XD INC(HK:02400)2022-09-29 08:57Financial Performance - Revenue for the first half of 2022 was RMB 1,594,037 thousand, representing a 15.6% increase from RMB 1,378,707 thousand in the same period of 2021[10]. - Gross profit for the first half of 2022 was RMB 782,915 thousand, up 15.7% from RMB 676,699 thousand year-on-year[10]. - The company reported a net loss of RMB (381,395) thousand for the first half of 2022, an 18.3% increase compared to RMB (322,351) thousand in the same period of 2021[10]. - Total revenue for the first half of 2022 was RMB 1,594,037 thousand, compared to RMB 1,378,707 thousand in the same period of 2021, marking a year-on-year increase[24]. - Revenue from games accounted for 70.7% of total revenue in the first half of 2022, down from 75.6% in the same period of 2021[25]. - Information services revenue increased to RMB 467,750 thousand, representing 29.3% of total revenue, compared to 24.4% in the same period of 2021[25]. - Game business revenue increased by 8.0% year-on-year to RMB 1,126.3 million for the six months ended June 30, 2022, driven primarily by revenue growth from "Sausage Man"[27]. - Revenue from online games rose by 10.9% year-on-year to RMB 1,042.1 million, while revenue from paid games decreased by 18.0% to RMB 72.6 million[27]. - The company reported a net loss attributable to equity holders of RMB 386,056 thousand for H1 2022, compared to a net loss of RMB 325,147 thousand in H1 2021, indicating a decline in performance[147]. - Basic loss per share for H1 2022 was RMB 0.82, compared to RMB 0.71 in H1 2021, showing a deterioration in earnings per share[147]. User Metrics - Average monthly active users for online games decreased by 2.2% to 15,346 thousand from 15,690 thousand year-on-year[11]. - Average monthly paying users increased by 88.7% to 1,530 thousand from 811 thousand year-on-year[11]. - TapTap's average monthly active users for the Chinese version reached approximately 41.7 million, a year-on-year increase of 45.5%, with game downloads totaling 402.3 million, up 62.2%[21]. - The international version of TapTap had an average monthly active user count of about 9.0 million, reflecting a year-on-year decrease of 31.9%[22]. Game Portfolio and Development - The current game portfolio includes 20 online games and 22 paid games as of June 30, 2022[16]. - The top five games contributing to revenue as of June 30, 2022, were Sausage Man, Ragnarok M, Ulala, Lan Yan Qing Meng, and Shen Xian Dao (HD)[17]. - Sausage Man, launched in April 2018, saw record high active users and payment rates in the first half of 2022, with significant revenue growth compared to the same period last year[17]. - New self-developed games Flash Party and T3 Arena launched in the first half of 2022, with Flash Party ranking in the top three for free game downloads in Japan[18]. Financial Position and Cash Flow - The company holds approximately RMB 3.8 billion in cash and cash equivalents and short-term investments as of June 30, 2022, indicating sufficient resources for business development[15]. - Cash and cash equivalents as of June 30, 2022, were RMB 2,095.9 million, down from RMB 3,164.7 million as of December 31, 2021[43]. - Total current assets, including cash and short-term investments, decreased to RMB 3,792.4 million as of June 30, 2022, from RMB 3,957.2 million as of December 31, 2021[43]. - The company reported a net cash flow from operating activities of RMB 174.5 million[44]. - The company’s cash flow from operating activities remains strong, with cash on hand and bank cash totaling RMB 1,955,042 thousand as of June 30, 2022[187]. Expenses and Cost Management - Total revenue cost increased by 15.5% year-on-year to RMB 811.1 million, with game business costs rising by 6.0% to RMB 674.3 million[30]. - Sales and marketing expenses rose by 17.2% year-on-year to RMB 403.7 million, primarily due to increased marketing spending for TapTap and new game launches[35]. - R&D expenses increased by 14.0% to RMB 656.4 million for the six months ended June 30, 2022, despite a reduction in R&D personnel from 1,565 to 1,387[36]. - General and administrative expenses decreased by 6.4% to RMB 104.5 million for the same period, primarily due to a reduction in back-office staff and rental savings[36]. Shareholder and Governance Information - The company has a total of 1,890 employees as of June 30, 2022, primarily located in Shanghai[59]. - Major shareholders include Credit Suisse Trust Limited with 229,484,865 shares (47.77%) and Happy Today Company Limited with 157,605,000 shares (32.80%) as of June 30, 2022[72]. - The company has established a competitive compensation and incentive system to attract and retain qualified personnel[60]. - The company has adopted a corporate governance code and has complied with all applicable provisions, except for the separation of the roles of Chairman and CEO, which are held by Mr. Huang Yimeng[61]. Risks and Compliance - The company faces various financial risks, including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies noted for the reporting period[111]. - The audit committee has reviewed the unaudited consolidated financial statements for the six months ending June 30, 2022, ensuring compliance with accounting policies and practices[64]. - The company has confirmed compliance with the standard code for securities trading by its directors for the six months ending June 30, 2022[63]. Investments and Acquisitions - The company has not yet monetized the international version of TapTap[29]. - The company has no major investments or acquisitions as of June 30, 2022[45]. - The company plans to continue exploring mergers and acquisitions to enhance its market presence and product offerings[108]. - The company acquired 100% of Lean Cloud (Hong Kong) Limited for a total cash consideration of RMB 876 million, with RMB 83.2 million paid as of June 30, 2022[199].