BAIOO(HK:02100)2022-09-28 11:00Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 289,641 thousand, a decrease of 44% compared to RMB 519,887 thousand in 2021[26]. - Gross profit for the same period was RMB 117,738 thousand, down 51% from RMB 240,221 thousand in 2021[26]. - The company reported an operating loss of RMB 61,884 thousand, compared to a profit of RMB 56,995 thousand in the previous year, marking a 209% decline[26]. - Adjusted net loss for the period was RMB 7,834 thousand, a significant decrease from a profit of RMB 69,295 thousand in 2021, representing a 111% decline[26]. - Adjusted EBITDA for the first half of 2022 was a loss of RMB 18,002 thousand, down 120% from RMB 90,914 thousand in the same period last year[26]. - The net loss attributable to shareholders for the period was RMB 39,928 thousand, compared to a profit of RMB 46,289 thousand in the same period of 2021[141]. - The company did not declare any interim dividend for the six months ended June 30, 2022, consistent with the previous year[128]. - The company recorded an operating loss of RMB 61.9 million for the six months ended June 30, 2022, compared to an operating profit of RMB 57.0 million in the prior year[96]. - Adjusted net loss for the six months ended June 30, 2022, was RMB 7.8 million, a decrease of 111.3% compared to a net profit of RMB 69.3 million for the same period in 2021[102]. Assets and Liabilities - Total assets as of June 30, 2022, were RMB 1,946,988 thousand, a slight decrease from RMB 1,994,342 thousand as of December 31, 2021[31]. - Total liabilities as of June 30, 2022, were RMB 317.3 million, while total assets were RMB 1,946.99 million, resulting in a debt-to-asset ratio of 16%[106]. - Cash and cash equivalents amounted to RMB 1,174.6 million as of June 30, 2022, down from RMB 1,429.2 million at the end of 2021[107]. - Total liabilities increased from RMB 311,702 thousand to RMB 317,269 thousand, an increase of about 1.8%[148]. - The company’s share premium decreased from RMB 1,106,699 thousand to RMB 1,076,454 thousand, a decrease of about 2.7%[155]. - The company reported a decrease in lease liabilities from RMB 79,352,000 as of December 31, 2021, to RMB 70,147,000 as of June 30, 2022[181]. Market and Business Strategy - The company continues to focus on three major gaming segments: female-oriented games, pet battle games, and ACG (Anime, Comic, and Games) games[23]. - The gaming market in China has shown signs of slowing down, with a slight decline in market size, while mobile gaming remains dominant[34]. - The company aims to enhance its IP development strategy to create innovative gaming products that provide upgraded experiences for users[35]. - The company has expanded its gaming business beyond mainland China, successfully launching games in regions such as Hong Kong, Macau, Taiwan, Japan, South Korea, Singapore, Malaysia, and Europe and the United States[39]. - The company plans to focus on three gaming segments: female-oriented games, pet collection and nurturing, and "2D" games in the second half of 2022[43]. - The company aims to integrate more traditional Chinese culture into its game content, providing innovative and beneficial gaming experiences to users globally[43]. Research and Development - Research and development expenses increased to RMB 105.0 million, representing 36% of revenue, compared to 16% of revenue last year[76]. - The company has invested in product R&D and talent acquisition to optimize game graphics, gameplay, and operations, laying a solid foundation for continued development in the gaming sector[40]. - The company continues to enhance its game content and R&D capabilities, focusing on the Z generation users and maintaining stable operational performance and user reputation[36]. - The company emphasizes user-centric content creation, integrating traditional Chinese culture into games to showcase Chinese characteristics and wisdom[61]. User Engagement and Market Response - The average quarterly active accounts decreased to 6.3 million, a decline of 48.4% compared to 12.2 million in the same period last year[72]. - The average quarterly paying accounts fell to 1.0 million, down 52.4% from 2.1 million year-on-year[73]. - The average revenue per paying account for the quarter reflects the company's ability to monetize its user base effectively[57]. - The core mobile and web games operations remain stable, with successful titles like "Food Fantasy," "Aola Star," and "Aoqi Legend" receiving positive user and market feedback[59]. - The mobile game "Aobi Island: Dream Kingdom," derived from the classic IP "Aobi Island," was officially launched in mainland China on July 12, 2022, with over 300 million registered users accumulated over 13 years[43]. Awards and Recognition - The company received the "Best Small and Medium Market Capitalization Company" award at the 6th Golden Hong Kong Stock Awards in January 2022[40]. - The company received recognition at the 7th Blackstone Awards, winning three awards including "Outstanding Cooperative Company of the Year" and "Most Anticipated Game" for "Aola Star"[65]. Financial Risks and Management - The company continues to face multiple financial risks, including market risk, credit risk, and liquidity risk[175]. - The company aims to maintain sufficient cash and cash equivalents for daily operations, reflecting its strategy to ensure financial flexibility[177]. - The company has not experienced any significant changes in risk management policies since December 31, 2021[176].