LINEKONG(HK:08267)2022-03-31 12:32Company Performance and Financials - The group's revenue for the year ended December 31, 2021, was approximately RMB 85.9 million, a decrease of about 59.5% compared to RMB 211.9 million for the year ended December 31, 2020[31]. - Revenue from online game development and operation was approximately RMB 70.6 million, a decrease of about 38.0% or RMB 43.3 million from the previous year, attributed to the decline in existing games[33]. - Revenue from the licensing and custom web drama business was approximately RMB 15.4 million, a decrease of about 84.3% or RMB 82.6 million compared to RMB 98.0 million in the previous year[34]. - Total revenue for the year ended December 31, 2021, was approximately RMB 70.6 million, a decrease of about 38.1% from RMB 113.9 million in 2020[36]. - Gross profit for the year was approximately RMB 25.3 million, down about 48.6% from RMB 49.2 million in 2020, with a gross margin of 29.4%, an increase of 6.2 percentage points from 23.2%[39]. - Operating loss for the gaming business was RMB 42.5 million, compared to a loss of RMB 30.3 million in 2020, reflecting a deterioration of 40.2%[46]. - The net loss attributable to equity owners for the year was approximately RMB 75.3 million, an increase of about 118.3% from RMB 34.5 million in 2020[50]. - The adjusted net loss for the year ended December 31, 2021, was approximately RMB 69.6 million, an increase of 235.9% compared to RMB 20.7 million for the year ended December 31, 2020[52]. - The company reported a total annual loss of RMB 80.9 million for 2021, which is a 99.9% increase from RMB 40.5 million in 2020[52]. Research and Development - The company continued to increase investment in independent research and development, focusing on products targeted at female mobile game users[10]. - The company will continue to increase investment in independent research and development for both gaming and film industries to ensure long-term development[22]. - Research and development expenses increased by approximately 14.3% to RMB 19.2 million, up from RMB 16.8 million in 2020, indicating a commitment to enhancing R&D investment[42]. Product Development and Launches - The independent game product "Dream Mansion" has completed its development phase and is expected to launch in Q2 2022 after successful testing on domestic Android channels[11]. - The joint-developed AVG+RPG mobile game "Zhen Huan Chuan: Floating Life Dream" has completed testing both domestically and overseas, awaiting launch, targeting the female market with a strong IP[11]. - The company has several high-quality IPs in reserve, with plans to launch multiple new products in 2022, enhancing its product capabilities[11]. - The company plans to strengthen its overseas market exploration in regions such as South Korea, Japan, and North America, while also focusing on female-oriented and casual games[22]. - In 2022, the company expects to launch 1-2 high-quality works, with the web drama "I Like You More Than Just Like" officially in production and "Maya: The Human Realm" successfully completed filming[22]. Market Expansion - The company is deepening its market presence in key overseas regions, including Japan, South Korea, and North America[10]. - The company has strengthened its Japanese publishing team, with all members having experience in top 30 bestselling game products, enhancing its operational capabilities in Japan[11]. - The group is focusing on expanding into the Japanese market, having established a local publishing team in 2019 and secured exclusive rights for the mobile version of the classic ARPG "Ys VIII" for global release[25]. - The company aims to continue developing self-researched games with a focus on IP-oriented, female-oriented, and casual games while actively exploring overseas markets in 2022[30]. Film and Television Segment - The film and television segment has increased its quality IP reserves, aiming to develop key works for release in 2022[10]. - The film and television business has performed well, with series such as "Mr. Gu" and "The Moonlight" achieving notable success and market recognition[11]. - The company is actively pursuing a matrix layout for its film and television business, aiming to enrich its potential IP reserves and promote high-quality drama production[22]. - The modern urban romantic drama "To You, It's More Than Just Like" is currently in production and is expected to premiere in Q4 2022[28]. Employee and Human Resource Management - The company employed 152 staff members as of December 31, 2021, an increase from 141 employees in the previous year[63]. - The total employee compensation for the year was approximately RMB 51.0 million, compared to RMB 47.7 million in 2020[63]. - The company has established health records for employees and provides free annual health check-ups[157]. - The company has developed various training programs tailored to different job roles to enhance employees' professional skills and teamwork capabilities[158]. - The employee training participation rate was 89.89% for other staff, with an average training duration of 9 hours[195]. Corporate Governance - The company has established three board committees: the Remuneration Committee, the Nomination Committee, and the Audit Committee, each with a clear written scope of authority[88]. - The Remuneration Committee reviewed the remuneration of directors and senior management for the year ending December 31, 2021, and deemed it fair and reasonable[89]. - The Nomination Committee evaluated the composition of the board and the independence of non-executive directors, recommending candidates for new director appointments[90]. - The board consists of eight directors with a gender ratio of 6:2, including three independent non-executive directors[95]. - The company has adopted a board diversity policy since December 29, 2014, which was revised on December 27, 2018, considering factors such as gender, age, culture, and professional experience[94]. Environmental, Social, and Governance (ESG) Initiatives - The company has committed to ESG responsibilities and has prepared an ESG report in accordance with the Stock Exchange's guidelines[122]. - The company has established an ESG governance framework to oversee ESG-related risks and opportunities[130]. - The company has implemented energy-saving measures, including the use of high-efficiency appliances and optimizing server operations[139]. - The company has established policies to reduce significant impacts on the environment and natural resources, detailing actions taken to manage these impacts[198]. - The company emphasizes the importance of stakeholder engagement in its ESG management efforts[133]. Risk Management - The company faces significant risks from tightened government regulations in the gaming industry and ongoing global challenges from the COVID-19 pandemic, prompting a focus on high-quality game development and IP reserves[115]. - The company has established an internal control system based on the COSO framework, with clear responsibilities defined for management and the board[111]. - The internal control system aims to manage risks rather than eliminate them, providing reasonable assurance against significant misstatements or losses[110]. Community Engagement and Social Responsibility - The company created multiple job opportunities in the local community, providing a platform for young people to pursue their dreams[190]. - The company received the honor of being a key cultural export enterprise for the 2021-2022 period, awarded by several government departments[190]. - Community investment policies were outlined, focusing on understanding community needs and ensuring business activities consider community interests[199].