the Chairman
SustainabilityHighlights
AboutKingNet Network
Materiality Assessmentof Sustainability Topics
SustainabilityManagement System
EnvironmentalChapter
SocialChapter
GovernanceChapter
Appendix
the Chairman
SustainabilityHighlights
AboutKingNet Network
Materiality Assessmentof Sustainability Topics
SustainabilityManagement System
EnvironmentalChapter
SocialChapter
GovernanceChapter
Appendix
the Chairman
SustainabilityHighlights
AboutKingNet Network
Materiality Assessmentof Sustainability Topics
SustainabilityManagement System
EnvironmentalChapter
SocialChapter
GovernanceChapter
Appendix
About the Report
Scope of Report
Basis of Preparation
Data Description
Principles of Preparation
Materiality
Accuracy
This is the third Sustainability Report and the 10th ESG Report released by KingNet NetworkCo., Ltd. It aims to disclose to all stakeholders the principles, management methods, e?ortsand achievements of the Company in sustainable development topics during its operation.
Scope of organisation: The Report covers KingNet Network Co., Ltd. (KingNet Network) andits subsidiaries. Unless otherwise speci?ed, the scope hereof remains consistent with thatin the consolidated ?nancial statements of KingNet Network (stock code: SZ.002517) overthe same period. The full and short names of the Company and subsidiaries involved in theReport are as follows:
The Report is prepared in accordance with theSelf-Regulatory Guidelines No. 17 forCompanies Listed on Shenzhen Stock Exchange—Sustainability Report (For TrialImplementation) (hereinafter referred to as the "Guidelines") and theShenzhen StockExchange Guidelines No. 1 on Self-Regulation of Listed Companies—StandardisedOperation of Companies Listed on the Main Board(revised in December 2023) , and withreference to theGRI Sustainability Reporting Standards 2021(hereinafter referred to as"GRI Standards") of the Global Sustainability Standards Board (GSSB).The data and cases in the Report are derived from o?cial records of the actual operationof the Company. The ?nancial data in the Report are all in RMB. In case of any discrepancywith the Company's annual ?nancial report, the annual ?nancial report shall prevail.
The Company has identi?ed material topics related to its operation that all stakeholdersare concerned about as the highlights of the Report. The presentation of material topics inthe Report focuses on the characteristics of the industry in which the Company operatesand the nature of its business activities. See the "Materiality Assessment of SustainabilityTopics" in the Report for the process and results of the materiality assessment of topics.
The Report ensures that the information is as accurate as possible. The data standards,calculation basis, and assumption conditions have been explained in the quantitativeinformation to guarantee that the calculation error range does not mislead thestakeholders. Quantitative information and notes are detailed in the "ESG Data Table andNotes" section of the Report.Time range: The reporting period is from 1 January to 31 December 2024. Unless otherwise
stated, the data in the Report are those within this period.
Release cycle: This is an annual report. The previous report was the 2023 Report.
Full NameShort Name
KingNet Network Co., Ltd.KingNet Network, the Company or weShanghai Doushi Network TechnologyCo., Ltd.
Shanghai DoushiShanghai KingNet Network TechnologyCo., Ltd.
Shanghai KingNetShanghai KingNet Software TechnologyCo., Ltd.
Shanghai KingNet SoftwareZhejiang Shenghe Network TechnologyCo., Ltd.
Zhejiang ShengheShaoxing Shengwang Network TechnologyCo., Ltd.
Shaoxing Shengwang
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AboutKingNet Network
Materiality Assessmentof Sustainability Topics
SustainabilityManagement System
EnvironmentalChapter
SocialChapter
GovernanceChapter
Appendix
Clarity
ComparabilityQuanti?cation
Integrity
Timeliness
Veri?ability
The Report is published in simpli?ed Chinese and English. The Report contains informationsuch as tables, diagrams, and and other information as a supplement to facilitate a betterunderstanding by stakeholders. To facilitate faster access to information for stakeholders,the Report provides a table of contents and a benchmarking index of ESG standards.
The statistics and disclosure of the same quantitative indicators in the Report areconsistent from one reporting period to another. If there are any changes in the datacollection, measurement, or calculation methods, the relevant data are retrospectivelyadjusted, with explanations of the adjustments and their reasons provided in the notes tothe Report so that stakeholders can conduct meaningful analyses and assess the trend ofthe Company's ESG performance level.
The Report discloses key quantitative performance indicators and, where possible,historical data.
The scope of the disclosures shall be in line with that of the Company's consolidated?nancial statements.The Report is an annual report and the Company endeavors to publish the Report assoon as possible after the end of the reporting year to provide stakeholders with timelyinformation for decision-making.
The cases and data in the Report come from the original records or financial reports ofthe Company's actual operations. The Company has adopted the HiESG performancemanagement system to administrate its quantitative sustainability performance over theyears so that the source of the disclosed data and the calculation process can be tracedand support external assurance inspections.External Audit
Access to the Report
Contact Us
SGS-CSTC Standard Technical Services Co., Ltd. (SGS) independently audited the datain the Report, relevant policies, and management systems. See "Appendix: Third-PartyIndependent Audit Report" for the details of the Audit Report.The Report is published in electronic form on the o?cial websites of the Company, SZSE,and Cninfo.
To continuously enhance our efforts in sustainability and ESG (Environmental, Social,and Governance) information disclosure, we welcome your feedback and suggestions.Please scan the QR code to provide your comments on this report, or feel free to contact usthrough the following means:
Address: 15/F, Block A, Expo Yaohua Business Centre, 899 Yaohua Road, Pudong New Area,ShanghaiEmail: csr@kingnet.com
ImpartialityThe Report reflects objective and factual information and impartially discloses bothpositive and negative information related to the Company. The Company found nonegative events that should have been disclosed but were not disclosed during thereporting period.
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SustainabilityHighlights
Materiality Assessmentof Sustainability Topics
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AppendixGovernanceChapterAboutKingNet NetworkMessage from the ChairmanIn 2024, China's game industry maintained steady growthin market size, alongside ongoing optimisation of theindustry ecosystem. The sector continued to serve as akey enabler and catalyst for cutting-edge technologicalinnovation, facilitating the transformation and application oftechnological advances. Meanwhile, the cultural dimensionof games became increasingly prominent. As an importantvehicle for preserving and promoting China's rich culturalheritage, games injected new vitality into the development oflocal cultural tourism and creative industries.KingNet Network, a well-known listed online gamecompany in China, upholds the sustainable developmentphilosophy of "Play With Buff" and continuously promotesthe implementation of the sustainable development plan forsustainable business. In 2024, we further strengthened ourstakeholder engagement mechanisms by building diversi?edcommunication platforms, actively listening to stakeholderfeedback, and responding to their concerns in a timelymanner. These efforts ensure our sustainability strategyremains closely aligned with stakeholder expectations.Advancing a green and low-carbon transformation to supporta sustainable climate. In response to climate change, the
Company set clear targets: To achieve carbon neutrality inoperation by 2025 and to achieve full value chain carbonneutrality by 2035. We actively managed climate-related risksand opportunities, earning a "B" score at the managementlevel in our ?rst response to the CDP climate questionnaire.Green practices were embedded in our daily operationsthrough initiatives such as paperless o?ce and the recyclingof office supplies. We also raised public awareness ofbiodiversity through projects like the eco-friendly game"Yorozuya" and a series of educational campaigns.
Continuing to broaden the scope of gaming, envisioning ajoyful and sustainable future. While deepening our presenceacross diverse game genres, we embraced the digital and AIrevolution, accelerating the development and deployment ofAI large models of "Xingyi" and "Zhimeng" and the KingNetChain platform. These digital intelligence innovationspowered our core gaming business and fuelled new qualityproductive forces. We also explored "Game+" integrationmodels—such as "Game + Culture" and "Game + CulturalTourism"—to contribute to the shaping of a dynamic digitalculture ecosystem. Meanwhile, we pressed ahead with globalexpansion, advancing our internationalisation strategy bydelivering high-quality content and sharing Chinese storieswith global audiences through gaming.Creating shared value with stakeholders. Guided by a people-oriented philosophy, we developed a comprehensive talentdevelopment system and strengthened our employerbrand appeal. Centred on user needs, we developed a high-quality service system that safeguarded user privacy anddata security while promoting the healthy development ofminors. Under the "KingNet's Love Public Welfare" banner,we launched public welfare projects such as "Girls' Escortof KingNet's Love" and the "Game Literacy Programme",spreading warmth and hope throughout society.Continuously enhancing governance e?ectiveness to unlocknew momentum for corporate development. Guided bythe goal of Red Party-building Leading Orange KingNet, weestablished a unique brand of Party building for Internetgame companies - an "Orange" Heart towards the Party (beloyal to the Party). We implemented a primary responsibilitysystem for our Chief Responsibility Officer (CRO) team,
continuously optimised our corporate governance structure,and promoted standardised and compliant operations. Wealso reinforced internal control mechanisms, and e?ectivelymitigated various risks to enhance compliant operations andmanagement.The sustainability performance received widespreadrecognition from both domestic and international capitalmarkets. The Company was scored B in the CDP ClimateQuestionnaire, and earned top-tier ratings from severaldomestic agencies, including an AAA rating from the CSI ESGIndex, AA from CNI ESG Rating, and A from Wind ESG Rating.The industry influence also continued to grow in 2024. Wewere recognised as a "Representative Enterprise of NewQuality Productive Forces" in China's game industry andreceived the "Game Empowerment Promoter Award". TheCompany also actively contributed to the formulation of sixindustry and group standards, including theGuidelines onInformation Disclosure of Corporate Social Responsibilityand ESG of Internet IndustryandEvaluation Guidelinesfor Corporate Social Responsibility and ESG InformationDisclosure by Internet Enterprises.
Looking ahead, we will continue to advance sustainabledevelopment by building on four K powers—K Cohesion,K Strength, K Protection, and K Gravitation. Throughstrengthened ESG capabilities and deepened sustainabilitypractices, we aim to work with all stakeholders to co-create apositive and lasting cycle of responsible value.
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EnvironmentalChapter
SocialChapter
AppendixGovernanceChapterAboutKingNet NetworkSustainability Highlights
EconomicPerformance
Environmental
Performance
SocialPerformance
RevenueRMB
Net pro?t attributable to shareholdersof the listed company
Total pro?tRMB
RMB
Up
year on year
Up
year on year
million
million
million
5,118
1,628
1,673
19.16%
11.41%
Purchase of
green electricitycerti?cates1,100
R&D investmentRMB
million
Volunteer service
hours1,579
Employee volunteer service participation
approximately
times
thousand
3,000A total of 20 public welfareprojects were carried out, with aninvestment of RMB7,380.5
Total GHG emissions (Scope 1 + Scope 2):
down
tCO
e
year on year
339.67
59.00%
GHG emission intensity (Scope 1 + Scope 2)per unit revenue:
tCO
e/RMB million
0.07
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AppendixGovernanceChapterAboutKingNet NetworkRecognitions and Industry Association Participation in 2024In 2024, KingNet Network was repeatedly recognised by the industry and the capital market for its excellent performance in sustainable development management.
CDP Rating: B
Carbon Disclosure Project (CDP)
Morningstar Sustainalytics: Low Risk
Morningstar
Wind ESG Rating: AWind
SynTao Green Finance ESG Rating: A?
SynTao Green Finance
CSI ESG Rating: AAA
China Securities Index Co., Ltd.
CNI ESG Rating: AA
Shenzhen Securities Information Company Limited
AA-CCXGF ESG Rating: AA?CCX Green Finance ESG Grade
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AppendixGovernanceChapterAboutKingNet Network
Industry Associations Joined by KingNet Network and Its Subsidiaries
Industry and Group Standards Participated in by KingNet Network
Full Name of AssociationMembership LevelEntityInternet Society of ChinaCouncil MemberKingNet Network Co., Ltd.China Cultural Industry AssociationCouncil MemberKingNet Network Co., Ltd.China Mobile CommunicationsAssociation (CMCA)'s Metaverse Council
Observer MemberKingNet Network Co., Ltd.China Audio-video and Digital PublishingAssociation
Deputy DirectorKingNet Network Co., Ltd.China Association for Public CompaniesCouncil MemberKingNet Network Co., Ltd.Trust and Integrity Enterprise AllianceMember
Shanghai KingNet SoftwareTechnology Co., Ltd.China Toy & Juvenile ProductsAssociation
Member
Hangzhou KingNet NetworkTechnology Co., Ltd.Yangtze River Delta Entrepreneurs Union
Member
Hangzhou KingNet NetworkTechnology Co., Ltd.
Member
Shanghai KingNet SoftwareTechnology Co., Ltd.Shanghai Software Industry Association
Council Member
Shanghai KingNet NetworkTechnology Co., Ltd.
Group Member
Shanghai KingNet SoftwareTechnology Co., Ltd.
Group Member
Shanghai Shengsong NetworkTechnology Co., Ltd.
Group Member
Shanghai Doushi NetworkTechnology Co., Ltd.Shanghai Cultural and Creative IndustryPromotion Association
Council MemberKingNet Network Co., Ltd.Shanghai Information ServiceAssociation
Council Member
Shanghai KingNet SoftwareTechnology Co., Ltd.Minhang Association of Cultural andCreative Industries
Vice President
Shanghai Doushi NetworkTechnology Co., Ltd.Shanghai Cyber Culture AssociationMember
Shanghai KingNet NetworkTechnology Co., Ltd.Internet Association of ShanghaiMember
Shanghai KingNet NetworkTechnology Co., Ltd.Shanghai Online Game Association
Vice President
Shanghai KingNet SoftwareTechnology Co., Ltd.
Member
Shanghai Doushi NetworkTechnology Co., Ltd.Shanghai Network Audio-visualAssociation
Member
Shanghai KingNet SoftwareTechnology Co., Ltd.Internet Association of ShanghaiCouncil Member
Shanghai KingNet SoftwareTechnology Co., Ltd.
Full Name of AssociationMembership LevelEntity
Shanghai Information Network SecurityAdministration Association
Member
Shanghai KingNet SoftwareTechnology Co., Ltd.Shanghai Network SecurityAdministration Association
Member
Shanghai KingNet SoftwareTechnology Co., Ltd.Shanghai Association of Stock SystemEnterprises
MemberKingNet Network Co., Ltd.Shanghai International Trade in ServicesIndustry Association
Council Member
Shanghai KingNet NetworkTechnology Co., Ltd.Jiangxi Software Industry Association
Vice Council Chair
Member
Shangrao Kaisheng NetworkTechnology Co., Ltd.Jiangxi Internet AssociationCouncil Member
Shangrao Kaisheng NetworkTechnology Co., Ltd.Jiangsu Internet AssociationMember
Suzhou Juhe Network TechnologyCo., Ltd.Zhejiang Games Association
Vice PresidentKingNet Network Co., Ltd.
Council Member
Zhejiang Shenghe NetworkTechnology Co., Ltd.Zhejiang Institute of Animation Industry
Executive Council
Member
KingNet Network Co., Ltd.Zhejiang Internet AssociationCouncil MemberKingNet Network Co., Ltd.Hangzhou Animation Comic & GameAssociation
Vice PresidentKingNet Network Co., Ltd.
IssuerTitleCategory
Ministry of Industry andInformation Technology of thePeople's Republic of China
Guidelines on Information Disclosure of CorporateSocial Responsibility and ESG of Internet Industry
IndustrystandardInternet Society of China
Evaluation Guidelines for Corporate SocialResponsibility and ESG Information Disclosure byInternet Enterprises
GroupstandardInternet Society of China
Guidelines for Carbon Information Disclosure ofInternet Enterprises
GroupstandardInternet Society of China
Guidelines for Compiling Social ResponsibilityReports on Internet Minor Protection
GroupstandardInternet Society of China
Guidelines for Compiling Social ResponsibilityReports on Personal Information Protection of theInternet Industry
GroupstandardShanghai Software IndustryAssociation
Technical Requirements for Remote ControlSoftware
Groupstandard
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AppendixGovernanceChapterAboutKingNet NetworkAbout KingNet NetworkCompany Pro?le
General Information on KingNet Network
KingNet Network Co., Ltd. (SZ.002517) is a well-known listed onlinegame company in China. Its main businesses include the R&D,operation, and publishing of high-quality entertainment contentsuch as mobile and web games, as well as the operation of webgaming platforms and mobile application distribution platforms.The Company has established a long-term strategic commitment inthe ?elds of virtual reality and the metaverse, engaging in ongoinginnovation and exploration. At the same time, it actively expands itsglobal publishing capabilities to reach broader platforms and userbases.The Company persists in focusing on the main business ofdeveloping games as its core strategy for corporate development.It follows the principle of creating quality games that meet marketdemand and operates three business systems including R&D,publishing, and investment + IP. This has enabled the formation of adiversi?ed ecosystem driven by gaming at the Company's core. TheCompany holds fast to the philosophy of providing higher qualityand better service and continuously provides users with qualitycontent and services as well as a ful?lling gaming experience, whichdrives its high-quality development.
Chinese name
Mainproducts
English nameHeadquarters siteMain business
恺英网络股份有限公司
Original LegendsWar of AngelsDragon Nest OpenWorld
Gundam BattleProject UltramanTales of Douluo:
Legend of Evil PurgeLord of Nazarick
Retro-themedgames
Innovativepremium games
KINGNET NETWORK CO., LTD.Shanghai
Principal subsidiariesShanghai KingNet Network TechnologyCo., Ltd. ("Shanghai KingNet")Zhejiang Shenghe Network TechnologyCo., Ltd. ("Zhejiang Shenghe")Revenue
5,1188,026
Total assets
Total number of employees
2,184
R&D, operation, and publishing of mobile gamesand web gamesOperation of web game platforms and mobileapplication distribution platforms (XY GamePlatform and KingNet Cloud Games)
millionmillionRMBRMB
Sword and Fairy：A NewBeginningDigimon: Source CodeThe New Heaven Swordand Dragon SaberMonster GO!
That Time I Got Reincarnated as aSlime: New WorldMecha PartyGods' Calamity: Shadow PrincessThe Graver Robbers’Chronicles:
The Beginning
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AppendixGovernanceChapterAboutKingNet NetworkBusiness Areas and Value Chain
Three Business Systems with "Games" at the Core
R&DPublishing
Investment
+ IP
R&D Strength
Gundam
Studio
GenieStudio
KingStudio
Arc Light
Studio
Blue Moon
Studio
DominatorStudio
FlyingBirdStudio
Otherprojectteams
Investment Layout
Natural Select (Shenzhen) AI Co.,Ltd.
EVE
Hangzhou Flow EntertainmentNetwork Technology Co., Ltd.
Dragon PowFigure Fantasy
Shenzhen Ultimate Dreality NetworkTechnology Co., Ltd.
Singularity Saga
Hangzhou Xingyue InteractiveCultural Creativity Co., Ltd.Nobunaga's Ambition: Path to
Uni?cationSteam Fortress
Lexiang Technology Co., Ltd.(DPVR)
VR hardware devicesAI glasses (in preparation for
mass production)
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AppendixGovernanceChapterAboutKingNet NetworkMateriality Assessment of Sustainability Topics
Communication with StakeholdersCommunication with stakeholders is an important aspect of KingNet Network's sustainability and ESG management. In response to stakeholder expectations, the Company has establishede?ective communication mechanisms centred on the topics of concern to each stakeholder group. We maintain regular two-way communication with stakeholders through diversi?edcommunication channels such as the o?cial website, media, conferences, reports, and activities. Key Stakeholder
Shareholders andinvestors
Government andregulators
UsersEmployeesSuppliersIndustry organisationsCommunities
Topic ofConcern
Corporate governanceCompliant operationRisk managementAnti-commercial briberyand anti-corruption
Compliant operationProtection of minors incyberspaceAnti-unfaircompetitionSocial functions ofgames
Product R&D and innovationCustomer service andcomplaint handlingData security and customerprivacy protectionProtection of minors incyberspace
Employment andprotection ofemployees' rights andinterestsHuman capitaldevelopment
Suppliersustainabilitymanagement
Protection of minors incyberspaceSocial functions ofgamesContent qualitymanagement
Communitycontribution and ruralrevitalisationClimate responseEnergy utilisation andGHG emission reductionGreen o?ceEcosystem andbiodiversity protection
CommunicationMethods/Channels
Information disclosure asa listed companyGeneral meeting ofshareholdersInvestor exchangemeetingsComplaint and reportingmechanism
Policy implementationInformation disclosureCommunication andresearch meetingsCopyright applicationsOverseas developmentof games
User questionnairesUser privacy agreementsO?cial management channelfor player groups24-hour customer servicehotlineDistribution of brochureson the prevention of minorsfrom becoming addicted toonline games
Employees' congressClub activitiesEmployee trainingprogrammes
Supplier audit andassessment
Industry associationactivitiesParticipation instandard setting
Employee volunteerservicesCommunity publicwelfare activitiesEnergy conservationand emission reductionactivitiesBiodiversity protectionpublic welfare activities
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AppendixGovernanceChapterAboutKingNet NetworkTopic Materiality Assessment
In 2024, in accordance with the requirements for "materialityassessment of topics" under the Guidelines, the Companyconducted a materiality assessment of its sustainability topics.During the assessment process, the Company engagedexperts and, based on the context of its activities and businessrelationships, carried out topic identification and selectionthrough benchmarking against relevant standards, policyanalysis, and peer comparison. The actual and potentialimpacts, risks, and opportunities associated with each topicwere evaluated, and their materiality was analysed from twoperspectives: financial materiality and impact materiality.Finally, the Company reviewed and approved the materialityassessment results, and has disclosed the methodology,process, and results of the assessment in this Report.
Considerations for KingNet Network's 2024 Topic Materiality AssessmentAspectDe?nitionDimensions of Materiality Analysis
ImpactMateriality
Whether the Company’s performance on the relevanttopic may have actual or potential signi?cant impacts onthe economy, society, and the environment.
? Likelihood of impact? Scale, scope, and irremediabilityof the impactFinancialMateriality
Whether the topic is expected to have a signi?cantimpact, in the short, medium, or long term, on theCompany’s business model, operations, developmentstrategy, ?nancial position, operating results, cash ?ow,?nancing methods, and cost.
? Likelihood of ?nancialimplications? Degree of ?nancial implications
KingNet Network's 2024 Topic Materiality Assessment Process
Understand the Company'sactivities and businessrelationships.Understand the external operatingenvironment.Identify key a?ected stakeholders,including shareholders andinvestors, government andregulatory authorities, users,suppliers, industry associations,communities, and employees.
Through standardbenchmarking, policy analysis,and peer comparison, identify,screen, and de?ne theboundaries of sustainabilitytopics relevant to the Company,and analyse the actual andpotential impacts, risks, andopportunities associated withthese topics.
Impact materiality assessment (Scoring range: 0–10):
Conduct stakeholder engagement through questionnairesurveys and incorporate feedback from internal and externalexperts to determine the impact materiality of each topic.Financial materiality assessment (Scoring range: 0–10):
Engage with senior management and ?nance personnelthrough questionnaires and interviews, and incorporatefeedback from internal and external experts to determine the?nancial materiality of each topic.Topics that receive a score above 5 in either dimension areconsidered material and are consolidated into a materialitymatrix.
Following review andapproval by the Board ofDirectors, the Companyfocuses on disclosing thehighly material topics for2024 in this Report.
Step 1了解公司活动和业务Step 3Step 4Step 2
Understand the context ofthe Company's activities andbusiness relationships
Assess and validate topicmateriality
Topic reportingDevelop a list of topics
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AppendixGovernanceChapterAboutKingNet NetworkList of TopicsIn the process of identifying material topics for 2024, KingNet Network fully considered the following five factors, identified and selected 19 topics based on the Company's actualoperations, and analyzed the impact, risks and opportunities of each topic.
Climate response, Energy utilisation and GHG emissionreduction, Green o?ce, Ecosystem and biodiversityprotection
Protection of minors in cyberspace, Data security and customer privacyprotection, Content quality management, Social functions of games,Product R&D and innovation, Customer service and complaint handling,Employment and protection of employees' rights and interests, Humancapital development, Supplier sustainability management, Communitycontribution and rural revitalisation
Corporate governance, Anti-commercialbribery and anti-corruption, Compliantoperation, Risk management, Anti-unfaircompetition
KingNet Network's 2024 Topic Pool
ESG Standards
The Guidelines, GRI Standards, InternationalSustainability Standards Board (ISSB)IFRSS1 General Requirements for Disclosure ofSustainability-related Financial Information("IFRS S1"), International Financial ReportingSustainability Disclosure Standard 2 - Climate-Related Disclosures ("IFRS S2"), SustainabilityAccounting Standards Board (SASB)Sustainability
Accounting Standards – InternetMedia & Services, etc.
InternationalInitiatives
United NationsSustainableDevelopment Goals(SDGs), etc.
Macroeconomic andIndustry Policy Trends
Macroeconomic policies suchas the Outline of the 14thFive-Year Plan (2021-2025) forNational Economic and SocialDevelopment and the Long-Range Objectives Through theYear 2035, and industry-speci?cpolicies such as theMeasures forthe Administration of OnlineGamesand theOutline of aNational Campaign for Scienti?cLiteracy (2021–2035)
Sustainability Strategyand Planning of theCompanySustainability Plan ofKingNet Network Co., Ltd.(2023–2025)– K Action
Key Topics ofConcern of theIndustryKey sustainabilitytopics highlightedby the media andentertainmentindustry in which theCompany operates
Social (10 topics)Governance (5 topics)Environmental (4 topics)
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Impact Materiality AssessmentFinancial Materiality Assessment
KingNet Network's 2024 Topics with Impact MaterialityKingNet Network's 2024 Topics with Financial Materiality
In accordance with theGuidelines, the Company assessed the impact materiality ofsustainability-related topics based on two key aspects: the likelihood of impact and theseverity of impact. The likelihood of impact was further assessed across three dimensions:
scale, scope, and irremediability.
In accordance with theGuidelines, the Company assessed the financial materiality ofsustainability-related topics across three cycles
: short-term (within 1 year [inclusive]),medium-term (1 to 5 years [inclusive]), and long-term (over 5 years).To gain deeper insights into key stakeholders' concerns and perspectives regarding theCompany's material topics for 2024, KingNet Network designed an impact materialityquestionnaire based on the assessment methodology and invited stakeholders toparticipate in the survey. A total of 236 responses were received from stakeholders.Based on the results, the Company identified the concerns of different stakeholders. Incombination with expert judgement, the Company ranked the impact materiality of the 19topics and, using a de?ned materiality threshold, compiled a list of topics considered tohave impact materiality.
During the analysis, the Company established thresholds for determining the degreeof financial implications based on historical pre-tax profit. Through questionnaires,interviews, and other engagement methods, we communicated with nine membersof the Board of Directors, Board of Supervisors and senior management, including theChief Executive O?cer, Chief Sustainability O?cer, and the Head of the Finance Team. Incombination with feedback from investor surveys, we assessed the likelihood of risks andopportunities associated with each topic in the short, medium, and long term, as well astheir expected ?nancial implications. Referring to expert opinions, the Company rankedthe ?nancial materiality of all 19 topics and, based on a de?ned threshold, compiled a listof topics considered to have ?nancial materiality.
1.Product R&D and innovation
2.Compliant operation
3.Data security and customer privacy
protection
4.Employment and protection of
employees' rights and interests
5.Content quality management
6.Energy utilisation and GHG emission
reduction
7.Protection of minors in cyberspace
8.Corporate governance
9.Social functions of games
1.Corporate governance
2.Product R&D and innovation
3.Anti-commercial bribery and anti-
corruption
4.Compliant operation
5.Content quality management
6.Social functions of games
7.Risk management
8.Human capital development
9.Anti-unfair competition
10.Supplier sustainability
management
11.Climate response
12.Customer service and complaint
handling
13.Green o?ce
14.Community contribution and
rural revitalisation
15.Anti-unfair competition
16.Ecosystem and biodiversity
protection
10.Community contribution and
rural revitalisation
11.Data security and customer
privacy protection
12.Climate response
TheMateriality Assessment Implementation Guidanceof the European Financial Reporting Advisory Group (EFRAG) states that "sustainability risks and opportunities are assessed based on the likelihood of theiroccurrence and the scale of the potential ?nancial implications , which can occur in the short, medium and long term". Therefore, three time cycles, short, medium and long term, are used in the process of analysing?nancial materiality for separate assessment. The range of years in the time cycle is determined with reference to the Ministry of Finance'sCorporate Sustainability Disclosure Standards - Basic Standards.
Topics with Impact MaterialityTopics with Financial Materiality
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AppendixGovernanceChapterAboutKingNet NetworkResults of the Materiality Assessment
KingNet Network's 2024 Materiality MatrixBased on the above analysis, KingNet Network identi?eda total of 19 material topics for 2024, among which ninetopics exhibit double materiality, three topics have?nancial materiality only, and seven topics have impactmateriality only.The Board of Directors and the Strategy and SustainabilityCommittee reviewed and con?rmed the materialitymatrix for the year. The Company has comprehensivelysummarised the impacts, risks, and opportunitiesassociated with each material topic and disclosed thecorresponding management actions and outcomes in theReport. For topics with ?nancial materiality, the Companyhas provided focused disclosures under the four-elementframework of "Governance", "Strategy", "Managementof Impacts, Risks and Opportunities", and "Metrics andTargets".At the practical level, the Company has establisheda sound sustainability management system. Risksand opportunities related to each material topic areincorporated into routine management priorities.During the preparation of the Report, the Company alsoconducted due diligence procedures to identify andaddress potential negative impacts or risks associatedwith sustainability, thereby advancing its sustainabledevelopment e?orts.
Impact MaterialityLegend:
Financial materiality
Employment and protection ofemployees' rights and interests
Product R&D and innovation
0 1 2 3 4 5 6 7 8 9 10
Compliant operationData security and customer privacyprotectionContent quality management
Corporate governanceSocial functions of gamesClimate responseCommunity contribution and ruralrevitalisationAnti-unfair competition
Risk management
Anti-commercial briberyand anti-corruptionHuman capital development
Energy utilisation and GHG emission reductionProtection of minors in cyberspace
Supplier sustainabilitymanagementCustomer service andcomplaint handling
Green o?ceEcosystem and biodiversityprotection
Financial andimpact materialityFinancial materiality
onlyImpact materiality
onlyNeither Financial nor
impact materiality
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KingNet Network's 2024 Analysis of Material Topics' Impacts, Risks, and Opportunities
Topic
Scope of Impact
Impact Overview
CorrespondingSDGs
Overview of Risks and Opportunities
TimeHorizon ofImpact
CorrespondingSectionUpstreamValue Chain
OwnOperations
DownstreamValue Chain
Climate reponse
Extreme weather events such as typhoonsmay endanger employee health and safety.As the Company operates in a region prone totyphoons, establishing emergency responseplans and actively implementing measures toaddress extreme weather helps mitigate thenegative impact on employee health and safety.
Risk:
Climate change may lead to natural disastersand policy changes, posing both physical andtransition risks for the Company, potentiallyresulting in ?nancial losses.Opportunity:
Strong performance in climate reponse maycreate opportunities for the Company to o?erclimate-related products and services.
Short-,medium-and long-term
ClimateReponse
Energyutilisation andGHG emissionreduction
The Company’s o?ce operations and datacentre activities involve electricity and energyconsumption, which result in GHG emissions andenvironmental pollution. E?cient use of energyand the adoption of renewable energy sourceshelp reduce negative environmental impacts.
Opportunity:
Developing new energy solutions and improvingenergy e?ciency can help the Company reduceenergy costs, enhance its corporate image, andultimately increase pro?tability and marketcompetitiveness.
Medium-and long-term
ClimateReponse, GreenO?ce
Green O?ce
The Company’s operations involve theconsumption of natural resources and may resultin environmental pollution. O?ce operationsinvolve the use of natural resources and thegeneration of waste. Promoting green o?cepractices and implementing e?ective resourceand waste management can help mitigateadverse environmental impacts.
Opportunity:
By promoting a green o?ce philosophy, theCompany can enhance its brand image, reduceenergy and resource consumption, and loweroperational costs.
Medium-and long-term
Green O?ce
Ecosystem andbiodiversityprotection
The Company actively engages in ecosystemand biodiversity protection e?orts, which havea positive impact on local ecosystems and helpraise awareness of biodiversity conservationamong employees and the public.
Opportunity:
By actively engaging in ecosystem andbiodiversity protection e?orts, the Companydemonstrates a strong sense of environmentalresponsibility, which can enhance its brandimage and attract investor attention.
Medium-and long-term
Ecosystem andBiodiversityProtection
For the expected ?nancial implications of "risks and opportunities" on the Company, as well as the Company's corresponding response strategies, methods and plans, please refer to the "Strategy" section of eachdouble-material/?nancially material topic.
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Scope of Impact
Impact Overview
CorrespondingSDGs
Overview of Risks and Opportunities
TimeHorizon ofImpact
CorrespondingSectionUpstreamValue Chain
OwnOperations
DownstreamValue Chain
Protectionof minors incyberspace
Excessive gaming among minors may negativelya?ect their physical and mental health as wellas their academic development. The Companyactively implements measures to preventgaming addiction among minors and enhancetheir digital literacy, providing a healthy onlineenvironment and reducing the potential adversee?ects of gaming on minors.
Risk:
If the Company fails to implement e?ectiveprotection measures for minors, resultingin widespread addiction to its online gamesamong underage users, it may face negativepublic opinion and investor concern, potentiallya?ecting its market valuation.
Medium-and long-term
Protectionof Minors inCyberspace
Data security andcustomer privacyprotection
Improper data and privacy managementmay result in customer privacy breaches andcause negative consequences for users. As theCompany handles large volumes of customerdata during its operations, actively strengtheningdata and privacy protection helps safeguardindividuals’ privacy and fundamental rightsand interests.
Risk:
Incidents such as customer informationbreaches may damage the Company’sreputation, result in regulatory penalties, andlead to a decline in capital market valuation.Such events may also erode customer trust,increase compliance costs, and negatively a?ectfuture revenue.
Medium-and long-term
Data Securityand CustomerPrivacyProtection
Content qualitymanagement
Inadequate control over game content qualitymay negatively impact the online environmentand even the broader social context. Bymaintaining rigorous content quality standards,the Company helps foster a healthy andpositive online ecosystem and prevents thedissemination of prohibited content as de?nedby national regulations.
Risk:
Failure to properly manage game content,including the appearance of inappropriate orprohibited material, may result in violationsof relevant laws and regulations, harm theCompany’s reputation, increase compliancecosts, and adversely impact future businessrevenue.
Short-,medium-and long-term
Content QualityManagement
Social functionsof games
As a cultural medium, games play an importantrole in promoting positive values and shapinga healthy social and cultural atmosphere. As aleading internet gaming company, the Companyactively develops functional games that deliverknowledge and promote positive values toplayers, fulfilling the positive social role ofgames.
Opportunity:
Incorporating traditional cultural elementsinto games and actively promoting traditionalculture aligns with national policy, enhancesgame quality, and attracts a broader user base.In addition, promoting cultural exports throughgames supports entry into emerging marketsand helps increase revenue.
Medium-and long-term
SocialFunctions ofGames
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Topic
Scope of Impact
Impact Overview
CorrespondingSDGs
Overview of Risks and Opportunities
TimeHorizon of
Impact
CorrespondingSectionUpstreamValue Chain
OwnOperations
DownstreamValue Chain
Product R&D andinnovation
Game research and innovation contribute tothe provision of high-quality cultural productsfor society. Through innovation in gameplayand storytelling, the Company develops newgame products that o?er users a unique andengaging experience, promoting progress anddevelopment within the industry.
Risk:
Investment in product research and innovationmay increase operational costs withoutguaranteeing signi?cant returns. Additionally,the innovation process may involve intellectualproperty issues, leading to higher compliancecosts for the Company.Opportunity:
By strengthening its research and developmentcapabilities and actively promoting AIGCtechnologies, the Company can enhanceoverall operational e?ciency and corecompetitiveness. This may attract greaterinvestor interest, unlock new growthopportunities, and contribute to increasedfuture revenue.
Medium-and long-term
Product R&Dand Innovation
Customer serviceand complainthandling
Poor customer service quality or inadequatecomplaint resolution can damage the userexperience and harm customer interests. Bydelivering high-quality game-related servicesand actively responding to customer concerns,the Company helps improve user experience andsafeguard customers’ fundamental rights andinterests.
Risk:
Poor customer service quality or inadequatecomplaint resolution may lead to user attritionand negatively impact future revenue.Opportunity:
Enhancing customer service quality andmaintaining strong customer relationships canimprove user retention and strengthen marketcompetitiveness.
Medium-and long-term
CustomerService andComplaintHandling
Employmentand protectionof employees’rights andinterests
Alleviating labour disputes and buildingharmonious labour relations contribute to socialstability and development. By complying withrelevant laws and regulations and protectingemployees’ fundamental rights and interests,the Company enhances employee well-being.
Risk:
Failure to protect employees’ legal rightsand bene?ts may expose the Company to riskssuch as labour arbitration or lawsuits, therebydamaging its reputation.
Medium-and long-term
Employmentand Protectionof Employees’Rights andInterests
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Impact Overview
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Overview of Risks and Opportunities
TimeHorizon ofImpact
CorrespondingSectionUpstreamValue Chain
OwnOperations
DownstreamValue Chain
Human capitaldevelopment
The Company has established a comprehensiveemployee training system, o?ering diversetraining programmes and implementingperformance-based incentive mechanisms.These e?orts e?ectively improve employees’skills and capabilities, supporting personalgrowth and career development.
Opportunity:
Through e?ective incentives and training,employee engagement and productivity mayimprove. This enables the Company to fullyleverage talent and creativity, potentiallyleading to the development of more high-quality game products and enhanced marketcompetitiveness.
Risk:
Poor human capital management may resultin skill gaps, talent loss, and reduced worke?ciency. This could increase recruitmentand training costs, weaken competitivenessand pro?tability, and negatively a?ect theCompany’s ?nancial performance.
Short-,medium-and long-term
Human CapitalDevelopment
Suppliersustainabilitymanagement
Neglecting the sustainable management ofsuppliers may result in negative environmentaland social impacts by suppliers and disruptthe Company’s business stability. As theCompany relies on third-party server leasing foroperations, implementing sustainable suppliermanagement helps mitigate supply chain risks,ensures stable game operations, and delivers abetter experience for users.
Risk:
Inadequate supplier management maycompromise server stability, which could a?ectuser experience and lead to user attrition.
Medium-and long-term
SupplierSustainabilityManagement
Communitycontributionand ruralrevitalisation
Engaging in social welfare and rural revitalisatione?orts contributes to social harmony andimproved livelihoods. As a leading listedcompany, KingNet Network actively participatesin public welfare projects and rural revitalisationwork, which helps strengthen connections withcommunities and stakeholders, supports socialdevelopment, and aligns economic value withsocial value.
Opportunity:
Strong performance in community contributionand rural revitalisation demonstrates theCompany’s social responsibility, enhancesits brand image, and helps attract morepartnership resources.
Medium-and long-term
CommunityContributionand RuralRevitalisation
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Topic
Scope of Impact
Impact Overview
CorrespondingSDGs
Overview of Risks and Opportunities
TimeHorizon of
Impact
CorrespondingSectionUpstreamValue Chain
OwnOperations
DownstreamValue ChainCorporategovernance
Poor corporate governance may expose theCompany to operational risks and harmshareholder interests. By continuously improvingits governance structure, enhancing corporategovernance e?ectiveness, and strengtheninginformation disclosure, the Company helpsmitigate governance-related risks and protectthe interests of shareholders and otherstakeholders.
Risk:
Inadequate internal management and poorgovernance practices may lead to lower ESGratings or even regulatory penalties, damagingthe Company’s reputation, raising investorconcerns, a?ecting market valuation, andreducing future revenue.
Medium-and long-term
CorporateGovernance
Anti-commercialbribery and anti-corruption
Incidents of corruption and commercial briberycan damage the investment environment andundermine the interests of shareholders andother stakeholders. By improving its anti-briberyinvestigation procedures and maintaining openreporting channels, the Company protectsshareholders’ legitimate rights and fosters aculture of integrity, creating a sound businessenvironment.
Risk:
Incidents involving commercial bribery orcorruption may result in violations of relevantlaws and regulations, reputational damage,investor attrition, increased compliance costs,and negative impacts on future revenue.
Medium-and long-term
Anti-commercialBribery andAnti-corruption
Compliantoperation
A robust compliance system plays a criticalrole in corporate governance, operationalmanagement, and risk control. By building acompliance framework, cultivating a strongcorporate culture, and enhancing employeecompliance awareness, the Company reducesnegative impacts on stakeholders, safeguardscorporate interests, and ensures long-term,stable development.
Risk:
Compliance issues in the Company’soperations may lead to regulatory penaltiesand reputational damage, creating investorconcerns, increasing compliance costs, andnegatively impacting future business revenue.
Medium-and long-term
CompliantOperation
Riskmanagement
If the Company’s risk management system isinadequate and its ability to respond to risks isweak, it may su?er economic losses, ultimatelyharming shareholder interests.
Risk:
If the Company’s risk management system isnot robust, it may lack the capacity to e?ectivelyrespond to potential risks, leading to ?nanciallosses, reputational damage, and a decline inrevenue.
Medium-and long-term
RiskManagement
Anti-unfaircompetition
Gaining advantages through unfair means ina competitive environment may damage thebroader business ecosystem and eventuallyharm the Company itself. E?orts in standardisingintellectual property management, preventingfalse advertising, and establishing a system helpmanage and prevent unfair competition, therebyreducing potential negative impacts.
Risk:
Improper management of anti-unfaircompetition practices may expose the Companyto legal action and ?nes, harm its reputation,result in the loss of customers and businesspartners, and increase compliance costs.
Medium-and long-term
Anti-unfairCompetition
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Key Changes in KingNet Network's Material Topics in 2024Material Topics in 2024Material Topics in 2023ChangeReasons for Change
Climate response
Climate change mitigation and
adaptation
Medium-high material topics → topicswith double materiality
The materiality of topics has been adjusted based on the latest domesticregulatory requirements and the Company's actual business context.Green o?ceGreen o?ce
Medium material topics → topics with
impact materiality
Protection of minors in cyberspaceProtection of minors in cyberspace
High material topics → topics with
impact materiality
Supplier sustainabilitymanagement
Supplier sustainabilitymanagement
Medium material topics → topics with
double materialityEnergy utilisation and GHG
emission reduction
Energy management and GHGemission reduction
Wording adjustments
The wording of certain topics has been re?ned in line with updatedregulatory requirements and optimised to re?ect the Company'soperational realities.Data security and customer privacy
protection
Privacy and data securityCommunity contribution and rural
revitalisation
Community contribution and
public welfare and charityAnti-commercial bribery and anti-
corruption
Business ethics and anti-corruptionEcosystem and biodiversity
protection
—New
New topics have been introduced in response to the latest regulatoryrequirements and tailored to the Company's speci?c circumstances.Anti-unfair competitionIntellectual Property Protection
Re?ned wording and expanded topic
boundaries
The wording has been adjusted and the connotation of the topics hasbeen improved based on the latest regulatory requirements to enhanceconsistency with the Guidelines.
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Corporate Culture
Sustainable Development ManagementConcept
K行动·KingNet Always Cares
因为在乎，所以行动
FaithVisionMissionLove creates value
Adhering to the concept of "Play With Buff" and starting with sustainable business,KingNet Network helps protect the green planet, builds its positive force, promotes itssustainable development through comprehensive ESG management, and strives tocreate long-term and sustainable shared value for stakeholders including shareholders,customers, and employees.Leader of the cultural
industry
Joy everywhereHigh spirit: Enthusiasm, takechallenges, outdo ourselves
Open & transparent: Open
mind, honest, innovativeValue oriented: User oriented,result oriented, see the bigpicture
Professionalism: Stay upright,
cooperative, professional and
e?cient
Play With Bu?乐聚可持续游戏力
Values
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Sustainability Governance StructureKingNet Network has formulated theSustainability (ESG) Management Measuresand established a three-tier top-down sustainability governance structure comprising the SupervisionLevel, Management Level, and Execution Level. The Board of Directors, together with its Strategy and Sustainability Committee, exercises overall oversight of the Company's sustainabilityand ESG matters and bears ultimate responsibility. At the same time, a Sustainability Work Leading Group, led by senior executives, has been authorised to advance the Company'ssustainability and ESG management e?orts.The Company has established a Chief Responsibility O?cer Team, consisting of the Chief Strategy O?cer, Chief Executive O?cer, Chief Operating O?cer, Chief Innovation O?cer, ChiefTechnology O?cer, Chief Product O?cer, and Chief Social Responsibility O?cer, to provide the organizational guarantee for the conduct and enhancement of ESG work and boost its high-quality development. The Chief Social Responsibility O?cer is responsible for the overall coordination and advancement of the Company's sustainability and ESG work.
In 2024, the Company's Board of Directors fully performed its review, decision-making, and supervision duties for ESGmatters and deliberated and approved ESG matters in aspects of corporate governance, information disclosure, andcompliant operation.
Sustainability Governance Structure of KingNet Network
Supervisionlevel
Managementlevel
Executionlevel
ESG Matters Deliberated by the Board ofDirectors of KingNet Network in 2024Topics of concernThe content reviewedCorporategovernance
CompliantoperationESGinformationdisclosureIn 2024, the Company held one meeting of the Strategyand Sustainability Committee to deliberate the2023 WorkReport of the Strategy and Sustainability Committee ofthe Board of Directors, and to follow up on the progress ofits sustainable development plan goals.
Deliberation and approval ofmatters such as the revision of theArticles and Association.Deliberation and approval of the2023 Self-Evaluation Report onInternal Controland other proposalsto ensure the Company's legal andcompliant operation.Deliberation and approval of the2023 Sustainability & Environmental,Social and Governance (ESG) Report,the 2024 Report on Analysis ofMaterial Topics, etc.
Board of DirectorsStrategy andSustainabilityCommittee
Sustainability WorkLeading GroupChief ResponsibilityO?cer TeamSustainability WorkExecuting GroupFunctional Departments(led and coordinated by the ChiefResponsibility O?cer)
Develop the Company's overall sustainable development plan andgoals and assess ESG-related risks and opportunities.Regularly report work to the Board of Directors and the Strategyand Sustainability Committee.Be responsible for the specific execution and implementation ofsustainability and ESG-related policies, plans, and goals.Coordinate the preparation of the annual Sustainability Report.
Overall supervise the sustainable development plan and ESGmanagement work and be ultimately responsible for them.Research, analyse, and assess the Company's sustainabledevelopment and ESG-related matters and give correspondingsuggestions.Review the sustainable development plan and goals, and regularlytrack progress toward these goals.Review the Company's annual list of material sustainabledevelopment topics and the sustainability report.
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AppendixGovernanceChapterAboutKingNet NetworkSustainable Development Strategic Plan and ProgressIn 2023, KingNet Network o?cially released the 2023-2025 sustainable development plan, namely KingNet Always Cares Action (K Action), which focuses on the three strategic pillars ofPlay: Sustainable Business, With: Sustainable Temperature, and Bu?: Sustainable Care. Furthermore, the Company implements its sustainable development concept around UNSustainable Development Goals, with a focus on good health and well-being, quality education, gender equality, climate action, community development, etc.At the same time, the Company developed an implementation plan for its K Action, including the K-Power of K Cohesion, K Strength, K Protection and K Gravitation, to further promote theimplementation of its sustainable development plan.Over the past two years, the Companyhas taken a comprehensive andcontinuously improving approach toESG management as a foundation,implementing its sustainabilityphilosophy through actions centredon product, environment, and people.Building upon K Action and guided bythe core socialist values, the Companyadheres to the sustainability visionof "Play With Bu?", leveragingtechnological innovation as aninternal driver to cultivate newquality productive forces and unlocknew growth momentum. Throughthe mobilisation of its four coreforces, the Company aims to foster apositive and self-reinforcing cycle ofresponsible value creation.
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K Action Progress
CompletedIn progressPillarTarget from 2023 to 2025Performance in 2024ProgressPlay: Sustainablebusiness
1 sustainability-related game developed or improvedannually.
gameWith: Sustainabletemperature
Achieve carbon neutrality in operation by 2025
Total GHG emissions (Scope 1 + Scope 2):
59.00%
lower than 2023Participate in green electricity consumption by procuring a total of1,100greenelectricity certi?catesBu?: SustainableCare
A total investment of RMB20 million in social welfareundertakings from 2023 to 2025
The community public welfare investment in 2024 amounted to RMB7,380.5thousand, with a cumulative investment of RMB13,896.5thousand over thepast two years
ComprehensiveESG management
Promoting Board diversityPercentage of female directors
12.5%
100% coverage of directors in annual anti-corruptiontraining
100%100% coverage of directors in annual ESG training100%100% coverage of employees in annual compliancetraining
100%0 glitches in the anti-addiction system
100% coverage of employees in training100%12 hours of training time per employee
13.05 hours
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Green Coexistence:
Safeguarding aSustainable Climate
Topics Responded:
SDGs Addressed:
ClimateResponse
EnergyUtilisation andGHG EmissionReduction
GreenO?ce
Ecosystem andBiodiversityProtection
Environmental Chapter
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KingNet Network is fully aware of the materiality of climate response. In line with the recommended framework of IFRS S2 Climate-related Disclosuresissued by the InternationalSustainability Standards Board (ISSB), the Company has established a climate change management system to identify, assess, and manage climate-related risks and opportunities.KingNet is committed to reducing greenhouse gas emissions and has pledged to achieve carbon neutrality in operations by 2025 and carbon neutrality across the full value chain by 2035,contributing to the national carbon neutrality goal.
Board of DirectorsStrategy and Sustainability Committee under theBoard of Directors
Oversee matters related to climate change, review carbon neutralitytargets, and monitor carbon reduction outcomes.Incorporate climate-related rating performance into management levelperformance appraisal.
Chief Executive O?cer
Identify, assess, and manage climate-related risks and opportunities anddevelop transition plans, carbon neutrality targets, and implementationstrategies.Report regularly to the Board of Directors and the Strategy andSustainability Committee on climate-related work, and operate undertheir supervision.Sustainability Work Executing Group
Execute climate-related targets and integrate the management of climate-related risks and opportunities into routine operations.
The Company places strong emphasis on building a robust governance system for climate-related matters and has established a three-tier, top-down governance structure comprising theSupervision level, Management level, and Execution level.
Supervision
level
Managementlevel
Execution level
Climate Response
Governance
KingNet Network's Climate Change Governance Structure
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The Company regards climate change as a key topic in its sustainability management framework. It identi?es, analyses, and assesses climate-related risks and opportunities, and activelyformulates strategies to seize opportunities and mitigate risks.Main Types of Risks /Opportunities
Description
Time Horizon
of Impact
PotentialFinancialImplications
Response Strategy
Risks
Acutephysical risk
Extreme weather events such as typhoons and otherclimate-related disasters may disrupt the normaloperations of leased data centres, and pose risks toserver security, which may even a?ect the Company'sbusiness.
Medium- andlong-term
Increase inoperating costs
When selecting server providers, the Company chooses providers froma wide range of regions and prioritises large, highly secure providers toensure maximum server stability and e?ectively mitigate the potentialnegative impacts of extreme weather and other force majeure events.Chronicphysical risk
Long-term shifts in the natural environment, such assea level rise and persistent high temperatures, couldhave an impact on the Company's normal operations.
Medium- andlong-term
Increase inoperating costs
Pay close attention to the possible adverse impacts on the Company'sbusiness during the implementation of the carbon peaking and carbonneutrality policies and take timely countermeasures.
Policy andregulationrisk
The state is vigorously carrying out the deploymentof carbon peaking and carbon neutrality strategy, andraises higher expectations for companies to acceleratelow-carbon green transformation and strengthenenvironmental information disclosure.
Medium- andlong-term
Increase incompliance costs
To comply with relevant policies and regulatory requirements, theCompany should increase the proportion of clean energy used, carry outcarbon accounting and related disclosures, and strive to achieve carbonneutrality in operation by 2025.Reputationrisk
The public is increasingly concerned about greenoperations and environmental protection, and ifthe Company fails to achieve carbon neutrality onschedule and meet stakeholders' expectations, it maypose a reputation risk to the Company's operations.
Medium- andlong-term
Decrease inrevenue
Actively promote the concept of green o?ce practices.Regularly disclose carbon emissions data through CDP.Actively promote the portfolio planning of the metaverse sector,support the application of new technologies and materials, and lead thetransformation of lifestyles to a smarter and greener model with digitaleconomy products and digital content.Opportunities
Productand serviceopportunity
As sustainability concepts gain greater publictraction, users may increasingly prefer low-carbon,environmentally friendly products and games.
Medium- andlong-term
Increase inrevenue
Develop games or other digital content themed around low-carbon andenvironmental protection, continuously exploring the positive potential ofgaming.Reputationalopportunity
The use of renewable energy and strong performancein energy transition e?orts may enhance theCompany's brand image, increase investorrecognition, drive business growth, and boostrevenue.
Medium- andlong-term
Increase inrevenue
Actively explore green electricity certificate trading, participate in greenpower consumption, and accelerate the Company's progress towardsoperational carbon neutrality.
Strategy
Climate-related Risks, Opportunities, and Response Strategies of KingNet Network
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KingNet Network's Management Process for Climate Change Risks and Opportunities
The Company actively responds to the risks and opportunities brought by climate change by establishing and improving a risk and opportunity management process of "Identi?cation– Assessment – Monitoring – Management". The Company regularly identi?es climate-related risks and opportunities, assesses the likelihood and potential impact of those risks andopportunities, and implements appropriate measures to address them proactively. In addition, the Company reduces greenhouse gas emissions by purchasing green electricity certi?catesand promoting green o?ce practices.
Identify potential climate-related risks and opportunities in operational activities by referring to the risk analysis framework under IFRS S2.
Based on the Company's actual situation, assess the Company's external impact and the types of climate change risks and opportunities that have asigni?cant impact on the Company's operations from the two dimensions of likelihood and degree of impact, and analyse their ?nancial implicationson the Company and time horizon of the impact.Regularly track greenhouse gas emissions data and emissions reduction performance.Establish carbon neutrality targets and disclose both absolute and intensity-based GHG emissions data annually in the sustainability report to assessand monitor the e?ectiveness of the Company's climate change management performance.The Sustainability Work Leading Group develops response strategies for identi?ed climate-related risks and opportunities, and promotes energyconservation and emissions reduction initiatives to minimise energy consumption and carbon emissions in o?ce operations.
Identi?cation
Assessment
Monitoring
Management
Management of Impacts, Risks and Opportunities
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The Company has set the goal of achieving "carbonneutrality in operation by 2025 and full value chain carbonneutrality by 2035". We will continue to carry out energyconservation and emissions reduction initiatives andmonitor carbon reduction performance.
GHG emission intensity (Scope 1 + Scope 2) perunit revenue
Total GHG emissions (Scope 1 + Scope 2)down
0.07
59.00
tCO
e/RMB million
% year on year
TopicMeasuresResults
Climatereponse-
relatedrisks andopportunities
Proactively identify climate-related risks and opportunitiesin accordance withIFRS S2 Climate-related Disclosures, andformulate response strategies.Conducted in-depth analysis and assessment of climate-related risks and opportunities, responded to the CDP ClimateQuestionnaire for the ?rst time, and disclosed climate-relatedinformation.
Achieved a "B" rating (Management
level) from CDP, reaching a leading
position within the domestic industry.
Energyutilisation andGHG emissionsreduction
Actively participated in green electricity certi?catetransactions to accelerate the achievement of carbonneutrality in the Company's operations.Adopted environmentally friendly paper and cartons for NewYear gift boxes.Promoted the concept of green o?ce to reduce energyconsumption during daily operations.Advanced the replacement of traditional petrol vehicles withnew energy vehicles to reduce future consumption of non-renewable energy.Advocated green procurement by incorporatingenvironmental protection requirements into suppliercontracts, and promoted energy conservation and emissionsreduction across the entire value chain.Supported the national carbon peaking and carbon neutralitystrategy by sponsoring the planting of apple trees in Aksu,Xinjiang to o?set carbon emissions.
Procured 1,100 green electricitycerti?cates, o?setting a total of 1,100MWh of electricity.Reduced carbon emissions by a totalof 10.22 tonnes through green o?ceinitiatives.O?set 32 tonnes of carbon emissionsthrough the sponsorship of apple treeplanting.
KingNet Network's 2024 Climate Response Measures and Achievements
GHG Emissions Performance of KingNet
Network for 2024
Metrics and Targets
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KingNet Network complies with theEnvironmental Protection Law of the People's Republic of China, the Law of the People's Republic of China on Energy Conservation, and otherrelevant laws and regulations to ensure proper environmental management throughout our operations. As an online game company, our operations do not cause any signi?cant adverseenvironmental impact. Energy consumption during o?ce operations primarily involves electricity and petrol, while daily water usage is mainly sourced from municipal supplies. O?ceactivities also generate waste such as used paper and electronic products.We have integrated the concept of the green office into all aspects of our operations, issuing a green office initiative to promote energy conservation. Various measures have beenimplemented in areas such as paperless o?ce, rational use of electricity, and green mobility. In 2024, the Company recorded no violations related to environmental protection.
? Utilise the web-based o?ce system to reduce
the issuance of paper-based information bytransmitting information via the web, whileensuring security. In 2024, paper consumptiondecreased by
4.5%
compared with 2023.
? Ensure power is switched o? when not in use duringoperations, with security personnel assigned toconduct daily inspections.? Procure and install energy-saving lighting to reduceelectricity consumption.
Energy-saving Lighting
Implementation of a paperless o?ceRational use of electricity
Green O?ce
Green O?ce Measures of KingNet Network in 2024
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? New Year gift boxes are made using environmentally friendly paperand cartons, reducing carbon emissions by a total of
5.92
tonnes.? Mid-Autumn Festival gift boxes are made using environmentallyfriendly ABS and cartons, reducing carbon emissions by a total of
4.3
tonnes.
? Recycle single-sided used paper when printing and copying.? Advocate the use of recycled paper, re?llable pens, toner cartridges and rechargeable batteries,and other recyclable items.? Continue PET recycling initiatives in o?ce areas.? Actively use second-hand o?ce furniture in the o?ce, practicing the concept of environmentalprotection.? Issue tableware sets to employees and prohibit the use of disposable chopsticks.
? Set up di?erent types of garbage bins oneach ?oor to achieve separate collectionof four types of garbage: dry garbage,wet garbage, hazardous garbage andrecyclable garbage.? Hand over non-hazardous waste suchas cardboard boxes, waste paper, wastedry batteries and hazardous waste suchas waste electronic products to propertymanagement company for compliancetreatment.
? Advocate driving fewer private cars, taking more public transportation or driving newenergy vehicle.? Promote the replacement of the Company's own petrol vehicles with new energyvehicles.? Actively practice the "1-3-5" mobility mode: Insist on low-carbon mobility modes of
walking within 1 km, cycling within 3 km and taking public transportation within 5km.
Use of green paper productsRecycling of o?ce supplies
Green mobilityWaste disposal
Mid-Autumn Festival Gift BoxNew Year Gift Box
Packaging of the Induction Giftfor New Employees
Waste sorting and
collection
Issuance ofTableware Sets
Special Recycling Bagfor PET Plastic Bottles
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Ecosystem and Biodiversity ProtectionAs an online game company, KingNet Network's operationsdo not have any significant adverse impact on ecosystemsand biodiversity. Nevertheless, we recognise that ecosystemsand biodiversity are not only the foundation of humansurvival, but also an essential safeguard for sustainableeconomic and social development. Accordingly, theCompany attaches great importance to the protection ofecosystems and biodiversity, and actively participates inrelated conservation activities.In 2024, the Company focused on the topic of ecosystem andbiodiversity protection by promoting diverse stakeholderengagement. This was achieved through initiatives suchas enhancing public awareness, conducting educationaloutreach, organising participation in public welfare activities,and developing environmentally themed games. Throughthese efforts, we fulfilled our social responsibility inbiodiversity protection and high-quality development.
To actively respond to biodiversityprotection initiatives, the Companydesigned and produced 12 themedpublic welfare posters aligned withkey environmental observances,including International WetlandsDay, World Forest Day, Earth Day,and International Day for BiologicalDiversity. These e?orts aimed topromote the concept of biodiversityprotection, raise public awarenessof ecological issues, and encouragecollective action to protect ourshared planet.
On 2 February 2024, the Company's Volunteer Association held a themed activity titled "InternationalWetlands Day – An Introduction to Urban Birdwatching" at our Shanghai office, aiming to raiseecological awareness among employees.An invited expert delivered an engaging presentation to participants, introducing the relationshipbetween urban wetlands and human life, the characteristics and habits of various bird speciesinhabiting urban areas, the fundamentals and techniques of birdwatching, as well as the signi?canceof urban wetland and bird conservation.
Biodiversity Public Welfare Posters of KingNet Network
On-site Highlights of Themed Activities
Enhancing Public Awareness of Biodiversity Protection
International Wetlands Day Themed Activity
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On 22 May 2024, the Company collaborated with the Shanghai Botanical Gardenand the SEE Foundation to hold a themed activity titled "United with Nature for aDiverse Future". Nearly 200 employees from Shanghai, Hangzhou, and Guangzhoutook part in the activity.The activity featured a biodiversity-themed science popularisation exhibitionthat showcased and introduced 20 endangered plant species in detail. Inaddition, experts were invited to deliver an online educational session titledTheWonderful World of Plants, along with a hands-on workshop. The activity aimedto enhance employees' awareness of biodiversity protection and foster a senseof responsibility for protecting the natural environment — from understanding toaction.
In November 2024, the 2024 National Birdwatching Festival (Shanghai Station),supported by the Company, was successfully held at the Shanghai BotanicalGarden.The initiative aimed to promote the growth of the birdwatching community in Chinaand to cultivate a scienti?c birdwatching culture. Through a variety of engaging andeducational bird-related activities and professional yet interesting birdwatchingevents, the programme encouraged more people to learn about birds, participatein birdwatching, and submit bird observation records. These e?orts helped raisepublic awareness of bird conservation, contributed to the development of the ChinaBird Report Centre, and supported the advancement of bird conservation in China.
On-site Highlights of Themed Activities
On-site Highlights of the Birdwatching Event
International Day for Biodiversity Themed ActivityStrategic Support for the 2024 National Birdwatching Festival – Shanghai Session
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In August 2024, the Company collaborated with the public welfare society of theShanghai Film Academy to jointly develop the functional mini-game Yorozuya.The game focuses on the environmental topic of biodiversity protection, featuringtasks such as cleaning up marine litter and protecting migratory birds. It aimsto educate players on the materiality of biodiversity and raise awareness of thethreats facing global biodiversity.
In 2024, the Company partnered with the Shanghai Botanical Garden to launch theShanghai Nature Education – Biodiversity Public Education Programme. As part ofthis initiative, biodiversity conservation courses were developed to enhance publicawareness and understanding of biodiversity protection. The programme includesa series of courses on rare and endangered plants, biodiversity protection,and interactive family-oriented sessions. It aims to raise public awarenessof biodiversity and promote community engagement in urban biodiversityprotection.
Game InterfacePeat Crisis Composting Workshop
Development of Environmental-themed Game Yorozuya
Shanghai Nature Education – Biodiversity Public Education Programme at ShanghaiBotanical Garden
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Diverse Quality O?erings
for an Enjoyable and
Sustainable Future
Topics Responded:
SDGs Addressed:
Product R&Dand Innovation
Social Functions
of Games
Content QualityManagement
Social Chapter
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AppendixGovernanceChapterAboutKingNet NetworkProduct R&D and InnovationGovernanceKingNet Network has successfully developed a range of high-quality, popular games,particularly in the Legend series. In recent years, in response to evolving market trends,the Company has continued to enrich its product portfolio and game content whilesteadily increasing investment in new quality productive forces such as AIGC technologyapplications and large model development. These efforts have yielded tangible results,enhancing both our market competitiveness and industry in?uence.
During the research and development process, the Company strictly complies with theData Security Law of the People's Republic of China, theCopyright Law of the People'sRepublic of China, theGuidelines on Strengthening Data Asset Management, theInterimMeasures for the Administration of Generative Artificial Intelligence Services, and otherrelevant laws and regulations. We respect social ethics and moral standards, and arecommitted to promoting the technology for good.The Company has established a position of Chief Research and Development O?cer andformed a Game R&D Division, IP R&D Department, and a Technology Platform System.These units are respectively responsible for the development of game products, IPcontent, AI large Models and emerging technology Platforms. Together, they form a well-structured industrialised R&D system that enhances communication and collaborationacross all stages of game development, thereby improving the overall e?ciency of our R&Dand operations.Disassembling,de?ning, and forminga ?xed R&D process
Modularisingdi?erent R&D links tofurther improve R&De?ciency and reducecosts
De?ning therequirements anddelivery standards foreach link of the R&DprocessRealising theautomation of the R&Dmiddle o?ce or backo?ce to some extentand matching the bestsolutions based onR&D accumulation
Original Legends, Hot-blooded Strike, War of Angels,TheEternal League,etc.
Real-time battle game Gundam Battle, turn-based strategycard gameLord of Nazarick,VR gameMecha Party,turn-based RPG gameStone Age: Awakening,etc.
Crafts and Qubits, SEASONAL VOICE, LEGEND OF BLUEMOON,Yu Xi World,etc.
CategoryMajor WorksMain Self-developed Game Products and IPs of KingNet Network
Industrialised
R&D Systemof KingNetNetwork
Pipeline
Modular
Standardised
Automatic
Retro-
themed
games
Innovativepremium
games
Self-developedIPs
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The Company has cultivated expertise in niche segments witha strong focus on technological innovation. Guided by userdemand, we place game development and content creation atthe core of our business. Adhering to a strategy of diversi?cationand premium product development, we implement a multi-format integration approach under the "IP+" model. Byleveraging emerging technologies such as AI and blockchain, wecontinue to empower our core gaming business and enhanceour core competitiveness.In terms of product development, the Company maintains acomprehensive presence across multiple platforms, includingmobile games, PC games, mini programmes, and VR. Wecontinue to follow a premium product strategy, refining andupgrading product quality, optimising world-building, art design,and gameplay mechanics to deliver users an immersive visualand interactive gaming experience. On the IP development front,while advancing self-developed IPs, we are also expanding IPapplication scenarios. We are making continued progress acrossdiversified formats such as "IP + AI", "IP + VR", "IP + CulturalCreativity", and "IP + Cultural Tourism", thereby enriching our IPmonetisation models
.In addition, the Company places great importance on therole of cutting-edge technology in leading and driving thegame industry. We are steadily advancing the developmentand operation of technology platforms such as "Xingyi" LargeModel, "Zhimeng" Large Model and KingNet Chain. Theseplatforms empower our existing game business, while activelyexpanding future revenue streams and supporting our long-termsustainable development.
Type of Risk/Opportunity
Timeframeof Impact
Potential Financial
Implications
Response Strategy
Risks
Infringement risk
Short-,medium-and long-term
Increasedcompliancecosts
Comply with intellectual propertylaws and regulations to protect thelegitimate rights and interests oforiginal creators.Emergingmoneylaunderingrisk
Establish anti-money launderingand counter-terrorism ?nancingmechanisms to prevent the platformfrom being used for illicit activities.
Opportunities
Marketopportunity
Increasedrevenue
Increase R&D funding and intensifyR&D investment.Diversify product categories andexpand the rang e of self-developedgames to maintain a well-balancedshort-, medium-, and long-termproduct development pipeline.Technologicalopportunity
IncreasedrevenueReducedoperating costs
Leverage AI for automation andintelligent processes to improvegame development e?ciency.
For more information on IP-related content, please refer to the"SocialValue of Game" section.
StrategyThe Company conducts assessments and analyses of the impacts, risks, and opportunities associated withproduct R&D and innovation. This process enables the identification of potential risks and the formulation ofeffective response strategies, while also uncovering new opportunities arising from market and technologicaltransformation. These e?orts support the Company in advancing steadily amid ?erce market competition.
Risks and Opportunities in Product R&D and Innovation Identi?ed
by KingNet Network and Response Strategies
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Rapid iteration and productoptimisationPreliminary exploration andexperimental application oftrending technologies
Launch low-cost, rapid-iterationcustom projects
Shan Hai Fu Meng LuCodename: TK
Product line expansion to coverniche segmentsDiversi?ed development
Advance self-development oftop-tier licensed IP productsCollaborate with externalpartners on customiseddevelopment
Legends of the CondorHeroes, Divine Condor,Errant Knight, and TheHeaven Sword andDragon SabreMr. BlackResearch and expansion of cutting-edge technologiesEcosystem development andstrategic deployment
Develop original IPs for cross-platform deploymentDevelop an unreal engine
Codename: AdventureThe Graver Robbers'Chronicles: TheBeginningLord of Nazarick
2022
RMB million
20232024
In 2024, the Company's R&Dinvestment amounted to
accounting for
11.69%
Management of Impacts, Risks and Opportunities
Product R&DThe Company has established a short-, medium-, and long-term development strategy, with a diversi?ed R&D approach.While consolidating our strengths in existing categories, we are also expanding into new game segments and exploringgrowth potential in niche markets such as emotional companionship and ACG (anime, comics, and games). In addition, wecontinue to optimise and update popular games already launched, aiming to extend their lifecycle.
Short-, Medium-, and Long-term Product R&D Layout of KingNet Network
R&D Investment ofKingNet Network from 2022 to 2024Short-term
products
Medium-termproducts
Long-termproducts
Product TypeR&D FocusKey InitiativesFlagship Products
RMB million
of the Company's revenue
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VR Game Development:
Mecha PartyFeatured at the International CulturalIndustries ExpoMecha Partyis a self-developed mech battle VR game by KingNet Network,representing the Company's e?ort to explore innovative gameplay and enrichits product portfolio. The game has been launched in overseas marketson PlayStation, Steam, and Meta Quest platforms. Its unique cockpit-stylegameplay e?ectively addresses motion sickness commonly experienced in 3DVR games. Players can wear VR devices to become mech warriors and engagein 2v2 real-time battles with friends or other players.In November 2024,Mecha Partywas showcased at the 5th Yangtze River DeltaInternational Cultural Industries Expo. A VR interactive experience zone wasset up at the exhibition booth, attracting many visitors eager to try the gameand experience the allure of future technologies.
New technologies are ushering in a new era of game. AIGC technology is reshaping thegame industry by in?uencing all aspects of game development, experience optimisation,and operational updates. Embracing the wave of digitalisation and AI, the Companyis actively advancing the construction and application of various technology platformsystems to facilitate a digital and intelligent transformation of our business.Our approach to exploring AIGC technology is grounded in pragmatism. By training andapplying AI in targeted niche segments, we ensure its alignment with the Company'sspecific needs. In 2024, our proprietary "Xingyi" large model achieved a breakthroughby establishing China's first AI industrialised pipeline, comprehensively empoweringautomation across game development processes.The "Xingyi" large model encompasses two core capabilities: "Xing" (form) for imagegeneration, and "Yi" (interpretation) for understanding and processing textual content. Ithas evolved from an internal R&D support tool into a complete toolchain covering interfacegeneration, map generation, animation generation, code generation, and numerical valuegeneration, deeply empowering every stage of game development based on AI.
KingNet AI – Intelligent Digital Architecture
HUIJIE
HUIJIE –InterfaceGeneratorAIDONG-AnimationGenerator
YUSHAN– CodeGeneratorXIANSHU–MapGeneratorSLOTH-Numerical ValueGenerator
YUEQIAN –AutomatedGame Generator
AIDONGYUSHANXIANSHUSLOTHYUEQIAN
KingNet Network's Booth B-04 at the 5th Yangtze River Delta International
Cultural Industries Expo
Digital Intelligence Transformation
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The "Xingyi" model operates based on a multidimensional large model matrix that enables?exible and parallel processing of diverse models, including those for art asset generation,system numerical generation, technical algorithm solutions, and intelligent audio-visualmatching. This matrix supports the coordinated execution of large-scale tasks. By applyinga unique AI-driven data logic, it streamlines development work?ows, reduces trial-and-errorcosts, and signi?cantly improves the e?ciency of resource utilisation in game development.
By deeply integrating large model technology into all stages of game development,the "Xingyi" model covers a wide range of areas including game animation, mapdesign, and technical development. AI has become the core driving force ofdevelopment, reshaping the way games are created and o?ering a new path toimprove e?ciency across the game industry.
Building on the experience accumulated from the"Xingyi" large model in pipeline processes and trainingmethods, the Company developed the "Zhimeng" largemodel based on deep learning technologies. "Zhimeng"focuses on strengthening fundamental capabilities andimproving data quality, and has achieved industry-leadingperformance across technical benchmarks such as MMLU,CMMLU, mtBench, and AlignBench. In November 2024,the "Zhimeng" model successfully passed the ShanghaiGenerative Arti?cial Intelligence Service Review and waso?cially approved and registered.In addition, the Company has partnered with FudanUniversity, the Ministry of Culture and Tourism'sTechnical Innovation Centre for Digital Application ofCalligraphy and Painting, the AI-TOP100 platform, X-META,and other academic institutions and organisations tocontinuously explore the application of AI technologiesin IP development, unleashing greater creativity andpossibilities.
With the application of the "Xingyi" model, the time required to generate animatedcharacters has been reduced from several weeks to just a few seconds, while the timefor game map production has dropped from weeks to an average of three minutes permap.The "Xingyi" model helps reduce repetitive tasks and communication costs duringdevelopment, ensuring consistency and stability in game content creation, andunleashing the creative potential of developers.
[Integration of Data and Games]: A logical processing box is required for receiving data and providing feedback.
Art asset generation
System numericalgenerationeneration
Technical algorithmsolutions
Intelligent audio-visual matchingAI-Driven Data Logic BoxKnowledge conversionKnowledge upgrading
Knowledge inheritanceAITransformation
The collection of data and the ?ne-tuning of games is essentially a process of dynamic
optimisation based on theoretical data models, which is exactly what AI excels at.
Data CollectionAutomated Game GenerationCollection of planningparameters and post-launchoperational data
Game generation guided byoptimised data
Achievement Highlights of KingNet Network's "Xingyi" Large Model in 2024End-to-end automation
Improved developmente?ciency
Collaborativeoperations
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Seasonal Voice partnered with the AI-TOP100 platform to launch an AI Short DramaCompetition. Creators were invited to produceshort dramas using AI technologies, with AImodels generating music styles based on the plot,atmosphere, and other creative requirements.
The Maliang large model facilitates the digitalgeneration of traditional Chinese calligraphyand painting by integrating AI technology withtraditional culture. It creates artworks in stylesconsistent with Chinese artistic traditions,transforming textual content into highlyauthentic visual art, and driving the developmentof the cultural and creative industries.In April 2024, the derivative IPSeasonal Voiceof Song Dynastypartnered with Hangzhouscenic sites and Fudan University to host the"Seasonal Huanglong: Shangsi Literacy Soiree"poetry and AI event, themed around Chinesetraditional festivals and solar terms. Poets wereinvited to present their compositions in theform of calligraphy and classical paintings usingthe Maliang model. This event not only o?ereda cultural feast for poetry enthusiasts but alsoinjected new vitality into the inheritance anddevelopment of national culture through theinnovative fusion of tradition and technology.
The "Maliang" Large Model Featured at the "Seasonal Huanglong:
Shangsi Literacy Soiree" Poetry and AI Event
Themed "Dragonsong of the Stars: Legend ofBluemoon", theLegend of Bluemoon Warrior-Mage-Taoist IP Character AI Creative Contestwas jointly organised by the AI-TOP100 platformand KingNet Chain, with co-organisation byX-META. Participants were encouraged to use AItechnology to design unique professions andequipment that integrate with the "dragonkin"character concept.
Seasonal Voice
Legend of Bluemoon
KingNet Network Empowering IPInnovation through AI Technology
The "Maliang" Large Model Empowering Digital Generation of Calligraphy and Painting
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KingNet Chain is the Company's digital asset platform, developed by integrating emerging technologies such as blockchain, the metaverse, and arti?cial intelligence. Guided by the fourcore principles of Gleaning, Multivariant, Extraordinary, and Equal, the platform brings together diverse creators and game IP holders. It is committed to building a digital art marketingsystem, establishing digital brand images, and creating a rich and diverse metaverse content ecosystem to inject fresh vitality into the development of the digital economy. In 2024, KingNetChain achieved outstanding results in optimising blockchain technology, innovating gami?ed integration of IP and digital assets, and enabling cross-chain deployment of digital assetsoverseas.
KingNet Chain collaborated with the Shanghai Tree-Graph Blockchain Research Institute to successfully optimise the platform's underlyingblockchain architecture, achieving multi-chain and cross-chain functionality. By introducing a more e?cient consensus mechanism and smartcontract templates, the platform enabled the application of cross-chain technology and achieved interoperability with mainstream blockchainnetworks.
KingNet Chain partnered with IP brands to deeply integrate IP content, digital assets, and gaming. This initiative not only created a novel interactiveentertainment platform for users but also provided innovative approaches and models for the application of digital assets and the promotion of IPbrands.
By leveraging multi-chain and cross-chain technologies, KingNet Chain opened new pathways for the international dissemination of traditionalcultural IPs and the global circulation of digital assets. This allowed global users to engage with and appreciate the unique charm of Chinese culturein digital form. The cross-border deployment of digital assets has supported the overseas expansion of traditional culture and o?ered internationalusers new ways to participate in and invest in Chinese culture, thereby further advancing the deep integration of culture and technology.
Achievement Highlights of KingNet Network's KingNet Chain Platform in 2024
Blockchainunderlyingtechnologyoptimisation
Gami?cationof IP + digitalassets
Cross-chaindeployment ofdigital assetsoverseas
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Taking into account the diversity of its business model,the Company has established a range of di?erentiatedmetrics and targets across various R&D and technologymodules. In 2024, we continued to increase our e?ortsin research and development, constantly exploring ourinnovation potential. This resulted in a steady increasein R&D investment, continuous enhancement of teamcapabilities, and signi?cant breakthroughs across multipletechnological ?elds. Our successful development hasinjected fresh vitality into the game industry. At the sametime, we placed strong emphasis on intellectual propertyprotection to safeguard our innovation outcomes frominfringement.
Number of active patents during thereporting period
Number of trademarks approvedduring the reporting period
Cumulative number ofapproved trademarks
MetricTargetProgress in 2024
IP DevelopmentNumber of IPs developed
Yu Xi World, SeasonalVoice: Jingchu
CompletedTechnologyPlatformDevelopment
KingNet Chain
Transaction processingcapacity (TPS)
Process over 1,000transactions per second
CompletedSystem response time
Maintain an averageresponse time within 200
milliseconds
CompletedSystem availability
Achieve 99.99% systemavailability
Completed
Certi?cations
and Awards
Earned byKingNet Chain
Blockchain Information Service Filing Number (KingNet Chain: H.W.X.B. No. 31011523631635910013)Blockchain Information Service Filing Number (KingNet Alliance Chain: H.W.X.B. No. 31011523631635910021)Computer Software Copyright Registration Certi?cate(KingNet Chain Platform: R.ZH.D.Z. No. 11157908)"Innovation Value Enterprise" at the 2024 Global Digital Trade Innovation CompetitionBronze Award in the Blockchain and Digital Finance Track
Certi?cationsand Awards
Earned byKingNet
Network
Subsidiary Shanghai Doushi recognised as Shanghai SRDI Enterprise2024 Golden Plaque Award – "AI Breakthrough Pioneer of the Year"Subsidiary Shanghai KingNet recognised as 2024 Shanghai Software Enterprise with CoreCompetitiveness (Innovative Type)
Metrics and Targets
Metrics and Targets on Product R&D and Innovation of KingNet Network in 2024
Certi?cations and Awards of Product R&D and Innovation Earned by KingNet Network
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Type ofOpportunity
Timeframe ofImpact
PotentialFinancialImplications
Response Strategy
Marketopportunity
Short-,medium- and
long-term
Increase inrevenue
? Promote traditional culture by bringing intangible
cultural heritage to life through games.
? Expand into overseas markets and share Chinese storieswith the world through gaming.
? Integrate traditional cultural elements into digitalartworks to enrich the expression of cultural heritage.
ReputationalopportunityPolicyopportunity
Social Functions ofGamesKingNet Network deeply integrates the conceptof sustainable development into its core businessoperations. The Company continues to make e?orts topromote traditional culture and share Chinese storieswith the world, creating diverse value for societythrough gaming.
The Company is committed to multi-dimensional and in-depth IP operations to continuously expand the connotation andextension of games. By developing full-industry-chain content based on traditional Chinese culture, the Company helpselevate the cultural value of the game industry and revitalise traditional heritage. KingNet Network continues to pursuean integrated development path that combines IP with cultural creativity and cultural tourism, driving deep integrationbetween IP and diversi?ed scenarios while exploring new possibilities for IP promotion.Expanding into overseas markets is one of the Company's core strategic priorities. Aligned with the national strategy ofpromoting cultural strength, KingNet Network remains dedicated to cultural industries and actively implements a globaldistribution layout. At present, the Company has preliminarily established an overseas publishing strategy, startingwith regions such as Taiwan, Hong Kong, South Korea, and Southeast Asia, and gradually expanding into European andAmerican markets. In parallel, we are committed to exploring the global communication value of games, using a universalnarrative to tell compelling Chinese stories and promote Chinese IPs worldwide.
Building on a sustainable governance framework, theCompany has designated its IP R&D Department tooversee the planning, development, and operationof IP content. This structure supports the evolutionof our IP commercialisation system towards greaterinnovation and diversity, continuously exploring newavenues for sustainable business growth and strivingto develop high-quality IPs with long-term value.
To better highlight the cultural attributes and positivesocial value of games and to promote the healthydevelopment of the game industry, the Companyconducts assessments and analyses of the impacts
Governance
Strategy
and opportunities related to thesocial functions of games based on itsbusiness layout and characteristics.
Opportunities in Social Functions of Games Identi?ed by KingNet Network and
Response Strategies
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Promoting Traditional Culture
Comic
GameDerivatives
Courses
NovelAnimation
The Company is committed to promoting traditional Chinese culture by empowering intangible cultural heritage through IP and digital technology. At the same time, we are activelyexpanding into international markets, using games as a medium to share China's stories with the world.With promoting excellent traditional Chinese culture and protecting intangible cultural heritage as the theme, the Company's self-developed IP,Crafts and Qubits,is committed to theinnovative communication of Chinese traditional handicraft culture, active exploration of the social and cultural value of animation and game products in addition to entertainment, andpromotion of the leap of the cultural value of animations and games. In 2024, Crafts and Qubits continued to expand across multiple content formats, including comics, novels, animations,games, and cultural and creative products. Related and derivative content reached over 100 million views across online platforms.
CraftsandQubitscomic series reached 73episodes, with 120 minutes of motion comicspublished across social media platforms.
TheCraftsandQubitsmobile game received itspublishing licence in May 2024 and successfullylaunched for testing in October.
CraftsandQubitsnovel was published in both print anddigital formats, and made available on platforms suchas Xinhua Bookstore, JD.com, and WeChat Reading.
Over 20 SKUs of self-developed culturaland creative products were launched.
Season 1 of theCrafts and Qubitsanimation (24episodes, 168 minutes) was released online, withtotal views exceeding 5 million.
10 sets ofCrafts and QubitsICH handicraft art courseswere developed, combining animation, theatricalperformance, and user-friendly craft kits to vividlypresent the essence of intangible cultural heritage.
2024 Creative Achievements of Crafts and Qubits
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In March, Crafts and Qubits andMETAVATAR jointly launched 10 co-branded streetwear T-shirts.In June, Crafts and Qubits partneredwith balabala to release nineapparel products. Together, they co-created the spin-o? animationCraftsand Qubits Tailor Shop, based onbalabala's "Chang'an Melody" Hanfuseries.
Co-brandedapparel line
In June, theCraftsandQubitsBook andAnimation Launch Event was held at theChina Comic and Animation Museum,where the team also donated the "AllThings Have Spirit" black paper fan (co-branded with Wang Xing Ji) and theCrafts
andQubits novel.In August, six public classes titled"KingNet Crafts and Qubits –IntangibleCultural Heritage in Paper" were held atthe China Comic and Animation Museum,with nearly 200 children participating andgaining a deep appreciation for intangiblecultural heritage.In October, Crafts and Qubits X ChinaComic and Animation Museum jointlylaunched theBringing Cultural Relics toLife board game.
In February, Crafts and Qubits enteredo?ine retail stores nationwide viaQianyuxun, contributing to the sceniceconomy and co-developing the"Hangzhou Series" cultural and creativegift boxes.In May, Crafts and Qubits and ShanghaiPublic Transportation Card launched?ve themed mobile transport cards tosupport green mobility.In September, a collaboration withDdung Doll saw the release of two co-branded dolls.In October, in partnership with MiyuCulture, Crafts and Qubits released aseries of creative products, including apaper puppet theatre, New Year printred envelopes, acrylic couplets, andinteractive transparent cards.
In April, participated in the Ninth CGFAnimation and Gaming Festival inWuhan.In May, participated in the ChinaInternational Cartoon & AnimationFestival.In July, attended both the ChinaInternational Comics and Games Expo(CCG EXPO) in Shanghai and a creatorforum at the Zhejiang IntangibleCultural Museum.In October, participated in theHangzhou Cultural and CreativeIndustry Expo.
In 2024,CraftsandQubitsleveraged brand collaborations and co-creations to promote cross-sector content integration, bringing vitality to the IP across a wide range of scenarios. The IPwas also actively integrated into public welfare initiatives, using its content to support the outreach of intangible cultural heritage. Collaborations included partnerships with the ChinaComic and Animation Museum, Zhejiang Intangible Cultural Heritage Foundation, Zhejiang Intangible Cultural Museum, and Hangzhou Normal University. In total, 17 o?ine events wereheld to promote intangible cultural heritage through concrete actions.
Key Measures for IP-Driven Promotion of Intangible Cultural Heritage ofCrafts and Qubits in 2024
Collaborationwith culturalmuseums
Developmentof cultural andcreative products
Participationin o?ineexhibitions
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Lantern Festival Joy is a light novel featuring anthropomorphisedChinese traditional festivals under the self-developed IPSeasonalVoice. The novel is currently available on Migu Reading, where itonce topped the women's ?ction chart and was selected as a keyproject by the Hangzhou Social Sciences Planning O?ce.
the IP had amassed
with cumulative views of relatedcontent reaching
529.7
29.41
million
The Seasonal Voice IP, developed by KingNet Network,is rooted in China's traditional festival and solar termculture. It combines elements of traditional Chineseculture with modern design concepts to create digitalcontent that conveys the charm of tradition through high-quality visual art and interactive experiences, both onlineand o?ine. In 2024, Seasonal Voice continued to advancethe innovative communication of seasonal culture throughcollaborations with intangible cultural heritage projects,brand partnerships, derivative product development, andmagazine serialisation.With its profound cultural foundation, creative expression,and modern reinterpretation of tradition, SeasonalVoice gained widespread recognition and popularityamong young audiences. By the end of 2024, the IP hadamassed 529,700 followers across all online platforms,with cumulative views of related content reaching 29.41million.
Seasonal Voice Spin-o?Lantern Festival Joy Marks a New Milestone in Screen Adaptation
In May 2024, the screen adaptation rights forSeasonal Voice:
Lantern Festival Joywere officially signed. In September, themicro-drama seriesLantern Festival Joy, specially supported byKingNet Network, began filming in Hengdian. Additionally, theseries collaborated with the fashion brand Mi Ahuang to launch aco-branded clothing line under the name ofLantern Festival Joy,enriching the character design with detailed silk craftsmanshipand authentically recreating the elegance of Song-style attire.
Launch Ceremony for theLantern Festival Joy Novel and Micro-drama Series
followers across all online platforms
thousand
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Delivered a themed workshoptitled Songyun Finance Campat Bo'ao Primary School,a?liated with ZhejiangNormal University in XiaoshanDistrict.Children'seducation
Brandcollaboration
Comicserialisation
Cultural
forums
Productdevelopment
Partnered with Jingdezhen porcelain brand "Cier" to co-createa series of porcelain products and festive wall plaques themedaround "Seasonal Voice: 24 Solar Terms" illustrations.
Opened a themed café showcasing and sellingseasonal porcelain and Seasonal Voice IPmerchandise to attract foot tra?c and promotetraditional culture through immersive visualand experiential storytelling.
Hosted the 2024 SeasonalHuanglong: Shangsi Literacy Soiree& 19th March 3 Huanglong PoetryFestival in Hangzhou, China.
Collaborated with Beijing Normal Universityand the China Intangible Cultural HeritageMuseum to promote seasonal intangiblecultural heritage, including consignmentsales of related products.Product categories included: Shanghaipublic transportation cards, festival-themedHanfu, Mamian skirts, Hutou hats, plushRuyi bags, board games, campus card skins,themed wallpapers, and more.Successfully completedthe 2023–2024 comicserialisation incollaboration withClassicof Mountains and Seas,jointly promoting thedissemination of traditionalChinese culture.
Participated in the 2024 Spring Festival Cultural Forum.
Key Initiatives ofSeasonal Voicein 2024 for the Inheritance and Promotion of Traditional Culture
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AppendixGovernanceChapterAboutKingNet NetworkAs the digital asset platform under KingNet Network,KingNet Chain actively responds to the national call topromote the inheritance and innovation of outstandingtraditional Chinese culture. By leveraging digital andblockchain technologies, the platform integratestraditional cultural elements with modern digital artworksand public welfare initiatives. In 2024, KingNet Chainlaunched a series of digital artworks themed aroundtraditional culture and public welfare, exploring aninnovative path that combines "technology + culture +public good".
The "24 Solar Terms" public welfare digital art series was jointly produced by Seasonal Voice and the ShanghaiJing'an UniLove Public Welfare Development Service Centre. This collection integrates traditional seasonal culturewith charitable causes, conveying the heartfelt message of young artists with special needs, "We long to be seen andrecognised". The initiative supports the ongoing rehabilitation and artistic education of adolescents with physicaland mental disabilities, helping them integrate into society and achieve independence in the future. The seriescomprises 24 unique digital assets, with a total of 70,400 editions issued.
"24 Solar Terms" Public Welfare Digital Art Series
KingNet Chain Releases "24 Solar Terms" Public Welfare Digital Art Series
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RMBmillion
221.48%
Overseas Development of GamesUpholding the principle of "cultural con?dence", the Company continues to deepen its presence in Hong Kong, Macao, Taiwan, South Korea, and Southeast Asia, while striving to expandinto markets such as Japan and Europe. By promoting more game products with distinct Chinese characteristics on the global stage, the Company aims to contribute greater wisdom andstrength to the global dissemination of Chinese culture. In 2024, the Company recorded overseas revenue of RMB 375 million, representing a year-on-year increase of 221.48%.
In 2024, the Company recorded overseasrevenue of
representing a year-on-year increase of
Vietnam
Singapore, Malaysia, the PhilippinesHong Kong, Macao and Taiwan regions of China
Hong Kong, Macao and Taiwan regions of China;
Singapore, Malaysia, Vietnam
South Korea
Achievements of KingNet Network
in Overseas Publishing in 2024
The New Heaven Sword and Dragon Saber
Monster GO!Lord of Nazarick(OVERLORD)Sword and Fairy：A New Beginning
Drifting in the Jianghu
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The Company leverages IP value to support theinternational dissemination of Chinese culture andcontinues to promote the overseas publicationand distribution of self-developed IP content. In2024, theSeasonal Voicewas fully translated intoEnglish, and invited for overseas publication byWorld Joint Publishing House. The sub-series novelLantern Festival Joy underSeasonal Voicewas alsoadapted for screen and fully translated into Englishas a short novel for international release.
KingNet Network's IPYu Xi World Participates in Cultural Exchange in EuropeIn September 2024, KingNet Network's IPYu Xi Worldand its derivative publications were selected as featured worksfor the "Cultural Exchange of Chinese Online Authors in Europe" programme, organised by the China-Europe CulturalExchange Centre of the Ministry of Culture and Tourism.Yu Xi Worldblends traditional Chinese culture with philosophy and science to create a ?ctional, imaginative world.The project team drew inspiration from classical texts such as TheClassic of Mountains and Seas, In Search ofthe Supernatural,andThe Classic of Divine Marvels, as well as from Chinese folklore, to build a world that is bothinnovative and richly authentic. The IP received high praise from local experts during the event.
Yu Xi World Engages in Cultural Exchange in Europe
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MetricTargetProgress in 2024
Product
and IPDevelopment
Number of sustainability-related games
Average of 1 gamedeveloped per year
CompletedNumber ofCrafts and Qubitso?ine public welfareactivities
At least 10 o?ine eventsCompletedNumber ofSeasonal Voiceo?ine public welfareactivities
At least 40 o?ine eventsCompleted
Digital ArtCreation
KingNetChain
Number of traditional culture-themed
digital artworks issued
At least 5 seriesCompletedNumber of public welfare-themeddigital artworks issued
At least 2 seriesCompletedTotal number of digital artworks issued
More than 50,000 items
issued
Completed
In 2024, the Company continued to promote a more open and diverse cultural ecosystem by presenting traditional culture in ways that reflect contemporary trends and resonatewith younger audiences. We also advanced the overseas distribution of our game products, further expanding our presence in global markets and bringing more exceptional titles tointernational players.
Metrics and Targets on Social Functions of Games of KingNet Network
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CraftsandQubitsmobile game was shortlisted for the 2024 Golden Lion Award forOutstanding Mini Game; theBringing Cultural Relics to Lifeboard game, co-developed withthe Crafts and Qubits X China Comic and Animation Museum, won Third Prize at the ThirdHangzhou Cultural and Creative Design Competition.Recognised as one of the outcomes of the major project "Researchon the Construction of New Era Civilisation Practice Centres"funded by the National Social Science Fund of China; winner ofthe 2024 Golden Lion Award for Outstanding Game DerivativeProduct; Best Cultural IP at the Second "Qilin Cup" by the BeijingAnimation & Game Industry Association; Second Prize for ExcellentScience and Technology Publications (36th Edition) from sciencepublishers in East China; Top 10 Comics and Illustrations at theFirst Lingnan Water Town International Cartoon & AnimationWeek;TheSeasonal Voice? JingchuDigital Cultural IndustryAlliance won the 2024 'City Symbol' Best Creative IP Award.
KingNet Network received the 2023 and 2024 China Game Sailing Award forOutstanding Overseas Expansion.
Seasonal Voicewas selected as an Outstanding Original Cultural Work underthe 2023 Kirin Cup Animation IP Overseas Promotion Project.KingNet Network's subsidiary, Shanghai Zhizhan Network Technology Co.,Ltd., received the "2023-2024 National Key Cultural Export Enterprise" Award.Selected for the Cultural Boutique Support Project in HangzhouHigh-tech Zone (Binjiang), Zhejiang Province; Gold Prize in theNational Essay Competition "Beautiful China, Wonderful Binjiang".Selected for the Cultural Boutique Support Project inHangzhou High-tech Zone (Binjiang), Zhejiang Province.
Recognition Earned by KingNet Network in 2024 for Demonstrating the Social Value of Games
In 2024, the Company's achievements in global game publishing werewidely recognised:
In 2024, several of the Company's self-developed IPs aimed at promoting traditional culturereceived external recognition:
Crafts and Qubits
Seasonal Voice
LanternFestival JoyYu Xi World
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Type of Risk
Timeframe ofImpact
PotentialFinancialImplication
Response Strategy
Contentcompliancerisk
Short-,medium- andlong-term
Increase incompliancecostsDecrease inrevenue
Evaluate product content quality across ?ve keydimensionsImplement a three-tier content review responsibilitysystemMaintain a comprehensive acceptance testingprocessAdopt a cautious approach to IP acquisitionProvide training on content quality review
Content Quality
Management
GovernanceStrategy
KingNet Network's content qualitymanagement spans two core modules: self-developed content and externally sourcedcontent. The Company has accumulatedextensive practical experience in self-developed content, with its associatedtesting and review mechanisms repeatedlyvalidated by the market. As a result, arelatively mature content quality controlsystem has been established. Lookingahead, the Company will continue tostrengthen the management of contentquality for investment and externallyintroduced products, further re?nerelevant processes and mechanisms, andadopt diversi?ed strategies to enhancecontent quality while advancing itspremium development strategy.
The Company complies with theCopyright Law ofthe People's Republic of China, theMeasures for theAdministration of Online Games, theRegulation on theAdministration of Publication,and theAdministrativeProvisions on Online Publishing Services, and otherapplicable laws and regulations. It has established internalpolicies such as theRegulations on the Management ofIP Introduction and Adapted Game Projectsto strictlycontrol the quality of externally introduced content. ThePublishing Department is responsible for overseeing andreviewing the content of all game products under theCompany's umbrella to ensure that the product content isin line with laws and regulations and free from harmful orinappropriate messaging.
The Company adheres to a premium productdevelopment strategy, aiming to deliver high-qualitygames to players. While externally sourced content canenhance the Company's core business, it also introducescertain risks and places higher demands on contentquality management capabilities. To address this, theCompany conducts systematic assessments and in-depthanalyses of risks related to content quality management.This enables the identi?cation of potential risk points andtargeted optimisation of management processes, ensuringcontent compliance and a consistently high standard ofpresentation.
Risks in Content Quality Management Identi?ed by KingNet Network and Response Strategies
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The Company has strengthened its content oversight and delivery by evaluating product content across ?ve dimensions: concept orientation, original design, production quality, culturalconnotation, and development level. Through a multi-pronged approach, the Company continually enhances content quality.
Whether the gametheme, characters andgameplay are in linewith the core socialistvalues.
Whether the gameplay,artistic style, and world-building demonstratereasonable innovation.
Whether the productionof game scenes,character designs, andstorylines re?ects a highstandard of quality andre?nement.
Whether the gamescan disseminate andpromote the essence ofChinese culture as wellas accurate scienti?cand cultural knowledge.
Whether the gamecontent is complete,the character settings,storyline and gameplayare comprehensive, andwhether the game'soperation is sound.
Management of Impacts, Risks and Opportunities
Consideration Dimensions of Product Contents of KingNet Network
ConceptOrientation
OriginalDesign
ProductionQuality
CulturalConnotation
DevelopmentLevel
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The PublishingDepartment conductsan internal reviewof game content toensure there are nocontent-related risks.
Game content isstrictly revisedin accordancewith the feedbackfrom regulatoryauthorities.
Regularcomprehensivereviews of gamecontent are conducted,with corrective actionsorganised as needed.
Before applicationDuring applicationAfter launch
MetricTargetProgress in 2024
Number ofgame contentviolations
Completed
The Company ?rmly implements the three-tier content review responsibility system for game licence applications, aimingto ensure that products can successfully obtain publishing approval and that game content aligns with evolving regulatoryrequirements.
The Company strictly implements internal andexternal regulations on game content qualitymanagement. In 2024, we achieved the goal ofzero violations for newly launched games, andcontinued to lead the industry in the IP contentapproval rate.
During the game development, the Company has established a comprehensive product testing and acceptance process.The QA Department is responsible for quality control throughout all phases of development. Closed Beta Testing (CBT) andOpen Beta Testing (OBT) are used to continuously optimise and adjust game mechanics, content, and design, ensuring ahigh-quality experience for players.When introducing external IPs, the Company prioritises IPs that are widely recognised by the public, supported by the state,and aligned with traditional Chinese culture—such as theLegends of the Condor Heroes, Divine Condor, Errant KnightandThe Heaven Sword and Dragon Sabreand theGu Long Martial Arts Series. At the same time, IP content is adapted to alignwith core socialist values and promote the right value orientation.In addition, the Company organises monthly training sessions for content quality reviewers to familiarise them with thelatest review requirements. Employees are also encouraged to participate in training organised by regulatory bodies andindustry associations, thereby enhancing their awareness and capabilities in content quality management.
Metrics and Targets on Content QualityManagement of KingNet Network in 2024
Metrics and Targets
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Dual Approach: DeliveringHigh-Quality Services Both
Internally and Externally
Topics Responded:
SDGs Addressed:
CustomerService andComplaintHandling
Data Securityand CustomerPrivacyProtection
Protectionof Minors inCyberspace
SupplierSustainabilityManagement
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Note: XY Game Platform is a premium game operation platform under Shanghai KingNet Network Technology Co., Ltd.
In 2024, theCompany's customer
service handled atotal of
A total ofplayer issues andcomplaints were
resolved
user interactions
comprisingstandard customerservice casesVIP service casesincluding
from VIP userscomplaint cases acrossthree categoriesAll complaint cases on the Company'sService Platform were resolved within
hours orworking days
from standard users
1,670,000
334,000
950,000
190,000
720,000
4,000140,000
XY Game Platform Customer Service Hotline: 400-993-6669
Customer Service and Complaint HandlingKingNet Network always adheres to the concept of "providing higher quality and better service", with user value as thecore, continuously creating a customer-centred high-quality experience. By formulating theManagement Measures forComplaints from Game Usersand building diversi?ed customer communication channels, the Company has developed athree-level customer complaint handling procedure of "customer service - team leader - complaint specialist", properlyresolves user complaints, and maximises the satisfaction of legitimate and reasonable user demands, reducing the risks ofuser disputes.
O?cialwebsite
Exclusive WeChatservice channelO?cial managementchannel for playergroups
Online instantcommunicationsoftware
Service channel formanaging anchorsof networkingplatform fan groups
WeChat publicaccount
24-hour customerservice hotlineChannels for Customer Communication of KingNet Network
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To provide users with a better experience, the Company'sCustomer Service Platform consistently adheres to andcontinually refines its service management system. TheCompany has established strict quality control (QC)standards to promptly identify, address, and correct issuesin the service process. Currently, the QC sampling rate isset at 30% of the total daily service volume.Priorities of Customer Service QualityControl (QC):
In 2024, building on its existing customer service platform, the Company continued to optimize the integrated servicesystem that combines user support, user data analysis, user engagement planning, and game content output functions.
Conducted over
Conducted user follow-ups on a ?xed scheduleof twice per week, with each follow-up involvingan online sample ofuser follow-up calls
users (60% of whom are VIP users)
115,000
1,200with more thanResulting in
The user satisfaction rate fromfollow-ups exceeded
approximately valid feedback and suggestions receivedusers being followed up per week
users being followed up per month
36,0002,400
95%
9,600
Accuracy of responses relatedto business knowledgeService attitude and e?ciency and e?ectiveness ofproblem-solving techniquesCompliance of communicationlanguage with service standardsMonitoring for any non-compliant operations inthe customer service backend system
User Follow-up Performance Data of KingNet Network in 2024
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In accordance with theCybersecurity Law of the People's Republic of China, theData Security Law ofthe People's Republic of China, and thePersonal Information Protection Law of the People's Republicof China, the Company has established a series of internal policies, including theBasic System for DataCollection Management,theData Storage Management System, theData Collection ManagementSystem, and theManagement System for Information Security Incidents and Emergency Response.These measures continuously strengthen the institutional foundation for standardised data governance.The Company has also established a clear and comprehensive data security and customer privacyprotection governance framework, ensuring the e?cient execution of all related management tasks.
To better understand the evolving information security pro?le, promptly adjustsecurity strategies, and allocate resources e?ectively, the Company identi?es,assesses, and analyses risks related to data security and customer privacyprotection. These e?orts ensure the continued e?ectiveness and adaptabilityof its information security management system.
The CEO makes important decisions related to privacy and datasecurity incidents.The Vice President of Public Security is mainly responsible for theoverall privacy and data security strategy, ensuring that the Companycomplies with relevant laws, regulations, and mandatory standards.The Senior Director of the Operation & Maintenance SecurityCentre formulates privacy policies and related procedures,ensuring the e?ective operation of data security and networksecurity mechanisms.The Information Security Department ensures that theCompany's data processing mechanisms are compliantand promptly identi?es and blocks any possible privacyand data security issues.
Type of Risk
Timeframe ofImpact
Response Strategy
Data leakagerisk
Reputationalrisk
Short-,medium- and
long-term
Increase incompliancecosts
Strengthendata securityprotection acrossall stages of productdevelopment andgame operations.Formulate andimplement aPrivacy Agreements
to regulate the useof user information.
Supervision
levelManagement
levelExecution
level
Data Security and Customer Privacy ProtectionEnsuring data security and protecting customer privacy are critical to earning user trust and maintaining the Company's reputation. KingNet Network reinforces its information securitydefence by improving the internal management mechanism, optimising the technical defence system, and conducting comprehensive employee awareness training.GovernanceStrategy
Risks in Data Security and Customer Privacy ProtectionIdenti?ed by KingNet Network and Response Strategies
Potential ?nancial
impact
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During the game development process, the Companyfollows the principles of secure development, assessesprivacy design, and enhances data security throughoutthe product development process.
During operations, the Company ensures data security through technical measures such as identity veri?cation, encryptedtransmission and storage, access control, secure con?guration, and audit mechanisms. In parallel, regular employeeinformation security awareness training and standardised data management protocols for partners are implemented toenhance the overall level of information security management.
The development team adheres to best practices insecure development, conducts regular code reviews,and utilises the latest security tools for vulnerabilitydetection. It continuously learns about the latestsecurity standards and threats in the industry, whiletimely updating and improving security measures.
The Company assesses privacy design in the earlystages of product design, identi?es potential privacyrisks in the data processing process, and implementscorresponding measures to mitigate these risks.
The Company conducts more than four external information security audits annually, including classi?ed protectionassessments, communications security assessments, data security risk assessments, and annual audits required for listedcompanies. These audits primarily assess whether the full data lifecycle and cybersecurity practices meet the expectedstandards for initial certi?cation.The Company carries out at least one internal information security audit each year. These internal audits focus onevaluating employee awareness of data security and social engineering risks to ensure they meet the Company'sexpectations.The Company has obtained multiple information security certi?cations, including classi?ed protection assessments,communications security assessments, and data security risk assessments. These certi?cations cover all Company data.The Company has established relevant emergency response plans and continuously updates them based on evolvingexternal circumstances. These plans de?ne detailed operational steps for each stage of an incident, including eventdetection and reporting, incident response, evidence preservation, incident review, auditing, and reward andpunishment actions, ensuring potential losses are minimised in the event of a security breach.All new employees must undergo data security awareness training, which covers personal information protection,social engineering, and relevant laws and regulations. The Company also conducts spot checks on current employeesto ensure that their awareness levels meet internal standards.The Company has formulated a data security management system for partners. We conduct strict quali?cation reviewsof our partners, assess their data security protection capabilities in terms of technology, personnel and equipment, andalso examine the implementation of their protection obligations in terms of laws, regulations and industry standards.
Conduct regular information system audits
Obtain information security system certi?cations
Establish emergency response plans for information security incidents
Provide data security awareness training for employees
Implement data protection policies for suppliers and partners
Secure development practices
Privacy design assessment
Management of Impacts,Risks and Opportunities
Data Security Protection Measures of KingNet Network
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AppendixGovernanceChapterAboutKingNet NetworkIn accordance with relevant laws and regulations, the Company has formulated a transparent and publicly availablePrivacy Agreementsthat clearly outlines users' rights and the rulesgoverning data collection, usage, storage, and sharing. We also implement multiple protective measures to prevent the leakage, loss, or unauthorised access of users' personal information.
The Company uses clear and understandable language to inform users about the data controller, purposes of collection, types of personal information collected, processingmethods, and retention periods, ensuring users' right to be informed.The Company grants users autonomy over their data, allowing them to modify, correct, or delete their personal information through preset methods, and seek assistance viawebsite, email, or phone if needed.The Company adheres to the principle of data minimisation by collecting only the personal data necessary to support game service operations.Except for collecting game-related survey information through third-party research agencies to improve products and provide personalised services, the Company does notshare personal data with third parties without user consent.
The Company encrypts personal information during storage and employs https encryption to prevent user data from being stolen during transmission andstorage.
The Company implements access control policies, with only authorised personnel having access to sensitive data, and regularly reviews and updates employeeaccess permissions to maintain the principle of minimum authorisation.Employing the de-identi?cation technique, the Company removes individual identity information during data analysis and processing to ensure that datacannot be restored to speci?c individuals during use.The Company retains personal data only for the required period and commits not to rent, sell, or share personal information with third parties for purposesbeyond ful?lling transactions or services.
Data collection
Data transmission and storage
Data use and retention
User Privacy Protection Measures of KingNet Network
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Shanghai KingNet
"OutstandingBlue Team"
Shanghai KingNet
"OutstandingProgress Award"
In November 2024, the Company joined the Minhang District Cybersecurity and Safety Alliance, co-initiated by the MinhangDistrict Public Security Sub-bureau alongside various internet enterprises and cybersecurity institutions. KingNet Networkwill work together with industry partners to actively promote online civility, strengthen cybersecurity defences, foster aclean and orderly cyberspace, and contribute to the healthy development of the digital ecosystem.
During the 2024 "Personal Information ProtectionDay" campaign, KingNet Network was awardedthe "Outstanding Organisation" Certi?cate by theCyberspace Administration of the Shanghai MinhangDistrict Committee in recognition of its exceptionalorganisational capabilities and promotional e?orts.
"Outstanding Organisation"
Certi?cate by the CyberspaceAdministration of the Shanghai
Minhang District Committee
In 2024, the Company did not experience any data securityor leakage incidents, achieving the goal of "zero datasecurity incidents" and e?ectively protecting data securityand user privacy.
Number of data security incidents
Coverage rate of employee trainingand awareness on data security andprivacy protection
Target
Target
Progress in 2024
Progress in 2024
100%
100%
On the afternoon of 10 December, the Shanghai Communications Administration, in collaboration with the ShanghaiMunicipal Cyberspace Administration, the Shanghai Municipal Commission of Economy and Informatization, the ShanghaiMunicipal Public Security Bureau, the Shanghai Municipal Education Commission, and the People's Government of PutuoDistrict, held the "Cyber Shield 2024" Shanghai Cybersecurity Red-Blue Exercise and "Bedrock Action" Summary Conferencefor the industrial and information technology sector.Shanghai KingNet Software Technology Co., Ltd., KingNet Network's subsidiary, was awarded "OutstandingBlue Team" and "Outstanding Progress Award" for its outstanding performance in the event. Gong Hongjun, thesubsidiary's employee, was recognised as an "Outstanding Individual". Additionally, a "Bedrock Action Dragon/Tiger List" was prepared based on cumulative scores from each session of the Bedrock Action since 2021, andKingNet Network ranked 14th on the "Bedrock Action Dragon List" (Blue Team Enterprises).
Consolidating the Defence Line of Personal Information Protection and Safeguarding Player Privacy
KingNet Network Subsidiary Receives Multiple Honours in the "Bedrock Action"
An Employee of ShanghaiKingNet Recognised as an
"Outstanding Individual"
Metrics and Targets
Metrics and Targets on Data Security andCustomer Privacy Protection of KingNet Network
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KingNet Network strictly complies with theLaw of the People's Republic of China on Protection of Minors, theNotice ofthe National Press and Publication Administration on Preventing Minors from Becoming Addicted to Online Games, andtheNotice on Further Enhancing the Administration to Effectively Prevent Minors from Becoming Addicted to OnlineGames, and other laws and requirements on the online protection of minors. The Company has continually reinforcedits protection system for minors, enhancing and refining its anti-addiction system. It has actively participated in thedevelopment of relevant standards and industry collaborations, creating a clean network environment for minors.Our game products primarily serve adult users. Since September 2021, we have disabled registration for minors. Exceptfor a very small number of existing minor users, there have been no new minor users in our self-operated game products.We actively ful?l our social responsibility as a game company, engage in initiatives related to the protection of minors incyberspace, and safeguard their healthy development.
In July 2024, KingNet Network established a WorkingCommittee for Caring about the Next Generation, withthe Company's Party Secretary and General Managerserving as the director of the committee. The PartyCommittee, the Working Committee for Caring about theNext Generation and the Volunteer Association adhere toreform and innovation, follow the laws of youth growth,continuously innovate working methods, and enrichworking vehicles to jointly create a favourable socialenvironment for the healthy growth of minors.
The Company has fully integrated with the real-name verification system for online game anti-addictionmanagement, and does not provide online game services to users who are not verified or to minors inany form.The Company displays an age prompt for game products in prominent positions such as game icons, o?cialwebsites, and main game interfaces.The Company has established a dedicated content review team to regularly inspect all game products underthe Company, ensuring that no harmful content a?ecting the physical or mental well-being of minors ispresent.The Company sets up "Online Harmful Information Reporting Area" and "Shanghai Internet IllegalInformation Reporting Centre" on the XY Game Platform and the home page of its o?cial website.
Strengthen real-name veri?cation management
Age promptEnhance content review
Establish a dedicated reporting channel
Inauguration of KingNet NetworkJuvenile Legal Protection Station
KingNet Network has deepened its collaboration withGrandall Law Firm (Shanghai) in advancing volunteerservices. The Company has appointed Grandall LawFirm (Shanghai) as its "Public Welfare Legal Adviser"and, in coordination with schools under the Rural Cloud-based Educational Support Programme of KingNet'sLove Public Welfare, leveraged the expertise of Grandall'sprofessional legal team to establish a "Juvenile LegalProtection Station". This initiative provides legal aid,psychological counselling, and legal education services toadolescents in remote areas, aiming to enhance minors'awareness of the rule of law and their capacity for self-protection.
Protection of Minors in Cyberspace
KingNet Network's Actions for the Protection of Minors in Cyberspace
Consolidating the Defence Line of PersonalInformation Protection and Safeguarding PlayerPrivacy
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The types of suppliers for KingNet Network mainly include service, engineering construction, comprehensive materials.The Company complies with relevant laws and regulations such as theBidding Law of the People's Republic of China
and theCivil Code of the People's Republic of China, and has formulated internal policies including theProcurementManagement System, theProcurement Process Management Rules, and theSupplier Management Rules. These policiesensure a systematic and closed-loop management process covering the entire supplier lifecycle from onboarding andprocess management to performance assessment and exit.
The Company collaborates with suppliers to build a clean and transparent supply chain. We have issued theLetter ofIntegrity Commitmentto All Partner Suppliers and signed theIntegrity and Honesty Commitmentwith suppliers, clarifyingto suppliers and business partners its attitude of zero tolerance towards corruption. We conduct supplier training sessionson an ad hoc basis to strengthen their understanding of our procurement policies and promote compliant procurementpractices. The Company also provides suppliers with the contact email of the procurement supervision department,allowing them to report any corruption-related clues identi?ed during cooperation, thereby jointly fostering a sound andethical business environment.
Supply chain security is of vital importance to theCompany's stable operations. By coordinating acrossmultiple dimensions, such as procurement planning,process management, and performance management,the Company has successfully established an e?cient andresilient supply chain risk management system. In 2024,all major projects were delivered on time, meeting bothquality and quantity requirements.In addition, the Company attaches importance tothe security management of suppliers' data. Wehave formulated systems, encompassed theProjectOutsourcing Management Regulationsand signedcon?dentiality agreements with suppliers, so as tocooperate with suppliers to construct a safe and reliabledata management ecosystem.
In 2024, all
new suppliers signed theCon?dentiality Undertakingwith the Company,which has been signed by all suppliers introducedsince the establishment of the suppliermanagement system.
Before engaging suppliers, theCompany conducts background checkson them, including quali?cation auditsand on-site inspections, to ensure thattheir capabilities meet procurementneeds, while also examining theirperformance in environmental andsocial responsibilities.
The Company employsdi?erentiated suppliermanagement and takesmeasures such as interviews,supplier performanceassessment, and hierarchicalmanagement to incentiviseand guide some keysuppliers.
The Companycompleted the 2024supplier performanceassessment andissued recti?cationnotices to twosuppliers.
If a supplier violatesbusiness ethics or if theCompany su?ers signi?cantlosses due to the supplier'sinability to ful?l its supplyobligations, the Companywill immediately terminatethe cooperation with thatsupplier.
AdmissionRelation ManagementAssessmentExit
In 2024, all
new suppliers signed the Integrity and Honesty Commitment, which has beensigned by all suppliers introduced since the establishment of the supplier management system.
Supplier Sustainability Management
Supplier Lifecycle Management of KingNet Network
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Purposeful ActionDriven by Passion to
Create Value
Topics Responded:
SDGs Addressed:
Employment andProtection ofEmployees' Rightsand Interests
HumanCapitalDevelopment
CommunityContributionand RuralRevitalisation
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AppendixGovernanceChapterAboutKingNet NetworkEmployment and Protection of Employees' Rights and InterestsKingNet Network has established diverse talent recruitment channels, fully respects workplace diversity among employees, safeguards employee rights, interests and bene?ts, and strivesto create a warm, healthy, and comfortable working environment for all sta?.Employee Recruitmentand EmploymentThe main types of employees hired by theCompany include full-time employees underlabour contracts and part-time employees.Abiding by applicable laws and regulations suchas theLabor Law of the People's Republic ofChina and the Labor Contract Law of the People'sRepublic of China, the Company achievedcompliant employment. In 2024, the Companydidn't experience labour violations.The Company is committed to fair recruitment,providing equal employment opportunities to alljob applicants. In 2024, we recruited a total of 877individuals through online recruitment, internalreferrals, and campus recruitment, and created?exible employment opportunities by hiring part-time employees.
Post job openings on majorrecruitment websites, making fulluse of free features to minimiserecruitment costs.
Encourage employees to recommendsuitable candidates through theirpersonal networks.
Leverage mainstream social platformssuch as Maimai and Douyin to identifytarget candidates, maintain regularengagement, and build a long-termtalent pipeline.
Establish a specialised team to handlerecruitment tasks, conduct detailed datatracking, ensure timely communicationand feedback, and regularly updaterecruitment progress and statistics.
Accelerate CV screening and interviews,and provide timely feedback on interviewoutcomes.
Conduct comprehensive assessmentsof candidates based on educationalbackground, academic major, workexperience, skills, and personality traits.
Channelexpansion andoptimisation
Processoptimisationand e?ciencyenhancementRecruitmentStrategy
Online recruitmentplatforms
Strengthened internalreferrals
Social mediaplatforms
Dedicated recruitmenttaskforce
Process optimisation
Targeted talentidenti?cationAs of the end of the reporting period,the Company had a total of
employees2,184
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To bridge the gap between planned recruitment headcount and actual talent demand, the Company introduced a quarterly reporting mechanism in 2024, in addition to the existing annualheadcount planning process. Based on the reporting results and business development needs, the Human Resources Department conducted recruitment forecasting and formulatedrecruitment plans to enhance e?ciency and e?ectiveness.The Company upholds the principles of fairness, impartiality, and transparency, and is committed to fostering an equal and inclusive working environment. To improve the qualityof campus recruitment and attract outstanding young talent, the Company has established broad cooperation channels with universities. KingNet Network has reached cooperationagreements with Shanghai University, East China Normal University, Donghua University, and Shanghai Normal University, engaging in in-depth collaboration in areas such as talentrecommendation, internships and employment, background checks, and user research. In 2024, the Company held two on-campus dual-selection job fairs for graduates and interns atpartner universities, achieving a conversion rate of 8%.
Industry–Academia Collaboration Initiatives of KingNet Network
Students from partner universitiesare invited to participate in userresearch and testing projects fornew game releases, enabling thecollection of precise user insightdata.
Campus ambassadors fromvarious universities are mobilisedto promote recruitment postersand new game research activitieswithin active student communities,enhancing the Company'semployer brand in?uence.
Connections are established withuniversity faculty members toverify the academic performanceand teamwork of student interns,ensuring the authenticity of theinformation provided.
The Company has deepenedits collaboration with ShanghaiFilm Academy by conducting livestreaming activities on campus,providing students with moreopportunities for practical socialexperience.
Partner universities regularlyrecommend outstanding studentresources to the Company, and theCompany in turn o?ers internshipopportunities to universitystudents.
Jointinternshipbase
User researchcollaboration
Communitypromotion
Backgroundchecks
Livestreamingbase
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Basic salaryProject bonusVariable performance bonus(including non-sales employeesand junior employees)Other cash incentives andsubsidies
Remuneration andBene?t System ofKingNet Network
Healthy Workplace Management Measures of
KingNet Network
Remuneration
Routine bene?ts
Guaranteedbene?ts
Health bene?ts
Protection of Employee Rights and InterestsThe Company has formulated regulations such as theRemuneration Management Measuresand theOutsourced Personnel Management Measures. In 2024, theAttendance Management Policywas updated toinclude provisions on employees' physical and mental well-being, with a focus on work–life balance. TheEmployee Behaviour Management Measureswas also revised to reinforce the Company's commitment tofostering an inclusive and friendly working environment. The updated policies emphasise respect for diversityand inclusion in performance assessment and promotion, and explicitly reject workplace discrimination.The Company protects the legitimate rights and interests of employees, pays their wages on time, and duly andfully contributes to employees' social insurance and housing provident fund. In addition to providing statutorywelfare bene?ts, it also o?ers a diverse range of ?exible bene?ts, including meal allowances, transportationallowances, annual health check-ups, supplementary commercial insurance, and festive gifts for regularemployees (labour contract employees).
Supplementary commercialinsurance (including insurancefor including serious diseases,accidental injuries, andoutpatient and emergencyhospitalization)Annual health check-upsCultural and sports activities
Social insurance andhousing provident fundpaid in full
The Company places great emphasis on employees' physical and mental wellbeingand promotes the concept of healthy working. We strive to create a comfortableworkplace environment. Based on our assessments, there are no signi?cantoccupational health risks among our employees. In 2024, the Company adoptedvarious measures to safeguard employee health and wellbeing.
The Company is committed to fostering harmonious labour relations and activelyengages in democratic communication with employees. Before revising majorpolicies that concern employees' vital interests, such as personnel managementregulations, the Company seeks feedback from all employees. In designingthe benefits system, we also prioritise employee input by involving them inpreliminary voting for holiday bene?ts and conducting satisfaction surveys afterbenefit implementation. These efforts effectively enhance employees' sense ofparticipation and belonging.
Established a workplace inspection mechanism to promptly identify potentialrisks associated with o?ce equipment.Purchased supplementary commercial insurance covering critical illness,accidental injury, and outpatient and inpatient medical treatment.Organised regular health check-ups (including pre-employment andannual physical examinations), achieving 100% employee coverage.Held monthly "On-site Doctor Visits" to provide employees withconsultations on general health issues, family health concerns, andinterpretation of medical reports.Organised mental health seminars to help employees understand,manage, and overcome anxiety, thereby safeguarding mental well-being and enhancing quality of life and work.Provided employees with a range of recreational facilities andregularly organised diverse cultural and sports activities.Birthday gifts, festive giftsWelfare leave (paid annualleave exceeding thatstipulated by the state)Annual ceremony bene?tsand New Year's redenvelopes
Anniversary gifts for employees
Meal and transportation
allowancesDepartment team building andannual development-oriented
tourismInterest clubs
Caring bene?ts
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Human Capital DevelopmentKingNet Network adheres to a people-oriented development philosophy, placing employees at the core of its business strategy. We continuously improve our talent development andtraining systems, enhance the attractiveness of our employer brand, and strive to create a competitive environment for talent growth.Governance
Strategy
The Company attaches great importance to talentdevelopment. The CEO is responsible for overseeing humanresources and daily administrative affairs. A dedicatedTraining and Culture Department has been established tocoordinate and manage all training activities across theCompany. These efforts aim to continuously improve thestandardisation of human resources management, provideemployees with stable and reasonable career developmentprospects, and attract and retain top talent.
Talent is the core resource in the game and internet industries. To maintain a long-term competitive advantage, theCompany identi?es, assesses, and analyses the risks and opportunities associated with human capital development.
To address the risk of losing core talent, the Company ensures the stability of human resources through strategicrecruitment, the establishment of a talent pool, and the implementation of an employee stock ownership plan.
Employee training
Employee evaluation
Employee promotion
Management Measures for Corporate Trainers andInternal Training CoursesPerformance Management Measures, AttendanceManagement PolicyPromotion Management Measures, PositionSystem Management Measures
Human Capital Development Policy Systemof KingNet Network
Risks/Opportunities in Human Capital Development Identi?ed by
KingNet Network and Response Strategies
RiskLoss of core talent
Short-, medium-,and long-term
? Decrease in
revenue? Increase inoperating costs
? Formulate a talentdevelopment strategy? Establish a talent pool forfuture sta?ng needs? Implement an employeestock ownership planOpportunity
Enhancedinnovationcapability
Short-, medium-,and long-term
? Increase in
revenue? Decrease in
operating costs
? Conduct strategicrecruitment
Type of Risk/Opportunity
Timeframe of
Impact
Response StrategyPotential ?nancialimpact
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Management of Impacts, Risks and OpportunitiesEmployee TrainingTo meet the learning needs of all employees at different stagesof their career development, the Company has established aninternal online learning platform called "Sky City", and developeda multi-level training system.
In 2024, the Company adjusted and optimised its training system. The enhanced system is designed to cover a broaderemployee base, o?er greater personalisation and intelligence, and better empower employee development and growth.Multi-level Employee Training System ofKingNet Network
Key Measures for Optimising KingNet Network's Training System in 2024Training and Culture Department – Overview of Training and
Culture Initiatives
Knowledge Inheritance O?cer and external
training
Launch of new courses, migration to Version 2.0,data organisation, project generationTraining assistance, course development, learning
analysis, etc.
Events, competitions, funding support, problem
settlement, etc.
Managementlevel promotionOn-job training
Online trainingBasic work
Cultural division
Newcomertraining
M PlanLecturer management
Training operationAnniversary ceremony activitiesKingNeter Annual JournalClub operation
Sky City Learning PlatformTraining for newcomers from social
recruitment
To provide employees with a richer and more convenient online learning experience, the onlinelearning platform underwent a comprehensive upgrade, including improvements to the userinterface, learning data monitoring, and personalisation features.To ensure training programmes align effectively with business needs, the core courses of eachprogramme are developed around speci?c scenarios encountered by KingNet employees. These aredesigned by full-time instructors, which reduces reliance on external training providers and lowerstraining costs, while e?ectively addressing professional issues within the business.For frontline leadership development programmes, after successful implementation and deliveryat the Shanghai headquarters
, the programme was replicated at the Guangzhou branch. Premiumcourses and best practices were shared with participants in Guangzhou, achieving standardisedproject coverage across regions.As a hallmark of scienti?c progress and the evolving times, the internet industry is on the brink ofdeeper AI integration. Recognising the value and potential of AI, KingNet actively explored learningopportunities and launched AI development initiatives to achieve technological upgrades.The Company also optimised instructor management and incentive mechanisms, clari?ed internaltraining course development standards, and strengthened the development of internal trainingteams, thereby o?ering employees more high-quality training programmes. 1
"Headquarters" means KingNet Network and its subsidiaries Shanghai KingNet, Shanghai KingNet Software and Shanghai Doushi.
Migration and upgrade of
the learning platform
In-house development oftraining content
Empowering regionalbranches across locations
Closer integration with AIOptimisation ofinstructor management
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M PlanLeadership training
The programme combines lectures and practical exercises to helpparticipants comprehensively enhance their managerial mindset,stimulate self-awareness, clarify their understanding of roles, andexperience diverse management approaches and insights to elevatetheir leadership perspective. In particular,Becoming an Intervieweremphasises that managers must maintain fairness and impartialityduring interviews.
The programme ran for a total durationofthreemonths and was conductedfor frontline managers in Shanghai andGuangzhou. A total of
employeesparticipated, with
training coursesdelivered over
19.5
hours, and a totalof
attendances recorded.
Knowledge inheritance
o?cer
Targeted businesstraining
To deepen professional knowledge across various positions andenhance technical expertise, the Training Department assembledan internal instructor team comprising in-house experts. Theseinstructors share knowledge and skills with employees to addresscommon workplace challenges and improve professional capabilities.
A total ofsixsessions were deliveredover the year, withninehours oftraining in total and
cumulativeattendances.
Technical applicationof AIGC and largemodels
Training incollaboration withexternal institutions
The training is delivered through a combination of courses and hands-on exercises, enabling participants to learn by doing and practisewhile learning. Course topics includeLarge Model Programming andDevelopment Environments and Tools for Large Models, o?ering richand comprehensive content that supports participants in gaining anin-depth understanding of AI technologies.
The programme included
online courses, with
employeesparticipating. The average learningtime per person was
23.5
hours.
The Company is committed to building a learning-oriented organisation and provides a diverse range of training programmes for employees, covering various dimensions such asleadership and business training. These programmes are designed to meet employees' di?erentiated learning needs. The implementation of training not only supports employees inachieving personal growth but also serves as a solid foundation for the Company's sustainable development by cultivating a robust talent pipeline.
Key Training Programmes and Outcomes of KingNet Network in 2024Project NameNature of ProgrammeDetailsOutcomes
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Employee AssessmentThe Company conducted quarterly performance assessments for regular staff based on jobresponsibilities and key work tasks. The results of performance assessments were applied toperformance communication and improvement, performance bonus calculation, performanceassistance, salary adjustment, promotion, and equity incentives.
The Company manages performance based onthe principles of openness, fairness, impartiality,objectivity, and healthy competition. A performancefeedback and communication mechanism has beenestablished, and employees can access their appraisalresults via the OA system. For employees whoseperformance results are unsatisfactory, their immediatesupervisors are required to conduct performanceinterviews, identify areas for improvement, and provideguidance on how to improve. In 2024, the HumanResources Department developed and promoted theuse of thePerformance Interview CommunicationGuidelinesamong frontline managers to enhancethe e?ectiveness of performance discussions. Theseinterviews also serve to re?ne work targets for thenext review cycle and strengthen team e?ectivenessmanagement.Meanwhile, the Company has established aperformance assessment appeal mechanism with aclear appeal process. If any employee has any objectionto the assessment results, he/she may submit a writtenappeal via email within the speci?ed time frame. Therelevant department will investigate and handle theappeal within one week of receiving it. The feedbackon appeal handling opinions will be provided to theemployee and his/her direct supervisor.
The Company clearly stipulates that personnelresponsible for handling appeals must maintaincon?dentiality regarding the details of the appealand the individuals involved in the investigation.Employees who violate con?dentiality requirementswill be subject to disciplinary action. Any form ofretaliation or discriminatory behaviour againstemployees who ?le an appeal is strictly prohibited.
Performance Assessment Process of KingNet Network
Performance Appeal Process of
KingNet NetworkProposing an objection by an
employeeCommunicating with the superiorSubmitting a written appeal
Investigating the appealGiving feedback on appealhandling opinions
In addition, to keep employees informed in real time about the Company's trainingactivities and to encourage greater participation, the Company designed a "TrainingCalendar" that is updated monthly. The calendar is promoted through both onlineand offline channels, truly realising the goal of "making learning accessible andknowledge shareable."
KingNet Network's Campus Recruitment Training Programme"M Plan" Recognised as a "Branded Learning Programme"Launched in 2022, "M Plan" is a leadership development initiative focusedon cultivating management capabilities across all levels. It supports frontlinemanagers at KingNet in making a meaningful transition from individualcontributors to e?ective leaders by fostering a correct understanding ofmanagerial roles, accelerating their shift into management positions, and helpingthem meet role expectations more quickly, while also alleviating pressure onmiddle managers.During the initial phase, the project team conducted in-depth research to identifythe core challenges managers face in team leadership. Based on these ?ndings,the team designed tailored learning experiences to encourage knowledge sharingand peer exchange among participants, enabling them to build awareness oftheir managerial responsibilities and acquire practical tools and methods.
Award Photo of "M Plan"Learning Map of "M Plan"
Performance
plandevelopmentPerformanceself-assessment
Performanceassessment
Performanceapproval
Performancecommunication
PerformanceappealPerformanceplan review
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AppendixGovernanceChapterAboutKingNet NetworkEmployee PromotionValuing the personal development of its employees, the Company adheres to the principle of "openly and transparentlygradual promotion", and provides employees with fair and equitable promotion opportunities and diverse careerdevelopment paths. We have established a dual-track development mechanism encompassing both management andprofessional pathways, o?ering employees a clear and structured career progression framework.The Company has established a sound career development system and formulated promotion programme plans basedon management level decisions. Through mechanisms such as merit-based nominations, review and inspection, andpromotion decisions, it provides employees with fair and equitable promotion opportunities and vast career developmentprospects.
Department heads checkteam members and selectemployees who meet thepromotion nomination criteriaand are suitable for thecorresponding job level.The Human Resources Centrereviews and approves thenomination suggestionsfrom each department basedon uni?ed standards anddetermines the promotioncandidates.
The Human Resources Centre leadsdepartment heads and internal experts invarious professional ?elds to establish apromotion review team.The promotion review team uniformly reviewsand inspects the promotion candidates basedon theJob Quali?cation Standards, andthe review opinions serve as an importantreference for promotion decisions.Each promotion candidate presents his/herachievements over the past year through awork report, demonstrates his/her professionalabilities and professional competence, andresponds to questions from the judges duringthe defence session.
The Human Resources Centresummarises the reviewand assessment opinionsand submits them to themanagement level for decision-making.
Merit-basedNomination
Review and Inspection
Promotion DecisionPromotion Mechanism of KingNet Network
Talent Attraction and RetentionTo attract and retain core talent while enabling employeesto share in the Company's growth, the Company launcheda stock option incentive scheme in 2022, granting atotal of 19.71 million shares to 21 individuals, includingprofessional managers and key personnel. In December2024, the second vesting period of the scheme ended. Theconditions for exercising options in the second exerciseperiod have been met, with a total of 9,857,208 stockoptions eligible for exercise, representing 0.46% of theCompany's current total share capital.The Company continues to promote talent pipelinedevelopment and enhance organisational resiliencethrough strategic recruitment and the establishment ofa talent pool. Looking ahead, we will further refine ourtalent management practices to better align with thestrategic development needs of the Company.
the Company launched a stock optionincentive scheme in 2022, granting atotal of
including
million shares toindividuals
19.71
professional managers and keypersonnel
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AppendixGovernanceChapterAboutKingNet NetworkMultiple KingNet Network Employees Recognised as "2024 SkilledTalents in Shanghai's Software Enterprises"In July 2024, the Shanghai Software Industry Association held its 8th GeneralAssembly (Fourth Session) and the 8th Council Meeting (12th Session).During the event, the "List of Skilled Talents in Software Enterprises" wasreleased, with three KingNet employees selected for recognition. The eventwas attended by key o?cials including Qiu Wei, Director of the Softwareand Information Services Division of the Shanghai Municipal Commissionof Economy and Informatization, and Li Wenbo, Director of the Scienceand Technology Commission of Putuo District, Shanghai, along withrepresentatives from over 300 enterprises. The evaluation was based onthe T/SSIA 0001-2019Speci?cation for the Evaluation of Skilled Talents inSoftware Enterprisesand conducted through a comprehensive assessmentby an expert panel. The results were also published inWenhui Daily.
KingNet Network Employees Recognised as "2024 Skilled Talents in
Shanghai's Software Enterprises"
Metrics and Targets
With the goal of "strengthening cohesionamong KingNet employees", theCompany has established human capitaldevelopment metrics and targets aimedat comprehensively enhancing employeecompetencies and building a vibrant,creative, and competitive team. In 2024,the Company's employee turnover rateshowed a downward trend comparedto previous years, re?ecting signi?cantprogress in talent management andemployer brand development.
20%15%10%0%
202220232024
Employee Turnover Rate at KingNet Network
Metrics and Targets on Human Capital Development of KingNet Network in 2024
100%
100%
hours
13.05
17.86%
18.89%
11.08%
Coverage ofemployees in trainingAverage traininghours per employeeNumber of labour
rights violations
TargetProgress in 2024
hours
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Enhancing brand value
Medium- and long-term
Decrease inoperating costs
? Innovative development model ofGames + Public Welfare
? Organise diversi?ed public welfare andcharitable activities? Establish an emergency response and
disaster relief mechanismStrengthening organizational
cohesion
Medium- and long-
termAccessing collaborativeresources
Short-term
Community Contribution and Rural RevitalisationKingNet Network promotes warmth and positive impact by engaging in public welfare and volunteer service activities, contributing to comprehensive rural revitalisation. These initiativeshelp uncover the Company's future-oriented positive potential and create sustainable value for all stakeholders, aligning economic value with social value.
GovernanceStrategy
The Company complies with relevant laws and regulations,including theCharity Law of the People's Republic of Chinaand theRegulations of Shanghai Municipality on Volunteer Services. Underthe unified leadership of the General Manager, the Company hasappointed a Chief Social Responsibility Officer and established aSocial Responsibility Team within the Board Office to coordinate,advance, and implement social responsibility-related initiatives.The Company has formulated theVolunteer Management Systemof KingNet Networkto continue promoting the standardisation,branding, and professionalisation of volunteer services. In 2024,building on its base in Shanghai, the KingNet Network VolunteerAssociation established volunteer service teams in Hangzhou andGuangzhou. The formation of these three teams marks a furtherenhancement and improvement of the Company's volunteer servicesystem, providing solid organisational support and operationalcapacity to better serve society and assist those in need.
To explore innovative models of public welfare and enhance the in?uence of the "KingNet's Love Public Welfare" brand, theCompany analysed the impacts and opportunities related to community contribution and rural revitalization.
Guided by the sustainable development philosophy of "Play With Buff", the Company contributes to social progressthrough the "K Action". We continue to support underprivileged children, with a particular focus on educational assistancefor rural left-behind children and urban children with special needs. Through standardised and systematic operations, theCompany consistently expands its positive social impact.
Opportunities in Community Contribution and Rural Revitalisation Identi?ed by
KingNet Network and Response StrategiesType of Opportunity
Timeframe ofImpact
Response StrategyPotential ?nancialimpact
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Commitment to Public Welfare and Philanthropy
As a well-known online game company in China, the Company leverages its core business strengths to explore aninnovative development path combining "Games + Public Welfare". At the same time, we actively collaborate withstakeholders to build a symbiotic model that integrates corporate growth with responsible business practices.The Company continues to carry out public welfare and charitable initiatives to provide care and support to disadvantagedgroups, promote the inheritance and development of intangible cultural heritage, and contribute to environmentalprotection. Through these e?orts, KingNet Network makes meaningful contributions to sustainable social development.
In addition, the Company has established an e?cient andwell-structured disaster relief response mechanism toensure timely action in the event of a disaster, providinga?ected communities with prompt and e?ectiveassistance and support.
Disasters arecategorised basedon their scope ofimpact and severity.
Based on thedisaster level, relieffunds are approvedin accordance withprede?ned fundingallocation principles.
On World Autism Awareness Day, the Companydispatched a volunteer service team to participate inthe "Charity Companion Run" event, supporting morethan
"children from the stars" in completing therace.
The "Haisi New Space" Theatre Incubation Programmeaims to discover, nurture, and incubate new talents andoriginal works in innovative forms of Chinese opera andinterdisciplinary productions. In 2024, the programmesupported the successful staging ofsixnew productionscentred around traditional opera elements.The public welfare course series, themed around "paper",integrated various intangible cultural heritage crafts such astraditional papermaking, tile rubbing, movable type printing,round fan making, kite making, and paper-cut windowdecorations. Through hands-on creation and immersiveexperiences, the courses enabled young participants to gain adeep understanding of the profound in?uence of "paper" onChinese civilisation.
The "Bright Future Health Initiative" is dedicatedto providing medical surgeries and rehabilitationtreatment for eligible children under the age of 18 inthe Aksu region of Xinjiang and the First Division ofthe Xinjiang Production and Construction Corps whosu?er from visual, auditory, or speech impairments,or congenital heart disease. In 2024, the Companydonated RMB 500,000
to the dedicated BrightFuture Health Initiative Fund.
2024
Overview of Public Welfare Projects of KingNet Network in 2024 (Selected)
Disaster Relief Response Mechanism of
KingNet Network
Care for Special GroupsInheritance of Intangible Cultural HeritageWorld Autism Awareness Day Public Welfare
Activity
Bright Future Health Initiative
"Haisi New Space" Theatre Incubation Programme
"KingNet's Love · Crafts and Paper Art – Intangible CulturalHeritage in Paper" Series of Public Welfare Courses
In response to the requirements of theGuidelines, public welfare and charitable activities carried out in rural areas or for residents in rural areas are clearly disclosed separately in thesection "Empowering Rural Revitalisation".
An annualemergencydisaster relief fundis allocated toensure a timely andrapid emergencyresponse whendisasters occur.
Relevant funds,supplies, andpersonnel aremobilised to carryout disaster reliefactivities withlocal charitableorganisations.
EmergencyDisasterAssessmentEstablishment ofDedicated Fund
Implementationof Relief E?orts
Approval ofRelief Funds
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Empowering Rural RevitalisationThe Company actively responds to the national call to "promote comprehensive rural revitalisation" by supporting talent development in rural areas. Through initiatives such aseducational support, facility donations, development sponsorships, and living assistance, the Company works to provide rural children with a higher-quality educational environment.Leveraging our expertise and industry strengths, we empower rural educators and contribute to enhancing the standard of quality education in rural communities, injecting vitality into thesustainable and healthy development of these regions.
Key Rural Revitalisation Empowerment Projects of KingNet Network in 20242024
The Company donated RMB100,000to the "Game Literacy Programme" public welfareproject by Boke Philanthropy. The donation supported the provision of game literacy toolkitstosevenschools under the Company's paired assistance initiative. In addition,two on-site co-creation game workshops were held locally, along with online support foreleven
game co-creation sessions.
In collaboration with the China Academy of Art, the Company organisedeightarteducation training sessions for
art teachers and headteachers from
rural schools inQinghai, Yunnan, and Sichuan—regions under the Company's paired assistance initiative.These sessions aimed to enhance rural teachers' capacity for delivering high-quality arteducation.
In partnership with the Adream Foundation, the Company supported rural physicaleducation teachers through a combination of o?ine training and online course resourcesharing. In 2024,?veonline teacher-sharing sessions were held for
rural teachers, witha total of
minutes of online training. In Yushu,?veschools implemented an averageof 44 physical education lessons per year, amounting to a total of 220lessons, bene?tingmore than 6,000 children.Together with Grandall Law Firm (Shanghai), the Company developed and launched picturebook Girls' Escort of KingNet's Love – Healthy Education Mini-Classroom, donating a totalof12,554books to school-aged girls in
schools across ?vecounties in YushuPrefecture, Qinghai Province, to support the healthy development of Tibetan girls in theregion.
In partnership with the Beijing Share the Care Public Welfare Promotion Centre, theCompany organised a cultural and educational study tour for
Tibetan teachers andstudents fromsevenCloud-based Education Support Project schools. The tour tookplace in Shanghai and Hangzhou, with 15corporate volunteers from the Company guidingparticipants as they explored the vibrancy of the cities.
Caring for the Growth of Rural ChildrenTraining and Empowerment for Rural Teachers"Game Literacy Programme" Public Welfare Project
"Coloured Plateau" Rural Teacher Training Programme
"Sports Dreams" Empowerment Programme for Rural Teachers
KingNet's Love: Rural Girls Protection Charity Project
"Shanhai Journey" Summer Study Camp
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AppendixGovernanceChapterAboutKingNet NetworkMetrics and TargetsThe Company has formulated theKingNet Network Sustainable Development Plan (2023–2025), setting anoverarching goal of "Sustainable Protection". Under this goal, we continue to invest in social welfare areas such aschildren and youth education, rural revitalisation, emergency and disaster response, and digital accessibility.In 2024, the Company carried out 20 public welfare projects, with a total investment of RMB 7,380.5 thousand,delivered 1,579 hours of volunteer service, and bene?ted nearly 3,000 individuals through volunteer engagement.
Total investment ofRMB
million in publicwelfare projectsfrom 2023 to 2025Since 2020, KingNet's Love Public Welfare has bene?ted
provinces (autonomous regions and municipalities),
cities (autonomous prefectures and regions), and
counties (districts, county-level cities, autonomouscounties, and banners). It has provided a total of
478,000
items (sets) of aid materials, with donated goodsvalued at RMB
15.1
million, bene?ting a cumulative total of
35,000
individuals, including over 90% fromethnic minority groups. More than
public welfare activities have been organised,
sixemergency disasterresponses have been initiated, and the programme has received multiple forms of social recognition, signi?cantlyexpanding the Company's positive in?uence.
Metrics and Targets on Community Contribution and Rural Revitalisation of
KingNet Network in 2024
A Closed-loop Journey from the Internet to theClassroom—"Coloured Plateau" Creates Momentsof Dreams for ChildrenIn 2022, KingNet Network and the Education Foundation of theChina Academy of Art jointly launched the "Coloured Plateau"Rural Art Education Public Welfare Project. The initiative hassince delivered online art classes in Qinghai, Sichuan, andYunnan, while also providing professional development trainingfor local rural art teachers.In September 2024, KingNet Network held a Children's CharityArt Exhibition themed "My Fairy Tale Tree" as part of CharityDay activities. The event was organised in collaboration withKingNet Chain and featured the release of a digital charity artpiece titled My Fairy Tale Tree. The programme was also linkedwith the Company's gameRainbow Orangefor an o?ine charityexhibition.As of the end of 2024, the programme has supported 12 ruralschools, delivering 205 online art lessons totalling 9,800 minutesto 548 rural children, and providing art education training toover 40 teachers.
"Coloured Plateau" Rural Art Education Public Welfare Project in Yushu,QinghaiEmpowering Rural Teachers in Aesthetic Education through TrainingDigital Assets in "My Fairy Tale Tree Series"
Socialwelfareinvestmentamount
TargetProgress in 2024
2024
Cumulativefor 2023–2024
7,380.5
13,896.5
RMBthousand
thousandRMB
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Anti-commercialBriberyand Anti-corruption
SDGs Addressed:
Topics Responded:
Governance Chapter
E?ective GovernanceDriving High-Quality
Development
CorporateGovernance
CompliantOperation
RiskManagement
Anti-unfairCompetition
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AppendixGovernanceChapterAboutKingNet NetworkCorporate Governance
GovernanceStrategyThe Company strictly complies with theCompany Law, theSecurities Law, the
Code of Governance for Listed Companies, theRules Governing the Listing ofShares on Shenzhen Stock Exchange, theMeasures for the Administration ofInformation Disclosure by Listed Companies, and other laws, regulations, normativedocuments, and business guidelines. Upholding the leadership of the Party, theCompany has established a corporate governance structure comprising the GeneralMeeting of Shareholders, the Board of Directors and its special committees, theBoard of Supervisors, and senior management level. We have established a ChiefResponsibility O?cer team, and implemented a primary responsibility system. Theseefforts continuously enhance the Company's governance structure and internalcontrol system, promoting standardised and compliant operations.In 2024, in line with the latest regulatory requirements and business practices, theCompany revised internal governance documents such as theManagement Measuresfor Shareholding and Changes in Shareholding by Directors, Supervisors and SeniorManagement Members,and introduced theRules of Procedure for Special Meetings ofIndependent Directors, further improving the corporate governance system.
Corporate governance not only a?ects ?nancial performance, but also plays a crucial role in shaping brand reputation,fostering innovation, and earning user trust. The Company places strong emphasis on regulatory complianceand investor relations management, and continuously identifies, assesses, and manages the impacts, risks, andopportunities associated with corporate governance. We have developed the Action Plan for Quality and ReturnEnhancement to re?ne and strengthen our governance framework, ensuring it remains transparent, standardised, ande?cient. At the same time, we are reinforcing corporate culture, building core competitiveness, elevating our positionwithin the industry, and laying a solid foundation for long-term sustainable development.
Corporate Governance Structure of KingNet Network
Impacts, Risks and Opportunities in Corporate Governance Identi?ed by
KingNet Network and Response Strategies
Board of SupervisorsGeneral Meeting of
Shareholders
NominationCommittee
AuditCommittee
Remunerationand AppraisalCommittee
Strategy andSustainabilityCommittee
Board of Directors
Impact:
Impairment ofinvestor rights
Risks:
Reputationalrisk,compliancerisk
Operation ofthe systemof "GeneralMeeting ofShareholders,Board ofDirectorsand Board ofSupervisors"
Medium- andlong-term
? Increase incompliance costs? Decrease inoperating revenue? Increase in?nancing costs
? Always adhere to the principles ofstandardisation and transparency toensure lawful and compliant decision-making processes.? Strengthen the mechanism forprotecting the rights and interests ofminority shareholders.? Enhance supervision of seniormanagement conduct.Informationdisclosure andprotection ofshareholderrights andinterests
? Uphold the principles of truthfulness,accuracy, integrity, timeliness, andfairness to build an e?cient, investor-oriented information disclosuresystem.? Establish a stable and e?ectivecommunication mechanism withshareholders.
Key Impacts, Risks, andOpportunities
Timeframe ofImpact
Response StrategyPotential ?nancialimpact
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Materiality Assessmentof Sustainability Topics
SustainabilityManagement System
EnvironmentalChapter
SocialChapter
AppendixGovernanceChapterAboutKingNet NetworkManagement of Impacts,Risks and OpportunitiesLeadership by Party Building
KingNet Network incorporates leadership of Party buildinginto itsArticles of Association. The Company's directors,deputy chairman, and general manager serve as thesecretaries of the CPC committees, fully leveraging theleadership role of the CPC committees to strengthen theunity of Party leadership and corporate governance. TheCompany's Party Committee has four party branches with114 members.In 2024, the Company continued to innovate in its Party-building methods and platforms, successfully launching aParty-building brand tailored to the online game industry- an "Orange" Heart towards the Party (be loyal to theParty). A comprehensive brand system was developed,integrating corporate culture and values, and includedthe design of a dedicated brand logo, visual identity,highlights, case studies, achievements, and animations.We also launched a series of themed merchandise anddigital assets under the brand.Guided by the goal of "Red Party-building Leading OrangeKingNet", the Company actively promoted the "dualcoverage" of Party building, embedding Party building intocorporate culture and operations. Through coordinatedlearning initiatives and joint Party-building activities, wehave consolidated and extended the outcomes of themededucation and advanced the role of Party building indriving new quality productive forces.
"1 July" Commendation Conference and Party-building Brand Launch Event
Joint Party Building with Party Organisations in the Same Industry
Honours and Commendations Received for the Company's Party Building in 2024
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AppendixGovernanceChapterAboutKingNet NetworkOperation of the System of "General Meeting of Shareholders, Board of Directors and Board of Supervisors"The Company operates in strict accordance with the Company Law and its Articles of Association, maintaining a soundcorporate governance structure with independent and comprehensive business and operational capabilities. In 2024, theCompany convened the General Meeting of Shareholders, meetings of the Board of Directors, the Board of Supervisors,as well as special committees as required. The procedures for convening meetings, deliberation, voting methods, andresolutions were all conducted lawfully and e?ectively.
Directors of the Company are elected or replaced by the GeneralMeeting of Shareholders, with each term lasting three years andeligibility for re-election upon expiry. In 2024, there were nochanges to the directors, supervisors, or senior managementmembers. The Board of Directors comprised eight members, noneof whom held board positions in more than three listed companies(including KingNet Network).All directors perform their duties in accordance with theRules ofProcedure for the Board of Directorsand other related systems,attending meetings of the Board of Directors and the GeneralMeeting of Shareholders diligently, actively participating inrelevant training, staying informed of applicable laws andregulations, and fulfilling their responsibilities with honesty andintegrity.In 2024, the Company actively organised directors, supervisors,and senior management members to participate in compliancetraining organised by regulatory authorities to strengthen theirprofessional competencies. Training topics covered ESG policiesand trends, listed company value management, corporategovernance practices, and reforms of the independent directorsystem.
In 2024, the Company convened:
The Company continues to enhance the assessmentmechanism for independent directors and fullyleverages their supervisory role in operations, decision-making, and major matters.In line with national reforms on the board system, theproportion of independent directors on the Boardwas increased from one-third to one-half, and theirrepresentation on the Audit Committee was raisedfrom two-thirds to full (3/3), further enhancing theirrole in daily governance and promoting the Board'sindependence, fairness, transparency, and objectivity,while improving internal control e?ciency.In 2024, the Company formulated theRules ofProcedure for Special Meetings of IndependentDirectorsto strengthen Board independence. Onespecial meeting of independent directors wasconvened, reviewing one proposal.
When nominating candidates for directorship, theCompany considers Board diversity across multipledimensions, including but not limited to gender, age,skills, and professional background.
E?ective performance of the Board of Directors
Independence of the Board of Directors
Diversity of the Board of Directors
Operation of KingNet Network's Board of Directors in 2024
General Meeting of
Board of Directors
Board of Supervisors
meetings of special
with
with
with
with
proposals reviewed
proposals reviewed
proposals reviewed
proposals reviewed
Shareholders
meetings
meetings
committees
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SustainabilityManagement System
EnvironmentalChapter
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AppendixGovernanceChapterAboutKingNet Network
A fair and transparent performance assessment andincentive and restraint mechanism has been establishedand continuously improved for directors, supervisors,and senior management members. The appointment ofsenior management members is open and transparent,in compliance with legal and regulatory requirements.The Company has implemented theRemunerationManagement System for Directors and Supervisors.The General Meeting of Shareholders determines theannual remuneration framework, while the Board'sRemuneration and Appraisal Committee, under theauthorisation of the General Meeting of Shareholders, isresponsible for performance appraisals of directors.The Management Measures for Shareholding andChanges in Shareholding by Directors, Supervisors andSenior Management Memberswas revised to strengthenoversight of their shareholdings and changes.In 2024, the Company's senior management level madea formal commitment not to reduce their directly heldshares in the Company in any form over the five yearsfrom 3 July 2024 to 2 July 2029.
Performance assessment and incentive & restraint mechanismfor directors, supervisors, and senior management members
Information on Members of KingNet Network's Board of Directors
DirectorsPositions HeldAge
fromManagementlevel
Independentfrom OtherStakeholders
FinancialExpert
IndustryExpert
RiskManagementExpertJin Feng
Chairman of the BoardMember of the NominationCommitteeChair of the Strategy andSustainability Committee
Shen Jun
Vice ChairmanGeneral ManagerMember of the Remuneration andAppraisal Committee
Zhao FanDirector, Deputy General Manager 47Qian JunfaDirector, Deputy General Manager 45Zhu Yayuan
Independent DirectorChair of the Nomination CommitteeMember of the Remuneration andAppraisal CommitteeMember of the Strategy andSustainability Committee
Fu Weigang
Independent DirectorMember of the Audit CommitteeMember of the NominationCommitteeMember of the Remuneration andAppraisal Committee
Huang Fa
Independent DirectorChair of the Audit CommitteeMember of the Strategy andSustainability Committee
JiangHongzhen
Independent DirectorMember of the Audit Committee
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AppendixGovernanceChapterAboutKingNet NetworkInformation Disclosure and Protectionof Shareholder Rights and InterestsThe Company is committed to protecting the legitimate rights andinterests of the Company, its shareholders, and other stakeholdersby focusing on improving the transparency of informationdisclosure, deepening investor relations, and enhancing thee?ectiveness of capital operations.The Company maintains active communication with investorsthrough multiple channels, including the corporate website,online announcements, an official investor relations WeChatpublic account platform, earnings briefings, both online ando?ine investor meetings, and the platform (irm.cninfo.com.cn) ofthe Shenzhen Stock Exchange. The Company also fully leveragesdigital tools to improve communication e?ciency, and conductsinternal audits and oversight of the disclosure process to reduceerrors and inappropriate practices, thereby enhancing the qualityand reliability of information disclosure. In 2024, the Companypublished a total of 80 announcements on the Shenzhen StockExchange. Our information disclosure received an "A" ratingfrom the Shenzhen Stock Exchange, while our investor relationsmanagement earned an "A" rating—the highest level—in theFujian region among listed companies.Adhering to an investor-?rst philosophy, the Company formulatesaThree-Year Shareholder Return Planevery three years andimplements it rigorously. We actively protect investor rightsand enhance returns through measures such as prioritisingshareholder returns, repurchasing shares to boost minorityshareholder confidence, and public commitments fromcontrolling shareholders and senior executives not to reducetheir shareholdings for five years. Our profit distribution policycomplies with the Company's Articles of Association and approvalprocedures, fully safeguarding the legal rights and interests ofminority investors.
The Company organises investor communicationactivities on a regular or ad hoc basis, engagingwith approximately
investors in total in 2024.
"Journey to Success, Inspire the Future" – 2024 Mid-Year
Game Business Exchange Conference
"Core Gamers, Committed to Value" – 2024 Annual
Investor Exchange Conference
2,000
Honours and Recognitions for KingNet Network'sInformation Disclosure and Investor Relations in 2024:
Comein Finance
Securities Times
Best Value Communication IR Team Award
Tianma Award for Investor Relations ofChinese Listed CompaniesChina Fund
China Association for Public Companies
Yinghua A-Share Value AwardYinghua A-Share ESG Value Award
Outstanding Board Practice Case
Yinghua A-Share IR Innovation Award
Outstanding Sustainable Development
Practice Case
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Materiality Assessmentof Sustainability Topics
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AppendixGovernanceChapterAboutKingNet NetworkMetrics and TargetsThe Company has established corporate governance-related targets and corresponding monitoring indicators to continuously track implementation progress. In 2024, the actual stateof corporate governance did not show any material deviation from the laws, administrative regulations, or provisions on corporate governance issued by the China Securities RegulatoryCommission. For more details on corporate governance topic management, please refer to the "Corporate Governance" section of the2024 Annual Report of KingNet Network Co., Ltd.
The number of directors, supervisors and senior management members of the Company is 15, includingtwo female members.
Strengthen support mechanismsfor directors in ful?lling their duties
Promote diversity within the Boardand senior management level
Re?ne and improve the Company'sshareholder dividend returnmechanismImprove the assessment mechanismfor independent directors and enhancethe independence of the BoardAverage attendance rate of
Annual ESG training
Number of female directors Rounds of dividend
Number of female senior with a cumulative total of%
directors at Board meetings
%
directorsThe Board consisted of
independentdirectors
million
Proportion of independent
%
%
%
during the year
coverage rate for directors
on the Boarddistribution
executivesRMB
Annual anti-corruption Proportion of independenttraining coverage rate for directors on the AuditdirectorsCommittee
directors on the Board
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AppendixGovernanceChapterAboutKingNet Network
Strategy
During operations, the Company may face various compliance risks, such as violations related to game content orrecruitment, which may lead to regulatory penalties, legal disputes, economic losses, or reputational damage. To mitigatethese risks, the Company has developed a sound compliance management system to accurately identify and e?ectivelymanage compliance risks, thereby continuously enhancing compliant operations.
| During operations, the Company may face various compliance risks, such as violations related to game content or recruitment, which may lead to regulatory penalties, legal disputes, economic losses, or reputational damage. To mitigate these risks, the Company has developed a sound compliance management system to accurately identify and e?ectively manage compliance risks, thereby continuously enhancing compliant operations. | ||
| Key Compliance Risks Identi?ed by KingNet Network and Response Strategies | ||
Type of Risk
Compliant Operation
GovernanceGuided by the management philosophy of "CreatingValue from Compliance", the Company has establisheda comprehensive internal management systemfollowing laws, regulations and relevant rules such astheCompany Law of the People's Republic of ChinaandtheBasic Standard for Enterprise Internal Control. Thesystem covers various aspects including ?nance, humanresources, asset management, and capital activities.In 2024, the Company added and revised a total of 27internal compliance management systems, includingtheManagement System for Impairment Provision forLong-term Equity Investments, theEmployee BehaviourManagement Measures, and theContract ManagementSystem. These systems cover the management offinancial asset impairment provisioning and write-off processing, employee behaviour management,and company contracts. The Company improvedits compliance management processes, activelyimplemented compliance management actions, andensured the legality and compliance of its operations.The Company has established a Legal AffairsDepartment, headed by the Chief Legal Officer andoperates under the supervision of the Board ofDirectors. The department is responsible for buildingand refining the Company's compliance managementsystem, providing legal safeguards and legal support forthe Company's development.
Compliancerisks such asviolationsrelated to gamecontent andrecruitment
Medium- andlong-term
? Increase incompliance costs? Decrease in revenue
? Conduct regular compliancetraining and awareness activities.? Continuously improve the internalcontrol system and strengtheninternal audits.? Integrate compliancemanagement into the dailymanagement of all ESG topics.
Timeframe of
Impact
Response StrategyPotential ?nancial
impact
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AppendixGovernanceChapterAboutKingNet NetworkManagement of Impacts,Risks and Opportunities
Metrics and Targets
The Company is committed to building a comprehensiveinternal control and audit system, reviewing and strengtheningmanagement processes and institutional frameworks, and activelymaintaining an effective internal control system. By enhancingaudit and supervision procedures, and implementing a seriesof internal control measures, the Company aims to reduce theoccurrence of errors and non-compliant behaviours.
The Company has established compliance management targets and put in place oversight mechanisms to ensure e?ectiveimplementation of compliance practices.
Enhance the effectiveness of internal control,compliance management, and internal auditing
Improve the truthfulness, accuracy, and integrityof ?nancial and accounting information
Compliance Training for Directors, Supervisors, Senior Management Members and Key MiddleManagement Personnel2024, the Company organised a compliance training session for directors, supervisors, senior managementmembers, and key middle management personnel. The session was attended by 35 participants and lasted threehours. Training topics includedCompliant Duty Performance of Directors, Supervisors and Senior ManagementMembers,Interpretation and Analysis of the New Company Law, andNew Approaches to Investor RelationsManagement in the Registration-Based Era.
Compliance Training Site
Compliant Operation and Management
Measures of KingNet Network in 2024
Ensure the soundness of the internal control system andcompliance with applicable regulations.Strengthen the independence of the internal auditdepartment, which reports directly to the Board ofDirectors, and enhance company-wide complianceawareness and skills through training.
Establish a robust internal control system, includingregular ?nancial audits, internal inspections, andcompliance reviews.Emphasise professional training for accounting personnelto ensure team members are pro?cient in accountingstandards, ?nancial reporting, and professional ethics.Introduce an independent external audit mechanism byregularly engaging professional ?rms to conduct audits.
Employee compliance training coverage rateNumber of violation incidents
TargetTargetProgress in 2024Progress in 2024
0100%0100%
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AppendixGovernanceChapterAboutKingNet Network
Risk ManagementGovernance
Strategy
The Company strictly complies with theCompany Law of the People's Republic of China, theBasic Standard for Enterprise Internal Control, theEvaluation Guideline for Enterprise InternalControl, and other relevant laws, regulations, and requirements. We have established a sound risk management system, strictly enforce internal control systems applicable to listedcompanies, accelerate the implementation of internal control standards, and continuously enhance our operational management capabilities and risk prevention capacity.The Company has built a comprehensive risk management framework consisting of three lines of defence: the Board of Directors and the Audit Committee, the Internal Audit Departmentand the business departments. The Internal Audit Department, led by the Chief Audit Officer, operates under the supervision and guidance of the Board of Directors and its AuditCommittee. It conducts regular internal audits to assess and improve the e?ectiveness of internal controls and the risk management mechanism.
The Company faces several key risks in its daily operations, including risks related to game content, intensi?ed market competition, loss of core talent, and changes in industry policies. Toaddress these challenges, the Company has established a comprehensive risk management system and actively formulates response strategies for identi?ed risks, enabling e?ective riskmitigation and control.
Risk Management Framework of KingNet Network
Board of DirectorsAudit CommitteeInternal AuditDepartment
Guide and oversee the formulation and implementation of internal audit policies.Supervise the implementation of internal control and risk management.
Independently conduct internal audit work, evaluate the soundness and e?ectiveness of internal controls,and ensure the internal control system is well-established and e?ectively implemented.
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Materiality Assessmentof Sustainability Topics
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AppendixGovernanceChapterAboutKingNet NetworkKey Sustainability Risks Identi?ed by KingNet Network and Response Strategies
Risks
Timeframe ofImpactRisk DescriptionsResponse StrategyGame content risk
If the Company fails to manage gamecontent appropriately, it may violaterelevant laws and regulations or facereputational damage due to negativecontent.
Medium-and long-term erm
? Increase incompliancecosts? Decrease inrevenue
? Establish a comprehensive supervision and review mechanism for gameproducts, issue regular compliance reports, and mitigate game contentrisks.Intensi?ed marketcompetition r isk
If the Company's game products fail toadapt to changing market demands orstrengthen core competitiveness andexpand market share, it will face intensemarket competition.
? in revenue
? Enhance publishing standards and operational capabilities, deliver
differentiated product services, continuously optimise user gamingexperience, and maintain competitive advantages.? Continuously launch hit titles and new games to strengthen corecompetitiveness, expand market share, and ensure efficient growth inglobal mobile game publishing and operations.
Risk of losing coretalent
Talent is a core resource in the gamingand internet industries. Maintaininghuman resource stability is critical to theCompany's sustainable development.
? Implement employee stock ownership and stock option incentive plans toestablish and improve the bene?t-sharing mechanism between employeesand owners, attracting and retaining outstanding management personneland key talents. (For details, refer to the "Human Capital Development"section.)Policy change risk inthe game industry
Changes in industry policies, such asgame licensing approvals, may a?ectthe advancement of domestic gameoperations and the Company's overallproduct pipeline.
? Closely monitor changes in national policies and promptly adjust gameoperation strategies. At the same time, adhere to the principles of high-quality game development, long-term operational planning, and overseasmarket expansion to reduce the impact of industry policies on theCompany's game business.? Introduce IPs suitable for global distribution to avoid a?ecting the launch ofthe game due to licensing policy factors.
IP acquisition risk
In the process of acquiring IP, theCompany may encounter risks related tocost, content, and geopolitical factors.
? Increase inoperatingexpenses? Decrease inrevenue
? In the IP acquisition process, the Company comprehensively assessesthe cost of the project and selects IPs with controllable costs and provencommercial content.? Con?rm that all acquired IPs are promoted for R&D and production withinsix months, and all acquired IP game projects are released in at least onemajor mainstream mobile game market.Other sustainability-related risks
See relevant topics in this Report
Potential ?nancialimpact
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Management of Impacts, Risks and Opportunities Metrics and TargetsThe Company has developed an RCM (Risk Control Matrix) to continuously enhance its major risk prevention and controlmechanisms. Through this matrix, risks are identi?ed and corresponding control objectives and measures are set to ensurethat risks related to ?nancial statements are e?ectively managed.In addition, to address game content risks e?ectively, the Company uses the OA system to track and manage the entirepublishing process. This ensures rigorous control over each stage—from content creation to review and publishing—guaranteeing that all game content complies with laws, regulations, and ethical standards.Other sustainability-related risk management measures are available in the relevant topics of this Report.
Requirementssubmissionby businessdepartments
Internal reviewby the PublishingDepartment
Provincialpublishingadministrationauthority
National Pressand PublicationAdministration
Approval of game
licence
To address game content risk, the Company has seta target of "zero violations in published games" andestablished a long-term monitoring mechanism to ensurethe e?ective implementation of risk management.
Game Publishing Management Process of KingNet Network
Number of violations in published games
TargetProgress in 2024
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AppendixGovernanceChapterAboutKingNet NetworkAnti-commercial Bribery and Anti-corruptionGovernanceStrategyThe Company strictly abides by applicable laws andregulations such as theInterim Provisions on ProhibitingCommercial Bribery. The Company has establisheddocuments such as theEmployee Behaviour ManagementMeasures, theJoint Meeting System for Integrity and Self-Disciplineand theSupervision Systemto define "redline" behaviours, and issued theBusiness Ethics andAnti-Corruption Statementto jointly foster a culture ofintegrity.The Board of Directors exercises overall oversight of ESG-related management, including business ethics and anti-corruption, and is ultimately responsible for its outcomes.The Supervisory Department is responsible for promotingthe establishment of the Company's integrity system,standardising the control measures and procedures forpreventing and identifying corruption risks, conductingtargeted audits, and strengthening the Company's riskmanagement practices in anti-commercial bribery andanti-corruption.
Adhering to a "zero tolerance" policy towards corruption, the Company follows punishing and preventing simultaneously.We actively identify, assess, and manage risks related to anti-commercial bribery and anti-corruption, continuouslyimproving our management system to e?ectively prevent and control corruption and bribery risks across the entire valuechain.
Risks in Anti-commercial Bribery and Anti-corruption Identi?ed by KingNet Network and
Response Strategies
Reputational
risk
Medium- and
long-term
? Increase incompliancecosts? Decrease in
revenue
? Adhere to a "zero tolerance" policyand the principle of punishing andpreventing simultaneously, withclearly de?ned red-line behaviours.? Strengthen the integrity system.? Conduct targeted supervisory audits.? Establish a whistleblowing platformand maintain open internal reportingchannels.? Enhance internal anti-corruptionawareness and advocacy.
Risks
Timeframe ofImpact
Response StrategyPotential ?nancialimpact
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SustainabilityManagement System
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AppendixGovernanceChapterAboutKingNet NetworkManagement of Impacts, Risks and OpportunitiesThe Company continuously strengthens its anti-commercial bribery and anti-corruption efforts by focusing on systemdevelopment, supervisory audits, whistleblower protection, and awareness campaigns. These initiatives aim to preventand mitigate potential corruption risks within business operations.Key Anti-commercial Bribery and Anti-Corruption Management Measures of KingNet Network
Ensure open reporting channels: Establish multiple reporting methods, including a dedicated email address (jubao@kingnet.com) and mailing address, encouraging all employees, business partners, and other stakeholders to report anyactual or suspected incidents of corruption, fraud, or misconduct involving Company personnel via email or writtencorrespondence.Whistleblower protection:The Supervisory Department leads comprehensive investigations into reported matters. Inaccordance with applicable laws, regulations, and the Company's policy documents, whistleblower con?dentiality isstrictly maintained, and appropriate measures are taken to protect whistleblowers, witnesses, and investigators fromretaliation.
Conduct regular targetedsupervisory audits coveringall Company operation sites.Assess and evaluate theintegrity, appropriateness, ande?ectiveness of the Company'sand key subsidiaries'ethical standards, anti-corruption policies, and theirimplementation.
Conduct targeted audits
Conduct annual anti-corruptionand integrity education activitiescovering all employees, includingtraining on ethical standards,strengthening integrity education,guiding employees to build a?rm line of defence on ideologyand morality,and enhancingawareness of anti-corruptionand integrity.
Promote anti-corruptionawareness and education
Establish a whistleblower protection mechanism
Implement theSupplierManagement Rules, theProcurement ProcessManagement Rules, andsign Integrity and HonestyCommitmentwith suppliersto make it clear to suppliersand business partners thatthe Company holds zerotolerance for corruption.
Anti-Corruption Awareness Session
In 2024, the Company organised two anti-corruptionawareness sessions, targeting employees at relevantP-level positions. The total training duration wasthree hours, covering more than 70 participants.
Awareness Session SiteMetrics and Targets
The Company has established management metrics tocontinuously monitor the e?ectiveness of anti-commercialbribery and anti-corruption efforts. During the reportingperiod, no incidents related to commercial bribery orcorruption occurred.Number of concluded corruption litigation cases ?led against theCompany or its employees during the reporting period
TargetProgress in 2024
Manage anti-corruptionwithin the supply chain
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AppendixGovernanceChapterAboutKingNet NetworkAnti-unfair CompetitionGovernance
StrategyThe Company complies with theAnti-Unfair CompetitionLaw of the People's Republic of Chinaand is committedto eliminating all forms of unfair competition. Thisincludes preventing false advertising, protectingintellectual property rights, ensuring fair competition,and maintaining a fair competitive market order. To thisend, the Company has established internal policies suchas theIntellectual Property Management System, theTrademark Management Measures, theRegulations on theManagement of Commissioned Technology DevelopmentBusiness, and theRegulations on the Management ofIP Introduction and Adapted Game Projects, in orderto safeguard its own intellectual property and preventinfringement of others' rights.Under the supervision of the Board of Directors, the LegalAffairs Department and the Game Publishing Divisionare responsible for managing the Company's anti-unfaircompetition e?orts.
The Company actively identi?es risks related to unfair competition and formulates targeted response strategies. A range
of measures and procedures are implemented to prevent false advertising, protect intellectual property, and ensure fair
competition, thereby contributing to the healthy development of the industry.Risks in Anti-unfair Competition Identi?ed by KingNet Network and Response Strategies
Risks
Timeframe of
Impact
Response StrategyMarketingviolations
Medium- andlong-term
? Increase incompliancecosts
? Continuously strengthen the marketingcompliance framework.Infringement ofothers' intellectualproperty rights
? Increase incompliancecosts
? Adhere to the core principles of "creationencouragement, effective utilization, legalprotection, and scienti?c management" toensure ongoing and effective intellectualproperty protection.Infringement ofthe Company'sintellectualproperty rights
? Decrease inrevenue
Potential ?nancial
impact
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AppendixGovernanceChapterAboutKingNet NetworkManagement of Impacts, Risks and Opportunities
Metrics and Targets
The Company places great importance on its brand image and conducts marketing and promotional activities in fullcompliance with regulations, e?ectively preventing false advertising. In terms of intellectual property protection, we followthe core principles of "creation encouragement, e?ective utilization, legal protection, and scienti?c management", andimplement intellectual property management across multiple dimensions, including trademark application and renewal,intellectual property protection litigation, and specialised training on intellectual property protection.
The Company has set a goal of "zero unfair competition"and actively promotes compliant marketing andintellectual property protection. In 2024, no incidents offalse advertising, monopolistic practices, or infringementof others' intellectual property were recorded.
Obtain Certi?cation for Intellectual PropertyCompliance Management SystemIn 2024, the Companyobtained the IPRCompliance ManagementSystem Certi?cation, whichcovers "IPR compliancemanagement activitiesrelated to the developmentand sales of mobile gamesand PC games within thescope of quali?cation andthe procurement related tothe above process".
Anti-unfair Competition Management Measures of KingNet NetworkSystem enhancement
The Company has improved intellectual property management practices and obtainedcerti?cation for the intellectual property compliance management system.
Amount involved in litigation or major administrativepenalties due to the Company's unfair competitionpractices during the reporting period
Trademarkapplication andrenewalIntellectual propertyrights protectionlitigation
Game IP protection
Purchase oflicensed softwareIntellectual propertycompliance training
The Company has ?led a total of 25 trademark-related applications, includingregistrations, renewals, and amendments.The Company protects the Company's game IP through litigation. In 2024, KingNetcooperated with South Korea's Mgame to defend the Yul Hyul Kang Ho IP, taking legalaction against pirated projects operated without authorisation.The Company protects its game IP through copyright registration, trademark registration,patent protection, contractual safeguards, and enforcement actions. For unauthorisedmerchandise and trademark squatting issues, the Company actively registers copyrightsand trademarks, monitors the market, and initiates legal action as needed.The Company replaces pirated software with open-source or free-licensed systems andsoftware, or purchases authorised software to ensure compliance.Regular intellectual property compliance training sessions were conducted to raiseemployee awareness of IP protection.
Target
Progress in 2024
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AppendixGovernanceChapterAboutKingNet NetworkESG Data Table and NotesEnvironmental Performance
IndicatorUnit202220232024
Total energy consumptiontce——227.67Direct energy consumption
tce——36.74Indirect energy consumption
tce——190.93Energy consumption per unit revenuetce/RMB million——0.04Total power consumptionkWh2,098,7802,060,8941,552,434Purchase of green electricitycerti?cates
kWh—825,0001,100,000Proportion of green electricity inannual power consumption
%—40.0370.86Power consumption per unitoperating revenue
kWh/RMB0,0005.634.803.03Gasoline consumption of selfowned vehicles
L17,847.4742,452.0033,737.56Total GHG emissions (Scope 1+Scope 2)
tCO
e1,236.22828.40339.67
IndicatorUnit202220232024Scope 1 GHG emissions
tCO
e39.0094.0374.73Scope 2 GHG emissions
tCO
e1,197.22734.37264.95GHG emissions(Scope 1 + Scope 2) perunit revenue
tCO
e/RMB million0.330.190.07Scope 3 GHG emissionstCO
e—21,126.62132,360.68Category 1: Purchased goods andservices
tCO
e—19,595.72130,644.35Category 6: Business traveltCO
e—371.91362.01Category 7: Employee commutingtCO
e—1,158.991,354.32Total water consumption
t8,9806,37716,781.75Water consumption per unitrevenue
t/RMB0,0000.0240.0150.033
Note 1: [Statistical Scope] The statistical scope for environmental data includes KingNet Network and its subsidiaries Shanghai KingNet, Shanghai KingNet Software, Shanghai Doushi, and Zhejiang Shenghe. In 2022, gasoline consumption from Company-owned vehicles was calculated based solely on Zhejiang Shenghe. In 2023 and 2024, the statistical scope was expanded to include KingNet Network and its subsidiaries Shanghai KingNet, Shanghai KingNet Software, Shanghai Doushi, and Zhejiang Shenghe.As a result, the data shows a signi?cant change compared to 2022.Note 2: Direct energy consumption refers to gasoline used by Company-owned vehicles. The energy consumption data was converted using the average lower heating value coe?cients published in the China Energy Statistical Yearbook by the National Bureauof Statistics.Note 3: Indirect energy consumption refers to purchased electricity. Conversion of energy consumption is based on the standard 20
。
C calori?c value as speci?ed inGB/T 2589—2020 General Rules for Calculation of the Comprehensive Energy Consumption.Note 4: In 2024, the Company purchased a total of 1,100 green electricity certi?cates, each representing 1 MWh of green electricity, and the period when the electricity consumption was o?set lasted from 1 January to 31 December 2024.Note 5: The total GHG emissions includes the Scope 1 and Scope 2 GHG emissions. Scope 1 GHG emissions are direct GHG emissions generated by gasoline consumption of self-owned vehicles. The calculated GHG types include CO
, CH
, and N
O. Thecalculation coe?cients for GHG emissions generated by gasoline consumption follow theAccounting Method and Reporting Guide of GHG Emissions from Land Transportation Enterprises (Trial) (2015)issued by the National Development and ReformCommission and theChina Energy Statistical Yearbook (2022)published by the National Bureau of Statistics of China. Scope 2 GHG emissions are GHG emissions generated from purchased electricity and the calculated GHG type is CO
. In 2022, the Companycalculated GHG emissions generated from purchased electricity based on location. In 2023 and 2024, the Company disclosed GHG emissions generated from purchased electricity calculated based on both location and market. In 2024, the relevant GHGemission factors refer to theAnnouncement on the Release of CarbonDioxideEmission Factors for Electricity in 2022issued by the Ministry of Ecology and Environment and the National Bureau of Statistics in 2024. The emission factor for purchased electricityby location is 0.5366 tCO
e per megawatt-hour, and the emission factor for purchased electricity (excluding non-fossil energy electricity traded in the market) by market is 0.5856 tCO
e per megawatt-hour.Note 6: Category 1: Outsourced goods and services include information technology services, commercial services, and cultural and o?ce equipment.Note 7: Due to the inclusion of water fees in property expenses at the Head O?ce, it was not possible to separately calculate water consumption from the total utility bills. Therefore, in 2022 and 2023, water consumption statistics included reception water useand separate restroom usage at the headquarters, as well as total water consumption at Zhejiang Shenghe. In 2024, the Company estimated total water consumption by applying Zhejiang Shenghe's per capita water use rate across the entire reporting scope.Accordingly, the 2024 data show signi?cant variation compared to previous years.
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IndicatorUnit202220232024
Total number of employeesPerson1,7021,8692,184By gender
MalePerson1,2471,3661,584FemalePerson455503600By type ofemployment
Labor contractPerson1,7021,8692,184Labor dispatchsystem
Person000Part-timePerson000By region
Mainland ChinaPerson1,7021,8692,183Hong Kong,Macau, Taiwan,and overseas
Person001By age
Over 50 years oldPerson1 2630-50 years oldPerson8039271,112Under 30 years oldPerson8989401,066Number of employees in themanagement level
Person——175Percentage of female employees inthe management level
%—14.9416.00Turnover of employees
%17.8618.8911.08By gender
Male%17.8019.1110.42Female%18.0218.2912.83By age
Over 50 years old%100033.3330-50 years old%10.2114.356.38Under 30 years old%24.6123.415.85Signing rate of labour contracts%100100100
Employment and Training Performance Table
IndicatorUnit202220232024
Percentage of employees acceptingregular performance and careerdevelopment assessment
%100100100Number of employee trainingsessions
Session——329Total employee training expenditureRMB0,000——81.51Coverage of employees in training
%100100100Training time per employee
Hour4.3818.8413.05Total number of employeediscrimination incidents
No.000Employee work-related injuryinsurance expenditure
RMB0,000——57.29Coverage rate of employee work-related injury insurance
%——100Percentage of employee deaths dueto work-related injuries
%000Working days lost due to work-relatedinjuries
day000Incidence rate of work-relatedaccidents
%000Note 1: The management level encompasses senior management level and middle management level.Note 2: [Calculation method] Turnover in each category of employees = number of employees who voluntarily resignedwithin the year/total number in each category of employees at the end of the year * 100.Note 3: [Calculation method] Percentage of employees accepting regular performance and career developmentassessment = employees accepting regular performance and career development assessment during the reportingperiod / total number of employees at the end of the reporting period * 100.Note 4: [Calculation method] Coverage of employees in training= number of employees receiving training / total numberof employees * 100.Note 5: [Calculation method] Training time per employee = total number of hours of training received by employeesduring the year / total number of employees.
Social Performance
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IndicatorUnit202220232024Number of complaints aboutproducts and services
/70273520Complaint handling rate
%100100100Number of legal or regulatoryviolations related to game contentquality
/—00IP approval rate for acquiredintellectual properties
%——100
IndicatorUnit20232024
Number of R&D personnelPerson1,2751,488Proportion of R&D personnel%68.2268.13Amount invested in R&DRMB0,000—59,837.31R&D investment as a percentageof main business revenue
%—11.69Number of patent applicationsduring the reporting period
/—1Number of patents grantedduring the reporting period
/—0Number of valid patents duringthe reporting period
/—22Number of invention patentsapplied to main business
/—5Number of trademarkapplications during the reportingperiod
/—25Number of trademarks approvedduring the reporting period
/—31Cumulative number oftrademarks approved
/—669IndicatorUnit202220232024Coverage rate of employee trainingand awareness on data securityand privacy protection
%——100Number of penalty incidents dueto violations of data security lawsand regulations
/——0Amount involved in data securityincidents
RMB0,000——0.00Number of ?aws in anti-addictionsystem
/——0Total number of violations relatedto customer privacy
/000
Product Responsibility and Customer ServicePerformance Table
Innovation-Driven Performance Table
Data Security and Customer Privacy ProtectionPerformance Table
Note 1: The scope of the number of complaints and complaint handling rate covers the number of complaints received bythe XY platform and 12345 Citizen Service Hotline. Complaint handling rate = number of complaints timely handled andresolved by the Company / number of complaints about products and services received by the Company within the year.In the past two years, the scale of the Company's gaming business has expanded, driving an increase in the number ofproduct categories launched and a growing user base. As a result, the total number of complaints has risen year by year.
IndicatorUnit202220232024
Total number of suppliersNo.401461531Number of suppliers in MainlandChina
No.400460530Number of suppliers in HongKong, Macau, Taiwan andoverseas
No.111
Supply Chain Management Performance Table
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IndicatorUnit2024
Compliance training coverage rate%100Number of compliance trainingsessions conducted
/24
Compliant Operation Performance Table
IndicatorUnit202220232024
Percentage of employees coveredby anti-commercial bribery andanti-corruption training
%——100Number of suppliers that signedanti-corruption agreements
No.——531Amount involved in litigation ormajor administrative penaltiesdue to the Company's unfaircompetition practices during thereporting period
RM0,000——0.00Number of completed corruptionlawsuits ?led against the Companyor its employees during thereporting period
No.000
Sustainability Governance Performance
Anti-commercial Bribery and Anti-corruption PerformanceTable
IndicatorUnit202220232024
RevenueRMB 0,000372,553.45429,539.03511,819.29Total pro?tRMB 0,000138,427.44169,724.34167,325.24
Economic Performance
IndicatorUnit202220232024
Investment in social publicwelfare
RMB3,949,670.506,516,983.397,380,497.08Public welfare donationRMB3,076,710.001,274,715.002,775,989.00Number of volunteeractivities organised
/——20Total hours of employeevolunteer service
Hour——1,579Employee volunteer serviceparticipation
/——2,893Number of public welfareprojects carried out
/——20Number of bene?ciariesof rural revitalisationinitiatives
Person——14,268Investment amount in ruralrevitalisation
RMB——1,873,673.26
Community Investment Performance Table
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AppendixGovernanceChapterAboutKingNet NetworkReport Standard IndexIndex of theSelf-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen StockExchange—Sustainability Report (For Trial Implementation)DisclosureRequirement
Corresponding Section in ThisReport
Topics Required for Disclosure under theGuidelinesClimate response
Climate ReponseESG Data Table and NotesPollutant discharge
Green O?ceESG Data Table and NotesWaste disposal
As an online game company, theCompany produces relativelylow levels of emissions and hasminimal environmental impact.Therefore, this topic is of lowrelevance to the Company.Ecosystem andbiodiversity protection
Ecosystem and BiodiversityProtectionEnvironmentalcompliancemanagement
Green O?ceESG Data Table and NotesEnergy utilizationWater resourcesutilizationCircular economyRural revitalisationCommunity Contribution andRural RevitalisationESG Data Table and NotesSocial contributions
DisclosureRequirement
Corresponding Section in ThisReportInnovation
Product R&D and InnovationESG Data Table and NotesEthics of science andtechnologySupply chain security
Supplier SustainabilityManagement
Equal treatment of SMEs
As of the end of the reportingperiod, the balance of theCompany's accounts payable(including notes payable) didnot exceed RMB30 billion andaccounted for less than 50% oftotal assets.Neither the Companynor its subsidiaries had anyoverdue payments to small-and medium-sized enterprisespublicly disclosed via the NationalEnterprise Credit InformationPublicity System.Product and servicesafety and quality
Content Quality ManagementCustomer Service and ComplaintHandlingESG Data Table and NotesData security andcustomer privacy
Data Security and CustomerPrivacy ProtectionESG Data Table and Notes
DisclosureRequirement
Corresponding Section in ThisReportEmployees
Employment and Protection ofEmployees' Rights and InterestsHuman Capital DevelopmentESG Data Table and NotesDue diligenceTopic Materiality AssessmentStakeholderengagement
Communication withStakeholdersAnti-commercial briberyand anti-corruption
Anti-Commercial Bribery and Anti-CorruptionESG Data Table and NotesFair CompetitionAnti-Unfair CompetitionTopics Voluntarily Disclosed in Accordance withArticle 5 of the GuidelinesSocial Functions ofGames
Social Functions of GamesProtection of Minors inCyberspace
Protection of Minors in CyberspaceCorporate Governance
Corporate Governance
ESG Data Table and NotesCompliant Operation
Compliant Operation
ESG Data Table and NotesRisk ManagementRisk Management
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GRI Content Index
GRIStandards
DisclosureLocation
GRI 2:
GeneralDisclosures(2021)
2-1 Organizational detailsCompany Pro?le2-2 Entities included in the organization'ssustainability reporting
About the Report2-3 Reporting period, frequency and contactpoint2-4 Information RestatementESG Data Table and Notes2-5 External assurance
Appendix: Third-Party
Independent Audit Report2-6 Activities, value chain and other businessrelationships
Company Pro?le2-7 Employees
Company Pro?le
ESG Data Table and Notes2-8 Workers who are not employeesESG Data Table and Notes2-9 Governance structure and composition
Corporate Governance
2024 Annual Report2-10 Nomination and selection of the highestgovernance body
2024 Annual Report2-11 Chair of the highest governance body
Corporate Governance
2024 Annual Report
Statement of use
KingNet Network has reported the information for the period from 1January to 31 December 2024 with reference to the GRI Standards.GRI 1 usedGRI 1: Foundation 2021
GRIStandards
DisclosureLocation
GRI 2:
GeneralDisclosures(2021)
2-12 Role of the highest governance body inoverseeing the management of impacts
Sustainability Governance2-13 Delegation of responsibility for managingimpacts2-14 Role of the highest governance body insustainability reporting
Chairman's Statement
Sustainability Governance
Structure2-15 Con?icts of interest2024 Annual Report2-16 Communication of critical concerns
Sustainability Governance
Structure2-17 Collective knowledge of the highestgovernance body
Corporate Governance2-22 Statement on sustainable developmentstrategy
Message from the Chairman
Sustainable Development
Strategic Plan and Progress2-25 Processes to remediate negative impacts
Customer Service and
Complaint Handling
Human Capital Development2-27 Compliance with laws and regulations
Content Quality
Management
Data Security and Customer
Privacy Protection
Protection of Minors in
Cyberspace
Compliant Operation2-29 Approach to stakeholder engagement
Communication with
Stakeholders
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AppendixGovernanceChapterAboutKingNet NetworkGRIStandards
DisclosureLocationGRI 3:
MaterialTopics (2021)
3-1 Process to determine material topics
Topic Materiality Assessment3-2 List of material topics3-3 Management of material topics
Sustainability Governance
Structure
Subsections by TopicGRI 201:
EconomicPerformance(2016)
201-1 Direct economic value generated anddistributed
Sustainability Highlights
ESG Data Table and Notes201-2 Financial implications and other risks andopportunities due to climate change
Climate Response201-3 De?ned bene?t plan obligations and otherretirement plans
Employment and Protection
of Employees' Rights and
InterestsGRI 203:
IndirectEconomicImpacts (2016)
203-2 Signi?cant indirect economic impacts
Community Contribution
and Rural RevitalisationGRI 205:
Anti-corruption(2016)
205-2 Communication and training about anti-corruption policies and proceduresAnti-Commercial Bribery and
Anti-Corruption205-3 Con?rmed incidents of corruption andactions takenGRI 302: Energy(2016)
302-1 Energy consumption within theorganization
ESG Data Table and Notes302-3 Energy intensity302-4 Reduction of energy consumptionGreen O?ceGRI 303:
Water andE?uents (2018)
303-3 Water withdrawalESG Data Table and Notes
GRIStandards
DisclosureLocation
GRI 305:
Emissions(2016)
305-1 Direct (Scope 1) GHG emissions
ESG Data Table and Notes 305-2 Energy indirect (Scope 2) GHG emissions305-4 GHG emissions intensityGRI 306: Waste(2020)
306-1 Waste generation and signi?cant waste-related impacts
Green O?ce306-2 Management of signi?cant waste-relatedimpactsGRI 401:
Employment(2016)
401-1 New employee hires and employeeturnover
ESG Data Table and Notes401-2 Bene?ts provided to full-time employeesthat are not provided to temporary or part-timeemployees
Employment and Protection
of Employees' Rights and
Interests401-3 Parental leaveESG Data Table and NotesGRI 403:
OccupationalHealth andSafety (2018)
403-3 Occupational health services
Employment and Protection
of Employees' Rights and
Interests403-6 Promotion of worker health403-7 Prevention and mitigation of occupationalhealth and safety impacts directly linked bybusiness relationships403-9 Work-related injuries
ESG Data Table and NotesGRI 404:
Training andEducation(2016)
404-1 Average hours of training per year peremployee404-2 Programs for upgrading employee skillsand transition assistance programmes
Human Capital Development404-3 Percentage of employees receiving regularperformance and career development reviews
ESG Data Table and Notes
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DisclosureLocationGRI 405:
Diversityand EqualOpportunity(2016)
405-1 Diversity of governance bodies andemployees
ESG Data Table and NotesGRI 406: Non-discrimination(2016)
406-1 Incidents of discrimination and correctiveactions taken
Employment and Protection
of Employees' Rights and
InterestsGRI 416:
CustomerHealth andSafety (2016)
416-1 Assessment of the health and safetyimpacts of product and service categories
Content Quality
Management
Protection of Minors in
Cyberspace416-2 Incidents of non-compliance concerningthe health and safety impacts of products andservices
None in 2024GRI 417:
Marketing andLabeling (2016)
417-1 Requirements for product and serviceinformation and labeling
Content Quality
Management
Protection of Minors in
Cyberspace417-2 Incidents of non-compliance concerningproduct and service information and labeling
Protection of Minors in
CyberspaceGRI 418:
CustomerPrivacy (2016)
418-1 Substantiated complaints concerningbreaches of customer privacy and losses ofcustomer data
ESG Data Table and Notes
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AppendixGovernanceChapterAboutKingNet NetworkAppendix:Third-Party Independent Audit Report
SGS-CSTC ’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE KINGNETNETWORK. CO., LTD. 2024 SUSTAINABILITY & ESG REPORT
NATURE OF THE ASSURANCE/VERIFICATIONSGS-CSTC Standards Technical Services Co., Ltd. (hereinafter referred to as SGS) was commissioned byKingnet Network Co.,Ltd (hereinafter referred to as Kingnet Network) to conduct an independent assurance ofthe Chinese version of Kingnet Network Co.,Ltd. 2024 Sustainability & ESG Report (hereinafter referred to asthe Report).
INTENDED USERS OF THIS ASSURANCE STATEMENTThis Assurance Statement is provided with the intention of informing all Kingnet Network’s Stakeholders.
RESPONSIBILITIESThe information in the Report and its presentation are the responsibility of the management and governing bodyof Kingnet Network. SGS has not been involved in the preparation of any of the material included in the Report.
Our responsibility is to express an opinion on the text, data, graphs and statements within the scope ofassurance with the intention to inform all Kingnet Network’s stakeholders, especially the verification of the “ESGData Performance Tableand Notes” in the Report.
SGS hereby states that it shall not be held responsible or liable for any direct, indirect, incidental, orconsequential damages or losses arising from or in connection with the use of information provided in thisreport.
ASSURANCE STANDARDS, TYPE AND LEVEL OF ASSURANCEThe SGS ESG & Sustainability Report Assurance (SRA) protocols used to conduct assurance are based uponinternationally recognised assurance standards including the AA1000 series of standards and ISAE3000.
The assurance of this report has been conducted according to the following Assurance Standards:
Assurance Standard Options
| Level of Assurance | |||
| AA1000AS v3 Type 2 | Moderate | ||
SCOPE OF ASSURANCE AND REPORTING CRITERIAThe assurance engagement was conducted to evaluate the accuracy and reliability of the sustainabilityperformance information included in the Report. Additionally, it assessed the extent to which the Report'scontent refers to the requirements of GRI Standards 2021.
ASSURANCE METHODOLOGYThe assurance comprised a combination of pre-assurance research, on-site interviews with relevant employeesof Kingnet Network located at 15th Floor, Block A, Expo Yew Wah Business Center, No. 899 Yaohua Road,Pudong New District, Shanghai; documentation and record review and validation where relevant.
LIMITATIONS AND MITIGATION
Data drawn directly from independently audited financial accounts has not been checked back to source as partof this assurance process.
The carbon emission data are checked by a third party or calculated by themselves without third partyverification. In the context of the present assurance engagement, our procedures were limited to sample-basedvalidation.
CN25/00002329
ASSURANCE STATEMENT
This assurance engagement was restricted to the group level of Kingnet Network and did not include traceabilityof original data from all subordinate institutions.
STATEMENT OF INDEPENDENCE AND COMPETENCEThe SGS Group of companies is the world leader in inspection, testing and certification, operating in multiplecountries and providing services. SGS affirms our independence from Kingnet Network, being free from biasand conflicts of interest with the organisation, its subsidiaries and stakeholders.
The assurance team was assembled based on their knowledge, experience and qualifications for thisassignment.
FINDINGS AND CONCLUSIONS
ASSURANCE/VERIFICATION OPINIONOn the basis of the methodology described and the assurance engagement performed, the specifiedperformance information included in the Kingnet Network Co.,Ltd. 2024 Sustainability & ESG Report isaccurate, and provides a fair and pertinent statement of the sustainable development activities of KingnetNetwork for the period from 1 January 2024 to 31 December 2024.
CONCLUSIONS, FINDINGS AND RECOMMENDATIONS BASED ON GRI STANDARDS 2021
The assurance team concludes that the Report has referred to the requirements of GRI Standards 2021.
FINDINGS AND RECOMMENDATIONS
All observations pertaining to commendable practices, sustainable development activities, and managerialrecommendations identified throughout the assurance process have been thoroughly documented in theInternal Management Report on Sustainability Reporting Assurance. This report has been officially presented tothe relevant management divisions of Kingnet Network to serve as a reference for their ongoing efforts towardscontinuous improvement.
Signed:
For and on behalf of SGS-CSTC
David XinSr. Director – Business Assurance16/F Century Yuhui Mansion, No. 73, Fucheng Road, Beijing, P.R. China
Apr. 12th
, 2025WWW.SGS.COM