Company Overview - Guangzhou Huali Technology Co., Ltd. was approved for public issuance of RMB ordinary shares (A shares) on May 10, 2021, becoming a listed company on the Growth Enterprise Market [1] - The company is a comprehensive service provider for the distribution and operation of commercial gaming and amusement equipment in China, covering design, research and development, production, sales, and operation [1] - As of December 31, 2024, the registered capital of the company is RMB 146,692,000 [1] Financial Reporting Basis - The financial statements are prepared based on the going concern assumption and in accordance with the relevant accounting standards and guidelines [2] - The accounting year runs from January 1 to December 31, and the company uses RMB as the functional currency for its domestic subsidiaries [2] Accounting Policies and Estimates - The financial statements reflect the company's financial position, operating results, changes in owners' equity, and cash flows accurately and completely [2] - The company has established significance criteria for various financial items, such as accounts receivable and payable, which exceed 1% of total assets or RMB 10 million [3] Business Combinations - The company follows specific accounting treatments for business combinations, distinguishing between combinations under common control and those not under common control [5][6] - Costs directly related to business combinations, such as audit and legal fees, are recognized in the current period's profit and loss [4][7] Financial Instruments - Financial assets are classified into three categories: measured at amortized cost, measured at fair value with changes recognized in other comprehensive income, and measured at fair value with changes recognized in profit or loss [15][16] - Financial liabilities are classified similarly, with initial recognition at fair value and subsequent measurement based on their classification [18][19] Credit Risk and Impairment - The company assesses credit risk and expected credit losses for financial assets, applying a three-stage model based on changes in credit risk since initial recognition [24][25] - Impairment losses are recognized in profit or loss, and the company evaluates financial assets for significant increases in credit risk at each reporting date [27][28]

Core Viewpoint - The commercial gaming and amusement equipment industry in China is experiencing a synergistic development opportunity driven by "policy encouragement + consumption upgrade," with the market size expected to reach 15.504 billion yuan in 2024, representing a year-on-year growth of 17.35% [1][11]. Overview - Amusement game equipment, also known as amusement game machines, refers to electronic and mechanical devices that provide interactive gaming content and processes for entertainment purposes. The products are categorized into commercial amusement machines, handheld gaming devices, and home gaming consoles, with commercial machines being placed in commercial complexes, shopping centers, and amusement parks [2][4]. Development Background - Recent national policies have simplified approvals, categorized management, and strengthened technical compliance, creating a regulatory framework that supports the healthy development of the commercial gaming and amusement equipment industry. The continuous development of VR, AR, MR, and other technologies has also provided new growth opportunities for the industry [7][19]. Industry Chain - The upstream of the commercial gaming and amusement equipment industry includes electronic manufacturing, structural materials, and hardware tools. The midstream involves the research and development and manufacturing of amusement equipment, while the downstream consists of entertainment venues such as amusement parks and children's theme parks [9]. Current Development - The industry emphasizes technological experiences and integrates health, parent-child interaction, and leisure entertainment, making amusement parks, cinemas, and dining venues important components of commercial complexes. The dual benefits of steady growth in cultural entertainment spending and consumption experience upgrades have created favorable conditions for the industry [11]. Competitive Landscape - The industry has numerous participants, particularly in Guangdong Province, with many small-scale enterprises leading to a low concentration of the market. Major companies include Guangzhou Huali Technology Co., Ltd., Guangdong Shiyu Technology Co., Ltd., and others, with Huali Technology holding a market share of less than 5% [13][14]. Company Analysis - **Guangzhou Huali Technology Co., Ltd.**: A leading comprehensive service provider in the domestic commercial gaming and amusement equipment sector, with a projected total revenue of 1.017 billion yuan in 2024, of which 549 million yuan comes from gaming equipment sales [15]. - **Guangdong Shiyu Technology Co., Ltd.**: Established in 1994, the company focuses on the R&D, production, and sales of gaming and amusement equipment, as well as digital sports and family gaming solutions [17]. Development Trends - **Technological Innovation**: The industry is undergoing a transformation driven by technological advancements, with manufacturers focusing on developing innovative products that cater to all age groups and combine entertainment with fitness [19]. - **IP Ecosystem Reconstruction**: The industry is moving towards an IP-centric resource integration phase, leveraging popular IPs to enhance market penetration and user retention [20][21]. - **Big Data Utilization**: The industry is leveraging user behavior data to drive product development and marketing strategies, leading to a digital transformation across the value chain [22]. - **AI Applications**: The integration of AI in game design and operations is expected to enhance efficiency and support global collaboration, pushing the industry towards intelligent and comprehensive service models [23].