IDREAMSKY(HK:01119)2022-09-08 08:35Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 1,381,472 thousand, representing a 1.1% increase from RMB 1,367,072 thousand in the same period of 2021[9]. - Gross profit increased by 14.1% to RMB 591,889 thousand compared to RMB 518,770 thousand in the prior year[9]. - Loss before income tax was RMB (223,255) thousand, a significant increase of 176.2% from RMB (80,842) thousand in the previous year[9]. - The period loss for the six months ended June 30, 2022, was RMB (222,000) thousand, which is a 226.7% increase from RMB (67,956) thousand in the same period of 2021[9]. - Adjusted loss for the period was RMB (156,922) thousand, compared to an adjusted profit of RMB 44,364 thousand in the same period last year, reflecting a decrease of 453.7%[9]. - Operating loss widened to RMB (150,492) thousand compared to RMB (14,125) thousand in the previous year[14]. - The net loss for the six months ended June 30, 2022, was RMB 222.0 million, compared to RMB 68.0 million for the same period in 2021[35]. - Basic and diluted loss per share for the six months ended June 30, 2022, was RMB 0.15, compared to RMB 0.06 for the same period in 2021[85]. - EBITDA for the six months ended June 30, 2022, was RMB (24.7) million, a significant decline from RMB 103.9 million for the same period in 2021[39]. Market and Business Development - The company achieved a stable performance despite a challenging environment, with ongoing optimization of its gaming business and a focus on self-developed games[10]. - The domestic gaming market saw a decline in both revenue and user scale in the first half of 2022, as reported in the "2022 China Gaming Industry Report"[10]. - The company has launched several self-developed games, including "Honor All-Stars," and has a pipeline of upcoming titles such as "Beware of Fire," "Tuanzi Hehe House," and "Witch's Diary"[10]. - The gaming business is undergoing inventory adjustments, with a focus on competitive games, puzzle games, and RPGs to control costs and enhance user experience[10]. - The company aims to strengthen partnerships with IP owners and artists to explore new market opportunities and expand its product offerings[12]. - The company is committed to enhancing its digital capabilities to better serve the "Z generation" consumer group, utilizing data-driven strategies for product development and sales[12]. IP Derivatives and Sales Channels - The IP derivatives business has experienced rapid growth, with 30 stores established across key cities, and non-store sales channels now account for 20% of this business[11]. - The company has launched its IP trendy art product platform "Wujiang," which has seen strong sales since its debut in May 2022[11]. - The IP derivative business revenue surged by 254.1% year-on-year, driven by the expansion of offline stores and online sales channels[19]. - The number of QQfamily offline stores reached 30, with significant foot traffic, including over 11,000 visitors on the opening day of the Wuhan store[19]. Financial Position and Cash Flow - Cash and cash equivalents decreased by 74.7% to approximately RMB 180.8 million as of June 30, 2022, from approximately RMB 714.8 million as of December 31, 2021[40]. - Total borrowings as of June 30, 2022, were approximately RMB 1,051.4 million, down from RMB 1,350.4 million as of December 31, 2021[41]. - The current ratio as of June 30, 2022, was 1.97, compared to 2.42 as of December 31, 2021[41]. - The debt ratio as of June 30, 2022, was 34.6%, a slight improvement from 36.3% as of December 31, 2021[42]. - The total capital expenditure for the six months ended June 30, 2022, was approximately RMB 108.3 million, down from RMB 185.8 million for the same period in 2021[44]. - The company reported a cash flow from operating activities increased to RMB 2,466 thousand for the six months ended June 30, 2022, compared to RMB 1,462 thousand for the same period in 2021, reflecting a growth of approximately 68.5%[90]. - The company’s financing activities resulted in a net cash outflow of RMB 212,733 thousand for the six months ended June 30, 2022, compared to RMB 195,939 thousand in the previous year[90]. Shareholder and Governance Information - The company has adopted the corporate governance code as per the listing rules, ensuring high standards of governance to protect shareholder interests[56]. - No interim dividend was recommended for the six months ended June 30, 2022, consistent with the previous year[58]. - The audit committee, consisting of four members, reviewed the consolidated interim results for the six months ended June 30, 2022, ensuring compliance with accounting standards[59]. - The company repurchased a total of 8,795,200 shares from April to June 2022, with a total cost of HKD 33,983,355.52[61]. - As of June 30, 2022, the company had a total of 1,420,330,345 shares issued, with major shareholders holding significant stakes[65]. Employee and Management Information - As of June 30, 2022, the group had 1,081 full-time employees, a slight decrease from 1,113 employees as of December 31, 2021[46]. - The company granted a total of 1,300,000 restricted share units to participants outside of the board and senior management during the six months ended June 30, 2022[82]. - The remuneration for key management personnel was RMB 3,030,000 for the six months ended June 30, 2022, slightly up from RMB 2,945,000 in the same period of 2021, reflecting an increase of about 3%[170]. Risk Management and Compliance - The group has not reported any significant changes in risk management policies as of June 30, 2022[96]. - The company has a diversified financial risk management strategy, addressing market, credit, and liquidity risks[96]. - The company adheres to international financial reporting standards in its financial disclosures[172].