FINGERTANGO(06860)2023-04-27 09:19Financial Performance - In 2022, FingerTango Inc. reported total revenue of RMB 832.5 million, a decrease of 18.5% compared to RMB 1,021.1 million in 2021[13]. - The company experienced a net loss of RMB 139.4 million in 2022, compared to a net loss of RMB 517.4 million in 2021, indicating an improvement in financial performance[13]. - The adjusted net loss for 2022 was RMB 139.4 million, which is a significant reduction from the adjusted net loss of RMB 515.6 million in 2021[13]. - The company recorded total revenue of RMB 832.5 million, an increase of 35.8% year-on-year, driven by effective marketing of new games[23]. - The company's attributable loss was RMB 139.4 million, down from RMB 517.4 million in the previous year, mainly due to increased gross profit and reduced other losses[23]. - Total revenue for the reporting period was RMB 832.5 million, an increase of 35.8% compared to RMB 613.0 million in the previous year[34]. Market Environment - The total number of game licenses issued in China decreased by 32.2% in 2022, with only 512 licenses granted compared to 755 in 2021, reflecting a challenging regulatory environment[16]. - In 2022, the actual sales revenue of the Chinese gaming market was RMB 265.88 billion, a year-on-year decrease of 10.3% or RMB 30.63 billion[20]. - The overseas revenue from self-developed games was USD 17.35 billion, a year-on-year decline of 3.7%, primarily due to the global gaming market downturn and increased competition[21]. - The total number of game licenses issued in 2022 was 512, a decrease of 32.2% compared to 755 licenses in 2021, marking a continuous decline for five years[21]. User Engagement - Monthly active users (MAUs) reached 2.57 million, a 100.7% increase year-on-year, while monthly paying users (MPUs) reached 183.5 thousand, up 34.9%[27]. - The cumulative registered user base grew by 10.4% year-on-year, reaching 204.3 million as of December 31, 2022[27]. Strategic Initiatives - The company aims to strengthen its operational capabilities and market insights to navigate the evolving gaming landscape and pursue sustainable growth[16]. - FingerTango Inc. is committed to enhancing product quality and user experience to achieve better market performance in the future[17]. - The company has strategically adjusted its product release plans in response to market conditions and changing player preferences, focusing on game character upgrades and in-game events[17]. - The company plans to launch new games in 2023, focusing on optimizing product strategies and leveraging big data analytics for better market performance[29]. - The company aims to enhance game lifecycle management and user experience to improve monetization capabilities and ensure stable revenue generation[28]. - The company will continue to expand its game portfolio while focusing on SLG games and promoting the concept of "game quality" to develop higher-quality games[29]. Financial Position - Non-current assets as of December 31, 2022, were RMB 149.1 million, unchanged from 2021, while current assets decreased to RMB 907.1 million from RMB 973.8 million in 2021[14]. - Total equity decreased to RMB 777.8 million in 2022 from RMB 894.3 million in 2021, indicating a decline in the company's financial position[14]. - As of December 31, 2022, the company's current assets were RMB 907.1 million, including cash and cash equivalents of RMB 682.8 million, a 12.3% increase from RMB 608.0 million the previous year[47]. - The company had no bank borrowings or other debt financing obligations, resulting in a debt-to-equity ratio of zero[48]. Expenses and Profitability - Cost of revenue increased by 20.0% to RMB 302.7 million, up RMB 50.4 million from the previous year[35]. - Gross profit was RMB 529.8 million, with a gross margin increase from 58.8% to 63.6%[36]. - Sales and marketing expenses surged by 119.2% to RMB 408.6 million, accounting for 49.1% of total revenue[37]. - Administrative expenses decreased by 30.5% to RMB 73.5 million, primarily due to reduced bad debt losses[39]. - Research and development expenses rose by 2.6% to RMB 78.4 million, mainly due to increased employee costs[40]. - Other losses decreased significantly to RMB 106.0 million from RMB 524.2 million in the previous year[41]. Corporate Governance - The board of directors will continue to review and monitor the company's conduct to maintain a high standard of corporate governance[182]. - The company has adopted the corporate governance code as set out in Appendix 14 of the Listing Rules to regulate its corporate governance practices[178]. - The company has complied with the relevant provisions of the corporate governance code during the reporting period, except for a deviation from provision C.2.1[181]. - The company has purchased appropriate directors' liability insurance for its directors during the review year[176]. - The board consists of experienced members, including Liu Jie as Chairman and CEO, and Zhu Yanbin as COO, both of whom have extensive experience in the mobile internet industry[190][194]. Legal and Compliance - The company is involved in a legal dispute claiming HKD 250 million related to a subscription agreement from July 2018[115]. - The company has taken legal actions to recover overdue debts from certain borrowers, which may impact the audit qualifications related to receivables[59]. - The company’s management believes that the audit qualifications will be removed once sufficient evidence regarding the financial condition of the borrowers is obtained[59]. - The auditor issued an unqualified opinion regarding the group's continuing connected transactions as disclosed under the Hong Kong Listing Rules[173]. Investments and Financial Products - The company has made several investments in financial products, including a RMB 45 million investment with an expected annualized return of 3.76% to 3.96%[89]. - The company subscribed to various financial products totaling RMB 210,000,000, with expected annualized returns ranging from 2.60% to 4.00%[1]. - The expected annualized return for the "Wealth Class 3" financial product is 3.00% for a 30-day investment period[1]. - The company has a total of six financial product subscriptions, with varying investment periods and expected returns[1]. Employee and Shareholder Information - The company had a total of 361 employees as of December 31, 2022, an increase from 334 employees the previous year[139]. - The company provides competitive compensation and benefits to employees, with regular reviews based on individual performance[139]. - The company has adopted a dividend policy that allows for the declaration and distribution of dividends, subject to the group recording post-tax profits[142]. - The company’s major shareholders include LJ Technology Holding Limited, holding 1,007,837,500 shares (52.18%), and ZYB Holding Limited, holding 148,488,000 shares (7.69%)[128].