Financial Performance - The company achieved a revenue of RMB 1,244.7 million for the year ended December 31, 2023, representing a year-on-year growth of 16.7% compared to RMB 1,066.2 million in 2022[2]. - Gross profit for the year was RMB 420.7 million, an increase of 12.5% from RMB 374.0 million in the previous year[2]. - The company's net profit for the year reached RMB 263.9 million, reflecting an 11.6% increase from RMB 236.6 million in 2022[2]. - Revenue from AR/VR marketing services was RMB 845.1 million, showing a significant growth of 24.0% year-on-year[4]. - Revenue from AR/VR content business was RMB 334.0 million, with the number of clients increasing by 29% to 75[8]. - The company's revenue increased by 16.7% from RMB 1,066.2 million in 2022 to RMB 1,244.7 million in 2023, primarily driven by growth in AR/VR marketing services[19]. - Revenue from AR/VR marketing services rose by 24.0% from RMB 681.8 million in 2022 to RMB 845.1 million in 2023, despite a slight decline in the number of advertising clients[21]. - Revenue from AR/VR SaaS services grew by 31.7% from RMB 43.7 million in 2022 to RMB 57.6 million in 2023, due to an increase in the number of clients subscribing to customized AR/VR SaaS projects[26]. - The company's total revenue for the year ended December 31, 2023, was RMB 1,244,723 thousand, representing an increase from RMB 1,066,157 thousand in 2022, which is approximately 16.7% growth[104]. Client and Market Expansion - Domestic marketing revenue increased by 9% to RMB 745.6 million, while the number of advertising clients decreased from 27 to 24[6]. - The company expanded its AR/VR marketing services to overseas markets, generating RMB 99.6 million in revenue from 4 overseas advertising clients[5]. - The number of AR/VR marketing service clients increased, with the average payment per channel rising by 68.7% to RMB 51.9 million[21]. - The company expanded its overseas AR/VR marketing services, serving 4 overseas advertising agencies and reaching 374 overseas media outlets[21]. - The company is actively exploring new business directions, including digital human development and operation services, to capture emerging market opportunities[14]. - The company plans to leverage new hardware platforms to expand its C-end XR content offerings, anticipating explosive growth in content demand[17]. User Engagement and Growth - The number of paid users for the AR/VR SaaS platform increased by 103% year-on-year to 9,283[12]. - The registered user count for AR/VR SaaS services reached 41,880, up 75% from 23,991 in 2022[13]. - The average monthly active users rose by 21% to 10,028 compared to 8,288 in the previous year[13]. - The total number of end media increased from 4,378 in 2022 to 4,780 in 2023, representing a growth of 9.2%[5]. Cost and Expenses - Cost of revenue rose by 19.0% from RMB 692.2 million in 2022 to RMB 824.0 million in 2023, primarily due to increased traffic acquisition costs associated with AR/VR marketing services[28]. - Distribution and selling expenses rose by 42.0% from RMB 136 million in 2022 to RMB 193 million in 2023, driven by increased employee costs and promotional expenses[42]. - Administrative expenses increased by 49.4% from RMB 332 million in 2022 to RMB 496 million in 2023, mainly due to higher employee costs and increased office space rental[43]. - Research and development expenses grew by 5.6% from RMB 485 million in 2022 to RMB 512 million in 2023, reflecting higher personnel costs and outsourced R&D expenses[44]. Profitability and Margins - Gross profit increased by 12.5% from RMB 374.0 million in 2022 to RMB 420.7 million in 2023, while gross margin decreased from 35.1% to 33.8%[34]. - The gross margin for AR/VR marketing services slightly decreased to 22.5% in 2023 from 22.8% in 2022, attributed to increased traffic costs[36]. - The gross margin for AR/VR content improved to 57.5% in 2023 from 55.9% in 2022, due to enhanced content production efficiency[36]. - The gross margin for AR/VR SaaS increased significantly to 79.3% in 2023 from 68.3% in 2022, benefiting from economies of scale[36]. - Net profit increased by 11.6% from RMB 236 million in 2022 to RMB 264 million in 2023, while the net profit margin decreased from 22.2% to 21.2%[47]. Assets and Liabilities - Trade receivables rose from RMB 375.5 million in 2022 to RMB 561.5 million in 2023, consistent with business growth[53]. - Intangible assets increased significantly from RMB 479 million in 2022 to RMB 950 million in 2023, primarily due to the acquisition of adaptation rights and software to support AR/VR SaaS business development[50]. - Trade and other payables increased from RMB 139.6 million as of December 31, 2022, to RMB 148.1 million as of December 31, 2023, driven by higher employee compensation and tax liabilities[57]. - Total liabilities decreased to RMB 268,142 thousand in 2023 from RMB 300,525 thousand in 2022, representing a reduction of about 10.7%[71]. Corporate Governance and Compliance - The audit committee, consisting of three independent non-executive directors, reviewed the financial reporting process and internal control systems, confirming compliance with applicable accounting standards[142]. - The company has committed to high standards of corporate governance to protect shareholder interests and enhance transparency[140]. - The company has maintained the required public float as per listing rules as of the announcement date[146]. - The board believes that the combination of the roles of chairman and CEO is beneficial for management[140]. Future Outlook and Investments - The company plans to enhance its R&D capabilities and improve services and products, allocating approximately HKD 53.2 million (10.0% of net proceeds) for this purpose by the end of 2024[137]. - The company intends to develop and optimize its AR/VR development engine, with an allocation of HKD 42.6 million (8.0% of net proceeds) by the end of 2024[137]. - A total of HKD 79.8 million (15.0% of net proceeds) is earmarked for selected mergers, acquisitions, and strategic investments by the end of 2024[137].

Financial Performance - The company reported a revenue of RMB 598.96 million for the first half of 2023, representing a 26.6% increase compared to RMB 473.12 million in the same period of 2022[8]. - Gross profit for the first half of 2023 was RMB 196.06 million, up 32.7% from RMB 147.73 million year-on-year, with a gross margin of 32.7%[8]. - Profit before tax increased by 15.0% to RMB 122.58 million, compared to RMB 106.60 million in the previous year[8]. - The net profit for the period was RMB 116.32 million, reflecting a 41.4% growth from RMB 82.24 million in the same period last year[8]. - The company achieved a basic earnings per share of RMB 6.4, an increase of 18.5% from RMB 5.4 in the previous year[8]. - Revenue increased by 26.6% from RMB 473.1 million in the six months ended June 30, 2022, to RMB 599.0 million in the same period of 2023, driven by growth in AR/VR marketing services and content[22]. - Revenue from the e-commerce sector grew significantly from RMB 30.8 million to RMB 63.3 million, attributed to increased AR/VR advertising expenditures by major clients[27]. - Revenue from the entertainment and gaming sectors increased from RMB 867 million in the first half of 2022 to RMB 1,015 million in the first half of 2023, driven by increased spending from major clients and a rise in the number of clients[30]. AR/VR Services - Revenue from AR/VR marketing services reached RMB 424.8 million, a 25.3% increase year-on-year, driven by an increase in the number of products and average spending per advertising client[10]. - Revenue from AR/VR content services was RMB 146.6 million, marking a 29.8% increase, attributed to a rise in client and project numbers[12]. - Revenue from AR/VR SaaS services reached RMB 26.9 million in H1 2023, representing a growth of 35.7% year-over-year[13]. - The number of customers for AR/VR content services increased to 35 in H1 2023, up 52.2% from 23 in H1 2022[13]. - The number of paying subscribers surged by 117.2%, reaching 3,030 compared to 1,395 in H1 2022[14]. - The company plans to continue expanding its augmented reality and virtual reality (AR/VR) marketing services, aiming to capture a larger market share in the growing AR/VR sector[121]. Cost and Expenditure - Cost of revenue increased by 23.8% from RMB 3,254 million in the first half of 2022 to RMB 4,029 million in the first half of 2023, primarily due to rising traffic acquisition costs and subcontracting costs related to AR/VR services[35]. - R&D expenditure for the company was RMB 28.2 million in H1 2023, marking a 69.0% increase year-over-year[18]. - The company incurred a loss of RMB 32,103 thousand in other comprehensive expenses during the first half of 2023, compared to no such expenses in the same period of 2022[117]. - The total depreciation and amortization expenses for the six months ended June 30, 2023, amounted to RMB 19,228,000, compared to RMB 10,507,000 for the same period in 2022, indicating an increase of 83.5%[134]. Assets and Liabilities - Trade receivables increased from RMB 375.5 million as of December 31, 2022, to RMB 518.4 million as of June 30, 2023, reflecting business growth[65]. - Total assets as of June 30, 2023, were RMB 1,394,694 thousand, compared to RMB 1,278,627 thousand at the end of 2022[113]. - The company's equity attributable to owners increased to RMB 1,306,888 thousand from RMB 1,222,672 thousand, reflecting a growth of 6.9%[115]. - The total amount of trade and other receivables and deposits reached RMB 527,725,000, up from RMB 387,266,000, reflecting a growth of 36.3%[146]. - The company’s total liabilities increased to RMB 183,178,000 as of June 30, 2023, from RMB 139,624,000 as of December 31, 2022[149]. Strategic Initiatives - The company plans to launch several digital personas with over one million followers in the second half of 2023, enhancing its digital persona MCN matrix[16]. - The company aims to leverage AIGC technology to reduce 3D modeling costs and enhance user interaction experiences in the metaverse[17]. - The company plans to allocate a total of HKD 531.9 million for various purposes, with 10% (HKD 53.2 million) dedicated to enhancing sales and marketing functions[87]. - The company is exploring potential acquisitions to enhance its product portfolio, with a budget of $500 million allocated for this purpose[165]. Corporate Governance - The audit committee consists of three independent non-executive directors, ensuring compliance with financial reporting and risk management standards[102]. - The company has maintained high standards of corporate governance, with a commitment to reviewing its governance structure regularly[105]. - Major shareholders collectively hold 42.21% of the company's equity, with Wanglei Co., Ltd. and LYH. Ltd. each owning 764,083,301 shares[97]. Market Outlook - The metaverse industry is projected to reach a market size of USD 700-900 billion by 2030, with content creation tools expected to capture about 70% of this market[17]. - The company provided a positive outlook for the next quarter, projecting a revenue growth of 10% to 12% based on current market trends[165].

Financial Performance - The company reported a revenue of RMB 598.96 million for the six months ended June 30, 2023, representing a 26.6% increase compared to RMB 473.12 million in the same period last year[2]. - Gross profit for the same period was RMB 196.06 million, up 32.7% from RMB 147.73 million, with a gross margin of 32.7%[2][3]. - Profit before tax increased by 15.0% to RMB 122.58 million, compared to RMB 106.60 million in the previous year[2]. - Net profit for the period was RMB 116.32 million, reflecting a 41.4% growth from RMB 82.24 million in the prior year[2][3]. - Total revenue for the first half of 2023 reached RMB 424.8 million, a 25.3% increase from RMB 339.0 million in the same period of 2022[19]. - The group recorded a profit of RMB 116.3 million for the six months ended June 30, 2023, a 41.4% increase from RMB 82.2 million in the same period of 2022[44]. - The company reported a net profit of RMB 116.32 million for the six months ended June 30, 2023, compared to RMB 82.24 million for the same period in 2022, marking a year-over-year increase of approximately 41.4%[60]. - The profit attributable to the company's owners for the six months ended June 30, 2023, was RMB 116,319,000, an increase of 41.2% compared to RMB 82,381,000 for the same period in 2022[62]. - The basic earnings per share for the period was RMB 6.4, up from RMB 5.4 in the previous year, reflecting a growth of 18.5%[62]. Revenue Breakdown - Revenue from AR/VR marketing services reached RMB 424.8 million, a 25.3% increase year-on-year, with a stable gross margin of 22.86%[4]. - The company achieved a 29.8% revenue growth in AR/VR content services, totaling RMB 146.6 million, driven by an increase in client and project numbers[6]. - Revenue from the e-commerce sector increased from RMB 30.8 million in the first half of 2022 to RMB 63.3 million in the first half of 2023, driven by increased AR/VR advertising spending[20]. - Revenue from the automotive sector surged from RMB 2.7 million in the first half of 2022 to RMB 26.5 million in the first half of 2023, reflecting an expanded customer base[20]. - Revenue from AR/VR content business rose by 29.8% to RMB 146.6 million in the first half of 2023, up from RMB 113.0 million in the same period of 2022[21]. - Revenue from AR/VR SaaS business grew by 35.7% to RMB 26.9 million in the first half of 2023, compared to RMB 19.8 million in the same period of 2022[23]. Client and User Metrics - The number of advertising clients decreased by 7.7% to 24, while the average spending per client rose by 35.7% to RMB 17,700[5]. - The number of registered users for AR/VR SaaS services grew by 49.8% to 8,778, while the number of paying users surged by 117.2% to 3,030[8]. - The number of clients in the AR/VR content business increased from 23 in the first half of 2022 to 35 in the first half of 2023[21]. Research and Development - R&D expenditure for the first half of 2023 was RMB 28.2 million, representing a 69.0% year-on-year increase, with a focus on enhancing AIGC capabilities in content production[14]. - R&D expenses for the six months ended June 30, 2023, were RMB 28.22 million, compared to RMB 16.70 million in the same period of 2022, reflecting increased investment in new technologies[60]. - The company is focused on research and development (R&D) to enhance its software-as-a-service (SaaS) offerings[98]. Operational Efficiency - The gross margin improved from 31.2% in the first half of 2022 to 32.7% in the first half of 2023, attributed to business expansion and operational efficiency[31]. - The gross margin for AR/VR SaaS business surged from 59.0% to 75.6%, mainly due to all subscription contracts being signed directly with agents, resulting in higher margins[34]. - The company is leveraging its self-developed FT-Engine to improve the efficiency of content production, reducing project development cycles by 10-20%[14]. Strategic Initiatives - The company aims to expand its metaverse applications into emerging fields such as digital collectibles, industrial metaverse, and urban metaverse[14]. - The company is actively pursuing overseas business opportunities, with initial success noted in the first half of 2023[15]. - The company plans to enhance its talent pool and management structure to support business expansion and product development[15]. - The company is committed to providing high-quality, immersive interactive experiences through AI-driven models tailored for specific verticals like tourism and entertainment[14]. Financial Position - The company had cash and cash equivalents of RMB 376.3 million as of June 30, 2023, ensuring liquidity for future growth opportunities[57]. - The company's net current assets increased to RMB 1,068,897,000, up from RMB 978,102,000, representing a growth of 9.2%[63]. - The company's equity attributable to owners increased to RMB 1,306,888,000 from RMB 1,222,672,000, reflecting a growth of 6.9%[64]. - Trade receivables rose from RMB 375.5 million on December 31, 2022, to RMB 518.4 million on June 30, 2023, in line with business growth[51]. Corporate Governance - The company is committed to high standards of corporate governance to protect shareholder interests and enhance transparency[90]. - The company has established an audit committee to oversee financial reporting and risk management, ensuring compliance with applicable accounting standards[93]. - The board of directors includes both executive and independent non-executive members, ensuring diverse oversight[98]. Market Outlook - The metaverse industry is projected to reach a market size of USD 700-900 billion by 2030, with content and content creation tools expected to account for approximately 70% of this market[12]. - The company plans to provide future guidance on performance metrics and growth expectations[98]. - The company is exploring new product development to meet evolving market demands[98].

Financial Performance - Revenue for the year ended December 31, 2022, reached RMB 1,066,157 thousand, representing a 79.1% increase from RMB 595,290 thousand in 2021[7] - Gross profit for 2022 was RMB 373,995 thousand, up 113.1% from RMB 175,516 thousand in the previous year[7] - Profit before tax increased by 183.6% to RMB 247,144 thousand, compared to RMB 87,142 thousand in 2021[7] - Net profit for the year was RMB 236,593 thousand, a significant rise of 229.9% from RMB 71,719 thousand in 2021[7] - Total comprehensive income for the year amounted to RMB 257,465 thousand, reflecting a 259.0% increase from RMB 71,719 thousand in 2021[7] - Adjusted net profit (unaudited) was RMB 257,711 thousand, a 144.1% increase from RMB 105,596 thousand in 2021[8] - The company recorded a profit of RMB 236.6 million for the year ended December 31, 2022, a 229.9% increase from RMB 71.7 million in 2021, with a net profit margin rising from 12.0% to 22.2%[54] Revenue Breakdown - In 2022, the company's revenue reached RMB 1,066.2 million, a 79.1% increase year-on-year, driven by growth in AR/VR marketing services and content[11] - The AR/VR marketing services revenue grew by 81.2% to RMB 681.8 million, with a gross margin of 22.8%[12] - The AR/VR content business revenue increased by 108.3% to RMB 336.2 million, with a gross margin of 55.9%[15] - Revenue from the tourism sector increased from RMB 33.8 million in 2021 to RMB 109.5 million in 2022, reflecting a growing client base[30] - The e-commerce sector's revenue grew from RMB 20.9 million in 2021 to RMB 77.1 million in 2022, driven by increased AR/VR advertising spending[30] - Revenue from AR/VR SaaS business increased by 112.3% from RMB 20.6 million in 2021 to RMB 43.7 million in 2022, driven by an increase in the number of customers subscribing to customized AR/VR SaaS projects[17] - Revenue from the entertainment and gaming sectors increased from RMB 125.6 million in 2021 to RMB 264.7 million in 2022, due to higher spending from major clients and an increase in customer numbers[32] Client and Project Growth - The number of advertising clients increased from 24 in 2021 to 27 in 2022, with the average spending per client rising from RMB 15.7 million to RMB 25.3 million[13] - The number of AR/VR content projects increased from 95 in 2021 to 149 in 2022, with the client base growing from 46 to 58[15] - The number of customized AR/VR SaaS projects increased from 142 in 2021 to 320 in 2022, indicating significant growth in project development[18] - The number of registered users for AR/VR SaaS reached 23,991 in 2022, up from 12,265 in 2021, representing an increase of approximately 95%[18] - The number of paid subscription users for AR/VR SaaS increased to 4,570 in 2022, up from 2,015 in 2021, marking a growth of approximately 127%[18] Cost and Expenses - Total revenue cost rose by 64.9% from RMB 419.8 million in 2021 to RMB 692.2 million in 2022, primarily due to increased traffic acquisition costs and subcontracting costs related to AR/VR content[36] - Traffic acquisition costs accounted for 75.6% of total revenue costs in 2022, amounting to RMB 523.1 million, up from 74.2% in 2021[37] - The cost of AR/VR marketing services increased from RMB 294.8 million in 2021 to RMB 526.1 million in 2022, driven by growth in the AR/VR marketing services business[38] - The cost of AR/VR content business rose from RMB 86.9 million in 2021 to RMB 148.2 million in 2022, mainly due to increased subcontracting and development costs[40] - The company's administrative expenses rose by 52.9% from RMB 21.7 million in 2021 to RMB 33.2 million in 2022, driven by increased employee costs and office space rental[50] - R&D expenses surged by 123.3% from RMB 21.7 million in 2021 to RMB 48.5 million in 2022, reflecting higher personnel costs and outsourced development expenditures[51] Assets and Liabilities - Non-current assets as of December 31, 2022, were RMB 248,823 thousand, compared to RMB 40,236 thousand in 2021[9] - Current assets increased to RMB 1,278,627 thousand from RMB 543,279 thousand in the previous year[9] - Current liabilities rose to RMB 300,525 thousand, up from RMB 134,201 thousand in 2021[9] - Total equity as of December 31, 2022, was RMB 1,225,405 thousand, compared to RMB 446,570 thousand in 2021[9] - Trade receivables increased from RMB 161.9 million in 2021 to RMB 375.5 million in 2022, indicating business growth aligned with increased customer purchases of AR/VR services[62] - Intangible assets rose from RMB 29.3 million in 2021 to RMB 47.9 million in 2022, primarily due to increased purchases of adaptation rights and software to support AR/VR SaaS business[57] - Prepayments surged from RMB 153.4 million in 2021 to RMB 485.5 million in 2022, driven by higher prepayments for advertising traffic related to AR/VR marketing services[64] Strategic Initiatives - The company plans to enhance R&D capabilities and improve products and services using the net proceeds of approximately HKD 531.9 million from its IPO[11] - The company aims to expand its presence in overseas markets and strengthen investments and collaborations along the industry chain[11] - The company plans to invest in R&D to strengthen its core technologies and develop new solutions, including AI-generated 3D models and video content[23] - The company aims to expand its business in line with the trend of transitioning from 2D to 3D content, leveraging advancements in technologies like 5G and AI[21] - The company is actively exploring overseas markets in 2023, leveraging its experience in AR/VR content and services[26] - The company plans to enhance sales and marketing functions, allocating HKD 53.2 million (10.0% of net proceeds) for brand image strengthening, with HKD 35.4 million remaining to be utilized by the end of 2024[100] Governance and Compliance - The company has established a solid governance structure with independent directors providing oversight and independent judgment[84] - The board consists of seven members, including four executive directors and three independent non-executive directors[169] - The company has established a risk management system to monitor business performance and ensure compliance with regulations[188] - The audit committee consists of three independent non-executive directors, ensuring independent oversight of financial reporting and internal controls[193] - The company has implemented a whistleblowing policy allowing employees and stakeholders to report misconduct confidentially and anonymously[193] - The company is committed to high standards of corporate governance and has established policies for environmental protection and corporate social responsibility[156] Market and Industry Outlook - The company anticipates that the overall scale of China's virtual reality industry will exceed RMB 350 billion by 2026, with a projected sales volume of over 25 million VR terminals[20] - The company is facing uncertainties in the Chinese SaaS and AR/VR marketing industries, which may impact future performance[131] - The competitive landscape remains intense, posing challenges in successfully competing with existing and future competitors[131] - The company plans to expand its market presence through strategic partnerships and acquisitions[137] Shareholder Information - The board does not recommend any final dividend for the year ending December 31, 2022[90] - The company has adopted a dividend policy that considers overall operating performance, financial condition, and future cash needs[162] - Shareholders holding at least 10% of the paid-up capital can request the board to convene a special general meeting[197]

Financial Performance - The company's revenue for the year ended December 31, 2022, reached RMB 1,066.2 million, representing a 79.1% increase compared to RMB 595.3 million in 2021[2] - Gross profit increased by 113.1% to RMB 374.0 million, with a gross margin of 35.1%[3] - Profit for the year surged by 229.9% to RMB 236.6 million, with basic and diluted earnings per share of RMB 14.8, up from RMB 5.2 in 2021[2] - Revenue increased by 79.1% from RMB 595.3 million in 2021 to RMB 1,066.2 million in 2022, driven by growth in AR/VR marketing services and content[24] - The company reported a net profit of RMB 236.6 million for the year ended December 31, 2022, a 229.9% increase from RMB 71.7 million in 2021[54] - Basic and diluted earnings per share for the year ended December 31, 2022, were RMB 14.8, compared to RMB 5.2 in 2021, an increase of 184.6%[79] - The adjusted net profit for the year ended December 31, 2022, was RMB 257.7 million, an increase of 143.8% from RMB 105.6 million in 2021[56] Revenue Segmentation - The AR/VR marketing services segment generated revenue of RMB 681.8 million, an 81.2% increase from RMB 376.3 million in 2021, driven by an increase in the number of advertising clients and average spending per client[5] - The AR/VR content business saw revenue grow by 108.3% to RMB 336.2 million, with the number of projects increasing from 95 to 149[9] - Revenue from the tourism sector grew from RMB 33.8 million in 2021 to RMB 109.5 million in 2022, reflecting an expanded customer base[28] - Revenue from the e-commerce sector increased from RMB 20.9 million in 2021 to RMB 77.1 million in 2022 due to increased AR/VR advertising spending[28] - Revenue from the entertainment and gaming sectors increased from RMB 125.6 million in 2021 to RMB 264.7 million in 2022, driven by increased spending from major clients and a rise in the number of clients[31] - Revenue from AR/VR SaaS business increased by 112.3% from RMB 20.6 million in 2021 to RMB 43.7 million in 2022, driven by an increase in the number of customers subscribing to customized AR/VR SaaS projects[12] Client Metrics - The number of advertising clients increased from 24 in 2021 to 27 in 2022, with the average spending per client rising from RMB 15.7 million to RMB 25.3 million[6] - The renewal rate for AR/VR marketing services increased to 63.0% in 2022 from 50.0% in 2021, indicating higher client retention[6] - The number of registered users for AR/VR SaaS reached 23,991 in 2022, up from 12,265 in 2021, while the number of paying users increased to 4,570 from 2,015[13] - The average monthly active users increased to 8,288 in 2022 from 4,551 in 2021, with peak monthly active users reaching 9,835 compared to 6,601 in the previous year[13] Research and Development - R&D expenses amounted to RMB 48.5 million in 2022, representing 4.5% of revenue, compared to RMB 21.7 million and 3.6% in 2021[14] - The R&D team consists of 56 full-time employees, accounting for approximately 46.7% of the total workforce[14] - The company is focused on enhancing its R&D capabilities to better meet customer needs and improve service quality[14] - The company plans to enhance R&D investment to sustain growth momentum and develop standardized, platform-based solutions[20] Market Strategy - The company plans to leverage its industry advantages to capture market opportunities and achieve long-term growth in the expanding AR/VR sector[3] - The company aims to deepen its presence in the metaverse by providing AR/VR services across various sectors, including e-commerce, education, and smart cities[18] - The company is exploring overseas markets in 2023, leveraging its experience in AR/VR content and services[23] Cost and Efficiency - Total cost of revenue increased by 64.9% from RMB 419.8 million in 2021 to RMB 692.2 million in 2022, primarily due to rising traffic acquisition costs and subcontracting costs related to AR/VR services[35] - Traffic acquisition costs accounted for 75.6% of total revenue costs in 2022, amounting to RMB 523.1 million, up from 74.2% in 2021[36] - The company achieved economies of scale in several cost areas, enhancing operational efficiency and bargaining power with suppliers[41] - The gross profit margin for total operations improved from 29.5% in 2021 to 35.1% in 2022, indicating overall operational efficiency gains[42] Corporate Governance - The company has complied with all applicable principles and provisions of the corporate governance code from the listing date to December 31, 2022, except for deviation from provision C.2.1[118] - The audit committee consists of three independent non-executive directors, with the main responsibility of reviewing and supervising the financial reporting process and internal control systems[120] - The company confirmed it has maintained the required public float as per the listing rules as of the announcement date[122] Shareholder Information - The company did not declare any dividends for the year ended December 31, 2022, consistent with the previous year[104] - The company will not recommend a final dividend for the year ending December 31, 2022[117] Listing and Capital Structure - The company successfully listed on the Hong Kong Stock Exchange on October 18, 2022, raising approximately HKD 531.9 million to enhance R&D capabilities and support strategic investments[3] - The company issued 271,500,000 ordinary shares at a cash price of HKD 2.21 per share on October 18, 2022, following its listing[110] Future Outlook - The Chinese virtual reality industry is projected to exceed RMB 350 billion by 2026, with over 25 million VR devices expected to be sold[15] - The company plans to use the remaining proceeds for purposes disclosed in the prospectus, with the expected timeline subject to market conditions[116]