XD INC(02400)2021-09-29 08:31Financial Performance - Revenue for the first half of 2021 was RMB 1,378,707, a decrease of 4.3% compared to RMB 1,440,481 in the same period of 2020[9]. - Gross profit for the first half of 2021 was RMB 676,699, down 18.1% from RMB 825,800 in the previous year[9]. - The company reported a loss attributable to equity holders of RMB 322,351 for the first half of 2021, compared to a profit of RMB 259,912 in the same period of 2020, representing a decline of 224.0%[9]. - Game revenue decreased by 12.2% year-on-year to RMB 1,043.0 million, primarily due to a 15.4% decline in online game revenue to RMB 940.0 million[22]. - The company reported a net loss attributable to equity holders of RMB 325,147 thousand for the six months ended June 30, 2021, compared to a profit of RMB 206,546 thousand in the same period of 2020, representing a significant decline[132]. - The company reported a total comprehensive loss of RMB 350,599 thousand for the period, compared to a total comprehensive income of RMB 272,182 thousand in 2020[79]. User Engagement - Average monthly active users (MAU) for online games decreased by 48.5% to 15,690 thousand from 30,474 thousand year-on-year[10]. - Average monthly paying users for online games decreased by 17.4% to 811 thousand from 982 thousand year-on-year[10]. - The international version of the TapTap app saw a significant increase in average monthly active users, rising by 484.4% to 13,183 thousand from 2,256 thousand year-on-year[10]. - TapTap's average monthly active users for the Chinese version reached 28.7 million, a year-on-year increase of 15.6%, with game downloads totaling 248.1 million, up 12.8%[18]. - The international version of TapTap saw a significant increase in average monthly active users, reaching 13.2 million, a year-on-year growth of 484.4%[18]. Cash and Investments - The company has over RMB 4.3 billion in cash and cash equivalents and short-term investments as of June 30, 2021, providing sufficient resources for business development[12]. - As of June 30, 2021, cash and cash equivalents were RMB 1,905.2 million, down from RMB 2,319.5 million at the end of 2020[37]. - The company issued convertible bonds with a total principal amount of USD 280 million at an interest rate of 1.25%, maturing on April 12, 2026[37]. - The net proceeds from the convertible bond issuance were approximately USD 275.6 million[44]. - The company completed a placement of 26,318,000 new shares at a price of HKD 42.38 per share, raising approximately HKD 1,113.0 million in net proceeds[48]. Expenses and Costs - The cost of revenue increased by 14.2% year-on-year to RMB 702.0 million, with game costs accounting for 61.0% of total revenue costs[27]. - Sales and marketing expenses increased by 23.8% year-on-year to RMB 344.5 million, driven by higher marketing expenditures for TapTap and the gaming segment[32]. - Research and development expenses surged by 164.0% year-on-year to RMB 575.9 million, attributed to an increase in the number of R&D personnel from 1,065 to 1,565[33]. - The company's gaming business revenue cost increased by 10.1% year-on-year to RMB 636.1 million, primarily due to hiring professionals for local operations in Southeast Asia and increased employee benefits for gaming operations[30]. Corporate Governance and Compliance - The company has complied with all applicable corporate governance code provisions, except for the separation of the roles of Chairman and CEO, which are held by the same individual[60]. - The audit committee has been established in accordance with Listing Rules and consists of three members, with Mr. Xin Quandong as the chairman[63]. - The company has not adopted any new accounting standards that would have a significant impact on the interim financial statements for the period ending June 30, 2021[96]. Future Plans and Developments - The company is focusing on the development of 13 existing game projects and restructuring the technology architecture of TapTap for future growth[12]. - The company plans to continue launching major updates for existing games, including a Disney collaboration version for "Ragnarok M" in overseas markets[14]. - The company plans to launch several highly anticipated titles, including "Terraria mobile" and "Eastward," across multiple platforms in the second half of 2021[16]. - The company has opened TapTap Developer Services (TDS) to third-party developers, with nearly 100 games integrated into TapSDK, enhancing user engagement and monetization opportunities[18]. Shareholder Information - As of June 30, 2021, Mr. Huang Yimeng holds 157,605,000 shares, representing 32.80% of the company's total shares[67]. - Credit Suisse Trust Limited holds 229,484,865 shares, representing 47.77% of the company's total shares[71]. - The total number of shares held under the Restricted Share Unit Plan is 8,437,540, accounting for approximately 1.76% of the company's issued share capital[73]. - The company did not declare any interim dividends for the six months ended June 30, 2021[50]. Assets and Liabilities - Total assets as of June 30, 2021, amounted to RMB 5,529,806 thousand, an increase from RMB 3,344,742 thousand as of December 31, 2020[82]. - Total liabilities as of June 30, 2021, were RMB 2,492,470 thousand, compared to RMB 764,616 thousand as of December 31, 2020[83]. - The company’s total equity attributable to owners of the company increased to RMB 43,832 million as of June 30, 2021, from RMB 21,609 million at the beginning of the year, representing a growth of approximately 103%[152]. Market and Economic Factors - The company benefited from a reduced corporate income tax rate of 15% for certain subsidiaries classified as "high-tech enterprises" in China[12]. - The expected return rate for financial products issued by commercial banks ranged from 2.90% to 4.27%[108]. - The company’s management has made significant judgments and estimates in preparing the interim financial information, consistent with the 2020 financial statements[109].