ARCHOSAUR GAMES(HK:09990)2022-09-27 08:43Financial Performance - Archosaur Games Inc. reported a revenue of approximately $50 million for the first half of 2022, representing a year-over-year increase of 25%[2]. - Revenue for the six months ended June 30, 2022, was RMB 329.8 million, a decrease of 40.4% compared to RMB 553.8 million in the same period of 2021[21]. - Gross profit for the same period was RMB 242.8 million, down 45.0% from RMB 441.1 million year-on-year[21]. - The company reported an operating loss of RMB 304.1 million, a significant increase of 246.8% compared to an operating loss of RMB 87.7 million in the previous year[21]. - Adjusted net loss for the period was RMB 279.8 million, a significant increase of 494.1% compared to RMB 47.1 million in the same period of 2021[21]. - The net loss for the period was RMB 308,857 thousand, compared to a net loss of RMB 85,835 thousand in the previous year, representing an increase of 259.5%[115]. - The company recorded revenue of RMB 329.8 million for the six months ended June 30, 2022, a decrease of 40.4% compared to RMB 553.8 million for the same period in 2021[42]. - The total comprehensive loss for the six months ended June 30, 2022, was RMB (199,408) thousand, compared to RMB (112,680) thousand for the same period in 2021, reflecting a worsening financial performance[124]. User Growth and Market Expansion - The company’s user base grew to 10 million active users, a 15% increase compared to the previous period[2]. - Archosaur Games Inc. anticipates a revenue growth of 30% for the second half of 2022, driven by new game launches and market expansion strategies[2]. - Archosaur Games Inc. plans to expand its market presence in Southeast Asia, targeting a 20% increase in user acquisition in that region by the end of 2022[2]. - Cumulative registered users for the 12 operational games exceeded 140 million globally[24]. - The company has launched a new game that has already attracted 1 million downloads within the first month of release[2]. Research and Development - The company is investing $5 million in research and development for new gaming technologies and features to enhance user experience[2]. - Research and development expenses increased by 8.8% to RMB 367.1 million from RMB 337.3 million year-on-year[21]. - The company is launching a new SLG mobile game titled "Age of Chaos," which has received positive feedback during its testing phases in both mainland China and overseas markets[37]. - The company plans to launch 10 new games across various genres from 2022 to 2024, including MMORPGs, SLGs, and strategy card games[28]. Strategic Initiatives - The company is exploring potential mergers and acquisitions to enhance its portfolio and market share, with a focus on companies in the gaming sector[2]. - The company has established partnerships with major gaming platforms to increase distribution and visibility of its products[2]. - The company aims to leverage its partnerships with Tencent and its strong IPs to enhance the market performance of its new games[35]. Financial Management - The gross profit margin for the first half of 2022 was reported at 60%, indicating strong cost management and operational efficiency[2]. - Cash used in operating activities was RMB 241.6 million for the six months ended June 30, 2022, compared to RMB 75.6 million in the same period of 2021, an increase of 219.6%[63]. - Cash used in investing activities was RMB 96.2 million for the six months ended June 30, 2022, a decrease of 75.3% from RMB 389.3 million in the same period of 2021[64]. - Cash used in financing activities increased to RMB 88.4 million for the six months ended June 30, 2022, compared to RMB 20.4 million in the same period of 2021, an increase of 333.3%[65]. Employee and Compensation - As of June 30, 2022, the company employed approximately 1,469 full-time employees, with about 79.44% being R&D personnel[72]. - Employee compensation and benefits costs for the six months ended June 30, 2022, were approximately RMB 370.9 million, compared to RMB 297.7 million for the same period in 2021, representing a year-over-year increase of 24.5%[72]. - The company is committed to providing competitive and fair compensation and benefits to its employees, continuously improving its compensation and incentive policies through market research[74]. Shareholder Information - The total issued share capital of the company is approximately 811,863,000 shares[85]. - Mr. Li Qing holds a controlled interest in 280,849,802 shares, representing 34.59% of the company's issued share capital[84]. - Tencent holds a controlled interest in 137,698,399 shares, representing 16.96% of the company's issued share capital[84]. - The company repurchased a total of 4,497,000 shares at a total cost of HKD 32,598,640 during the six months ended June 30, 2022[95]. Corporate Governance - The company has complied with all applicable corporate governance code provisions, except for C.2.1 and C.5.7[98]. - The board will continue to review the effectiveness of its corporate governance structure[99]. - The audit committee has reviewed the unaudited interim financial information for the six months ended June 30, 2022, with no objections to the accounting treatment[106]. Market Challenges - The decline in revenue is attributed to the normal lifecycle of older games and underperformance of a new game launched in mainland China in the first half of 2022[48]. - The company has maintained a stable operational environment during the COVID-19 pandemic, with no significant adverse impact on financial performance[43].