IDREAMSKY(HK:01119)2022-04-06 09:00Financial Performance - Total revenue for 2021 was RMB 2,637,637, a decrease of 17.8% compared to RMB 3,212,118 in 2020[7] - Gross profit for 2021 was RMB 1,103,341, representing a gross margin of approximately 41.8%[7] - Adjusted net profit for 2021 was RMB 42,201, a significant decline from RMB 162,253 in 2020[7] - The company reported a net loss of RMB 155,930 for 2021, compared to a net loss of RMB 564,996 in 2020[7] - The annual net loss decreased by 72.4% from RMB 565.0 million for the year ended December 31, 2020, to RMB 155.9 million for the year ended December 31, 2021, with adjusted annual profit at RMB 42.2 million[38] - Adjusted annual profit for 2021 was RMB 42.201 million, down from RMB 162.253 million in 2020, indicating a decline of about 74.0%[42] - The company's EBITDA for 2021 was RMB 186.585 million, compared to a negative EBITDA of RMB 225.668 million in 2020, marking a turnaround[42] Assets and Liabilities - Total assets as of December 31, 2021, were RMB 6,610,940, a decrease from RMB 6,752,841 in 2020[8] - Total liabilities for 2021 were RMB 2,401,698, down from RMB 3,037,000 in 2020[8] - The total equity increased to RMB 4,209,242 in 2021 from RMB 3,715,841 in 2020, indicating a stronger financial position[8] - Total cash and cash equivalents decreased by 2.8% to approximately RMB 714.8 million as of December 31, 2021, down from RMB 735.6 million in 2020[43] - Total borrowings as of December 31, 2021, were approximately RMB 1,350.4 million, a decrease of about 13.1% from RMB 1,553.7 million in 2020[43] - The current ratio improved to 2.42 as of December 31, 2021, compared to 1.53 in 2020, indicating better short-term financial health[45] - The company's debt ratio decreased to 36.3% as of December 31, 2021, down from 45.0% in 2020, reflecting an ongoing optimization of capital structure[46] Revenue Sources - Game revenue contributed 88.3% of total revenue in 2021, amounting to RMB 2,297.9 million, down from RMB 2,805.6 million in 2020[26] - The company's total revenue decreased by 17.9% year-on-year in 2021 due to the gradual termination of products not aligned with its gaming business strategy[11] - Revenue from the experience retail business surged by 463.1% to RMB 36.6 million in 2021, compared to RMB 6.5 million in 2020[28] User Engagement - The average monthly active users decreased from 138.0 million in 2020 to 128.0 million in 2021, primarily due to the termination of non-strategic gaming products[12] - The average monthly paying users decreased from 5.9 million in 2020 to 5.5 million in 2021, with average revenue per paying user dropping from RMB 38.0 to RMB 34.2[12] Research and Development - In 2021, the company's total R&D expenditure was RMB 325.2 million, with the R&D expense ratio increasing from 10.1% in 2020 to 12.3% in 2021[11] - The actual net amount used for R&D to further expand the company's self-developed game portfolio was RMB 25.50 million as of December 31, 2021, with RMB 184.50 million remaining unused[55] Strategic Initiatives - The company is focusing on new product development and market expansion strategies to drive future growth[6] - Management indicated plans for potential mergers and acquisitions to enhance market presence and capabilities[6] - The company aims to strengthen cooperation with leading IPs and accelerate product and store layout in the new year[10] Corporate Governance - The company is committed to maintaining high standards of corporate governance, as detailed in the annual report[157] - The board includes members with diverse academic backgrounds, such as degrees from prestigious institutions like Tsinghua University and the University of Texas, contributing to a well-rounded leadership team[163][164] - The company has established a governance framework that aligns with best practices, ensuring compliance and transparency in its operations[167] Shareholder Information - The company did not recommend a final dividend for the year ended December 31, 2021, consistent with the previous year[69] - The total number of shares issued as of December 31, 2021, is 1,387,475,615[93] - The company completed a placement of 72,280,000 shares at a price of HKD 5.92 per share on December 13, 2021, increasing the total issued share capital to 1,387,475,615 shares[106] Social Responsibility - The company donated RMB 1 million to aid disaster relief efforts in Henan and Shanxi provinces in 2021, showcasing its commitment to corporate social responsibility[22] - The revenue from underage users accounted for only 0.07% of the company's total game revenue as of December 31, 2021, reflecting a commitment to responsible gaming practices[22] Market Conditions - Future guidance suggests a cautious outlook due to market conditions, with an emphasis on cost management and operational efficiency[6] - The company faces various risks related to its gaming business and regulatory environment in China, which may impact future operations[65]