DS CULTURE(SH:600892)2022-04-27 16:00Financial Performance - The company reported a net profit attributable to shareholders of -113.16 million RMB for 2021, a decrease of 584.69% compared to the previous year[5]. - Total revenue for 2021 was 214.26 million RMB, down 28.39% from 299.19 million RMB in 2020[23]. - The net cash flow from operating activities was 6.03 million RMB, a decline of 93.45% compared to 92.19 million RMB in 2020[23]. - The company's total assets decreased by 21.28% to 457.21 million RMB from 580.79 million RMB in 2020[23]. - The company's net assets attributable to shareholders fell by 42.43% to 154.01 million RMB from 267.52 million RMB in 2020[23]. - Basic earnings per share for 2021 was -0.20 CNY, a decrease of 600% compared to 0.04 CNY in 2020[25]. - The weighted average return on equity dropped to -53.74%, a decrease of 62.65 percentage points from 8.91% in 2020[25]. - The company reported a net loss of 30.84 million RMB for its subsidiary Wuxi Zhonglian Chuan Dong, indicating challenges in the film production sector[72]. - The company reported a net loss of RMB 1.54 billion in retained earnings, worsening from a loss of RMB 1.43 billion in the previous year[186]. - The company reported a net profit attributable to shareholders of -113.16 million yuan for the year 2021, with the parent company achieving a net profit of -270.51 million yuan[114]. Revenue and Market Trends - The company faced significant challenges in 2021, leading to a substantial decline in both revenue and profit margins[5]. - The gaming market in China generated 296.51 billion CNY in 2021, with a year-on-year growth of 6.40%[37]. - The number of game users in China reached 666 million in 2021, a slight increase of 0.22% compared to 2020[37]. - The revenue from self-developed games in China was CNY 255.82 billion, with a year-on-year increase of 6.51%[38]. - The company is focusing on game business development, with two new game products expected to launch in 2022[35]. - The company plans to maintain existing game profitability while exploring new cooperation channels[77]. - The online game "Peach Blossom Source" generated revenue of 4,934 million RMB, while the mobile game version generated 19,760 million RMB, indicating a significant contribution to overall revenue[65]. Operating Costs and Expenses - The company’s operating costs decreased by 89.69% to CNY 11.73 million, primarily due to the lack of new media releases in the current period[44][45]. - Sales expenses increased by 90.88% to CNY 57.92 million, attributed to increased advertising for gaming products[44][45]. - Research and development expenses rose by 6.92% to CNY 67.74 million, driven by higher personnel costs[46]. - Total operating costs for 2021 were CNY 225,568,704.56, down 18.1% from CNY 275,332,226.13 in 2020[191]. Legal and Compliance Issues - The company has faced challenges in recovering certain receivables, with ongoing legal actions to enforce judgments related to compensation payments[119]. - The company is involved in a civil lawsuit regarding a compensation claim amounting to 2.48 million yuan, with a judgment requiring joint liability for repayment[134]. - The company has incurred legal fees of 594,885.90 yuan related to ongoing litigation[136]. - The company has faced multiple lawsuits, indicating a complex legal environment that could affect its operations[134]. - The company is currently awaiting the execution of judgments from previous lawsuits, which have not yet been enforced[134]. Governance and Management - The company has implemented a transparent governance structure, ensuring compliance with legal and regulatory requirements, and protecting the rights of all shareholders, particularly minority investors[85]. - The board of directors consists of 9 members, including 3 independent directors, ensuring compliance with governance standards and promoting responsible decision-making[86]. - The company has organized 2 performance briefings to communicate its performance to investors and address their concerns, enhancing transparency and investor relations[88]. - The company has established a competitive compensation and benefits system to retain core R&D personnel, which is essential for maintaining competitive advantage in game development[80]. - The company has a structured governance framework with clear roles for board members and management[93]. Future Outlook and Risks - The company has indicated potential risks in future development strategies, urging investors to be cautious[6]. - The gaming industry in China is experiencing intense competition, which poses risks to the company's market share and overall performance[78]. - The gaming industry faces risks related to rapid product updates, limited product lifecycles, and fast-changing user preferences, which could negatively impact operating performance if new games do not meet market expectations[79]. - Regulatory changes in the gaming and film industries pose risks, such as stricter approval processes for new games and potential challenges in film distribution due to compliance issues[82]. Financial Position and Assets - The company's total liabilities were RMB 274.39 million, slightly down from RMB 280.05 million in the previous year, indicating a decrease of about 2.4%[185]. - The total equity attributable to shareholders decreased to RMB 154.01 million from RMB 267.52 million, reflecting a decline of approximately 42.5%[186]. - Cash and cash equivalents stood at RMB 112.36 million, down from RMB 130.30 million, which is a decrease of about 13.7%[184]. - The company’s non-current liabilities increased by 107.55% to 83,467,401.96 CNY, primarily due to the reclassification of long-term borrowings to current liabilities[61]. - The company has reported a total guarantee amount of 80 million RMB, which accounts for 43.76% of the company's net assets[143].