Stock Code: 603444 Stock Name: G-bits
G-bits Network Technology (Xiamen) Co., Ltd.
2023 Annual Report (Summary)
March 2024
Should there be any discrepancy between the English version and the Chinese version of this Report,the Chinese version shall prevail.
Part I Important NotesI. The summary of the Annual Report is extracted from the full text of the Annual Report.To gain a thorough understanding of the Company's operational achievements, financialstatus, and future development plans, investors are advised to carefully read the fullAnnual Report on the website www.sse.com.cn.II. The board of directors (or the “Board”), supervisory board, directors, supervisors, andsenior management of the Company guarantee the truthfulness, accuracy, andcompleteness of the annual report, ensuring that there are no false records, misleadingstatements, or material omissions. They also bear individual and joint legalresponsibilities.III. All directors of the Company attended the board meeting for the review of the AnnualReport.IV. KPMG Huazhen LLP has issued a standard unqualified audit opinion for the Company.V. The profit distribution proposal or reserve capitalization proposal for the ReportingPeriod approved by the Board of directorsIn recent years, the number of R&D personnel in the Company has been continuouslyincreasing. By the end of 2021, 2022, and 2023, the company had 530, 692, and 855 R&Dpersonnel, respectively, with a sustained increase in R&D investment. However, due to factorssuch as intensified market competition and changes in consumer willingness to spend, the coreproduct revenue of the Company experienced a decline. Taking into account the aforementionedfactors, as well as the potential capital investment in subsequent reserve projects, the capitalneeds for overseas business development, and the funding requirements for the execution ofrepurchase plans, the Board of Directors of the Company, at its 20th meeting of the 5th session,deliberated and decided not to distribute cash dividends for the year 2023, nor to distribute profitsin any other form.To share the operational achievements and boost investor confidence, it is proposed toauthorize the Board of Directors to decide on the mid-term profit distribution plan for 2024
(including the semi-annual and first three quarters) under the following conditions and implementit within the specified period: (1) The Company is profitable for the period, and the accumulatedundistributed profits are positive. After evaluating the current operating conditions and the fundsrequired for sustainable future development, the Board of Directors deems the funds to besufficient, and it is suitable to distribute cash dividends for the period; (2) The cumulative amountof cash dividends during the period shall not exceed 100% of the net profit attributable toshareholders of the Company.The above proposal is subject to approval by the shareholders' meeting.The Company completed the cash dividend distribution for the 2023 interim period onSeptember 27, 2023, totaling RMB 504 million. The cash dividend amount for the full year 2023accounted for 44.82% of net profit attributable to shareholders of the Company in the Company's2023 consolidated financial statements.
Part II Basic Information of the Company
I. Company Profile
| Stock Profile | ||||
| Types of Stocks | Stock Exchange | Stock Name | Stock Code | Previous Stock Name |
| A-shares | Shanghai Stock Exchange | G-bits | 603444 | N/A |
| Contact Information | Board Secretary | Securities Affairs Representative |
| Name | LIANG Lili | CAI Luxi |
| Telephone | 0592-3213580 | 0592-3213580 |
| Office Address | G-bits Building, No.4 Wang Hai Road, Software Park II, Xiamen | G-bits Building, No.4 Wang Hai Road, Software Park II, Xiamen |
| ir@g-bits.com | ir@g-bits.com |
II. Key Accounting Data and Financial Indicators of the Company（I） Key Accounting Data and Financial Indicators for the Past 3 Years
Unit: RMB Yuan
| Item | 31 December 2023 | 31 December 2022 | YoY+/- (%) | 31 December 2021 |
| Total assets | 6,636,771,238.42 | 6,490,420,298.78 | 2.25 | 7,103,275,522.22 |
| Equity attributable to shareholders of the Company | 4,463,842,027.96 | 3,978,734,566.03 | 12.19 | 4,580,137,503.55 |
| Item | 2023 | 2022 | YoY+/- (%) | 2021 |
| Operating revenue | 4,184,851,388.03 | 5,167,615,488.17 | -19.02 | 4,619,046,080.80 |
| Net profit attributable to shareholders of the Company | 1,125,119,212.35 | 1,460,874,459.68 | -22.98 | 1,468,498,092.21 |
| Net profit attributable to shareholders of the Company after deducting non-recurring profits and losses | 1,118,962,328.86 | 1,468,317,227.00 | -23.79 | 1,225,770,911.42 |
| Net cash flows from operating activities | 1,185,500,983.67 | 1,752,393,962.54 | -32.35 | 2,418,288,430.93 |
| Weighted average return on equity (%) | 26.04 | 32.49 | a decrease of 6.45 percentage points | 35.97 |
| Basic earnings per share (RMB/share) | 15.63 | 20.33 | -23.12 | 20.43 |
Description:
i. Overview of Main Game Revenue and Profits
1. Domestic Game Business
（1） The operating revenue and profit of Asktao (PC) this year remained basically flatcompared to last year;
（2） The operating revenue of Asktao (Mobile) this year decreased compared to lastyear, with distribution expenses remaining basically stable, resulting in a decrease in overall profitcompared to last year;
（3） The operating revenue and distribution expenses of Overmortal (Mainland Version)decreased significantly compared to last year. However, the decrease in operating revenuecompared to the decrease in distribution expenses was greater this year, resulting in a significantdecrease in overall profit compared to last year;
（4） Aobi Island: Dreamland was launched in July 2022. The operating revenue thisyear decreased compared to last year, but the decrease in distribution expenses this year wasgreater (mainly due to the large distribution expenses at the initial launch in 2022). The productprofits turned losses into profits this year;
（5） Dragon POW! was launched in August 2023, contributing incremental revenue.The initial distribution expenses was substantial, and as of the end of this period, it has not yetmade a profit;
（6） Beasts Evolved 2 and Pica Town: Dream Origin Gameplay were launched inDecember 2023, and as of the end of the reporting period, the games are still in a loss-makingstate.
2. Overview of Overseas Business
This year, the Company's overseas revenue totaled RMB 272 million, an increase of
5.03% compared to last year. The Company primarily launched Overmortal (European and
American version) overseas this year. As of the end of the reporting period, the overall overseasgaming business has not yet generated profits.ii. Overview of Company Personnel
1. At the end of the reporting period, the total number of employees was 1,447, an increaseof 193 compared to the end of the previous year (a growth of 15.39%). Among them, the numberof R&D personnel increased by 163, and the number of operational personnel increased by 24.
2. The average monthly number of employees in the Company this year was approximately1,386, an increase of approximately 246 compared to last year (a growth of 21.58%). Amongthem, the number of R&D personnel increased by approximately 159, and the number ofoperational personnel increased by approximately 83.
The number of Company employees increased compared to the previous year, resulting incorresponding increases in basic salaries and related expenses. However, bonuses provided bythe Company based on operational performance decreased compared to the previous year,resulting in a slight decrease in overall personnel-related expenses.iii. Overview of Equity Investment Business
The Company's investment targets mainly consist of upstream and downstream enterprisesin the game industry or industry investment funds. There were a few new equity investments thisyear. The total return from investment business this year (including investment income, gains orlosses from changes in fair value, assets impairment losses, etc.) are detailed in the table below:
Unit: RMB Yuan
| Item | 2023 | 2022 |
Investment income recognized under the equitymethod for joint ventures and associates(Profits of the investee recognized based onownership percentage)
| Investment income recognized under the equity method for joint ventures and associates (Profits of the investee recognized based on ownership percentage) | 9,207,061.64 | 74,292,570.87 |
Provision for impairment of long-term equityinvestments(Impairment of equity investments)
| Provision for impairment of long-term equity investments (Impairment of equity investments) | -19,961,119.52 | -143,022,342.67 |
Investment income(Gain on disposal of equity investments)
| Investment income (Gain on disposal of equity investments) | 2,198,115.56 | -54,000.00 |
Gain or loss from fair value changes of other non-current financial assets
| Gain or loss from fair value changes of other non-current financial assets | -42,380,484.84 | -67,007,069.44 |
| Item | 2023 | 2022 |
(Fair value changes of investees)
(Fair value changes of investees)Investment income during the holding period ofother non-current financial assets(Dividends from investees)
| Investment income during the holding period of other non-current financial assets (Dividends from investees) | 6,180,720.21 |
Total
| Total | -50,936,427.16 | -129,610,121.03 |
iv. Overview of Foreign Exchange Gain/LossesThe period-end central parity rate of the USD against the RMB was 7.0827, representingan increase of 1.70% compared to the end of the previous year. Some of the Company'stransactions are settled in USD, and the Company holds a relatively large amount of USD. Theincome generated from exchange rate changes this year amounted to RMB 31.51 million (ofwhich RMB 19.17 million is attributable to shareholders of the Company). In comparison, theincome generated from exchange rate changes in the same period last year was RMB 173 million(with the exchange rate at the end of the previous year increasing by 9.24% compared to theend of the year before last), This year's income generated from exchange rate changesdecreased by RMB 141 million compared to the previous year.v. Overview of Operating Cash Flow
1. The net cash flow from operating activities for the current year decreased by 32.35%compared to last year, mainly due to a year-on-year decrease in revenue from core products,resulting in a decrease in cash inflows from operating activities.
2. The year-on-year decrease in operating revenue for the current year was 19.02%, whichis roughly equivalent to the decrease in cash inflows from operating activities (a year-on-yeardecrease of 17.78%). However, the year-on-year decrease in cash outflows from operatingactivities was only 10.76%. Therefore, the decrease in net cash flow from operating activitiesexceeded the decrease in operating revenue.vi. Overview of Deferred Game Revenue
As of December 31, 2023, the Company's unamortized deferred game revenue balanceamounts to 441 million yuan, a decrease of RMB 115 million compared to the previous year-end
balance of RMB 556 million. The main reasons are:
1. The Company's cooperation with the developer of Mole's World expired on May 26, 2023,and the Company recognized the deferred revenue balance as operating revenue during thereporting period, as the performance obligations are no longer required.
2. The decrease in revenue from core products led to a corresponding decrease in thebalance of deferred revenue.vii. Adjusted Net Profit Attributable to Shareholders of the Company
To better reflect the operating performance of the Company's main business, the impact ofexchange rate changes and equity investment activities on profit has been excluded. Theadjusted net profit attributable to shareholders of the Company for the year 2023 decreased by
21.35% compared to last year. The summary is as follows:
Unit: RMB Yuan
| Item | 2023 | 2022 |
Net profit attributable to shareholders of the Company
| Net profit attributable to shareholders of the Company | 1,125,119,212.35 | 1,460,874,459.68 |
Less: (1) Changes in Equity Holdings Period (Gainsor Losses from Changes in Fair Value,, InvestmentIncome, and Asset Impairment Losses, etc.)
| Less: (1) Changes in Equity Holdings Period (Gains or Losses from Changes in Fair Value,, Investment Income, and Asset Impairment Losses, etc.) | -60,053,823.16 | -107,674,340.91 |
(2) Foreign Exchange Gains
| (2) Foreign Exchange Gains | 19,167,301.84 | 104,159,091.54 |
(3) Taxes and Charges Related to Investment
Operations and Foreign Exchange Movements
| (3) Taxes and Charges Related to Investment Operations and Foreign Exchange Movements | -2,522,112.51 | -21,352,917.98 |
Adjusted Net Profit Attributable to Shareholders of theCompany
| Adjusted Net Profit Attributable to Shareholders of the Company | 1,168,527,846.18 | 1,485,742,627.03 |
（II） Quarterly Key Accounting Data during the Reporting Period
| Q1 | Q2 | Q3 | Q4 | Total |
Operatingrevenue
| Operating revenue | 1,144,370,036.56 | 1,204,554,622.60 | 957,847,434.54 | 878,079,294.33 | 4,184,851,388.03 |
Net profitattributable toshareholders ofthe Company
| Net profit attributable to shareholders of the Company | 306,552,774.63 | 369,418,231.91 | 183,338,216.61 | 265,809,989.20 | 1,125,119,212.35 |
Net profitattributable toshareholders ofthe Companyafter deductingnon-recurring
| Net profit attributable to shareholders of the Company after deducting non-recurring | 280,615,068.87 | 365,081,137.68 | 178,116,785.81 | 295,149,336.50 | 1,118,962,328.86 |
| Q1 | Q2 | Q3 | Q4 | Total |
profits andlosses
profits andlossesNet cash flowsfrom operatingactivities
| Net cash flows from operating activities | 245,586,232.47 | 356,063,608.17 | 222,909,244.23 | 360,941,898.80 | 1,185,500,983.67 |
Description:
1. The decrease in fourth-quarter revenue compared to the third quarter is mainly due to adecrease in revenue from core products and a relatively small contribution from newly launchedproducts.
2. The increase in net profit attributable to shareholders of the Company in the fourthquarter compared to the third quarter is mainly due to:
（1） In the first three quarters of the year, the provision for bonuses was relativelysufficient based on operating performance. However, at the year-end, a portion of the bonuseswas offset based on the Company's annual operating performance, project performance, andemployee performance.
（2） In the fourth quarter of the year, Xiamen Leiting Interactive Network Co., Ltd. offsetthe difference between the provision for income tax based on a 25% rate in 2022 and the actualsettlement and payment of taxes. Based on cautious consideration, income tax was stillprovisioned at a rate of 25% for the year 2023.
3. The increase in net cash flow from operating activities in the fourth quarter compared tothe third quarter is mainly due to:
（1） The Company typically pays salaries on the 5th of each month. However, due to theNational Day holiday, salaries were paid at the end of September, resulting in lower salarypayments in the fourth quarter compared to the third quarter.
（2） Fluctuations in quarterly performance and the tax declaration period resulted in lowertax payments in the fourth quarter compared to the third quarter.
III. Shareholder Composition（I） Number and shareholding of the Company's shareholders
| Total number of ordinary shareholders at the end of the reporting period | 21,808 |
Total number of ordinary shareholders as of the end of the previous month beforethe disclosure date of the annual report
| Total number of ordinary shareholders as of the end of the previous month before the disclosure date of the annual report | 26,350 |
Total number of preferred shareholders with voting rights restored at the end of thereporting period
| Total number of preferred shareholders with voting rights restored at the end of the reporting period | - |
Total number of preferred shareholders with voting rights restored as of the end ofthe previous month before the disclosure date of the annual report
| Total number of preferred shareholders with voting rights restored as of the end of the previous month before the disclosure date of the annual report | - |
Top 10 shareholders
Top 10 shareholdersName ofshareholder
| Name of shareholder | Increase/decrease in the Reporting Period | Number of shares held at the end of the reporting period | Shareholding percentage (%) | Restricted shares held | Pledged, marked, or frozen shares | Nature of Shareholder | |
| Status | Quantity | ||||||
LU Hongyan
| LU Hongyan | -216,860 | 21,412,615 | 29.72 | None | Domestic individual |
CHEN Tuolin
| CHEN Tuolin | 8,240,025 | 11.44 | None | Domestic individual |
Hong KongSecuritiesClearingCompany Ltd.
| Hong Kong Securities Clearing Company Ltd. | 1,457,789 | 7,058,812 | 9.80 | None | Overseas corporation |
HUANG Zhihui
| HUANG Zhihui | -75,500 | 1,374,782 | 1.91 | None | Domestic individual |
LI Peiying
| LI Peiying | 1,350,000 | 1.87 | None | Domestic individual |
ZhongtaiSecurities AssetManagement -China MerchantsBank - ZhongtaiXinghe No. 12Collective AssetManagement Plan
| Zhongtai Securities Asset Management - China Merchants Bank - Zhongtai Xinghe No. 12 Collective Asset Management Plan | -437,459 | 891,281 | 1.24 | None | Other |
China MinshengBank Co., Ltd. -Huaxia CSIAnimation &Game Exchange-Traded Open-EndIndex SecuritiesInvestment Fund
| China Minsheng Bank Co., Ltd. - Huaxia CSI Animation & Game Exchange-Traded Open-End Index Securities Investment Fund | 546,936 | 682,008 | 0.95 | None | Other |
ChinaConstruction BankCorporation -Zhongtai KaiyangValue-Optimized
| China Construction Bank Corporation - Zhongtai Kaiyang Value-Optimized | -139,623 | 423,811 | 0.59 | None | Other |
Flexible AllocationMixed-TypeSecuritiesInvestment Fund
China UniversalAssetManagement－China LifeInsurance Co.,Ltd. - DividendInsurance－ChinaUniversal AssetManagementGrowth EquityPortfolio SingleAssetManagement Plan(Available forSale)
| China Universal Asset Management－China Life Insurance Co., Ltd. - Dividend Insurance－China Universal Asset Management Growth Equity Portfolio Single Asset Management Plan (Available for Sale) | 409,700 | 409,700 | 0.57 | None | Other |
Ping An Fund -Ping An LifeInsuranceCompany ofChina, Ltd. - PingAn Life - Ping AnFund EquityEntrustedInvestment No. 1Single AssetManagement Plan
| Ping An Fund - Ping An Life Insurance Company of China, Ltd. - Ping An Life - Ping An Fund Equity Entrusted Investment No. 1 Single Asset Management Plan | -217,776 | 398,968 | 0.55 | None | Other |
Related or acting-in-concert partiesamong the shareholders listed above
| Related or acting-in-concert parties among the shareholders listed above | N/A |
Explanation of preferredshareholders with voting rightsrestored and their shareholdingquantities
| Explanation of preferred shareholders with voting rights restored and their shareholding quantities | N/A |
（II） Diagram of Equity and Control Relationships Between the Company andControlling Shareholder
（III） Diagram of Equity and Control Relationships Between the Company and theUltimate Controlling Party
Part III Management Discussion and Analysis
I. Discussion and Analysis of Business OperationsThe Company specializes in the development and operation of online games, with a focuson nurturing innovative talent and promoting efficiency. The Company’s mission is to presentunique products and enriching entertainment to a global audience.
In terms of in-house game development, the Company's self-developed products such asAsktao (PC), Asktao (Mobile) and Overmortal have garnered a strong following among playersand maintained solid profitability. Asktao (PC) has been in continuous operation for nearly 18years since its launch in 2006, releasing key updates such as New Year versions, anniversaryversions, mid-year versions, and zodiac-themed versions, all of which have been well-receivedby players. Asktao (Mobile), available for almost 8 years, has consistently performed well, withan average ranking of 35th on the App Store's bestselling games list during the reporting period,with a peak ranking of 10th place. Overmortal, launched in February 2021, has maintained anaverage ranking of 44th on the App Store's bestselling games list during the reporting period,with a peak ranking of 7th place.In terms of game operation, the Company maintains a "boutique" approach through its self-operated platform, Leiting Game, implementing a differentiation strategy. Over years ofaccumulation and refinement, Leiting Game has developed outstanding game operationcapabilities and has successfully operated a diverse portfolio of games, including Asktao (Mobile),Overmortal, Aobi Island: Dreamland, Dragon POW!, World Flipper, Tale of Immortal (PC),Dungeon Survivor II: Dark Tide (Android), Dungeon Survivor III: Dark Genesis, Funny Fighters:
Battle Royale, and Gumballs, among others.
In the future, the Company will continue to iterate and update existing products to enhancegame performance and user experience, as well as prolong the lifecycle of products throughcontinuous IP development. In terms of new product research and development, the Companywill remain focused on MMORPG, idle game categories, and SLG while exploring content-oriented products. The goal is to consistently strengthen the engineering capabilities of the R&D
team and develop high-quality games that combine entertainment, playability, and commerciallyviable design. Regarding product licensing, the Company will continue to focus on classic gamingIPs, multiplayer competitive games, mid-core games, and commercially viable games withexperiential differences. This approach will be adjusted according to market dynamics and otherrelevant factors.The Company will increase its investment in overseas markets continuously. Apart from afew reserved IP-based products, all in-house developed products must be targeted towardsoverseas markets to be considered for approval. The Company will also continue to recruitoutstanding producers and distribution teams with profound insights into various culturesworldwide to accelerate the development of its overseas business.（I） Major Product PerformanceOverview of Launched Products:
| Name | In-house Developed/Licensed | Genre | Release Date |
Asktao (PC)
| Asktao (PC) | In-house Developed | Turn-Based MMORPG | April, 2006 |
Asktao (Mobile)
| Asktao (Mobile) | In-house Developed | Turn-Based MMORPG | April, 2016 |
Overmortal
| Overmortal | In-house Developed | Idle Taoist Immortality Cultivation Game | February, 2021 |
Aobi Island: Dreamland
| Aobi Island: Dreamland | Licensed | Casual Simulation | July, 2022 |
Dragon POW!
| Dragon POW! | Licensed | Fantasy Roguelike Shooting Game | August, 2023 |
Outpost: Infinity Siege
| Outpost: Infinity Siege | In-house Developed | First-Person Shooting PC Game | March, 2024 |
Monster Never Cry
| Monster Never Cry | In-house Developed | Western Fantasy Idle Game | March, 2024 |
Beasts Evolved 2
| Beasts Evolved 2 | Licensed | Strategy Card Game | December, 2023 |
Funny Fighters: Battle
Royale
| Funny Fighters: Battle Royale | In-house Developed | Casual Competitive RPG | July, 2019 |
World Flipper
| World Flipper | Licensed, in Charge of Localization Development | RPG with Pinball Element | October, 2021 |
Dungeon Survivor III:
Dark Genesis
| Dungeon Survivor III: Dark Genesis | Licensed | Dungeon RPG | October, 2021 |
Note: All the games are mobile games except Asktao (PC) and Outpost: Infinity Siege.
i. Asktao (PC)The Company’s first product, Asktao (PC), an online game that the Company developedindependently, was launched in April 2006 and quickly became a favorite among gamers, evenreaching a peak of nearly one million concurrent users. The game's excellence was recognizedwith the Best Design for Digital Balance and the Best 2D (characters/scenes) Art Design awardsat the 5th annual CGDA (China Game Developers Awards). It was also nominated as one of theTop 10 Outstanding PC Games in 2022 by CADPA (China Audio-Video and Digital PublishingAssociation).Since its release in 2006, Asktao (PC) has won players' hearts with its high-qualitygameplay and reasonable business design. To prolong the game's life cycle and increase its IPvalue, the Company adapts to market trends and player feedback to update the gameconsistently. Every year, the Company release four major updates, the new year, annual, mid-year, and zodiac updates, to keep the game fresh and maintain its profitability.
ii. Asktao (Mobile)
In April 2016, the Company launched Asktao (Mobile), an in-house developed MMORPG.It retains the narrative and world setting of Asktao (PC). Harnessing the loyal user base and IPvalue the PC version built over the past decade, and with extensive user research, it was deeplyoptimized to adapt its core gameplay to the mobile platform. The Company also incorporates
user feedback into regular updates to ensure the game meets player expectations. To extendthe game's life cycle, the Company persistently work on enhancing the Asktao brand and its IPvalue.Due to its exceptional performance, Asktao (Mobile) has gained industry recognition, andwas chosen as the 6th game to win the China Excellent Publication Award (Audio-VisualElectronic Game Publication) from the CADPA. It also won several other awards as well,including Best Original Mobile Game at the 2016 Golden Plume Awards, and Best Game MusicDesign at the 9th CGDA. It was voted one of the Top Ten Most Popular Original Mobile OnlineGames of 2016.
During the reporting period, Asktao (Mobile) continued its tradition of four major versionupdate from previous years. In January, the new year's costume was launched. The 7th-anniversary grand event in April featured a fireworks festival, a new server ceremony, and otherspecial events. The 7th-anniversary theme song, performed by singer Xianzi, awakened thesentimental feelings of fellow players in the game. In July, the summer event provided playerswith exclusive stress-relief gameplay. In October, the National Day event was introduced withthe launch of the custom short film. In November, adopting a “Fellow Daoists Create Together”approach, the game introduced its first animated series - Wulong Daoist Adventures inZhongzhou, presenting players with a rich and immersive gaming world.During the reporting period, Asktao (Mobile) maintained an average ranking of 35th on theApp Store's bestselling game list, with a peak ranking of 10th.
iii. Overmortal
Overmortal is an in-house developed, idle Taoist immortality cultivation mobile game witha traditional Chinese ink wash art style. The game depicts a Taoist realm inhabited by humans,immortals, monsters, and demons. It faithfully recreates the stages and mechanisms of Taoistspiritual cultivation, as well as displaying abilities and techniques from similar novels of the genre.Accompanied by dynamic lighting and sound effects, players will enjoy an immersive andengaging gaming experience.With outstanding game development and operational performance, Overmortal hasreceived high industry recognition, winning awards such as the Best Concept Art Design awardat the 12th CGDA, the Best Creativity for Mobile Games award at the 14th CGDA, andnominations for the Top 10 Outstanding Creative Games and Top 10 Emerging Games by theCADPA in 2021.In 2023, Overmortal officially launched the "Guardian Heritage" cultural publicwelfare project. It has successfully implemented various intangible cultural heritage publicwelfare activities, including cuju (ancient Chinese football), paper cutting, traditional opera,shadow puppetry, and more. The game was honored with the "Outstanding Cultural HeritageGame of the Year" award at the 8th Golden Gyro Award.After over three years of operation, Overmortal has accumulated over 25 million registeredusers. In the subsequent operational strategy, the Company will focus more on existing users,
refining user acquisition to reduce inefficient spending. In terms of promotion, there will be acontinued emphasis on brand exposure, moderate adjustments and control of performance-based advertising expenses, and active exploration of innovative marketing methods. For useroperations, activities such as daily live streaming, Key Opinion Consumer (KOC) promotion,content creation, e-commerce initiatives, and community re-engagement will be carried out tocontinually enhance user engagement and interaction. Simultaneously, Overmortal will persist inIP development, enriching game content with diverse derivative materials such as novels, music,comics, and animations to boost brand influence and foster a unique IP culture recognitionamong players.During the reporting period, Overmortal maintained an average ranking of 44th on the AppStore's bestselling game list, with a peak ranking of 7th.
iv. Aobi Island: Dreamland
Aobi Island: Dreamland is a casual mobile game based off an existing IP launched on July12, 2022. The game retains many iconic elements from its web-based predecessor, whileintroducing various social interaction features and integrating fashion trends such as modernizedChinese traditional styles. Players can engage in various in-game features such as characterdevelopment, management simulation, and outfit changing. The game has been updated at arapid pace since its release, providing players with a fresh and varied gaming experience.
Since its launch, the game has maintained a rapid iteration and update pace, continuouslyintroducing new events, gameplay features, and various brand/IP collaborations. Collaborationshave included partnerships with CCTV Animation Journey to the West, The Legend of Nezha,The Adventures of Little Carp, and other classic Chinese animation IPs), as well as PleasantGoat and Big Big Wolf, totaling 11 well-known brands/IPs. A series of exciting events have beenlaunched, providing players with a diverse and enriching gaming experience.
v. Dragon POW!
Launched on August 11, 2023, Dragon POW! is a top down shoot 'em up mobile game witha unique gameplay mechanic of counterattacking by devouring bullets. Players take on the roleof a dragon knight who travels through various kingdoms with a small black dragon to retrievethe lost treasures of the dragons. Instead of dodging enemy attacks, players can swallowincoming bullets to unleash powerful counterattacks, resulting in a thrilling gameplay experience.Since the game's launch, it has been widely loved by players due to its innovative differentiationin theme and gameplay.
vi. Outpost: Infinity SiegeOutpost: Infinity Siege is a first-person shooting PC game that focuses on multiplayercooperative survival, exploration, and construction. It was officially released on the Steam onMarch 27th, 2024. The game combines three gameplay elements: FPS (first-person shooter),RTS (real-time strategy), and TD (tower defense). Players can build their own exclusive outposts,casually combine a variety of weapons and ammunition, and experience diverse game modes,varied terrains, and exploration and battles filled with random elements.
（II） Overview of Main Reserve ProductsThe Company's main reserve products are as follows：
Main Reserve Products (In-house Developed)ProductsDeveloped In-House
| Products Developed In-House | Status of Game ISBN Licensing | Genre | Planned Regions for Release | Estimated Release Date |
M72 (Code Name)
| M72 (Code Name) | ISBN License Applied | Idle Taoist Cultivation Simulation | Mainland China, Hong Kong, Macao, Taiwan, and Southeast Asia | TBD |
M88 (Code Name)
| M88 (Code Name) | ISBN License Applied | Fantasy Idle Cultivation Game | Mainland China, Hong Kong, Macao, and Taiwan, as well as Japan and South Korea | Second Half of 2024 (Overseas) |
Fortress Battle
| Fortress Battle | ISBN License Obtained | Tower Defense SLG | Worldwide | TBD |
M11 (Code Name)
| M11 (Code Name) | Not Yet Applied | Western Fantasy Idle Game | Worldwide | TBD |
Note: The ISBN License is a mandatory government approval required to legally launch agame in China.
Main Reserve Products (Licensed)Licensed Products
| Licensed Products | ISBN License | Genre | Authorized Regions | Estimated Release Date |
One Piece: Dream
Pose
| One Piece: Dream Pose | Owned | 3D Vertical Adventure Mobile Game | Mainland China | April 1st, 2024 |
Billion Light Years
| Billion Light Years | Owned | Science Fiction Theme Card Game with Light SLG Elements | Worldwide | Second Half of 2024 （Mainland China） |
League of Gods：
Fantasyland
| League of Gods：Fantasyland | Owned | Chinoiserie RPG | Mainland China | Second Half of 2024 |
Chinese Cuisine Cruise
| Chinese Cuisine Cruise | Owned | Business Simulation Game | Mainland China, Hong Kong, Macao, Taiwan, and Singapore, Malaysia | 2024 （Overseas） |
Lost Castle 2
| Lost Castle 2 | Not Owned | Roguelike | Worldwide | TBD |
Note: 1. The games listed above are some of the Company's reserved products, among whichOne Piece: Dream Pose is co-distributed by Leiting Games in collaboration with othercompanies.
2. The final launch status, timing, and intended release regions of games listed in the
product reserve inventory are subject to uncertainty and may depend on products and marketconditions. Please stay up to date with the latest news and announcements from LeitingGames.
3. The game Billion Light Years is identified by the codename, and this codename isprovisional and does not represent the final official name.
The introduction of some reserve products is as follows:
i. M72 (Code Name)
M72 (Code Name) is an idle mobile game with a Taoist immortality theme. You start as anovice Taoist and gradually grow into an important member of your sect, engaging inbreathtaking adventures across three realms. The game brings to life 3D aerial combat,recreating the mid-air battles and the use of magical talismans, reminiscent of renowned Chinesefantasy tales. Having applied for a license by the end of 2023, M72 (Code Name) is nowpassionately under development.
ii. M88 (Code Name)
M88 (Code Name) is an immersive idle MMORPG mobile game. Within the game, playershave the freedom to customize their characters, combine diverse skillsets, and select theirpreferred class branches. Employing strategies to combat formidable foes, players explore therealm of lost mysterious legends in this world of sword and magic. You can build your own homes,
engage in guild activities, participate in team battles, and embark on adventurous journeys withother players, relaxing in the laid-back idle gaming experiences. The overseas version of M88(Code Name) is scheduled to be launched in the second half of 2024.
iii. One Piece: Dream PoseOne Piece: Dream Pose is an immersive 3D mobile game, designed for portrait mode,and officially licensed by Toei Animation, based on the beloved One Piece IP. As captains,players can rally companions from the New World, and step into the shoes of the Straw HatPirates, reliving their epic adventures in the One Piece universe. The game's world is craftedwith stunning details and graphics. The game has secured its license and is scheduled to belaunched on April 1st, 2024.
iv. Billion Light Years
Billion Light Years is an engaging space warfare strategy game. Players begin theirgaming experience with a midcore strategy card game, which seamlessly transitions into amore casual SLG gameplay as they progress. Within the game, players can immersethemselves in adrenaline-fueled real-time battles, strategize on ship customization andweapon combinations, and collect various types of sci-fi battleships. Additionally, players canset sail on thrilling expeditions, experience unexpected events, and team up with allies forepic cosmic battles. The game has secured its license and is scheduled to be launched inthe second half of 2024.
（III） Overseas Business Overview
The Company has been actively expanding its overseas operations, gradually establishinga comprehensive system for testing and releasing products abroad, covering most regionsoverseas. This enables the Company’s Minimum Viable Product (MVP) approach can be easilyapplied in overseas markets, allowing for earlier participation in paid testing compared to thedomestic market. This provides more comprehensive basic information and data for productselection, development, and optimization.In 2023, the Company's overseas business achieved operating revenue of RMB 272 million,representing a year-on-year growth of 5.03%. During the Reporting Period, the Companysuccessfully launched products overseas, including Overmortal (European and Americanversion), Overmortal (Vietnamese version), and Funny Fighters: Battle Royale (Southeast Asianversion). In January 2024, Dragon POW! was launched in the Hong Kong, Macau, Taiwanregions, and South Korea, while other previously launched projects continued to operate steadily.
Furthermore, several in-house developed products from the Company have undergonemultiple rounds of testing in overseas markets, adopting the MVP approach for rapid iteration.The Company also has a reserve of several licensed products for overseas distribution, includingCode M88, Billion Light Year, Chinese Cuisine Cruise, Lost Castle 2, and more.
（IV） Investment Activities OverviewThe Company continues to deepen its presence in the gaming market, focusing on theresearch and development as well as operational aspects of online gaming. Simultaneously, itinvests in upstream and downstream enterprises related to the game industry, including high-quality game developers, publishers, and industry funds.Below are introductions to some of the enterprises in which the Company has invested orholds shares:
i. Qingci Games Inc.Qingci Games, established in March 2012, specializes in online game development andoperations. It's known for The Marvelous Snail, the idle mobile game with a beautiful hand-drawnart style, and the roguelike game Gumballs. It was listed on the Hong Kong Exchanges inDecember 2021, and G-bits holds an 18.55% stake in Qingci Games.
According to publicly disclosed information from Qingci Games, the game The MarvelousSnail has been released in multiple overseas regions, including Japan, the United States,Canada, Australia, and Thailand. As of the end of 2023, the total revenue of The Marvelous Snailboth domestically and internationally has reached approximately RMB 3.26 billion, with acumulative registered user count exceeding 26.72 million.ii. TapTap
TapTap, founded in March 2016, manages the TapTap platform. G-bits holds a 9.67% stakein TapTap. TapTap platform is a renowned third-party platform connecting game developers,publishers, and players, allowing users to download high-quality games and share theirexperiences with others. From January to June 2023, the average monthly active users for theTapTap Chinese version App were approximately 33.97 million people, while the TapTapinternational version app had an average of around 7.14 million monthly active users.iii. Xiamen Yongshi Technology Co., Ltd.
Xiamen Yongshi Technology Co., Ltd., established in December 2014, focuses on online
game development and production. G-bits holds a 20.00% stake in Xiamen Yongshi. Azure Lane,an anime-style game co-developed by Xiamen Yongshi, is the first domestically producedsecond-dimensional game to top the Japanese iOS bestselling list. It received the Google PlayBest Game Award in 2017 and holds a 9.4 rating on TapTap. Another in-house developed game,Eye of Deep Space, was honored with the "Best 3D Game Award" on the 2021 Made with UnityChina list, and has garnered over 0.13 million five-star reviews on the App Store.iv. Xiamen Taojin Interactive Network Co., Ltd.
Established in June 2013, Xiamen Taojin Interactive Network Co., Ltd. focuses on onlinegame development and production. Xiamen Taojin created the popular roguelike series DungeonSurvivor. G-bits holds a 30.00% stake in Xiamen Yongshi. Developed by Taojin Interactive,Dungeon Survivor II: Dark Tide (Android Version) and Dungeon Survivor III: Dark Genesis areoperated by Leiting Game. As of the end of 2023, Dungeon Survivor II: Dark Tide (AndroidVersion) has accumulated a registered user count exceeding tens of millions.v. Xiamen Zhenyouqu Information Technology Co., Ltd.Xiamen Zhenyouqu Information Technology Co., Ltd., established in August 2012, mainlydevelops and produces online games. G-bits holds a 10.00% stake in Xiamen Zhenyouqu. It hasnumerous popular games such as Sausage Party, Ulala: Idle Adventure, and Rapid Clash. Inparticular, Sausage Party has over 240 million downloads on TapTap.vi. Unity Technologies ChinaUnity Technologies China, established on November 29, 2021, is a joint venture of US-based game engine developer Unity Technologies. G-bits holds a 1.6% stake in UnityTechnologies China. Founded in 2004, Unity Technologies is one of the leading companies inthe industry. Unity Technologies China is committed to creating a more suitable engine versionfor local developers, and its products have extensive applications in various fields such asgaming, automotive, consumer culture and tourism, industrial manufacturing, and film andanimation. In 2023, Unity Technologies China officially launched the Unity Technologies ChinaEdition Engine, marking the commencement of the localization process for Unity in China.
vii. PeroPeroGames
PeroPeroGames, founded in August 2017, mainly develops and produces online games.G-bits holds a 15.00% stake in PeroPeroGames. Its parkour-themed music game Muse Dashhas accumulated sales exceeding 10 million copies, and it boasts a positive user review rate of90% on the Steam.II. Industry Overview During the Reporting Period（I） Industry LandscapeThe cultural industries of online gaming and online animation are important branches of theinternet economy, benefiting from the overall growth of the internet industry and exhibiting rapiddevelopment over an extended period. In recent years, as the demographic dividends of thegame industry have gradually diminished, the market has entered a stage of stock competition.The industry growth rate is gradually slowing down, marking a period characterized by bothchallenges and opportunities.According to the 2023 China Game Industry Report jointly released by the Game PublishingCommittee of China Audio-visual and Digital Publishing Association (GPC) and the China GameIndustry Research Institute, the Chinese game user base reached 668 million people, with ayear-on-year growth of 0.61%. The actual sales revenue of the China’s domestic game marketin 2023 reached RMB 302.96 billion, a year-on-year growth of 13.95%. This growth was primarilydriven by the release of high-quality new games. In the segmented market, mobile games stillmaintain a leading position, with actual sales revenue accounting for 74.88%. In addition, PCand console games also have a considerable number of products and audiences, and new trackssuch as cross-platform games and mini-games have shown impressive performance, making theindustry growth direction more flexible and diverse.
"Going global" remains a key development strategy for many gaming companies in China.According to the 2023 Research Report on Chinese Gaming Overseas compiled by China Audio-visual and Digital Publishing Association (GPC) and the China Game Industry Research Institute,the actual sales revenue of games developed independently by China in overseas markets in2023 reached US$16.37 billion, experiencing a 5.65% year-on-year decrease. Intensecompetition in the international market, rising costs of acquiring traffic, and a lack of localizedtalent are significant challenges for China gaming companies venturing into overseas business.
Furthermore, technological innovation has become a key driver of global competitivenessin the game industry. In 2023, the emergence of various AI tools has played an increasinglyimportant role in improving game development efficiency and content generation quality, drivingmore innovation applications in the gaming field, and bringing about more changes andopportunities. Therefore, adhering to high-quality and refined development, embracing a dual-drive strategy of technology and content innovation, continuously cultivating differentiated tracks,and placing more emphasis on user experience have become strategic means for the Chinesegame industry to face competition and achieve healthy development.
（II） Impact of Industry Policies on the Company's SectorIn recent years, regulatory authorities have attached great importance to the standardizedand healthy development of the game industry, issuing a series of policies related to theprotection of minors and prevention of gaming addiction. Since the implementation of the revisedLaw of the People's Republic of China on Protection of Minors in 2021 and the issuance of theNotice of Further Strict Management to Effectively Prevent Minors from Addiction to OnlineGames, the gaming regulatory authorities, the game industry, and various sectors of society havecollaborated efforts. Approved games have achieved comprehensive access to the anti-addictionreal-name authentication system. The total gaming duration and spending limits for minors havesignificantly decreased, marking a phased achievement in the efforts to prevent gaming addictionamong minors. On January 1, 2024, the Regulation on the Protection of Minors in Cyberspaceofficially came into effect, providing more specific guidelines for the improvement andimplementation of the protection of minors in the game industry.
In addition to emphasizing the implementation of the basic requirements of the anti-addiction gaming system, regulatory authorities have also put forward correspondingrequirements for user information protection, product content review, and the development offunctional games. This indicates the key areas for the future work of gaming enterprises,emphasizing the need to enhance the protection of personal information security while ensuring
the protection of minors.As the policy environment for the game industry in our country continues to optimize, withsuccessive laws, regulations, and institutional norms being introduced, and a continued focus onhigh-quality original games, awareness of protecting gaming intellectual property rights hasfurther increased. The ecological environment of the game industry in our country is becominghealthier and more standardized, moving towards high-quality and high-level development.III. Overview of Core Business During the Reporting Period（I） Core Business Operations of the Company
The Company specializes in the development and operation of online games, with a focuson nurturing innovative talent and promoting efficiency. The Company’s mission is to presentunique products and enriching entertainment to a global audience.Founded in 2004, the Company has immersed itself in the game industry. Through yearsof development and technological advancement, the Company has grown significantly,enhancing its technical capabilities and expanding its product portfolio. Rooted in traditionalChinese culture, the Company has developed games such as Asktao (PC), Asktao (Mobile), andOvermortal. Asktao (PC) has been in continuous operation for nearly 18 years since its debut in2006. Building on its strong user base and IP popularity, the Company launched the mobileversion of the MMORPG Asktao(Mobile) in April 2016, which has enjoyed steady popularity fornearly 8 years. In February 2021, the Company launched Overmortal, an ink-wash style idlemobile game about the Taoist cultivation of immortality. Since its release, it has attracted over25 million users.Leiting Games, a platform the Company operates independently, has robust gamemanagement capabilities. Leiting Games has managed a wide range of games such as Asktao(Mobile), Overmortal, Aobi Island: Dreamland, Dragon POW!, World Flipper, Tale of Immortal(PC), Dungeon Survivor II: Dark Tide (Android), Dungeon Survivor III: Dark Genesis, FunnyFighters: Battle Royale, and Gumballs, among other successful titles.
（II） Primary Business Model of the Companyi. Revenue Streams
The payment models for online games primarily include pay for virtual items, pay fordownloads, pay based on playtime, and in-game advertising. The Company's game productrevenue mainly comes from the payment model based on virtual items, wherein players can enterthe game for free, and the operator primarily profits from selling virtual items within the game.Payment for virtual items is the prevalent revenue model adopted by the online game industry inChina.ii. Operating ModelsThere are three main operating models for the Company’s games: independent operation,licensed operation, and cooperative operation.
1) Independent Operation: The Company publishes games on its platform and handlesboth publishing and promotion. These games might be developed by the Company or by otherorganizations.
2) Licensed Operation: The Company licenses games developed by itself to externalpublishers, who are responsible for managing the game's publishing and promotion. TheCompany’s role is limited to technical support and content development.
3) Cooperative Operation: The Company partners with third-party platforms, such as theApp Store and Android application stores, to co-publish and promote its games, whetherdeveloped by the Company itself or licensed.
The Company’s mobile games mainly follow the independent operation and cooperativeoperation models. For example, Asktao (PC) is licensed to Beijing Guangyu Online TechnologyCo.,Ltd., and other PC games from the Company’s mainly follow the cooperative operation model.
（III） Analysis of Core Competencies During the Reporting Periodi. Strong Independent Research and Development (R&D) Capabilities
1. Overview of the Company’s R&D Performance
The Company attached great importance to R&D and talent development. During thisreporting period, The Company’s R&D expense amounted to RMB 679 million, accounting for
16.23% of its revenue. This sustained investment has laid the foundation for its innovation. TheCompany’s R&D team has grown year on year, with the number of employees reaching 530 in2021, 692 in 2022, and 855 in 2023, representing 56.08%, 55.18%, and 59.09% of the totalnumber of employees respectively.
2. Boost R&D Performance with the Minimum Viable Product (MVP) ApproachGames, as a form of cultural entertainment, derive their strength from delivering fresh andcaptivating experiences to users. The Company places significant emphasis on productinnovation, striving to develop games that stand out both unique and commercially. By focusing
on differentiation, the Company continuously explores innovative approaches in core gameplay,conceptualization, art style, and other aspects, thereby enhancing the competitive edge of itsproducts. However, this pursuit of differentiation also escalates the complexity of projectdevelopment, necessitating enhanced capabilities in gameplay refinement, project management,and data analysis within the development teams. Drawing from years of experience, theCompany has embraced an iterative development model known as the MVP approach in its R&Dprocess.
In applying the MVP approach to the Company’s R&D, at the start of a project, the Companyassembles a core team to develop a prototype based on the creative designer's idea. Extensiveuser testing is then used to validate the feasibility of the core gameplay mechanics. Throughoutthe development process, the game undergoes numerous iterations and is fine-tuned based ontest data. This MVP approach, starting from the demo version, allows the Company to keep atight rein on product direction, avoid wasteful investments, and control R&D costs. Frequenttesting during development helps the Company to control variables between two successive tests,allowing the Company to analyze user behavior feedback more accurately. As a result, theCompany has able to address issues that arise during development in a timely manner,increasing R&D efficiency. As the demo evolves into a final project, the Company continuallyrefines and adapts the MVP approach to ensure seamless integration between gameplay testingand art assets.
While the MVP approach is effective in controlling R&D costs, it doesn't imply smallerprojects or less overall investment. The scope of the project depends on the experience of thecore team, project management skills, technological accumulation, the nature of the project, etc.The Company is committed to nurturing excellent game producers over the long term, andthrough the MVP approach, the Company filters projects and allocates more resources in thehope of producing more innovative, engaging, and high-quality products.
In addition, the MVP approach involves the Company’s operations team working closelywith the R&D team on a variety of tests and analyses. This allows the Company to gain a deepunderstanding of the market and users of its products, so that the Company can tailor itsstrategies and minimize the risks and costs of release.
3. Middle Platform Construction, A Strong R&D Foundation
The Company has prioritized the establishment of solid R&D middle platforms. Thisincludes the Company’s Technical Center, Art Center, Audio Department, and Test Center.These pillars support every aspect of development, from R&D and art design, to soundtrackcreation and product testing. This system not only ensures development, efficiency, and highquality output, but also optimizes the allocation of resources across projects, minimizingredundant costs and ensuring a stable R&D process.
The Company’s Technical Center specializes in game development, focusing on both
conventional and emerging technologies. It provides strong support including performancetesting and optimization, effectively tackling technical challenges and improving R&D efficiency.Currently, the Technical Center focuses on developing compilers and auxiliary tools for GS, whilebuilding server frameworks and various public services rooted in GS. It's designing PKG anddevelopment tool chain is based on the GS environment, so that it can develop universal toolsfor all R&D teams and provide automated building and deployment solutions. The centerconducts in-depth research on Unity, Unreal engine, and 3D rendering technologies. The centerstandardizes, modularizes, and builds frameworks for projects to provide service tailored to theneeds of different teams. As a result, The Technical Center manages to reduce both theresources and time costs of game development, while improving R&D quality. In addition, TheTechnical Center applies cutting-edge AI technologies across all stages of game development,including planning, development, and testing, improving both the R&D efficiency and the overallgaming experience. In 2023, it established an AI Web Hub within the company, consolidatingvarious commonly used AI drawing tools, thereby facilitating painting-related tasks andenhancing efficiency.The Company’s Art Center focuses on improving the quality and style of game art. Itestablishes efficient pipelines for 2D, 3D, and content-oriented production lines, laying a solidfoundation for both existing and future projects. Tailoring unique art styles to fit each game'stheme, the Art Center strives to create differentiated game experiences while catering to diverseaesthetic preferences, incorporating mainstream elements to evoke emotional resonance withplayers. Through continuous testing and iteration, it seeks the optimal balance betweendistinctiveness and mainstream appeal. Focusing on artistic excellence, the Art Center setsrigorous standards and guidelines for each product, continually enhancing design capabilitiesand quality control. The Art Center closely monitors the development of new technologies in itsdaily work and actively promotes the application of cutting-edge technologies such as AIGC ingame art. In the field of game image generation, these techniques are utilized to create artisticoriginal drawings and in-game assets, including icons. These AI drawing tools help reduce thetime and resources required for producing a large volume of content, enabling a more efficientworkflow and enhancing the productivity of game art production.
The Company’s Audio Department is dedicated to creating immersive audio that integrateswith the game's narrative and gameplay. It pioneers the use of state-of-the-art audio and AItechnology to effectively create audio that enhances the gaming experience and is tailored toplayer preferences.The Company’s Test Center manages project testing for daily and version updates toensure that the performance is up to the standard. The center ensures a stable allocation oftesting resources, improving both the efficiency and standardization of our testing process. Bydrawing on past experience, it provides reusable testing methodologies to ensure that our gamesmaintain a stable quality.ii. Exceptional Game Operations
1. Overview of Company's Game Operations
Leiting Games, an independently operated platform, is committed to a quality-firstapproach that prioritizes the user experience. The high-quality, unique, and highly engaginggames under Leiting Games' operations have gained significant popularity and earned anexcellent reputation.
With years of experience, Leiting Games has developed a comprehensiveunderstanding of operating various game genres including MMORPG, Roguelike, idle games,and casual simulation. Leiting Games' operational framework covers everything, such as gameversion optimization, brand development, media outreach, event planning, cooperative channels,customer support, etc. With a keen understanding of the unique features of mobile games andthe target market, as well as a sharp insight into player demographics, behaviors, and spendinghabits, Leiting Games tailor its strategies to deliver precise and effective promotion.
2. Player-Centric Approach for Long-Term Operations
The Company upholds a "player-centric" game design and operation philosophy, dedicatedto fostering enjoyable experiences in the entertainment industry.The Company deeply understands user needs and creates high-quality original gamesbeloved by players. After the game launches, the Company strengthens communication withplayers through various channels. For example, the Asktao (Mobile) project team conducts onlineactivities annually and organizes offline events to interact with core players regarding gameversion planning, promotion plans, and other aspects. Moreover, the Company listens tofeedback from key opinion leaders (KOLs) and collaborates with players to "customize" the game.The Company actively responds to user demands, providing sincere and comprehensivecustomer service. Guided by the service philosophy of "becoming an official friend to users andcreating a wonderful service experience," the Company embeds a "Contact Customer Service"button within games. It provides players with comprehensive and meticulous service through
various channels such as a 24-hour customer service hotline, WeChat customer service officialaccount, customer service forums, and customer service email, catering to users' real-timeinquiries, complaints, feedback, and other requests. Additionally, to improve response speed, theCompany utilizes advanced technologies such as AI to build an intelligent self-service system,further enhancing customer service levels. A service quality inspection team is also establishedto monitor service quality daily, aiming to enhance player experience.
3. Precision and Effective Marketing Promotion Strategies
In recent years, "buying traffic" has become an important promotion method in the gameindustry. However, its rising cost can negatively impact a game's profitability. Over the years, theCompany has consistently prioritized creating unique, high-quality products and tailoring itspromotion strategies accordingly. The Company’s promotion plans are based on the game'sfeatures, the target market, and our understanding of the player base — their preferred platforms,behaviors, and spending habits. Simultaneously, the Company explores customer acquisitionfrom various methods, including daily live streaming, Key Opinion Customer (KOC) promotion,content creation, e-commerce, and community re-engagement. This allows the Company toreach its target audience effectively and precisely, while avoiding over-reliance on "buying traffic".
（1） User Relationship Management
The Company values user relationship management as it facilitates communicationbetween the Company and its players. It allows the Company to meet the evolving demands ofour players by understanding their needs deeply, a strategy that benefits its relationship with theusers and enhances the Company’s reputation within the industry. With sincerity towards theplayers being the core of the Company’s operations, game designers, promotions staff, andcustomer support personnel organized numerous events for players. Some activities for users ofAsktao (Mobile) are as follow:
Since 2016, Asktao (Mobile) project team has been organizing multiple “Designers Talk”events annually in different cities, providing an opportunity for game designers to engage withplayers. By the end of 2023, they have covered a total of 18 cities, including Wuhan, Chengdu,Hangzhou, and others. Starting from 2018, Asktao (Mobile) project team has held an annualAsktao Conference, which gives players an opportunity to engage in in-depth discussions andparticipate in fun events, either online or offline. In 2023, Asktao (Mobile) project team gatheredoffline with 51 players to discuss 102 topics. Since 2017, Asktao (Mobile) has held a nationalcompetition every year, attracting a huge number of participants. The competition includes warm-ups, point-based matches, city matches (offline), knockout stages, and finals (offline), creatingan energetic and engaging environment. In 2023, the national championship-related livebroadcasts or videos of Asktao (Mobile) reached 5.33 million people, with an official online livebroadcast accumulating 0.19 million views.
（2） Advertising
The Company primarily engages in advertising promotion activities on platforms with activeuser engagement by deploying advertising materials, Key Opinion Customer (KOC)recommendations, gaming live streams, and various other methods. At the same time, theCompany supports UGC (user-generated content) across multiple platforms to spread theproduct information faster and further. The Company also focuses on user retention with well-designed gameplay and customer service. The Company believes that improving the userexperience is the key to higher user retention and long-term product success.
In response to traditional “buying traffic” methods, the company consistently refines itsadvertising delivery model to adapt to changes in the market and user demands. It strives toreach the target audience with lower acquisition costs, enhancing the level of Return onInvestment (ROI). In terms of innovative marketing, the Company’s games like Asktao (Mobile)and Overmortal have run KOL (key opinion leader) promotional campaigns on short videoplatforms based on the dates of major version updates and user activities. These targetedpromotions ensure a continuous flow of new users. Furthermore, the Company continuouslyexplores and experiments with various innovative marketing strategies, including the TikTokCreator Program, native bidding ad placements, cloud-based micro-end advertising, and e-commerce live streaming.
（3） IP Development
The Company’s IP development aims to enrich the game's world, character portrayals, andstorylines to deepen players' immersion and emotional connection to the game.
Asktao (Mobile), a classic IP that has been in operation for almost 18 years, represents theCompany’s efforts to strengthen the Asktao brand. To build the brand, the Company is enhancinggame stories and player immersion through various Asktao IP derivatives, including novels,audiobooks, merchandise, and short films. From 2018 to 2021, Asktao (Mobile) successivelyreleased two official novels, Asktao: Dashing Spear and Asktao: Tao in the Heart. The Companyinvited dozens of veteran players to participate in creative discussions and trial readings for thenovels, aiming to vividly depict the world of Asktao (Mobile) as envisioned by the players. InNovember 2023, adopting a "Co-creation with Fellow Daoists" approach, the Company launchedthe first animated series of Asktao (Mobile) titled Wulong Daoist Adventures in Zhongzhou. Thisseries faithfully reproduces classic scenes and NPC characters from the game, presentingplayers with a more diverse and immersive gaming world.
Overmortal is a unique Taoist immortality cultivation-themed IP which is enhanced by musicrecordings, comics, novels, animations, and more. Since its launch in 2022, the derivative IPanimation has been consistently updated on platforms such as Tik Tok, Kuaishou, and Bilibili.The cumulative fan base across all platforms has exceeded 2.5 million. Additionally, the game
continues to engage and retain users through a long-term strategy of IP content. It has releasedbrand documentaries such as the film Ordinary Yet Extraordinary, the mini-drama Mr. White Fox,the audiobook Between Demon and Immortal, the game's theme song, animation, and more.These contents maintain consistently high levels of popularity on major platforms and havereceived widespread acclaim from players.
（4） Collaborations
Based on the characteristics of games and players, the Company frequently collaborateswith products that have a high overlap with the target user base to conduct joint activities. Thisapproach aims to attract more user attention and recognition. Collaborative partners includegames, novels, animated films, online animated series, and other well-known IPs.During the reporting period, Asktao (Mobile) collaborated with the China Academy of Artand the inheritor of the art of velvet flowers, creating a seventh-anniversary costume and a Qixi(Chinese Valentine's Day) velvet flower gift box that integrate traditional Chinese colors andpatterns. This initiative aimed to promote the protection, inheritance, and innovation of Chinesetraditional culture and intangible cultural heritage. In addition, Overmortal partnered with the WestLake Scenic Area and the classic cultivation IP Shrouding the Heavens working towardsconstructing a " Self-Cultivation Universe" for players to enhance their immersive experience.Aobi Island: Dreamland maintained frequent content updates throughout the year. It collaboratedwith 11 well-known brands/IPs, including CCTV Animation (Journey to the West, The Legend ofNezha, The Adventures of Little Carp), as well as Pleasant Goat and Big Big Wolf, launching aseries of exciting activities to provide players with a rich gaming experience.
（5） Charts & Recommendations
The Company’s high-quality, unique, and intriguing games have earned therecognition from leading platforms such as the App Store and TapTap. The Company isregularly featured in its charts, attracting a significant number of downloads and earningwidespread attention. In addition, players' ratings and discussions on these platforms havefurther increased its games' popularity. During the reporting period, several of the Company’s
games, including Asktao (Mobile), Overmortal, Aobi Island: Dreamland, World Flipper,Dungeon Survivor III: Dark Genesis, Beasts Evolved 2, and Path of Immortals: Survivor werefeatured on popular platforms such as the App Store.
（6） Word-of-Mouth Marketing
The Company leverages its excellent product quality to drive word-of-mouth marketingthrough various third-party gaming platforms, recommendations from KOCs (key opinionconsumers), WeChat accounts, QQ groups, and its official channels. The Company’s approachincludes user selection, expectation management, feature communication, and user feedbacktracking to refine and improve its operations.
Part IV Financial StatementsCONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 31 December 2023 | 31 December 2022 |
| CURRENT ASSETS: | ||
| Cash and Cash equivalents | 2,397,018,382.09 | 2,628,619,551.17 |
| Settlements Provision | ||
| Loans to banks and other financial institutions | ||
| Financial assets held for trading | 1,125,621,695.38 | 629,605,938.78 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 238,756,746.14 | 264,695,831.84 |
| Financing receivables | ||
| Prepayments | 21,422,780.34 | 13,330,296.84 |
| Insurance premium receivable | ||
| Due from reinsurers | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 5,599,445.09 | 8,022,029.25 |
| Including: Interest receivable | ||
| Dividends receivable | 4,000,000.00 | |
| Financial assets purchased under agreements to resell | ||
| Inventories | ||
| Contract assets | ||
| Assets classified as held for sale | ||
| Current portion of non-current assets | 11,536,441.92 | 20,502,738.32 |
| Other current assets | 11,746,515.71 | 14,078,760.20 |
| Total current assets | 3,811,702,006.67 | 3,578,855,146.40 |
| NON-CURRENT ASSETS: | ||
| Loans and advances | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 11,908,237.48 | 16,707,513.05 |
| Long-term equity investments | 1,164,814,123.76 | 1,187,261,211.65 |
| Other equity instruments investments | ||
| Other non-current financial assets | 620,273,547.42 | 656,389,807.13 |
| Investment properties | 170,713,042.03 | 185,051,014.53 |
| Fixed assets | 596,402,026.29 | 639,100,053.20 |
| Construction in progress | 1,660,948.61 | |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 36,327,899.47 | 7,639,002.23 |
| Intangible assets | 69,766,821.60 | 72,135,456.36 |
| Development expenditures | ||
| Goodwill | 3,808,266.80 | 3,808,266.80 |
| Long-term prepaid expenses | 20,045,631.47 | 5,681,818.18 |
| Deferred tax assets | 83,259,745.81 | 97,185,342.58 |
| Other non-current assets | 46,088,941.01 | 40,605,666.67 |
| Total non-current assets | 2,825,069,231.75 | 2,911,565,152.38 |
| Total assets | 6,636,771,238.42 | 6,490,420,298.78 |
| CURRENT LIABILITIES: | ||
| Short-term borrowings | ||
| Borrowing from the central bank |
| Item | 31 December 2023 | 31 December 2022 |
| Deposits and balances from banks and other financial institutions | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 188,815,811.08 | 282,198,091.94 |
| Receipts in advance | 501,832.24 | 64,876.98 |
| Contract liabilities | 417,007,621.68 | 509,694,875.47 |
| Financial assets sold under agreements to buy | ||
| Customer deposits and balances from banks and other financial institutions | ||
| Customer brokerage deposits | ||
| Securities underwriting brokerage deposits | ||
| Payroll and employee benefits payable | 455,196,050.52 | 530,906,045.00 |
| Taxes payable | 182,803,660.02 | 262,203,676.39 |
| Other payables | 34,516,136.28 | 75,527,618.02 |
| Including: Interest payable | ||
| Dividend payable | ||
| Fees and commission payable | ||
| Payable reinsurance | ||
| Liabilities classified as held for sale | ||
| Current portion of non-current liabilities | 10,800,876.22 | 4,148,677.00 |
| Other current liabilities | 13,186,313.60 | 25,882,386.82 |
| Total current liabilities | 1,302,828,301.64 | 1,690,626,247.62 |
| NON-CURRENT LIABILITIES: | ||
| Insurance reserves | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference share | ||
| Perpetual debt | ||
| Lease liabilities | 28,132,847.55 | 3,606,651.23 |
| Long-term Payable | ||
| Long-term payroll and employee benefits payable | ||
| Provisions | ||
| Deferred income | 159,642.70 | 684,231.97 |
| Deferred tax liabilities | 705,651.53 | 3,464,492.20 |
| Other non-current liabilities | 57,336,347.24 | 82,537,676.23 |
| Total non-current liabilities | 86,334,489.02 | 90,293,051.63 |
| Total liabilities | 1,389,162,790.66 | 1,780,919,299.25 |
| SHAREHOLDERS' EQUITY: | ||
| Paid-in capital | 72,041,101.00 | 71,866,482.00 |
| Other equity instruments | ||
| Including: Preference share | ||
| Perpetual debt | ||
| Capital reserve | 1,400,918,753.30 | 1,334,367,676.34 |
| Less: treasury shares | ||
| Other comprehensive income | 73,375,545.86 | 59,710,028.24 |
| Special reserve | ||
| Surplus reserve | 36,020,550.50 | 35,941,112.50 |
| General reserve | ||
| Retained earnings | 2,881,486,077.30 | 2,476,849,266.95 |
| Equity attributable to shareholders of the Company | 4,463,842,027.96 | 3,978,734,566.03 |
| Non-controlling interests | 783,766,419.80 | 730,766,433.50 |
| Total shareholders’ equity | 5,247,608,447.76 | 4,709,500,999.53 |
| Total liabilities and shareholders’ equity | 6,636,771,238.42 | 6,490,420,298.78 |
Legal Representative: Lu Hongyan Chief Accountant: Lin Jiajin Head of AccountingDepartment: Chen Hualiang
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2023Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 31 December 2023 | 31 December 2022 |
| CURRENT ASSETS: | ||
| Cash and Cash equivalents | 172,514,364.01 | 316,357,502.93 |
| Financial assets held for trading | 328,976,474.94 | 60,342,000.00 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 45,693,275.98 | 31,868,438.63 |
| Financing receivables | ||
| Prepayments | 1,158,216.36 | 560,714.17 |
| Other receivables | 70,829,561.42 | 116,613,690.66 |
| Including: Interest receivable | ||
| Dividends receivable | 69,977,500.00 | 114,576,000.00 |
| Inventories | ||
| Contract assets | ||
| Assets classified as held for sale | ||
| Current portion of non-current assets | 5,555,356.97 | 4,089,865.87 |
| Other current assets | 383,623.67 | 177,765.77 |
| Total current assets | 625,110,873.35 | 530,009,978.03 |
| NON-CURRENT ASSETS: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 2,486,121.17 | 5,861,968.11 |
| Long-term equity investments | 2,150,458,973.88 | 2,128,930,582.66 |
| Other equity instruments investments | ||
| Other non-current financial assets | 148,546,250.01 | 148,339,140.34 |
| Investment properties | 283,235,747.11 | 304,655,429.83 |
| Fixed assets | 10,328,855.38 | 10,849,209.46 |
| Construction in progress | ||
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 423,898.63 | 518,200.56 |
| Development expenditures | ||
| Goodwill | ||
| Long-term prepaid expenses | 364,995.95 | |
| Deferred tax assets | ||
| Other non-current assets | ||
| Total non-current assets | 2,595,844,842.13 | 2,599,154,530.96 |
| Total assets | 3,220,955,715.48 | 3,129,164,508.99 |
| CURRENT LIABILITIES: | ||
| Short-term borrowings | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 3,091,805.96 | 7,546,577.55 |
| Receipts in advance | 534,094.42 | 34,710.95 |
| Contract liabilities | 19,695,860.98 | 28,818,229.76 |
| Payroll and employee benefits payable | 103,614,920.85 | 118,552,169.31 |
| Taxes payable | 27,210,531.94 | 47,822,500.61 |
| Item | 31 December 2023 | 31 December 2022 |
| Other payables | 5,012,208.17 | 5,109,242.69 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liabilities classified as held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 1,454,183.60 | 1,976,867.48 |
| Total current liabilities | 160,613,605.92 | 209,860,298.35 |
| NON-CURRENT LIABILITIES: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference share | ||
| Perpetual debt | ||
| Lease liabilities | ||
| Long-term payable | ||
| Long-term payroll and employee benefits payable | ||
| Provisions | ||
| Deferred income | 151,675.64 | 533,731.97 |
| Deferred tax liabilities | 3,061,614.95 | |
| Other non-current liabilities | 1,777,206.67 | 1,653,646.50 |
| Total non-current liabilities | 1,928,882.31 | 5,248,993.42 |
| Total liabilities | 162,542,488.23 | 215,109,291.77 |
| SHAREHOLDERS’ EQUITY： | ||
| Paid-in capital | 72,041,101.00 | 71,866,482.00 |
| Other equity instruments | ||
| Including: Preference share | ||
| Perpetual debt | ||
| Capital reserve | 1,210,019,236.80 | 1,143,391,521.98 |
| Less: treasury shares | ||
| Other comprehensive income | -24,035.06 | -24,035.06 |
| Special reserve | ||
| Surplus reserve | 36,020,550.50 | 35,941,112.50 |
| Retained earnings | 1,740,356,374.01 | 1,662,880,135.80 |
| Total shareholders’ equity | 3,058,413,227.25 | 2,914,055,217.22 |
| Total liabilities and shareholders’ equity | 3,220,955,715.48 | 3,129,164,508.99 |
Legal Representative: Lu Hongyan Chief Accountant: Lin Jiajin Head of AccountingDepartment: Chen Hualiang
CONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2023Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 2023 | 2022 |
| 1. Total revenue | 4,184,851,388.03 | 5,167,615,488.17 |
| Including: Operating revenue | 4,184,851,388.03 | 5,167,615,488.17 |
| Interest income | ||
| Net earned premiums | ||
| Net fee and commission revenue | ||
| 2. Total cost of sales | 2,500,157,080.35 | 2,800,021,736.04 |
| Including: Cost of sales | 479,905,478.93 | 582,139,390.15 |
| Interest expenses | ||
| Fees and commission expenses | ||
| Surrenders | ||
| Net payments for insurance claims | ||
| Net provision of insurance reserve |
| Item | 2023 | 2022 |
| Policyholder dividends | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 25,074,744.32 | 20,542,210.28 |
| Selling expenses | 1,127,241,515.96 | 1,401,713,286.40 |
| General and administrative expenses | 314,983,930.97 | 340,059,533.55 |
| Research and development expenses | 679,358,601.39 | 672,606,989.65 |
| Financial expenses | -126,407,191.22 | -217,039,673.99 |
| Including: Interest expenses | 1,561,576.37 | 371,657.45 |
| Interest income | 90,555,821.67 | 44,784,179.87 |
| Add: Other income | 41,385,502.91 | 48,614,213.47 |
| Investment income/(losses) | 34,921,944.16 | 106,355,390.43 |
| Including: Share of profits or loss of associates and joint ventures | 9,207,061.64 | 74,292,570.87 |
| Gain from derecognition of financial assets measured at amortized cost | ||
| Exchange gains or losses | ||
| Net exposure hedging gains/ (losses) | ||
| Gain/ (losses) on the changes in fair value | -32,966,781.00 | -27,356,324.21 |
| Credit impairment losses | 3,727,608.72 | 6,004,840.37 |
| Assets impairment losses | -25,895,706.04 | -180,603,588.49 |
| Gain/ (losses) from disposal of assets | 326,039.11 | -74,690.07 |
| 3. Operating profit | 1,706,192,915.54 | 2,320,533,593.63 |
| Add: Non-operating income | 576,190.90 | 4,111,201.50 |
| Less: Non-operating expenses | 6,800,538.08 | 9,706,890.19 |
| 4. Profit/(loss) before tax | 1,699,968,568.36 | 2,314,937,904.94 |
| Less: Income tax expense | 238,876,135.03 | 355,440,226.60 |
| 5. Net profit /(loss) | 1,461,092,433.33 | 1,959,497,678.34 |
| (1) Categorized by operation continuity | ||
| Net profit from continuing operations | 1,461,092,433.33 | 1,959,497,678.34 |
| Net profit from discontinuing operations | ||
| (2) Categorized by ownership | ||
| Net profit attributable to shareholders of the Company | 1,125,119,212.35 | 1,460,874,459.68 |
| Net profit attributable to non-controlling interests | 335,973,220.98 | 498,623,218.66 |
| 6. Other comprehensive income, net of tax | 14,236,742.09 | 76,362,714.35 |
| (1) Other comprehensive income, net of tax, attributable to shareholders of the Company | 13,665,517.62 | 73,759,967.18 |
| (i) Other comprehensive income that will not be reclassified to profit or loss | ||
| Remeasurement gains or losses of a defined benefit plan | ||
| Other comprehensive income using the equity method that will not be reclassified to profit or loss | ||
| Changes in fair value of other equity instrument investments | ||
| Changes in fair value of enterprise's own credit risk | ||
| (ii) Other comprehensive income to be reclassified to profit or loss | 13,665,517.62 | 73,759,967.18 |
| Other comprehensive income that can be reclassified to profit or loss in equity method | 3,870,111.84 | 24,210,160.88 |
| Changes in fair value of other debt investments | ||
| Amount of financial assets reclassified into other comprehensive income | ||
| Provision for credit impairment of other debt investments | ||
| Cash flow hedging reserves (effective part of profit and loss of cash flow hedging) | ||
| Exchange differences on translation of foreign currency financial statements | 9,795,405.78 | 49,549,806.30 |
| Others |
| Item | 2023 | 2022 |
| (2) Other comprehensive income, net of tax, attributable to non-controlling interests | 571,224.47 | 2,602,747.17 |
| 7. Total comprehensive income | 1,475,329,175.42 | 2,035,860,392.69 |
| Total comprehensive income attributable to shareholders of the Company | 1,138,784,729.97 | 1,534,634,426.86 |
| Total comprehensive income attributable to non-controlling interests | 336,544,445.45 | 501,225,965.83 |
| 8. Earnings per share | ||
| Basic earnings per share (RMB yuan / share) | 15.63 | 20.33 |
| Diluted earnings per share (RMB yuan / share) | / | / |
Legal Representative: Lu Hongyan Chief Accountant: Lin Jiajin Head of AccountingDepartment: Chen Hualiang
INCOME STATEMENT OF COMPANYFor the year ended 31 December 2023Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 2023 | 2022 |
| 1. Total revenue | 358,670,329.43 | 366,952,095.41 |
| Less: Total cost of sales | 47,110,325.74 | 52,957,080.97 |
| Taxes and surcharges | 4,621,644.92 | 3,978,019.77 |
| Selling expenses | ||
| Administrative expenses | 49,461,736.62 | 56,893,848.36 |
| Research and development expenses | 119,182,218.79 | 121,330,495.33 |
| Finance expenses | -13,529,502.51 | -1,478,215.01 |
| Including: Interest expenses (expressed with positive value) | ||
| Interest income (expressed with positive value) | 11,999,749.20 | 1,437,605.32 |
| Add: Other income | 23,161,446.02 | 9,852,216.87 |
| Investment income/(losses) | 643,832,058.16 | 1,069,054,203.86 |
| Including: Share of profits or losses of associates and joint ventures | -45,879,868.75 | -12,277,587.40 |
| Gain from derecognition of financial assets measured at amortized cost | ||
| Net exposure hedging gains/ (losses) | ||
| Gain/ (losses) on the changes in fair value | -4,565,761.05 | 9,449,592.39 |
| Credit impairment losses | -509,115.93 | -278,868.81 |
| Assets impairment losses | ||
| Gain/ (losses) from disposal of assets | 419.03 | -26,349.81 |
| 2. Operating profit/Loss | 813,742,952.10 | 1,221,321,660.49 |
| Add: Non-operating income | 6,345.58 | 22,245,626.22 |
| Less: Non-operating expenses | 1,525,892.86 | 1,838,051.86 |
| 3. Profit/(loss) before tax | 812,223,404.82 | 1,241,729,234.85 |
| Less: Income tax expense | 14,264,764.61 | 30,618,060.18 |
| 4. Net profit /(loss) | 797,958,640.21 | 1,211,111,174.67 |
| (1) Net profit from continuing operations | 797,958,640.21 | 1,211,111,174.67 |
| (2) Net profit from discontinuing operations | ||
| 5. Other comprehensive income, net of tax | ||
| (1) Other comprehensive income, net of tax | ||
| Other comprehensive income that will not be reclassified to profit or loss | ||
| Other comprehensive income using the equity method that will not be reclassified to profit or loss | ||
| Changes in fair value of other equity instrument investments |
| Item | 2023 | 2022 |
| Changes in fair value of enterprise's own credit risk | ||
| (2) Other comprehensive income to be reclassified to profit or loss | ||
| Other comprehensive income that can be reclassified to profit or loss in equity method | ||
| Changes in fair value of other debt investments | ||
| Amount of financial assets reclassified into other comprehensive income | ||
| Provision for credit impairment of other debt investments | ||
| Cash flow hedging reserves (effective part of profit and loss of cash flow hedging) | ||
| Exchange differences on translation of foreign currency financial statements | ||
| Others | ||
| 6. Total comprehensive income | 797,958,640.21 | 1,211,111,174.67 |
| 7. Earnings per share | ||
| (1) Basic earnings per share (RMB yuan / share) | ||
| (1) Diluted earnings per share (RMB yuan / share) |
Legal Representative: Lu Hongyan Chief Accountant: Lin Jiajin Head of AccountingDepartment: Chen Hualiang
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 2023 | 2022 |
| 1. CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Cash receipts from the sale of goods and the rendering of services | 4,275,602,815.62 | 5,283,768,708.60 |
| Net increase in customer bank deposits and due to banks and other financial institutions | ||
| Net increase in loans from the central bank | ||
| Net increase in funds borrowed from other financial institutions | ||
| Cash premiums received on original insurance contracts | ||
| Net cash received from re-insurance business | ||
| Net increase in deposits and investments from insurers | ||
| Cash received from interest, fees and commission | ||
| Net increase in funds deposit | ||
| Net increase in repurchase business funds | ||
| Net income from securities trading brokerage business | ||
| Tax refunds received | ||
| Cash received relating to other operating activities | 153,020,528.31 | 102,742,365.44 |
| Sub-total of cash inflows from operating activities | 4,428,623,343.93 | 5,386,511,074.04 |
| Cash paid for purchase of goods and services | 689,290,600.25 | 805,723,313.49 |
| Net increase in loans and payments on behalf of customers | ||
| Net increase in deposits with central bank and other financial institutions | ||
| Payments for claims for original insurance contracts | ||
| Net increase in funds lent | ||
| Cash paid for interest, fees and commission | ||
| Commissions on insurance policies paid | ||
| Cash paid to and on behalf of employee | 1,042,923,072.57 | 927,760,338.06 |
| Cash paid for taxes | 465,104,414.01 | 676,767,132.59 |
| Cash paid relating to other operating activities | 1,045,804,273.43 | 1,223,866,327.36 |
| Sub-total of cash outflows from operating activities | 3,243,122,360.26 | 3,634,117,111.50 |
| Net cash flows from operating activities | 1,185,500,983.67 | 1,752,393,962.54 |
| Item | 2023 | 2022 |
| 2. CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Cash received from disposal of investments | 5,032,510,000.00 | 5,396,627,362.89 |
| Cash received from investment income | 78,529,048.99 | 80,526,820.62 |
| Net proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets | 1,310.00 | 60,970.00 |
| Cash received from disposal of subsidiaries and other business units | ||
| Cash received relating to other investing activities | 6,841,666.67 | |
| Sub-total of cash inflows from investing activities | 5,111,040,358.99 | 5,484,056,820.18 |
| Purchase of property, plant and equipment, intangible assets and other non-current assets | 55,673,991.85 | 43,603,059.73 |
| Cash paid for investments | 5,545,911,111.00 | 5,254,320,492.69 |
| Net increase in secured loans | ||
| Net cash paid for acquisition of a subsidiary and other operating units | ||
| Cash paid relating to other investing activities | ||
| Sub-total of cash outflows from investing activities | 5,601,585,102.85 | 5,297,923,552.42 |
| Net cash flows from investing activities | -490,544,743.86 | 186,133,267.76 |
| 3. CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Cash received from investment | 63,743,604.71 | 677,105.70 |
| Including: Cash receipts from capital contributions from non-controlling interests of subsidiaries | ||
| Proceeds from borrowings | ||
| Cash receipts relating to other financing activities | ||
| Subtotal of cash inflows from financing activities | 63,743,604.71 | 677,105.70 |
| Repayments for debts | ||
| Cash payments for distribution of dividends or profit and interest expenses | 1,013,195,819.00 | 2,398,348,767.95 |
| Including: Dividends or profit paid to non-controlling shareholders of subsidiaries | 283,992,000.00 | 252,000,000.00 |
| Cash payments relating to other financing activities | 9,796,328.24 | 6,132,880.88 |
| Subtotal of cash outflows from financing activities | 1,022,992,147.24 | 2,404,481,648.83 |
| Net cash flows from financing activities | -959,248,542.53 | -2,403,804,543.13 |
| 4. EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 36,832,233.24 | 187,832,199.74 |
| 5. NET INCREASE IN CASH AND CASH EQUIVALENTS | -227,460,069.48 | -277,445,113.09 |
| Add: Cash and cash equivalents at beginning of year | 2,622,640,821.07 | 2,900,085,934.16 |
| 6. CASH AND CASH EQUIVALENTS AT END OF THE YEAR | 2,395,180,751.59 | 2,622,640,821.07 |
Legal Representative: Lu Hongyan Chief Accountant: Lin Jiajin Head of AccountingDepartment: Chen Hualiang
COMPANY STATEMENT OF CASH FLOWSFor the year ended 31 December 2023Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 2023 | 2022 |
| 1. CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Cash receipts from the sale of goods and the rendering of services | 311,647,085.47 | 351,742,009.71 |
| Tax refunds received | ||
| Cash received relating to other operating activities | 86,859,266.26 | 103,204,659.03 |
| Sub-total of cash inflows from operating activities | 398,506,351.73 | 454,946,668.74 |
| Cash paid for purchase of goods and services | 4,520,905.45 | 7,222,101.67 |
| Cash paid to and on behalf of employee | 182,754,174.90 | 176,848,240.26 |
| Cash paid for taxes | 54,430,631.86 | 99,585,994.33 |
| Item | 2023 | 2022 |
| Cash paid relating to other operating activities | 24,747,344.33 | 38,592,651.08 |
| Sub-total of cash outflows from operating activities | 266,453,056.54 | 322,248,987.34 |
| Net cash flows from operating activities | 132,053,295.19 | 132,697,681.40 |
| 2. CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Cash received from disposal of investments | 760,500,000.00 | 2,235,600,000.00 |
| Cash received from investment income | 735,185,796.88 | 1,811,930,454.50 |
| Net proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets | 30,033.00 | |
| Cash received from disposal of subsidiaries and other business units | ||
| Cash received relating to other investing activities | 336,800.00 | |
| Sub-total of cash inflows from investing activities | 1,495,685,796.88 | 4,047,897,287.50 |
| Purchase of property, plant and equipment, intangible assets and other non-current assets | 3,792,909.09 | 2,322,412.61 |
| Cash paid for investments | 1,098,900,000.00 | 2,014,400,000.00 |
| Cash Paid for disposal of subsidiaries and other business units | ||
| Cash paid relating to other investing activities | ||
| Sub-total of cash outflows from investing activities | 1,102,692,909.09 | 2,016,722,412.61 |
| Net cash flows from investing activities | 392,992,887.79 | 2,031,174,874.89 |
| 3. CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Cash received from investment | 63,743,604.71 | 677,105.70 |
| Proceeds from borrowings | ||
| Cash receipts relating to other financing activities | ||
| Subtotal of cash inflows from financing activities | 63,743,604.71 | 677,105.70 |
| Repayments for debts | ||
| Cash payments for distribution of dividends or profit and interest expenses | 729,203,819.00 | 2,146,864,067.95 |
| Cash payments relating to other financing activities | 413,368.72 | 1,231,686.64 |
| Subtotal of cash outflows from financing activities | 729,617,187.72 | 2,148,095,754.59 |
| Net cash flows from financing activities | -665,873,583.01 | -2,147,418,648.89 |
| 4. EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 993.26 | 46,784.25 |
| 5. NET INCREASE IN CASH AND CASH EQUIVALENTS | -140,826,406.77 | 16,500,691.65 |
| Add: Cash and cash equivalents at beginning of year | 312,508,715.23 | 296,008,023.58 |
| 6. CASH AND CASH EQUIVALENTS AT END OF THE YEAR | 171,682,308.46 | 312,508,715.23 |
Legal Representative: Lu Hongyan Chief Accountant: Lin Jiajin Head of AccountingDepartment: Chen Hualiang
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 2023 | ||||||||||||||
| Equity attributable to shareholders of the Company | Non-controlling interests | Total shareholders’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury Shares | Other comprehensive income | Special reserve | Surplus reserve | General reserve | Retained earnings | Others | Subtotal | |||||
| preference share | Perpetual debt | Others | |||||||||||||
| 1. Balance at the end of previous year | 71,866,482.00 | 1,334,367,676.34 | 59,710,028.24 | 35,941,112.50 | 2,476,849,266.95 | 3,978,734,566.03 | 730,766,433.50 | 4,709,500,999.53 | |||||||
| Changes in accounting policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of the year | 71,866,482.00 | 1,334,367,676.34 | 59,710,028.24 | 35,941,112.50 | 2,476,849,266.95 | 3,978,734,566.03 | 730,766,433.50 | 4,709,500,999.53 | |||||||
| 3. Increase/(decrease) during the period | 174,619.00 | 66,551,076.96 | 13,665,517.62 | 79,438.00 | 404,636,810.35 | 485,107,461.93 | 52,999,986.30 | 538,107,448.23 | |||||||
| (1) Total comprehensive income | 13,665,517.62 | 1,125,119,212.35 | 1,138,784,729.97 | 336,544,445.45 | 1,475,329,175.42 | ||||||||||
| (2) Shareholders’ contributions and reduction | 174,619.00 | 66,279,676.56 | 66,454,295.56 | 348,038.26 | 66,802,333.82 | ||||||||||
| (i) Shareholders ‘contributions in ordinary share | 174,619.00 | 63,568,985.71 | 63,743,604.71 | - | 63,743,604.71 | ||||||||||
| (ii) Other equity instruments contributions | |||||||||||||||
| (iii) Amount of share-based payments recognized in equity | 2,710,690.85 | 2,710,690.85 | 348,038.26 | 3,058,729.11 | |||||||||||
| (iv) Others | |||||||||||||||
| (3). Profit distribution | 79,438.00 | -720,482,402.00 | -720,402,964.00 | -283,992,000.00 | -1,004,394,964.00 | ||||||||||
| (i) Transfer to surplus reserve | 79,438.00 | -79,438.00 | |||||||||||||
| Item | 2023 | ||||||||||||||
| Equity attributable to shareholders of the Company | Non-controlling interests | Total shareholders’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury Shares | Other comprehensive income | Special reserve | Surplus reserve | General reserve | Retained earnings | Others | Subtotal | |||||
| preference share | Perpetual debt | Others | |||||||||||||
| (ii) Transfer to general Reserve | |||||||||||||||
| (iii) Distribution to shareholders | -720,402,964.00 | -720,402,964.00 | -283,992,000.00 | -1,004,394,964.00 | |||||||||||
| (iv) Others | |||||||||||||||
| (4) Transfer within equity | |||||||||||||||
| (i) Capital reserves converted to share capital | |||||||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||||||
| (iv) Changes in the defined benefit plan transferred to retained earnings | |||||||||||||||
| (v) Other comprehensive income transferred to retained earnings | |||||||||||||||
| (vi) Others | |||||||||||||||
| (5). Special reserve | |||||||||||||||
| (i). Additions | |||||||||||||||
| (ii). Utilisation | |||||||||||||||
| (6) Others | 271,400.40 | 271,400.40 | 99,502.59 | 370,902.99 | |||||||||||
| 4. Balance at the end of the period | 72,041,101.00 | 1,400,918,753.30 | 73,375,545.86 | 36,020,550.50 | 2,881,486,077.30 | 4,463,842,027.96 | 783,766,419.80 | 5,247,608,447.76 | |||||||
| Item | 2022 | ||||||||||||||
| Equity attributable to shareholders of the Company | Non-controlling interests | Total shareholders’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury Shares | Other comprehensive income | Special reserve | Surplus reserve | General reserve | Retained earnings | Others | Subtotal | |||||
| preference share | Perpetual debt | Others | |||||||||||||
| 1. Balance at the end of previous year | 71,864,752.00 | 1,314,418,710.72 | -14,049,938.94 | 35,941,112.50 | 3,171,962,867.27 | 4,580,137,503.55 | 479,481,724.36 | 5,059,619,227.91 | |||||||
| Changes in accounting policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of the year | 71,864,752.00 | 1,314,418,710.72 | -14,049,938.94 | 35,941,112.50 | 3,171,962,867.27 | 4,580,137,503.55 | 479,481,724.36 | 5,059,619,227.91 | |||||||
| 3. Increase/(decrease) during the period | 1,730.00 | 19,948,965.62 | 73,759,967.18 | -695,113,600.32 | -601,402,937.52 | 251,284,709.14 | -350,118,228.38 | ||||||||
| (1) Total comprehensive income | 73,759,967.18 | 1,460,874,459.68 | 1,534,634,426.86 | 501,225,965.83 | 2,035,860,392.69 | ||||||||||
| (2) Shareholders’ contributions and reduction | 1,730.00 | 7,420,142.21 | 7,421,872.21 | 1,309,040.04 | 8,730,912.25 | ||||||||||
| (i) Shareholders ‘contributions in ordinary share | 1,730.00 | 675,375.70 | 677,105.70 | - | 677,105.70 | ||||||||||
| (ii) Other equity instruments contributions | |||||||||||||||
| (iii) Amount of share-based payments recognized in equity | 6,744,766.51 | 6,744,766.51 | 1,309,040.04 | 8,053,806.55 | |||||||||||
| (iv) Others | |||||||||||||||
| (3). Profit distribution | -2,155,988,060.00 | -2,155,988,060.00 | -252,000,000.00 | -2,407,988,060.00 | |||||||||||
| (i) Transfer to surplus reserve | |||||||||||||||
| (ii) Transfer to general Reserve | |||||||||||||||
| (iii) Distribution to shareholders | -2,155,988,060.00 | -2,155,988,060.00 | -252,000,000.00 | -2,407,988,060.00 | |||||||||||
| (iv) Others | |||||||||||||||
| Item | 2022 | ||||||||||||||
| Equity attributable to shareholders of the Company | Non-controlling interests | Total shareholders’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury Shares | Other comprehensive income | Special reserve | Surplus reserve | General reserve | Retained earnings | Others | Subtotal | |||||
| preference share | Perpetual debt | Others | |||||||||||||
| (4) Transfer within equity | |||||||||||||||
| (i) Capital reserves converted to share capital | |||||||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||||||
| (iv) Changes in the defined benefit plan transferred to retained earnings | |||||||||||||||
| (v) Other comprehensive income transferred to retained earnings | |||||||||||||||
| (vi) Others | |||||||||||||||
| (5). Special reserve | |||||||||||||||
| (i). Additions | |||||||||||||||
| (ii). Utilisation | |||||||||||||||
| (6) Others | 12,528,823.41 | 12,528,823.41 | 749,703.27 | 13,278,526.68 | |||||||||||
| 4. Balance at the end of the period | 71,866,482.00 | 1,334,367,676.34 | 59,710,028.24 | 35,941,112.50 | 2,476,849,266.95 | 3,978,734,566.03 | 730,766,433.50 | 4,709,500,999.53 | |||||||
Legal Representative: Lu Hongyan Chief Accountant: Lin Jiajin Head of Accounting Department: ChenHualiang
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 2023 | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury Shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | |||
| preference share | Perpetual debt | Others | |||||||||
| 1. Balance at the end of previous year | 71,866,482.00 | 1,143,391,521.98 | -24,035.06 | 35,941,112.50 | 1,662,880,135.80 | 2,914,055,217.22 | |||||
| Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Others | |||||||||||
| 2. Balance at the beginning of the year | 71,866,482.00 | 1,143,391,521.98 | -24,035.06 | 35,941,112.50 | 1,662,880,135.80 | 2,914,055,217.22 | |||||
| 3. Increase/(decrease) during the period | 174,619.00 | 66,627,714.82 | 79,438.00 | 77,476,238.21 | 144,358,010.03 | ||||||
| (1) Total comprehensive income | 797,958,640.21 | 797,958,640.21 | |||||||||
| (2) Shareholders’ contributions and reduction | 174,619.00 | 66,627,714.82 | 66,802,333.82 | ||||||||
| (i)Shareholders’ contributions in ordinary share | 174,619.00 | 63,568,985.71 | 63,743,604.71 | ||||||||
| (ii)Other equity instruments contributions | |||||||||||
| (iii) Amount of share-based payments recognized in equity | 3,058,729.11 | 3,058,729.11 | |||||||||
| (iv) Others | |||||||||||
| (3). Profit distribution | 79,438.00 | -720,482,402.00 | -720,402,964.00 | ||||||||
| (i) Transfer to surplus reserve | 79,438.00 | -79,438.00 | |||||||||
| (ii) Distribution to shareholders | -720,402,964.00 | -720,402,964.00 | |||||||||
| (iii) Others | |||||||||||
| (4) Transfer within equity | |||||||||||
| (i) Capital reserves converted to share capital | |||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||
| Item | 2023 | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury Shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | |||
| preference share | Perpetual debt | Others | |||||||||
| (iv) Changes in the defined benefit plan transferred to retained earnings | |||||||||||
| (v) Other comprehensive income transferred to retained earnings | |||||||||||
| (vi) Others | |||||||||||
| (5). Special reserve | |||||||||||
| (i). Additions | |||||||||||
| (ii). Utilisation | |||||||||||
| (6) Others | |||||||||||
| 4. Balance at the end of the period | 72,041,101.00 | 1,210,019,236.80 | -24,035.06 | 36,020,550.50 | 1,740,356,374.01 | 3,058,413,227.25 | |||||
| Item | 2022 | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury Shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | |||
| preference share | Perpetual debt | Others | |||||||||
| 1. Balance at the end of previous year | 71,864,752.00 | 1,134,650,612.13 | -24,035.06 | 35,941,112.50 | 2,607,757,021.13 | 3,850,189,462.70 | |||||
| Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Others | |||||||||||
| 2. Balance at the beginning of the year | 71,864,752.00 | 1,134,650,612.13 | -24,035.06 | 35,941,112.50 | 2,607,757,021.13 | 3,850,189,462.70 | |||||
| 3. Increase/(decrease) during the period | 1,730.00 | 8,740,909.85 | -944,876,885.33 | -936,134,245.48 | |||||||
| (1) Total comprehensive income | 1,211,111,174.67 | 1,211,111,174.67 | |||||||||
| (2) Shareholders’ contributions and reduction | 1,730.00 | 8,729,182.25 | 8,730,912.25 | ||||||||
| (i)Shareholders’ contributions in ordinary share | 1,730.00 | 675,375.70 | 677,105.70 | ||||||||
| (ii)Other equity instruments contributions | |||||||||||
| (iii) Amount of share-based payments recognized in equity | 8,053,806.55 | 8,053,806.55 | |||||||||
| Item | 2022 | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury Shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | |||
| preference share | Perpetual debt | Others | |||||||||
| (iv) Others | |||||||||||
| (3). Profit distribution | -2,155,988,060.00 | -2,155,988,060.00 | |||||||||
| (i) Transfer to surplus reserve | |||||||||||
| (ii) Distribution to shareholders | -2,155,988,060.00 | -2,155,988,060.00 | |||||||||
| (iii) Others | |||||||||||
| (4) Transfer within equity | |||||||||||
| (i) Capital reserves converted to share capital | |||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||
| (iv) Changes in the defined benefit plan transferred to retained earnings | |||||||||||
| (v) Other comprehensive income transferred to retained earnings | |||||||||||
| (vi) Others | |||||||||||
| (5). Special reserve | |||||||||||
| (i). Additions | |||||||||||
| (ii). Utilisation | |||||||||||
| (6) Others | 11,727.60 | 11,727.60 | |||||||||
| 4. Balance at the end of the period | 71,866,482.00 | 1,143,391,521.98 | -24,035.06 | 35,941,112.50 | 1,662,880,135.80 | 2,914,055,217.22 | |||||
Legal Representative: Lu Hongyan Chief Accountant: Lin Jiajin Head of Accounting Department: ChenHualiang