Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
Securities Code: 002174 Securities Abbreviation: YOOZOO Games Announcement Number: 2019-035
Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
I. Important Tip
The summary of this annual report comes from the full text of the annual report. To fully understand the
Company’s operating results, financial situation and future development plan, investors should read the full text of
the annual report carefully in the media designated by the China Securities Regulatory Commission (CSRC).
Statement of Dissension by Directors, Supervisors and Senior Management
Name Title Content and Reason
Statement
Other than the following directors, the other directors personally attended the Board of Directors meeting to review
the annual report
Name of director not present Title of director not present in Reasons for not attending the Name of authorized
in person person meeting in person representative
Non-standard Audit Opinion Prompt
□ Applicable √ Not applicable
Preplan for the distribution of common stock profits during the reporting period considered by the Board of
Directors or the preplan for the transfer of capital stock from the accumulation fund
√ Applicable □ Not applicable
Preplan for the transfer of capital stock from the accumulation fund
□ Applicable√ Not applicable
The profit distribution plan reviewed and approved by the Board of Directors of the Company is: With the base of
865,835,850, distribute cash dividend of RMB 0.00 (tax included) for every 10 shares and 0 shares (tax included)
of bonus share to all stockholders, and not use the accumulation fund to transfer the increased share capital.
Preplan for profit distribution of preferred stock in this reporting period adopted by the resolution of the Board of
Directors
□ Applicable √ Not applicable
II. Basic Information of the Company
1. Company profile
Stock abbreviation YOOZOO Games Stock code 002174
Stock exchange Shenzhen Stock Exchange
Contact person and contact information Secretary of the Board Securities affairs representative
Name Xu Bin Zhu Mengjing
Building 2, Huaxin Business Building 2, Huaxin Business Center,
Address Center, 711 Yishan Rd., Xuhui 711 Yishan Rd., Xuhui District,
District, Shanghai, China Shanghai, China
Tel. 021-33671551 021-33671551
E-mail ir@yoozoo.com ir@yoozoo.com
2. Major business or product brief introduction during the reporting period
As the leading interactive entertainment provider in China, YOOZOO Games focuses on the development,
distribution and operation of mobile games and web games. The Company adheres to the strategy of “Fit-For-
Growth”, based on the three major directions of “Transmedia IP”, “Elite Products” and “Globalization”, adheres to
the corporate mission of “Share Simple Happiness”, and continues to provide high-quality game products and
1
Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
services to global users, so as to enhance the player’s game experience.
During the reporting period, the Company continued to launch several high-quality games such as Era of
Celestials(天使纪元), The 36 Stratagems(三十六计), League of Angels II(女神联盟2), and continued to develop
the three major categories of the MMO, CARD, SLG, which maintained advantages. The Company made in-depth
differentiation of products to improve product quality and IP vitality, and at the same time sought for
breakthroughs to enter new markets such as Anime games, Casual games and H5. During the reporting period, the
Company set up the R&D center in Singapore and branches in India, Turkey, South Korea and Thailand. And the
Company continued to optimize its product matrix to accelerate the globalization and regionalization of the layout.
Based on the long-term operation of mobile games such as Legacy of Discord-Furious Wings(狂暴之翼) and web
games such as League of Angels II(女神联盟2), The company launched new games such as Era of Celestials(天使
纪元) and League of Angels III(女神联盟3), and integrated regional traffic through strategic cooperation and
large-scale exhibitions and other forms of campaigns to further expand the global game distribution network.
The year 2018 has witnessed the industrial environment stabilization and optimization reform. According to China
Game Industry Report in 2018 jointly released by GPC and CNG, the actual sales revenue of the Chinese game
market reached RMB 214.44 billion in 2018 with a year-on-year increase of 5.3%, in which, the actual sales
revenue of mobile games was RMB133.96 billion with a year-on-year increase of 15.4%. But as the approval of
game licenses returns to normal, the industry growth rate is expected to pick up. At the same time, the state pays
more and more attention to the game industry. The digital creative industries, including online games, has been
included in the national nine major strategic emerging industries for key development, establishing the status of
related industries and strengthening the supporting policies for industrial development, which is of milestone
significance. This is also the new historical orientation of the development of the game industry.
In 2018, a major breakthrough in the game industry was the overseas export of game. In 2018, the actual sales
revenue of China’s independent research and development on online overseas games market reached US$ 9.59
billion, a year-on-year increase of 15.8%. As an important part of the cultural industry, the game industry is not
only the digital link connecting tradition and future, but also the world language connecting China and the world in
the Internet era. The game industry is committed to creating cultural self-consciousness and cultural
self-confidence by game creation, better interpreting and expressing traditional Chinese culture through the form
of games, allowing users to experience, understands and even makes spiritual interactions with the traditional
cultural industry in the game, and truly achieves cultural output. The Company has been committed to the global
layout of the games, helping to promote the global spread of Chinese culture by enhancing the culture value of the
games., The Company was ranked 11th in the list of Chinese publishers’ overseas revenue in 2018 released by App
Annie, and was listed in the annual “Top 52 Publishers” list of global revenue for two consecutive years.
3. Major accounting data and financial indicators
(1) Major accounting data and financial indicators for the past three years
Whether the Company needs to retroactively adjust or restate previous accounting data
□ Yes √ No
Unit: RMB
Year-On-Year
2018 2017 2016
Increase/Decrease
Operating income 3,581,253,925.15 3,235,675,454.52 10.68% 2,530,114,414.00
Net profits attributable to the
1,009,116,882.41 655,890,460.38 53.85% 587,879,910.68
listed company shareholders
Net profits attributable to
listed company shareholders
736,716,882.60 598,722,981.56 23.05% 554,853,560.42
after deducting non-recurring
profits and losses
Net cash flows from operating
273,338,494.93 741,508,830.90 -63.14% 561,385,099.68
activities
Basic earning per share
1.15 0.76 51.32% 0.68
(yuan/share)
Diluted earning per share
1.15 0.76 51.32% 0.68
(yuan/share)
Weighted average rate of
23.62% 21.12% 2.50% 24.12%
return on equity
Year-On-Year
End of 2018 End of 2017 End of 2016
Increase/Decrease
Total assets 7,332,575,255.04 6,635,947,807.91 10.50% 4,703,862,967.83
2
Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
Net assets attributable to listed
4,509,617,206.26 4,051,162,418.38 11.32% 2,711,477,777.67
company shareholders
(2) Quarterly major accounting data
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 867,815,132.91 918,972,177.79 836,170,910.12 958,295,704.33
Net profits attributable to the
222,082,812.69 270,903,226.04 189,815,519.09 326,315,324.59
listed company shareholders
Net profit attributable to
listed company shareholders
218,011,849.68 161,484,372.18 176,793,891.48 180,426,769.26
after deducting non-recurring
profits and losses
Net cash flows from
50,110,401.11 -36,389,561.17 106,120,038.01 153,497,616.98
operating activities
Whether the above financial indicators or their added total amount are significantly different from the financial
indicators related to the Company’s disclosed quarterly report and semi-annual report.
□ Yes √ No
4. Share capital and shareholders
(1) Table of the number of common shareholders and preferred shareholders with restored
voting rights and the shareholding situation of the top 10 shareholders
Unit: share
The total number of
The total number of
preferred shareholders
common shareholders
The total number of recovered from the
at the end of the At the end of the
common shareholders at 32,015 32,527 0 voting rights at the end 0
previous month before report
the end of the report of the previous month
the disclosure of the
before the disclosure of
annual report
the annual report
Shareholding situation of the top 10 shareholders
Number of shares Condition of pledge or freezing
Name of Nature of Shareholding Quantity of
holding restricted Stock
shareholders shareholders ratio shareholding Quantity
sales conditions status
Domestic natural
Lin Qi 34.84% 309,536,169 232,152,126 Pledge 302,805,807
person
Ningbo Bonded
Domestic
Area Yongxie
non-state-owned 6.00% 53,308,072
International
legal person
Trade Co., Ltd.
Domestic natural
Wang Qingwei 3.98% 35,378,319 Pledge 4,650,000
person
Guosheng Domestic
Securities Co., non-state-owned 3.90% 34,619,708
Ltd. legal person
Domestic natural
Wang Qingyong 3.65% 32,438,319 Pledge 3,850,000
person
Domestic natural
Zhu Weisong 2.58% 22,893,191 Pledge 21,291,490
person
Domestic natural
Ma Xinqi 1.99% 17,661,249
person
Shanghai
Yijidangxian
Domestic
Management
non-state-owned 1.91% 17,000,000 Pledge 17,000,000
Consulting
legal person
Partnership
(Limited
3
Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
Partnership)
YOOZOO Games
Co., Ltd. - the first Domestic
phase of the non-state-owned 1.80% 15,994,290
employee stock legal person
ownership plan
Domestic natural
Zhang Yunlei 1.75% 15,515,903 Pledge 14,570,000
person
Mr. Wang Qingyong and Mr. Wang Qingwei are brothers and they are persons acting
Explanation of the above-mentioned in concert. It is not known whether there is a relationship among the other
shareholder-related relationship or shareholders mentioned above, or whether they belong to the co-actors specified in the
concerted action Measures for the Administration of Information Disclosure of Changes in
Shareholders Shareholding in Listed Companies.
Note on shareholders participating in At the end of the period, the shareholder of the Company, Ma Xinqi, held 17,661,249
securities margin trading business (if shares, all of which were held through the Client Credit Trading Guarantee Securities
any) Account of the securities company.
(2) Table of the total number of preferred stock shareholders and the shareholding situation
of the top 10 preferred stock shareholders of the Company
□ Applicable √ Not applicable
The Company does not have the the shareholding situation of preferred stock shareholder during the reporting
period.
(3) Disclosure of the property rights and control relationship between the Company and the
actual controller in the form of a block diagram
Lin Qi
34.84%
YOOZOO Games Co., Ltd.
5. Corporation bonds
Whether there is a company publicly issued and listed on the stock exchange, and the corporation bonds that have
not expired or expired in full on the date of approval of the annual report
No.
(1) Basic information on corporation bonds
Bond balance
Bond name Bond abbreviation Bond code Due date Interest rate
(RMB 10,000)
(2) The latest corporation bond rating tracking and rating changes
(3) Major accounting data and financial indicators of the Company for nearly 2 years as of
the end of the report
Unit: RMB 10,000
Item In 2018 In 2017 Synchronous rate of change
4
Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
III. Discussion and Analysis of Operation
1. Brief introduction to the operation during the reporting period
Whether the Company is required to comply with disclosure requirements for special industries
No
In recent years, China’s online game industry continuously optimized the allocation of resources and improved the
industry chain gradually. It has become one of the important driving forces for the vigorous development of
China’s information industry and an important part of China’s cultural and creative industry. After years of rapid
growth, the online game industry is maturing. With the continuous promotion of the supply side reform of the
game industry, the threshold for entry into the industry has become higher, the concentration of the industry has
been raised, the top products showed a trend of high quality.
During the reporting period, the Company continued to implement the “Fit-For-Growth” strategy, based on the
three major directions of “Transmedia IP, Elite Products, and Globalization”, consolidated its core business
advantages through the development and upgrading of games and fine operation, deepened the global layout.
During the reporting period, the Company realized gross revenue of RMB 3.581 billion, with a year-on-year
increase of 10.68%; among them, mobile game revenue of RMB 2.568 billion, with a year-on-year increase of
11.59%, accounting for 71.7% of total revenue; revenue from overseas reached RMB 1.844 billion, accounting for
51.49% of total revenue. Net profits attributable to the listed company shareholders reached RMB 1.009 billion, an
increase of 53.85% year-on-year. As of Dec. 31, 2018, the total assets of the Company was RMB 7.333 billion,
with a year-on-year increase of 10.50%, the net assets attributable to listed company shareholders was RMB 4.51
billion, an increase of 11.32% year-on-year.
During the reporting period, the Company launched a number of high-quality games, relying on its own research
and development for many years, and continued to develop the three major categories of MMO, CARD and SLG
that have been formed accumulation, and actively expand new markets such as Anime game and io game to meet
the needs of different users. According to China Game Industry Report in 2018, the total market share of ARPG,
turn-based RPG, CARD and SLG in the top 100 mobile games of 2018 revenue is more than 60%, which is
conducive to the further promotion of the Company’s market share. In 2018, the number of female users in
China’s game market was 290 million, increased by 11.5% year-on-year, much higher than that of online game
users. The actual sales revenue of Chinese Anime games mobile gaming market reached RMB 19.09 billion in
2018, up 19.5% year-on-year, accounting for 14.3% of China’s mobile gaming market. As the new increment of
the game market, the Anime game has become the main market of the Company’s new development.
1. During the reporting period, the Company used creation capacity on diversified products and multiple products,
continuously improve the quality of products, and continue to enrich the product matrix. With its excellent game
quality and years of stable operation, the transaction amount of the Company’s classic card mobile game Junior
Three Kingdom(少年三国志) overtook 5 billion in four years and the game won “Top 10 Most Popular Mobile
Games in 2018”. Another game Legacy of Discord-Furious Wings(狂暴之翼) gained “Top 10 Most Popular
Overseas Mobile Games in 2018” by virtue of its outstanding achievements in overseas markets.
During the reporting period, the 3D magical MMO Era of Celestials was in the forefront of the same product
category in terms of battle theme, game screen performance, combat experience, compliant operation, and perfect
sound effect. In the field of SLG, the Company launched The 36 Stratagems (三十六计) mobile game, confirmed
the deep user base and distribution strength on research and development in the field of SLG. League of Angels
II(女神联盟2), as a continuation of “League of Angel” IP series, with excellent game quality and picture quality
matched with that of the host game created by Lu Taiyou, lead artist in the GTA R & D team, won the praise of the
industry and players. In addition, boutique mobile game aim to the diversified preferences for young users with
wide-ranging themes and detailed division on users such as Game of Thrones Winter is Coming(权力的游戏凛冬
将至) and Shanhai Jinghua (山海镜花), which have been launched first beta test. Junior Three Kingdom II(少年
三国志2) will launch the first test soon.
2. While maintaining the advantages of the domestic market, the Company adheres to the layout of “Globalized
Market” with a “Localized Thinking”. With years of overseas distribution experience, the Company has expanded its
distribution to more than 200 countries and regions around the world and accumulated more than 1,000 partners,
including Ubisoft, Microsoft and Apple. The Company’s penetration rate and regional advantages in the overseas
market have been further enhanced by the upgrade from introduction, original to output.
During the reporting period, the Company appeared in Gamescom with the famous web game named Game of
Thrones Winter is Coming(权力的游戏凛冬将至) adapted from famous IP Game of Thrones and became the only
Chinese gaming company to take part in the core exhibition area. The Company in Gamescom showcased the high
revivification of the game to the IP scene, showed that the original creation of Chinese team to this
world-renowned IP, and opened pre-registration, attracting the attention of the global players.
On Mar. 26, 2019, the English version of real-time war strategy web game named Game of Thrones Winter is
Coming(权力的游戏凛冬将至) developed and distributed by the Company officially launched the abroad public
beta testing after the official authorization from Warner Bros. Entertainment, Inc. through the approval of HBO.
Through the creation of real details to restore the IP scene and micro-innovations on gameplay setting, the game
has been recommended worldwide by Facebook. In 2019, the Company will continue to explore overseas markets
5
Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
with a variety of games such as Rangers of Oblivion(猎魂觉醒), Saint Seiya(圣斗士星矢) and Shendu Night(神都
夜行录), and strive to become a Chinese game enterprise with a global awareness and strong international
competitiveness.
3. The Company improves the efficiency of its internal R&D operations by building a reliable platform and a strong
foreground. Through the establishment of the platform, the Company strengthens the professional degree of
technology, data, tool and other resources in the vertical field, aligns with industry standards and enhances its own
ability. Forming modular, component-based resource packages to quickly match the resources and capabilities
needed for the foreground. At the same time, this will enhance the efficiency of R&D and strengthen the quality
control.
2. Whether there is any significant change in the main business during the reporting period
□ Yes √ No
3. Products accounting for more than 10% of the Company’s main business revenue or main
business profit
√ Applicable □ Not applicable
Unit: RMB
Year-On-Year Year-On-Year Year-On-Year
Operating Gross profit Increase/Decreas Increase/Decreas Increase/Decreas
Product name Operating profit
income margin e of operating e of operating e of gross profit
revenue profit margin
Web games 893,950,672.13 527,712,695.30 59.03% -1.12% 0.24% 0.80%
Mobile games 2,567,697,322.91 1,428,557,177.57 55.64% 11.59% 24.87% 5.92%
4. Whether there are any seasonal or cyclical characteristics that require special attention
□ Yes √ No
5. Explanation of operating income, operating cost, total net profit attributable to common
shareholders of listed companies during the reporting period or significant change
compared with previous reporting period
□ Applicable √ Not applicable
6. Suspension and termination of listing
□ Applicable √ Not applicable
7. Matters relating to financial report
(1) A statement of changes in accounting policies, accounting estimates and accounting
methods compared with the previous year’s financial report
√Applicable □ Not applicable
1. In the light of the principle of prudent operation and effective prevention of the risk of asset loss, combining the
customer characteristics of the Company and the structure, repayment and cancellation of receivables, as well as
provision standard of the bad debts of receivables of other companies in the same industry, the Company has
conducted an adequate assessment of the method of bad debt provision for receivables. In order to reflect the
Company’s financial situation and operating results more objectively, truthfully and fairly, according to
6
Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
Accounting Standards for Enterprises and other relevant regulations, the Company makes changes to the
accounting estimates for the provision of bad debts for receivables. The matter has been approved at the 10th
meeting of the 5th Board of Directors and the 9th meeting of the 5th Supervisory Committee of the Company.
Please refer to Announcement No.2018-115 disclosed by the Company in the CNINF Information Network for
more details. The Company has conducted necessary and adequate communication with the audit institution
appointed by the Company at that time, Ruihua Certified Public Accountants (Special General Partner), about the
change of the accounting estimation. The change of the accounting estimation is in line with the Accounting
Standards for Business Enterprises and relevant provisions, and will not impact the financial situation and
operating results disclosed in previous periods.
2. The format of the general corporate financial statements was revised according to the Notice on Revising and
Issuing the Format of General Enterprise Financial Statements for 2018 released by the Ministry of Finance in
June 2018 (CK [2018] No.15).The financial statements of the Company for 2018 and beyond shall be prepared in
accordance with the regulations above. This change in accounting policy shall have an impact on the items listed in
financial statements of the Company and shall have no material impact on the profits and losses, total assets and
net assets of the Company.
(2) A description of the retrospective restatement of the correction of major accounting
errors during the reporting period
□ Applicable √ Not applicable
No major accounting errors during the reporting period need to be restated retrospectively.
(3) A description of the changes in the scope of the consolidated statements compared with
the previous year’s financial report
√Applicable □ Not applicable
1. In March 2018, Yoozoo US Corp was set up by a subsidiary of the Company, Youzu Games Hong Kong
Limited, holding a stake of 100%, which has been included in the consolidated statements of the Company since
March 2018.
2. In March 2018, Shanghai Youjin Enterprise Management Co., Ltd. was set up by a subsidiary of the
Company, Shanghai Youchuang Investment Management Co., Ltd., holding a stake of 100%, which has been
included in the consolidated statements of the Company since March 2018.
3. In April 2018, YOOZOO GAMES KOREA CO. LTD was set up by a subsidiary of the Company, Youzu
Games HongKong Limited, holding a stake of 100%, which has been included in the consolidated statements of
the Company since April 2018.
4. In April 2018, E4U Live Pte. Ltd. was set up by a subsidiary of the Company, Youzu (SINGAPORE）
PTE.LTD, holding a stake of 100%, which has been included in the consolidated statements of the Company since
April 2018.
5. In May 2018, Shanghai Youfu Jiuzu Information Technology Co., Ltd. was set up by a subsidiary of the
Company, Shanghai Youzhong Information Technology Co., Ltd., holding a stake of 60%, which has been
included in the consolidated statements of the Company since May 2018.
6. In June 2018, the Company and a subsidiary of the Company, Ningbo Meishan Bonded Area Youxin
Enterprise Consultation and Management Co., Ltd., transferred 76.92% and 0.01% of the shares held by Zexi
Equity Investment Partnership in Bonded Area of Ningbo Meishan for RMB 84 million and RMB 10,920.00
respectively to Ningbo Zejin Venture Capital Partnership (Limited Partnership) and Ningbo Zeshi Investment
7
Summary of the 2018 Annual Report of YOOZOO Games Co., Ltd.
Management Co., Ltd., and agreed to transfer all the general partner shares held at the same time. From the same
month on, our company and its subsidiary would no longer have a significant impact on Ningbo Zexi.
7. In July 2018, Youzu (SINGAPORE) PTE. LTD., a subsidiary of the Company, set up YOOZOO Co., Ltd.
(Janpan), holding a stake of 100%, which has been included in the consolidated statements of the Company since
July 2018.
8. In July 2018, Yoozoo Games Gmbh was set up by a subsidiary of the Company, Youzu (SINGAPORE)
PTE. LTD, holding a stake of 100%, which has been included in the consolidated statements of the Company since
July 2018.
9. In November 2018, YOUZU GAMES (THAILAND) CO., LTD. was set up by a subsidiary of the
Company, Youzu (SINGAPORE) PTE. LTD, held the total share capital of 300,000.00 shares, of which
153,000.00 shares are preferred stock and 147,000.00 shares are common stock. Youzu (SINGAPORE) PTE. LTD.
held 146,999.00 common shares of YOUZU GAMES (THAILAND) CO., LTD., accounting for 49% of shares.
According to the Articles of Association, the preferred stock holder is entitled to one vote for every six shares held
by him; common share holder is entitled to one vote for every one shares held by him. The voting proportion of the
Company has is 85.22%, so the Company has control over YOUZU GAMES (THAILAND) CO., LTD., which has
been included in the scope of consolidated statement of the Company since November 2018.
10. In December 2018, Chengdu YOOZOO Information Technology Co., Ltd. was set up by a subsidiary of the
Company, Shanghai YOOZOO Information Technology Co., Ltd., holding a stake of 100%, which has been
included in the consolidated statements of the Company since December 2018.
11. In December 2018, Horgos Chiyou Information Technology Co., Ltd., a subsidiary of the Company wrote
off and withdrew from the scope of consolidated statements from December 2018.
(4) Estimates of operating performance for January to March 2019
□ Applicable √ Not applicable
8
