HOMELAND ITL(03798)2024-03-28 12:46Financial Performance - Revenue for the year ended December 31, 2023, reached RMB 1,779.7 million, representing a year-on-year increase of 13.9%[2] - Gross profit for the same period was RMB 1,157.5 million, with a year-on-year growth of 13.4%[2] - Adjusted net profit attributable to the company's owners was RMB 499.4 million, reflecting a decrease of 5.5% compared to the previous year[2] - The net profit attributable to shareholders for the period was RMB 436.9 million, a decrease of 6.1% year-on-year, while the adjusted net profit was RMB 499.4 million, down 5.5% year-on-year[14] - The company's revenue for the year ended December 31, 2023, was approximately RMB 1,779.7 million, an increase of 13.9% compared to RMB 1,562.9 million in 2022[21] - The group's profit before tax increased by approximately 33.3% from RMB 376.0 million for the year ended December 31, 2022, to approximately RMB 501.1 million for the year ended December 31, 2023[29] - The profit before tax margin improved from 24.1% to 28.2%, primarily due to a reduction in sales and marketing expenses by approximately 37.4%[29] - The profit attributable to the company's owners decreased by approximately 6.1% from RMB 465.3 million in 2022 to RMB 436.9 million in 2023[31] - Adjusted net profit attributable to the company's owners was approximately RMB 499.4 million for the year ended December 31, 2023, down 5.5% from RMB 528.6 million in 2022[33] User Metrics - Daily Active Users (DAUs) as of December 31, 2023, were 14,389,388, showing a year-on-year increase of 3.1%[5] - Monthly Active Users (MAUs) averaged 68,289,393, representing a year-on-year growth of 9.4%[5] - The number of paying users decreased by 21.3% to 13,104,865, indicating a need for strategic adjustments in user monetization[7] - Daily active users (DAUs) increased to 14,389,388, a year-on-year growth of 3.1%, and monthly active users (MAUs) rose to 68,289,393, up 9.4% year-on-year[14] - The number of paying players decreased to 13,104,865, reflecting a decline of 21.3% year-on-year[14] Revenue Sources - Revenue from self-developed mobile games was RMB 1,566.5 million, up 23.9% from RMB 1,264.3 million in the previous year[3] - Revenue from third-party mobile games decreased by 21.0% to RMB 145.2 million from RMB 183.9 million[3] - The company generated RMB 145.2 million in revenue from third-party game collaborations during the reporting period[14] - Advertising revenue reached RMB 1,711,667,000, compared to RMB 1,448,199,000 in the previous year, marking an increase of about 18.2%[51] Expenses and Costs - Sales cost increased by approximately 14.7% to RMB 622.2 million from RMB 542.3 million in 2022, primarily due to increased commissions and fees paid to third-party distribution channels and suppliers[22] - Sales and marketing expenses decreased by approximately 37.4% to RMB 340.6 million from RMB 543.7 million in 2022, due to adjustments in advertising spending[27] - The total employee cost for the year ended December 31, 2023, was approximately RMB 278.9 million, an increase from RMB 224.8 million in 2022, primarily due to an increase in the number of game developers and share-based compensation[40] - The total employee costs for 2023 amounted to RMB 278,860,000, representing a 24.0% increase from RMB 224,800,000 in 2022[58] Strategic Initiatives - The company launched new 3D upgraded versions of popular games, enhancing user experience and engagement[8] - The company is expanding its global presence with localized versions of games, including the international and Vietnamese versions of "Micro Fishing" launched in 2023[8] - The company has established a new media marketing strategy, focusing on game distribution through live streaming and partnerships with over 10,000 streamers, enhancing user acquisition and engagement[10] - The company has developed a digital tool platform that integrates third-party media services, significantly improving operational efficiency and data analysis capabilities[11] - The company is actively applying AI technology in product development and has plans to open its digital tool platform to third parties for commercialization[12] - The company aims to evolve from a leading local game operator in China to a global casual competitive gaming platform through diversified strategies[14] - The company plans to expand its game portfolio and increase market penetration, particularly targeting potential users in lower-tier cities[16] - The company aims to enhance customer acquisition through new media marketing strategies and innovative channels to reduce customer acquisition costs[17] - The company intends to increase its geographical coverage in China, focusing on cities in provinces such as Henan, Yunnan, Shandong, and Guangdong[18] Financial Position - Cash and cash equivalents increased to approximately RMB 1,340.9 million as of December 31, 2023, compared to RMB 1,163.3 million as of December 31, 2022[35] - The group had no short-term or long-term bank borrowings as of December 31, 2023, resulting in a leverage ratio of zero[36] - Non-current assets increased to RMB 399.5 million as of December 31, 2023, from RMB 495.5 million in 2022, primarily due to changes in investments[44] - Current assets totaled RMB 1,887.4 million as of December 31, 2023, compared to RMB 1,609.8 million in 2022, indicating a growth in liquidity[44] - The company's net asset value increased to RMB 2,084.2 million as of December 31, 2023, from RMB 1,794.0 million in 2022, reflecting a strong financial position[45] Corporate Governance - The company complied with the corporate governance code, except for the separation of the roles of Chairman and CEO until September 5, 2023[76] - The company appointed a new CEO, replacing the previous CEO on September 5, 2023, ensuring compliance with corporate governance standards[77] - All directors confirmed adherence to the standard code of conduct for securities trading during the reporting period[78] - The group's annual performance has been audited by Deloitte, confirming compliance with applicable accounting principles and full disclosure[81] - The audit committee consists of three independent non-executive directors, with Mr. Hu Yangyang serving as the chairman[80] Taxation - Income tax expenses rose by approximately 130.3% from RMB 26.3 million in 2022 to RMB 60.6 million in 2023, with an effective tax rate increase from 7.0% to 12.1%[30] - The effective corporate income tax rate for the company was reduced to 15% due to its recognition as a "High-tech Enterprise" and "Double Software Enterprise" in China[54] - The company reported a total income tax expense of RMB 69,163,000 for the year, up from RMB 45,635,000 in 2022[53] - The company recognized a tax impact of RMB 12,381,000 from the excess deduction for R&D expenses in 2023, compared to RMB 21,708,000 in 2022[57]