祖龙娱乐(09990) - 2022 Q3 - 季度财报

Tencent Games Cooperation Framework Agreement - The renewal of the Tencent Games Cooperation Framework Agreement allows Tencent to provide promotional and advertising services, issue games on Tencent's platform, and exclusively operate the group's games until December 31, 2025[1]. - The group has established annual caps for the ongoing related transactions under the renewed agreements, effective from January 1, 2023, to December 31, 2025[1]. - The maximum applicable percentage for transactions under the renewed Tencent Games Cooperation Framework Agreement exceeds 5%, requiring independent shareholder approval[5]. - The group will hold a special general meeting to seek independent shareholder approval for the proposed annual caps for 2023, 2024, and 2025[6]. - Proposed annual caps for transactions under the renewed Tencent gaming cooperation framework agreement are set at RMB 27.23 million, RMB 22.73 million, and RMB 18.09 million for the years ending December 31, 2023, 2024, and 2025 respectively[39]. - The company has not exceeded the annual caps for transactions under the Tencent gaming cooperation framework agreement as of December 31, 2021, and does not expect to exceed them in the future[34]. - The company will appoint Tencent to exclusively publish and operate several self-developed games in designated regions, enhancing operational efficiency and market reach[42]. - The fee arrangements for exclusive publishing and operation will include fixed licensing fees, revenue/profit sharing, and performance bonuses based on game success[44]. - The proposed annual caps for the Tencent Games Cooperation Framework Agreement for the years ending December 31, 2023, 2024, and 2025 are RMB 814.21 million, RMB 494.09 million, and RMB 308.68 million respectively[56]. - The company believes that collaboration with Tencent in game operations will significantly enhance its market expansion efforts in both China and overseas[119]. Shareholder Structure - Tencent and Perfect World Group are major shareholders, holding approximately 17.09% and 16.46% of the company's issued shares, respectively[3]. - Tencent Group is a major shareholder of the company, and independent shareholders exclude Tencent and its associates[160]. Marketing and Advertising Strategy - The company anticipates increased marketing and advertising investments to expand its gaming player base, reflecting a strategic focus on user acquisition[39]. - Tencent is recognized as one of China's leading advertising platforms, which is expected to enhance the company's game market exposure significantly[29]. - The company will engage Tencent as a distribution channel to publish its games on Tencent's platforms, leveraging Tencent's extensive user base to attract paying players[40]. - The company has established a strategy to optimize marketing effectiveness by partnering with Tencent at the early stages of game development[57]. Cloud Services - The agreements include provisions for cloud services provided by Tencent Cloud, which is a wholly-owned subsidiary of Tencent[1]. - The cloud services provided by Tencent Cloud include cloud computing, data storage, CDN services, and AI products, with a commitment to 24/7 support[63]. - The company will ensure that the service fees paid to Tencent Cloud are competitive and in line with market rates through independent assessments[65]. - The company has transitioned part of its server and computing infrastructure to cloud service providers since 2015, becoming one of the few game publishers in China to integrate cloud technology into its gaming infrastructure[72]. Perfect World Group Cooperation - The company renewed the game cooperation framework agreement with Perfect World Group on November 4, 2022, which was originally established on June 10, 2020[157]. - The collaboration with Perfect World Group is expected to leverage each other's competitive advantages in game development, utilizing proprietary IP rights suitable for adaptation into mobile or PC games[85]. - The proposed annual caps for the next three years under the renewed Perfect World game cooperation framework agreement are RMB 6.58 million, RMB 6.10 million, and RMB 5.47 million for the years ending December 31, 2023, 2024, and 2025, respectively[84]. - The company has not exceeded the annual caps for the past two years under the Perfect World game cooperation framework agreement, and it is expected that the transaction amounts will not exceed the annual caps for the year ending December 31, 2022[79]. Financial Oversight and Compliance - The company’s independent non-executive directors and risk management committee will review related party transactions annually to ensure they are conducted on fair and reasonable terms[122]. - The company’s financial department is responsible for monitoring related party transactions and ensuring they remain within the annual limits[120]. - The independent board committee has been established to provide opinions to independent shareholders regarding the renewed Tencent Game Cooperation Framework Agreement[131]. - The company has engaged an independent financial advisor to assist the independent board committee and independent shareholders[131]. - The company is committed to ensuring compliance with the Hong Kong Stock Exchange listing rules in its operations and transactions[158]. Intellectual Property and Game Development - The company emphasizes the importance of intellectual property rights in its gaming development strategy, particularly in relation to the "Dragon Tribe" literary series[156]. - Tencent Group will grant the company several IP rights for adaptation and development into games, which will be promoted and operated in designated regions[100]. - The pricing policy for licensing fees and revenue sharing will be determined based on the quality and popularity of the original IP, as well as market comparables[103]. - The company expects to leverage Tencent's competitive advantages in game development to attract more potential players through related animations and videos[110]. - The company has made significant progress in developing mobile MMORPGs, SLGs, and female-oriented games, positioning itself as a pioneer in the Chinese mobile gaming industry[119].