Kunlun(SZ:300418)2018-07-10 10:35Business Expansion and Subsidiaries - The company has established subsidiaries in regions including Hong Kong, Japan, South Korea, Malaysia, the United States, and the United Kingdom since 2009, with overseas business revenue rapidly increasing[13] - The company has established a global internet business network with offices in over 10 overseas markets, enhancing its international market layout[61] - The company has established several new subsidiaries in 2017, including a ¥50 million investment in a micro-loan company and a ¥10 million investment in a technology network company[95] Financial Performance - The company's operating revenue for 2017 was ¥3,436,369,668.04, representing a 41.73% increase compared to ¥2,424,670,626.82 in 2016[30] - The net profit attributable to shareholders for 2017 was ¥998,666,057.61, an increase of 87.90% from ¥531,497,123.47 in 2016[30] - The net cash flow from operating activities reached ¥1,045,795,985.00, a significant increase of 192.84% compared to ¥357,120,976.89 in 2016[30] - The total assets at the end of 2017 amounted to ¥12,061,405,708.47, a 91.27% increase from ¥6,306,050,480.99 at the end of 2016[30] - The company reported a basic earnings per share of ¥0.89 for 2017, up 89.36% from ¥0.47 in 2016[30] - The net assets attributable to shareholders increased by 176.32% to ¥8,709,730,697.17 at the end of 2017 from ¥3,152,027,892.88 at the end of 2016[30] Market and Product Development - The company launched self-developed games such as "Seal Hope: New World" and "Gods and Demons Domain" during the reporting period, contributing to its growth strategy[40] - The mobile game "Seal Hope: New World" achieved first place in the App Store and Google Play download charts in Taiwan shortly after its launch in July 2017[41] - The company plans to enhance its corporate governance structure and improve management levels to address operational and internal control challenges[16] - The company plans to expand its market presence with new product launches and collaborations, including the upcoming release of "Dragon Nest M" in various regions[43] Risks and Challenges - The company faces risks from intensified market competition, particularly in the internet gaming industry, where it aims to enhance user engagement through continuous innovation and targeted market strategies[6] - The company acknowledges the potential risks associated with intellectual property disputes and is taking measures to safeguard its rights and minimize infringement risks[8] - The company is actively managing foreign exchange risks as its overseas revenue constitutes a significant portion of total income, necessitating effective risk management strategies[13] - The company has identified the risk of new game development failures due to market competition and is committed to continuous research and development to stay ahead in the industry[158] - The company faces risks from regulatory changes in the internet industry, which could impact its operations and performance[154] Investment and Acquisitions - The company has invested in various sectors including internet tools, social platforms, and video streaming, achieving returns from projects like Qudian and Inke, but faces risks of underperformance due to market volatility[15] - The company acquired Xianlai Interactive Entertainment and Grindr, which generated goodwill; however, future adverse changes in their competitive landscape or regulatory environment may impact their performance and lead to potential impairment risks[16] - The company has made investments in various sectors, yielding significant returns that enhance operational capabilities and shareholder returns[64] - The company is expanding its business through acquisitions, including the purchase of Beijing Xianlai Network Technology Co., Ltd., to enhance competitiveness and profit growth[146] Corporate Governance and Management - The company emphasizes the importance of maintaining a stable core management and technical team, offering competitive compensation and a supportive work environment to attract and retain talent[12] - The overall strategic and development goals of the company are overseen by the chairman, with business line CEOs responsible for execution[16] - The company has adjusted its organizational structure to clarify the functions of the group and its business departments, facilitating coordinated development across its three main business segments[77] - The company plans to enhance user engagement on its social entertainment platform by introducing new entertainment models and optimizing operational strategies[151] Shareholder Returns and Dividends - The company distributed a cash dividend of 0.87 RMB per 10 shares (tax included) to all shareholders for the fiscal year 2017[18] - The cash dividend payout ratio for 2017 is 10.04% of the net profit attributable to shareholders, which is CNY 998,666,057.61[173] - The company has a history of increasing cash dividends over the past three years, with a decrease in payout ratio in 2017 compared to previous years[173] - The company plans to distribute a cash dividend of CNY 0.87 per 10 shares, totaling CNY 100,219,320.79 based on a total share capital of 1,151,946,216 shares for the year 2017[171] Research and Development - The company is focused on continuous R&D of new games and technologies to stay ahead in a rapidly evolving market, with dedicated teams for various gaming segments[10] - The number of R&D personnel increased to 854, accounting for 59.64% of the workforce, indicating a strong focus on innovation[107] - The company has established a unified big data system across its business segments to leverage technology for growth and innovation[74] - Research and development investment amounted to CNY 282,647,779.43, representing 8.23% of total revenue, with a significant increase from 4.16% in 2016[107]