Stock Code: 603444 Stock Name: G-bits
G-bits Network Technology (Xiamen) Co., Ltd.
2024 Interim Report (Summary)
August 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 Notes
I. The summary of the Interim Report is extracted from the full text of the InterimReport. To gain a thorough understanding of the Company's operational achievements,financial status, and future development plans, investors are advised to carefully readthe full Interim Report on the website www.sse.com.cn.II. The board of directors (or the “Board”), supervisory board, directors, supervisors,and senior management of the Company guarantee the truthfulness, accuracy, andcompleteness of the Interim report, ensuring that there are no false records,misleading statements, or material omissions, and agree to assume joint and severalliability for this Interim Report.III. All directors of the Company attended the board meeting for the review of theInterim Report.IV. This Interim Report is unaudited.V. The profit distribution proposal or reserve capitalization proposal for the reportingperiod approved by the BoardThe Company plans to distribute a cash dividend of RMB 45.00 per 10 shares(including taxes) based on the total number of shares outstanding on the equity registrationdate of the 2024 semi-annual profit distribution plan, excluding the shares repurchased. As ofAugust 14, 2024, the Company’s total share capital is 72,041,101 shares, with 282,800shares held in the repurchase account, resulting in a base of 71,758,301 shares. The totalproposed cash dividend is RMB 322.91 million (including taxes), accounting for 62.36% of thenet profit attributable to shareholders of the Company for the first half of 2024. This profitdistribution will not involve any capital reserve transfer to share capital or other forms of profitdistribution.According to Article 18 of the Rules for Repurchase of Shares by Listed Companies:
"Shares repurchased with cash, whether through tender offers or centralized bidding, aredeemed equivalent to cash dividends and should be included in the calculation of cash
dividend ratios." During first half of 2024, the Company repurchased a total of 241,500 sharesthrough its dedicated repurchase account via centralized bidding, with a total payment ofRMB 44.73 million (excluding transaction fees).
In summary, the combined amount of cash dividends and repurchases for thefirst half of 2024 is estimated RMB 367.64 million, representing 71.00% of the net profitattributable to shareholders of the Company for the first half of 2024.Since its IPO in January 2017, the Company has cumulatively distributed andrepurchased a total of RMB 5.67 billion (including the announced but not yet implementedsemi-annual dividend for 2024), which is 6.30 times the net proceeds raised from the initialpublic offering.
Part II Basic Information of the CompanyI. Company Profile
Stock ProfileTypes of Stocks
| Types of Stocks | Stock Exchange | Stock Name | Stock Code | Previous Stock Name |
A-shares
| A-shares | Shanghai Stock Exchange | G-bits | 603444 | N/A |
| Contact Information | Board Secretary | Securities Affairs Representative |
Name
| Name | LIANG Lili | CAI Luxi |
Telephone
| Telephone | 0592-3213580 | 0592-3213580 |
Office Address
| 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 Financial Information
Unit: RMB Yuan
| 30 June 2024 | 31 December 2023 | YoY+/- (%) |
Total assets
| Total assets | 6,941,681,046.33 | 6,636,771,238.42 | 4.59 |
Equity attributable toshareholders of the Company
| Equity attributable to shareholders of the Company | 4,942,655,048.75 | 4,463,842,027.96 | 10.73 |
| H1 2024 | H1 2023 | YoY+/- (%) |
Operating revenue
| Operating revenue | 1,959,649,131.75 | 2,348,924,659.16 | -16.57 |
Net profit attributable toshareholders of the Company
| Net profit attributable to shareholders of the Company | 517,827,593.16 | 675,971,006.54 | -23.39 |
Net profit attributable toshareholders of the Companyafter deducting non-recurringprofits and losses
| Net profit attributable to shareholders of the Company after deducting non-recurring profits and losses | 462,597,868.33 | 645,696,206.55 | -28.36 |
Net cash flows fromoperating activities
| Net cash flows from operating activities | 594,283,192.43 | 601,649,840.64 | -1.22 |
Weighted average return onequity (%)
| Weighted average return on equity (%) | 11.00 | 15.82 | a decrease of 4.82 percentage points |
Basic earnings per share(RMB/share)
| Basic earnings per share (RMB/share) | 7.18 | 9.40 | -23.62 |
Diluted earnings per share(RMB/share)
| Diluted earnings per share (RMB/share) | 7.18 | 9.39 | -23.54 |
Description:
i. Overview of Main Game Revenue and Profits
The Company's operating revenue primarily derives from its core self-developedproducts: Asktao (PC), Asktao (Mobile), and Overmortal (Mainland version). During thereporting period, the game gross billings
generated from these three self-developed productsis as follows:
Unit: RMB million Yuan
| Item | H1 2024 | H1 2023 | YoY+/- (%) |
Asktao (PC)
| Asktao (PC) | 656.43 | 564.35 | 16.31 |
Asktao (Mobile)
| Asktao (Mobile) | 1,155.09 | 1,353.55 | -14.66 |
Overmortal (Mainland version)
| Overmortal (Mainland version) | 311.10 | 688.47 | -54.81 |
Total
| Total | 2,122.62 | 2,606.38 | -18.56 |
1. Domestic Game Business
（1）The operating revenue and profit of Asktao (PC) have increased year-over-yearduring the reporting period.
（2）The operating revenue, distribution expenses and profit of Asktao (Mobile) haveall decreased year-over-year during the reporting period.
（3）The operating revenue, distribution expenses and profit of Overmortal (MainlandVersion) and Aobi Island: Dreamland have all decreased year-over-year during the reportingperiod.
（4）Dragon POW! (Mainland Version), launched in August 2023, along with BeastsEvolved 2 and Pica Town: Dream Origin Gameplay both launched in December 2023, havecontributed operating revenue and profit compared to the same period last year.
（5）The newly launched Alchemy Family, Chinese Cuisine Cruise and One Piece:
Dream Pose have contributed operating revenue compared to the same period last year.However, these products have not yet achieved profitability.
2. Overview of Overseas Business
The game gross billings refer to the amount of player recharges. The difference between gross billingsand the Company’s operating revenue is primarily due to factors such as revenue-sharing costs paid tooperators, related taxes and fees, and unutilized player items.
The Company's overseas operating revenue for the period totaled RMB 255.03 million,an increase of 113.77% compared to the same period last year. This growth was primarilydriven by the launch of Dragon POW! (Overseas Version), Monster Never Cry (European andAmerican Version), and Outpost: Infinity Siege (Steam). As of the end of the reporting period,the overall overseas game business, considering the inclusion of development costs, has notyet generated profits.ii. Overview of Company Personnel
（1）At the end of the reporting period, the total number of employees was 1,463, anincrease of 16 compared to the end of the previous year, primarily due to the increase in R&Dpersonnel.
（2）At the end of the reporting period, the average monthly number of employeeswas 1,485, an increase of 168 compared to the same period last year (a growth of 12.76%).Among them, the number of R&D personnel increased by 124, and the number of overseasoperational personnel increased by 45.
The total number of employees increased year-over-year, leading to a correspondingincrease in basic salary-related expenses. However, bonuses accrued based on operatingperformance decreased year-over-year, resulting in overall employee compensationexpenses remaining largely unchanged compared to the previous year.
iii. Overview of Equity Investment Business
The Company's investment targets mainly consist of upstream and downstreamenterprises in the game industry or industry investment funds. There were a few new equityinvestments this year. The total return from investment business (including investmentincome, fair value changes, asset impairment losses, etc.) during the reporting period aredetailed in the table below:
Unit: RMB Yuan
| Item | H1 2024 | H1 2023 |
Investment income recognized under the equity method for jointventures and associates(Profits of the investee recognized based on ownership percentage)
| Investment income recognized under the equity method for joint ventures and associates (Profits of the investee recognized based on ownership percentage) | 24,252,754.63 | 58,257,678.97 |
Provision for impairment of long-term equity investments(Impairment of equity investments)
| Provision for impairment of long-term equity investments (Impairment of equity investments) | -41,887,915.72 | -149,355.22 |
Investment income(Gain on disposal of equity investments)
| Investment income (Gain on disposal of equity investments) | 38,774,948.78 |
Gain or loss from fair value changes of other non-current financialassets(Fair value changes of investees)
| Gain or loss from fair value changes of other non-current financial assets (Fair value changes of investees) | -4,251,370.95 | -3,051,901.71 |
Investment income during the holding period of other non-currentfinancial assets(Dividends from investees)
| Investment income during the holding period of other non-current financial assets (Dividends from investees) | 10,000,000.00 |
Total
| Total | 26,888,416.74 | 55,056,422.04 |
iv. Overview of Foreign Exchange Gain/LossesThe period-end central parity rate of the USD against the RMB was 7.1268,representing an increase of 0.62% compared to the end of the previous year. Some of theCompany's transactions are settled in USD, and the Company holds a relatively large amountof USD. The income generated from exchange rate changes during the period amounted toRMB 20.73 million (of which RMB 12.66 million is attributable to shareholders of theCompany). In the same period last year, the income from exchange rate changes was RMB
68.98 million (with RMB 42.10 million attributable to shareholders of the Company), resultingin a year-over-year decrease in income of RMB 48.25 million.v. Overview of Operating Cash FlowThe net cash flow from operating activities for the reporting period decreased by 1.22%compared to the same period last year. This was primarily due to a year-on-year decrease ingame gross billings from core products, leading to an 11.02% decrease in cash inflows fromoperating activities. Expenditures on distribution and revenue-sharing costs paid to gamedevelopers decreased, resulting in a 14.19% decrease in cash outflows from operatingactivities.
vi. Overview of Deferred Game RevenueAs of June 30, 2024, the Company's unamortized deferred game revenue balance
amounts to RMB 516.17 million, an increase of RMB 75.66 million compared to the previousyear-end balance of RMB 440.51 million. The main reason is the launch of new games duringthe reporting period, including Alchemy Family, Dragon POW! (Overseas Version), ChineseCuisine Cruise, Monster Never Cry (European and American Version), and One Piece:
Dream Pose. This has resulted in an increase in deferred revenue based on the progress ofitem consumption or the estimated lifespan of paying players.
vii. Adjusted Net Profit Attributable to Shareholders of the CompanyTo better reflect the operating performance of the Company's main business, the impactof exchange rate changes and equity investment activities on profit has been excluded. Theadjusted net profit attributable to shareholders of the Company for reporting period decreasedby 22.51% compared to the same period last year. The summary is as follows:
Unit: RMB Yuan
| Item | H1 2024 | H1 2023 | YoY+/- (%) |
Net profit attributable to shareholders of the Company
| Net profit attributable to shareholders of the Company | 517,827,593.16 | 675,971,006.54 | -23.39 |
Less: (1) The investment income from therepurchase of partial equity in Chengdu YuxiangTechnology Co., Ltd recognized by the Company
| Less: (1) The investment income from the repurchase of partial equity in Chengdu Yuxiang Technology Co., Ltd recognized by the Company | 38,774,948.78 |
(2) Changes in Equity Holdings Period (Gains or
Losses from Changes in Fair Value, InvestmentIncome, and Asset Impairment Losses, etc.)
| (2) Changes in Equity Holdings Period (Gains or Losses from Changes in Fair Value, Investment Income, and Asset Impairment Losses, etc.) | 4,630,731.79 | 41,357,885.54 | -88.80 |
(3) Foreign Exchange Gains
| (3) Foreign Exchange Gains | 12,663,807.08 | 42,097,352.48 | -69.92 |
(4) Taxes and Charges Related to Investment
Operations and Foreign Exchange Movements
| (4) Taxes and Charges Related to Investment Operations and Foreign Exchange Movements | -2,800,013.97 | -7,009,728.26 | 60.06 |
Adjusted Net Profit Attributable to Shareholders of theCompany
| Adjusted Net Profit Attributable to Shareholders of the Company | 464,558,119.48 | 599,525,496.78 | -22.51 |
Note：1）The data listed in the table above are attributable to shareholders of the Company.2）Government subsidies and revenue amortization deferrals also affect the performancedata for the reporting period. For consistency in analysis, the adjusted data in the table abovedo not exclude the impact of government subsidies and revenue amortization deferrals.III. Quarterly Key Accounting Data during the Reporting Period
Unit: RMB Yuan
| Item | Q2 2024 | Q1 2024 | Q2 2024 QoQ+/- (%) | Q2 2023 | Q2 2024 YoY+/- (%) |
| Item | Q2 2024 | Q1 2024 | Q2 2024 QoQ+/- (%) | Q2 2023 | Q2 2024 YoY+/- (%) |
Operating revenue
| Operating revenue | 1,032,384,127.82 | 927,265,003.93 | 11.34 | 1,204,554,622.60 | -14.29 |
Net profit attributableto shareholders ofthe Company
| Net profit attributable to shareholders of the Company | 264,464,585.84 | 253,363,007.32 | 4.38 | 369,418,231.91 | -28.41 |
Net profit attributableto shareholders ofthe Company afterdeducting non-recurring profits andlosses
| Net profit attributable to shareholders of the Company after deducting non-recurring profits and losses | 264,624,775.23 | 197,973,093.10 | 33.67 | 365,081,137.68 | -27.52 |
Net cash flows fromoperating activities
| Net cash flows from operating activities | 363,712,658.76 | 230,570,533.67 | 57.74 | 356,063,608.17 | 2.15 |
Description:
i. Analysis of Quarter-on-Quarter Changes from Q1 to Q2 2024
1. Operating revenue and net profit attributable to shareholders of the Company afterdeducting non-recurring profits and losses, increased in Q2 2024 compared to Q1 2024. Thiswas primarily due to the 8th-anniversary version update for Asktao (Mobile), which led to arise in operating revenue and overall profit.
2. The change in net profit attributable to shareholders of the Company after deductingnon-recurring profits and losses, was 33.67%, which is greater than the 4.38% change in netprofit attributable to shareholders of the Company. This difference was mainly due to therecognition of investment income from the repurchase of partial equity in Chengdu YuxiangTechnology Co., Ltd in Q1 2024.
3. The net cash flow from operating activities significantly increased in Q2 2024compared to Q1 2024, primarily due to higher product sales receipts in Q2 and the paymentof year-end bonuses for 2023 in Q1.
ii. Analysis of Year-on-Year Changes from Q2 2023 to Q2 2024
Operating revenue and net profit attributable to shareholders of the Company afterdeducting non-recurring profits and losses, decreased in Q2 2024 compared to the sameperiod last year. This decline was primarily due to:
1. A decrease in game business revenue and profit, including: （1）A significantreduction in revenue and profit for Overmortal (Mainland Version) in Q2 2024 compared tothe previous year. （2）Revenue recognition in Q2 2023 from deferred revenue balancerelated to the expiration of the Company’s collaboration with the developer of Mole's World.
2. The income from exchange rate changes in Q2 2024 was RMB 11.25 million,compared to RMB 94.32 million in Q2 2023, representing a decrease of RMB 83.08 million(with a decrease of RMB 50.55 million attributable to shareholders of the Company).
3. Provision for impairment of equity investments increased by RMB 41.89 million in Q22024 compared to the previous year, primarily due to the unsatisfactory performance inGuangzhou Zhuoyou Information Technology Co., Ltd., Guangzhou Alpha NetworkTechnology Co., Ltd., Chengdu Vaneplus Information Technology Co., Ltd., and GuangzhouYouqu Interactive Network Technology Co., Ltd., leading to impairment provisions inaccordance with accounting standards.IV. Shareholder Composition（I） Number and shareholding of the Company's shareholders
| Total number of ordinary shareholders at the end of the reporting period | 27,881 |
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 | - |
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 | 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. | -3,521,394 | 3,537,418 | 4.91 | None | Overseas corporation |
HUANG Zhihui
| HUANG Zhihui | 1,374,782 | 1.91 | None | Domestic individual |
LI Peiying
| LI Peiying | 1,350,000 | 1.87 | None | Domestic |
individual
China MinshengBank Co., Ltd. -Huaxia CSIAnimation &GameExchange-Traded Open-End IndexSecuritiesInvestment Fund
| China Minsheng Bank Co., Ltd. - Huaxia CSI Animation & Game Exchange-Traded Open-End Index Securities Investment Fund | 522,398 | 1,204,406 | 1.67 | None | Other |
Agricultural Bankof China - PingAn Low CarbonEconomy MixedSecuritiesInvestment Fund
| Agricultural Bank of China - Ping An Low Carbon Economy Mixed Securities Investment Fund | 720,000 | 720,000 | 1.00 | None | Other |
Guotai AssetManagementCo., Ltd. - SocialSecurity FundPortfolio 1102
| Guotai Asset Management Co., Ltd. - Social Security Fund Portfolio 1102 | 666,579 | 666,579 | 0.93 | None | Other |
China MerchantsBank Co., Ltd. -China EuropeInternet PioneerMixed SecuritiesInvestment Fund
| China Merchants Bank Co., Ltd. - China Europe Internet Pioneer Mixed Securities Investment Fund | 534,245 | 534,245 | 0.74 | None | Other |
Agricultural Bankof China - CSI500 Exchange-Traded Open-End IndexSecuritiesInvestment Fund
| Agricultural Bank of China - CSI 500 Exchange-Traded Open-End Index Securities Investment Fund | 273,400 | 476,531 | 0.66 | 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 |
Part III Management Discussion and AnalysisI. Overview of Core Business during the Reporting Period（I） Core Business Operations of the CompanyThe Company specializes in the development and operation of online games, with afocus on cultivating innovative talent and pursuing efficient work methods. Its goal is toprovide differentiated products and services to global users, creating and sharing delightfulexperiences in the entertainment industry.
Since its establishment in 2004, the Company has immersed itself in the game industry.Through years of rapid growth and technological accumulation, it has continually expanded inscale and strengthened its R&D capabilities, enriching its product portfolio. Rooted intraditional Chinese culture, the Company has developed games such as Asktao (PC), Asktao(Mobile), and Overmortal. Asktao (PC) has been in continuous operation for 18 years sinceits debut in 2006. Building on its strong user base and IP popularity, the Company launchedthe mobile version of the MMORPG Asktao (Mobile) in April 2016, which has maintainedsteady long-term operation for the past 8 years. In February 2021, the Company launchedOvermortal, an ink-wash style idle mobile game about the Taoist cultivation of immortality.Since its release, it has maintained stable iterative updates. In 2023 and the first half of 2024,the combined revenue from Asktao (PC), Asktao (Mobile), and Overmortal (Mainland version)accounted for 71.19% and 68.17% of the Company’s total revenue, respectively.Leiting Games, an independently operated platform by the Company, has accumulatedextensive experience and expertise in game operation over the years. As of the reportingdate, Leiting Games has successfully managed a diverse portfolio of games, including Asktao(Mobile), Overmortal, Aobi Island: Dreamland, Dragon POW!, Chinese Cuisine Cruise, WorldFlipper, Tale of Immortal (PC), Funny Fighters: Battle Royale, and Gumballs.
The Company will continue to iterate and update existing products to enhance gameperformance and user experience, as well as prolong the lifecycle of products throughcontinuous IP development. In terms of new product research and development, the
Company will remain focused on MMORPG, idle games, and SLG while exploring content-oriented products. The goal is to consistently strengthen the engineering capabilities of theR&D team and develop high-quality games that combine entertainment, playability, andcommercially viable design. Regarding product licensing, the Company will continue to focuson classic gaming IPs, multiplayer competitive games, mid-core games, and commerciallyviable games with experiential differences. This approach will be adjusted according tomarket dynamics and other relevant factors.
The Company will increase its investment in overseas markets continuously. Apart froma few 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 operation teams with profound insights into various culturesworldwide to accelerate the development of its overseas business.（II） Primary Business Model of the Companyi. Revenue StreamsThe 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 canenter the game for free, and the operator primarily profits from selling virtual items within thegame. Payment for virtual items is the prevalent revenue model adopted by the online gameindustry in China.ii. Operating ModelsThere are three main operating models for the Company’s games: independentoperation, cooperative operation, and licensing operation. Among them, Asktao (PC) islicensed to Beijing Guangyu Online Technology Co.,Ltd. Other in-house developed andlicensed products mainly adopt independent operation and cooperative operation models.The three operation models are as follows:
1.Independent Operation: The Company publishes games on its platform and isresponsible for promotion and operation. These games might be developed by the Companyor by external developers.
2.Cooperative Operation: The Company partners with third-party platforms, such as theApp Store and Android app store including Huawei, vivo, and Google Play, to co-publish andpromote its games, whether developed in-house or licensed.
3.Licensing Operation: The Company licenses its self-developed games to externalpublishers, who are responsible for managing the game's publishing and promotion. TheCompany’s responsibilities are limited to providing technical support and ongoing contentdevelopment.
（III） Industry Overview During the Reporting Period
i. Industry Landscape
According to the China Game Industry Report for January-June 2024 released by theGame Committee of China Audio-visual and Digital Publishing Association（CADPA）, theactual sales revenue of the domestic game market in China reached RMB147.27 billion fromJanuary to June 2024, a year-on-year growth of 2.08%. The number of game users in Chinareached 0.67 billion, with a year-on-year growth of 0.88%. In the segmented market, mobilegames accounted for 73.01% of the actual sales revenue of the domestic game market,
maintaining dominance despite a slight decline. The share of actual sales revenue from PCgames continues to rise. Revenue from mini-program mobile games reached RMB 16.60billion, with a year-on-year growth of 60.52%, which has maintained a high growth rate forthree consecutive years.
“Going global” remains a key development strategy for many Chinese game companies.As one of the important ways to promote Chinese culture internationally, China-developedgames have reached nearly a hundred countries and regions, including Europe, the UnitedStates, Japan, and South Korea. From January to June 2024, the actual sales revenue ofgames developed independently by China in overseas markets reached US$8.55 billion, witha year-on-year growth of 4.24%, which is mainly due to several newly launched productsbecoming hits.
ii. Impact of Industry Policies on the Company's SectorIn recent years, regulatory authorities have attached great importance on the healthydevelopment of the game industry, implementing a series of policy aimed at various aspectsof game development, publishing, and operation. These policies introduce new requirementsand standards in areas such as minor protection, cultural values, network ecologygovernance, data security, personal information protection, and the management of emergingtechnologies. The goal is to guide the industry towards standardized and high-qualitydevelopment. In the long term, effective regulation is crucial for the advancement andprogress of the industry.In response, the Company will adhere to strategies of globalization, high quality, anddifferentiation, with a commitment to cultural confidence and technological innovation, todeliver exceptional gaming experiences to players worldwide. The Company will focus oncontent development, improve its internal management system, and continue to implementpre-, during-, and post-regulation of games, strengthen the governance of the contentecosystem of game products, effectively protect minors, and maintain a healthy gameenvironment for its products. The Company will continuously monitor and analyze industry
policies, keep up with industry trends in real-time, and improve its policy risk managementcapabilities.II. Analysis of Core Competencies During the Reporting Period（I） Strong Independent Research and Development (R&D) Capabilitiesi. Overview of the Company’s R&D Performance
The Company attached great importance to R&D and talent development. During thereporting period, The Company’s R&D expense amounted to RMB 391.15 million, accountingfor 19.96% of its revenue. This sustained investment has laid the foundation for its innovation.The Company’s R&D team has grown year on year, with the number of employees reaching692 at the end of 2022, 855 at the end of 2023, and 871 at the end of the reporting period,representing 55.18%, 59.09%, and 59.54% of the total number of employees respectively.
ii. Boost R&D Performance with the Minimum Viable Product (MVP) Approach
Games, as a form of cultural entertainment, derive their strength from delivering fresh
and captivating experiences to users. The Company places significant emphasis on productinnovation, striving to develop games that stand out both unique and commercially. Byfocusing on differentiation, the Company continuously explores innovative approaches in coregameplay, conceptualization, art style, and other aspects, thereby enhancing the competitiveedge of its products. However, this pursuit of differentiation also escalates the complexity ofproject development, necessitating enhanced capabilities in gameplay refinement, projectmanagement, and data analysis within the development teams. Drawing from years ofexperience, the Company has embraced an iterative development model known as the MVPapproach in its R&D process.
In applying the MVP approach to the Company’s R&D, at the start of a project, theCompany assembles a core team to develop a prototype based on the creative designer'sidea. Extensive user testing is then used to validate the feasibility of the core gameplaymechanics. Throughout the development process, the game undergoes numerous iterationsand is fine-tuned based on test data. This MVP approach, starting from the demo version,allows the Company to keep a tight rein on product direction, avoid wasteful investments, andcontrol R&D costs. Frequent testing during development helps the Company to controlvariables between two successive tests, allowing the Company to analyze user behaviorfeedback more accurately. As a result, the Company has able to address issues that ariseduring development in a timely manner, increasing R&D efficiency. As the demo evolves intoa final project, the Company continually refines and adapts the MVP approach to ensure
seamless integration among gameplay testing, art resources and commercialization design.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 ofthe core team, project management skills, technological accumulation, the nature of theproject, etc. The Company is committed to nurturing excellent game producers over the longterm, and through the MVP approach, the Company filters projects and allocates moreresources in the hope of producing more innovative, engaging, and high-quality products.In addition, the MVP approach involves the Company’s operation team working closelywith the R&D team on a variety of tests and analyses. This allows the Company to gain adeep understanding of the market and users of its products, so that the Company can tailorits strategies and minimize the risks and costs of release.iii. Construction of Middle Platforms Builds Up Strong R&D FoundationThe 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 high-quality 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&Defficiency. Currently, the main tasks of the Technical Center include:
1.GS Language Development: Developing compilers and auxiliary tools for GS (GameScript); building server frameworks, client frameworks and various public services rooted inGS; creating GIP management tools (GS install package) for the unified storage andmanagement of various packages; developing various toolchains and common developmenttools for each project team based on the GS, and providing common automated build anddeployment solutions.
2.Engine and Rendering Technology Research: Conducting in-depth research on Unity,Unreal engines and 3D rendering technologies; developing a powerful combat bottom layerand combat editor to enhance the overall performance and development efficiency of combatin games.
3.AI Technology Exploration and Application: Focusing on cutting-edge AI technologies,actively exploring the integration of AI technologies across all stages of game development,including planning, development, and testing, to improve R&D efficiency and gameexperience. The Technical Center has established AIWebHub within the Company,consolidating various commonly used AI drawing tools and models, providing functions suchas AI drawing, online data management, computational power sharing, drawing workflow andtechnical sharing, facilitating the rapid application of AI drawing in the Company's gamedevelopment processes.
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 todiverse aesthetic preferences, incorporating mainstream elements to evoke emotionalresonance with players. Through continuous testing and iteration, it seeks the optimalbalance between distinctiveness and mainstream appeal. Focusing on artistic excellence, the
Art Center sets rigorous standards and guidelines for each product, continually enhancingdesign capabilities and quality control. The Art Center closely monitors the development innew technologies and actively promotes the application of cutting-edge technologies, such asAIGC, in game art. In the field of game image generation, these techniques are utilized in theearly stages of projects for art style exploration and continuously training and optimizing AImodels for various game art styles. These AI drawing tools help reduce the time andresources required for producing large volumes of content, enabling a more efficient workflowand enhancing the productivity of game art production.The Company’s Audio Department is dedicated to creating immersive audio thatintegrates with the game's narrative and gameplay. It pioneers the use of state-of-the-artaudio and AI technology to effectively create audio that enhances the gaming experience andis tailored to player 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.By drawing on past experience, it provides reusable testing methodologies to ensure that ourgames maintain a stable quality.（II） Exceptional Game Operationsi. Overview of Company's Game OperationsLeiting 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. The classic MMORPG Asktao (Mobile) has maintained stableoperations for many years, and the idle Taoist immortality cultivation game Overmortal has
shown excellent performance. Additionally, several casual games such as Aobi Island:
Dreamland, Dragon POW!, and Chinese Cuisine Cruise are highly popular among youngplayers.
ii. Player-Centric Approach for Long-Term OperationsThe Company upholds a "player-centric" game design and operation philosophy,dedicated to fostering enjoyable experiences in the entertainment industry.The Company deeply understands user needs and develops high-quality original gamesbeloved by players. After the game launches, the Company strengthens communication andinteraction with players through various channels. For example, the Asktao (Mobile) projectteam conducts online activities annually and organizes offline events to interact with coreplayers regarding game version planning, promotion plans, and other aspects. Moreover, theCompany listens to feedback from key opinion leaders (KOLs) and collaborates with playersto refine and enrich the game experience. Additionally, the official community app for Asktao(Mobile), Asktao in Hand, launched in June 2024, provides a convenient interactive platform
for players to access game information, share their experiences, and directly communicatewith the development team, thereby facilitating a deeper immersion into the "Asktao" universe.
The Company actively responds to user demands, providing sincere andcomprehensive customer service. Guided by the service philosophy of "becoming an officialfriend to users and creating a wonderful service experience," the Company embeds a"Contact Customer Service" button within games. It provides players with comprehensive andmeticulous service through various channels such as a 24-hour customer service hotline,WeChat customer service official account, customer service forums, and customer serviceemail, catering to users' real-time inquiries, complaints, feedback, and other requests.Additionally, to improve response speed, the Company utilizes advanced technologies suchas AI to build an intelligent self-service system, further enhancing customer service levels. Aservice quality inspection team is also established to monitor service quality daily, aiming toenhance player experience.iii. Precision and Effective Marketing Promotion Strategies"Buying traffic" is one of the important methods for promoting game products. However,its rising cost can negatively impact a game's profitability. Over the years, the Company hasconsistently prioritized creating unique, high-quality products and tailoring its promotionstrategies accordingly. The Company’s promotion plans are based on the game's features, thetarget market, and our understanding of the player base — their preferred platforms, behaviors,and spending habits. Simultaneously, the Company explores customer acquisition from variousmethods, including daily live streaming, Key Opinion Customer (KOC) promotion, contentcreation, e-commerce, and community re-engagement. This allows the Company to reach itstarget 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, helps understand their needs deeply, and allows theCompany to adapt content to meet evolving player demands. This approach benefits theCompany’s relationship with users and enhances its reputation within the industry. Withsincerity towards the players being the core of the Company’s operations, game designers,promotions staff, and customer support personnel organized numerous events for players.Some activities for users of the Company are as follow:
Since 2016, Asktao (Mobile) project team has been organizing multiple“Designers Talk” events annually in different cities. Since 2017, Asktao (Mobile) hasheld a national competition every year, attracting a large number of participants,creating an energetic and engaging environment. Starting from 2018, Asktao (Mobile)project team has held an annual Asktao Conference, which gives players anopportunity to engage in in-depth discussions and participate in fun events, eitheronline or offline. Since 2020, Asktao (Mobile) has conducted an annual event. Duringthis event, the head of product operations engages in one-on-one in-depth interviewswith players to understand their genuine needs, listen to their feedback, and addressissues they encounter in the game.
Overmortal hosts an annual "Offline Meet-and-Greet" event. Starting from 2023, theseevents have expanded to cities such as Hangzhou, Wuhan, Shenzhen, and Beijing, whereplayers can engage in Q&A sessions and fun activities to strengthen their connection with thegame.Additionally, to better provide high-quality membership services, the Company launchedthe official community platform "Leiting Games Membership Center" in November 2022. Onthis platform, players can access a range of game activity benefits, get the latest gameupdates and news, and enjoy various membership perks such as "Game Concierge," "DirectLine to Planners," and "Game Gift Packs." By offering a one-stop service platform, playerscan more conveniently participate in game activities and obtain information, while theCompany gains a direct platform for understanding player needs and feedback, which helpsin precisely optimizing products and services.
2. Advertising
The Company primarily engages in advertising promotion activities on platforms withactive user engagement by deploying advertising materials, Key Opinion Customer (KOC)recommendations, game 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 optimizesits advertising delivery model to adapt to changes in the market and user demands. It strivesto reach the target audience with higher efficiency, 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 shortvideo platforms based on the dates of major version updates and user activities. Thesetargeted promotions ensure a continuous flow of new users. Furthermore, the Companycontinuously explores and experiments with various innovative marketing strategies,
including e-commerce live streaming, TikTok’s Star Network advertising, TikTok cloud game,and recruitment tasks.
3. IP Development
The Company’s IP development aims to enrich the game's world, character portrayals,and storylines 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 isenhancing game stories and player immersion through various Asktao IP derivatives,including novels, audiobooks, merchandise, and short films. From 2018 to 2021, Asktao(Mobile) successively released two official novels, Asktao: Dashing Spear and Asktao: Taoin the Heart. The Company invited dozens of veteran players to participate in creativediscussions and trial readings for the novels, aiming to authentically represent the world ofAsktao (Mobile) as envisioned by the players. In November 2023, adopting a "Co-creationwith Fellow Daoists" approach, the Company launched the first animated series of Asktao(Mobile) titled Wulong Daoist Adventures in Zhongzhou. This series faithfully reproducesclassic scenes and NPC characters from the game, presenting players with a more diverseand immersive gaming world.
Overmortal is a unique Taoist immortality cultivation-themed IP which is enhanced bymusic recordings, comics, novels, animations, and more. Since its launch in 2022, thederivative IP animation has been consistently updated on platforms such as TikTok,Kuaishou, and Bilibili. The cumulative fan base across all platforms has exceeded 3.2 million.Additionally, the game continues to engage and retain users through a long-term strategy ofIP content. It has released brand documentaries such as the film Ordinary Yet Extraordinary,the comic Overmortal, the audiobook Between Demon and Immortal, the game's themesong, animation, and more, all of which have received widespread acclaim from players.
4. Collaborations
Based on the characteristics of games and players, the Company frequently
collaborates with products that have a high overlap with the target user base to conduct jointactivities. This approach aims to attract more user attention and recognition. Collaborativepartners include games, novels, animated films, online animated series, and other well-known IPs.
During the reporting period, Asktao (Mobile) collaborated with Journey to the West forits 8th anniversary event, introducing a Monkey King-themed costume and releasing a re-arranged version of Dare to Ask Where Is the Road (theme song of the series Journey to theWest) performed with traditional Chinese instruments. Aobi Island: Dreamland maintainedfrequent content updates, its collaborated with multiple well-known IPs/brands, including thePalace Museum’s The World of the Palace, Sherlock Holmes and Balala the Fairies,launching a series 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 the recognitionfrom leading platforms such as the App Store and TapTap. The Company is regularlyfeatured in its charts, attracting a significant number of downloads and earning widespreadattention. In addition, players' ratings and discussions on these platforms have furtherincreased its games' popularity. During the reporting period, several of the Company’s games,including Asktao (Mobile), Overmortal, Aobi Island: Dreamland, World Flipper, ChineseCuisine Cruise were featured 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 game platforms, recommendations from KOCs (key opinionconsumers), WeChat accounts, QQ groups, and its official channels. The Company’sapproach includes user selection, expectation management, feature communication, anduser feedback tracking to refine and improve its operations.
（III） Discussion and Analysis of Business Operations
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 |
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 |
| Dragon POW! | Licensed | Fantasy Roguelike Shooting Game | August, 2023 |
Chinese Cuisine Cruise
| Chinese Cuisine Cruise | Licensed | Business Simulation Game | January, 2024 |
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 |
Gumballs
| Gumballs | Licensed | Roguelike and Simulation | December, 2016 |
Note: （1）All the games are mobile games except Asktao (PC) and Outpost: Infinity Siege.
（2）The products in the table are sorted according to their importance and operationalperformance.
1. Asktao (PC)
The Company’s first self-developed PC game, Asktao (PC), was launched in April 2006and quickly became a favorite among gamers, even reaching a peak of nearly one millionconcurrent users. The game's excellence was recognized with the Best Design for DigitalBalance and the Best 2D (characters/scenes) Art Design awards at the 5th annual CGDA(China Game Developers Awards). It was also nominated as one of the Top 10 OutstandingPC Games in 2022 by CADPA (China Audio-Video and Digital Publishing Association).Since its release in 2006, Asktao (PC) has won players' hearts with its high-qualitygameplay and reasonable commercialization design. To prolong the game's life cycle andincrease its IP value, the Company adapts to market trends and player feedback to update
the game consistently. 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.
2. 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 wasdeeply optimized to adapt its core gameplay to the mobile platform. The Company alsoincorporates user feedback into regular updates to ensure the game meets player expectations.To extend the game's life cycle, the Company persistently work on enhancing the Asktao brandand its IP value.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.In 2024, Asktao (Mobile) continued its long-term stable operation strategy. In January, thegame launched the New Year update. In April, the game celebrated its 8th anniversary with
new features such as new costumes, anniversary pets, and special gift packs. The anniversarycelebration also included a grand gala, which attracted a large number of viewers andmaintained high levels of engagement and popularity. In July, the summer update was released,featuring new costumes and companion pets, as well as upgrades to the game's casualgameplay and benefits, providing players with a refreshed game experience. Additionally, apartfrom the New Year, Anniversary, Summer, and National Day updates, the Company plans tointroduce a special update in November to enrich the game's content for players.In June 2024, Asktao (Mobile) launched its official community app, Asktao in Hand. Thisapp provides players with a convenient interactive platform for accessing game news, sharingexperiences, and directly communicating with the planning team, making it easier for players toimmerse themselves in the "Asktao" universe.During the reporting period, Asktao (Mobile) maintained an average ranking of 35th onthe App Store's bestselling game list, with a peak ranking of 10th.
3. Overmortal
Overmortal is an in-house developed, idle Taoist immortality cultivation mobile gamewith a traditional Chinese ink wash art style. The game depicts a Taoist realm inhabited byhumans, immortals, monsters, and demons. It faithfully recreates the stages andmechanisms of Taoist spiritual cultivation, as well as displaying abilities and techniques from
similar novels of the genre. Accompanied by dynamic lighting and sound effects, players willenjoy an immersive and engaging gaming experience.With outstanding game development and operational performance, Overmortal hasreceived high industry recognition, winning awards such as the Best Concept Art Designaward at 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 bythe CADPA in 2021. The production team received the "Jury's Choice Game ProductionTeam Award" at the 15th CGDA Outstanding Game Producer Competition and was honoredwith the "Outstanding Game Studio of the Year Award" at the 8th Golden Gyro Award. In2023, Overmortal officially launched the "Guardians of Intangible Cultural Heritage" culturalpublic welfare project. It has successfully implemented various intangible cultural heritagepublic welfare activities, including cuju (ancient Chinese football), paper cutting, Peking 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 26 millionregistered users. In the subsequent operational strategy, the Company will focus more onexisting users, refining user acquisition to reduce inefficient spending. In terms of promotion,there will be a continued emphasis on brand exposure, moderate adjustments and control ofperformance-based advertising expenses, and active exploration of innovative marketingmethods. For user operations, activities such as daily live streaming, Key Opinion Consumer(KOC) promotion, content creation, e-commerce initiatives, and community re-engagementwill be carried out to continually enhance user engagement and interaction. Simultaneously,Overmortal will persist in IP development, enriching game content with diverse derivativematerials such as novels, music, comics, and animations to boost brand influence and fostera unique IP culture recognition among players.
During the reporting period, Overmortal maintained a steady update pace, continuouslylaunching various events and versions, and introduced a new cultivation path, which receivedpositive feedback from players. Overmortal maintained an average ranking of 67th on theApp Store's bestselling game list, with a peak ranking of 27th.
4. Aobi Island: Dreamland
Aobi Island: Dreamland is a casual mobile game based off an existing IP launched onJuly 12, 2022. The game retains many iconic elements from its web-based predecessor,while introducing various social interaction features and integrating fashion trends such asmodernized Chinese traditional styles. Players can engage in various in-game features suchas character development, management simulation, and outfit changing. The game has beenupdated at a rapid pace since its release, providing players with a fresh and varied gamingexperience.
Since its launch, the game has maintained a rapid iteration and update pace,continuously introducing new events, gameplay features, and various brand/IP collaborations,providing players with a diverse and enriching gaming experience.
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 |
Immortal Sword(Codename M72)
| Immortal Sword (Codename M72) | ISBN License Obtained | Idle Taoist Cultivation Simulation | Mainland China, Hong Kong, Macao, Taiwan, and Southeast Asia | TBD |
Scepter and Sword(Codename M88)
| Scepter and Sword (Codename M88) | ISBN License Obtained | Fantasy Idle Cultivation Game | Mainland China, Hong Kong, Macao, and Taiwan, as well as Japan and South Korea | First Half of 2025 |
Fortress Battle
| Fortress Battle | ISBN License Obtained | Tower Defense SLG | Worldwide | TBD |
M11 (Codename)
| M11 (Codename) | ISBN License 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 |
League of Gods：
Fantasyland
| League of Gods：Fantasyland | Owned | Chinoiserie RPG | Mainland China | Oct 18th,2024 |
Main Reserve Products (Licensed)Licensed Products
| Licensed Products | ISBN License | Genre | Authorized Regions | Estimated Release Date |
Billion Light Years
| Billion Light Years | Owned | Science Fiction Theme Card Game with Light SLG Elements | Worldwide | TBD |
Stone Heros: Squad Saga
| Stone Heros: Squad Saga | Owned | Strategy Card Battle | Europe and America | TBD |
Echoes of Vision
| Echoes of Vision | Owned | Urban Horror Mystery Strategy | Mainland China | Second Half of 2024 |
Super Kairo Manager
| Super Kairo Manager | Owned | Business Simulation Game | Mainland China | TBD |
Kingdom Adventurers
| Kingdom Adventurers | Owned | Simulation Management Strategy and RPG Progression | Mainland China | Second Half of 2024 |
Note: 1. The final launch status, timing, and intended release regions of games listed in theproduct 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.
2. 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:
1. Immortal Sword (Codename M72)
Immortal Sword (Codename M72) is an idle mobile game with a Taoist immortalitytheme. You start as a novice Taoist and gradually grow into an important member of yoursect, engaging in breathtaking adventures across three realms. The game brings to life 3Daerial combat, recreating the mid-air battles and the use of magical talismans, reminiscent ofrenowned Chinese fantasy tales. The game has obtained its ISBN license and will conduct atest in the third quarter of 2024. The official launch date is to be determined.
2. Scepter and Sword (Codename M88)
Scepter and Sword (Codename M88) is an immersive idle MMORPG mobile game.Within the game, players have the freedom to customize their characters, combine diverseskillsets, and select their preferred class branches. Employing strategies to combatformidable foes, players explore the realm of lost mysterious legends in this world of swordand magic. You can build your own homes, engage in guild activities, participate in teambattles, and embark on adventurous journeys with other players, relaxing in the laid-back idlegaming experiences. The game has obtained its ISBN license and is scheduled to belaunched in the first half of 2025.
iii. Overseas Business OverviewThe Company has been actively expanding its overseas business. In terms of researchand development, apart from a few reserved domestic IP-based products, the Companyrequires all in-house developed products must be targeted towards overseas markets to beconsidered for approval. In terms of operation, the Company has established a testing andoperation system covering most countries and regions worldwide. Additionally, localizationteams deeply participate in the game development process to ensure that the products meetthe preferences of different regional markets and players.
From January to June 2024, the Company's overseas business achieved operatingrevenue of RMB 255.03 million, representing a year-on-year growth of 113.77%. During theReporting Period, the Company successfully launched products overseas, including MonsterNever Cry, Dragon POW!(Overseas version), Outpost: Infinity Siege(Steam).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,including Scepter and Sword (Codename M88), Stone Heros: Squad Saga, Billion Light Year,and more.
iv. Investment Activities OverviewThe Company continues to deepen its presence in the game market, focusing on theresearch and development as well as operational aspects of online game. 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 investedor holds shares:
1. 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-drawn art style, and the roguelike game Gumballs. It was listed on the Hong Kong Exchangesin December 2021, and G-bits holds an 18.55% stake in Qingci Games.As of the end of 2023, the total revenue of The Marvelous Snail both domestically andinternationally has reached approximately RMB 3.26 billion, with a cumulative registered usercount exceeding 26.72 million.
2. TapTap
TapTap, founded in March 2016, manages the TapTap platform. G-bits holds a 9.67%stake in TapTap. TapTap platform is a renowned third-party platform connecting gamedevelopers, publishers, and players, allowing users to download high-quality games andshare their experiences with others.
3. Xiamen Yongshi Technology Co., Ltd.
Xiamen Yongshi Technology Co., Ltd., established in December 2014, focuses ononline game development and operation. G-bits holds a 20.00% stake in Xiamen Yongshi.Azure Lane, an anime-style game co-developed by Xiamen Yongshi, is the first domesticallyproduced second-dimensional game to top the Japanese iOS bestselling list. Its in-housedeveloped game, Eye of Deep Space has garnered over 0.14 million five-star reviews on the
App Store. Xiamen Yongshi is listed on the NEEQ. According to its 2023 annual report, itgenerated a net profit of RMB 87.20 million.
4. Xiamen Taojin Interactive Network Co., Ltd.
Established in June 2013, Xiamen Taojin Interactive Network Co., Ltd. focuses ononline game development and production. Xiamen Taojin created the popular roguelikeseries Dungeon Survivor. G-bits holds a 30.00% stake in Xiamen Taojin. Xiamen Taojin islisted on the NEEQ. According to its 2023 annual report, it generated a net profit of RMB
14.71 million.
5. Xiamen Zhenyouqu Information Technology Co., Ltd.
Xiamen Zhenyouqu Information Technology Co., Ltd., established in August 2012,mainly develops and produces online games. G-bits holds a 10.00% stake in XiamenZhenyouqu. It has numerous popular games such as Sausage Party, Ulala: Idle Adventure,and Rapid Clash. In particular, Sausage Party has over 240 million downloads on TapTap.
6. Unity Technologies China
Unity 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 enginedevelopment companies in the industry. Unity Technologies China is committed to creating amore suitable engine version for Chinese developers, and its products have extensiveapplications in various fields such as gaming, automotive, consumer culture and tourism,industrial manufacturing, and film and animation. In 2023, Unity Technologies China officiallylaunched the Unity Technologies China Edition Engine.
7. 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 on
the Steam.
Part IV Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 30 June 2024 | 31 December 2023 |
| Current assets | ||
| Cash and Cash equivalents | 2,166,411,990.84 | 2,397,018,382.09 |
| Settlements Provision | ||
| Loans to banks and other financial institutions | ||
| Financial assets held for trading | 1,694,451,974.41 | 1,125,621,695.38 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 249,970,431.59 | 238,756,746.14 |
| Financing receivables | ||
| Prepayments | 28,025,557.49 | 21,422,780.34 |
| Insurance premium receivable | ||
| Due from reinsurers | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 9,740,235.97 | 5,599,445.09 |
| Including: Interest receivable | ||
| Dividends receivable | 3,600,000.00 | |
| Financial assets purchased under agreements to resell | ||
| Inventories | ||
| Contract assets | ||
| Assets classified as held for sale | ||
| Current portion of non-current assets | 10,759,554.45 | 11,536,441.92 |
| Other current assets | 13,809,526.60 | 11,746,515.71 |
| Total current assets | 4,173,169,271.35 | 3,811,702,006.67 |
| Non-current assets | ||
| Loans and advances | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 10,021,236.41 | 11,908,237.48 |
| Long-term equity investments | 1,143,490,291.09 | 1,164,814,123.76 |
| Other equity instruments investments | ||
| Other non-current financial assets | 614,056,419.81 | 620,273,547.42 |
| Investment properties | 163,544,055.80 | 170,713,042.03 |
| Fixed assets | 579,723,394.28 | 596,402,026.29 |
| Construction in progress | 7,653,698.17 | 1,660,948.61 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use asset | 31,391,772.66 | 36,327,899.47 |
| Intangible assets | 68,936,948.49 | 69,766,821.60 |
| Development expenditures | ||
| Goodwill | 3,808,266.80 | 3,808,266.80 |
| Long-term prepaid expenses | 10,400,252.00 | 20,045,631.47 |
| Deferred tax assets | 90,640,169.23 | 83,259,745.81 |
| Other non-current assets | 44,845,270.24 | 46,088,941.01 |
| Total non-current assets | 2,768,511,774.98 | 2,825,069,231.75 |
| Total assets | 6,941,681,046.33 | 6,636,771,238.42 |
| Current liabilities | ||
| Short-term borrowings | ||
| Borrowing from the central bank |
| Item | 30 June 2024 | 31 December 2023 |
| Deposits and balances from banks and other financial institutions | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 171,816,896.10 | 188,815,811.08 |
| Receipts in advance | 110,212.29 | 501,832.24 |
| Contract liabilities | 494,956,541.14 | 417,007,621.68 |
| 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 | 391,961,788.72 | 455,196,050.52 |
| Taxes payable | 202,417,107.70 | 182,803,660.02 |
| Other payables | 34,935,807.54 | 34,516,136.28 |
| Including: Interest payable | ||
| Dividend payable | ||
| Fees and commission payable | ||
| Payable reinsurance | ||
| Liabilities classified as held for sale | ||
| Current portion of non-current liabilities | 11,299,456.43 | 10,800,876.22 |
| Other current liabilities | 14,644,555.10 | 13,186,313.60 |
| Total current liabilities | 1,322,142,365.02 | 1,302,828,301.64 |
| Non-current liabilities | ||
| Insurance reserves | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference share | ||
| Perpetual debt | ||
| Lease liabilities | 23,744,423.82 | 28,132,847.55 |
| Long-term Payable | ||
| Long-term payroll and employee benefits payable | ||
| Provisions | ||
| Deferred income | 145,775.64 | 159,642.70 |
| Deferred tax liabilities | 764,082.11 | 705,651.53 |
| Other non-current liabilities | 49,327,426.30 | 57,336,347.24 |
| Total non-current liabilities | 73,981,707.87 | 86,334,489.02 |
| Total liabilities | 1,396,124,072.89 | 1,389,162,790.66 |
| Shareholders' equity: | ||
| Paid-in capital | 72,041,101.00 | 72,041,101.00 |
| Other equity instruments | ||
| Including: Preference share | ||
| Perpetual debt | ||
| Capital reserve | 1,400,913,027.92 | 1,400,918,753.30 |
| Less: treasury shares | 44,728,187.00 | |
| Other comprehensive income | 79,094,885.87 | 73,375,545.86 |
| Special reserve | ||
| Surplus reserve | 36,020,550.50 | 36,020,550.50 |
| General reserve | ||
| Retained earnings | 3,399,313,670.46 | 2,881,486,077.30 |
| Equity attributable to shareholders of the Company | 4,942,655,048.75 | 4,463,842,027.96 |
| Non-controlling interests | 602,901,924.69 | 783,766,419.80 |
| Total shareholders’ equity | 5,545,556,973.44 | 5,247,608,447.76 |
| Total liabilities and shareholders’ equity | 6,941,681,046.33 | 6,636,771,238.42 |
Legal Representative: LU Hongyan Chief Accountant: LIN Jiajin Head of Accounting Department:
CHEN Hualiang
COMPANY STATEMENT OF FINANCIAL POSITION
As at 30 June 2024Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | 30 June 2024 | 31 December 2023 |
| Current assets | ||
| Cash and Cash equivalents | 159,476,963.35 | 172,514,364.01 |
| Financial assets held for trading | 480,044,358.38 | 328,976,474.94 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 20,834,088.52 | 45,693,275.98 |
| Financing receivables | ||
| Prepayments | 853,778.15 | 1,158,216.36 |
| Other receivables | 50,998,240.38 | 70,829,561.42 |
| Including: Interest receivable | ||
| Dividends receivable | 40,736,500.00 | 69,977,500.00 |
| Inventories | ||
| Contract assets | ||
| Assets classified as held for sale | ||
| Current portion of non-current assets | 5,317,202.49 | 5,555,356.97 |
| Other current assets | 425,146.89 | 383,623.67 |
| Total current assets | 717,949,778.16 | 625,110,873.35 |
| Non-current assets | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 2,055,758.13 | 2,486,121.17 |
| Long-term equity investments | 2,236,427,191.12 | 2,150,458,973.88 |
| Other equity instruments investments | ||
| Other non-current financial assets | 141,941,611.33 | 148,546,250.01 |
| Investment properties | 272,525,905.75 | 283,235,747.11 |
| Fixed assets | 9,592,014.04 | 10,328,855.38 |
| Construction in progress | ||
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use asset | ||
| Intangible assets | 326,689.11 | 423,898.63 |
| Development expenditures | ||
| Goodwill | ||
| Long-term prepaid expenses | 281,324.75 | 364,995.95 |
| Deferred tax assets | ||
| Other non-current assets | ||
| Total non-current assets | 2,663,150,494.23 | 2,595,844,842.13 |
| Total assets | 3,381,100,272.39 | 3,220,955,715.48 |
| Current liabilities | ||
| Short-term borrowings | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 2,446,467.64 | 3,091,805.96 |
| Receipts in advance | 48,753.84 | 534,094.42 |
| Contract liabilities | 19,866,957.50 | 19,695,860.98 |
| Payroll and employee benefits payable | 81,289,590.13 | 103,614,920.85 |
| Taxes payable | 22,250,566.73 | 27,210,531.94 |
| Item | 30 June 2024 | 31 December 2023 |
| Other payables | 4,572,076.09 | 5,012,208.17 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liabilities classified as held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 1,689,723.73 | 1,454,183.60 |
| Total current liabilities | 132,164,135.66 | 160,613,605.92 |
| 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 | 145,775.64 | 151,675.64 |
| Deferred tax liabilities | ||
| Other non-current liabilities | 1,791,927.05 | 1,777,206.67 |
| Total non-current liabilities | 1,937,702.69 | 1,928,882.31 |
| Total liabilities | 134,101,838.35 | 162,542,488.23 |
| Shareholders’ equity： | ||
| Paid-in capital | 72,041,101.00 | 72,041,101.00 |
| Other equity instruments | ||
| Including: Preference share | ||
| Perpetual debt | ||
| Capital reserve | 1,210,013,511.42 | 1,210,019,236.80 |
| Less: treasury shares | 44,728,187.00 | |
| Other comprehensive income | -24,035.06 | -24,035.06 |
| Special reserve | ||
| Surplus reserve | 36,020,550.50 | 36,020,550.50 |
| Retained earnings | 1,973,675,493.18 | 1,740,356,374.01 |
| Total shareholders’ equity | 3,246,998,434.04 | 3,058,413,227.25 |
| Total liabilities and shareholders’ equity | 3,381,100,272.39 | 3,220,955,715.48 |
Legal Representative: LU Hongyan Chief Accountant: LIN Jiajin Head of AccountingDepartment: CHEN Hualiang
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2024Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | H1 2024 | H1 2023 |
| 1. Total revenue | 1,959,649,131.75 | 2,348,924,659.16 |
| Including: Operating revenue | 1,959,649,131.75 | 2,348,924,659.16 |
| Interest income | ||
| Net earned premiums | ||
| Net fee and commission revenue | ||
| 2. Total cost of sales | 1,282,294,987.13 | 1,372,301,755.60 |
| Including: Cost of sales | 230,937,298.45 | 269,653,185.81 |
| Interest expenses | ||
| Fees and commission expenses | ||
| Surrenders | ||
| Net payments for insurance claims | ||
| Net provision of insurance reserve |
| Item | H1 2024 | H1 2023 |
| Policyholder dividends | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 12,091,873.72 | 13,817,803.01 |
| Selling expenses | 537,604,809.95 | 643,496,326.15 |
| General and administrative expenses | 180,079,270.17 | 195,040,040.65 |
| Research and development expenses | 391,149,398.94 | 369,828,064.89 |
| Financial expenses | -69,567,664.10 | -119,533,664.91 |
| Including: Interest expense | 896,207.32 | 651,783.12 |
| Interest income | 49,338,496.86 | 45,750,292.34 |
| Add: Other income | 11,732,001.03 | 36,216,535.75 |
| Investment income/(loss) | 90,032,854.68 | 67,632,401.01 |
| Including: Share of profits or loss of associates and joint ventures | 24,252,754.63 | 58,257,678.97 |
| Gain from derecognition of financial assets measured at amortized cost | ||
| Exchange gains or losses | ||
| Net exposure hedging gains/ (losses) | ||
| Gain/ (loss) on the changes in fair value | -2,268,121.06 | 1,012,585.46 |
| Credit impairment losses | -407,959.61 | 957,606.19 |
| Assets impairment losses | -41,887,915.72 | -149,355.22 |
| Gain/ (loss) from disposal of assets | -15,567.10 | 161,357.95 |
| 3. Operating profit | 734,539,436.84 | 1,082,454,034.70 |
| Add: Non-operating income | 751,447.96 | 193,954.18 |
| Less: Non-operating expenses | 1,092,566.08 | 1,261,219.80 |
| 4. Profit/(loss) before tax | 734,198,318.72 | 1,081,386,769.08 |
| Less: Income tax expense | 109,522,329.41 | 187,643,728.41 |
| 5. Net profit /(loss) | 624,675,989.31 | 893,743,040.67 |
| (1) Categorized by operation continuity | ||
| Net profit from continuing operations | 624,675,989.31 | 893,743,040.67 |
| Net profit from discontinuing operations | ||
| (2) Categorized by ownership | ||
| Net profit attributable to shareholders of the Company | 517,827,593.16 | 675,971,006.54 |
| Net profit attributable to non-controlling interests | 106,848,396.15 | 217,772,034.13 |
| 6. Other comprehensive income, net of tax | 6,006,448.75 | 32,736,567.34 |
| (1) Other comprehensive income, net of tax, attributable to shareholders of the Company | 5,719,340.01 | 31,301,728.27 |
| (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 | 5,719,340.01 | 31,301,728.27 |
| Other comprehensive income that can be reclassified to profit or loss in equity method | 2,370,523.90 | 8,719,662.30 |
| 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 | 3,348,816.11 | 22,582,065.97 |
| Others | ||
| (2) Other comprehensive income, net of tax, attributable to non- | 287,108.74 | 1,434,839.07 |
| Item | H1 2024 | H1 2023 |
| controlling interests | ||
| 7. Total comprehensive income | 630,682,438.06 | 926,479,608.01 |
| Total comprehensive income attributable to shareholders of the Company | 523,546,933.17 | 707,272,734.81 |
| Total comprehensive income attributable to non-controlling interests | 107,135,504.89 | 219,206,873.20 |
| 8. Earnings per share | ||
| Basic earnings per share (yuan / share) | 7.18 | 9.40 |
| Diluted earnings per share (yuan / share) | 7.18 | 9.39 |
Legal Representative: LU Hongyan Chief Accountant: LIN Jiajin Head of AccountingDepartment: CHEN Hualiang
INCOME STATEMENT OF COMPANYFor the six months ended 30 June 2024Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | H1 2024 | H1 2023 |
| 1. Total revenue | 204,139,160.70 | 188,690,911.55 |
| Less: Total cost of sales | 25,428,002.75 | 24,331,834.66 |
| Taxes and surcharges | 2,636,055.87 | 2,380,122.39 |
| Selling expenses | ||
| Administrative expenses | 26,677,440.36 | 31,248,373.61 |
| Research and development expenses | 69,169,866.33 | 72,013,475.11 |
| Finance expenses | -2,367,777.20 | -5,433,832.03 |
| Including: Interest expenses (expressed with positive value) | ||
| Interest income (expressed with positive value) | 2,274,873.04 | 4,019,007.66 |
| Add: Other income | 1,827,938.26 | 23,071,223.30 |
| Investment income/(loss) | 162,678,906.70 | 405,947,008.66 |
| Including: Share of profits or loss of associates and joint ventures | -1,823,242.76 | -414,794.00 |
| Gain from derecognition of financial assets measured at amortized cost | ||
| Net exposure hedging gains/ (losses) | ||
| Gain/ (loss) on the changes in fair value | -4,702,386.92 | -2,493,559.21 |
| Credit impairment losses | 1,359,209.23 | 302,347.91 |
| Assets impairment losses | ||
| Gain/ (loss) from disposal of assets | 979.59 | 419.03 |
| 2. Operating profit/Loss | 243,760,219.45 | 490,978,377.50 |
| Add: Non-operating income | 6,863.31 | 5,795.58 |
| Less: Non-operating expenses | 440,453.54 | 255,057.24 |
| 3. Profit/(loss) before tax | 243,326,629.22 | 490,729,115.84 |
| Less: Income tax expense | 10,007,510.05 | 16,026,823.63 |
| 4. Net profit /(loss) | 233,319,119.17 | 474,702,292.21 |
| (1) Net profit from continuing operations | 233,319,119.17 | 474,702,292.21 |
| (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 | ||
| Changes in fair value of enterprise's own credit risk |
| Item | H1 2024 | H1 2023 |
| (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 | 233,319,119.17 | 474,702,292.21 |
| 7. Earnings per share | ||
| (1) Basic earnings per share (yuan / share) | ||
| (1) Diluted earnings per share (yuan / share) |
Legal Representative: LU Hongyan Chief Accountant: LIN Jiajin Head of AccountingDepartment: CHEN Hualiang
CONSOLIDATED STATEMENT OF CASH FLOWSFor the six months ended 30 June 2024Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | H1 2024 | H1 2023 |
| 1. Cash flows from operating activities | ||
| Cash receipts from the sale of goods and the rendering of services | 2,109,069,807.56 | 2,362,948,931.09 |
| 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 | 79,281,353.25 | 96,462,452.54 |
| Sub-total of cash inflows | 2,188,351,160.81 | 2,459,411,383.63 |
| Cash paid for purchase of goods and services | 247,940,247.16 | 387,513,135.80 |
| 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 | 636,179,184.28 | 610,711,025.42 |
| Cash paid for taxes | 184,541,237.26 | 268,724,511.21 |
| Cash paid relating to other operating activities | 525,407,299.68 | 590,812,870.56 |
| Sub-total of cash outflows | 1,594,067,968.38 | 1,857,761,542.99 |
| Net cash flows from operating activities | 594,283,192.43 | 601,649,840.64 |
| 2. Cash flows from investing activities |
| Item | H1 2024 | H1 2023 |
| Cash received from disposal of investments | 4,012,416,677.89 | 2,181,050,000.00 |
| Cash received from investment income | 41,830,800.38 | 62,707,662.00 |
| Net proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets | 75,174.00 | 1,310.00 |
| Cash received from disposal of subsidiaries and other business units | ||
| Cash received relating to other investing activities | ||
| Sub-total of cash inflows | 4,054,322,652.27 | 2,243,758,972.00 |
| Purchase of property, plant and equipment, intangible assets and other non-current assets | 14,815,806.55 | 41,046,523.24 |
| Cash paid for investments | 4,549,776,111.00 | 2,756,960,000.00 |
| 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 | 4,564,591,917.55 | 2,798,006,523.24 |
| Net cash flows from investing activities | -510,269,265.28 | -554,247,551.24 |
| 3. Cash flows from financing activities | ||
| Cash received from investment | 63,743,604.71 | |
| 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 | 63,743,604.71 | |
| Repayments for debts | ||
| Cash payments for distribution of dividends or profit and interest expenses | 288,000,000.00 | 428,916,112.00 |
| Including: Dividends or profit paid to non-controlling shareholders of subsidiaries | 288,000,000.00 | 204,000,000.00 |
| Cash payments relating to other financing activities | 50,775,977.23 | 3,607,844.95 |
| Subtotal of cash outflows | 338,775,977.23 | 432,523,956.95 |
| Net cash flows from financing activities | -338,775,977.23 | -368,780,352.24 |
| 4. Effect of exchange rate changes on cash and cash equivalents | 23,769,510.43 | 74,837,052.69 |
| 5. Net increase in cash and cash equivalents | -230,992,539.65 | -246,541,010.15 |
| Add: Cash and cash equivalents at beginning of year | 2,395,180,751.59 | 2,622,640,821.07 |
| 6. Cash and cash equivalents at end of the period | 2,164,188,211.94 | 2,376,099,810.92 |
Legal Representative: LU Hongyan Chief Accountant: LIN Jiajin Head of AccountingDepartment: CHEN Hualiang
COMPANY STATEMENT OF CASH FLOWSFor the six months ended 30 June 2024Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | H1 2024 | H1 2023 |
| 1. Cash flows from operating activities | ||
| Cash receipts from the sale of goods and the rendering of services | 219,817,551.74 | 176,479,019.30 |
| Tax refunds received | ||
| Cash received relating to other operating activities | 21,633,410.97 | 42,120,414.02 |
| Sub-total of cash inflows | 241,450,962.71 | 218,599,433.32 |
| Cash paid for purchase of goods and services | 3,990,743.14 | 1,563,337.97 |
| Cash paid to and on behalf of employee | 120,345,737.91 | 120,964,069.28 |
| Cash paid for taxes | 29,716,404.17 | 40,189,771.25 |
| Cash paid relating to other operating activities | 12,396,420.60 | 13,796,480.26 |
| Sub-total of cash outflows | 166,449,305.82 | 176,513,658.76 |
| Item | H1 2024 | H1 2023 |
| Net cash flows from operating activities | 75,001,656.89 | 42,085,774.56 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | 963,000,000.00 | 210,000,000.00 |
| Cash received from investment income | 196,347,646.75 | 286,022,510.83 |
| Net proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets | ||
| Cash received from disposal of subsidiaries and other business units | ||
| Cash received relating to other investing activities | ||
| Sub-total of cash inflows | 1,159,347,646.75 | 496,022,510.83 |
| Purchase of property, plant and equipment, intangible assets and other non-current assets | 410,754.65 | 2,892,637.93 |
| Cash paid for investments | 1,202,291,460.00 | 436,100,000.00 |
| Cash Paid for disposal of subsidiaries and other business units | ||
| Cash paid relating to other investing activities | ||
| Sub-total of cash outflows | 1,202,702,214.65 | 438,992,637.93 |
| Net cash flows from investing activities | -43,354,567.90 | 57,029,872.90 |
| 3.Cash flows from financing activities | ||
| Cash received from investment | 63,743,604.71 | |
| Proceeds from borrowings | ||
| Cash receipts relating to other financing activities | ||
| Subtotal of cash inflows | 63,743,604.71 | |
| Repayments for debts | ||
| Cash payments for distribution of dividends or profit and interest expenses | 224,916,112.00 | |
| Cash payments relating to other financing activities | 44,733,912.38 | 122,760.30 |
| Subtotal of cash outflows | 44,733,912.38 | 225,038,872.30 |
| Net cash flows from financing activities | -44,733,912.38 | -161,295,267.59 |
| 4. Effect of exchange rate changes on cash and cash equivalents | -466.16 | 3,783.81 |
| 5. Net increase in cash and cash equivalents | -13,087,289.55 | -62,175,836.32 |
| Add: Cash and cash equivalents at beginning of year | 171,682,308.46 | 312,508,715.23 |
| 6. Cash and cash equivalents at end of the period | 158,595,018.91 | 250,332,878.91 |
Legal Representative: LU Hongyan Chief Accountant: LIN Jiajin Head of AccountingDepartment: CHEN Hualiang
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2024Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | H1 2024 | ||||||||||||||
| 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 | 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 | |||||||
| Changes in accounting policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of the year | 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 | |||||||
| 3. Increase/(decrease) during the period | -5,725.38 | 44,728,187.00 | 5,719,340.01 | 517,827,593.16 | 478,813,020.79 | -180,864,495.11 | 297,948,525.68 | ||||||||
| (1) Total comprehensive income | 5,719,340.01 | 517,827,593.16 | 523,546,933.17 | 107,135,504.89 | 630,682,438.06 | ||||||||||
| (2) Shareholders’ contributions and reduction | 44,728,187.00 | -44,728,187.00 | -44,728,187.00 | ||||||||||||
| (i) Shareholders ‘contributions in ordinary share | 44,728,187.00 | -44,728,187.00 | -44,728,187.00 | ||||||||||||
| (ii) Other equity instruments contributions | |||||||||||||||
| (iii) Amount of share-based payments recognized in equity | |||||||||||||||
| (iv) Others | |||||||||||||||
| Item | H1 2024 | ||||||||||||||
| 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 | |||||||||||||
| (3). Profit distribution | -288,000,000.00 | -288,000,000.00 | |||||||||||||
| (i) Transfer to surplus reserve | |||||||||||||||
| (ii) Transfer to general Reserve | |||||||||||||||
| (iii) Distribution to shareholders | -288,000,000.00 | -288,000,000.00 | |||||||||||||
| (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 | |||||||||||||||
| Item | H1 2024 | ||||||||||||||
| 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 | |||||||||||||
| (6) Others | -5,725.38 | -5,725.38 | -5,725.38 | ||||||||||||
| 4. Balance at the end of the period | 72,041,101.00 | 1,400,913,027.92 | 44,728,187.00 | 79,094,885.87 | 36,020,550.50 | 3,399,313,670.46 | 4,942,655,048.75 | 602,901,924.69 | 5,545,556,973.44 | ||||||
| Item | H1 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 | 65,493,488.32 | 31,301,728.27 | 79,438.00 | 459,776,311.54 | 556,825,585.13 | 15,585,152.29 | 572,410,737.42 | |||||||
| (1) Total comprehensive income | 31,301,728.27 | 675,971,006.54 | 707,272,734.81 | 219,206,873.20 | 926,479,608.01 | ||||||||||
| (2) Shareholders’ contributions and reduction | 174,619.00 | 65,222,087.90 | 65,396,706.90 | 278,776.51 | 65,675,483.41 | ||||||||||
| (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 | |||||||||||||||
| Item | H1 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 | |||||||||||||
| contributions | |||||||||||||||
| (iii) Amount of share-based payments recognized in equity | 1,653,102.19 | 1,653,102.19 | 278,776.51 | 1,931,878.70 | |||||||||||
| (iv) Others | |||||||||||||||
| (3). Profit distribution | 79,438.00 | -216,194,695.00 | -216,115,257.00 | -204,000,000.00 | -420,115,257.00 | ||||||||||
| (i) Transfer to surplus reserve | 79,438.00 | -79,438.00 | |||||||||||||
| (ii) Transfer to general Reserve | |||||||||||||||
| (iii) Distribution to shareholders | -216,115,257.00 | -216,115,257.00 | -204,000,000.00 | -420,115,257.00 | |||||||||||
| (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 | |||||||||||||||
| Item | H1 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 | |||||||||||||
| (vi) Others | |||||||||||||||
| (5). Special reserve | |||||||||||||||
| (i). Additions | |||||||||||||||
| (ii). Utilisation | |||||||||||||||
| (6) Others | 271,400.42 | 271,400.42 | 99,502.59 | 370,903.00 | |||||||||||
| 4. Balance at the end of the period | 72,041,101.00 | 1,399,861,164.66 | 91,011,756.51 | 36,020,550.50 | 2,936,625,578.49 | 4,535,560,151.16 | 746,351,585.79 | 5,281,911,736.95 | |||||||
Legal Representative: LU Hongyan Chief Accountant: LIN Jiajin Head of Accounting Department: CHEN Hualiang
COMPANY STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2024Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
Unit: RMB Yuan
| Item | H1 2024 | ||||||||||
| 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 | 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 | |||||
| Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Others | |||||||||||
| 2. Balance at the beginning of the year | 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 | |||||
| 3. Increase/(decrease) during the period | -5,725.38 | 44,728,187.00 | 233,319,119.17 | 188,585,206.79 | |||||||
| Item | H1 2024 | ||||||||||
| 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) Total comprehensive income | 233,319,119.17 | 233,319,119.17 | |||||||||
| (2) Shareholders’ contributions and reduction | 44,728,187.00 | -44,728,187.00 | |||||||||
| (i)Shareholders’ contributions in ordinary share | 44,728,187.00 | -44,728,187.00 | |||||||||
| (ii)Other equity instruments contributions | |||||||||||
| (iii) Amount of share-based payments recognized in equity | |||||||||||
| (iv) Others | |||||||||||
| (3). Profit distribution | |||||||||||
| (i) Transfer to surplus reserve | |||||||||||
| (ii) Distribution to shareholders | |||||||||||
| (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 | -5,725.38 | -5,725.38 | |||||||||
| Item | H1 2024 | ||||||||||
| 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 | |||||||||
| 4. Balance at the end of the period | 72,041,101.00 | 1,210,013,511.42 | 44,728,187.00 | -24,035.06 | 36,020,550.50 | 1,973,675,493.18 | 3,246,998,434.04 | ||||
| Item | H1 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 | 65,500,864.41 | 79,438.00 | 258,507,597.21 | 324,262,518.62 | ||||||
| (1) Total comprehensive income | 474,702,292.21 | 474,702,292.21 | |||||||||
| (2) Shareholders’ contributions and reduction | 174,619.00 | 65,500,864.41 | 65,675,483.41 | ||||||||
| (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 | 1,931,878.70 | 1,931,878.70 | |||||||||
| (iv) Others | |||||||||||
| (3). Profit distribution | 79,438.00 | -216,194,695.00 | -216,115,257.00 | ||||||||
| (i) Transfer to surplus reserve | 79,438.00 | -79,438.00 | |||||||||
| (ii) Distribution to shareholders | -216,115,257.00 | -216,115,257.00 | |||||||||
| (iii) Others | |||||||||||
| (4) Transfer within equity | |||||||||||
| Item | H1 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 | |||||||||
| (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 | |||||||||||
| 4. Balance at the end of the period | 72,041,101.00 | 1,208,892,386.39 | -24,035.06 | 36,020,550.50 | 1,921,387,733.01 | 3,238,317,735.84 | |||||
Legal Representative: LU Hongyan Chief Accountant: LIN Jiajin Head of Accounting Department: CHEN Hualiang