7ROAD(HK:00797)2022-03-25 08:39Financial Performance - 7Road Holdings Limited reported a significant increase in revenue, reaching HK$1.2 billion, representing a year-over-year growth of 25%[10] - The profit attributable to owners of the Company for the year ended December 31, 2021, was approximately RMB94.2 million, reflecting an increase of approximately 15.9% compared to the previous year[19] - The profit for the year was RMB97.99 million, up from RMB80.01 million in 2020[20] - The Company recorded a profit of RMB94.24 million attributable to owners, compared to RMB81.31 million in 2020[20] - The financial performance indicates a recovery trend in profitability, with a significant increase in profit compared to the previous year[19] - The total revenue for the year 2021 was approximately RMB 420.5 million, remaining relatively stable compared to RMB 424.3 million in 2020[32] - The gross profit margin for the company in 2021 was 53.4%, with gross profit amounting to RMB224.5 million, a decrease of approximately 28.4% from RMB313.5 million in 2020[30] - Profit before income tax was RMB 91.1 million, an increase of 75.6% compared to RMB 51.9 million in 2020[76] - Profit for the year was RMB 98.0 million, representing a 22.5% increase from RMB 80.0 million in 2020[76] User Metrics - The company achieved an average of 1.5 million monthly active users (MAUs) during the reporting period, which is a 15% increase compared to the previous year[10] - Monthly paying users (MPUs) rose to 300,000, marking a 20% increase from the last fiscal year[10] - The average revenue per paying user (ARPPU) was reported at HK$400, reflecting a 5% increase year-over-year[10] - For the year ended 31 December 2021, the average MAUs for web games were approximately 0.5 million, while mobile games had an average MAUs of approximately 1.4 million[72] - The average MPUs for web games were approximately 37,000, and for mobile games, it was approximately 216,000[72] - The ARPPU for web games was approximately RMB 477.3, and for mobile games, it was approximately RMB 220.8[72] Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in user acquisition in the next fiscal year[10] - Future guidance indicates a revenue target of HK$1.5 billion for the next fiscal year, representing a growth rate of 25%[10] - The Company continues to explore new strategies for market expansion and product development to enhance future performance[21] - The Group aims to enhance game quality and create superior gaming products by leveraging existing IPs and years of development experience, forming a diversified IP product line[38] - The Group will enhance its gaming portfolio and development capabilities to improve performance and integrate existing resources[42] - The company aims to improve its global presence in the gaming industry and strengthen its competitiveness, resource consolidation, sustainable development, and risk resistance[44] Research and Development - Research and development (R&D) expenditures increased by 10% to HK$150 million, focusing on enhancing game technology and user experience[10] - The Group is enhancing data analytics capabilities to develop popular games and improve the gaming experience[67] - Revenue from the Group's game business was RMB 253.6 million, a decrease of approximately 8.9% from RMB 278.5 million in 2020, primarily due to new game products still under R&D[78] Cloud Computing Initiatives - The company commenced its cloud computing business in April 2021, generating approximately RMB49.0 million in revenue from this new business in 2021[31] - The company aims to diversify its services beyond gaming, focusing on cloud computing to stabilize long-term income streams and enhance shareholder returns[30] - The Group commenced the provision of cloud computing services to diversify income streams and create better returns for shareholders[72] - The demand for cloud computing and related services is expected to grow rapidly, prompting the Group to seek investment opportunities in this sector[42] - The company plans to expand its cloud computing services to include animation, artificial intelligence, big data supercomputing, and blockchain technology-related services[36] Corporate Governance - The company emphasized its commitment to improving corporate governance and sustainability practices in its operations[10] - The board currently comprises six directors, including three executive directors and three independent non-executive directors[46] - The Company has established procedures for Directors to seek independent professional advice at the Company's expense when necessary[118] - The Company has received written confirmations of independence from each independent non-executive Director, in accordance with Rule 3.13 of the Listing Rules[116] - The Company has arranged appropriate insurance cover for legal proceedings against the Directors[115] Financial Position - Non-current assets increased to RMB1,535,214 in 2021 from RMB1,243,150 in 2020, reflecting a growth of approximately 23.5%[23] - Current assets decreased to RMB473,591 in 2021 from RMB871,194 in 2020, a decline of approximately 45.4%[23] - Total equity rose to RMB1,621,684 in 2021, up from RMB1,511,897 in 2020, indicating an increase of approximately 7.3%[23] - Total liabilities decreased significantly to RMB387,121 in 2021 from RMB602,447 in 2020, a reduction of approximately 35.7%[23] Management and Leadership - Mr. Peng Cheng has been appointed as CEO since September 1, 2019, with substantial experience in the online game industry[59] - Mr. Jiang Mingye has been appointed as Chief Operating Officer since January 1, 2022, with over 18 years of experience in project management and game product operations[59] - Ms. Zhou Wenwen has been appointed as Chief Human Resources Officer since January 1, 2022, with over 9 years of experience in administration and human resources management[60] - The financial management team is well-qualified, with members holding certifications such as Chinese Certified Public Accountant and Chartered Financial Analyst[53] Risks and Challenges - Key risks include compliance with new policies in the gaming and cloud industries, uncertainties in market growth, and reliance on key personnel[64] - The Group's current liquidity position and working capital are sufficient despite the ongoing impact of COVID-19[69] - The Group has implemented cost control policies to improve risk-averse capabilities amid the pandemic[69] - The Company emphasizes the importance of risk management and internal controls to achieve its strategic objectives[160]