YAOJI TECHNOLOGY(002605)2021-08-29 16:00Financial Performance - The company reported a total revenue of 1.2 billion yuan for the first half of 2021, representing a year-on-year increase of 15% compared to the same period in 2020[22]. - The company achieved operating revenue of CNY 1,995,074,099.94, representing a year-on-year increase of 95.84%[39]. - The company reported a net profit margin of 10% for the first half of 2021, maintaining a stable profitability level compared to the previous year[22]. - The net profit attributable to shareholders was CNY 367,008,668.29, a decrease of 54.15% compared to the previous year[39]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 326,602,179.96, an increase of 17.19% year-on-year[39]. - The company reported a net cash flow from operating activities of CNY 201,444,576.34, down 27.68% from the previous year[39]. - The total assets at the end of the reporting period were CNY 3,940,036,253.80, an increase of 1.38% compared to the end of the previous year[39]. - The company’s revenue for the reporting period reached ¥1,995,074,099.94, a 95.84% increase compared to ¥1,018,729,759.17 in the same period last year, primarily due to the acquisition of an 88% stake in Luming Technology in July 2020[65]. - The cost of sales increased by 242.36% to ¥1,179,975,799.67 from ¥344,660,350.10, attributed to the consolidation of Luming Technology and growth in both the poker and gaming segments[68]. - The software segment reported a revenue of ¥639,909,177.20, with a year-on-year increase of 9.76%[71]. - The gross profit margin for the internet marketing segment was only 4.98%, despite significant revenue growth[71]. User Growth and Market Expansion - User data showed an increase in active users by 20% year-on-year, reaching 5 million active users by June 30, 2021[22]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by the end of 2022[22]. - The company has over 70 million registered users for its domestic mobile game products and over 186 million for its WeChat mini-games[40]. - The overseas game products have been released in over 100 countries and regions, with a total of over 25 million registered users[40]. - The mobile gaming industry is projected to reach a revenue of CNY 217.7 billion in 2022, with a compound annual growth rate (CAGR) of 15.9% from 2017 to 2022[45]. - The mobile game user base in China reached 516 million by the end of 2020, with a 2.4% year-on-year decline, emphasizing the importance of retaining existing users[45]. Research and Development - The company has allocated 100 million yuan for research and development of new technologies in gaming and entertainment[22]. - The company is actively increasing R&D investment and is developing a 3D game version to enhance product offerings[40]. - Research and development expenses rose by 69.66% to ¥87,962,425.17 from ¥51,845,142.11, driven by an increase in the number of R&D personnel[68]. - The company is committed to increasing R&D efforts and focusing on high-quality game development to enhance market competitiveness[99]. - The company has strengthened its talent pool by combining internal training with external recruitment, enhancing its R&D and management capabilities[64]. Strategic Initiatives - New product launches are expected to contribute an additional 200 million yuan in revenue for the second half of 2021[22]. - The company is exploring strategic acquisitions to enhance its product offerings and market reach, with a budget of 300 million yuan for potential acquisitions[22]. - The company is focused on expanding its market presence through new subsidiaries and investments in technology[94]. - The company has established a data-driven marketing and operational system in the mobile gaming sector, enhancing user acquisition and retention through precise market strategies[63]. Risks and Challenges - The management highlighted potential risks including market competition and regulatory changes, which could impact future performance[6]. - The company faces risks related to reliance on third-party distribution channels for game releases, which could significantly impact business performance if relationships deteriorate[102]. - The company has a significant dependency on a single supplier for raw materials in its playing card business, which poses risks if the supplier faces operational issues[102]. - The company acknowledges the potential impact of regulatory changes on its playing card business and is prepared to adapt accordingly[102]. - The company is addressing cybersecurity risks by enhancing network security measures and collaborating with leading cloud service providers[99]. Marketing and Advertising - The internet innovation marketing segment focuses on information flow advertising and content marketing, providing online marketing solutions for over 500 major clients across various industries, including Tencent and Alibaba[44]. - The company has a professional video production team and diverse shooting scenes to meet client needs for high-quality advertising content[44]. - The marketing business leverages a strong video production team and a proprietary advertising platform, optimizing ad performance and increasing client ROI through data-driven strategies[62]. - The digital marketing sector in China is expected to grow by 20% in 2021, reflecting increased confidence among advertisers despite market uncertainties[56]. Shareholder and Equity Information - The company will not distribute cash dividends or issue bonus shares for the current fiscal year[7]. - The company reported a 24.45% investor participation rate in the first extraordinary general meeting of 2021, held on January 13, 2021[112]. - The company has completed the exercise of 1,615,900 stock options under its 2018 stock option plan, with 155,800 options exercised in the first half of 2021[115]. - The company granted a total of 402,000 stock options to 3 incentive targets under the 2018 stock option and restricted stock incentive plan, with an adjusted exercise price of RMB 9.41 per share[117]. - The company plans to repurchase shares with a total amount not less than RMB 30 million and not exceeding RMB 60 million, with a maximum price of RMB 35 per share[185]. Subsidiaries and Investments - The company established several new subsidiaries during the reporting period, including Chongqing Huasheng Xintong Company and Anhui Yaoji Company, with no significant impact on overall operations[94]. - The company has provided joint liability guarantees for various subsidiaries, with the largest guarantee amount being 15,000,000 for Qidong Yaoji Poker Industry Co., Ltd.[164]. - The company has entrusted financial management with a total amount of 1,900,000, with no overdue amounts or impairment provisions[171]. Corporate Governance - The company has not experienced any changes in its controlling shareholder or actual controller during the reporting period[199]. - The company has not reported any changes in the shareholding of directors, supervisors, and senior management during the reporting period[198].