IGG(HK:00799)2022-04-21 09:32Financial Performance - The company achieved a record revenue of HKD 6 billion in 2021, driven by the strong performance of the game "King of Kingdoms" and the addition of new titles[7]. - Total revenue for the year increased by 11% year-on-year to HKD 6.05 billion, with contributions from Asia, North America, and Europe accounting for 36%, 35%, and 23% of total revenue respectively[13]. - The company's main business profit was HKD 424.3 million, a decrease from HKD 1.15 billion in the previous year[24]. - The company recorded an annual profit of HKD 369.6 million, down from HKD 2.1 billion in the previous year[24]. - The adjusted net profit for the year was HKD 452.9 million, down from HKD 2.12 billion in the previous year[24]. - The company's revenue for the year ended December 31, 2021, was HKD 6.051 billion, an increase of 11% compared to HKD 5.464 billion for the year ended December 31, 2020[28]. - The cost of sales for the year ended December 31, 2021, was HKD 1.853 billion, up 12% from HKD 1.649 billion for the year ended December 31, 2020[29]. - Gross profit for the year ended December 31, 2021, was HKD 4.198 billion, a 10% increase from HKD 3.815 billion for the year ended December 31, 2020, with a gross margin of 69.4%[30]. - Research and development expenses for the year ended December 31, 2021, were HKD 1.254 billion, an 82% increase from HKD 690 million for the year ended December 31, 2020, representing 21% of revenue[35]. - Selling and distribution expenses for the year ended December 31, 2021, were HKD 1.953 billion, a 36% increase from HKD 1.437 billion for the year ended December 31, 2020, accounting for 32% of revenue[32]. User Engagement and Game Development - The total number of users reached nearly 1.3 billion, with monthly active users exceeding 36 million[12]. - "King of Kingdoms" has contributed a cumulative revenue of HKD 23 billion since its launch over six years ago, maintaining its strong market position[8]. - The company launched its first female-oriented game "Princess of Time," which won the "Best Casual Game of 2021" award in South Korea on Google Play[11]. - The company is committed to enhancing its game development standards and aims to deliver more high-quality games to players in the future[11]. - The company is focusing on a strategy of diversification and premiumization in its game offerings[7]. - The company plans to launch new games across various genres in 2022, including the action game "Project Yeager," which received positive feedback during testing[21]. - The company emphasizes a culture of innovation and responsiveness to player feedback to drive game development[11]. - The company has engaged in collaborations with cultural institutions to enhance player experiences, as seen with "Princess of Time"[11]. - The company emphasizes the importance of user experience in gaming, continuously innovating and updating game content to attract and retain users[186]. - The company has established localized operational teams globally to understand local cultures and gaming preferences, enhancing service to local players[187]. Research and Development - The R&D team expanded from over 500 members in 2016 to 2,000 members in 2021, focusing on cities with a high concentration of talent such as Shanghai and Chengdu[8]. - The company has implemented multiple R&D evaluation mechanisms to continuously test products in the market during development[8]. - The company has established new R&D bases in Asia to leverage opportunities arising from the pandemic and regulatory changes in the gaming industry[7]. - The company plans to expand its game product matrix through increased research and development investments[35]. Corporate Governance and Management - The company appointed Ms. Shen Jielei as CFO in June 2016, who has approximately 25 years of financial and corporate management experience[76]. - The company has a strong focus on external startups and internal incubation projects for strategic investments[77]. - The company has expanded its board with experienced directors, including Dr. Liang Hanki and Mr. Yu Dajian, who bring extensive industry experience[79][82]. - The company is committed to maintaining high levels of corporate governance, ensuring transparency and accountability to shareholders[89]. - The board currently consists of nine members, including five executive directors and three independent non-executive directors, ensuring a balance of power and authority[93]. - The company has adopted a board diversity policy to enhance overall effectiveness and ensure a variety of perspectives are represented[96]. - The independent non-executive directors play a crucial role in providing unbiased opinions on the company's strategies and performance[100]. - The board will continue to review and improve corporate governance practices to maximize shareholder returns[89]. - The company has a strong focus on internal controls and risk management as part of its governance framework[89]. Financial Position and Investments - As of December 31, 2021, the group reported a net current asset value of HKD 14.37 billion, down from HKD 17.45 billion as of December 31, 2020[44]. - The group's cash and cash equivalents amounted to HKD 19.50 billion as of December 31, 2021, compared to HKD 21.73 billion a year earlier[44]. - The group had 3,101 employees as of December 31, 2021, an increase from 2,022 employees a year earlier, with total employee-related costs reaching HKD 1.19 billion[54]. - The group experienced a total loss of HKD 54.68 million from investments for the year ended December 31, 2021, compared to a gain of HKD 949.80 million in the previous year[57]. - The group has invested a total of USD 12 million (approximately HKD 93.3 million) in Griffin, representing about 5.44% equity, with the investment cost and fair value accounting for approximately 1.97% and 2.48% of total assets, respectively[66]. Risk Management and Compliance - The board is responsible for evaluating and determining the nature and extent of risks the company is willing to accept to achieve its strategic objectives, ensuring effective risk management and internal control systems are in place[140]. - The management team continuously monitors the group's business performance through regular meetings with departments and project teams to identify potential risks and develop response strategies[143]. - The group integrates "Environmental, Social, and Governance" (ESG) risks into its risk management framework[143]. - The board is responsible for guiding and overseeing ESG matters, having established an ESG working group directly led by the board[157]. - The company adheres to the United Nations Convention Against Corruption and has implemented an internal anti-fraud system to prevent corruption and fraud[175]. Customer Service and User Safety - The customer service center operates 24/7, ensuring timely and comprehensive support for players globally[198]. - The company has established a customer service emergency response plan to handle unexpected situations effectively[199]. - The company adheres to various local laws and regulations regarding player health and safety, including measures for underage protection in China[197]. - The company collects user feedback through social media, customer service channels, and surveys to improve game quality and service[197]. - The company has implemented measures to address inappropriate user behavior in its service agreement[194].