2022-09-08 10:51Financial Performance - Total net revenue reached RMB 4.9 billion (USD 732.9 million), an increase of 9% year-over-year[3] - Monthly active users (MAUs) reached 305.7 million, a 29% increase year-over-year[3] - Daily active users (DAUs) reached 83.5 million, a 33% increase year-over-year[3] - Average monthly paying users reached 27.5 million, a 32% increase year-over-year[3] - Advertising revenue increased by 10% year-over-year to RMB 1.158 billion (USD 172.9 million)[4] - Value-added services revenue increased by 29% year-over-year to RMB 2.103 billion (USD 314.0 million)[4] - Total net revenue for the six months ended June 30, 2022, was RMB 9,963,030, a 18.6% increase compared to RMB 8,396,327 for the same period in 2021[16] - Total net revenue for the second quarter of 2022 was RMB 4,908,931, a decrease of 1.3% compared to RMB 4,995,254 in the same period of 2021[40] - Mobile games revenue for the second quarter of 2022 was RMB 1,046,236, a decrease of 22.3% from RMB 1,357,818 in the previous quarter[16] - Advertising revenue for the second quarter of 2022 reached RMB 1,158,252, reflecting a 11.3% increase from RMB 1,040,770 in the previous quarter[16] - Gross profit for the six months ended June 30, 2022, was RMB 1,545,526, down 19.8% from RMB 1,926,858 for the same period in 2021[16] Expenses and Losses - Research and development expenses increased by 68% year-over-year to RMB 1.132 billion (USD 169.0 million)[5] - Sales and marketing expenses decreased by 16% year-over-year to RMB 1.172 billion (USD 175.0 million)[5] - Operating costs increased by 19% year-over-year to RMB 4.171 billion (USD 622.7 million)[4] - Operating loss for the company was RMB 2,191.1 million (USD 327.1 million), compared to RMB 1,520.6 million in the same period of 2021[6] - Net loss amounted to RMB 2,010.4 million (USD 300.2 million), an increase from RMB 1,121.8 million in the same period of 2021[6] - Adjusted net loss was RMB 1,967.9 million (USD 293.8 million), compared to RMB 1,324.7 million in the same period of 2021[6] - Operating loss for the second quarter of 2022 was RMB 2,191,062, compared to RMB 1,990,812 in the previous quarter, indicating a worsening of 10.1%[16] - The company reported a net loss of RMB 2,010,445 for the second quarter of 2022, compared to a net loss of RMB 2,284,132 in the previous quarter[16] - The adjusted net loss for the six months ended June 30, 2022, was RMB 4,294,577, compared to RMB 2,026,672 for the same period in 2021, representing an increase of 112.5%[19] Cash and Investments - Cash and cash equivalents, term deposits, and short-term investments totaled RMB 24.9 billion (USD 3.7 billion) as of June 30, 2022[6] - Cash and cash equivalents decreased to RMB 3,491,471 as of June 30, 2022, from RMB 7,523,108 as of December 31, 2021[18] - Total assets as of June 30, 2022, were RMB 48,503,627, down from RMB 52,053,151 as of December 31, 2021[18] - Total liabilities increased slightly to RMB 30,560,913 as of June 30, 2022, compared to RMB 30,337,085 as of December 31, 2021[18] - The company repurchased approximately 2.6 million American Depositary Shares (ADS) at a total cost of USD 53.6 million as of June 30, 2022[6] - The company plans to repurchase up to USD 500 million of ADS over the next 24 months, with USD 23.6 million spent in Q2 2022[6] Future Outlook - The company expects net revenue for Q3 2022 to be between RMB 5.6 billion and RMB 5.8 billion[9] - The company plans to transition to a primary listing on the Hong Kong Stock Exchange, effective October 3, 2022[3] - The company has received shareholder approval for its proposed dual primary listing on the Hong Kong Stock Exchange, effective October 3, 2022[8] - The company expects to continue cost control measures while aiming for growth in the second half of 2022[27] Corporate Governance - The company confirmed compliance with the corporate governance code as stipulated in the Hong Kong Listing Rules as of June 30, 2022[22] - The Nomination and Corporate Governance Committee consists of independent non-executive directors, including Mr. JP Gan as the chairman[47] - The committee reviewed the company's compliance with the Corporate Governance Code and the Hong Kong Listing Rules[48] - The committee monitored risks related to different voting structures and related party transactions[48] - Recommendations were made for the board to continue implementing corporate governance measures and to regularly review their effectiveness[48] Strategic Focus - The company emphasizes the importance of retaining and enhancing user engagement, membership, and advertising clients as part of its strategic focus[38] - The company is committed to providing high-quality content, products, and services while expanding its offerings in the online entertainment sector[38] - The company acknowledges the impact of the COVID-19 pandemic on its business and financial performance, highlighting the need for adaptability[38] - The company aims to maintain its cultural and brand image within target user communities amidst competitive pressures in the online entertainment industry[38] - The company is focused on managing costs and expenditures effectively to support its operational strategies[38]