iHuman(IH) - 2023 Q4 - Annual Report

Financial Position - As of December 31, 2023, cash and cash equivalents totaled RMB1,213.8 million (US $171.0 million), with a year-over-year increase of 15.5% from RMB1,050.0 million in 2022[535]. - As of December 31, 2023, 62.7% of cash and cash equivalents were held in mainland China, with 61.5% denominated in Renminbi[538]. - The company anticipates that current cash and cash equivalents, along with expected cash flows, will be sufficient for working capital and capital expenditures for at least the next 12 months[537]. Operating Activities - Net cash provided by operating activities was RMB172.1 million (US$ 24.2 million) in 2023, a decrease of 8.7% compared to RMB188.5 million in 2022[536]. - The company reported a working capital surplus for the years ended December 31, 2021, 2022, and 2023, indicating prudent management of working capital[536]. Investing Activities - Net cash used in investing activities was RMB6.5 million (US $0.9 million) in 2023, significantly lower than RMB32.8 million in 2022[545]. - In February 2024, the company acquired intellectual property assets for RMB64.0 million (US$ 9.0 million), indicating ongoing investment in strategic assets[548]. - Capital expenditures were RMB6.5 million (US $0.9 million) in 2023, down from RMB32.3 million in 2021 and RMB6.6 million in 2022[547]. Financing Activities - Net cash used in financing activities was RMB9.4 million (US$ 1.3 million) in 2023, primarily for the repurchase of ordinary shares[546]. Revenue and Currency - The company expects future revenues to be primarily denominated in Renminbi, with existing foreign exchange regulations allowing for certain transactions without prior approval[541]. Valuation Metrics - The fair value per ordinary share as of the valuation date is US$0.41[559]. - The risk-free rate used in the valuation is 3.44%[559]. - The expected volatility for the options granted is 71.71%[559]. - The exercise multiple ranges from 2.2 to 2.8[559].