QINGCI GAMES(HK:06633)2023-03-28 08:35Financial Performance - Total revenue for the year ended December 31, 2022, was approximately RMB 630.4 million, a decrease of 43% compared to RMB 1,105.8 million in 2021[2] - Gross profit for the same period was RMB 422.1 million, down 48% from RMB 812.6 million in the previous year[2] - The net profit attributable to equity holders was RMB 50.3 million, a significant turnaround from a loss of RMB 367.2 million in 2021[2] - Revenue decreased by 43.0% from approximately RMB 1,105.8 million in 2021 to RMB 630.4 million in 2022[14] - Revenue from self-developed games decreased by 29.5% to approximately RMB 557.6 million, primarily due to the maturity of "The Strongest Snail" in mainland China[16] - Revenue from licensed games decreased by 86.8% to approximately RMB 34.4 million, mainly due to the maturity of "Lantern and Dungeon"[16] - Information services revenue decreased by 50.1% to approximately RMB 9.6 million, attributed to a decline in ad views and clicks within games[18] - Gross profit decreased by 48.1% to approximately RMB 422.1 million, with a gross margin decline from 73% in 2021 to 67% in 2022[22] - Operating profit for the year ended December 31, 2022, was RMB 86.6 million, down from RMB 337.2 million in 2021[41] - Adjusted net profit decreased by 89.1% from approximately RMB 4,221 million for the year ended December 31, 2021, to approximately RMB 462 million for the year ended December 31, 2022, primarily due to the maturity of flagship games and increased R&D investment[34] User Metrics - Average Monthly Active Users (MAU) decreased by 37% to 1.6 million from 2.5 million in 2021[4] - Average Monthly Paying Users (MPU) fell by 51% to 214,000 from 440,000 in the previous year[4] - The cumulative registered players increased by 10% to 79.0 million from 72.0 million in 2021[4] - As of December 31, 2022, the company has accumulated 10.6264 million active players through various social media platforms, representing a growth of 0.91% compared to the end of the previous year[8] Game Development and Releases - The game "The Strongest Snail" generated cumulative revenue of approximately RMB 2.75 billion, with over 23.5 million registered players[6] - The game "The Strongest Snail" achieved revenue of approximately RMB 136 million in Japan within the first week of its launch[6] - The flagship game "The Strongest Snail" was released in Thailand on January 29, 2023, reaching the top of the free game rankings and peaking at fifth place in the sales rankings[11] - The self-developed game "The Magic Plan" generated approximately RMB 25.5 million in revenue within two months of its launch from January 4 to March 4, 2023[12] - The company is preparing to launch the self-developed game "Time Travel Agency" within the year, which combines elements of Rogue-like RPG, card games, and auto chess[12] - The company plans to release the licensed game "New Legend of the Swordsman" in the first half of 2023, featuring high-fidelity recreations of classic single-player storylines[13] - Two new licensed games, "Project 36Z" and "Project V," were added to the game reserve as of March 10, 2023, focusing on simulation and idle gameplay respectively[10] - The company has a game reserve of 12 mobile games, covering various genres including RPG, SLG, and ACT RPG, with plans to expand into overseas markets and develop new original IP games[9] Financial Position and Investments - Total assets increased to RMB 1,916,402 thousand in 2022 from RMB 1,868,903 thousand in 2021, representing a growth of 2.5%[43] - Non-current assets rose to RMB 302,793 thousand in 2022, up from RMB 253,020 thousand in 2021, marking an increase of 19.6%[43] - Total liabilities decreased to RMB 157,502 thousand in 2022 from RMB 222,568 thousand in 2021, a reduction of 29.3%[44] - The company's equity attributable to owners increased to RMB 1,763,427 thousand in 2022 from RMB 1,646,142 thousand in 2021, an increase of 7.1%[43] - The company completed a public offering, raising approximately RMB 744 million after expenses, with 85,000,000 new ordinary shares issued at HKD 11.20 each[69] - The net proceeds from the global offering amounted to approximately HKD 925.8 million after deducting underwriting fees and other estimated expenses[73] - HKD 324.0 million is allocated for expanding the game product portfolio and investing in game R&D capabilities, with HKD 95.2 million already utilized[74] - HKD 231.4 million is designated for expanding overseas business, with HKD 178.8 million already utilized[74] - HKD 138.9 million is allocated to strengthen game publishing and operation capabilities in the Chinese mobile game market, with HKD 61.9 million already utilized[74] - The company plans to make strategic investments and acquisitions in upstream and downstream companies in the mobile gaming industry, with HKD 138.9 million allocated and HKD 93.2 million already utilized[74] Expenses and Cost Management - Sales and marketing expenses decreased by 31.2% from approximately RMB 304.2 million in 2021 to RMB 209.3 million in 2022, mainly due to reduced marketing expenses for mature games[23] - Cost of revenue decreased by 29.0% to approximately RMB 208.3 million, with significant reductions in commissions paid to distribution channels[19] - Employee benefit expenses increased by 97.2% to approximately RMB 18.1 million, driven by an increase in employee numbers and average salaries[21] - R&D expenses increased by 24.2% from approximately RMB 912 million for the year ended December 31, 2021, to approximately RMB 1,133 million for the year ended December 31, 2022, primarily due to increased investment in game development and a rise in the number of R&D personnel[25] - General and administrative expenses decreased by 17.4% from approximately RMB 869 million for the year ended December 31, 2021, to approximately RMB 718 million for the year ended December 31, 2022, mainly due to the elimination of one-time listing expenses of approximately RMB 458 million in 2021[26] Taxation and Income - Income tax expense increased to approximately RMB 329 million for the year ended December 31, 2022, from an income tax benefit of approximately RMB 326 million for the year ended December 31, 2021, mainly due to an increase in the applicable tax rate for a profitable subsidiary[30] - The company reported a total tax expense of RMB 32,879 thousand for the year ended December 31, 2022, compared to a tax benefit of RMB 32,627 thousand in 2021[61] - Other income decreased by 45.8% from approximately RMB 111 million for the year ended December 31, 2021, to approximately RMB 60 million for the year ended December 31, 2022, mainly due to a reduction in R&D subsidies and government grants[28] Corporate Governance and Future Outlook - The company has complied with all corporate governance codes during the reporting period[75] - The company expresses gratitude to shareholders and business partners for their continued support and acknowledges the efforts of its employees[86] - The annual general meeting is scheduled for June 6, 2023, with the notice to be published in April 2023[80] - The company is actively seeking quality game projects to diversify its game portfolio and expand its entertainment content offerings[13] - The "Qingyu" platform is being developed to enhance player engagement and brand recognition, featuring customer service, live streaming, and social interaction capabilities[8]