CMGE(HK:00302)2023-03-22 14:57Financial Performance - The company's revenue for the year ended December 31, 2022, was RMB 2,713.9 million, a decrease of 31.4% compared to RMB 3,956.6 million in 2021[2]. - The gross profit for 2022 was RMB 1,111.7 million, down from RMB 1,473.5 million in 2021[2]. - The net loss for the year was RMB 216.9 million, compared to a profit of RMB 593.9 million in 2021[2]. - Adjusted net loss was RMB 196.1 million, down from an adjusted profit of RMB 630.0 million in the previous year[2]. - Revenue from IP games reached RMB 1,388.064 million for the year ended December 31, 2022, down from RMB 2,266.149 million in 2021, indicating a decline of approximately 38.7%[21]. - Revenue from non-IP games was RMB 1,037.559 million for the year ended December 31, 2022, showing an increase from RMB 991.062 million in 2021[21]. - Game publishing revenue fell by 25.0% from RMB 2,819.6 million in 2021 to RMB 2,114.2 million in 2022[28]. - Game development revenue decreased by 50.0% from RMB 905.0 million in 2021 to RMB 452.6 million in 2022[28]. - The company's gross profit for 2022 was RMB 1,111.7 million, down from RMB 1,473.5 million in 2021, reflecting a decline of approximately 24.5%[25]. - The adjusted net loss attributable to the parent company for 2022 was RMB 205.0 million, compared to a profit of RMB 611.8 million in 2021[26]. - The group's profit before tax turned from a profit of RMB 651.1 million for the year ended December 31, 2021, to a loss of RMB 175.5 million for the year ended December 31, 2022[44]. - The company reported a significant increase in financial assets at fair value through profit or loss, rising to RMB 2,099,456 thousand from RMB 1,896,914 thousand[70]. Research and Development - Research and development expenses increased to RMB 526.7 million in 2022, a 69.5% increase from RMB 310.7 million in 2021[4]. - The group has 650 R&D personnel, making up 55.8% of the total workforce[7]. - R&D costs rose significantly to RMB 526,745 in 2022, compared to RMB 310,673 in 2021, reflecting a 69.7% increase[91]. - The company is actively developing a new open-world game titled "Sword and Fairy World," which will incorporate advanced AI technology for enhanced user interaction and content creation, expected to launch in 2023[18]. - The company has partnered with Baidu to utilize its AI technology in the development of "Sword and Fairy World," aiming to provide an immersive experience for players[18]. Game Development and Launches - The company plans to launch the game "Xianjian World," which incorporates open-world elements, in 2023[4]. - The company has seen a gradual normalization in game license approvals since April 2022, allowing for the launch of several new titles[3]. - The mobile game "Zhenhun Street: Born to be King" has over 5 million pre-registrations in mainland China, achieving over 2 million new registrations on its first day and over 100 million in revenue in its first week[5]. - The game "All-Star Battle" won the 2022 Player's Most Anticipated Mobile Game award and achieved the top position on the Apple Store free chart in mainland China in its first month[7]. - The game "My Sword Diary" launched in November 2022 in the Hong Kong, Macau, and Taiwan regions, achieving third place on the Apple Store free chart in Taiwan in its first month[6]. - The group plans to launch the narrative card mobile game "New Sword and Fairy: Swinging Sword to Ask for Love" in the first half of 2023, which has already obtained its license[9]. - The game "Code: Basketball 3v3" is currently in the testing phase and is expected to launch in 2023, developed by a team with experience in competitive sports games[8]. - The game "Ultraman: Gathering" achieved over 1 million pre-registrations within a month of opening pre-registration and launched in January 2023[5]. - The company plans to launch multiple new games in 2023, including "Ultraman: Gathering," "My Sword Diary," and "New Sword and Fairy: Asking for Love," among others, targeting both domestic and international markets[15]. Financial Position and Cash Flow - Cash and cash equivalents decreased from RMB 818.5 million at the end of 2021 to RMB 237.0 million at the end of 2022[47]. - The net cash used in operating activities was RMB 1.9 million for the year ended December 31, 2022, compared to RMB 355.6 million for the year ended December 31, 2021[48]. - The net cash used in investing activities was RMB 176.6 million for the year ended December 31, 2022, primarily due to purchases of financial assets and intangible assets[50]. - The net cash used in financing activities was RMB 409.9 million for the year ended December 31, 2022, mainly due to repayment of bank loans[51]. - The current ratio decreased from 1.9 in 2021 to 1.6 in 2022, while the capital debt ratio improved from 13.2% to 7.8%[53]. - The company reported total revenue of RMB 2,713,892 thousand for the year ended December 31, 2022, a decrease of 31.4% compared to RMB 3,956,570 thousand in 2021[68]. - The company did not recommend a final dividend for the year ended December 31, 2022, due to financial needs for business operations and future development[67]. Corporate Governance and Compliance - The company has established a remuneration committee to assist the board in setting and executing a transparent remuneration policy for directors and senior management[64]. - The audit committee has reviewed the consolidated financial statements for the year ended December 31, 2022, with no disagreements on accounting treatments[65]. - The company has complied with the corporate governance code as per the listing rules, except for the separation of the roles of Chairman and CEO[60]. - The group has adopted revised Hong Kong Financial Reporting Standards, which did not have a significant impact on the financial performance or position for the current or prior periods[77]. Social Responsibility and Community Engagement - In March 2022, the company allocated RMB 1 million to procure anti-epidemic supplies for vulnerable groups in Hong Kong[14]. - The company has established ten "Zhong Shou You Dream Library" projects to promote youth reading, with the tenth library completed in June 2022[14]. - The company is collaborating with various partners to produce new merchandise, including blind box series and traditional cultural figurines[11]. Market Challenges and Future Outlook - The company faced challenges in the overall economic environment and the impact of the COVID-19 pandemic on its business operations[67]. - The average monthly active users decreased from 19,063 thousand in 2021 to 15,523 thousand in 2022, a decline of approximately 18.8%[23]. - The total number of new registered users in 2022 was 84,609 thousand, down from 116,880 thousand in 2021, representing a decrease of about 27.6%[23]. - The company plans to continue expanding its product offerings and enhancing operational capabilities to attract more users[23].