KINGNET(SZ:002517)2019-04-28 16:00Financial Performance - The company reported a total revenue of 1.2 billion RMB for the year 2018, representing a year-on-year increase of 15%[15]. - The company's operating revenue for 2018 was ¥2,283,757,176.83, a decrease of 27.13% compared to ¥3,134,019,143.58 in 2017[21]. - The net profit for 2018 was reported at 300 million RMB, with a net profit margin of 25%[15]. - The net profit attributable to shareholders for 2018 was ¥174,385,320.33, representing a significant decline of 89.17% from ¥1,610,217,415.18 in 2017[21]. - The company reported a total revenue of ¥2,283,757,176.83 in 2018, a decrease of 27.13% compared to ¥3,134,019,143.58 in 2017[54]. - The mobile internet revenue significantly declined by 61.92%, amounting to ¥277,389,439.64, compared to ¥728,421,568.89 in 2017[54]. - The company reported a net profit of approximately ¥297 million, a decrease of 82.41% year-on-year, primarily due to a decline in revenue from previously operated game products and regulatory impacts[67]. - The company reported a total economic loss compensation of RMB 50 million in a legal case against Tencent[144]. User Engagement and Growth - The number of active users reached 10 million, with a monthly growth rate of 5%[15]. - The mobile game "全民奇迹" has accumulated nearly 200 million active users and total revenue surpassing 8 billion RMB, ranking among the top 10 in both iOS and Google Play revenue charts in South Korea and Thailand[44]. - The XY.COM gaming platform has nearly 120 million active users and a cumulative recharge amount exceeding 2.3 billion RMB, establishing itself as one of the top three web game operators in the industry[47]. - The company’s mobile application distribution platform, XY Apple Assistant, has over 220 million active users and a cumulative recharge amount exceeding 1.5 billion RMB[33]. - The user base in China reached 626 million, showing a year-on-year growth of 7.3%[100]. Product Development and Strategy - The company plans to launch three new games in 2019, aiming to increase user engagement by 20%[15]. - The company is investing 200 million RMB in R&D for new technologies and game development in 2019[15]. - The company is actively extending its core gaming business and platform operations, focusing on innovation and breakthroughs in the gaming and high-tech sectors[30]. - The company aims to launch new mobile games based on original IPs like "蓝月" and "征途" in 2019[39]. - The company is actively developing multiple H5 games and has obtained the authorized rights for "奇迹MU," indicating a strong focus on expanding its game portfolio[45]. - The company is focusing on technological development and service enhancement in the computer and network technology sectors to drive future growth[95]. - The company plans to leverage its existing user base and market trends to explore new product offerings and technological advancements in the gaming sector[98]. Mergers and Acquisitions - The company is exploring potential mergers and acquisitions to enhance its market position and product offerings[15]. - The company acquired a 71% stake in Zhejiang Shenghe Network Technology Co., enhancing its game development capabilities and core competitiveness[31]. - The company completed the acquisition of Zhejiang Jiuling Network Technology Co. with a 70% stake, focusing on H5 games and WeChat mini-games[31]. - The company acquired 70% of Zhejiang Jiuling Network Technology Co., Ltd. for RMB 106.4 million, with projected net profits of RMB 190 million, RMB 220 million, and RMB 290 million for 2018, 2019, and 2020 respectively[126]. - Zhejiang Jiuling's actual net profit for 2018 exceeded the forecast, achieving RMB 210.82 million[126]. - The company acquired 51% of Zhejiang Shenghe Network Technology Co., Ltd. for RMB 160.65 million, with projected net profits of RMB 250 million, RMB 310 million, and RMB 380 million for 2017, 2018, and 2019 respectively[127]. - Zhejiang Shenghe's actual net profit for 2018 also exceeded the forecast, achieving RMB 315.93 million[127]. Research and Development - The company is committed to continuous market observation to identify new mobile internet product opportunities and user behavior trends[44]. - The company has implemented a robust R&D system to enhance product quality and operational efficiency, ensuring a steady output of high-quality games[46]. - Research and development expenses were reported at RMB 481.47 million for 2018, reflecting a significant increase from RMB 231.05 million in 2017[130]. - The number of R&D personnel rose by 46.81% to 828, with R&D personnel now accounting for 61.56% of the workforce[64]. Legal and Regulatory Issues - The company is facing regulatory risks related to game approvals, which could significantly impact operations if licenses are not obtained or maintained[105]. - The company is involved in ongoing litigation regarding intellectual property rights, specifically related to the "Legend of Mir" game, which may impact future revenue streams[138]. - The company is actively pursuing legal actions against competitors for alleged copyright infringement, which could lead to potential financial recoveries[138]. - The company has reported a legal claim for economic damages amounting to 5,000,000 yuan related to the game "烈火战神" (Fire God) and is required to cease infringement and unfair competition[121]. - The company is actively defending its legal rights in multiple arbitration and litigation cases, including those related to intellectual property rights[143]. - The ongoing legal cases may impact the company's market operations and future product launches[145]. Shareholder and Dividend Policies - The company has no plans to distribute cash dividends or issue bonus shares for the year[6]. - The company reported a net profit attributable to ordinary shareholders of approximately ¥174.39 million in 2018, with a cash dividend amount of ¥0.00, resulting in a cash dividend payout ratio of 0.00%[112]. - The company did not propose any cash dividend distribution for 2018, citing the need to enhance operational capabilities and invest in core business development[113]. - The company has committed to not distributing cash dividends or increasing capital stock through capital reserves for the current fiscal year[114]. - The company is focused on long-term stability and growth, prioritizing reinvestment over immediate shareholder returns[113]. Market Expansion and Competition - Future guidance indicates expected revenue growth of 10-15% for 2019, driven by new product launches and market expansion[15]. - Market expansion efforts include targeting Southeast Asia, with a projected increase in user base by 30% in that region[15]. - The gaming and internet industry is experiencing intensified market competition, with increasing demand and potential entrants into the market[105]. - The company continues to follow the "game + content + high-tech internet" strategy to accelerate the development of its main gaming business and enhance core competitiveness[102]. Financial Management and Investments - The company has established a big data intelligent processing center to analyze massive data for product trend forecasting and personalized user recommendations[50]. - The company has ongoing projects with a total committed investment of 57,772 million yuan for the XY Apple Assistant International Version, which has not yet commenced[85]. - The company reported a total investment during the reporting period of approximately ¥1.14 billion, a decrease of 39.69% compared to the previous year[76]. - The company has a remaining balance of 55,882,777.75 yuan in its fundraising account, which is the net amount after deducting fees from interest income[83]. - The company has not made any changes to the use of raised funds during the reporting period[83]. Corporate Governance and Compliance - The company has established commitments to maintain operational independence and comply with corporate governance standards post-restructuring[121]. - The company is focused on maintaining transparency and compliance in all financial disclosures and related party transactions[120]. - The company has outlined its obligations to manage shareholder rights and responsibilities in accordance with relevant laws and regulations[121]. - The company has committed to ensuring that no related party transactions occur that could harm the interests of the company and its shareholders[120].