INFINITIES TECH(HK:01961)2023-04-27 10:34Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 103.91 million, a decrease of 9.3% compared to RMB 114.91 million in 2021[6]. - Gross profit for the same period was RMB 16.05 million, representing a gross margin of 15.4%[6]. - The net loss for the year was RMB 86 million, slightly improved from a loss of RMB 86.82 million in 2021[6]. - Adjusted net loss, excluding listing expenses and trade receivables impairment, was RMB 65.61 million, compared to RMB 71.87 million in 2021[6]. - Revenue for the fiscal year 2022 decreased by approximately RMB 11.0 million or 9.6% to about RMB 103.9 million from RMB 114.9 million in fiscal year 2021, primarily due to a decline in mobile game revenue by approximately RMB 44.3 million[12]. - The company's loss for fiscal year 2022 was approximately RMB 86.0 million, slightly narrowing from a loss of RMB 86.8 million in fiscal year 2021, attributed to increased gross profit and reduced selling and distribution expenses[13]. - Total revenue decreased by 9.6% from RMB 114.9 million in 2021 to RMB 103.9 million in 2022[150]. - Revenue from mobile games declined by 43.0% from RMB 103.0 million in 2021 to RMB 58.7 million in 2022[151]. - Revenue from digital media content distribution increased by 68.0% from RMB 11.9 million in 2021 to RMB 20.0 million in 2022[151]. - The newly developed game product supply business generated revenue of approximately RMB 25.2 million in 2022[152]. Assets and Liabilities - Total assets decreased to RMB 115.68 million in 2022 from RMB 173.92 million in 2021, a decline of 33.4%[8]. - Total equity fell to RMB 54.35 million in 2022, down 60.8% from RMB 138.51 million in 2021[8]. - Non-current assets decreased significantly to RMB 28.81 million from RMB 57.11 million in 2021, a drop of 49.5%[8]. - Current liabilities increased to RMB 42.51 million in 2022, up from RMB 32.57 million in 2021, an increase of 30.0%[8]. Strategic Plans and Market Development - The company plans to focus on new product development and market expansion strategies in the upcoming year[10]. - The company plans to enhance its mobile game development and operations, and expand its digital media content distribution business in collaboration with leading media platforms[17]. - The company aims to accelerate the market expansion of its new game product supply business and actively explore overseas markets to improve revenue generation capabilities[17]. - The company will focus on integrating artificial intelligence technology into its operations, enhancing game engine development, and exploring new business models[16]. - The company is committed to maintaining the stability of its overall business while actively pursuing diversification strategies to enhance profitability[19]. - The company expresses confidence in overcoming challenges and achieving better results in the future[20]. - The company plans to increase investment in game engine development and game publishing operations, aiming to enhance competitiveness and explore new business models[141]. - The company is closely monitoring overseas market opportunities and has accelerated strategic cooperation to promote overseas business development[137]. Corporate Governance - The board of directors has undergone significant changes, with multiple appointments and resignations effective May 23, 2022[2][3]. - The board consists of seven directors, including two executive directors, two non-executive directors, and three independent non-executive directors[183]. - The company has maintained compliance with all applicable corporate governance codes during the fiscal year 2022[176]. - The board is responsible for key decisions including overall strategy, budget approval, and risk management systems[179]. - All directors have access to relevant information and independent professional advice when necessary[178]. - The company has established formal and informal channels for independent non-executive directors to express their opinions openly[187]. - Each director received training to ensure understanding of the company's operations and regulatory responsibilities[190]. - The company has purchased appropriate liability insurance for directors and senior officers against legal claims[194]. - The nomination committee oversees the appointment and succession planning of directors[188]. - The company has a balanced board composition to ensure effective independent judgment[181]. Shareholder Information - The company did not recommend any final dividend for the fiscal year 2022, consistent with the previous fiscal year[28]. - As of December 31, 2022, the company's distributable reserves amounted to approximately RMB 23.0 million[33]. - Major shareholders include Ms. An Fenghua and Infinities Cayman, each holding 280,498,495 shares, representing 51.37% of total shares[49]. - Mr. Tan Bing holds 48,592,274 shares, accounting for 8.9% of total shares[49]. - The company has not purchased, sold, or redeemed any of its listed securities during the fiscal year 2022[37]. - There were no known tax benefits for shareholders due to shareholding[32]. Risks and Compliance - The company may face significant consequences if the Chinese government deems its contractual arrangements for mobile gaming operations non-compliant with applicable laws[96]. - There is a risk of losing access to important assets if any of the consolidated entities declare bankruptcy or face liquidation[100]. - The company anticipates higher tax rates and potential additional tax liabilities due to its contractual arrangements, which could reduce net profit margins[101]. - Changes in China's preferential tax policies may lead to increased tax liabilities for the company[103]. - The company is committed to maintaining its subsidiaries' qualifications for preferential tax rates to continue enjoying tax benefits[103]. - The board closely monitors developments in applicable Chinese laws and regulations to ensure compliance and control by Chinese investors[97]. - Potential conflicts of interest may arise between the shareholders and the company, which could lead to unfavorable modifications to agreements[105]. Related Party Transactions - The company has ongoing related party transactions with Chengdu Electric Bus Trading Co., Ltd. for the supply of gaming products from August 1, 2022, to December 31, 2024[59]. - The independent non-executive directors confirmed that the related party transactions are conducted in the ordinary course of business and on fair commercial terms[65]. - The independent auditor has not identified any issues that would lead them to believe the disclosed related party transactions were not approved by the board[66]. - The transactions under the game product supply agreement are subject to the disclosure and independent shareholder approval requirements due to applicable percentage ratios exceeding 25%[63]. - The company has complied with the applicable disclosure requirements under the listing rules regarding the related party transactions[66]. Operational Efficiency - The company has implemented various business processes, approval systems, and risk control management systems to enhance operational efficiency[73]. - The integrated affiliate's administrative management system has been established to select experienced personnel for key management positions[73]. - The company is committed to protecting the integrity of the integrated affiliate's assets and ensuring compliance with operational guidelines[79]. Employee and Compensation - The company has a defined contribution retirement plan for all employees, with no forfeited contributions used to offset current contribution levels[52]. - The company has not entered into any management and administrative contracts concerning the majority of its business during the fiscal year 2022[116].