GAMEONE(HK:08282)2023-03-28 09:37Financial Performance - The company recorded a net loss of approximately HKD 11.1 million for the fiscal year ending December 31, 2022, compared to a net profit of approximately HKD 0.6 million in the same period of 2021, primarily due to decreased game operation revenue from mobile games[10]. - The gross profit decreased by HKD 9.4 million in 2022, attributed to reduced revenue from mobile games such as "古惑仔M" and "球場風雲"[10]. - Administrative expenses increased by HKD 4.9 million in 2022, driven by higher employee costs and expenses related to printing and office supplies[10]. - The company reported a net loss of approximately HKD 11.1 million for the fiscal year ending December 31, 2022, compared to a net profit of approximately HKD 0.6 million in the same period of 2021[18]. - Revenue increased by approximately 8.0% from about HKD 84.5 million in 2021 to approximately HKD 91.3 million in 2022, primarily due to increased income from software and technology services in mainland China[22]. - Game operation revenue from licensed games decreased from HKD 63.7 million (75.4%) in 2021 to HKD 52.0 million (57.0%) in 2022, reflecting a significant decline in performance[23]. - The company's gross profit decreased by approximately 28.6% from about HKD 32.9 million in 2021 to approximately HKD 23.5 million in 2022, mainly due to reduced revenue from licensed mobile games[27]. - Administrative expenses increased by approximately 41.2% from about HKD 11.9 million in 2021 to approximately HKD 16.8 million in 2022, driven by higher employee costs and office supplies[30]. - The gross margin for the fiscal year 2022 was approximately 25.7%, a decrease of about 13.2 percentage points from 38.9% in 2021, primarily due to lower margins from software services[27]. Strategic Initiatives - The company established its headquarters in Hangzhou, Zhejiang Province, and has begun to expand its revenue levels in the mainland China market through market development in 2022[11]. - The company plans to strategically invest in game developers, technology providers, and other game operators to enhance its market share in the mobile gaming industry[11]. - A research and development center has been applied for in Hangzhou, with plans to procure necessary hardware and software to keep pace with technological advancements in the gaming industry[12]. - The company aims to maintain its leading market share in Hong Kong and Taiwan while expanding its presence in the mainland China market[11]. - The company intends to leverage natural growth and strategic partnerships to expand its business in the mobile gaming sector[11]. - The company plans to expand its market share in the mobile gaming industry through organic growth and strategic partnerships with game developers and distributors[18]. - Software services revenue reached approximately HKD 29.7 million in 2022, marking a new revenue stream for the company[23]. Corporate Governance - The company has adopted anti-bribery and anti-corruption policies since 2019, which include guidelines on business ethics and reporting mechanisms for suspected corruption[77]. - The board has established a diversity policy to ensure independent viewpoints and opinions, which has been reviewed annually since 2019[81]. - The company has implemented a whistleblowing policy since 2019, ensuring that any confirmed cases are reported to the board and audit committee[80]. - The company maintains a commitment to effective communication with shareholders, with policies reviewed regularly since 2019[80]. - The board's responsibilities include fostering a healthy corporate culture aligned with the company's vision, values, and business strategy[77]. - The company has complied with all applicable corporate governance code provisions as of December 31, 2022, with some exceptions noted[77]. - The company has a dedicated committee for risk management and internal controls, which includes anti-corruption measures[77]. - The board evaluates the independence of non-executive directors annually to ensure independent opinions and recommendations are obtained[80]. - The company has a structured approach to determining the remuneration of non-executive directors, which requires shareholder approval[81]. - The company emphasizes the importance of accountability and transparency in maintaining stakeholder trust and long-term value creation[76]. - The board currently has a female representation of approximately 20.0%[83]. - The nomination committee is chaired by an independent non-executive director, with a majority of independent non-executive directors as members[84]. - The company has established three board committees: the Remuneration Committee, the Nomination Committee, and the Audit Committee, to oversee specific areas of the company's affairs[102]. - The Remuneration Committee held three meetings during the year ended December 31, 2022, to review the remuneration of directors and senior management, concluding that the compensation was fair and reasonable[106]. - The Nomination Committee conducted two meetings during the year ended December 31, 2022, to review and recommend the re-election of directors, including the appointment of new independent non-executive directors[109]. - The company emphasizes the importance of continuous professional development for directors, ensuring all directors attended at least one training course related to good corporate governance practices during the year[101]. - The company believes that having the same individual serve as both Chairman and CEO since January 7, 2022, enhances strategic planning and execution consistency[100]. - The company is committed to maintaining a balance of power and authority through board operations, which are managed by a group of experienced and capable individuals[100]. - The company encourages directors to participate in training courses to stay updated on the latest corporate governance information[101]. - The company has provided sufficient resources for all board committees to fulfill their duties and seek independent professional advice when necessary[105]. - The company will consider various factors, including gender, age, and industry experience, in the selection of board members to enhance diversity[109]. - The company plans to continue its focus on effective corporate governance policies and practices, ensuring compliance with the GEM Listing Rules[105]. Risk Management - The company faces significant risks including intense competition in the mobile gaming industry and potential obsolescence of its games due to rapid technological changes[19]. - The company has established a risk management system and internal control procedures, which were reviewed by the audit committee[112]. - The company has a structured approach to ensure that all directors are provided with sufficient time to review and approve meeting records[118]. - The company has established a risk management framework based on the COSO framework, which allows for effective risk management by the board and management[149]. - The risk register is updated at least annually to track identified major risks and document actions taken to mitigate these risks[150]. - The company has adopted a whistleblowing policy to provide a reliable channel for reporting serious misconduct without fear of retaliation[144]. - The company is committed to the highest standards of integrity and ethical behavior through its anti-bribery and anti-corruption policy, which is regularly reviewed and updated[147][148]. Shareholder Relations - The company maintains high standards of business ethics and governance, with clear guidelines included in training materials and the employee handbook[87]. - The board is responsible for overseeing the company's business management and ensuring alignment with shareholder interests[91]. - Independent non-executive directors provide impartial opinions on strategy and performance, ensuring the interests of all shareholders are considered[94]. - The company has appointed three independent non-executive directors, constituting over one-third of the board, with at least one possessing relevant financial management expertise[94]. - Shareholders have the right to propose individual resolutions for consideration and voting at the general meeting, ensuring the protection of their interests[139]. - The company has established multiple communication channels with shareholders to ensure timely and equal access to information[153][155]. - The company will disclose the nomination policy summary and the standards for selecting and recommending director candidates in the annual corporate governance report[134]. Environmental, Social, and Governance (ESG) - The environmental, social, and governance (ESG) report was published simultaneously with the annual report for the year ending December 31, 2022[85]. - The company has implemented green initiatives and measures in its daily operations, including resource recycling and energy-saving practices[157]. - The company has maintained effective communication and good relationships with key stakeholders, including employees, customers, suppliers, banks, regulators, and shareholders[159]. - The company’s board of directors reported no significant non-compliance with laws and regulations affecting its operations for the year ended December 31, 2022[158]. - The company has not made any charitable donations during the year ended December 31, 2022, consistent with the previous year[169]. Capital Structure - As of December 31, 2022, the company's issued share capital was approximately HKD 2.4 million, with a total of 240,000,000 shares issued at a par value of HKD 0.01 per share[33]. - The company raised approximately HKD 22.4 million through a rights issue, with net proceeds of about HKD 21.3 million after expenses[37]. - The rights issue involved issuing 80,000,000 shares, representing approximately 33.3% of the company's enlarged issued share capital[37]. - As of December 31, 2022, the company's cash and cash equivalents were approximately HKD 27.3 million, down from HKD 35.4 million as of December 31, 2021[35]. - The company's debt-to-asset ratio was approximately 30.5% as of December 31, 2022, compared to 36.7% as of December 31, 2021[47]. - The company has no significant investments or capital asset plans as of December 31, 2022[44]. - The company has no bank borrowings as of December 31, 2022, maintaining a conservative treasury policy[46]. - The company has no significant contingent liabilities as of December 31, 2022[50]. - As of December 31, 2022, the total employee cost reached approximately HKD 15.6 million, an increase from HKD 13.2 million as of December 31, 2021, reflecting a growth of about 18.3%[54]. - The company employed 50 staff members as of December 31, 2022, compared to 49 staff members as of December 31, 2021, indicating a slight increase in workforce[54]. - The company did not declare a final dividend for the year ended December 31, 2022, maintaining the same as the previous year at zero HKD per share[164]. - As of December 31, 2022, the total reserves available for distribution to shareholders amounted to approximately HKD 11,186,000, a decrease from approximately HKD 30,702,000 in 2021[175]. Business Operations - The company’s primary business involves providing software services in mainland China and developing, operating, and distributing online and mobile games in Hong Kong and other regions[162]. - The company entered into 10 technology development agreements with Hangzhou Cambridge Technology Co., Ltd., totaling RMB 3.6 million (approximately HKD 4.0 million) for software rights related to e-commerce and cybersecurity systems[173]. - The company paid approximately HKD 0.48 million to Duoyou Limited for NFT consulting services during the year[173]. - The company’s major customers include third-party game operators and developers, with no significant beneficial interests held by directors or their close associates in the top five customers or suppliers[177]. - The company did not purchase, sell, or redeem any of its listed securities during the year ended December 31, 2022[198]. - There were no significant contracts established between the company and its controlling shareholders during the year[188]. - The company has not entered into any management or administrative contracts related to its overall or any major business as of December 31, 2022[189]. - The remuneration policy includes fixed components (base salary) and variable components (discretionary bonuses and other rewards) based on various factors[184]. - The company has not received any written confirmations from directors regarding interests in businesses that may compete with the company[199]. - There were no significant related party transactions disclosed in the financial statements[186]. - The company’s governance practices are detailed in the corporate governance report on pages 19 to 38 of the annual report[200].