ARCHOSAUR GAMES(09990)2023-04-24 08:30Corporate Governance - The company maintains a high level of corporate governance, adhering to principles of integrity, accountability, transparency, independence, diligence, and fairness[23] - The board of directors is responsible for leadership, internal control, and overseeing the company's business, strategic decisions, and performance[24] - The company has four main board committees: Audit Committee, Nomination Committee, Remuneration Committee, and Risk Management Committee, each operating within its terms of reference[38] - The company's board of directors complies with the requirement to appoint at least three independent non-executive directors, with one possessing the necessary professional qualifications in accounting or financial management[28] - The company emphasizes the importance of board independence for effective corporate governance and decision-making, ensuring that independent opinions and recommendations are communicated to the board[32] - The company's Board of Directors consists of 7 members, including 2 executive directors, 2 non-executive directors, and 3 independent non-executive directors, ensuring strong independence[45] - The company's Audit Committee is composed of 3 members, with Mr. Zhu Lin serving as the Chairman, responsible for reviewing financial statements and overseeing internal controls and risk management systems[58] - The company's Nomination Committee considers diversity in terms of gender, age, cultural and educational background, industry experience, technical and professional skills, and tenure when recommending candidates for the Board[59] - The company's Board of Directors held 5 meetings during the year, with all directors attending all meetings, and the meeting minutes were recorded in detail and distributed to directors for review[54] - The company's independent non-executive directors attended all relevant Board meetings where they had no material interest, ensuring proper governance and decision-making[57] - The company's directors participated in various training programs, including updates on listing rules, directors' duties, and ESG reporting guidelines, to enhance their knowledge and skills[47] - The company's board of directors includes executive directors Li Qing (Chairman) and Bai Wei, non-executive directors Liu Ming and Lu Xiaoyin, and independent non-executive directors Bai Kun, Zhu Lin, and Ding Zhiping[97] Financial Performance - Revenue for 2022 decreased to RMB 584.1 million, a 36.5% decline compared to RMB 920.8 million in 2021[124] - Gross profit for 2022 was RMB 423.6 million, down 40.6% from RMB 713.5 million in 2021[124] - R&D expenses increased to RMB 746.3 million in 2022, up 5.8% from RMB 705.6 million in 2021[124] - Operating loss for 2022 widened to RMB 771.4 million, compared to an operating loss of RMB 289.4 million in 2021[124] - Adjusted net loss for 2022 was RMB 731.9 million, compared to an adjusted net loss of RMB 237.7 million in 2021[124] - Revenue for 2022 decreased by 36.6% to RMB 584.1 million compared to RMB 920.8 million in 2021[169] - Gross profit for 2022 decreased by 40.6% to RMB 423.6 million compared to RMB 713.5 million in 2021[169] - R&D expenses increased by 5.8% to RMB 746.3 million in 2022 compared to RMB 705.6 million in 2021[169] - Sales and marketing expenses increased by 13.5% to RMB 280.6 million in 2022 compared to RMB 247.2 million in 2021[169] - Operating loss for 2022 increased by 166.6% to RMB 771.4 million compared to RMB 289.4 million in 2021[169] - Net loss for 2022 increased by 153.4% to RMB 768.5 million compared to RMB 303.3 million in 2021[169] - Adjusted net loss for 2022 increased by 207.9% to RMB 731.9 million compared to RMB 237.7 million in 2021[169] - Total assets in 2022 were RMB 2,953.3 million, a decrease from RMB 3,518.1 million in 2021[153] - Total liabilities in 2022 were RMB 363.1 million, slightly higher than RMB 351.7 million in 2021[153] - Total equity in 2022 was RMB 2,590.2 million, down from RMB 3,166.4 million in 2021[153] - The company's distributable reserves amounted to RMB 6,243.3 million as of December 31, 2022[69] - The company's reserves and changes in reserves are detailed in the consolidated financial statements notes 25 and 33(b) on pages 153 and 167 of the annual report[68] - The company's consolidated financial performance for the year ended December 31, 2022, is detailed on pages 85-168 of the annual report[61] Share Repurchase and Dividends - The company repurchased a total of 12,616,370 shares in 2022, with a total repurchase price of HKD 61,261,899.90[33] - The company repurchased a total of 12,616,370 shares at a total cost of HKD 61,261,899.90 during the year, with 5,732,000 shares yet to be canceled as of December 31, 2022[69] - The company's Board of Directors resolved not to recommend any final dividend for the year ended December 31, 2022[62] Global Offering and Proceeds Utilization - The net proceeds from the global offering amounted to approximately HKD 2,358.5 million, with 40% allocated to enhancing development capabilities and expanding the game portfolio[77][79] - As of December 31, 2022, approximately HKD 2,028.3 million of the net proceeds from the global offering had been utilized[80] - The company plans to use the remaining net proceeds for strategic acquisitions and investments in the upstream and downstream of the industry value chain, with an expected utilization period from January 2023 to July 2023[79] - The company plans to temporarily place unused net proceeds in short-term interest-bearing instruments such as liquid fixed-income securities, short-term bank deposits, short-term low-risk financial products, or money market instruments with licensed commercial banks or other recognized financial institutions[94] - The original expected timeline for utilizing net proceeds for strategic acquisitions, investments in the upstream and downstream industry value chain, and expanding IP reserves was July 2022, but delays occurred due to unspecified reasons[95] Game Development and Performance - The company launched 19 mobile games by the end of 2022, available in over 170 regions with 14 language versions[154] - The game "以閃亮之名" topped the iOS free game charts in Hong Kong, Macau, Taiwan, Singapore, and Malaysia on its launch day in July 2022[155] - "以閃亮之名" ranked 2nd, 3rd, and 4th in the iOS game bestseller charts in Hong Kong, Macau, and Taiwan respectively within one month of launch[156] - The game "以閃亮之名" topped the Japanese iOS free game chart on its launch day in December 2022[156] - The company is developing a new SLG game "三國群英傳" based on a well-known IP, currently in the testing phase[158] - A strategy card game based on the "龍族" IP (Project E) is planned for future release[158] - The company aims to expand its product categories and explore multi-platform development[157] - The company has launched 19 high-quality mobile games in over 170 regional markets, with 13 games in operation and over 140 million global registered users[172] - 1 game has generated over RMB 4 billion in global cumulative revenue, 3 games over RMB 3 billion, and 6 games over RMB 1 billion[172] - The company has 5 games developed using Unreal Engine 4 and is among the first Chinese companies to explore Unreal Engine 5, positioning itself for future competitive advantages[163] - 《Shining Nikki》 achieved over RMB 100 million in revenue in Mainland China by the report date[173] - 《Shining Nikki》 generated over RMB 10 million in revenue on its first day of launch in Mainland China[173] - 《Shining Nikki》 ranked No. 1 on the iOS free game chart in Mainland China for four consecutive days after its launch[173] - 《Shining Nikki》 secured top 5 positions in the iOS game bestseller charts across Hong Kong, Macau, and Taiwan after updates[173] - 《Shining Nikki》 entered the top 20 of Japan's iOS game bestseller chart within two weeks of its launch[173] - 《Avatar: Reborn》 is expected to launch globally in 2023, combining MMORPG and shooting elements[175][184] - 《Shining Nikki》 has obtained dual-platform (mobile and PC) game licenses in Mainland China, indicating plans for multi-platform expansion[183] - The company plans to expand into PC and console platforms for future game projects, focusing on action and shooting genres[186] - 《Shining Nikki》 will be launched in Europe, America, and Southeast Asia following its success in Mainland China and other regions[173] - The company is exploring the integration of MMORPG with action and shooting elements in future game developments[184] - The game "Life Makeover" has demonstrated strong performance in overseas markets, reflecting the company's commitment to globalization[187] - The game "Three Kingdoms Tactics" achieved a cumulative revenue of over RMB 1.4 billion and registered over 6.9 million users by December 31, 2022[199] - The company continues to benefit from stable performance of classic games such as "Dream Zhu Xian" and "World of Kings 3D"[200] Global Strategy and Market Expansion - The company's global strategy focuses on "global distribution" as a prerequisite for product development, ensuring products are easily accepted by global players[187] - The company signed an exclusive agency and operation agreement with Tencent Shanghai and Shenzhen Tencent Tianyou for the promotion and operation of authorized games in South Korea[133] - The company entered into an exclusive, non-transferable licensing agreement with Tencent Penguin on June 18, 2022, to adapt, develop, publish, and operate a game based on the original work "Dragon Clan" and use related animation content[103] Technology and Innovation - The company utilizes Unreal Engine 4 and Unreal Engine 5, developed by Epic Games, for game development[120] - The company is actively exploring the application of AI in game development, particularly in areas like NPC creation and immersive experiences[192] Environmental, Social, and Governance (ESG) - The company's environmental policies and performance are detailed in the Environmental, Social, and Governance Report for the year ended December 31, 2022[66] Shareholder Information - The company's share transfer registration will be suspended from June 13, 2023, to June 16, 2023, to determine eligibility for attending and voting at the Annual General Meeting[63] - As of December 31, 2022, Perfect World Interactive Entertainment Co., Ltd. held 16.46% of the company's shares[109] - The company's shares are listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 700), and as of December 31, 2022, a subsidiary held 17.09% of the company's shares[116] Procurement and Suppliers - The largest supplier accounted for 15.7% of the company's total procurement, while the top five suppliers accounted for 40.8% of total procurement in 2022[4] Employee Information - The company has a total of 1,200 full-time employees as of December 31, 2022, with 78% in R&D and 12% in publishing and operations[190] Challenges and Future Outlook - The company faced challenges in 2022 due to slower-than-expected recovery in the global economy and underperformance of a product launched in the first half of the year[128] - The company remains committed to leveraging its technical advantages and international expansion to maintain its leading position in the competitive gaming industry[128]