ZENGAME(HK:02660)2023-04-26 08:50Financial Performance - Total revenue for Zengame Technology increased by 19.9% to approximately RMB 1,767.5 million in 2022 from RMB 1,473.9 million in 2021[9]. - Net profit rose by 36.0% to approximately RMB 680.3 million in 2022 compared to RMB 500.3 million in 2021[11]. - Adjusted net profit (excluding share-based compensation) increased by 38.2% to approximately RMB 695.0 million in 2022 from RMB 503.0 million in 2021[11]. - Gross profit margin improved to 64.4% in 2022 from 61.4% in 2021, reflecting a 3.0 percentage point increase[9]. - Earnings per share rose by 38.8% to RMB 0.68 in 2022 from RMB 0.49 in 2021[9]. - Revenue from virtual goods sales reached approximately RMB 1,541.8 million, up 47.8% from RMB 1,043.0 million in 2021[22]. - Revenue from self-developed games reached RMB 926.2 million in 2022, with a gross margin of 60.5%, compared to RMB 556.9 million and 53.8% in 2021[28]. - Other income rose by 76.8% from approximately RMB 32.1 million in 2021 to approximately RMB 56.7 million in 2022, primarily due to increased income from interest-bearing assets and government subsidies[29]. - The sales cost for the year ended December 31, 2022, was approximately RMB 629.5 million, an increase of about 10.7% from RMB 568.6 million in 2021[26]. User Engagement - Monthly active users decreased to 35,967 thousand in 2022 from 43,237 thousand in 2021, representing a decline of approximately 16%[16]. - Daily active users decreased to 5,810 thousand in 2022 from 6,890 thousand in 2021, reflecting a decline of about 16%[16]. - Monthly paying users for virtual items increased to 1,015 thousand in 2022 from 951 thousand in 2021, showing an increase of approximately 7%[16]. - Average revenue per paying user (ARPPU) for virtual items rose significantly from RMB 88 in 2021 to RMB 133 in 2022, an increase of approximately 51%[16]. - User retention rates improved to 85%, up from 80% in the previous year[164]. Strategic Focus - The flagship product "Finger Sichuan Mahjong" achieved the highest ranking in the iOS best-selling list for card games in China[11]. - The company focused on enhancing user retention and in-game payment rates through product innovation and marketing strategies[11]. - Zengame Technology plans to reduce investment in hyper-casual games and allocate more resources to the innovation and optimization of key card games[11]. - The company plans to continue focusing on classic card and casual games in both domestic and overseas markets, enhancing product development and innovation capabilities[12]. - The group plans to enhance R&D capabilities and actively explore overseas gaming markets in 2023[20]. Compliance and Regulations - The company has implemented real-name authentication and anti-addiction measures in response to new regulations aimed at protecting minors[12]. - The company is committed to ensuring compliance with relevant laws and regulations across all game products, enhancing user privacy protection measures[12]. - The group has not encountered any regulatory interference regarding the adoption of the 指尖互动娱乐架构合约, allowing the financial performance of 指尖互动娱乐 to be consolidated into the group's financial results[133]. - The company has not encountered any regulatory interference in adopting the Zenyou Shenzhen framework agreements[112]. Corporate Governance - The board of directors includes three executive directors and three independent non-executive directors, with changes in the board noted since the mid-year report[59][60]. - The company has adopted a dividend policy without a preset payout ratio, allowing the board to recommend dividends based on financial conditions and operational needs[47]. - The company has established three committees: the audit committee, remuneration committee, and nomination committee, each with specific written terms of reference[191]. - The board of directors is responsible for leading and monitoring the company, ensuring effective internal controls and risk management systems[187]. - The company has received annual confirmations of independence from all independent non-executive directors, affirming their status[185]. Shareholder Information - The company proposed a final dividend of HKD 0.21 per share for the year ended December 31, 2022, totaling HKD 215.9 million[47]. - As of December 31, 2022, the company had distributable reserves of RMB 59.1 million and total borrowings of approximately RMB 13.5 million, an increase from RMB 9.1 million as of December 31, 2021[52]. - The company has not entered into any related party transactions that require disclosure under the Listing Rules for the year ended December 31, 2022[108]. - The company has maintained at least 25% of its issued share capital held by the public as required by listing rules[157]. Employee Information - Total employee compensation for the year ended December 31, 2022, was approximately RMB 242.7 million, an increase of 41.1% from RMB 172.0 million in 2021[106]. - The average number of employees increased by 28.6% in 2022 compared to 2021, reaching approximately 524 employees[106]. - The company has maintained good working relationships with employees, with no significant labor disputes reported during the year[106]. Future Outlook - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[172]. - New product launches are expected to contribute an additional $20 million in revenue in the next fiscal year[171]. - The company is investing $5 million in research and development for new technologies aimed at enhancing user experience[167]. - A strategic acquisition of a smaller tech firm is anticipated to close by Q3 2023, expected to add $10 million in annual revenue[166]. - The company has set a performance guidance of 10% revenue growth for the upcoming fiscal year[168].