CENTURY HUATONG(SZ:002602)2022-04-29 16:00Business Transformation and Expansion - The company reported a significant business transformation from automotive parts to dual main businesses: automotive parts and internet gaming, following major asset acquisitions from 2014 to 2019[10]. - In 2021, the company expanded its main business to include an internet data center segment, with projects in Shenzhen and a partnership with Tencent for an AI advanced computing center[10]. - The company has established a "Cloud Data Division" in March 2022 to further enhance its data center capabilities[10]. - The company has integrated its subsidiaries into an internet gaming division to enhance management efficiency and business collaboration[24]. - The company aims to replicate the operational experience of the Tencent Yangtze River Delta AI Advanced Computing Center across key regions in China[26]. - The company is actively responding to the national "East Data West Computing" strategy to support digital infrastructure development[36]. - The company has initiated the establishment of a "Cloud Data Division" to integrate its internet data center and data security businesses, responding to national digital development policies[76]. Financial Performance - The company's operating revenue for 2021 was ¥13.93 billion, a decrease of 7.03% compared to ¥14.98 billion in 2020[12]. - The net profit attributable to shareholders for 2021 was ¥2.33 billion, down 21.03% from ¥2.95 billion in 2020[12]. - The net cash flow from operating activities was ¥890.44 million, a significant decline of 71.94% from ¥3.17 billion in 2020[12]. - The total assets at the end of 2021 were ¥40.64 billion, a decrease of 4.92% from ¥42.75 billion at the end of 2020[13]. - The net assets attributable to shareholders increased by 7.48% to ¥31.08 billion at the end of 2021, compared to ¥28.92 billion at the end of 2020[13]. - The company reported a basic earnings per share of ¥0.32 for 2021, down 20% from ¥0.40 in 2020[12]. - The total revenue for 2021 was approximately 13.93 billion yuan, a decrease of 7.03% compared to 2020[38]. Gaming Market Insights - The gaming market in China generated actual sales revenue of ¥296.51 billion in 2021, reflecting a year-on-year growth of 6.4%[21]. - The overseas market for Chinese self-developed games reached $18.01 billion in 2021, with a year-on-year increase of 16.59%[21]. - The internet gaming business generated revenue of 11.662 billion yuan, with mobile game revenue accounting for 72.08%[33]. - The gaming segment has a rich IP reserve, including popular titles like "Legend of Blood" and "Dragon Valley," contributing to sustained revenue[28]. - The company’s self-developed game "Family Farm Adventure" ranked 23rd in the "Overseas Revenue Growth" list by Data.ai in March 2022[34]. Research and Development - Research and development expenses amounted to 1.966 billion yuan in 2021, reflecting the company's commitment to innovation and product development[37]. - The number of R&D personnel increased to 4,008, a growth of 7.89% from 3,715 in the previous year[51]. - The company is continuously developing new game titles, including "Lyra," "Qing Yu Nian," and "Legend of the World," to enhance product quality and competitiveness[49]. - The R&D department has filed for 10 new patents related to gaming technology, aiming to enhance user experience and gameplay mechanics[95]. Strategic Partnerships and Collaborations - The company signed a strategic cooperation agreement with Tencent Cloud in October 2021 to enhance its internet data center business and expand its market presence[36]. - The company is collaborating with Weishitong to enhance data security compliance services, addressing the growing demand in the data security market[27]. - The company is exploring partnerships with international gaming firms to leverage global market opportunities[95]. Corporate Governance and Compliance - The company maintained compliance with corporate governance regulations, with no unresolved governance issues reported[81]. - The company has established independent operational systems, ensuring no reliance on major shareholders for business activities[82]. - The company’s financial department operates independently, with a complete financial accounting system in place[82]. - The company has committed to avoiding competition with its controlling shareholders and related parties in its business operations[142]. Sustainability and Social Responsibility - The company has committed approximately RMB 4.59 million to various charitable activities, including RMB 2.29 million for elderly care and RMB 500,000 for disaster relief in Henan[139]. - The company is actively pursuing green initiatives, including the development of a low-carbon digital solution for data centers, in line with the "dual carbon" policy[136]. - The company has implemented a paperless office initiative to reduce resource consumption and promote sustainability[137]. Future Outlook and Growth Strategies - The company provided a positive outlook for 2022, projecting a revenue growth of 25% driven by new game releases and market expansion efforts[95]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years[196]. - A strategic acquisition of a local competitor was completed, expected to contribute an additional 100 million RMB in annual revenue[199]. - The company plans to implement a new marketing strategy aimed at increasing brand awareness, with a budget allocation of 100 million RMB for digital marketing campaigns[160].