Wuhu 37 Interactive Entertainment Network
Technology Group Co., Ltd.
2021 Interim Report
August 2021
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of Wuhu 37 Interactive Entertainment Network TechnologyGroup Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the truthfulness,accuracy and completeness of the contents of this Report, and shall be jointly and severallyliable for any misrepresentations, misleading statements or material omissions therein.Li Weiwei, the Company’s legal representative, and Ye Wei, the Company’s Chief FinancialOfficer, hereby guarantee that the financial statements carried in this Report are truthful,accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report.
There is uncertainty with respect to the plans and other forward-looking statements in thisReport, which shall not be deemed as promises to investors. Investors and other stakeholdersshall be fully aware of the risk and understand the difference between plans, forecasts andpromises.
Possible risks facing the Company and countermeasures have been detailed in “VII RisksFacing the Company and Countermeasures” under “Part III Management Discussion andAnalysis” herein, which investors are kindly reminded to pay attention to.
The Board has approved an interim dividend plan as follows: based on 2,217,864,281 shares,a cash dividend of RMB 1.5 (tax inclusive) per 10 shares is planned to be distributed to all theshareholders of the Company, with no bonus issue from either profit or capital reserves.
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 6
Part III Management Discussion and Analysis ...... 9
Part IV Corporate Governance ...... 31
Part V Share Changes and Shareholder Information ...... 35
Part VI Financial Statements ...... 42
Documents Available for Reference
I The financial statements signed and stamped by the Company’s legal representative, and Chief Financial Officer ; andII The originals of the announcements and documents disclosed to the public by the Company on the newspaper designated by theCSRC for information disclosure during the Reporting Period.The documents above are available at the Board Secretary’s Office of the Company.
Definitions
| Term | Definition |
| CSRC | China Securities Regulatory Commission |
| SZSE/the Stock Exchange | Shenzhen Stock Exchange |
| Company/ the Company/ the Listed Company/ 37 Interactive Entertainment | Wuhu Shunrong Auto Parts Co., Ltd./Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co., Ltd./ Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd. |
| 37 Interactive Entertainment (Shanghai) | 37 Interactive Entertainment (Shanghai) Technology Co., Ltd. |
| Company Law | Company Law of the People's Republic of China |
| Securities Law | Securities Law of the People's Republic of China |
| Articles of Association | Articles of Association of Wuhu Shunrong Auto Parts Co., Ltd./Articles of Association of Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co., Ltd./Articles of Association of Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd. |
| RMB, RMB’0,000 | Expressed in the Chinese currency of Renminbi, expressed in tens of thousands of Renminbi |
| Reporting Period/the Reporting Period | The period from 1 January 2021 to 30 June 2021 |
| Period-end/end of the Reporting Period | 30 June 2021 |
| Browser games | Clientless or browser kernel-based micro-client games that are based on web development technologies and utilize standard protocols as basic transmission modes. Game users can play browser games directly through an Internet browser |
| Mobile games | Games that are downloaded via mobile network and run on mobile phones or other mobile terminals |
| RPG | Role playing game |
| ARPG | Action role playing game |
| SLG | Strategy game |
| STG | Shooting game |
| SRPG | Strategy role-playing game |
| MMO | Massive Multiplayer Online |
| MMORPG | Massive Multiplayer Online Role-Playing Game |
| MOBA | Multiplayer Online Battle Arena |
| SIM | Simulation game |
| Chengdu Pengwan Technology Co., Ltd. | Chengdu Pengwan Technology Co., Ltd. and its subsidiaries |
| Zengame Technology | Zengame Technology Holding Limited and its business entities |
| YOULIFE HOLDINGS | YOULIFE HOLDINGS and its business entities |
| X.D.Network | XD Inc. and its business entities |
| Jiangsu Aurora/Aurora Network/Jiangsu Aurora Network | Jiangsu Aurora Network Technology Co., Ltd. |
| Guangzhou 37 | Guangzhou 37 Network Technology Co., Ltd. |
Part II Corporate Information and Key Financial InformationI Corporate Information
| Stock name | 37 Interactive Entertainment | Stock code | 002555 |
| Place of listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 芜湖三七互娱网络科技集团股份有限公司 | ||
| Abbr. (if any) | 三七互娱 | ||
| Company name in English (if any) | WUHU 37 INTERACTIVE ENTERTAINMENT NETWORK TECHNOLOGY GROUP CO.,LTD. | ||
| Legal representative | Li Weiwei | ||
II Contact Information
| Board Secretary | Securities Affairs Representative | |
| Name | Ye Wei | Wang Sijie |
| Office address | 11/F, Creative Advertising Complex, Wuhu Advertising Industrial Park, Middle Beijing Road, Jiujiang District, Wuhu City, Anhui Province | 11/F, Creative Advertising Complex, Wuhu Advertising Industrial Park, Middle Beijing Road, Jiujiang District, Wuhu City, Anhui Province |
| Tel. | 0553-7653737 | 0553-7653737 |
| Fax | 0553-7653737 | 0553-7653737 |
| Email address | ir@37.com | ir@37.com |
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website addressand email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2020 Annual Report.
2. Media for Information Disclosure and Place where this Report is LodgedIndicate by tick mark whether any change occurred to the information disclosure media and the place for lodging the Company’speriodic reports in the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the
Company’s periodic reports and the place for lodging such reports did not change in the Reporting Period. The said information canbe found in the 2020 Annual Report.
3. Other Information
Indicate by tick mark whether any change occurred to other information in the Reporting Period.
√ Applicable □ Not applicable
The Proposal on Increase in Registered Capital and Amendments to the Articles of Association was approved at the 17th Meeting ofthe Fifth Board of Directors on 10 March 2021 and later at the First Extraordinary General Meeting of Shareholders of 2021 on 29March 2021. As approved by the CSRC Reply on Approval of the Private Placement of Wuhu 37 Interactive Entertainment NetworkTechnology Group Co., Ltd. (CSRC Permit [2021] No. 16), the Company carried out a private placement of 105,612,584RMB-denominated common shares with 14 subjects. Therefore, the Company’s registered capital has increased fromRMB2,112,251,697 to RMB2,217,864,281, and the relevant amendments have been made to the Company’s Articles of Association.For the relevant announcement, please visit http://www.cninfo.com.cn.IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| H1 2021 | H1 2020 | Change (%) | |
| Operating revenue (RMB) | 7,538,949,378.53 | 7,988,675,195.57 | -5.63% |
| Net profit attributable to the Listed Company’s shareholders (RMB) | 853,717,855.65 | 1,699,736,123.46 | -49.77% |
| Net profit attributable to the Listed Company’s shareholders after deducting non-recurring profits and losses (RMB) | 637,526,551.32 | 1,464,942,321.24 | -56.48% |
| Net cash flows from operating activities (RMB) | 1,253,919,152.46 | 2,450,226,546.90 | -48.82% |
| Basic earnings per share (RMB/share) | 0.39 | 0.80 | -51.25% |
| Diluted earnings per share (RMB/share) | 0.39 | 0.80 | -51.25% |
| Weighted average return on equity (%) | 10.15% | 22.05% | -11.90% |
| 30 June 2021 | 31 December 2020 | Change (%) | |
| Total assets (RMB) | 13,976,131,131.48 | 10,564,331,499.85 | 32.30% |
| Equity attributable to the Listed Company’s shareholders (RMB) | 9,377,434,662.37 | 6,037,383,625.95 | 55.32% |
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises (CAS)and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
VI Non-recurring profits and losses
√ Applicable □ Not applicable
Unit: RMB
| Items | Amount | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 180,785.65 | |
| Government grants through profit or loss (exclusive of government grants given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 34,729,545.45 | Mainly due to refund of value-added tax and government grants other than super-deduction in the calculation of taxable amount for VAT |
| Gain or loss on fair-value changes on trading and derivative financial assets and liabilities & income from disposal of trading and derivative financial assets and liabilities and other debt investments (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 185,547,167.31 | Mainly due to gains and dividends received in the period of holding equity investments, gains on disposal of equity investments, and gains on investments in wealth management products |
| Non-operating income and expenses other than the above | 1,563,764.86 | |
| Less: Income tax effects | 5,807,136.13 | |
| Non-controlling interests effects (net of tax) | 22,822.81 | |
| Total | 216,191,304.33 | -- |
Explanation of why the Company reclassifies as recurrent a non-recurring profits and losses item defined or listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring profits andlosses Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Part III Management Discussion and Analysis
I Principal Activity of the Company in the Reporting PeriodAs one of the top 20 global public game companies, key cultural export companies of China, and civilized institutions inGuangdong Province, 37 Interactive Entertainment is an outstanding listed Chinese A-share company engaged in comprehensivecultural and entertainment offerings. The Company focuses on cultural and creative businesses based on the development,publishing, and operation of mobile and browser games, as well as the development in segments such as film and television, music,talent agent, anime, VR/AR, cultural health, social entertainment, and new consumption. It has been steadily advancing itsdevelopment strategy of “boutiqueization, diversification and globalization”. With “bringing joy to the world” as its mission, theCompany is dedicated to becoming an excellent and sustainable entertainment enterprise.The Company operated in a steady and healthy manner in the Reporting Period. It continued to pursue its strategic objectives,adhered to the strategy of “integration of R&D and operation”, as well as kept driving product diversification and global marketing.During the Reporting Period, the Company recorded operating revenue of RMB 7.539 billion, with a year-over-year (YoY) decreaseof 5.63%; a profit before income tax expenses of RMB 1.006 billion, down by 49.51% YoY; and a net profit attributable to the ListedCompany’s shareholders of RMB 0.854 billion, declining by 49.77% YoY. As some major new products were just launched andmarketed in the Reporting Period, resulting in a higher ratio of selling expenses. So far, the expenditures on selling in Q1 havestarted to generate returns. As a result, Q2 saw a net profit attributable to the Listed Company’s shareholders of RMB 0.737billion,a growth of over 500% compared to that of Q1. The previous expenditures are expected to bring in profit as the operationsof these games grow mature over time.(I) Development status of the industry where the Company operates in the Reporting Period
1. Changes in industry-related economic situation and their impacts on the CompanyUnder the support and guidance of national industrial policies, China's game market now presents healthy, prosperous, anddiversified development trends. Domestic game companies have paid more attention to social benefits, protection of minors, andquality games, as well as cultural connotation and technology empowerment, and have been constantly creating quality contentsand promoting industry innovation and integration.According to the 2020 China's Game Industry Report and China's Game Industry Report from January to June 2021 jointlyreleased by Game Publishing Committee of China Audio-video and Digital Publishing Association (CADPA) and China Game IndustryResearch Institute, there are more than 660 million game users in China in 2020; the actual sales revenue of China's game market isRMB278.687 billion, with a YoY increase of 20.71%, and the growth rate was 13.05% higher YoY. The scale of "Games Export" hasbeen further expanded. The actual sales revenue of independently-developed games in the overseas market was USD15.450 billionwith a YoY growth rate of 33.25%, which is 12.3% higher YoY. The internationalization level was further improved. From January toJune 2021, the actual sales revenue of China's game market is RMB150.493 billion, with a YoY increase of 7.89%, continuing tomaintain a steady growth rate. There are 667 million game users, with a YoY increase of 1.38%, indicating a slowdown in thegrowth of game users. As a result of demographic shifts, competition in the game market will be more intense in the future, posinghigher requirements for enterprises and products. From January to June 2021, the actual sales revenue of China'sindependently-developed online games in the domestic market was RMB130.112 billion, with a YoY increase of 8.3%, continuing tooccupy over 80% shares in the domestic market. Meanwhile, the Company has been actively expanding and developing theoverseas market. In the first half of the year, the actual sales revenue of independently-developed games in the overseas market
was USD8.468 billion, with a YoY increase of 11.58%, indicating continuous increases in the overseas revenue fromindependently-developed game products.With the increasing improvements in the game production ecology, the average quality of products independently developed byChinese game companies constantly rose and became increasingly competitive in domestic and overseas markets. The industryushered in a new period of development. With the gradual disappearance of demographic dividend, the industry threshold hasbeen raised and game players have grown more mature. The mobile games have gradually transitioned from enjoying demographicdividend period to enjoying content dividend, which led to the result that players were posing higher requirements for onlinegames. Game companies need to improve the quality of games to expand user base and willingness to pay, and ultimately achievean increase in the return on product investment.The threshold of game development and barriers to competition have been substantially raised under this situation. Top gamecompanies embracing strengths in the R&D and publishing of quality products and operation are more likely to benefit from thenew situation. The Company has stepped into a high-quality development stage. It takes the main business as its core and deepensthe strategy of "integration of R&D and operation" and "dual engines at home and abroad". During the Reporting Period, theCompany kept its leading role in R&D capabilities by raising R&D investments and strengthening the output of quality games.Moreover, it advanced the "diversification" strategy from the aspects of R&D and publishing, and reserved varied quality games ondifferent themes through independent development, investment in R&D-oriented companies, and enhanced cooperation withdevelopers capable of producing quality games. In addition, the Company, through independently developed AI systems,consolidated refined operation, prolonged the life cycle of quality games, and improved operation efficiency.
2. Changes in industrial policy environment and their impacts on the Company
(1) On 6 June 2021, the Guidelines on Enhancing the Protection of Minors of the Steering Group of the Protection of Minors ofthe State Council (hereinafter referred to as the “Guidelines”) were officially issued. Revolving around the implementation of theCivil Code and the Law on the Protection of Minors, the Guidelines refined and specified the relevant articles of law, raising a totalof 25 tasks. Specifically, in terms of cyber protection, the Guidelines raised requirements such as improving the system ofregulations and policies, making more efforts to prevent minors from Internet addiction, and strengthening the online protection ofminors' personal information. During the Reporting Period, in accordance with the relevant requirements, the Company completedthe connection to the national real-name authentication system and strictly implemented the anti-addiction regulations for minors.Meanwhile, the Company actively proceeded with the online game age suitability reminders and now has completed the release ofsuch reminders on the official channels of all its games. The Company also created an online game anti-addiction system for minorsacross the whole process of R&D, publication, and operation of games, strictly restricting the time periods, duration, andconsumption for games by minors.Additionally, the Company added contents applicable to children to its Privacy Policy in line with the user habits of juvenilesunder 14 years old and their guardians. It contributed to turning China's gaming industry more standardized by activelyparticipating in the compilation of group standards for the gaming industry led by the China Audio-video and Digital PublishingAssociation ("CADPA"), such as the Specifications on Age Ratings of Online Games, the Specifications on Parent MonitoringPlatforms, and Online Game Terminology.
(2) On 7 June 2021, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and theNational Development and Reform Commission jointly released the Work Arrangements for Deepening the Extensive Deploymentand Application of IPv6 (hereinafter referred to as "the Work Arrangements"), which clarify the main goals and key tasks for theextensive deployment of IPv6 in 2021, and make careful and accurate arrangements mainly from the aspects of enhancing networkcarrying capacity, optimizing the service performance of apps, improving terminal support capacity, strengthening the R&D of keytechnologies, promoting the formulation of standard specifications, and reinforcing security assurance, and aim to promote theextensive deployment and application of IPv6 in a down-to-earth manner by taking multiple measures.
As one of the first batch of Internet enterprises responding to the Action Plan for Advancing the Extensive Deployment ofInternet Protocol Version 6 (IPv6), the Company has completed the phased goals for upgrading and transformation of TOP100domestic Internet apps to IPV6 with its products rated as excellent products in the overall assessment. Next, the Company will addmore products to the IPV6 upgrading plan to promote the integrated innovation of the Next Generation Internet and businesses.
(3) On 10 June 2021, the Data Security Law of the People's Republic of China (hereinafter referred to as the Data Security Law)was adopted at the 29th session of the Standing Committee of the 13th National People's Congress of the People's Republic ofChina. The Data Security Law is enacted for the purposes of regulating data processing activities, safeguarding data security,promoting data development and utilization, and protecting the legal rights and interests of individuals and organizations. Differentfrom the Cybersecurity Law of the People's Republic of China that has come into force, the Data Security Law places more emphasison the security of data itself.
The Company gives priority to information security and takes the protection of the personal information and privacy of usersas the top priority in the information security management. To this end, the Company has made commitments to increasingresource input and implementing the security responsibility policy in terms of data security and protection of privacy of users, andhas established information security policies and goals based on privacy protection; has formulated the principles of minimumadequate use, individual consent, and consistent rights and liabilities in terms of collecting and managing users' privacy information,so as to strictly protect the security of users' personal information and control information security risks. In terms of datatransmission, HTTPS encryption is adopted in the transmission of users' privacy information data to ensure security in thetransmission process; in terms of data storage, encrypted storage is adopted for user' privacy information data; in terms of dataaccess, the data storage server is isolated from external networks and cannot be accessed by any external network, and strictauthority control has been implemented for the access to all corresponding databases to realize multi-protection.
During the Reporting Period, 37 Interactive Entertainment increased the efforts in the research and development ofhigh-quality games, and protected intellectual property with great efforts at the same time. The Company used multiple methodsto protect its own legitimate rights and interests, and improved copyright awareness and copyright management to ensure itscompliance operation.(II) Overview of the Company’s main businesses in the Reporting Period
1. Main businesses and business models of the Company
During the Reporting Period, the Company's main businesses included the development, publishing, and operation of onlinegames. The operating modes of the Company’s online games mainly include independent operation and third-party joint operation.
Under the independent operation mode, the Company obtains the licenses of games through independent R&D or being anoperator of other games, and publishes and operates these products through its own or third-party channels. The Company is fullyresponsible for the operation, promotion and maintenance of the games; providing unified management services for onlinepromotion, online customer service and top-up payment; and updating games along with game developers based on the real-timefeedback of users and games.
Under the third-party joint operation mode, the Company cooperates with one or more game operators or game applicationplatforms to jointly operate games. And the aforesaid parties are responsible for the management of their own channels, includingoperation, promotion, the recharge and charge system, while the Company provides technical support services along with gamedevelopers.
2. Overview of the Company’s main businesses and products
During the reporting period, the domestic game industry entered a content dividend period.Game players' requirements forthe quality of online games have increased significantly, the effect of the boutique strategy has been obvious, and the development
of high-quality games has been certified.The Company precisely grasped the industry development trends, made continuousimprovements in operation, and remained a top performer in the industry, while adhering to the "boutiqueization, diversificationand globalization" strategy.During the Reporting Period, the Company recorded operating revenue of RMB 7.539 billion, with a YoY decrease of 5.63%; aprofit before income tax expenses of RMB 1.006 billion, down by 49.51% YoY; and a net profit attributable to the Listed Company’sshareholders of RMB 0.854 billion, declining by 49.77% YoY. As some major new products were just launched and marketed in theReporting Period, resulting in a higher growth in selling expenses than that in operating revenue and thus causing a temporaryimpact on the ratio of selling expenses in the period. Meanwhile, with the continual rollout of the Company’s “globalization”strategy, the overseas business in the Reporting Period soared to a new high and the operating revenue from the overseas gamebusiness increased by 111.03% YoY.(I) Mobile game businessDuring the Reporting Period, the Company recorded operating revenue of RMB 7.067 billion from mobile games, a YoYdecrease of 4.65%. The mobile game offering has become more diversified, game quality sees considerable improvement, and themobile game business maintains the leading position in domestic and overseas markets.
① Research and development of mobile games
During the Reporting Period, the Company continuously exerted more efforts for R&D, and R&D investments grew YoY. TheCompany’s R&D investments amounted to RMB 0.674 billion during the Reporting Period, up by 4.46% YoY. The total R&Dinvestments have reached RMB3.14 billion since 2018.
The R&D investments were mainly concentrated on improvement of product quality and exploration of product categories. In2021, high-quality games independently developed by the Company like Dou Luo Da Lu: Hun Shi Dui Jue (斗罗大陆：魂师对决),Rong Yao Da Tian Shi (荣耀大天使), and Yun Duan Wen Xian (云端问仙) were released and have won public praise and marketrecognition.
The "boutiqueization" strategy runs through the entire life cycle of the Company's independently developed products. TheCompany is committed to making better the product engines, art design and sound quality of gaming products to meet the userdemand in experiencing high-quality games at the technical level; it is dedicated to gameplay innovation and interface interactionto meet user demand in fun and smooth experience at the planning level. High-quality development and high-frequency iterationsturned new products more attractive to users, and allowed most independently developed products to maintain high gross billingfor a long time.
In July 2021, the mobile blockbuster battle strategy game Dou Luo Da Lu: Hun Shi Dui Jue (斗罗大陆：魂师对决), which wasindependently developed by 37 Interactive Entertainment, was officially released. As a blockbuster product with the highest quality,best animation and art effects, and the perfect representation of the original plots among all Dou Luo IP-related products in thecurrent market, the game deeply implements the Company's product strategy of "boutiqueization", represents the Company'sin-depth understanding of the demands of users, perfectly represents famous animation scenes through technologies such aspanoramic 3D special effects, real-time seamless day-night switch, and dynamic volume-based ray tracing, and creates the Dou LuoDa Lu that meets the fantasies of each fan of Dou Luo Da Lu with its multi-aspect gameplay design and construction of a friendlysocial system.
Dou Luo Da Lu: Hun Shi Dui Jue (斗罗大陆：魂师对决) is the in-depth continuation of the Company's idea of "boutiqueization"and represents a practice of the current cutting-edge R&D technologies. The significance of the game for the Company is that it hasunified the Company's R&D process and underlying logic in the field of next-gen games, developed a set of systems that can beinherited and constantly iterated, effectively improved the efficiency of game R&D and the ceiling for idea creation, and laid a solid
foundation for the Company's boutiqueization strategy.The Company improved the "diversification" of product R&D. R&D projects included game genres such as MMORPG, SLG,SRPG and SIM. Extensive numbers and categories of products were prepared for the year 2021. The Company will continueinnovation in diversified aspects, including product types, themes, art performance, and gameplay. It will pay close attention to thein-depth exploration of MMORPG, SLG, SRPG, SIM and endeavor to become a first-class game company that can provide globalplayers with various gaming products, based on quality content, operation experience in multiple types of products, andadvantages in numerical value and gameplay.Meanwhile, the Company turned the product supply side more diversified, by buying a stake in and joining hands withexcellent developers. In order to further raise the product success rate, the Company established a rigorous evaluation process,utilized its own advantages in numerical experiences to work out products along with game developers, thus ensuring a betterquality of games before their publishing.During the Reporting Period, the R&D department developed the Zeus platform, a middle platform with AI big data computingpower. Supported by one-stop service module, the Zeus platform can do deep learning calculations flexibly and freely and realizeautomated operation and maintenance. It can realize the automation and standardization across the whole process of R&D,deployment and operation, and clear a path for interconnectivity between systems of different departments, thus greatlyautomating systems and the original business process. The emergence of the platform marks the transfer of equipment resourcesfrom reserved mode to on-demand dynamic expansion mode. It sharply cuts costs and increases margins, utilizes idle equipmentand provides a flexible computing power environment for data analysts.
② Publishing of mobile games
1) Domestic market
The Company's advantages in refined operations in the domestic mobile games publishing were highlighted during theReporting Period. The highest monthly gross billing of its domestic mobile games exceeded RMB1.4 billion, with the total numberof newly registered users surpassing 160 million and the highest number of MAUs of over 46 million.During the Reporting Period, the Company adhered to the refined operation idea of "products + traffic + users", constantlyexpanded its product matrix and offered diversified gaming experience to players by successively releasing games in different typesand on varied themes, including Rong Yao Da Tian Shi (荣耀大天使), Dou Luo Da Lu: Wu Hun Jue Xing (斗罗大陆：武魂觉醒) andJue Shi Xian Wang (绝世仙王), as well as Dou Luo Da Lu: Hun Shi Dui Jue (斗罗大陆：魂师对决) launched in July, and achievedremarkable results. The Company was ranked among the top in terms of market share in China's mobile game publishing market.As a quality game released by the Company, Dou Luo Da Lu: Hun Shi Dui Jue (斗罗大陆：魂师对决) is released through"content-based publishing", in which the Company aims to construct a publishing system focusing on underlying gameplays, gamecontent, user experience, and creation of community cultures with the game as the foundation. Highly loyal to the original noveland animation, the Company has consolidated the foundation of content-based publishing with excellent game quality, constantlyexpanded user boundaries and target audience through some innovative publicity and publishing methods such as customizingvideo programs according to product features and through private domain traffic operation, to constantly attract potential gameplayers.
The Company has been constantly making its brands younger and more personalized through interesting and emotionalmarketing ideas and cross-sector collaboration between game IPs. In 2020, the adventure in another world theme MMORPG YunShang Cheng Zhi Ge (云上城之歌) published by the Company was released. Specializing in adventure gameplays in an open worldwith elegant 3D cartoon painting style, the game enjoyed wide popularity among younger users once it was released and becameone of the most successful MMO games in 2020. In June 2021, to celebrate its anniversary, the theme song Yun Shang Zhi Lu (云上
之旅)of the game that was produced by the Company in cooperation with Qigu Culture and sung by Shan Bao (a popular virtual idol)was officially released in the TME music league. As the anniversary activities inside and outside the game started successively, YunShang Cheng Zhi Ge (云上城之歌) gained more than 10 million people exposure within a short period and drove the market ofyounger users once again.With respect to the successful release of Yun Shang Cheng Zhi Ge (云上城之歌), on the one hand, it broke through theCompany's previous ARPG-based product distribution ideas, the Company's distribution and operation capabilities in differentcategories such as MMORPG have been greatly strengthened; on the other hand, Yun Shang Cheng Zhi Ge (云上城之歌) is apan-two-dimensional product with younger public. This distribution is also a successful exploration of the Company in youngercommunities, laying a solid foundation for the following company’s distribution and operation of diversified products.
The Company applied the "diversification" strategy to multiple aspects, including products, promotion, and services, based onits capabilities of operating multiple types of games. Thanks to the strategy, the Company reserved adequate products in terms oftype, theme, and quantity. Its product matrix covered different types of games, such as MMORPGs, card games, SLGs, and SIMgames, as well as varied themes, such as fantasy, mythology/martial arts, city life, campus and women-orientation.During the Reporting Period, the Company insisted on operating with systematic flow management and adopted a diversifiedapproach of “multi-channel marketing + targeted advertising + long-term service” to accurately grasp user needs, accurately delivercreative marketing plans to target groups and provide players with meticulous and comprehensive long-term service, with apurpose of improving player satisfaction, activity and retention rate to prolong the product life cycle and accumulate higher grossbilling.In terms of multi-channel marketing, the Company had formed a unique marketing approach featuring "branding + saleseffects". On the one hand, by selecting spokespersons that are consistent with the product’s connotation, the Company producedhigh-quality micro-film-style promotional materials for promotion. With more advanced technology, more advanced visualperformance, more realistic force, more diverse production methods, and richer story content, it can quickly "break the circle" andreach a wider user group; on the other hand, combinations were made with the short video platform to provide rich materialoutput and to meet the different cultural consumption needs of users in different angles, to further expand the scope of users, andthen to enlarge brand value and influence. For example, Rong Yao Da Tian Shi (荣耀大天使), a massive multiplayer online fantasy3D role-playing mobile game, relying on massive customized marketing activities, integrated itself with traffic resources, reachedsynergy between a quality game and extensive publicity and publication, realized the 2.0 upgrade of "branding + sales effects", andgained its own "differentiated" advantage in the fantasy-based market based on its excellent art effects and gameplay design.During the Reporting Period, the Company put its independently developed intelligent ad platform, "Quantum" and intelligentoperation analysis platform, "Destiny", into production. On the one hand, "Quantum" can connect with all mainstream channels toachieve rapid and automatic advertising. Meanwhile, the platform can be used together with multiple systems and connectprocedures in series to greatly reduce the time to create plans, perform standardized processing of plans in batches, and maintainplans automatically and systematically. Moreover, the platform can improve promotion efficiency and effect through big dataanalysis and AI algorithms. On the other hand, "Destiny" is a comprehensive operational decision system for statistics, analysis andprediction of game data. The system can accurately predict the life cycle of games through data analysis models,so as to improveuser stickiness and stabilize product life cycle.
2) Overseas market
During the Reporting Period, the Company significantly accelerated the strategic expansion of global footprint. Its overseasoperating revenue rose by 111.03% YoY. As of the end of the Reporting Period, its overseas brand, 37GAMES, covered manycountries and regions, whose products included SLGs, MMORPG, SIM and card games. During the Reporting Period, the highestmonthly gross billing of its overseas mobile games exceeded RMB500 million, with the total number of newly registered users
surpassing 30 million and the highest number of MAUs of over 8.5 million.Benefiting from the adjustment of overseas operations, the Company's overseas business grew rapidly during the ReportingPeriod. After years of accumulation of experience in publishing games overseas, the Company adjusted its overseas strategy fromthe original "partition breakthrough" to publishing based on the organization structure of the tracks and categories. Under theguidance of the new strategy, publishing personnel have a deeper understanding of the products and can be more effective. Moremeans of localized operations can be used by them.In terms of "globalization", on the one hand, the Company continued to develop its global layout through the deployment ofSLG games in various themes such as western and military. After years of accumulation, the Company has effectively entered theEuropean and American markets with SLG products, and its impact has been improved globally. SLG games are products with longlife cycles in the game field. After the initial growth, there will be a long-term payback period in the following period, thus ensuringthe stable growth of the gross billing of the Company's overseas business in the future. On the other hand, in Southeast Asia, Japanand South Korea, the Company still stayed ahead.The market's first "Match 3 + SLG" product Puzzles & Survival published by the Company is attractive and its gameplay isinnovative. It perfectly integrated the most popular match-3 gameplay in the European and American markets with the traditionalheavy SLG gameplay, integrated selling points with ideas based on the product itself, constantly made innovations, offered aunique audio-visual experience to users, and filled the gaps in the European and American markets. In 2021, it has secured itsposition in the top 30 grossing charts among American games, showing outstanding performance and faster growth than similarmobile games.
Besides the outstanding experience in the American market, Puzzles & Survival achieved remarkable results in global markets.As a classic case of SLG games that successfully gain new user groups, the product not only attracted core SLG players, but alsocharmed match-3 players with a large base in Europe and America, and player retention had also risen sharply. After it was officiallyreleased in the Japanese Market, Puzzles & Survival quickly topped free download charts in both iOS and Google Play platforms,made good results in the two platforms with rising ranks, and entered the head position of the top 20 grossing chart in Japan. Afterit was released in Germany in 2021, Puzzles & Survival has quickly secured its position in the top 50 grossing chart and hasmaintained a trend of steady growth. As at June 2021, the highest monthly gross billing of Puzzles & Survival exceeded RMB0.2billion and the cumulative gross billing had exceeded RMB1 billion, and the game was listed top 10 in the iOS top grossing charts of52 regions.In addition, as an important carrier for Chinese cultural exchange, games should undertake the mission of cultural inheritancewith imaginative and creative ways of artistic presentation. In 2021, the Company was once again listed in the 2021-2022 nationalkey export enterprises of culture, as the Company, by promoting the deep integration of quality games and traditional Chineseculture, had constantly advanced foreign players to take interest in the Chinese Culture in their experience and exploration ofgames. For example, Call Me the Big Shopkeeper (叫我大掌柜), a mobile game simulating business operation in ancient Chinapublished overseas by the Company, integrated historical and cultural elements in innovative ways, presented the authenticsimulation of business operation in ancient towns, constructed main scenarios starting with the style of "Chinese ink painting",deeply impressed overseas players with various commercial buildings, crowded streets, carriages shuttling through streets, shoutsof street vendors, and charmingly naive figures, as well as featured operation styles of clinics, Chinese food, and taverns, and thuswon a large number of praises. In 2021, the game achieved good responses after it was published in countries such as South Korea,Japan, and Vietnam, and has been ranking among the top in grossing charts in various regions.During the Reporting Period, the Company had been constantly taking up top 10 places in the overseas revenue rank ofChinese manufacturers released every month by App Annie, a world-leading mobile data and analysis company, and entered thetop 5 after rising steadily for months. Meanwhile, based on its extraordinary performance in the global game market, the Company
was included in the lists of the "Top 52 Overall Publishers of 2021" of App Annie. The Company pursues the publishing model ofpublishing diversified, tailored games in big markets around the world, and continues offering more quality Chinese games to globalplayers.
3)Game pipeline
Based on the Company's dual-core and diversified product strategy, besides products such as Dou Luo Da Lu: Hun Shi Dui Jue(斗罗大陆：魂师对决), Dou Luo Da Lu: Wu Hun Jue Xing (斗罗大陆：武魂觉醒), Yun Duan Wen Xian (云端问仙), Rong Yao Da TianShi (荣耀大天使), Jue Shi Xian Wang (绝世仙王), Queen of Diamonds (一千克拉女王), and Call Me the Big Shopkeeper (叫我大掌柜) that have been released in 2021in domestic market , and various popular games such as Puzzles & Survival, Call Me the BigShopkeeper (叫我大掌柜), Survival at Gunpoint, and Idol Angel (アイドルエンジェル),that have been released in 2021 in overseamarket,it is estimated that the subsequent products that are to be published by the Company in the domestic and oversea marketwill include:
(2) Browser games
During the Reporting Period, the Company’s browser game business achieved operating revenue of RMB 0.46 billion, whichwas lower than that of the same period of last year. It was mainly affected by both the shift of users to mobile phones and thedecrease in the number of browser game products. During the Reporting Period, the Company strengthened partnership withdomestic top browser game developers through strategic investment and business cooperation on the one hand, on the otherhand, the Company also refined the operation of its major quality games, improved user stickiness, stabilized the product life cycle,and further maintained its operating revenue.
3. Cultural industry
With a strategic focus on quality content, the Company actively developed quality game R&D companies through strategicinvestments involving MMORPG, SLG, SIM, card games, and other games, to make a strategic layout for the future growth of the
publication sector businesses of the Listed Company.
While maintaining the high-speed growth of its core business, the Company exploited opportunities in film and television,anime, music, VR/AR, cultural health, e-sports, and social entertainment with a strategic focus on quality content. As of the date ofthis report, cultural and creative enterprises funded or acquired by the Company included:
Film and television: Youying Culture, Zhonghui Television, Mowei Pictures, JinhaiShiyi, etc.
Music: FenghuaQiushi
Talent agent: Original Plan, and T Entertainment
Anime: YHKT Entertainment, and IDRAGONS Creative Studio
VR/AR: Archiact
Cultural health: Wake
E-sports: AG E-Sports Club
Social Entertainment: Wuli Planet and Wonderful Party
Consumption: Nowwa Coffee
The Company's investment business has become more market-oriented and professional. The Company initiated and managedmultiple industrial investment funds as the fund manager, mainly focusing on fields such as big cultural innovations, technology,mass consumption, and made investments in many excellent enterprises including DSMovie, Kapark, Yangji Mountain, Duokitty,Dong Eating, INMO Technology, and HomeRun Technology.
The Company adhered to the long-term investment concept. Based on the main business of games, it reached audiences invaried segments by investing in the upstream and downstream companies of the industry chain. With respect to investmentstrategies, the Company paid close attention to new people, new products and technologies in the industry and overseas andinternational distribution of products. In regard to the selection of investment targets, the Company valued the ability to constantlyoutput quality products, excellent team or talent reserves, and future growth potential. The Company continuously consolidated itsstatus in the cultural and creative industry by integrating quality resources in the industry.
In addition, companies in vertical fields where the Company invests have been more closely connected. For instance, ZhonghuiTelevision and YHKT Entertainment cooperated to purchase the copyright of Incarnation, a sci-fi blockbuster on bilibili.com, andwould make a series. "Original Plan", the talent agent, and "T Entertainment" are working with FenghuaQiushi, Zhonghui Television,Mowei Pictures, and 37 Interactive Entertainment to maximize the outstanding talent resources. Besides, "DSMovie", a superbdomestic Multi-Channel Network (MCN), is used as a promotional channel to exert an amplified and superimposed effect on theentertainment eco-system of 37 Interactive Entertainment.
In terms of film and television, the Company has invested a number of excellent film and television production enterprises,having a successful participation in the production of excellent works such as Peace Breaker, Suspect X, Forever Young, Till The EndOf The World, Better Days, Crane New Arrival and Serenade of Peaceful Joy. The Company will gradually release more excellent filmand television works in the future. In terms of animation, the Company has invested in several outstanding domestic animationproducers. The Three-Body Problem, an animation adapted from Liu Cixin's science fiction novel, is expected to be released in 2022by YHKT ENTERTAINMENT.
In the field of mass consumption, the Company has made investments in many excellent enterprises through industrial funds,perceived the demands of the new-generation consumers, and sought original brands with the abilities to generate quality
products. Yangji Mountain, Duokitty, Dong Eating, and HomeRun Technology are top brands in their sub-industries.The Company is further building a full industry chain in cultural and entertainment ecological layout. To promote the mutualempowerment between industrial and cultural value, the Company has already integrated emerging fields into the 5G era,including interactive games, virtual streamers, VR/AR industry chain and e-sports through M&A and equity investment. At the sametime, the Company will empower and coordinate strategically with the invested companies, offer more high-quality content withnew experience, create a one-stop cultural and entertainment ecosystem, and become the most trusted cultural brand of China’syounger generation.The Company is required to comply with the disclosure requirements of the SZSE Industrial Information Disclosure Guide No.12—Listed Companies Engaged in Software and IT Services.II Core Competitiveness Analysis
During the Reporting Period, the Company steadily promoted the development strategy of "boutiqueization, diversificationand globalization" and formed the following core competitiveness:
1. Industry-leading R&D strength
The Company carries on with its strategy of “integration of R&D and operation”, as well as emphasizes R&D investments andtalent cultivation. After years of efforts in R&D, the Company is ranked among the top in terms of R&D strengths. The Company'sindependently developed products are characterized by high output, a high success rate and a long period, and center on"boutiqueization and diversification". The Company keeps strengthening R&D. R&D investments amounted to RMB 0.674 billionduring the Reporting Period, up by 4.46% YoY. With the support of cutting-edge technologies like Next-Gen 3D engine, AI, and bigdata analysis platforms, the Company has established a professional layout in multiple market segments like MMORPG, SRPG, SLG,and SIM, and successfully developed eye-catching quality games like Dou Luo Da Lu: Wu Hun Jue Xing (斗罗大陆：武魂觉醒), andRong Yao Da Tian Shi (荣耀大天使), which are benchmarks for the R&D of quality games in the industry.
On the one hand, experienced users' awareness of game brands and demands for boutiqueization are on the rise."Boutiqueization" means that focus should be laid on improving the quality of game contents. The "boutiqueization" strategy runsthrough the entire life cycle of the Company's independently developed products. Before the publication of games, the Companycarefully worked out details regarding gameplay design, art quality, music effects, etc.; after the publication of games, theCompany continued to invest in product iteration, user experience and other aspects to ensure high gross billing and a long lifecycle of games. To improve the development quality, product technology innovation is also very important. The Company hasintegrated digital and intelligent technologies into its game publication business, created the intelligent ad system "Quantum" andthe operation analysis system "Destiny", explored quality contents through the refined analysis of creative ideas, and madebreakthroughs in output bottlenecks for creativity to improve the conversion rate. In terms of R&D, the Company has created theZeus platform, realizing the standardization and automation in the process from R&D to deployments and operation. Meanwhile,based on the three data analysis systems, “Athena", "Poseidon" and "Ares", it helped the research team find and solve problems ina quick and accurate way, further reduced development costs, substantially improved the quality of products, and providedassistance for the refined operation of games.
On the other hand, in the face of both challenges and opportunities, the differentiated positioning of the "diversification"strategy allowed products to better cover users. During the Reporting Period, the Company's R&D team, based on its R&D strengthsin ARPGs, expanded its game categories to MMORPG, SLG, SRPG, and SIM. It will continue to innovate in diversified aspects,including product types, themes, art performance, and gameplay.
Adhering to the long-term development idea, the Company expanded from product upgrading to talent cultivation, opened up
development channels for professionals, and embraced employee diversity. Moreover, it encouraged innovation by employees andincreased the proportion of senior R&D staff to build an excellent team. The Company vigorously reformed the mechanism for R&Dproject approval, shortened the evaluation cycle and established diversified indicators, so as to stimulate employees’ innovativevitality. At the same time, the Company adjusted the incentive mechanism for the R&D department, established a tiered incentivesystem for different categories of products, promoted the incentive for new categories of products, and encouraged employees tobe creative and step out of their comfort zone. The Company has also established a project lifecycle management process for gamedevelopment, which run through many links, such as idea creation, project approval, process and review, to achieve the risk controlof the entire R&D process, greatly improve the success rate of product R&D while effectively controlling the cost, and lay thefoundation for creating diverse, high-quality games. Internal management continued to improve, with leaner and more scientificmanagement in terms of game development.
2. Excellent publishing strength
During the Reporting Period, the Company maintained its leading position in mobile game and browser game publishingbusiness. 37 Interactive Entertainment enriched the product supply via independent R&D, investments, and cooperation withexcellent developers, improved the ability in publishing diverse, high-quality games and promoted the publishing strength to a newheight. In 2021, the Company expanded its product matrix and offered diversified gaming experience to players by launching qualitygames in different types and on varied themes, including Dou Luo Da Lu: Hun Shi Dui Jue (斗罗大陆：魂师对决), Rong Yao Da TianShi (荣耀大天使), Yun Duan Wen Xian (云端问仙), Jue Shi Xian Wang (绝世仙王), Dou Luo Da Lu: Wu Hun Jue Xing (斗罗大陆：武魂觉醒), and Queen of Diamonds (一千克拉女王) in the domestic mobile game market. Meanwhile, the Company hasaccumulated rich experience in overseas game publishing thanks to years of practice. Breakthroughs have been made in thepublishing areas and game categories. With its overseas business covering over 200 countries and regions, the Company hassuccessfully opened the European and North American markets, led the Asian market and improved its global influence. TheCompany successfully launched multiple independently-developed and agent products such as Puzzles & Survival, Call Me the BigShopkeeper (叫我大掌柜), Jing Ling Sheng Dian (精灵盛典), Swords of Archangels (大天使之剑), and Duo Luo Da Lu (斗罗大陆).Going forward, the Company will further play its existing advantages in overseas markets, constantly expand the scale of overseasbusiness based on its strong game R&D capacity and localized marketing capabilities, and make new contributions to promoting theChinese culture industry and boosting cultural confidence.The Company constantly sought innovative publishing approaches, and thus created a barrier to entry for competitors in gamepublishing. First, the Company developed its own AI system to improve the ability of accurate ad placement. With this system, theCompany has optimized placement methods, improved the quality of materials, took advantage of high-quality materials, andthereby effectively controlled the marketing cost. Second, the efficiency of publishing, including tool construction and dataalgorithm to help form a real-time monitoring system and reduce cost waste. The Company puts forward the publishing idea of“branding + sales effects”, grasps the market changes to carry out high-quality publicity, and uses good publishing ability to attracttarget users to achieve good results.
In terms of operation optimization, the Company possesses strong capabilities for operation and optimization in numericalmanagement, process optimization, event planning, etc. After the launch of games, the Company continues to improve the qualityof games, attract users through better contents, prolong the product life cycle, and accumulate higher gross billing.
In regard to promotion, through the two AI ad systems, i.e., "Quantum" and "Destiny", the Company conducted differentiatediteration and refined operation for specific types of users of specific games and servers in order to enhance user interaction andactivity, activate the paid game ecology, and maximize the effect of life time value ("LTV").
3. Advantage of the model of “integration of R&D and operation”
As the Company’s business mode of "integration of R&D and operation” becomes sophisticated, it is conducive to making fulluse of resources and creating quality products from a long-term perspective. On the one hand, the Company can ensure the stablesupply of quality products to support the operation development through strong R&D strengths. At the same time, the R&D teamcan utilize the feedback of the operation department to optimize products and extend the product life cycle. On the other hand, atthe early stage of product R&D, the operation team can provide advises and suggestions to the R&D team based on its years ofexperience and keen market insights.
4. Team strengths
The Company has been deeply involved in the field of cultural and creative industries for many years. Its core managementteam has long been on the front lines of the industry, and has forward-looking capabilities for strategic layout. During the ReportingPeriod, thanks to its outstanding performance in terms of the development speed and personnel training and development, theCompany won the title of "the Best Employer" of CNG. The Company has established a fully-fledged personnel training system. Ithas completed the personnel system reform, made new promotion mechanism, appraisal mechanism and incentive mechanism.The new system does not only make the employee’s growth path clearer, more open and more transparent but also motivatestheir enthusiasm and creativity in a better way. The Company has always adhered to the entrepreneurial spirit like marathonersand been clear about its goals. It aims to promote sustainable development, progressively realize long-term goals rather thanshort-term ones, and stay at the forefront of the industry.III Core Business AnalysisSee contents under the heading “I Principal Activity of the Company in the Reporting Period”.Year-over-year changes in key financial data:
Unit: RMB
| H1 2021 | H1 2020 | Change (%) | Main reason for change | |
| Operating revenue | 7,538,949,378.53 | 7,988,675,195.57 | -5.63% | This was mainly attributable to the different stages of games in their life cycle. Games in the current period were mainly new ones at the introduction stage, while those in the same period of last year were largely games at the mature stage, which were able to generate stable gross billing. |
| Cost of sales | 1,120,509,771.85 | 863,666,663.98 | 29.74% | Game revenue under the third-party joint operation model took up a larger share in the total revenue, resulting in an increase in royalties cost. |
| Distribution and selling expenses | 4,785,388,947.28 | 4,549,628,282.98 | 5.18% | The Company increased Internet traffic expenditures for a variety of newly launched games such as Rong Yao Da Tian Shi (荣耀大天使), Dou Luo Da Lu: Wu Hun Jue Xing (斗罗大陆：武魂觉醒), Jue Shi Xian Wang (绝世仙王), and Puzzles & Survival (launched globally), resulting in an increase in Internet traffic fee charges. |
| General and administrative expenses | 222,001,708.95 | 166,919,490.05 | 33.00% | The increased number of management personnel compared with the same period last year and the adjusted remuneration policy resulted in an increase in expenditures on employee benefits. Meanwhile, office expenses also increased due to |
| higher depreciation and amortization expenses on the office building and land, as well as a headcount increase. | ||||
| Financial expenses | -25,875,545.40 | 9,827,281.57 | -363.30% | Combined effect of a decrease in interest expenses on loans and an increase in interest income from banks |
| Income tax expenses | 162,728,946.02 | 110,659,828.94 | 47.05% | As the major games of certain subsidiaries were at an early stage of promotion in H1, these subsidiaries recorded paper losses in H1, while other profitable subsidiaries continued to pay their taxes, causing a YoY increase in income tax expenses. The Company expects that its overall income tax rate for the full year will decrease to a reasonable level as these deficit subsidiaries see their major games start to generate profit. |
| Research and development investments | 673,649,742.25 | 644,896,512.00 | 4.46% | The Company increased R&D investments, upsized the R&D team compared with the same period last year and refined the remuneration and incentive mechanism, resulting in increased expenditures on the remunerations and benefits of the R&D personnel. |
| Net cash flows from operating activities | 1,253,919,152.46 | 2,450,226,546.90 | -48.82% | Revenue decreased, and receivables from third-party channel platforms increased compared with the beginning of the year which resulted in cash received from the sales of goods or rendering services decreased accordingly. Meanwhile, remuneration payments for employees also rose resulting from the number of the employee rose compared with the same period last year. |
| Net cash flows used in/from investing activities | -835,664,111.30 | -952,419,788.81 | 12.26% | A payment for the acquisition of land use rights was made in the same period of last year, while there was no such cash outflow in the Reporting Period. Meanwhile, the net amount of wealth management instrument redemptions and purchases increased. |
| Net cash flows used in/from financing activities | 1,737,499,012.55 | -180,181,077.21 | 1,064.31% | Cash received from the private placement in the Reporting Period |
| Net increase in cash and cash equivalents | 2,153,528,582.00 | 1,328,403,368.73 | 62.11% | Combined effect of a decrease in net cash flows from operating activities, a decrease in net cash flows used in investing activities, and an increase in net cash flows from financing activities |
Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes in the Reporting Period.Breakdown of operating revenue:
Unit: RMB
| H1 2021 | H1 2020 | Change (%) | |||
| Amount | As % of operating revenue (%) | Amount | As % of operating revenue (%) | ||
| Total operating revenue | 7,538,949,378.53 | 100.00% | 7,988,675,195.57 | 100.00% | -5.63% |
| By operating division | |||||
| Online games | 7,538,949,378.53 | 100.00% | 7,988,675,195.57 | 100.00% | -5.63% |
| By product category | |||||
| Mobile games | 7,067,163,703.89 | 93.74% | 7,412,153,082.93 | 92.78% | -4.65% |
| Browser games | 460,286,420.34 | 6.11% | 564,975,213.48 | 7.07% | -18.53% |
| Others | 11,499,254.30 | 0.15% | 11,546,899.16 | 0.14% | -0.41% |
| By operating segment | |||||
| Domestic | 5,494,392,013.23 | 72.88% | 7,019,815,819.74 | 87.87% | -21.73% |
| Overseas | 2,044,557,365.30 | 27.12% | 968,859,375.83 | 12.13% | 111.03% |
Operating division, product category or operating segment contributing over 10% of operating revenue or operating profit:
√ Applicable □ Not applicable
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Online games | 7,538,949,378.53 | 1,120,509,771.85 | 85.14% | -5.63% | 29.74% | -4.05% |
| By product category | ||||||
| Mobile games | 7,067,163,703.89 | 977,728,886.12 | 86.17% | -4.65% | 34.06% | -3.99% |
| Browser games | 460,286,420.34 | 135,756,614.09 | 70.51% | -18.53% | 5.62% | -6.74% |
| By operating segment | ||||||
| Domestic | 5,494,392,013.23 | 859,046,703.67 | 84.37% | -21.73% | 19.84% | -5.42% |
| Overseas | 2,044,557,365.30 | 261,463,068.18 | 87.21% | 111.03% | 78.09% | 2.36% |
Core business data restated according to the changed methods of measurement that occurred in the Reporting Period:
□Applicable √ Not applicable
The Company is required to comply with the disclosure requirements of the SZSE Industrial Information Disclosure Guide No.12—Listed Companies Engaged in Software and IT Services.Operating division contributing over 10% of operating revenue or operating profit:
√ Applicable □ Not applicable
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) |
| By operating division of customers | ||||||
| Online games | 7,538,949,378.53 | 1,120,509,771.85 | 85.14% | -5.63% | 29.74% | -4.05% |
| By product category | ||||||
| Mobile games | 7,067,163,703.89 | 977,728,886.12 | 86.17% | -4.65% | 34.06% | -3.99% |
| Browser games | 460,286,420.34 | 135,756,614.09 | 70.51% | -18.53% | 5.62% | -6.74% |
| By operating segment | ||||||
| Domestic | 5,494,392,013.23 | 859,046,703.67 | 84.37% | -21.73% | 19.84% | -5.42% |
| Overseas | 2,044,557,365.30 | 261,463,068.18 | 87.21% | 111.03% | 78.09% | 2.36% |
Ongoing sales contracts with a single contract amount that is over RMB50 million and accounts for over 30% of the Company’saudited operating revenue in the most recent accounting year:
□Applicable √ Not applicable
Breakdown of the cost of sales for the core business:
Unit: RMB
| Breakdown of cost | H1 2021 | H1 2020 | Change (%) | ||
| Amount | As % of cost of sales | Amount | As % of cost of sales | ||
| Royalties | 1,014,617,869.61 | 90.55% | 756,529,181.79 | 87.60% | 34.11% |
| Cost of servers | 83,168,344.41 | 7.42% | 77,914,092.53 | 9.02% | 6.74% |
| Amortization of copyright money | 15,326,627.17 | 1.37% | 22,029,060.95 | 2.55% | -30.43% |
| Other costs | 7,396,930.65 | 0.66% | 7,194,328.71 | 0.83% | 2.82% |
Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
1. The overseas operating revenue increased by 111.03% YoY, primarily because the Company adjusted its overseas operatingstrategy in the Reporting Period, and the overseas mobile game development and launch business continued to grow, resulting in asignificant increase in operating revenue.
2. Royalties in the cost of sales increased by 34.11% YoY, primarily because game revenue under the third-party joint operationmodel took up a larger share in the total revenue in the Reporting Period, resulting in an increase in royalties cost.
3. Amortization of copyright money in the cost of sales went down by 30.43% YoY, mainly because copyright money was less used asa way to obtain the operation rights for major games in the Reporting Period, resulting in a decrease in amortization cost ofcopyright money.IV Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
| Amount | As % of profit before income | Reason/source | Recurrent or not |
| tax expenses | ||||
| Investment income | 73,957,894.70 | 7.35% | Mainly due to gains on investments from disposal of equity investments, dividends during the period of holding equity investments, and wealth management products | Not |
| Gain/loss on changes in fair value | 106,592,018.27 | 10.59% | Mainly due to changes in fair value of equity investments | Not |
| Impairment loss on assets | 1,130,937.77 | 0.11% | Mainly due to losses on doubtful accounts | Losses on doubtful accounts are recurrent |
| Non-operating income | 2,204,522.71 | 0.22% | Mainly due to compensation income | Not |
| Non-operating expenses | 713,926.50 | 0.07% | Mainly due to donations and expenditures on retirement of fixed assets | Not |
| Other income | 76,652,164.24 | 7.62% | Mainly due to refund of VAT and other government grants given in the Company’s ordinary course of business | Refund VAT is recurrent while other government grants are not. |
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 30 June 2021 | 31 December 2020 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary funds | 3,927,610,090.55 | 28.10% | 1,776,856,909.85 | 16.82% | 11.28% | Funds raised in a private placement of shares in the Reporting Period |
| Accounts receivable | 1,361,016,422.73 | 9.74% | 1,164,657,998.35 | 11.02% | -1.28% | The overseas game business expanded in the Reporting Period, while the relevant amounts receivable from third-party channels/platforms were undue. |
| Long-term equity investments | 428,731,774.82 | 3.07% | 360,566,552.56 | 3.41% | -0.34% | No significant change |
| Fixed assets | 906,707,500.39 | 6.49% | 922,736,638.76 | 8.73% | -2.24% | No significant change |
| Construction in progress | 10,232,260.08 | 0.07% | 4,180,019.75 | 0.04% | 0.03% | Construction of the Company’s Headquarters Building in Guangzhou commenced in the Reporting Period |
| Right-of-use | 89,700,305.83 | 0.64% | 0 | 0.00% | 0.64% | Right-of-use assets were recognized on |
| assets | leases according to the new accounting standard governing leases, which the Company has adopted since 1 January 2021 | |||||
| Short-term loans | 247,063,500.00 | 1.77% | 889,324,326.07 | 8.42% | -6.65% | Repayment of financings obtained through notes which became due in the Reporting Period |
| Contract liabilities | 246,023,708.35 | 1.76% | 204,231,829.45 | 1.93% | -0.17% | No significant change |
| Lease liabilities | 64,256,151.56 | 0.46% | 0 | 0.00% | 0.46% | The present value of future rental payments for office space occupied under operating leases was recognized as lease liabilities according to the new accounting standard governing leases in the Reporting Period |
| Trading financial assets | 2,144,978,476.54 | 15.35% | 1,321,234,029.61 | 12.51% | 2.84% | Increases in the balances of low-risk bank’s wealth management products and structured deposits purchased by the Company for higher capital returns |
| Prepayments | 1,116,715,243.28 | 7.99% | 999,890,031.00 | 9.46% | -1.47% | To enrich the product and IP pipeline, the Company increased the prepayments of royalties for licensed game operation, and increased the prepayments of license fees for IPs for self-developed games |
| Accounts payable | 1,636,208,353.34 | 11.71% | 1,078,096,658.12 | 10.21% | 1.50% | Increase in Internet traffic fee charges payable |
| Other payables | 1,187,472,426.30 | 8.50% | 1,317,972,818.79 | 12.48% | -3.98% | The Company paid for the acquisition of minority interests in Guangzhou 37 Network Technology Co., Ltd. in the Reporting Period |
2. Major Assets Overseas
√ Applicable □ Not applicable
| Asset | Source | Asset value (RMB) | Location | Management model | Control measures to protect asset safety | Return generated (RMB) | As % of the Company’s equity | Material impairment risk or not |
| Monetary funds | Income from investments and operations | 774,934,802.60 | Hong Kong, the US, etc. | A sound business supervision mechanism and a | 8.18% | Not |
| sound risk control mechanism have been put in place | ||||||||
| Other equity assets | Investments in overseas companies | 364,758,895.15 | Hong Kong, South Korea, etc. | A sound business supervision mechanism and a sound risk control mechanism have been put in place | 30,823,475.19 | 3.85% | Not | |
| Other information | None | |||||||
VI Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB
| Name | Relationship with the Company | Principal activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Jiangsu Aurora | Subsidiary | Development of mobile and browser games | 6,250,000.00 | 5,333,875,811.08 | 4,035,312,776.61 | 778,585,250.47 | 125,721,761.36 | 105,017,202.66 |
| Guangzhou 37 | Subsidiary | Launch and operation of mobile games | 11,764,706.00 | 4,692,808,416.27 | 2,221,050,907.43 | 3,836,134,123.00 | 762,599,569.08 | 628,293,962.64 |
Subsidiaries obtained or disposed of in the Reporting Period:
□ Applicable √ Not applicable
Other information on principal subsidiaries and joint stock companies:
VII Risks Facing the Company and Countermeasures
1. Risk of industry regulation
The online game industry is regulated by relevant national policies and government departments. During recent years,regulatory authorities have gradually attached importance to the healthy development of the online game industry, implementingmore stringent regulatory measures such as qualification management and content review for games’ development, publicationand operation. For example, the Standing Committee of the 13th National People's Congress revised the Law of the People'sRepublic of China on the Protection of Minors for the second time at its 22nd session in October 2020, which came into effect onJune 1, 2021. The Law of the People's Republic of China on the Protection of Minors strengthens network protection, stipulatingthat online games can be operated only after the approval of law. What’s more, China establishes a unified electronic identityauthentication system of online games for minors, specifies their online time, and stipulates penalties for network service providerswho do not fulfill their obligations to prevent online addiction and stop cyberbullying. During the operation of the game products, ifthe Company violates or misunderstands the relevant regulations, there may be a risk that it will be punished by authorities or thatrelevant works may not be published as planned because they do not meet the regulatory requirements.In the long term, the regulation of the online game industry is becoming more and more standardized, which is conducive tothe healthy development of the industry. The enterprises with standardized operation will benefit from it. 37 InteractiveEntertainment will strictly abide by the requirements related to the development of the industry and support its policies andregulations.
2. Market competition risks and countermeasures
The online game industry is facing increasingly fierce competition as it gradually matures. The development of variousInternet-based cultural creative segments other than online games is further exacerbating external competition. At the same time,online game users are also maturing, and online game users have increasingly higher demand for quality for game products Intense
market competition will challenge the Company’s development in terms of products and market channels.In response, the Company will continue to increase R&D investments, R&D and innovation in product creativity, gameplay,theme, art and technology. It will maintain close cooperation with excellent developers to guarantee the supply of quality products,and continue to connect users with quality games. In terms of market channels, the Company will further bring into play the role ofnew ideas in digital marketing and operation, deepen the business strategy of multi-channel marketing, targeted advertising andlong-term services, and continuously enhance its core market competitiveness.
3. Business risks and countermeasures
The online game industry is characterized by fast product update, limited life cycle and fast change of user preference. Gameenterprises need to increase their investment in technology development and closely keep in pace with trend of the industrialtechnologies. If the technology, products and other aspects of the game undergo major changes, and game enterprises fail to keepup with them, their products will fail to meet the market demands. At the same time, information security and user privacyprotection arouse great public concerns. If the Company leaks users’ information due to negligence, there will be a significantdamage to the user experience and brand image. Consequently, its operation performance will be impaired.In response, increasing R&D investments are needed to maintain continuous product innovation. The Company also needs todig deeper into operational data through independently developed AI systems, and timely adjust operational and R&D strategies,to meet the core demands of users.In terms of information security management and user privacy protection, based on strict management policies and processsystem, the Company adopts industry-leading technologies and benchmark them with international standards, strictly controlsinformation security risks, and guarantees data security to ensure the security of users' personal information to the maximumextent. In terms of information security, the Company defines and classifies security incidents to respond to possible data securityproblems. The Company's current information security management system covers the three game platforms of the Groupincluding 37Online, 37Mobile, and 37GAMES (Overseas), and integrates all service suppliers of the platforms in the whole systemfor management, which ensures the completeness of the systems and reduces the potential risks outside the system.In terms of the implementation of data security, it carries out systematic and rigorous operations to encrypt the storage andtransmission of data assets in the whole process. Information security audits take place once every six months for systematic controlof information security risks. In terms of privacy protection, the Privacy Policy has been established, which provides in details therules and standards for collection and use of users’ personal information and sets forth the reasonable and feasible securitymeasures adopted for protection of users’ personal information. The Company adopts privacy enhancement technology to manageusers' private data, including de-identification and anonymization of users' personal information, which can be used to store thepersonal information with recovered identification and the information after de-identification respectively, and enhances themanagement of access and using authorities to ensure the security of users' personal information. The Company ensures that itruns the business in compliance with applicable laws and regulations throughout the world, and protects the users’ right to managepersonal information. A response procedure has been stipulated to inform users of any possible cost and necessary actions neededto be taken.
4. Risks of core personnel turnover and countermeasures
A stable and high-quality talent team for game development, operation and management is an important guarantee for theCompany to maintain its core competitive advantage. If the Company fails to effectively build a core talent team, give reasonableincentives and manages the core personnel, the employees’ enthusiasm and creativity will be affected, which will have an adverseimpact on the Company’s core competitiveness.
In response, much attention has been attached to cultivation and acquisition of professional talents. The Company creatively
builds a platform-based talent management mechanism, according to which excellent game producers are rewarded with highproject bonus, and given discretion of research and creation. In order to attract and retain outstanding management talents andbusiness elites, the Company has vigorously reformed the project mechanism, encouraged “bottom-up” project creation,shortened the review cycle and established diversified indicators, so as to stimulate the innovative vitality of employees. In termsof employee performance appraisal, the Company has broken the traditional salary incentive system based on gross billing, and setup diversified KPIs based on employees' contribution and ability, and set up flexible team appraisal standards to encourageemployees’ creativity. Through the above mechanism changes, the Company increases the attractiveness to core staffs and R&Dpersonnel.
The Company has established “37 Interactive Entertainment Learning and Development Center” to provide sufficient trainingand learning opportunities for employees and help them grow rapidly. At the same time, “37 Interactive Entertainment Learningand Development Center” has set up academies with different specializations in each business group, focusing on professionalempowerment and talent cultivation around different needs for professional skill growth.VIII Operating Performance Forecast for January-September 2021
Performance forecast: year-on-year decreaseType of data in the table below: Interval data
| January-September 2021 | January-September 2020 | Change | ||||||
| Estimated net profit (RMB’0,000) | 160,000.00 | -- | 170,000.00 | 226,022.61 | Decrease | -29.21% | -- | -24.79% |
| Basic earnings per share (RMB/share) | 0.73 | -- | 0.77 | 1.07 | Decrease | -31.86% | -- | -27.60% |
| Notes | The Company estimates the net profit attributable to the Listed Company’s shareholders to be between RMB 1.6 billion to RMB1.7 billion for January-September 2021, with the number estimated to be between RMB 0.746 billion to RMB 0.846 billion for Q3 2021. The game business is characteristic of large investment before payback. The Company has launched more new games in 2021, which are now at the preliminary stage of promotion, resulting in a higher growth in selling expenses than that in operating revenue and thus causing a temporary impact on the ratio of selling expenses. So far, the expenditures on selling in Q1 have started to generate returns. As a result, Q2 2021 recorded a net profit attributable to the Listed Company’s shareholders of RMB 0.737 billion, representing a growth of over 500% compared to Q1 2021. The previous expenditures are expected to bring in profit as the operations of these games grow mature over time. As previous investments start to pay back and more new games are launched, the Company expects a quarter-on-quarter growth of over 15% in operating revenue, and a year-on-year growth of over 30% in net profit attributable to the Listed Company’s shareholders, in Q3 2021. The Company’s self-developed game Dou Luo Da Lu: Hun Shi Dui Jue (斗罗大陆：魂师对决) has been launched globally and successively, expected to generate gross billing of over RMB 0.7 billion in August. | |||||||
Part IV Corporate Governance
I Annual and Extraordinary General Meetings of Shareholders Convened during the ReportingPeriod
1. General Meetings of Shareholders Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Date of the meeting | Date of disclosure | Resolutions of the meeting |
| The First Extraordinary General Meeting of Shareholders of 2021 | Extraordinary General Meeting of Shareholders | 38.51% | 29 March 2021 | 30 March 2021 | 1. The Proposal on Increase in Registered Capital and Amendments to the Articles of Association was approved; and 2. The Proposal on Application for the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters in Relation to the Private Placement of Shares was approved. |
| The 2020 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 47.76% | 22 June 2021 | 23 June 2021 | 1. The 2020 Work Report of the Board of Directors was approved; 2. The 2020 Work Report of the Supervisory Committee was approved; 3. The Chinese versions of the full 2020 Annual Report and its Summary, along with the English version of the Summary, were approved; 4. The 2020 Final Account Report was approved; 5. The 2020 Final Dividend Plan was approved; 6. The Proposal on Appointment of Independent Auditor for 2021 Annual Financial Statements was approved; 7. The Proposal on the Expected Guarantee Line for Subsidiaries in 2021 was approved; 8. The Proposal on Adjustments to the Remuneration Plan for Non-independent Directors of the Fifth Board of Directors was approved; ‘ 9. The Proposal on the Use of Self-owned Idle Funds for Securities Investment was approved; and 10. The Proposal on the Use of Self-owned Idle Funds for Entrusted Wealth Management was approved. |
II Interim Dividend Plan
√ Applicable □ Not applicable
| Bonus issue from profit (share/10 shares) | 0 |
| Cash dividend/10 shares (RMB) (tax inclusive) | 1.5 |
| Share base (share) | 2,217,864,281 |
| Cash dividends (RMB) (tax inclusive) | 332,679,642.15 |
| Cash dividends in other forms (such as share repurchase) (RMB) | 0.00 |
| Total cash dividends (including those in other forms) (RMB) | 332,679,642.15 |
| Distributable profit (RMB) | 760,652,599.19 |
| Total cash dividends (including those in other forms) as % of total profit to be distributed | 100.00% |
| Applicable cash dividend policy | |
| If it is difficult to identify the development stage of the Company but it has a significant capital expenditure arrangement, when making profit distribution, cash dividends shall account for no less than 20% in the profit distribution. | |
| Details of the cash and/or stock dividend plan | |
| Upon approval by the Board of Directors, the Company’s 2021 interim dividend plan is as follows: Based on the total issued share capital (the total registered share capital less shares in the securities account for repurchases) on the date of record, a cash dividend of RMB1.5 (tax inclusive) per 10 shares is planned to be distributed to all the shareholders of the Company, with the remaining undistributed profit carried forward to the next year; and there will be no bonus issue from either profit or capital reserves. The above interim dividend plan is consistent with the Company’s performance growth, and also in line with relevant provisions of the Company Law, the Securities Law, the Articles of Association and the Company’s shareholder return plan. Therefore, it is legal, valid and reasonable. | |
III Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployees
√ Applicable □ Not applicable
The third employee stock ownership plan (ESOP) has been reviewed and approved by the Fourth Meeting of the Fifth Boardof Directors, the Fourth Meeting of the Fifth Supervisory Committee and the Fourth Extraordinary General Meeting of Shareholdersof 2019. The Company transferred the shares repurchased from 11 April 2019 to 7 May 2019 to the ESOP at zero price. The sharescovered under the ESOP amount to 22,347,537 shares, accounting for 1.06% of the Company's total share capital. The ESOPunlocked the underlying shares, which were received through non-trade transfer and other legitimate means, phase by phase 12months after the date of the Company's announcement on the transfer of the last shares to the ESOP. The maximum lock-up periodis 36 months.According to the third ESOP (draft), if the Company's performance target defined in the ESOP is achieved -- that is, the total netprofit (which is measured based on the net profit attributable to the Listed Company’s shareholders and does not include costsincurred by the shares under this ESOP) in 2019 and 2020 is not lower than RMB3.2 billion), then 30% of the total number of sharesin this ESOP can be unlocked. According to the Audit Report issued by Huaxing Certified Public Accountants LLP (special generalpartnership), the net profit attributable to the Listed Company’s shareholders in 2020 of RMB2.761 billion, and the net profitattributable to the Listed Company’s shareholders minus the cost incurred by this ESOP in 2020 is RMB2.893 billion. Therefore, thetotal net profit attributable to the Listed Company’s shareholders in 2019 and 2020 minus the cost incurred by this ESOP is
RMB5.077 billion. That is, the Company's performance target defined in the ESOP has been achieved. Therefore, 30% of the totalnumber of shares under this ESOP were unlocked 24 months after the date (27 July 2019) of the Company's announcement on thetransfer of the last shares to this ESOP upon the confirmation that the performance target has been achieved. That is, the lock-upperiod of the second batch of shares (6,704,261 shares) under the Company's third ESOP will expire on 26 July 2021.
IV Significant Events of Subsidiaries
√ Applicable □ Not applicable
Particulars about the commitment in relation to the 2020 annual performance of Guangzhou 37 Network Technology Co., Ltd.(hereinafter, “Guangzhou 37 Network”):
Entities involved in the profit and shareholding increase commitment (namely, Xu Zhigao, He Hong, Liu Jun, and Liu Jiayu) haveundertaken in their transaction with the Company regarding the Company’s acquisition of a 20% indirect interest in Guangzhou 37Network that the 2020, 2021 and 2022 annual net profits of Guangzhou 37 Network should not be lower than RMB1.2 billion,RMB1.44 billion and RMB1.656 billion, respectively. Note: The said net profit refer to the consolidated (if applicable) net profitattributable to Guangzhou 37 Network’s shareholders after deducting non-recurring profits and losses (except for statutorygovernment subsidies and tax preferences) in an accounting year of the commitment period. For further information, see theAnnouncement on the Plan to Acquire a 20% Indirect Interest in Guangzhou 37 Network Technology Co., Ltd. disclosed by theCompany on the website http://www.cninfo.com.cn dated 8 December 2020.
As audited, the 2020 annual net profit attributable to Guangzhou 37 Network’s shareholders and the 2020 annual net profitattributable to Guangzhou 37 Network’s shareholders after deducting non-recurring profits and losses (except for statutorygovernment subsidies and tax preferences) stood at RMB1,399.5432 million and RMB1,389.7833 million, respectively. As such, the2020 annual net profit attributable to Guangzhou 37 Network’s shareholders after deducting non-recurring profits and losses(except for statutory government subsidies and tax preferences) exceeded the promised annual net profit of RMB1.2 billion for2020.
Part V Share Changes and Shareholder InformationI Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in the Reporting Period (+/-) | After | |||||||
| Number | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Number | Percentage (%) | |
| 1. Restricted shares | 743,503,103 | 35.20% | 105,612,584 | -65,757,025 | 39,855,559 | 783,358,662 | 35.32% | ||
| 1.1 Shares held by the government | |||||||||
| 1.2 Shares held by state-owned corporations | 5,041,411 | 5,041,411 | 5,041,411 | 0.23% | |||||
| 1.3 Shares held by other domestic investors | 743,503,103 | 35.20% | 100,571,173 | -65,757,025 | 34,814,148 | 778,317,251 | 35.09% | ||
| Including: Shares held by domestic corporations | 97,690,367 | 97,690,367 | 97,690,367 | 4.40% | |||||
| Shares held by domestic natural persons | 743,503,103 | 35.20% | 2,880,806 | -65,757,025 | -62,876,219 | 680,626,884 | 30.69% | ||
| 1.4 Shares held by overseas investors | |||||||||
| Including: Shares held by overseas corporations | |||||||||
| Shares held by overseas natural persons | |||||||||
| 2. Un-restricted shares | 1,368,748,594 | 64.80% | 65,757,025 | 65,757,025 | 1,434,505,619 | 64.68% | |||
| 2.1 RMB-denominated common shares | 1,368,748,594 | 64.80% | 65,757,025 | 65,757,025 | 1,434,505,619 | 64.68% | |||
| 2.2 Domestically listed foreign shares | |||||||||
| 2.3 Overseas listed foreign shares | |||||||||
| 2.4 Others | |||||||||
| 3. Total shares | 2,112,251,697 | 100.00% | 105,612,584 | 0 | 105,612,584 | 2,217,864,281 | 100.00% |
Reasons for share changes:
√ Applicable □ Not applicable
With the Reply on Approval of the Application of Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd. for PrivatePlacement (CSRC Permit [2021] No. 16) issued by the CSRC, the Company was approved to issue no more than 105,612,584 sharesin a private placement. In the event of a changed share capital resulted from any bonus issue from profit or capital reserves, thenumber of shares to be issued could be adjusted accordingly. Eventually, the Company issued 105,612,584 RMB-denominatedcommon shares (A-stock) in a private placement to 14 specified entities, increasing its total share capital from 2,112,251,697 sharesto 2,217,864,281 shares. These newly issued shares were allowed for public trading on 10 March 2021. For further information, seethe Report on the Private Placement of Shares by Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd. & theListing Announcement of these Shares (Summary) disclosed by the Company dated 8 March 2021.
Approval of share changes:
√ Applicable □ Not applicable
With the Reply on Approval of the Application of Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd. for PrivatePlacement (CSRC Permit [2021] No. 16) issued by the CSRC, the Company was approved to issue no more than 105,612,584 sharesin a private placement. In the event of a changed share capital resulted from any bonus issue from profit or capital reserves, thenumber of shares to be issued could be adjusted accordingly. For further information, see the Announcement No. 2021-001 on theReceipt of the CSRC Approval Document for the Private Placement disclosed by the Company on 13 January 2021.
Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to the Company’scommon shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
√ Applicable □ Not applicable
Based on the diluted share capital of 2,217,864,281.00 shares, for the 12 months ended 31 December 2020, the basic earnings pershare, diluted earnings per share, and equity per share attributable to the Company’s common shareholders were RMB1.24,RMB1.24 and RMB2.72, respectively; and for the six months ended 30 June 2021, the corresponding amounts were RMB0.39,RMB0.39 and RMB4.23, respectively.II Issuance and Listing of Securities
√ Applicable □ Not applicable
| Name of stock and its derivative | Issue date | Issue price (or interest | Issued number | Listing date | Number approved for | Termination date of | Index to disclosed | Disclosure date |
| securities | rate) | public trading | transaction | information | ||||
| Stocks | ||||||||
| Private Placement of 37 Interactive Entertainment | 24 February 2021 | 27.77 | 105,612,584 | 10 March 2021 | 105,612,584 | http://www.cninfo.com.cn | 8 March 2021 | |
| Convertible corporate bonds, convertible corporate bonds with warrants, and corporate bonds | ||||||||
| Other derivative securities | ||||||||
Particulars about the securities (exclusive of preference shares) issued in the Reporting Period:
With the Reply on Approval of the Application of Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd. for PrivatePlacement (CSRC Permit [2021] No. 16) issued by the CSRC, the Company was approved to issue no more than 105,612,584 sharesin a private placement. Eventually, the Company issued 105,612,584 RMB-denominated common shares (A-stock) in a privateplacement to 14 specified entities, increasing its total share capital from 2,112,251,697 shares to 2,217,864,281 shares. These newlyissued shares were allowed for public trading on 10 March 2021.III Shareholders and Their Holdings as at the Period-End
Unit: share
| Number of common shareholders | 161,103 | Number of preferred shareholders with resumed voting rights (if any) (see note 8) | 0 | |||||||
| 5% or greater common shareholders or the top 10 common shareholders | ||||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Common shares held | Increase/decrease in the Reporting Period | Restricted common shares held | Un-restricted common shares held | Pledged, marked or frozen status | |||
| Status | Shares | |||||||||
| Li Weiwei | Domestic natural person | 14.52% | 322,113,019 | -39,300,000 | 271,059,764 | 51,053,255 | Pledged | 14,500,000 | ||
| Zeng Kaitian | Domestic natural person | 11.06% | 245,344,374 | 0 | 184,008,280 | 61,336,094 | Pledged | 9,100,000 | ||
| Hu Yuhang | Domestic natural person | 8.53% | 189,197,684 | 41,340,000 | 141,898,263 | 47,299,421 | Pledged | 7,800,000 | ||
| Wu Weihong | Domestic natural person | 4.36% | 96,692,962 | -4,840,000 | 76,149,721 | 20,543,241 | ||||
| Hong Kong Securities Clearing Company Ltd. | Overseas corporation | 3.26% | 72,268,007 | -10,504,079 | 0 | 72,268,007 | ||||
| Wu Weidong | Domestic natural person | 2.86% | 63,323,257 | -27,196,000 | 0 | 63,323,257 | ||||
| Wu Xushun | Domestic natural person | 2.26% | 50,070,682 | 0 | 0 | 50,070,682 | ||||
| China Merchants Bank | Other | 1.14% | 25,200,114 | 14,198,636 | 0 | 25,200,114 | ||||
| Co., Ltd.－Xingquan Herun Mixed Securities Investment Fund | ||||||||||
| China Merchants Bank Co., Ltd.－Ruiyuan Balanced Value Three-Year Mixed Securities Investment Fund | Other | 1.05% | 23,236,844 | 14,054,846 | 5,401,532 | 17,835,312 | ||||
| China Everbright Bank Company Limited Co., Ltd.－Xingquan Business Model Selected Mixed Securities Investment Fund (LOF) | Other | 1.01% | 22,359,486 | 10,274,385 | 0 | 22,359,486 | ||||
| Strategic investor or general corporation becoming a top-10 common shareholder in a rights issue (if any) (see note 3) | Not applicable | |||||||||
| Related or acting-in-concert parties among the shareholders above | 1. Among the top 10 shareholders of the Company, Wu Xushun is the father of Wu Weihong and Wu Weidong, which makes them shareholders acting in concert. 2. The Company is not aware of whether there is, among the other top 10 shareholders, any related parties or acting-in-concert parties as defined in the Measures on the Administration of Acquisition of Listed Companies. | |||||||||
| Explain if any of the shareholders above was involved in entrusting/being entrusted with voting rights or waiving voting rights | N/A | |||||||||
| Special account for share repurchases (if any) among the top 10 shareholders (see note 11) | N/A | |||||||||
| Top 10 un-restricted common shareholders | ||||||||||
| Name of shareholder | Un-restricted common shares held | Shares by class | ||||||||
| Class | Shares | |||||||||
| Hong Kong Securities Clearing Company Ltd. | 72,268,007 | RMB-denominated common shares | 72,268,007 | |||||||
| Wu Weidong | 63,323,257 | RMB-denominated common shares | 63,323,257 | |||||||
| Zeng Kaitian | 61,336,094 | RMB-denominated common | 61,336,094 | |||||||
| shares | |||
| Li Weiwei | 51,053,255 | RMB-denominated common shares | 51,053,255 |
| Wu Xushun | 50,070,682 | RMB-denominated common shares | 50,070,682 |
| Hu Yuhang | 47,299,421 | RMB-denominated common shares | 47,299,421 |
| China Merchants Bank Co., Ltd.－Xingquan Herun Mixed Securities Investment Fund | 25,200,114 | RMB-denominated common shares | 25,200,114 |
| China Everbright Bank Company Limited Co., Ltd.－Xingquan Business Model Selected Mixed Securities Investment Fund (LOF) | 22,359,486 | RMB-denominated common shares | 22,359,486 |
| Wu Weihong | 20,543,241 | RMB-denominated common shares | 20,543,241 |
| Xu Zhigao | 19,943,951 | RMB-denominated common shares | 19,943,951 |
| Related or acting-in-concert parties among the top 10 un-restricted common shareholders, as well as between the top 10 un-restricted common shareholders and the top 10 common shareholders | 1. Among the top 10 shareholders of the Company, Wu Xushun is the father of Wu Weihong and Wu Weidong, which makes them shareholders acting in concert. 2. The Company is not aware of whether there is, among the other top 10 shareholders, any related parties or acting-in-concert parties as defined in the Measures on the Administration of Acquisition of Listed Companies. | ||
| Top 10 common shareholders engaged in securities margin trading (if any) (see note 4) | None | ||
Indicate by tick mark whether any of the top 10 common shareholders or the top 10 un-restricted common shareholders of theCompany conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.IV Changes in the Shareholdings of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
| Name | Office title | Incumbent/Former | Beginning shareholding | Increase in the period | Decrease in the period | Ending shareholding | Beginning restricted | Restricted shares | Ending restricted |
| (share) | (share) | (share) | (share) | shares granted (share) | granted in the period (share) | shares granted (share) | |||
| Li Weiwei | Chairman of the Board and General Manger | Incumbent | 361,413,019 | 0 | -39,300,000 | 322,113,019 | 0 | 0 | 0 |
| Zeng Kaitian | Vice Chairman of the Board | Incumbent | 245,344,374 | 0 | 0 | 245,344,374 | 0 | 0 | 0 |
| Hu Yuhang | Director | Incumbent | 147,857,684 | 41,340,000 | 0 | 189,197,684 | 0 | 0 | 0 |
| Yang Jun | Director and Deputy General Manager | Incumbent | 693,400 | 2,100,000 | 0 | 2,793,400 | 0 | 0 | 0 |
| Li Yang | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Chen Jianlin | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Ye Xin | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Liu Guangqiang | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| He Yang | Chairman of the Supervisory Committee | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cheng Lin | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Liu Fengyong | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Zhu Huaimin | Deputy General Manager | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Ye Wei | Chief Financial Officer and Board Secretary | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | -- | -- | 755,308,477 | 43,440,000 | -39,300,000 | 759,448,477 | 0 | 0 | 0 |
Part VI Financial StatementsI Independent Auditor’s ReportAre these interim financial statements audited by an independent auditor?
□ Yes √ No
They are unaudited by such an auditor.II Financial StatementsCurrency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd.
30 June 2021
Unit: RMB
| Item | 30 June 2021 | 31 December 2020 |
| Current assets: | ||
| Monetary funds | 3,927,610,090.55 | 1,776,856,909.85 |
| Transaction settlement funds | ||
| Loans to other banks | ||
| Trading financial assets | 2,144,978,476.54 | 1,321,234,029.61 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 1,361,016,422.73 | 1,164,657,998.35 |
| Accounts receivable financing | ||
| Prepayments | 1,116,715,243.28 | 999,890,031.00 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 102,076,932.89 | 85,138,773.10 |
| Including: Interest receivable | ||
| Dividends receivable | 10,100,000.00 | 10,100,000.00 |
| Redemptory monetary capital for sale | ||
| Inventories |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 282,207,588.96 | 452,435,284.38 |
| Total current assets | 8,934,604,754.95 | 5,800,213,026.29 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 428,731,774.82 | 360,566,552.56 |
| Other equity investments | 364,998,286.10 | 294,824,927.02 |
| Other non-current financial assets | 423,216,689.35 | 372,195,483.93 |
| Investment properties | ||
| Fixed assets | 906,707,500.39 | 922,736,638.76 |
| Construction in progress | 10,232,260.08 | 4,180,019.75 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 89,700,305.83 | |
| Intangible assets | 1,100,776,339.37 | 1,108,434,647.51 |
| Development expenditure | ||
| Goodwill | 1,589,065,048.53 | 1,589,065,048.53 |
| Long-term deferred expenses | 115,071,414.74 | 71,442,122.88 |
| Deferred income tax assets | 11,076,743.28 | 9,967,411.35 |
| Other non-current assets | 1,950,014.04 | 30,705,621.27 |
| Total non-current assets | 5,041,526,376.53 | 4,764,118,473.56 |
| Total assets | 13,976,131,131.48 | 10,564,331,499.85 |
| Current liabilities: | ||
| Short-term loans | 247,063,500.00 | 889,324,326.07 |
| Loans from the central bank | ||
| Loans from other banks | ||
| Trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 563,500,000.00 | 393,351,017.72 |
| Accounts payable | 1,636,208,353.34 | 1,078,096,658.12 |
| Advances from customers | ||
| Contract liabilities | 246,023,708.35 | 204,231,829.45 |
| Financial assets sold under repurchase agreements | ||
| Customer deposits and interbank deposits | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Employee benefits payable | 300,377,802.41 | 410,000,161.52 |
| Taxes payable | 188,664,415.76 | 160,224,192.87 |
| Other payables | 1,187,472,426.30 | 1,317,972,818.79 |
| Including: Interest payable | ||
| Dividends payable | 443,572,856.20 | |
| Handling charges and commissions payable | ||
| Reinsurance payables | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 29,279,326.08 | |
| Other current liabilities | 41,162,474.93 | 45,287,027.61 |
| Total current liabilities | 4,439,752,007.17 | 4,498,488,032.15 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 64,256,151.56 | |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | ||
| Deferred income tax liabilities | 31,678.49 | 391,763.97 |
| Other non-current liabilities | ||
| Total non-current liabilities | 64,287,830.05 | 391,763.97 |
| Total liabilities | 4,504,039,837.22 | 4,498,879,796.12 |
| Shareholders' equity: | ||
| Share capital | 2,217,864,281.00 | 2,112,251,697.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 2,953,245,644.37 | 114,693,519.91 |
| Less: Treasury shares | ||
| Other comprehensive income | -160,292,383.05 | -149,074,272.37 |
| Special reserves | ||
| Surplus reserves | 4,868,573.36 | |
| General risk reserves | ||
| Retained earnings | 4,361,748,546.69 | 3,959,512,681.41 |
| Total equity attributable to shareholders of the Company | 9,377,434,662.37 | 6,037,383,625.95 |
| Non-controlling interests | 94,656,631.89 | 28,068,077.78 |
| Total shareholders' equity | 9,472,091,294.26 | 6,065,451,703.73 |
| Total liabilities and shareholders’ equity | 13,976,131,131.48 | 10,564,331,499.85 |
Legal representative: Li Weiwei Chief Financial Officer: Ye WeiBoard Secretary: Ye Wei
2. Balance Sheet of the Company
Unit: RMB
| Item | 30 June 2021 | 31 December 2020 |
| Current assets: | ||
| Monetary funds | 1,002,072,262.06 | 274,246.17 |
| Trading financial assets | 751,752,876.71 | |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | ||
| Accounts receivable financing | ||
| Prepayments | ||
| Other receivables | 1,161,095,000.00 | 1,000,017,597.10 |
| Including: Interest receivable |
| Dividends receivable | 1,000,000,000.00 | |
| Inventories | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 5,316,826.05 | 3,352,745.35 |
| Total current assets | 2,920,236,964.82 | 1,003,644,588.62 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 9,492,589,288.09 | 9,449,976,259.36 |
| Other equity investments | ||
| Other non-current financial assets | 29,040,909.54 | 29,040,909.54 |
| Investment properties | ||
| Fixed assets | ||
| Construction in progress | ||
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 9,918,654.37 | |
| Intangible assets | ||
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred income tax assets | ||
| Other non-current assets | ||
| Total non-current assets | 9,531,548,852.00 | 9,479,017,168.90 |
| Total assets | 12,451,785,816.82 | 10,482,661,757.52 |
| Current liabilities: | ||
| Short-term loans | 150,000,000.00 | |
| Trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 186,277.50 |
| Advances from customers | ||
| Contract liabilities | ||
| Employee benefits payable | 382,546.97 | 492,264.00 |
| Taxes payable | 147,427.78 | 4,749,796.66 |
| Other payables | 2,328,050,805.51 | 3,062,581,644.17 |
| Including: Interest payable | ||
| Dividends payable | 443,572,856.20 | |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 2,152,365.88 | |
| Other current liabilities | ||
| Total current liabilities | 2,480,733,146.14 | 3,068,009,982.33 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 7,123,309.63 | |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 7,123,309.63 | |
| Total liabilities | 2,487,856,455.77 | 3,068,009,982.33 |
| Shareholders' equity: | ||
| Share capital | 2,217,864,281.00 | 2,112,251,697.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 6,598,481,707.33 | 3,759,929,582.87 |
| Less: Treasury shares | ||
| Other comprehensive income | -60,000,000.00 | -60,000,000.00 |
| Special reserves |
| Surplus reserves | 446,930,773.53 | 442,062,200.17 |
| Retained earnings | 760,652,599.19 | 1,160,408,295.15 |
| Total shareholders' equity | 9,963,929,361.05 | 7,414,651,775.19 |
| Total liabilities and shareholders’ equity | 12,451,785,816.82 | 10,482,661,757.52 |
3. Consolidated Income Statement
Unit: RMB
| Item | H1 2021 | H1 2020 |
| 1. Total operating revenue | 7,538,949,378.53 | 7,988,675,195.57 |
| Including: Operating revenue | 7,538,949,378.53 | 7,988,675,195.57 |
| Interest income | ||
| Premium income | ||
| Handling charge and commission income | ||
| 2. Total operating costs and expenses | 6,792,689,615.37 | 6,257,275,520.69 |
| Including: Cost of sales | 1,120,509,771.85 | 863,666,663.98 |
| Interest expense | ||
| Handling charge and commission expenses | ||
| Surrenders | ||
| Net claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends | ||
| Reinsurance premium expenses | ||
| Taxes and surcharges | 17,014,990.44 | 22,337,290.11 |
| Distribution and selling expenses | 4,785,388,947.28 | 4,549,628,282.98 |
| General and administrative expenses | 222,001,708.95 | 166,919,490.05 |
| Research and development expenses | 673,649,742.25 | 644,896,512.00 |
| Financial expenses | -25,875,545.40 | 9,827,281.57 |
| Including: Interest expense | 11,764,539.22 | 34,655,637.60 |
| Interest income | 30,785,993.18 | 23,176,748.76 |
| Add: Other income | 76,652,164.24 | 95,213,596.55 |
| Investment income (“-” for loss) | 73,957,894.70 | 108,093,257.02 |
| Including: Share of profits and losses of joint ventures and associates | -7,279,101.80 | 13,131,170.06 |
| Gain on derecognition of financial assets measured at amortised cost (“-” for loss) | ||
| Gain on exchange (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 106,592,018.27 | 115,130,432.61 |
| Impairment loss on credit (“-” for loss) | 1,130,937.77 | -7,237,074.09 |
| Impairment loss on assets (“-” for loss) | -44,335,968.65 | |
| Gain on disposal of assets (“-” for loss) | 254,206.01 | 75,379.94 |
| 3. Operating profit (“-” for loss) | 1,004,846,984.15 | 1,998,339,298.26 |
| Add: Non-operating income | 2,204,522.71 | 2,297,869.41 |
| Less: Non-operating expenses | 713,926.50 | 7,429,745.23 |
| 4. Profit before income tax expenses (“-” for loss) | 1,006,337,580.36 | 1,993,207,422.44 |
| Less: Income tax expenses | 162,728,946.02 | 110,659,828.94 |
| 5. Net profit (“-” for net loss) | 843,608,634.34 | 1,882,547,593.50 |
| 5.1 Classified by continuity of operations | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 843,608,634.34 | 1,882,547,593.50 |
| 5.1.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5.2 Classified by ownership of the equity | ||
| 5.2.1 Net profit attributable to shareholders of the Company | 853,717,855.65 | 1,699,736,123.46 |
| 5.2.2 Net profit attributable to non-controlling interests | -10,109,221.31 | 182,811,470.04 |
| 6. Other comprehensive income, net of tax | -11,218,110.68 | 10,361,892.43 |
| Other comprehensive income attributable to shareholders of the Company, net of tax | -11,218,110.68 | 10,380,760.96 |
| 6.1 Other comprehensive income that will not be reclassified subsequently to profit or loss | -2,500,000.00 | |
| 6.1.1 Changes caused by remeasurement of defined benefit pension schemes | ||
| 6.1.2 Share of the other comprehensive income of the investee accounted for using equity method that will not be reclassified subsequently to profit or loss | ||
| 6.1.3 Changes in fair value of other equity investments | -2,500,000.00 | |
| 6.1.4 Changes in the fair value of the company's |
| own credit risk | ||
| 6.1.5 Others | ||
| 6.2 Other comprehensive income that will be reclassified subsequently to profit or loss | -8,718,110.68 | 10,380,760.96 |
| 6.2.1 Share of the other comprehensive income of the investee accounted for using equity method that will be reclassified subsequently to profit or loss | ||
| 6.2.2 Changes in fair value of other equity investments | ||
| 6.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 6.2.4 Allowance for credit impairments in other debt investments | ||
| 6.2.5 Cash flow hedge reserve | ||
| 6.2.6 Exchange differences on translation of foreign currency financial statements | -8,718,110.68 | 10,380,760.96 |
| 6.2.7 Others | ||
| Other comprehensive income attributable to non-controlling interests, net of tax | -18,868.53 | |
| 7. Total comprehensive income | 832,390,523.66 | 1,892,909,485.93 |
| Total comprehensive income attributable to shareholders of the Company | 842,499,744.97 | 1,710,116,884.42 |
| Total comprehensive income attributable to non-controlling interests | -10,109,221.31 | 182,792,601.51 |
| 8. Earnings per share: | ||
| 8.1 Basic earnings per share | 0.39 | 0.80 |
| 8.2 Diluted earnings per share | 0.39 | 0.80 |
Where business combinations under common control occurred in the current period, the net profit achieved by the acquireesbefore the combinations was RMB0.00, with the amount for the same period of last year being RMB0.00.Legal representative: Li Weiwei Chief Financial Officer: Ye WeiBoard Secretary: Ye Wei
4. Income Statement of the Company
Unit: RMB
| Item | H1 2021 | H1 2020 |
| 1. Operating revenue | 0.00 | 0.00 |
| Less: Cost of sales | 0.00 | 0.00 |
| Taxes and surcharges | 30,644.49 | 21,933.20 |
| Distribution and selling expenses | ||
| General and administrative expenses | 6,139,344.71 | 2,375,644.75 |
| Research and development expenses | ||
| Financial expenses | -4,741,019.01 | 389,882.06 |
| Including: Interest expense | 2,429,147.82 | |
| Interest income | 7,162,870.38 | 810.35 |
| Add: Other income | 4,634,292.84 | 439,106.01 |
| Investments income (“-” for loss) | 43,717,534.24 | -714,419.97 |
| Including: Share of profits and losses of joint ventures and associates | -714,419.97 | |
| Gain on derecognition of financial assets measured at amortised cost (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 1,752,876.71 | |
| Impairment loss on credit (“-” for loss) | 10,000.00 | 44,468.66 |
| Impairment loss on assets (“-” for loss) | ||
| Gain on disposal of assets (“-” for loss) | ||
| 2. Operating profit (“-” for loss) | 48,685,733.60 | -3,018,305.31 |
| Add: Non-operating income | 0.63 | |
| Less: Non-operating expenses | ||
| 3. Profit before income tax expenses (“-” for loss) | 48,685,733.60 | -3,018,304.68 |
| Less: Income tax expenses | ||
| 4. Net profit (“-” for net loss) | 48,685,733.60 | -3,018,304.68 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 48,685,733.60 | -3,018,304.68 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | ||
| 5.1 Other comprehensive income that will not be reclassified subsequently to profit or loss | ||
| 5.1.1 Changes caused by remeasurement of defined benefit pension schemes | ||
| 5.1.2 Share of the other comprehensive income of the investee accounted for using equity method that will not be |
| reclassified subsequently to profit or loss | ||
| 5.1.3 Changes in fair value of other equity investments | ||
| 5.1.4 Changes in the fair value of the company's own credit risk | ||
| 5.1.5 Others | ||
| 5.2 Other comprehensive income that will be reclassified subsequently to profit or loss | ||
| 5.2.1 Share of the other comprehensive income of the investee accounted for using equity method that will be reclassified subsequently to profit or loss | ||
| 5.2.2 Changes in fair value of other equity investments | ||
| 5.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 5.2.4 Allowance for credit impairments in other debt investments | ||
| 5.2.5 Cash flow hedge reserve | ||
| 5.2.6 Exchange differences on translation of foreign currency financial statements | ||
| 5.2.7 Others | ||
| 6. Total comprehensive income | 48,685,733.60 | -3,018,304.68 |
| 7. Earnings per share: | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | H1 2021 | H1 2020 |
| 1. Cash flows from operating activities: | ||
| Cash received from the sales of goods or rendering services | 7,676,444,468.63 | 8,468,127,558.75 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in loans from the central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received on original insurance contracts | ||
| Net proceeds from reinsurance | ||
| Net increase in deposits and investments of policy holders | ||
| Interest, handling charges and commissions received |
| Net increase in loans from other banks | ||
| Net increase in proceeds from repurchase transactions | ||
| Net proceeds from acting trading of securities | ||
| Refunds of taxes and levies | 6,041,391.30 | 6,317,294.49 |
| Cash received relating to other operating activities | 96,901,049.99 | 106,875,881.05 |
| Sub-total of cash inflows from operating activities | 7,779,386,909.92 | 8,581,320,734.29 |
| Cash paid for purchases of goods and services | 1,263,433,673.37 | 1,036,250,684.73 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in the central bank and other banks and financial institutions | ||
| Payments for claims on original insurance contracts | ||
| Net increase in loans to other banks | ||
| Interest, handling charges and commissions paid | ||
| Policy dividends paid | ||
| Cash paid to and on behalf of employees | 930,199,318.50 | 580,145,971.94 |
| Payments of taxes and levies | 176,556,465.72 | 196,576,891.94 |
| Cash paid relating to other operating activities | 4,155,278,299.87 | 4,318,120,638.78 |
| Sub-total of cash outflows used in operating activities | 6,525,467,757.46 | 6,131,094,187.39 |
| Net cash flows from operating activities | 1,253,919,152.46 | 2,450,226,546.90 |
| 2. Cash flows from investing activities: | ||
| Cash received from disposal of investments | 258,995,260.75 | 224,285,017.49 |
| Cash received from investment income | 53,461,764.70 | 53,388,661.32 |
| Cash received from disposal of fixed assets, intangible assets and other long-term assets | 691,899.95 | 614,635.00 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received relating to other investing activities | 2,157,163,728.00 | 4,678,500,000.00 |
| Sub-total of cash inflows from investing activities | 2,470,312,653.40 | 4,956,788,313.81 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 148,350,121.61 | 968,397,533.12 |
| Cash paid to acquire investments | 361,478,743.09 | 86,020,569.50 |
| Net increase in pledged loans granted | ||
| Net cash paid for the acquisition of subsidiaries and other business units | 4,650,000.00 | |
| Cash paid relating to other investing activities | 2,791,497,900.00 | 4,854,790,000.00 |
| Sub-total of cash outflows used in investing activities | 3,305,976,764.70 | 5,909,208,102.62 |
| Net cash flows from/used in investing activities | -835,664,111.30 | -952,419,788.81 |
| 3. Cash flows from financing activities: | ||
| Cash received from capital contributions | 2,980,232,843.10 | |
| Including: Cash received from capital contributions by non-controlling interests of subsidiaries | 76,700,000.00 | |
| Cash received from borrowings | 247,468,500.00 | |
| Cash received relating to other financing activities | 889,324,326.07 | |
| Sub-total of cash inflows from financing activities | 3,227,701,343.10 | 889,324,326.07 |
| Cash repayments of borrowings | 889,324,326.07 | 281,176,106.33 |
| Cash paid for interest and dividends | 9,562,304.72 | 788,329,296.95 |
| Including: Dividends paid by subsidiaries to non-controlling interests | 120,000,000.00 | |
| Cash paid relating to other financing activities | 591,315,699.76 | |
| Sub-total of cash outflows used in financing activities | 1,490,202,330.55 | 1,069,505,403.28 |
| Net cash flows from/used in financing activities | 1,737,499,012.55 | -180,181,077.21 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | -2,225,471.71 | 10,777,687.85 |
| 5. Net increase/decrease in cash and cash equivalents | 2,153,528,582.00 | 1,328,403,368.73 |
| Add: Cash and cash equivalents at beginning of the period | 1,774,081,508.55 | 2,135,260,406.77 |
| 6. Cash and cash equivalents at end of the period | 3,927,610,090.55 | 3,463,663,775.50 |
6. Cash Flow Statement of the Company
Unit: RMB
| Item | H1 2021 | H1 2020 |
| 1. Cash flows from operating activities: | ||
| Cash received from the sales of goods or rendering services | ||
| Refunds of taxes and levies | ||
| Cash received relating to other operating activities | 599,338,422.69 | 650,095,006.21 |
| Sub-total of cash inflows from operating activities | 599,338,422.69 | 650,095,006.21 |
| Cash paid for purchases of goods and services | ||
| Cash paid to and on behalf of employees | 961,537.33 | 545,424.75 |
| Payments of taxes and levies | 2,178,758.00 | 21,933.20 |
| Cash paid relating to other operating activities | 2,370,904,582.14 | 1,016,292,709.85 |
| Sub-total of cash outflows used in operating activities | 2,374,044,877.47 | 1,016,860,067.80 |
| Net cash flows from/used in operating activities | -1,774,706,454.78 | -366,765,061.59 |
| 2. Cash flows from investing activities: | ||
| Cash received from disposal of investments | ||
| Cash received from investment income | 1,043,717,534.24 | 1,000,000,000.00 |
| Cash received from disposal of fixed assets, intangible assets and other long-term assets | ||
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received relating to other investing activities | 550,000,000.00 | |
| Sub-total of cash inflows from investing activities | 1,593,717,534.24 | 1,000,000,000.00 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | ||
| Cash paid to acquire investments | 568,434,240.00 | |
| Net cash paid for the acquisition of subsidiaries and other business units | ||
| Cash paid relating to other investing activities | 1,300,000,000.00 | |
| Sub-total of cash outflows used in investing activities | 1,868,434,240.00 | |
| Net cash flows from/used in investing activities | -274,716,705.76 | 1,000,000,000.00 |
| 3. Cash flows from financing activities: | ||
| Cash received from capital contributions | 2,903,532,843.10 | |
| Cash received from borrowings | 150,000,000.00 | |
| Cash received relating to other financing activities | ||
| Sub-total of cash inflows from financing activities | 3,053,532,843.10 | |
| Cash repayments of borrowings | ||
| Cash paid for interest and dividends | 2,311,666.67 | 633,675,509.10 |
| Cash paid relating to other financing activities | ||
| Sub-total of cash outflows used in financing activities | 2,311,666.67 | 633,675,509.10 |
| Net cash flows from/used in financing activities | 3,051,221,176.43 | -633,675,509.10 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| 5. Net increase/decrease in cash and cash equivalents | 1,001,798,015.89 | -440,570.69 |
| Add: Cash and cash equivalents at beginning of the period | 274,246.17 | 765,545.81 |
| 6. Cash and cash equivalents at end of the period | 1,002,072,262.06 | 324,975.12 |
7. Consolidated Statement of Changes in Shareholders’ Equity
H1 2021
Unit: RMB
| Item | H1 2021 | ||||||||||||||
| Equity attributable to shareholders of the Company | Non-controlling interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Retained earnings | Others | Sub-total | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| 1. Balance as at the end of prior year | 2,112,251,697.00 | 114,693,519.91 | -149,074,272.37 | 3,959,512,681.41 | 6,037,383,625.95 | 28,068,077.78 | 6,065,451,703.73 | ||||||||
| Add: Adjustments for changed accounting policies | -3,040,560.81 | -3,040,560.81 | -2,224.58 | -3,042,785.39 | |||||||||||
| Adjustments for corrections of previous errors | |||||||||||||||
| Adjustments for business | |||||||||||||||
| combinations under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance as at beginning of year | 2,112,251,697.00 | 114,693,519.91 | -149,074,272.37 | 3,956,472,120.60 | 6,034,343,065.14 | 28,065,853.20 | 6,062,408,918.34 | ||||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 105,612,584.00 | 2,838,552,124.46 | -11,218,110.68 | 4,868,573.36 | 405,276,426.09 | 3,343,091,597.23 | 66,590,778.69 | 3,409,682,375.92 | |||||||
| 3.1 Total comprehensive income | -11,218,110.68 | 853,717,855.65 | 842,499,744.97 | -10,109,221.31 | 832,390,523.66 | ||||||||||
| 3.2 Capital contribution and withdrawal by shareholders | 105,612,584.00 | 2,838,552,124.46 | 2,944,164,708.46 | 76,700,000.00 | 3,020,864,708.46 | ||||||||||
| 3.2.1 Common shares contribution and withdrawal by shareholders | 105,612,584.00 | 2,795,939,095.73 | 2,901,551,679.73 | 76,700,000.00 | 2,978,251,679.73 | ||||||||||
| 3.2.2 Capital contribution and withdrawal by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included | 42,613,028.73 | 42,613,028.73 | 42,613,028.73 |
| in shareholders’ equity | |||||||||||||||
| 3.2.4 Others | |||||||||||||||
| 3.3 Profit distribution | 4,868,573.36 | -448,441,429.56 | -443,572,856.20 | -443,572,856.20 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | 4,868,573.36 | 4,868,573.36 | 4,868,573.36 | ||||||||||||
| 3.3.2 Appropriation to general risk reserves | |||||||||||||||
| 3.3.3 Distribution to shareholders | -448,441,429.56 | -448,441,429.56 | -448,441,429.56 | ||||||||||||
| 3.3.4 Others | |||||||||||||||
| 3.4 Internal transfers within shareholders’ equity | |||||||||||||||
| 3.4.1 Capital reserves transferred into capital (or share capital) | |||||||||||||||
| 3.4.2 Surplus reserves transferred into capital (or |
| share capital) | |||||||||||||||
| 3.4.3 Surplus reserves for making up losses | |||||||||||||||
| 3.4.4 Changes in defined benefit pension schemes transferred into retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred into retained earnings | |||||||||||||||
| 3.4.6 Others | |||||||||||||||
| 3.5 Special reserves | |||||||||||||||
| 3.5.1 Increase in the period | |||||||||||||||
| 3.5.2 Used in the period | |||||||||||||||
| 3.6 Others | |||||||||||||||
| 4. Balance as at the end of the period | 2,217,864,281.00 | 2,953,245,644.37 | -160,292,383.05 | 4,868,573.36 | 4,361,748,546.69 | 9,377,434,662.37 | 94,656,631.89 | 9,472,091,294.26 |
H1 2020
Unit: RMB
| Item | H1 2020 | ||||||||||||||
| Equity attributable to shareholders of the Company | Non-controlling interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Retained earnings | Others | Sub-total | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| 1. Balance as at the end of prior year | 2,112,251,697.00 | 73,153,800.49 | -94,582,500.13 | 227,390,965.90 | 4,711,093,895.82 | 7,029,307,859.08 | 264,400,744.45 | 7,293,708,603.53 | |||||||
| Add: Adjustments for changed accounting policies | |||||||||||||||
| Adjustments for corrections of previous errors | |||||||||||||||
| Adjustments for business combinations under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance as at beginning of year | 2,112,251,697.00 | 73,153,800.49 | -94,582,500.13 | 227,390,965.90 | 4,711,093,895.82 | 7,029,307,859.08 | 264,400,744.45 | 7,293,708,603.53 | |||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 83,785,280.26 | 10,380,760.96 | 1,066,060,614.36 | 1,160,226,655.58 | 66,740,026.93 | 1,226,966,682.51 | |||||||||
| 3.1 Total comprehensive income | 10,380,760.96 | 1,699,736,123.46 | 1,710,116,884.42 | 182,792,601.51 | 1,892,909,485.93 | ||||||||||
| 3.2 Capital contribution and withdrawal by shareholders | 83,785,280.26 | 83,785,280.26 | 3,947,425.42 | 87,732,705.68 | |||||||||||
| 3.2.1 Common shares contribution and withdrawal by shareholders | |||||||||||||||
| 3.2.2 Capital contribution and withdrawal by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in shareholders’ | 83,785,280.26 | 83,785,280.26 | 3,947,425.42 | 87,732,705.68 |
| equity | |||||||||||||||
| 3.2.4 Others | |||||||||||||||
| 3.3 Profit distribution | -633,675,509.10 | -633,675,509.10 | -120,000,000.00 | -753,675,509.10 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general risk reserves | |||||||||||||||
| 3.3.3 Distribution to shareholders | -633,675,509.10 | -633,675,509.10 | -120,000,000.00 | -753,675,509.10 | |||||||||||
| 3.3.4 Others | |||||||||||||||
| 3.4 Internal transfers within shareholders’ equity | |||||||||||||||
| 3.4.1 Capital reserves transferred into capital (or share capital) | |||||||||||||||
| 3.4.2 Surplus reserves transferred into capital (or share |
| capital) | |||||||||||||||
| 3.4.3 Surplus reserves for making up losses | |||||||||||||||
| 3.4.4 Changes in defined benefit pension schemes transferred into retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred into retained earnings | |||||||||||||||
| 3.4.6 Others | |||||||||||||||
| 3.5 Special reserves | |||||||||||||||
| 3.5.1 Increase in the period | |||||||||||||||
| 3.5.2 Used in the period | |||||||||||||||
| 3.6 Others | |||||||||||||||
| 4. Balance as at the end of the period | 2,112,251,697.00 | 156,939,080.75 | -84,201,739.17 | 227,390,965.90 | 5,777,154,510.18 | 8,189,534,514.66 | 331,140,771.38 | 8,520,675,286.04 |
8. Statement of Changes in Shareholders’ Equity of the Company
H1 2021
Unit: RMB
| Item | H1 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Retained earnings | Others | Total shareholders' equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| 1. Balance as at the end of prior year | 2,112,251,697.00 | 3,759,929,582.87 | -60,000,000.00 | 442,062,200.17 | 1,160,408,295.15 | 7,414,651,775.19 | ||||||
| Add: Adjustments for changed accounting policies | ||||||||||||
| Adjustments for corrections of previous errors | ||||||||||||
| Others | ||||||||||||
| 2. Balance as at beginning of year | 2,112,251,697.00 | 3,759,929,582.87 | -60,000,000.00 | 442,062,200.17 | 1,160,408,295.15 | 7,414,651,775.19 | ||||||
| 3. Increase/ decrease in the period (“-” for | 105,612,584.00 | 2,838,552,124.46 | 4,868,573.36 | -399,755,695.96 | 2,549,277,585.86 | |||||||
| decrease) | ||||||||||||
| 3.1 Total comprehensive income | 48,685,733.60 | 48,685,733.60 | ||||||||||
| 3.2 Capital contribution and withdrawal by shareholders | 105,612,584.00 | 2,838,552,124.46 | 2,944,164,708.46 | |||||||||
| 3.2.1 Common shares contribution and withdrawal by shareholders | 105,612,584.00 | 2,795,939,095.73 | 2,901,551,679.73 | |||||||||
| 3.2.2 Capital contribution and withdrawal by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in shareholders’ equity | 42,613,028.73 | 42,613,028.73 | ||||||||||
| 3.2.4 Others | ||||||||||||
| 3.3 Profit distribution | 4,868,573.36 | -448,441,429.56 | -443,572,856.20 | |||||||||
| 3.3.1 Appropriation to surplus reserves | 4,868,573.36 | -4,868,573.36 | ||||||||||
| 3.3.2 Distribution to | -443,572,856.20 | -443,572,856.20 |
| shareholders | ||||||||||||
| 3.3.3 Others | ||||||||||||
| 3.4 Internal transfers within shareholders’ equity | ||||||||||||
| 3.4.1 Capital reserves transferred into capital (or share capital) | ||||||||||||
| 3.4.2 Surplus reserves transferred into capital (or share capital) | ||||||||||||
| 3.4.3 Surplus reserves for making up losses | ||||||||||||
| 3.4.4 Changes in defined benefit pension schemes transferred into retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred into retained earnings | ||||||||||||
| 3.4.6 Others |
| 3.5 Special reserves | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Others | ||||||||||||
| 4. Balance as at the end of the period | 2,217,864,281.00 | 6,598,481,707.33 | -60,000,000.00 | 446,930,773.53 | 760,652,599.19 | 9,963,929,361.05 |
H1 2020
Unit: RMB
| Item | H1 2020 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Retained earnings | Others | Total shareholders' equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| 1. Balance as at the end of prior year | 2,112,251,697.00 | 3,622,063,902.37 | -52,759,111.69 | 340,080,723.42 | 1,509,926,022.61 | 7,531,563,233.71 | ||||||
| Add: Adjustments for changed accounting policies | ||||||||||||
| Adjustments for | ||||||||||||
| corrections of previous errors | ||||||||||||
| Others | ||||||||||||
| 2. Balance as at beginning of year | 2,112,251,697.00 | 3,622,063,902.37 | -52,759,111.69 | 340,080,723.42 | 1,509,926,022.61 | 7,531,563,233.71 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 87,732,705.68 | -636,693,813.78 | -548,961,108.10 | |||||||||
| 3.1 Total comprehensive income | -3,018,304.68 | -3,018,304.68 | ||||||||||
| 3.2 Capital contribution and withdrawal by shareholders | 87,732,705.68 | 87,732,705.68 | ||||||||||
| 3.2.1 Common shares contribution and withdrawal by shareholders | ||||||||||||
| 3.2.2 Capital contribution and withdrawal by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included | 87,732,705.68 | 87,732,705.68 |
| in shareholders’ equity | ||||||||||||
| 3.2.4 Others | ||||||||||||
| 3.3 Profit distribution | -633,675,509.10 | -633,675,509.10 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Distribution to shareholders | -633,675,509.10 | -633,675,509.10 | ||||||||||
| 3.3.3 Others | ||||||||||||
| 3.4 Internal transfers within shareholders’ equity | ||||||||||||
| 3.4.1 Capital reserves transferred into capital (or share capital) | ||||||||||||
| 3.4.2 Surplus reserves transferred into capital (or share capital) | ||||||||||||
| 3.4.3 Surplus reserves for making |
| up losses | ||||||||||||
| 3.4.4 Changes in defined benefit pension schemes transferred into retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred into retained earnings | ||||||||||||
| 3.4.6 Others | ||||||||||||
| 3.5 Special reserves | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Others | ||||||||||||
| 4. Balance as at the end of the period | 2,112,251,697.00 | 3,709,796,608.05 | -52,759,111.69 | 340,080,723.42 | 873,232,208.83 | 6,982,602,125.61 |