电魂网络(603258) - 2022 Q2 - 季度财报

Definitions This section defines key professional terms and company abbreviations, including various game types and the full names and short forms of subsidiaries and affiliates - This section mainly explains the professional terms and company entity abbreviations used in the report, including definitions of various games (client games, web games, mobile online games) and the full names and short forms of the company's subsidiaries and associated companies[10][11][12] Company Profile and Key Financial Indicators Key Accounting Data and Financial Indicators In H1 2022, the company experienced significant performance decline, with revenue down 14.71% and net profit down 30.13%, indicating pressure on profitability and cash flow Key Accounting Data for H1 2022 | Key Accounting Data | Current Period (Jan-Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 433,409,948.80 RMB | 508,187,124.02 RMB | -14.71% | | Net Profit Attributable to Shareholders of Listed Company | 145,428,550.28 RMB | 208,134,319.23 RMB | -30.13% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Items) | 125,440,995.85 RMB | 176,155,589.47 RMB | -28.79% | | Net Cash Flow from Operating Activities | 42,511,773.08 RMB | 137,288,044.05 RMB | -69.03% | | Net Assets Attributable to Shareholders of Listed Company | 2,322,385,264.93 RMB | 2,453,323,403.39 RMB | -5.34% (vs. end of prior year) | | Total Assets | 2,857,398,645.47 RMB | 3,094,883,163.10 RMB | -7.67% (vs. end of prior year) | Key Financial Indicators for H1 2022 | Key Financial Indicators | Current Period (Jan-Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.59 | 0.86 | -31.40% | | Diluted Earnings Per Share (RMB/share) | 0.60 | 0.86 | -30.23% | | Weighted Average Return on Net Assets (%) | 5.97% | 8.94% | Decreased by 2.97 percentage points | | Weighted Average Return on Net Assets (Excluding Non-recurring Items) (%) | 5.15% | 7.57% | Decreased by 2.42 percentage points | - During the reporting period, the company's non-recurring gains and losses totaled 19.99 million RMB, primarily from government subsidies (12.50 million RMB) and gains/losses from holding and disposing of financial assets (7.31 million RMB)[23][24] Management Discussion and Analysis Principal Business and Industry Overview The company focuses on R&D and operation of quality online games, with core products like 'Dream of Three Kingdoms' series, operating across various models, amidst a slight overall market decline but growth in client games and overseas business - The company's core self-developed products include PC games like Dream of Three Kingdoms, Dream Tower Defense, and Dream of Three Kingdoms 2, and mobile games such as Dream of Three Kingdoms Mobile (Remake), My Hero, and Barbarian Brawl Notably, Dream of Three Kingdoms 2 was selected for the 2022 Hangzhou Asian Games esports event[29] - The company has a pipeline of key products, including Lucida: Origin, Leap Traveler, Kapula Contract, Spiral Warrior, and Barbarian Brawl 2, laying a foundation for future growth[39][40] - The company has established four mature operating models: self-operation, licensed operation, co-operation, and agency operation, to adapt to diverse product and market demands[54][55] Key Data for China's Gaming Industry in H1 2022 | Market | Indicator | Amount/Scale | YoY Change | | :--- | :--- | :--- | :--- | | Overall Market | Actual Sales Revenue | 147.79 billion RMB | -1.80% | | | User Scale | Approx 666 million people | -0.13% | | Mobile Games | Actual Sales Revenue | 110.48 billion RMB | -3.74% | | Client Games | Actual Sales Revenue | 30.74 billion RMB | +2.85% | | Overseas Game Exports | Self-developed Game Overseas Revenue | 8.99 billion USD | +6.16% | | Esports | Actual Sales Revenue | 63.71 billion RMB | -11.59% | Analysis of Core Competencies Core competencies include deep cultivation of Chinese-style esports, mature event operations, robust talent development, strong marketing and R&D, and leveraging regional industry clusters - The company continues to cultivate high-quality Chinese-style games, exemplified by the Dream of Three Kingdoms series, rooted in Chinese history and culture, and has been recognized as a 'National Key Cultural Export Enterprise' for three consecutive years[66][67][69] - The company possesses a mature Chinese-style esports event operation system and has established a comprehensive talent incentive and development mechanism, ensuring the stability and innovation of its R&D and management teams[70][72] - The company has developed multiple core technologies in server and client-side development, such as game engines and distributed server architecture, achieving a leading domestic level, and has established a data-driven refined marketing and operation system[73] - Headquartered in Hangzhou with its subsidiary Youdong Network in Xiamen, the company fully leverages the animation and gaming industry cluster advantages of the Yangtze River Delta and Xiamen regions, fostering an industrial agglomeration effect[74] Discussion and Analysis of Operations H1 2022 saw revenue and net profit decline due to industry slowdown, yet R&D investment increased, and the company accelerated global expansion and explored 'culture + esports' integration Operating Performance for H1 2022 | Indicator | Amount | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 433 million RMB | -14.71% | | Net Profit Attributable to Parent | 145 million RMB | -30.13% | | Total Assets | 2.86 billion RMB | -7.67% | | Net Assets Attributable to Parent | 2.32 billion RMB | -5.34% | - The company continued to increase R&D investment, with R&D expenses reaching 98.36 million RMB during the reporting period, accounting for 22.70% of operating revenue[76] - The company accelerated its global expansion by increasing capital in its Singapore subsidiary by 13 million USD and establishing a wholly-owned subsidiary in Australia, while also completing the full acquisition of its subsidiary Youdong Network to strengthen its overseas capabilities[79][80] - The company actively explores new 'culture, tourism, and creative' models, with its game Dream of Three Kingdoms 2 collaborating with multiple national scenic areas like Mount Hua, Fanjing Mountain, and Qingming Riverside Landscape Park to promote integrated online and offline resources[81][82] Analysis of Key Operating Conditions Revenue decreased due to lower game top-ups, management expenses rose from severance costs, and operating cash flow significantly declined, while fair value income dropped and construction in progress increased Analysis of Major Financial Statement Item Changes | Item | Current Period Amount | Prior Year Period Amount | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 433 million RMB | 508 million RMB | -14.71% | Decrease in game top-up income | | Management Expenses | 59.71 million RMB | 45.67 million RMB | 30.74% | Increase in employee severance costs | | Financial Expenses | -15.37 million RMB | -2.80 million RMB | Not Applicable | Decrease in exchange losses and increase in interest income | | Net Cash Flow from Operating Activities | 42.51 million RMB | 137 million RMB | -69.03% | Decrease in game top-up income, increase in employee severance payments | | Net Cash Flow from Investing Activities | 158 million RMB | -106 million RMB | Not Applicable | Increase in net redemption of matured bank wealth management products | - Fair value change income was -29.92 million RMB, a decrease of 24.13 million RMB compared to the same period last year, primarily due to changes in fair value caused by the delisting of the company's investment in Luodun Development[88] - The ending balance of construction in progress increased by 755.23% compared to the end of last year, mainly due to the delivery of the Xiamen Jimei office building purchased by subsidiary Youdong Network[90] Risk Analysis and Other Disclosures The company faces risks from intense competition, tightening regulations, high reliance on 'Dream of Three Kingdoms', underperforming projects, talent loss, and overseas market uncertainties, with mitigation measures in place - The company faces intense industry competition and increasingly stringent policy and regulatory risks, including anti-addiction measures for minors and game license approvals[98][99] - The company's operating revenue is highly dependent on the single PC game Dream of Three Kingdoms, which accounted for 63.02% of total operating revenue during the reporting period, posing a risk of the product entering a declining paid user cycle[100] - The company faces multiple risks including underperforming self-developed projects, talent loss, and uncertainties in overseas market expansion[101][102][103] - During the reporting period, the company completed the acquisition of the remaining 20% equity in Xiamen Youdong Network Technology Co., Ltd., and increased capital in its Singapore subsidiary by 13 million USD[104][105] Corporate Governance Shareholders' Meetings and Equity Incentives The company held two shareholders' meetings, approving key proposals, and dynamically managed equity incentive plans by repurchasing restricted shares from departed recipients and vesting shares for eligible ones - Two shareholders' meetings were held during the reporting period, approving key proposals including the 2021 Annual Report, profit distribution plan, and the acquisition of 20% equity in Xiamen Youdong Network[108] - The company dynamically managed its 2019 and 2020 restricted stock incentive plans, repurchasing and cancelling a total of 768,000 granted but unvested restricted shares due to the departure of some incentive recipients[110] - The conditions for the third vesting period of the initial grant under the company's 2019 restricted stock incentive plan have been met, and 843,200 restricted shares were unvested for 59 incentive recipients[110] Environmental and Social Responsibility Fulfillment of Social Responsibilities As an internet company with minimal environmental impact, the company actively fulfills social responsibilities through continuous support for education, rural revitalization, and pandemic relief efforts - The company continues to fulfill its social responsibilities, primarily investing in supporting education in mountainous areas, public welfare, and pandemic relief during the reporting period[114] - Since 2016, the company has continuously sponsored impoverished students at Tubu Primary School in Nayong County, Guizhou, and continued to donate to 39 students in the first half of 2022[114] - During the pandemic, the company actively distributed 3,000 New Year gift packages to quarantined individuals and donated medical supplies such as thermometers to communities[115][116] Significant Matters Fulfillment of Commitments and Significant Related Party Transactions The company strictly fulfilled IPO commitments; significant related party transactions included a 50 million RMB private equity fund subscription by a subsidiary, with routine transactions also occurring - The company's actual controllers, shareholders, and the company itself strictly fulfilled commitments related to share lock-ups, non-compete clauses, and related party transactions made during the initial public offering[119][120] - The company's estimated routine related party transactions for 2022 are 5.695 million RMB, with 1.527 million RMB actually incurred as of the end of the reporting period[129] - The company's wholly-owned subsidiary Dianhun Venture Capital subscribed for 50 million RMB in units of Kunqiao Phase II (Xiamen) Semiconductor Industry Equity Investment Partnership (Limited Partnership) using its own funds, constituting a related party transaction[132] Share Changes and Shareholder Information Share Capital Changes and Shareholder Structure Total share capital decreased due to restricted stock repurchases, with 25,197 shareholders at period-end, and actual controllers maintaining joint control through a concerted action agreement - During the reporting period, due to two repurchases and cancellations of restricted shares from departed incentive recipients, the company's total share capital decreased by 864,000 shares, with the ending total share capital at 245,858,900 shares[136][137][138][139] Top Ten Shareholders' Holdings as of the End of the Reporting Period | Shareholder Name | Ending Shareholding (shares) | Percentage of Total Share Capital (%) | | :--- | :--- | :--- | | Chen Fang | 27,728,000 | 11.28% | | Hu Jianping | 26,387,100 | 10.73% | | Wu Wenzhong | 23,926,000 | 9.73% | | Hu Yubiao | 22,180,000 | 9.02% | | Zheng Jinxiu | 19,865,600 | 8.08% | | Yu Xiaoliang | 17,883,900 | 7.27% | | Lin Qingyuan | 15,079,900 | 6.13% | | Xu Defa | 4,182,300 | 1.70% | | Hao Jie | 2,984,000 | 1.21% | | Hong Kong Securities Clearing Company Limited | 2,713,975 | 1.10% | - The company's actual controllers are Hu Jianping, Chen Fang, and Hu Yubiao, who maintain a concerted action relationship through a 'Concerted Action Agreement', with Hu Jianping and Chen Fang being a married couple[145] Preferred Shares Information The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[151] Bonds Information The company had no corporate bonds, company bonds, or non-financial enterprise debt financing instruments during the reporting period - The company had no corporate bonds, company bonds, or non-financial enterprise debt financing instruments during the reporting period[153] Financial Report Financial Statement Summary This section presents the unaudited consolidated and parent company financial statements for H1 2022, detailing assets, liabilities, equity, revenue, and net profit Consolidated Financial Statement Core Data (June 30, 2022 / January-June 2022) | Statement Item | Amount (RMB) | | :--- | :--- | | Balance Sheet (Period-End) | | | Total Assets | 2,857,398,645.47 | | Total Liabilities | 528,967,495.11 | | Total Owners' Equity Attributable to Parent Company | 2,322,385,264.93 | | Income Statement (Reporting Period) | | | Total Operating Revenue | 433,409,948.80 | | Total Operating Costs | 286,204,756.28 | | Total Profit | 164,327,254.83 | | Net Profit | 150,313,694.43 | | Net Profit Attributable to Parent Company Shareholders | 145,428,550.28 | | Cash Flow Statement (Reporting Period) | | | Net Cash Flow from Operating Activities | 42,511,773.08 | | Net Cash Flow from Investing Activities | 158,492,029.01 | | Net Cash Flow from Financing Activities | -245,766,903.82 | | Cash and Cash Equivalents at Period-End | 876,377,550.37 |