FINGERTANGO(06860)2022-04-28 08:52Financial Performance - In 2021, FingerTango Inc. reported total revenue of RMB 613.0 million, a decrease of 18.1% compared to RMB 748.2 million in 2020[12] - The company's gross profit for 2021 was RMB 360.8 million, down 22.2% from RMB 464.0 million in the previous year[12] - The net loss for the year was RMB 517.4 million, compared to a profit of RMB 127.6 million in 2020, indicating a significant decline in performance[12] - The total equity of FingerTango Inc. at the end of 2021 was RMB 894.3 million, down from RMB 1,430.7 million in 2020[13] - The company recorded total revenue of RMB 613.0 million, a decline of approximately 18.1% year-on-year, primarily due to the maturity of classic games and a decrease in new game approvals[26] - The company reported a loss attributable to shareholders of RMB 517.4 million, compared to a profit of RMB 127.6 million in the same period last year, largely due to significant provisions for receivables[27] - The adjusted loss for the year ended December 31, 2021, was RMB 515.6 million, compared to an adjusted profit of RMB 135.8 million in 2020[52] Market Overview - The number of game users in China reached 666.0 million in 2021, with mobile game users accounting for 656.0 million, reflecting a growth of only 0.23% year-on-year[17] - The overseas market revenue for Chinese independently developed games grew by 16.6% to USD 18.01 billion, although this growth rate was significantly lower than in previous years[17] - Mobile games accounted for over 75% of the gaming market share in China, generating revenue of RMB 225.54 billion, which was a 7.6% increase year-on-year[16] - In 2021, the total revenue of the Chinese gaming market was approximately RMB 296.51 billion, representing a year-on-year growth of 6.4%[22] - The number of game licenses issued in 2021 was 755, a decrease of 46.3% compared to 1,405 licenses in 2020, marking a continuous decline for four years since 2018[23] Strategic Initiatives - The company plans to optimize its game business and explore innovative promotion channels in response to increasing advertising costs and changing market conditions[17] - The company is focusing on refined management and optimization of its gaming operations to adapt to the evolving regulatory environment in China[17] - The company plans to expand its existing game portfolio while focusing on the SLG game segment and broadening game categories[32] - The company aims to enhance user experience and monetization capabilities through continuous product optimization and innovation[32] - The company is leveraging big data analytics to optimize game strategies and improve cross-promotion effectiveness[32] Operational Metrics - The cumulative registered user base reached 185.0 million by December 31, 2021, an increase of 5.4% year-on-year, surpassing industry growth rates[30] - The average monthly revenue for classic games such as "My Mission" and "Tank Frontline" reached RMB 21.1 million and RMB 11.5 million respectively, indicating sustained popularity despite their maturity[28] - The cost of revenue was approximately RMB 252.3 million, down about 11.3% from RMB 284.2 million in the previous year[39] - Sales and marketing expenses were approximately RMB 186.4 million, representing 30.4% of total revenue, up from 25.9% in the previous year[41] - Research and development expenses increased by approximately 30.6% to RMB 76.3 million, reflecting the company's strategy to enhance game development capabilities[45] Investment and Financing - The company plans to use internal resources for expansion, investment, and business operations[53] - The company is actively monitoring the status of its investment in China Gas Industry Investment Holdings Co. Limited, which has been suspended from trading since March 25, 2021[62] - The company has recognized a default event regarding HKD 250,000,000 secured notes issued by a third party, with accumulated interest of HKD 8,750,000 as of the default date[125] - The board is assessing the financial impact of the default event and is taking actions to recover the principal and accrued interest from the issuer[126] Corporate Governance - The company has adopted a Restricted Share Unit Plan to formalize the process of granting share rewards to eligible management and employees[128] - The company has a Stock Option Plan effective for ten years from June 19, 2018, aimed at incentivizing eligible participants and retaining talent[132] - Major shareholders include Liu Jie with 1,007,837,500 shares (52.18%) and Zhu Yanbin with 148,488,000 shares (7.69%) [138] - The group had a total of 334 employees as of December 31, 2021, down from 372 employees the previous year [146] Regulatory and Legal Risks - The company is subject to regulatory risks regarding foreign investment in the Chinese telecommunications sector, which may impact its operations[169] - The contractual arrangements are designed to mitigate risks associated with changes in Chinese laws and regulations affecting the company's business operations[168] - The company faces risks related to its contractual arrangements, particularly concerning its Chinese operating entity, which may declare bankruptcy or face liquidation, potentially impacting asset utilization[191] - Shareholders of the Chinese operating entity have committed not to engage in competitive businesses during the validity of the contractual arrangements, mitigating potential conflicts of interest[197]