Financial Performance - Total revenue for the first half of 2023 was RMB 1,047.2 million, a decrease of 11.5% compared to RMB 1,183.9 million in the same period of 2022[12]. - Gross profit decreased by 12.7% year-on-year to RMB 132.5 million[12]. - Profit after tax fell by 26.7% year-on-year to RMB 43.0 million[12]. - Revenue from the mobile advertising business amounted to RMB 1,025.9 million, representing a decrease of 9.2% on a period-on-period basis[16]. - Revenue for the six months ended June 30, 2023, decreased by 11.5% to RMB 1,047.2 million from RMB 1,183.9 million in the same period of 2022[28]. - Mobile advertising revenue decreased by 9.2% from RMB 1,130.0 million for the six months ended June 30, 2022, to RMB 1,025.9 million for the same period in 2023[30]. - Revenue from online-video distribution services dropped by 87.3% to RMB 5.2 million in the first half of 2023, down from RMB 41.1 million in the corresponding period of 2022[43]. - Game co-publishing service revenue decreased from RMB 2.3 million for the six months ended June 30, 2022, to RMB 1.7 million for the same period in 2023[45]. - Adjusted EBITDA for the first half of 2023 was RMB 72.3 million, down 23.1% from RMB 94.0 million in the same period of 2022[28]. - Profit for the period decreased by 26.7% to RMB 43.0 million in the first half of 2023, compared to RMB 58.7 million in 2022[28]. Operational Challenges - Domestic smartphone shipments decreased by 7% year-on-year, indicating a prolonged consumer replacement cycle[11]. - The mobile distribution industry is facing increasingly fierce competition for channel resources[11]. - The number of mobile games marketed decreased, leading to a decline in mobile advertising revenue[39]. - The company believes the current performance challenges are necessary for sustaining growth and development[11]. Strategic Initiatives - The company expanded its distribution channels to include Apple and iQIYI in 2023[16]. - The company is committed to optimizing mobile distribution services to enhance customer experience and satisfaction[11]. - Strategic focus remains on improving operational efficiency and expanding service coverage[12]. - The focus for the second half of 2023 is to expand business scale among MHA members and accelerate economies of scale in new channels[22]. - The company aims to enhance AI placement technologies to make them more automated and intelligent, alongside researching generative AI technologies for creative material production[22]. - Multiple salon events were organized for Quick App developers to address challenges and discuss new commercialization models[20]. - The company is committed to improving the community ecosystem and ensuring mutual development within the industry[22]. - There is a focus on in-depth cooperation with mobile game customers, providing precise placement services and high-quality operation strategies[19]. - The overall strategy includes adapting to customers' evolving needs and providing higher quality services in a more efficient manner[22]. Financial Position - Cash and bank balances decreased by 10.3% from RMB 612.6 million as of December 31, 2022, to RMB 549.6 million as of June 30, 2023[91]. - Bank borrowings decreased by 19.5% from RMB 260.0 million as of December 31, 2022, to RMB 209.4 million as of June 30, 2023[91]. - Total equity increased by 3.9% from RMB 1,372.8 million as of December 31, 2022, to RMB 1,426.0 million as of June 30, 2023[91]. - Net current assets increased to RMB 1,307.7 million as of June 30, 2023, compared to RMB 1,254.6 million as of December 31, 2022, driven by an increase in accounts receivable and prepayments[98][101]. - The current ratio improved from 3.4 as of December 31, 2022, to 3.6 as of June 30, 2023, attributed to increased accounts receivable and decreased bank borrowings[108][115]. - The gearing ratio decreased from 28.2% as of December 31, 2022, to 26.3% as of June 30, 2023, primarily due to an increase in total assets[109][116]. - The adjusted net profit margin slightly decreased from 5.9% for the six months ended June 30, 2022, to 5.1% for the six months ended June 30, 2023, mainly due to increased finance costs[110][117]. Share Incentive Schemes - The 2016 Share Incentive Scheme has granted a total of 62,500,000 restricted share units (RSUs) as of December 31, 2022, with no RSUs granted during the first half of 2023[157]. - The 2016 Share Incentive Scheme is valid for ten years from March 31, 2016, and does not allow for further grants due to its scheme limit[156]. - The company terminated the Post-IPO Share Option Scheme on April 20, 2023, as no options were granted under this scheme since its adoption[150]. - The purpose of the 2016 Share Incentive Scheme is to attract, motivate, and retain skilled personnel by providing equity ownership opportunities[154]. - The company has adopted both the 2016 and 2019 Share Incentive Schemes to reward employees and management[149]. - As of December 31, 2022, the company granted RSUs representing 91,738,000 shares under the 2019 Share Incentive Scheme[172]. - No RSUs were granted or agreed to be granted under the 2019 Share Incentive Scheme during the six months ended June 30, 2023[172]. - The total number of RSUs exercised during the reporting period was 9,551,651[165]. - The maximum number of Shares available for grant under the Scheme Mandate Limit was 152,574,335, representing 10% of the total Shares in issue as of June 9, 2023[175]. - The average exercise price for the RSUs granted is HK$0.183[163][164]. Corporate Governance - The Group has complied with all applicable corporate governance code provisions as of June 30, 2023[191]. - The Board is responsible for ensuring effective risk management and internal control systems are in place[199]. - The Audit Committee reviews risk management practices on a half-yearly basis and the effectiveness of these systems annually[199]. - The internal audit team reports directly to the Audit Committee, ensuring oversight of risk management[199]. - The Company aims to manage key risks rather than eliminate them, providing reasonable assurance against material misstatement or loss[199].
万咖壹联(01762) - 2023 - 中期财报