance Code in Appendix 14 of the Listing Rules, with an audit committee composed of independent non-executive directors overseeing financial reporting and internal controls[63] Directors' and Chief Executives' Interests and Short Positions in Shares, Underlying Shares, and Debentures As of June 30, 2022, the company's directors and chief executives held interests in the company's shares, with Liu Dejian, Liu Luyuan, and Zheng Hui considered parties acting in concert, collectively holding 46.38% of the issued share capital Directors' and Chief Executives' Shareholding Profile (June 30, 2022) | Director's Name | Capacity and Nature of Interest | Number of Shares (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Liu Dejian | Beneficial owner, through controlled corporations and beneficiary of trusts | 250,822,457 | 46.38% | | Leung Nian Zai | Beneficial owner | 5,419,040 | 1.00% | | Liu Luyuan | Beneficial owner and beneficiary of certain trusts | 250,822,457 | 46.38% | | Zheng Hui | Beneficial owner and through controlled corporations | 250,822,457 | 46.38% | | Chen Hongzhan | Beneficial owner and beneficiary of certain trusts | 11,197,019 | 2.07% | | Cao Guowei | Beneficial owner | 438,500 | 0.08% | | Li Junxiong | Beneficial owner | 632,519 | 0.12% | | Liao Shiqiang | Beneficial owner | 818,019 | 0.15% | - Liu Dejian, Liu Luyuan, and Zheng Hui are deemed to hold interests in 46.38% of the company's issued share capital due to direct and deemed shareholdings[38] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares, Underlying Shares, and Debentures As of June 30, 2022, besides directors and chief executives, DJM Holding Ltd. and International Data Group (IDG) were substantial shareholders, holding 35.34% and 9.90% of the share interests, respectively Substantial Shareholders' Shareholding Profile (June 30, 2022) | Shareholder Name | Capacity and Nature of Interest | Number of Shares (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | DJM Holding Ltd. | Beneficial owner | 191,078,100 | 35.34% | | International Data Group | Beneficial owner | 53,533,320 | 9.90% | | Ho Chi Sing | Through controlled corporations | 53,533,320 | 9.90% | | Zhou Quan | Through controlled corporations | 50,470,735 | 9.33% | - International Data Group comprises four limited partnerships, with its controlling structure involving Zhou Quan and Ho Chi Sing[43] Share Option Schemes The company has a 2008 Share Option Scheme (expired) and a 2018 Share Option Scheme to provide equity incentives to eligible participants; as of June 30, 2022, 1,273,250 options remained unexercised under the 2008 scheme, and 5,300,000 options under the 2018 scheme 2008 Share Option Scheme Movements (H1 2022) | Status | January 1, 2022 | Granted | Exercised | Cancelled | Lapsed | June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Number of Options | 1,358,917 | – | 19,825 | – | 65,842 | 1,273,250 | 2018 Share Option Scheme Movements (H1 2022) | Status | January 1, 2022 | Granted | Exercised | Cancelled | Lapsed | June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Number of Options | 5,300,000 | – | – | – | – | 5,300,000 | - In the first half of 2022, the company recognized a total expense of RMB 3,774,000 for share options[128] Share Award Schemes The company has a NetDragon Share Award Scheme to incentivize selected employees; as of June 30, 2022, all awarded shares had vested or lapsed, with no unvested awarded shares remaining; Best Education Online Limited also has a share award scheme, but no awarded shares were granted as of June 30, 2022 NetDragon Share Award Scheme Movements (H1 2022) | Participant Category | January 1, 2022 Unvested | Granted during the period | Awards vested during the period | Lapsed during the period | June 30, 2022 Unvested | | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | 218,160 | – | 190,890 | 27,270 | – | | Other Employees | 148,080 | – | 87,420 | 60,660 | – | | Total | 366,240 | – | 278,310 | 87,930 | – | - As of June 30, 2022, there were no unvested awarded shares under the NetDragon Share Award Scheme[51] - No awarded shares were granted under the Best Share Award Scheme as of June 30, 2022[52] Best Issuance of Series A Preferred Shares Best Education Online Limited issued 180,914,513 Series A preferred shares to Series A investors in 2015 for a total consideration of USD 52.5 million; as of June 30, 2022, no Series A preferred shares had been converted into Best ordinary shares - Best issued 180,914,513 Series A preferred shares in 2015 for a total consideration of USD 52.5 million[53] - Assuming full conversion, the company's interest in Best ordinary shares would decrease from 90.28% to approximately 83.40%[53] - As of June 30, 2022, no Series A preferred shares had been converted into Best ordinary shares[53] Acquisition of EDMODO, INC. and Best Issuance of Series B Preferred Shares Best acquired Edmodo, LLC in 2018 for a total consideration of USD 137.5 million in cash and shares (issuing 112,560,245 Best Series B shares); as of June 30, 2022, no Series B preferred shares had been converted into Best ordinary shares - Best acquired Edmodo, LLC in 2018 for USD 137.5 million in cash and shares (112,560,245 Series B shares)[54] - As of June 30, 2022, no Series B preferred shares had been converted into Best ordinary shares[54] Issuance of Secured Convertible and Exchangeable Bonds by Best and Unlisted Warrants under General Mandate Best issued convertible and exchangeable bonds with a principal amount of USD 150 million to investors in 2020, and the company simultaneously issued unlisted warrants to investors; as of June 30, 2022, neither these bonds nor warrants had been converted - Best issued USD 150 million in convertible and exchangeable bonds in 2020, convertible into 11.16% of Best's issued share capital[55] - The company also issued unlisted warrants to investors, convertible into 11,502,220 company warrant shares[55] - The subscription price has been adjusted from HKD 21.1998 to HKD 19.6698[55] - As of June 30, 2022, no bonds or warrants had been converted[55] Use of Proceeds from Placing and Subscription on a "Top-up" Basis The company raised net proceeds of approximately HKD 774.28 million in 2020 through a placing and subscription on a "top-up" basis, with all proceeds fully utilized for expanding the education business - Raised net proceeds of approximately HKD 774.28 million in 2020 through placing and subscription[57] - All proceeds have been fully utilized for expanding the education business[57] Standard Code for Securities Transactions by Directors The company has adopted a code for directors' securities transactions no less exacting than the Model Code in Appendix 10 of the Listing Rules and confirmed that all directors complied with it in H1 2022 - The company has adopted a code for directors' securities transactions that complies with the Listing Rules[58] - All directors complied with the code in the first half of 2022[58] Interim Dividends The Board resolved to declare an interim special dividend of HKD 0.50 per share and an interim dividend of HKD 0.40 per share for the six months ended June 30, 2022, totaling HKD 0.90 per share, payable on or about October 31, 2022 2022 H1 Interim Dividends | Dividend Type | Amount per Share (HKD) | | :--- | :--- | | Interim Special Dividend | 0.50 | | Interim Dividend | 0.40 | | Total | 0.90 | - Dividends will be distributed to shareholders whose names appear on the company's register of members on September 14, 2022, and are expected to be paid on or about October 31, 2022[59] Closure of Register of Members To determine eligible shareholders for the interim dividend, the company will suspend registration of members from September 14 to September 15, 2022, with all share transfer documents to be lodged by 4:30 p.m. on September 13, 2022, at the Hong Kong share registrar - The register of members will be closed from September 14 to September 15, 2022[60] - The deadline for lodging share transfer documents is 4:30 p.m. on September 13, 2022[60] Changes in Directors' Information Disclosed under Rule 13.51B(1) of the Listing Rules In accordance with the Listing Rules, the company disclosed the change in independent non-executive director Mr. Li Junxiong's information, who resigned as an independent non-executive director of Puxin Financial Group Limited on July 17, 2022 - Independent non-executive director Li Junxiong resigned as an independent non-executive director of Puxin Financial Group Limited on July 17, 2022[61] Competition and Conflicts of Interest As of the report date, none of the company's directors or their associates held any interests in businesses competing or potentially competing with the Group's business, nor were there any other conflicts of interest - As of the report date, directors and their associates had no interests in businesses competing or potentially competing with the Group's business, nor any other conflicts of interest[62] Compliance with Corporate Governance Code The company has consistently complied with the code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules throughout the review period - The company consistently complied with the Corporate Governance Code in Appendix 14 of the Listing Rules throughout the review period[63] Audit Committee The company's Audit Committee, composed of three independent non-executive directors, is responsible for reviewing and overseeing financial reporting processes and internal control systems, and has reviewed and approved the Group's interim results for the six months ended June 30, 2022 - The Audit Committee comprises three independent non-executive directors: Cao Guowei (Chairman), Li Junxiong, and Liao Shiqiang[63] - Its primary responsibilities include reviewing and overseeing financial reporting processes and internal control systems, covering financial, operational, compliance monitoring, and risk management[63] - The Audit Committee has reviewed and deemed the Group's interim results for the six months ended June 30, 2022, to comply with applicable accounting standards and requirements[63] Purchase, Sale or Redemption of Securities For the six months ended June 30, 2022, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor its subsidiaries repurchased, sold, or redeemed any listed securities[64] Review Report on Condensed Consolidated Financial Statements Deloitte Touche Tohmatsu reviewed NetDragon Websoft Holdings Limited's condensed consolidated financial statements for the six months ended June 30, 2022, in accordance with Hong Kong Standard on Review Engagements 2410 - Deloitte Touche Tohmatsu reviewed NetDragon Websoft Holdings Limited's condensed consolidated financial statements for the six months ended June 30, 2022, in accordance with Hong Kong Standard on Review Engagements 2410[65] - The scope of review is substantially less than an audit, thus no audit opinion is expressed[66] - The conclusion is that nothing has come to their attention that causes them to believe the condensed consolidated financial statements are not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[67] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the company's financial performance for the six months ended June 30, 2022, including revenue, gross profit, operating profit, and profit attributable to owners Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB Thousand) | Indicator | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Revenue | 4,240,381 | 3,356,174 | | Cost of Revenue | (1,917,600) | (1,122,299) | | Gross Profit | 2,322,781 | 2,233,875 | | Operating Profit | 744,612 | 691,635 | | Profit Before Tax | 579,636 | 599,670 | | Taxation | (37,601) | (216,042) | | Profit for the Period | 542,035 | 383,628 | | Total Comprehensive Income for the Period | 557,907 | 377,721 | | Profit Attributable to Owners of the Company | 565,114 | 430,732 | | Basic Earnings Per Share (RMB cents) | 104.42 | 77.45 | - Revenue increased by 26.3% year-on-year, profit for the period increased by 41.3%, and profit attributable to owners of the company increased by 31.2%[69][70] Condensed Consolidated Statement of Financial Position This statement provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2022, and December 31, 2021 Condensed Consolidated Statement of Financial Position (RMB Thousand) | Indicator | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Non-current Assets | 4,109,200 | 3,944,043 | | Current Assets | 6,664,168 | 6,940,793 | | Current Liabilities | 2,663,096 | 2,554,109 | | Non-current Liabilities | 1,359,564 | 1,256,118 | | Net Assets | 6,750,708 | 7,074,609 | | Equity Attributable to Owners of the Company | 7,019,572 | 7,314,400 | - Net current assets decreased from RMB 4,386,684 thousand as of December 31, 2021, to RMB 4,001,072 thousand as of June 30, 2022[73] Condensed Consolidated Statement of Changes in Equity This statement details the changes in the company's equity attributable to owners for the six months ended June 30, 2022, including comprehensive income, share issuance, share repurchases, and dividends - Total comprehensive income attributable to owners of the company for the first half of 2022 was RMB 581,858 thousand[75] - Share capital increased by RMB 125 thousand during the period due to the exercise of share options[75] - Share capital decreased by RMB 330 thousand during the period due to share repurchases and cancellations[75] - Dividends paid for the 2021 final dividend and interim special dividend totaled RMB 809,042 thousand[75] Condensed Consolidated Statement of Cash Flows This statement presents the cash flows from operating, investing, and financing activities for the six months ended June 30, 2022, and June 30, 2021 Condensed Consolidated Statement of Cash Flows (RMB Thousand) | Activity Type | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Net cash from operating activities | 480,061 | 474,911 | | Net cash from (used in) investing activities | 201,867 | (807,987) | | Net cash used in financing activities | (715,245) | (153,020) | | Net decrease in cash and cash equivalents | (33,317) | (486,096) | | Cash and cash equivalents at end of period | 3,701,808 | 3,619,985 | - Net cash from investing activities changed from a net outflow of RMB 807.987 million in H1 2021 to a net inflow of RMB 201.867 million in H1 2022, primarily due to increased withdrawals of bank deposits with original maturity over three months and increased proceeds from the sale of financial assets at fair value through profit or loss[79] - Net cash outflow from financing activities significantly increased, mainly due to higher dividends paid and increased payments for share repurchases and cancellations[79] Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations and breakdowns of the figures presented in the condensed consolidated financial statements, including accounting policies, segment information, and financial instrument disclosures - The notes provide detailed explanations of the company's operating businesses, basis of financial statement preparation, and key accounting policies[80][81][82] - Detailed breakdowns and explanations are provided for key financial indicators such as revenue, segment information, taxation, dividends, and earnings per share[85][91][100][103][104] - The composition and changes of major balance sheet items (e.g., property, plant and equipment, intangible assets, financial instruments, inventories, receivables, and payables) are elaborated[106][107][109][110][112][113][115][119][120][121][123] - Specific details on share-based payment transactions, related party transactions, and fair value measurement of financial instruments are disclosed[127][129][132][133][136] 1. General Information NetDragon Websoft Holdings Limited was incorporated in the Cayman Islands in 2004, listed on the Main Board of the Hong Kong Stock Exchange, and primarily engages in online and mobile game development, education, mobile solutions, and property projects - The company was incorporated in the Cayman Islands on July 29, 2004, and its shares are listed on the Main Board of the Hong Kong Stock Exchange[80] - The ultimate controlling shareholders are Mr. Liu Dejian, Mr. Liu Luyuan, and Mr. Zheng Hui[80] - Principal activities include online and mobile game development and operation, education business, mobile solutions, and property projects[80] 2. Basis of Preparation The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of Appendix 16 to the Listing Rules of the Stock Exchange - Financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix 16 of the Listing Rules[81] 3. Principal Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments and investment properties measured at fair value; amendments to Hong Kong Financial Reporting Standards were first applied during this interim period but had no significant impact on financial position and performance - Financial statements are primarily prepared on a historical cost basis, with some financial instruments and investment properties measured at fair value[82] - First-time application of amendments to Hong Kong Financial Reporting Standards had no significant impact on the financial position and performance for the current and prior periods[84] 4. Revenue In H1 2022, the company's total revenue was RMB 4,240,381 thousand, primarily from education business (RMB 2,409,818 thousand) and online and mobile game business (RMB 1,775,729 thousand), with education business revenue significantly increasing by 71.2% year-on-year Revenue Composition (RMB Thousand) | Business Type | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Online and Mobile Game Revenue | 1,775,729 | 1,847,548 | | Education Revenue | 2,409,818 | 1,407,641 | | Mobile Solutions, Products and Marketing Revenue | 38,339 | 39,150 | | Property Project Revenue | 16,495 | 61,835 | | Total Revenue | 4,240,381 | 3,356,174 | - Education revenue increased by 71.2% year-on-year, while online and mobile game revenue decreased by 3.9% year-on-year[85] Disaggregation of Revenue from Contracts with Customers Revenue is disaggregated by type of goods and services, with education business primarily from sales of educational equipment and related goods, and gaming business from prepaid game cards; revenue recognition is mostly completed at a point in time Revenue by Type of Goods and Services (H1 2022, RMB Thousand) | Type of Goods and Services | Online and Mobile Game Revenue | Education Revenue | Mobile Solutions, Products and Marketing Revenue | Property Project Revenue | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue from prepaid game cards | 1,775,729 | – | – | – | 1,775,729 | | Sales of educational equipment and related goods | – | 2,335,138 | – | – | 2,335,138 | | Revenue from education services | – | 74,680 | – | – | 74,680 | - The vast majority of revenue (RMB 4,127,362 thousand) is recognized at a point in time, with revenue recognized over time amounting to RMB 113,019 thousand[88] Geographical Information In H1 2022, the company's revenue primarily originated from China (RMB 1,644,644 thousand) and the United States (RMB 1,862,637 thousand), with the US market accounting for the highest proportion of revenue Revenue by Geographical Region (H1 2022, RMB Thousand) | Region | Online and Mobile Game Revenue | Education Revenue | Mobile Solutions, Products and Marketing Revenue | Property Project Revenue | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | United States | 258,090 | 1,604,547 | – | – | 1,862,637 | | China | 1,501,009 | 127,140 | – | 16,495 | 1,644,644 | | Italy | – | 175,665 | – | – | 175,665 | | Germany | – | 173,007 | – | – | 173,007 | | United Kingdom | – | 109,931 | – | – | 109,931 | - Revenue from the US market increased from RMB 1,179,171 thousand in H1 2021 to RMB 1,862,637 thousand in H1 2022[89][90] 5. Segment Information The company reports revenue and profit (loss) across four business segments: online and mobile games, education, mobile solutions and marketing, and property projects; the education business achieved segment revenue of RMB 2,409,818 thousand in H1 2022 but still recorded a segment loss Segment Revenue and Profit (Loss) (H1 2022, RMB Thousand) | Segment | Segment Revenue | Segment Profit (Loss) | | :--- | :--- | :--- | | Online and Mobile Games | 1,775,729 | 997,433 | | Education | 2,409,818 | (286,148) | | Mobile Solutions, Products and Marketing | 38,339 | (6,043) | | Property Projects | 16,495 | 7,706 | | Total | 4,240,381 | 712,948 | - Education business segment loss narrowed from RMB (385,185) thousand in H1 2021 to RMB (286,148) thousand in H1 2022[92][93] - As of June 30, 2022, total assets for online and mobile games were RMB 4,704,391 thousand, and for education were RMB 4,509,313 thousand[95] 6. Other Income (Expenses) and Gains (Losses) This section details the composition of the company's other income and gains, including government grants and interest income, as well as other expenses and losses, such as impairment losses on intangible assets and severance payments, for H1 2022 - Total other income and gains decreased from RMB 86,859 thousand in H1 2021 to RMB 43,724 thousand in H1 2022[96] - Total other expenses and losses increased from RMB 94,341 thousand in H1 2021 to RMB 112,123 thousand in H1 2022[99] Other Income and Gains In H1 2022, the company's other income and gains primarily included interest income from bank balances (RMB 18,677 thousand), government grants (RMB 8,057 thousand), and VAT concessions (RMB 7,858 thousand), with government grants significantly decreasing year-on-year Other Income and Gains (RMB Thousand) | Item | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Government grants | 8,057 | 34,811 | | Interest income from bank balances, loans receivable and refundable rental deposits | 18,677 | 30,658 | | VAT concessions | 7,858 | 8,928 | | Total | 43,724 | 86,859 | - In the first half of 2022, RMB 2,066 thousand in COVID-19 related government grants were received, mainly from the Hong Kong government's "Employment Support Scheme"[97] Other Expenses and Losses In H1 2022, the company's other expenses and losses primarily included impairment losses on intangible assets (RMB 55,215 thousand), severance payments (RMB 26,013 thousand), and other taxes and fees (RMB 17,617 thousand) Other Expenses and Losses (RMB Thousand) | Item | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Impairment loss on intangible assets | 55,215 | – | | Severance payments | 26,013 | 13,503 | | Other taxes and fees | 17,617 | 16,406 | | Net exchange losses | 7,193 | 20,838 | | Total | 112,123 | 94,341 | - Impairment loss on intangible assets was primarily due to volatility in the cryptocurrency market[106] 7. Taxation In H1 2022, the company's tax expense was RMB 37,601 thousand, a significant decrease from the prior year; deferred tax assets of RMB 130 million were recognized during the period, mainly from unused tax losses of a US subsidiary Taxation Expense (RMB Thousand) | Item | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Hong Kong profits tax | 31,360 | 29,828 | | PRC enterprise income tax | 122,682 | 167,082 | | Taxation in other jurisdictions | 198 | 23,802 | | Deferred tax | (116,639) | (4,670) | | Total | 37,601 | 216,042 | - Deferred tax assets of RMB 130 million were recognized, mainly from unused tax losses of US subsidiary A, following its merger with subsidiary B into a single tax entity after reorganization[101] 8. Profit for the Period Profit for the period in H1 2022 was derived after deducting staff costs (RMB 1,042,784 thousand), total depreciation and amortization (RMB 198,638 thousand), and impairment loss on intangible assets (RMB 55,215 thousand) Items Deducted/Credited in Profit for the Period (RMB Thousand) | Item | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Total staff costs | 1,042,784 | 1,076,673 | | Total depreciation and amortisation | 198,638 | 201,379 | | Cost of goods sold for educational equipment and related goods | 1,679,116 | 855,308 | | Advertising and promotion expenses | 187,581 | 174,647 | | Impairment loss on intangible assets | 55,215 | – | - Total staff costs slightly decreased year-on-year, while the cost of educational equipment and related goods significantly increased year-on-year[102] 9. Dividends In H1 2022, the company recognized a total of RMB 809,042 thousand for the 2021 final dividend and interim special dividend; the Board resolved to declare an interim special dividend of HKD 0.50 per share and an interim dividend of HKD 0.40 per share for H1 2022 Dividends Recognized and Declared for the Period (RMB Thousand/HKD) | Dividend Type | 2022 H1 Recognized | 2021 H1 Recognized | 2022 H1 Declared | | :--- | :--- | :--- | :--- | | 2021 Final Dividend (HKD 0.40 per share) | 176,845 | 117,100 (2020 Final Dividend HKD 0.25 per share) | N/A | | 2021 Interim Special Dividend (HKD 1.43 per share) | 632,197 | – | N/A | | 2022 H1 Interim Special Dividend | N/A | N/A | HKD 0.50 per share (approx. RMB 231,219 thousand) | | 2022 H1 Interim Dividend | N/A | N/A | HKD 0.40 per share (approx. RMB 184,976 thousand) | 10. Earnings Per Share In H1 2022, the company's basic earnings per share were RMB 104.42 cents, and diluted earnings per share were RMB 104.40 cents, both higher than the prior year Earnings Per Share (RMB cents) | Indicator | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Basic Earnings Per Share | 104.42 | 77.45 | | Diluted Earnings Per Share | 104.40 | 77.39 | Number of Shares for EPS Calculation (Thousand Shares) | Indicator | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Weighted average number of ordinary shares in issue | 541,201 | 556,126 | | Effect of potential dilutive ordinary shares | 99 | 455 | | Weighted average number of ordinary shares for diluted EPS | 541,300 | 556,581 | 11. Property, Plant and Equipment, Right-of-Use Assets and Intangible Assets In H1 2022, the company invested in property, plant and equipment and intangible assets, with an impairment loss of RMB 55,215 thousand recognized on intangible assets due to cryptocurrency market volatility - In the first half of 2022, the company paid approximately RMB 88,692 thousand for the acquisition of property, plant and equipment, mainly for plant equipment and construction in progress[106] - In the first half of 2022, the company paid approximately RMB 55,546 thousand for the acquisition of intangible assets, including approximately USD 0.3 million in cryptocurrencies[106] - An impairment loss of RMB 55,215 thousand on intangible assets was recognized due to volatility in the cryptocurrency market[106] 12. Financial Assets at Fair Value Through Profit or Loss / Derivative Financial Instruments As of June 30, 2022, the company's total financial assets at fair value through profit or loss amounted to RMB 341,047 thousand, primarily comprising unlisted funds and unlisted equity investments; total derivative financial instruments (financial liabilities) amounted to RMB 36,442 thousand Financial Assets at Fair Value Through Profit or Loss (RMB Thousand) | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Equity-linked warrants | 1,414 | 1,852 | | Unlisted funds | 258,511 | 266,078 | | Unlisted equity investments | 81,122 | – | | Total | 341,047 | 267,930 | Derivative Financial Instruments (Financial Liabilities) (RMB Thousand) | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Unlisted warrants | 36,442 | 42,565 | | Total | 36,442 | 42,565 | - Unlisted equity investments refer to equity investments in private entities engaged in investing in cryptocurrencies, tokens, blockchain assets, and other digital assets[108] 13. Inventories As of June 30, 2022, the company's total inventories amounted to RMB 733,134 thousand, primarily consisting of finished goods, an increase from the end of 2021 Inventory Composition (RMB Thousand) | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Raw materials | 5,190 | 5,490 | | Finished goods | 727,944 | 679,627 | | Total | 733,134 | 685,117 | 14. Trade Receivables As of June 30, 2022, the company's total trade receivables amounted to RMB 972,352 thousand, an increase from the end of 2021, with a higher proportion of receivables over 90 days Ageing Analysis of Trade Receivables (RMB Thousand) | Ageing | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | 0 to 30 days | 452,395 | 374,790 | | 31 to 60 days | 263,953 | 264,081 | | 61 to 90 days | 107,530 | 107,186 | | Over 90 days | 148,474 | 85,929 | | Total | 972,352 | 831,986 | - The company generally grants credit terms of 30 to 60 days to distributors and payment channels/trade customers[110] 15. Other Receivables, Prepayments and Deposits As of June 30, 2022, the company's total other receivables, prepayments, and deposits amounted to RMB 480,151 thousand, a slight decrease from the end of 2021, primarily including prepayments to suppliers, prepaid lease payments, and refundable rental and guarantee deposits Other Receivables, Prepayments and Deposits (RMB Thousand) | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Prepayments to suppliers | 83,617 | 86,077 | | Prepaid lease payments for properties, utilities and servers | 84,673 | 56,684 | | Refundable rental and guarantee deposits | 75,275 | 77,278 | | Other amounts receivable from agents for purchase of cryptocurrencies | 18,018 | – | | Government grants receivable | – | 62,712 | | Total | 480,151 | 518,998 | - Includes potential prepaid lease payments and deposits of RMB 31,581 thousand paid to Fuzhou 851, an associate[112] 16. Amounts Due from Joint Ventures As of June 30, 2022, and December 31, 2021, amounts due from joint ventures were non-trade in nature, unsecured, interest-free, and repayable on demand - Amounts due from joint ventures are non-trade in nature, unsecured, interest-free, and repayable on demand[113] 17. Trade and Other Payables As of June 30, 2022, the company's total trade and other payables amounted to RMB 1,403,049 thousand, a slight decrease from the end of 2021, primarily including trade payables, accrued staff costs, and payables for property, plant and equipment purchases Trade and Other Payables (RMB Thousand) | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Trade payables | 840,312 | 681,135 | | Accrued staff costs | 213,581 | 331,730 | | Payables for purchase of property, plant and equipment | 100,215 | 104,930 | | Payables for compensation | – | 23,035 | | Total | 1,403,049 | 1,465,984 | Ageing Analysis of Trade Payables (RMB Thousand) | Ageing | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | 0 to 90 days | 759,102 | 614,099 | | 91 to 180 days | 18,767 | 6,599 | | 181 to 365 days | 7,888 | 5,391 | | Over 365 days | 54,555 | 55,046 | | Total | 840,312 | 681,135 | 18. Amounts Due to an Associate As of December 31, 2021, amounts due to an associate were trade in nature, unsecured, interest-free, and repayable on demand, and were fully repaid in H1 2022 - As of December 31, 2021, amounts due to an associate were fully repaid in the first half of 2022[119] 19. Bank Borrowings In H1 2022, the company incurred new bank borrowings of RMB 338,827 thousand; as of June 30, 2022, bank borrowings bore floating and fixed interest rates and were secured by subsidiary properties, right-of-use assets, corporate guarantees, and directors' personal guarantees - New bank borrowings of RMB 338,827 thousand were incurred in the first half of 2022[120] - Bank borrowings bear floating or fixed interest rates, such as HIBOR, Bloomberg Short-Term Bank Yield, US Prime Rate, or China's one-year Loan Prime Rate[120] - The secured portion is collateralized by subsidiary properties, right-of-use assets, corporate guarantees, and directors' personal guarantees[120] 20. Convertible and Exchangeable Bonds The company's subsidiary issued convertible and exchangeable bonds with a principal amount of USD 150 million to investors in 2020, bearing an annual interest rate of 5% and denominated in USD; as of June 30, 2022, the debt component of the bonds was RMB 1,209,664 thousand - USD 150 million in convertible and exchangeable bonds were issued in 2020, bearing an annual interest rate of 5% and denominated in USD[121] - The effective interest rate for the debt component is 16.62%[121] Movements in Debt Component of Convertible and Exchangeable Bonds (RMB Thousand) | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | At January 1 | 1,084,874 | 992,116 | | Interest accrued | 89,666 | 165,181 | | Interest repaid | (23,631) | (48,435) | | Exchange adjustment | 58,755 | (23,988) | | Total | 1,209,664 | 1,084,874 | 21. Convertible Preferred Shares The financial liability component of convertible preferred shares issued by the company's subsidiary is measured at fair value, with changes in fair value recognized directly in profit or loss; as of June 30, 2022, and December 31, 2021, the fair value of convertible preferred shares was zero - The financial liability component of convertible preferred shares is measured at fair value, with changes in fair value recognized in profit or loss[123] - As of June 30, 2022, and December 31, 2021, the fair value of convertible preferred shares was zero[123] 22. Share Capital As of June 30, 2022, the company's issued and fully paid share capital consisted of 540,743,633 shares with a par value of RMB 39,467 thousand; shares were issued upon exercise of share options and repurchased and cancelled during the period Share Capital Movements (Number of Shares/RMB Thousand) | Item | Number of Shares | Par Value (USD) | Par Value (RMB Thousand) | | :--- | :--- | :--- | :--- | | At December 31, 2021 | 545,245,308 | 5,452 | 39,795 | | Shares issued upon exercise of share options | 19,825 | – | 2 | | Shares repurchased and cancelled | (4,521,500) | (45) | (330) | | At June 30, 2022 | 540,743,633 | 5,407 | 39,467 | - In the first half of 2022, 19,825 share options were exercised, and 4,521,500 shares were repurchased and cancelled[126] 23. Share-based Payment Transactions The company has share option schemes and a share award scheme to incentivize employees; in H1 2022, a total expense of RMB 3,774 thousand was recognized for share options, and no unvested awarded shares remained under the share award scheme - The company has share option schemes (old and new) and a share award scheme to incentivize eligible participants[127][129] - In the first half of 2022, the company recognized a total expense of RMB 3,774 thousand for share options[128] - As of June 30, 2022, there were no unvested awarded shares under the company's share award scheme[130] Equity-settled Share Option Schemes As of June 30, 2022, 6,573,250 share options remained unexercised under the company's share option schemes; in H1 2022, a total expense of RMB 3,774 thousand was recognized for share options Share Option Movements (Number of Options) | Status | January 1, 2021 | Exercised | Lapsed | June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Unexercised | 8,411,384 | (19,825) | (65,842) | 6,573,250 | - In the first half of 2022, the company recognized a total expense of RMB 3,774 thousand for share options[128] The Company's Share Award Scheme As of June 30, 2022, all awarded shares under the company's share award scheme had vested or lapsed, with no unvested awarded shares remaining; in H1 2022, the company reversed an expense of approximately RMB 984 thousand for share awards Share Award Scheme Movements (H1 2022) | Participant Category | January 1, 2022 Unvested | Awards vested during the period | Lapsed during the period | June 30, 2022 Unvested | | :--- | :--- | :--- | :--- | :--- | | Directors | 218,160 | (190,890) | (27,270) | – | | Other Employees | 148,080 | (87,420) | (60,660) | – | | Total | 366,240 | (278,310) | (87,930) | – | - In the first half of 2022, the company reversed an expense of approximately RMB 984 thousand for share awards[129] Shares Awarded by a Subsidiary of the Company A subsidiary of the company has a share award scheme, and in H1 2022, a total expense of approximately RMB 13 thousand was recognized for share awards - In the first half of 2022, a subsidiary of the company recognized a total expense of approximately RMB 13 thousand for share awards[132] 24. Related Party Transactions The Group has several related party transactions with companies controlled by or under significant influence of the ultimate controlling shareholders, primarily involving sales of goods and receipt of service fees Related Party Transactions (RMB Thousand) | Nature of Transaction | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Sales of goods to Guoteng | (103) | (380) | | Receipt of service fees from Guoteng | (890) | – | | Sales of goods to Kunming NetDragon Huayu | (465) | (1,033) | | Receipt of service fees from Kunming NetDragon Huayu | (363) | – | | Sales of goods to Yunqi Smart | (2,610) | (3,152) | | Receipt of service fees from Yunqi Smart | (723) | – | | Interest income from advances to key management personnel | (184) | (183) | - As of June 30, 2022, advances to key management personnel amounted to approximately RMB 6,776 thousand, unsecured, bearing 5.00% annual interest[134] Key Management Personnel Remuneration In H1 2022, the company's key management personnel remuneration totaled RMB 65,573 thousand, primarily comprising salaries, allowances, and other short-term employee benefits Key Management Personnel Remuneration (RMB Thousand) | Item | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Salaries, allowances and other short-term employee benefits | 62,648 | 37,153 | | Contributions to retirement benefit schemes | 313 | 315 | | Equity-settled share-based payment expenses | 2,612 | 8,927 | | Total | 65,573 | 46,395 | - Remuneration is determined by the Remuneration Committee based on individual performance and market trends[135](index=135&type