7ROAD(HK:00797)2023-03-30 14:24Financial Performance - For the year ended December 31, 2022, the total revenue was approximately RMB 540.6 million, an increase of about 28.6% compared to RMB 420.5 million for the year ended December 31, 2021[2]. - The profit attributable to the owners of the company for the year ended December 31, 2022, was approximately RMB 282.5 million, representing a significant increase of about 199.8% compared to RMB 94.2 million for the previous year[2]. - The company's total revenue for the year ended December 31, 2022, was approximately RMB 540.6 million, an increase of 28.6% compared to RMB 420.5 million in 2021[13]. - The net profit attributable to the company's owners was approximately RMB 282.5 million, a substantial increase of 199.8% compared to RMB 97.9 million in 2021, largely due to gains from the sale of a subsidiary[21]. - Gross profit for the year was approximately RMB 261.2 million, up 16.4% from RMB 224.5 million in 2021, with a gross margin of 48.3%, slightly down from 53.4% in the previous year[16]. - Operating profit surged to RMB 307.37 million, compared to RMB 37.72 million in 2021, reflecting a significant increase[38]. - The company reported a total comprehensive income of RMB 285.63 million for the year ended December 31, 2022, compared to RMB 102.86 million in 2021[39]. - The company’s total assets as of December 31, 2022, amounted to RMB 2.19 billion, an increase from RMB 1.66 billion in 2021[40]. Revenue Sources - The gaming business revenue reached RMB 426.1 million, a significant increase of 68.0% from RMB 253.6 million in the previous year, primarily driven by the successful launch of the new game "弹弹堂大冒险" (Bouncing Adventure)[14]. - The cloud business generated approximately RMB 106.4 million in revenue for the year ending December 31, 2022, marking a new revenue source for the company[9]. - Cloud computing and related services revenue increased to RMB 106,367 thousand in 2022, up from RMB 48,954 thousand in 2021[49]. - Revenue from self-developed games reached RMB 165,569 thousand, a significant increase from RMB 39,259 thousand in the previous year[49]. Market Trends - The global gaming market size is projected to reach USD 196.8 billion in 2022, with mobile gaming accounting for 53% of the total industry revenue, reflecting a year-on-year growth of 5.1%[4]. - The gaming industry is expected to continue growing in the coming years, with the number of global players projected to increase from 3.2 billion to 3.5 billion[4]. - The Chinese gaming market's actual sales revenue in 2022 was RMB 265.8 billion, reflecting a year-on-year decline of 10.33% due to various challenges[4]. Strategic Initiatives - In 2023, the company plans to continue enhancing game quality and user engagement, focusing on the development of popular game products like "弹弹堂大冒险" and "神曲H5" for overseas markets[6]. - The company aims to launch a new mobile game based on a well-known Japanese IP in the second half of 2023, with the first test planned for the third quarter of 2023[6]. - The company plans to launch several games in 2023, including the RPG mobile game "Spirit Fantasy" in Korea and Europe, and the well-received IP game "Douluo Dalu" in Korea[7]. - The company is committed to maintaining the popularity of its core IP projects through continuous updates and new gameplay features[6]. - The company is actively exploring opportunities in the cloud computing sector, including high-performance chips and dedicated cloud services for the gaming industry[8]. - The company aims to enhance its competitive capabilities and resource control in response to market changes, focusing on long-term sustainable growth[8]. Expenses and Investments - The cost of revenue amounted to approximately RMB 279.4 million, an increase of 42.5% from RMB 196.1 million in 2021, mainly due to higher game distribution costs and server rental expenses[15]. - Research and development expenses increased to approximately RMB 129.5 million, a rise of 62.0% from RMB 79.9 million in 2021, due to higher employee compensation and outsourcing costs[18]. - Sales and marketing expenses surged to approximately RMB 115.6 million, a dramatic increase of 782.7% from RMB 13.1 million in the previous year, driven by marketing efforts for new game releases[19]. - The company has successfully completed the sale of a 49% stake in Wuxi Hand in Hand Network Technology Co., Ltd., which is expected to streamline operations and enhance profitability[77]. Financial Position - As of December 31, 2022, the company's cash and bank balances were approximately RMB 104.7 million, a slight decrease from RMB 108.5 million in the previous year[22]. - The company's debt balance increased to approximately RMB 206.9 million from RMB 10.0 million in 2021, primarily due to new loans obtained during the year[23]. - Total capital expenditure for the year ended December 31, 2022, was approximately RMB 183.8 million, a decrease of 40.9% from RMB 310.9 million in 2021, primarily due to reduced procurement of servers and other equipment[25]. - The group confirmed an unrealized fair value gain of approximately RMB 4.4 million from the investment in Shanghai Super Silicon for the year ended December 31, 2022[27]. - The group has no significant future plans for major investments or capital assets beyond those disclosed[28]. Corporate Governance - The company has complied with all applicable code provisions of the corporate governance code during the year ended December 31, 2022[71]. - The audit committee, consisting of three independent non-executive directors, reviewed the annual results for the year ended December 31, 2022[72]. - The annual general meeting is scheduled for May 23, 2023, with a notice to be published by the end of April 2023[69]. User Engagement and Future Outlook - The average monthly active users for web games were approximately 0.6 million, while mobile games had about 3.6 million active users as of December 31, 2022[9]. - User engagement metrics have shown improvement, with average session times increasing by F% compared to the last quarter[78]. - The overall market outlook remains positive, with anticipated growth driven by increasing demand for online gaming experiences[78].