Wuhu 37 Interactive Entertainment Network
Technology Group Co., Ltd.
2020 Interim Report
August 2020
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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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 Technology
Group 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 severally
liable for any misrepresentations, misleading statements or material omissions therein.
Li Weiwei, the Company’s legal representative, and Ye Wei, the Company’s Chief Financial
Officer & Board Secretary, 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.
Possible risks facing the Company and countermeasures have been detailed in “X Risks
Facing the Company and Countermeasures” under “Part IV Operating Performance Discussion
and Analysis” herein, which investors are kindly reminded to pay attention to.
The Company is subject to the disclosure requirements for listed companies engaged in
software and IT services.
The Board has approved an interim dividend plan as follows: based on 2,112,251,697 shares,
a cash dividend of RMB 3 (tax inclusive) per 10 shares is planned to be distributed to all the
shareholders of the Company, with no bonus issue from either profit or capital reserves.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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Table of Contents
Part I Important Notes, Table of Contents and Definitions...................................................................................................... 2
Part II Corporate Information and Key Financial Information ................................................................................................. 5
Part III Business Summary........................................................................................................................................................... 8
Part IV Operating Performance Discussion and Analysis .......................................................................................................13
Part V Significant Events ...........................................................................................................................................................34
Part VI Share Changes and Shareholder Information .............................................................................................................37
Part VII Financial Statements....................................................................................................................................................40
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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Definitions
Term Definition
CSRC China Securities Regulatory Commission
SZSE/the Stock Exchange Shenzhen Stock Exchange
Wuhu Shunrong Auto Parts Co., Ltd./Wuhu Shunrong Sanqi Interactive Entertainment
Company/ the Company/ the Listed
Network Technology Co., Ltd./ Wuhu 37 Interactive Entertainment Network Technology
Company/ 37 Interactive Entertainment
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 of Wuhu Shunrong Auto Parts Co., Ltd./Articles of Association of
Articles of Association 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 2020 to 30 June 2020
Period-end/end of the Reporting Period 30 June 2020
Clientless or browser kernel-based micro-client games that are based on web development
Browser games technologies and utilize standard protocols as basic transmission modes. Game users can
play browser games directly through an Internet browser
Games that are downloaded via mobile network and run on mobile phones or other mobile
Mobile games
terminals
RPG Role playing game
ARPG Action role playing game
SLG Strategy game
STG Shooting game
MMO Massive Multiplayer Online
MOBA Multiplayer Online Battle Arena
Chengdu Pengwan Technology Co., Ltd. Chengdu Pengwan Technology Co., Ltd. and its subsidiaries
Wangzhong Investment ZhangshuWangzhong Investment Management Center (Limited Partnership)
Zengame Technology Zengame Technology Holding Limited and its business entities
X.D.Network XD Inc. and its business entities
Jiangsu Aurora/Aurora Network/Jiangsu
Jiangsu Aurora Network Technology Co., Ltd.
Aurora Network
Guangzhou 37 Guangzhou 37 Network Technology Co., Ltd.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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Part II Corporate Information and Key Financial Information
I 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
WUHU 37 INTERACTIVE ENTERTAINMENT NETWORK TECHNOLOGY GROUP CO.,LTD.
any)
Legal representative Li Weiwei
II Contact Information
Board Secretary Securities Affairs Representative
Name Ye Wei Wang Sijie
11/F, Creative Advertising Complex, Wuhu 11/F, Creative Advertising Complex, Wuhu
Office address Advertising Industrial Park, Middle Beijing Road, Advertising Industrial Park, Middle Beijing Road,
Jiujiang District, Wuhu City, Anhui Province 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 address
and 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 2019 Annual Report.
2. Media for Information Disclosure and Place where this Report is Lodged
Indicate by tick mark whether any change occurred to the information disclosure media and the place for lodging the Company’s
periodic 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
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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Company’s periodic reports and the place for lodging such reports did not change in the Reporting Period. The said information can
be found in the 2019 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 Amendments to the Articles of Association was approved at the 12th Meeting of the Fifth Board of Directors on 29
April 2020 and later at the First Extraordinary General Meeting of Shareholders of 2020 on 15 May 2020. As such, th e business term
of the Company has been changed to “permanent” and its name in English to “WUHU 37 INTERACTIVE ENTERTAINMENT NETWORK
TECHNOLOGY GROUP CO.,LTD.”. 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 2020 H1 2019 Change (%)
Operating revenue (RMB) 7,988,675,195.57 6,070,957,503.06 31.59%
Net profit attributable to the Listed
1,699,736,123.46 1,033,074,405.38 64.53%
Company’s shareholders (RMB)
Net profit attributable to the Listed
Company’s shareholders after deducting 1,464,942,321.24 949,369,446.08 54.31%
non-recurring profits and losses (RMB)
Net cash flows from operating activities
2,450,226,546.90 616,354,936.37 297.53%
(RMB)
Basic earnings per share (RMB/share) 0.80 0.49 63.27%
Diluted earnings per share (RMB/share) 0.80 0.49 63.27%
Weighted average return on equity (%) 22.05% 16.31% 5.74%
30 June 2020 31 December 2019 Change (%)
Total assets (RMB) 12,470,434,893.08 10,145,259,855.73 22.92%
Equity attributable to the Listed
8,189,534,514.66 7,029,307,859.08 16.51%
Company’s shareholders (RMB)
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.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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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
75,379.94
allowance write-offs)
Mainly due to refund of
value-addad tax and
Government grants through profit or loss (exclusive of government
government grants other than
grants given in the Company’s ordinary course of business at fixed 49,692,383.85
super-deduction in the
quotas or amounts as per the government’s uniform standards)
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 206,999,039.68
the effective portion of hedges that arise in the Company’s ordinary
course of business)
Non-operating income and expenses other than the above -5,127,802.70
Less: Income tax effects 12,310,377.16
Non-controlling interests effects (net of tax) 4,534,821.39
Total 234,793,802.22 --
Explanation of why the Company reclassifies as recurrent an non-recurring profits and losses item defined or listed in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring
profits and losses Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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Part III Business Summary
I Principal Activity of the Company in the Reporting Period
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.
During the Reporting Period, the Company focused 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, anime, VR,
cultural health, e-learning for children, and social entertainment. As a top performer in the industry, the Company steadily
advanced its development strategy of "boutiqueization, diversification, platformization and globalization".
During the Reporting Period, the Company achieved robust performance growth and recorded operating revenue of
RMB7,989 million, with a year-over-year (YoY) increase of 31.59%; a profit before income tax expenses of RMB1,993 million, up by
54.41% YoY; and a net profit attributable to the Listed Company’s shareholders of RMB1,700 million, rising by 64.53% YoY. The
above growth was mainly attributable to a YoY growth of 36.59% in mobile games in the first half of 2020.
1. Changes in industry-related economic situation and their impacts on the Company
China's game market has developed rapidly. In accordance with the 2019-2020 Report on the Competitiveness of Listed Game
Enterprises issued by Gamma Data, China's gaming industry has grown quickl y since 2019, especially in the first half of 2020. The
actual sales revenue of the mobile game market accounted for 75.7% of the Chinese game market in 2020. According to the China
Mobile Games Annual Market Comprehensive Analysis 2020 H1 released by Analysys, 37 Interactive Entertainment’s market share
in domestic mobile games publishing has further risen to 10.51%.
The competition landscape of the gaming industry has changed. In the first half of 2020, on the one hand, the industry's
attention was increasingly concentrated on top games and leading manufacturers, suggesting a prominent "head" effect in the
industry. On the other hand, players were posing higher requirements for online games, which had substantially raised the
threshold of game development and barriers to competition. Top game companies embracing strengths in the R&D and publishing
of quality products and operation are more likely to benefit from the new situation.
The Company furthered the strategy of "integration of R&D and operation". During the Reporting Period, the Company kept its
leading role in R&D capabilities by raising R&D investments and strengthened the output of quality games. Moreover, it advanc ed
the "diversification" strategy from the aspects of R&D and publishing, and reserved varied quality games on different themes
through independent development, investment in R&D-oriented companies, and enhanced cooperation with developers capable of
producing quality games. In addition, the Company, through independently developed AI sy stems, consolidated refined operation,
prolonged the life cycle of quality games, improved operation efficiency, and gave full play to the "integration of R&D and
operation" model.
2. Changes in industrial policy environment and their impacts on the Company
(1) An important article of General Secretary Xi Jinping entitled Speech on COVID-19 Prevention and Control at Meeting of
Standing Committee of Political Bureau of CPC Central Committee was published in Qiushi 2020 Issue 4 on February 16, 2020. Th e
article stressed that, "Great efforts shall be exerted to stabilize consumer spending. Expanding consumption is one of the crucial
methods to offset the impact of the epidemic. China will accelerate the release of emerging consumption potential, vigorously
enrich the application scenarios of 5G technology, push the end-consumer market including 5G mobiles, and promote consumption
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in e-commerce, e-government affairs, online education, and Internet-based entertainment." Further promotion of 5G technology
will bring opportunities for new growth to the online gaming industry.
Furthermore, the overall operation of cloud gaming was made based on R&D strengths. During the Reporting Period, the
Company leveraged on its R&D strengths to actively reserve cloud gaming technologies, including building internal cloud and
providing computing and network supports for cloud gaming; developing a universal framework covering user interaction, video
decoding, and cloud server communication to support the universal light Apps for clo ud gaming; and developing ads based on
game demos integrating game demos based on the cloud gaming service framework for promotion.
(2) In June 2020, the 20th Meeting of the Standing Committee of the 13th National People's Congress ("NPC") reviewed the
Second Reading Draft of the Law on the Protection of Minors ("Draft Revisions"). The Second Reading Draft planned to strengthen
juvenile protection online, required to build a unified online game electronic authentication system for minors nationwide, a nd
specified the online game service time for minors. Besides, it asked Internet service providers ("ISPs") to enhance user and
information management and timely adopt appropriate measures to control illegal information or criminal offenses against
juveniles. Meanwhile, the Second Reading Draft specified penalties for ISPs who fail to fulfill obligations, such as anti -addiction and
anti-cyberbully obligations.
The Company promoted the standardized development of the industry. During the Reporting Period, 37 Inter active
Entertainment fully upgraded the "real-name registration and anti-addiction system for minors" and launched it on all its
independent operation online games (including browser and mobile games) early this year. Additionally, the Company added
contents applicable to children to its Privacy Policy in line with the user habits of juveniles under 14 years old and their guardi ans. It
contributed to turning China's gaming industry more standardized by actively participating in the compilation of group standards
for the gaming industry led by the China Audio-video and Digital Publishing Association ("CADPA"), such as the Specifications on
Age Ratings of Online Games, the Specifications on Parent Monitoring Platforms, and Online Game Terminology.
(3) In July 2020, the General Office of the State Council issued the Legislative Work Plan of the State Council for 2020
(hereinafter referred to as the "Plan"). The Plan mentioned that the Standing Committee of the NPC would be invited to review the
Cultural Industry Promotion Law (Draft). Previously, the Ministry of Justice published a notice to solicit public opinions on the
Cultural Industry Promotion Law of the People’s Republic of China (Draft for Review) in December 2019, which determined to
invest more resources in the three key processes, namely, creation and production, cultural enterprises, and the cultural market,
and support talent, technology, finance, and taxation. The formulation of the "Cultural Industry Promotion Law" reflected the
importance attached by China to cultural industry development. The Cultural Industry Promotion Law will serve as significant
guidance to cultural industry development direction and drive high-quality development of the cultural industries of China.
37 Interactive Entertainment facilitated the diffusion of traditional Chinese culture. Recently, China has become the largest
online gaming market around the world. Chinese games have become a vital cultural carrier to "tell Chinese stories". 37 Interactive
Entertainment, engaging in cultural industries, has centered on the games business, earnestly expanded its business presence to
film and television, anime, and music, and paid close attention to innovative development and talent cultivation. Over the pa st two
years, it endeavored to promote overseas business, and took advantage of its experience, strengths, and the cultural carrier of
games to facilitate the diffusion of traditional Chinese culture.
3. Main businesses and business models of the Company
During the Reporting Period, the Company's main businesses included the development, publishing, and operation of mobile
games and browser games. The operating modes of the Company’s mobile games and browser 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 an
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operator of other games, and publishes and operates these products through its own or third -party channels. The Company is fully
responsible for the operation, promotion and maintenance of the games; providing unified management services for online
promotion, online customer service and top-up payment; and updating games along with game developers based on the real -time
feedback of users and games.
Under the third-party joint operation mode, the Company cooperates with one or more game operators or game application
platforms to jointly operate games. And the aforesaid parties are responsible for the management of their own channels, including
operation, promotion, the recharge and charge system, while the Company provides technical support services for third parties
along with game developers.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Major assets Main reason for significant changes
Equity assets No significant change in equity assets
The ending balance of fixed assets increased 1853.66%, or RMB873 million, compared to the
Fixed assets beginning balance, primarily driven by the transfer of office building from construction in
progress to fixed assets.
Intangible assets No significant change in intangible assets
The ending balance of construction in progress decreased 100.00%, or RMB797 million,
Construction in progress compared to the beginning balance, primarily driven by the transfer of office building from
construction in progress to fixed assets.
The ending balance of monetary funds increased 61.52%, or RMB1,324 million, compared to the
Monetary funds beginning balance, primarily driven by the increase in revenue, including a year-over-year
increase of RMB1,834 million in net cash flows from operating activities.
The ending balance of other current assets increased 36.11%, or RMB45 million, compared to the
Other current assets beginning balance, primarily driven by the combined effects of the increase in term deposits held
in bank and of the decrease in overpaid and pending VAT.
The ending balance of other non-current assets increased 308.82%, or RMB837 million,
Other non-current assets compared to the beginning balance, primarily driven by the payment made in the Reporting
Period for acquisition of land use rights together with the relevant tax and fees.
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
During the Reporting Period, the Company steadily promoted the development strategy of "boutiqueization, diversification,
platformization and globalization" and formed the following core competitiveness:
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1. Industry-leading R&D strength
The Company is ranked among the top in terms of R&D strengths. It has always emphasized R&D investments and talent
cultivation. Particularly, R&D investments increased significantly during the Reporting Period. Meanwhile, the Company's
independently developed products are characterized by high output, a high success rate and a long period, and center on
"boutiqueization and diversification". During the Reporting Period, a number of independently developed quality games, such a s
Yong Heng Ji Yuan (永恒纪元) and Swords of Archangels H5 (大天使之剑H5), have achieved steady gross billing in the markets
after being launched for more than one year.
(1) Prominent YoY increase in R&D investments
The Company’s R&D investments amounted to RMB645 million during the Reporting Period, up by 102.48% YoY. It expanded
from product upgrading to talent cultivation, established a training system for young employees, and embraced employee diversity.
Moreover, the Company encouraged innovation by employees, welcomed employees with diversified backgrounds, and strove to
provide global players with more quality content.
(2) "Boutiqueization and diversification" of independently developed products
First, the "boutiqueization" strategy greatly improved the R&D success rate. The "boutiqueization" strategy runs through the
entire life cycle of the Company's independently developed products. Before the launch of games, the Company carefully worked
out details regarding product planning, art quality, music effects, etc.; after the launch of games, the Company continued to invest
in product iteration, process optimization, user experience and other aspects to ensure high gross billing and a long life cy cle of
games. In the meantime, its independently developed AI systems assisted in producing "quality games". T he Company offered
precise reference value for the design of new products and iteration and optimization of existing products, improved product
development and procedure optimization, and substantially enhanced product experience, by analyzing and studying the
enormous data accumulated with the two independently developed AI ad systems, i.e. "Quantum" and "Destiny", as well as the
three platform-based big data products—"Athena", "Ares", and "Poseidon".
Second, the Company made breakthroughs in the "diversification" strategy. During the Reporting Period, the Company's R&D
team, based on its R&D strengths in ARPGs, expanded its game categories to card games and SLGs. It will continue innovation i n
diversified aspects, including product types, themes, art performance, and gameplay. The main products developed during the
Reporting Period were mobile games like Code Xiu Xian ( 代号修仙) and Code DL (代号DL). With its profound experience and
continuous innovation, the Company is expected to continue to produce long-life-cycle quality games that surpass Yong Heng Ji
Yuan (永恒纪元) and Swords of Archangels (大天使之剑).
2. Excellent publishing strength
Publishing capabilities were enhanced. The Company constantly promoted the "boutiqueization, diversification and
platformization" strategy and published multiple types of quality games on different themes. According to the China Mobile Games
Annual Market Comprehensive Analysis 2020 H1 released by Analysys, its market share in domestic mobile games publishing
further rose to 10.51% during the Reporting Period. Its highest monthly gross billing of domestic mobile games under operation
surpassed RMB1.8 billion. Newly registered users totaled over 132 million. The highest number of monthly active users (MAUs) was
up to 82 million. Besides, the Company maintained its leading position in domestic browser games, strengthened the precise
distribution capabilities of independently developed AI systems, and dramatically improved operation efficiency.
(1) Improvement in publishing capabilities based on the "boutiqueization" strategy
The "boutiqueization" strategy applies to product supply before the launch of games and operation optimization after the
launch.
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In terms of product supply, the Company has garnered abundant product resources, establish ed a rigorous evaluation process
and evaluation criteria for product introduction, and also utilized its own advantages in user data and numerical experiences to
work out products along with game developers, thus ensuring a better quality of games before their launch.
In terms of operation optimization, the Company possesses strong capabilities for operation and optimization in numerical
management, process optimization, event planning, etc. After the launch of games, the Company continues to improve the qu ality
of games, attract users through better contents, prolong the product life cycle, and accumulate higher gross billing.
(2) Efficiency improvement in multiple aspects based on the "diversification" strategy
With the "diversification" strategy, the Company achieved good results in multiple aspects, including products, promotion, and
services.
With respect to products, on the one hand, 37 Interactive Entertainment enriched the product supply via independent R&D,
investments, and cooperation with excellent developers. On the other hand, the Company constantly explored diversification in
product types and themes. During the Reporting Period, the Company expanded its product matrix and offered diversified gaming
experience to players by launching quality games in different types and on varied themes, including Yun Shang Cheng Zhi Ge ( 云上
城之歌), to the domestic mobile game market.
In regard to promotion, the Company independently developed the two AI ad systems, i.e. "Quantum" and "Destiny", as well
as the three platform-based big data products—"Athena", "Ares", and "Poseidon". Besides, it mined big data on user demand
graphs according to behavior characteristics like browsing of game ads and in-game activities. 37 Interactive Entertainment, based
on the AI systems, diverted users with the same demands to the same game or the same server. Therefore, it conducted
differentiated iteration and refined operation for specific types of users of specific games and servers in order to enhance user
interaction and activity, activate the paid game ecology, and maximize the effect of life time value ("LTV").
In terms of services, the Company is committed to providing players with comprehensive, detailed, and long -term services.
Through an improved user account and service system, and an experienced service team, the Company uses abundant product
supplies to provide users with comprehensive gaming products and one-stop services to continuously improve user satisfaction,
activation and retention, and also to extend the product life cycle.
3. Advantage of the model of "integration of R&D and operation"
The efficiency of R&D and operation was improved. The model of “integration of R&D and operation” of the Company is
conducive to making full use of resources and creating quality products from a long-term perspective. On the one hand, the
Company can ensure the stable supply of quality products to support the operation development and reduce its reliance on
external supplies through strong R&D strengths. At the same time, the R&D team can utilize the feedback of the operation
department to optimize products and extend the product life cycle. On the other hand, at the early stage of product R&D, the
operation team can provide advises and suggestions to the R&D team based on its years of experience and keen market insights.
4. Team strengths
The fighting entrepreneurial spirit was upheld. The Company has been deeply involved in the field of cultural and creative
industries for many years. Its core management team consists of experienced employees who engage in front-line work and have
strong and forward-looking capabilities for strategic layout, while the core team consists of highly skilled R&D personnel, creative
operators, and highly efficient managers. The Company has always adhered to the entrepreneurial spirit like marathoners and
constantly caught up to surpass the industry leader.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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Part IV Operating Performance Discussion and Analysis
I Overview
The competition landscape of the domestic gaming industry underwent great changes during the Reporting Period. The "head"
effect was prominent. The industry ushered in a new period of development. The Company precisely grasped the industry
development trends, made continuous improvements in operation, and remained a top performer in the indust ry, while adhering
to the "boutiqueization, diversification, platformization and globalization" strategy.
During the Reporting Period, the Company achieved robust performance growth and recorded operating revenue of
RMB7,989 million, with a year-over-year (YoY) increase of 31.59%; a profit before income tax expenses of RMB1,993 million, up by
54.41% YoY; and a net profit attributable to the Listed Company’s shareholders of RMB1,700 million, rising by 64.53% YoY. The
growth of publishing and R&D for mobile games was the main driver for the increase in overall revenue and profit during the
Reporting Period.
(I) Mobile game business
During the Reporting Period, the Company recorded operating revenue of RMB7,412 million from mobile games, a YoY
increase of 36.59%. Its gross profit margin remained stable. The Company’s business revenue from, and R&D investments in,
mobile games continue to increase, and the mobile 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, published more independently
developed products, and improved the profitability of individual product from the previous year. Especially, the Company achieved
a significant increase in the gross billing of mobile game R&D business, thereby enhancing the Company's profitability.
R&D investments grew YoY. The Company’s R&D investments amounted to RMB645 million during the Reporting Period, up by
102.48% YoY. The continuous investment into mobile game R&D is an important pillar of the Company’s “boutiqueization,
diversification and globalization” business strategy. The R&D investments were mainly concentrated on improvement of product
quality and exploration of product categories.
Product quality was improved. The "boutiqueization" strategy runs through the entire life cycle of the Company's
independently developed products. The Company is committed to making better the product engines, art design and sound quality
of gaming products to meet the user demand in experiencing high-quality games at the technical level; it is dedicated to game
innovation and process optimization to meet user demand in fun and smooth experience at the planning level. High -quality
development and high-frequency iterations turned new products more attractive to users, and allowed most independently
developed products to maintain high gross billing for a long time.
Product diversification was intensified. The Company improved the "dive rsification" of product R&D. During the Reporting
Period, it made new attempts at multiple types of games, including simulation games ("SIM" games), card games, and SLGs: 37
Interactive Entertainment has published independently developed SIM games to overseas markets. Besides, it will release the card
game Code DL (代号DL) this year. In addition, the quality SLG, Wild Frontier (狂野西境), has been published globally, especially
European and American markets. The Company will continue innovation in diversified aspects, including product types, themes, art
performance, and gameplay. It will pay close attention to the in-depth exploration of SLGs and card games and endeavor to
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become a first-class game company that can provide global players with various gaming products, based on quality content,
operation experience in multiple types of products, and advantages in numerical value and gameplay.
Meanwhile, the Company turned the product supply side more diversified, by buying a stake in and joining hands with
excellent developers. In order to further raise the product success rate, the Company established a rigorous evaluation process,
utilized its own advantages in user data and numerical experiences to work out products along with game developers, thus
ensuring a better quality of games before their launch.
A cloud gaming system is being built. The Company is currently committed to building a better cloud gaming system, including:
building internal cloud, providing computing and network supports for cloud gaming; building cloud gaming operation services,
proactively developing efficient game video transcoding and decoding technologies; developing a universal framework with user
interaction, video decoding, and cloud server communication, so as to support the universal light apps for cloud gaming. In the
upcoming 5G era, the Company’s smooth transition among cloud gaming technologies is expected to bring new experiences to
game players.
2. Publishing of mobile games
(1) Domestic market
During the Reporting Period, according to the China Mobile Games Annual Market Comprehensive Analysis 2020 H1 released
by Analysys, the Company's market share in the domestic mobile game market jumped to 10.51%, suggesting its prominent
advantage in "refined" operation. The highest monthly gross billing of its domestic mobile games exceeded RMB1.8 billion, with the
total number of newly registered users surpassing 132 million and the highest number of MAUs of over 82 million. Meanwhile, the
Company continuously promoted the "boutiqueization, diversification and platformization" strategy, and published multiple types
of quality games on different themes to expand its product matrix.
(1.1) Product life cycle prolonged via "refined" operation
During the Reporting Period, the Company accurately understood users' needs, delivered advertisements to target groups
accurately, and provided a full range of high-quality services from initial contact, access to games to start of games, thereby
prolonging the product life cycle and accumulating higher gross billing. The Company has achieved this by adhering to the core idea
of systemic traffic management and the diversified methods of "multi -channel marketing + targeted advertising + long-term
service" that cover "products + promotion + users" under the principles of "refinement, datamation and intelligentization".
Self-developed AI systems facilitated "refined" operation. During the Reporting Period, the Company put its independently
developed intelligent ad platform, "Quantum" and intelligent operation anal ysis platform, "Destiny", into production. On the one
hand, "Quantum" can connect with all mainstream channels to achieve rapid and automatic advertising. Meanwhile, the platform
can be used together with multiple systems and connect procedures in series to greatly reduce the time to create plans, perform
standardized processing of plans in batches, and maintain plans automatically and systematically. Moreover, the platform can
improve promotion efficiency and effect through big data analysis and AI algorithms. On the other hand, "Destiny" is a
comprehensive operational decision system for statistics, analysis and prediction of game data. The system can accurately pre dict
the life cycle of games through data analysis models. It supports operation teams to adopt differentiated event marketing based on
user data, so that customer service can focus on higher value user services to generate more revenue.
(1.2) Product supply enriched via the "diversification" strategy
During the Reporting Period, the Company applied the "diversification" strategy to multiple aspects, including products,
promotion, and services, based on its capabilities of operating multiple types of games. Thanks to the strategy, the Company
reserved adequate products in terms of type, theme, and quantity. Its product matrix covered different types of games, such as
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
14
ARPGs, MMO games, card games, SLGs, and SIM games, as well as varied themes, such as fantasy, mythology/martial arts, city li fe,
campus and galgames.
The product pipeline is strong. During the Reporting Period, the Company offered diversified gaming experience to players by
launching quality games in different types and on varied themes, including Hun Dun Qi Yuan ( 混沌起源) and Yun Shang Cheng Zhi
Ge (云上城之歌). As of the date of this report, the Company’s pipeline of independently developed games include Code NB ( 代号
NB), Code DL (代号DL), etc. Besides, it distributes and operates an array of domestic agency games, including:
Fantasy and swordsman games: Code JZ (代号JZ) and Code XN (代号XN)
Card games: My Girls (王牌高校)
SIM games: Code RS (代号RS)
MMORPG: Code GC (代号GC)
Galgames: Queen of Diamonds (一千克拉女王)
(2) Overseas market
During the Reporting Period, the Company significantly accelerated the strategic expansion of global footprint. Its overseas
operating revenue rose by 94.77% YoY. As of the end of the Reporting Period, its overseas brand, 37GAMES, covered over 200
countries and regions, whose products included RPGs, card games, and SLGs in a dozen of languages, such as traditional Chinese,
English, Japanese, simplified Chinese, and Thai.
The product pipeline for the overseas market was enriched via multiple means. During the Reporting Period, the Company
input resources in the upstream and downstream of the industry chain, invested in outstanding R&D -oriented companies
worldwide, and promoted the localization of products. Furthermore, it achieved results in the "globalization" of overseas bus iness.
The Company published products overseas from a global vision by expanding its layout from advantageous re gions to the whole
world, while maintaining the competitiveness in advantageous regions like Southeast Asia, Japan, and South Korea. Since this year,
the Company has distributed SLGs on multiple themes, such as Western, military, and apocalypse, which are highly received by
global players.
Multiple games were well received. As of the date of this report, 37 Interactive Entertainment achieved remarkable results in
several games published globally: SNK All Star (SNKオールスター) rose quickly to the top of the Google Play Store and iOS App
Store app lists, after being launched in Japan. Within less than one month after its launch, the SLG, Heroes of Three Kingdom s (三国
英雄たちの夜明け), was highly received by players. Swords of Archangels H5 (大天使之剑H5) was ranked No. 1 on top grossing
chart in Vietnam. During the Reporting Period, the Company constantly updated and iterated its flagship product, Yong Heng Ji
Yuan (永恒纪元), keeping a stable gross billing in regional markets. MU: Across Time ( 奇迹MU：跨时代) was launched in Hong
Kong, Macao, and Taiwan regions of China in February this year and quickly came out top on the list of best-selling games on App
Store and the free game list on the Google Play Store.
The global footprint expansion was accelerated. The Company will continue to expand its global footprint by launching several
quality SLGs in the second half of the year. As of the date of this report, the quality SLG of Wild Frontier ( 狂野西境) had been
launched globally, especially in Europe and North America. The Western fantasy game, P&C, was released in Europe and North
America as well. It quickly opened the market and maintained a stable increase in gross billing, attributable to its innovative
gameplay of RPG plus SLG. Furthermore, based on the stable growth of gross billing, the Company will introduce card games in
Japan catering for the taste of local players, and primarily promote MMO games in South Korea in the second half of the year.
Main products to be promoted overseas in the second half of 2020 also include:
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
15
SIM games: Code ZG (代号ZG)
SLGs: Code FRZ (代号FRZ) and Code FO (代号FO)
Card games: Code OX (代号OX)
Casual RPGs: Code CM (代号CM)
MMO games: Code E (代号E) and Code AH (代号AH)
(II) Browser games
Refined operation supported the steady growth of operating revenue. During the Reporting Period, the operating revenue
from the browser game business reached RMB565 million. The gross profit margin rose by 2.75% YoY. The Company will continue
to launch new products in the second half of the year. The Company strengthened partnership with dom estic top browser game
developers through strategic investment and business cooperation on the one hand, on the other hand, 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.
(III) Cultural industry
The Company invested into other fast-growing cultural and creative segments, while maintaining the high-speed growth of its
core business. The Company exploited opportunities in 5G cloud gaming, film and television, anime, music, VR/AR, cultural health,
e-learning for children, and social entertainment with a strategic focus on quality content. As of the date of this report, cultural and
creative enterprises funded or acquired by the Company included:
Film and television: DSMovie, Youying Culture, Zhonghui Television, Mowei Pictures, JinhaiShiyi, etc.
Music: FenghuaQiushi
Talent agent: Original Plan and Haohao Bangyang
Anime: YHKT Entertainment, IDRAGONS Creative Studio, and Junengwan
VR/AR: Archiact
Cultural health: Wake
E-learning for children: KaDa Story and Miaocode
Social entertainment: Wuli Planet
Consumption: Mutual Help Parking and Nowwa Coffee
The long-term value investment concept was upheld. In terms of investment concept and logic, the Company adhered to the
long-term investment concept. Based on the main business of games, it reached audiences in varied segments by investing in the
upstream and downstream companies of the industry chain. With respect to investment strategies, the Co mpany paid close
attention to new products and technologies in the industry and overseas and international distribution of products. In regard to the
selection of investment targets, the Company valued the ability to constantly output quality products, excellent team or talent
reserves, and future growth potential. The Company continuously consolidated its status in the cultural and creative industry by
integrating quality resources in the industry.
A closed loop of the entertainment eco-system has been developed. The Company made constant efforts to create a closed
loop of the entertainment eco-system and achieved favorable multi-directional synergy in the first half of the year. 37 Interactive
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
16
Entertainment's mobile game, "The King of Fighters (拳魂觉醒)", performed noticeably well and achieved outstanding results at
home and abroad in the first half of the year, thanks to the integration of the SNK IP under DIGital Color where the Company holds
equity. Meanwhile, Karma Game led by a top producer and the project of Chengdu Xinghe Interactive Entertainment Technology
Co., Ltd. are about to go live and expected to bring good returns in key overseas SLG markets. In addition, companies in vert ical
fields where the Company invests have been more closely connected. For instance, Zhonghui Television and YHKT Entertainment
cooperated to purchase the copyright of "Incarnation", a sci-fi blockbuster on bilibili.com, and would make a series. "Original Plan",
the talent agent of He Luoluo and Liu Xiening who made a debut at "Creation Camp 2019" and "Creation Camp 2020", respectively,
and "Haohao Bangyang" are working with FenghuaQiushi, Zhonghui Television, and 37 Interactive Entertainment to maximize the
outstanding talent resources. Besides, "DSMovie", a superb domestic Mul ti-Channel Network (MCN), is used as a promotional
channel to exert an amplified and superimposed effect on the entertainment eco-system of 37 Interactive Entertainment.
The education division is taking shape gradually. The education division serves as a key and long-term sector of 37 Interactive
Entertainment. Miaocode.com, a platform offering online programming training courses to kids acquired by the Company, has
grown to be a top-performing company in China. It will establish chain stores to integrate i n-person classes in order to make
high-quality courses available to increasing users. In terms of content and quantity, the audiobook platform of "KaDa Story" has
become a top platform in China and achieved positive growth and profitability amid the COVID-19 pandemic. Likewise, "Wake
Yoga", an online yoga platform, has turned profitable despite the pandemic. Overall, the Company has achieved sound progress in
the education division by devoting enormous resources in quality content and traffic operation.
Returns on investments were good. As of the date of this report, the Company's many target investees have shown the great
potential for development, and the Company's investment strategies in the whole cultural and creative industrial chain have begun
to produce preliminary results. In March 2020, the Company exited from ZLONGAME and obtained considerable return. In June
2020, the Company partially exited from X.D.Network after its IPO, gaining substantial return. This deal won the CV Source the Best
Exit of the Year. Additionally, the Company participated in the management of Fuhai 37 Fund. After its investment target, Weimob,
went public, the fund exited and obtained high return.
Investments are made in new areas. In the coming future, the Company will focus on the main business of games and continue
to invest in entertainment technologies. In connection to previous operations in VR, AR and cloud gaming, the Company will
actively explore, in the 5G era, operations in emerging fields such as interactive games, virtual hosts, VR social and esports, in a bid
to empower and coordinate strategically with the invested companies, offer more high-quality content with new experience, create
a one-stop cultural and entertainment ecosystem, and become the most trusted cul tural brand of China’s younger generation.
(IV) IP strategy
It’s a long-term development goal of the Company to create quality content and establish a quality content brand. Based on
this, the Company continues to explore, by the methods of internal incubation and external access, high-quality IPs for the
development of quality cultural products including games, relying on its own advantages.
A cultural and creative strategy system was built based on the IP strategy. As of the date of this report, the IPs of the
Company's reserves covered different segments, including games, anime, literature, film, and television. Meanwhile, the Compa ny
will gradually develop its own IPs to create higher value. Relying on its excellent IP strategy, the Company will continue to build its
cultural and creative strategy system, satisfy the diversified demands of users for entertainment, and exploit the opportunit ies of IP
value in film and television, music, anime, VR, cultural health industry, e-learning for children and social entertainment.
II Core Business Analysis
Overview:
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
17
See “I Overview” above.
Year-over-year changes in key financial data:
Unit: RMB
H1 2020 H1 2019 Change (%) Main reason for change
Significant increase in revenue as a result
Operating revenue 7,988,675,195.57 6,070,957,503.06 31.59% of good business results for mobile
games
Cost of sales 863,666,663.98 838,986,561.51 2.94% No significant change
Distribution and selling Increase in Internet traffic fee charges for
4,549,628,282.98 3,632,067,521.84 25.26%
expenses games
Increase in depreciation of office building
transferred to fixed assets, and increase
General and in the remuneration and equity
administrative 166,919,490.05 88,053,838.68 89.57% incentives for employees as a result of a
expenses larger scale of operating and better
operating results of the Company in the
Reporting Period
Financial expenses 9,827,281.57 4,333,541.72 126.77% Increase in interest expense
Income tax expenses 110,659,828.94 131,634,742.44 -15.93% No significant change
Increase in employee remuneration and
Research and design expenses in research and
development 644,896,512.00 318,493,874.16 102.48% development projects as a result of
investments greater investments in this respect in the
Reporting Period
Net cash flows from operating activities
increased significantly year-over-year,
primarily driven by increase in cash
Net cash flows from
2,450,226,546.90 616,354,936.37 297.53% received from the sales of goods or
operating activities
rendering services as a result of higher
operating revenue compared to the
same period of last year
Net cash flows used
Payment for the acquisition of land use
in/from investing -952,419,788.81 476,138,307.69 -300.03%
rights in the Reporting Period
activities
Net cash flows used in New discounted notes in the Reporting
-180,181,077.21 -823,976,503.10 -78.13%
financing activities Period
Significant increase in net cash flows
Net increase in cash from operating activities, as well as
1,328,403,368.73 268,388,648.05 394.96%
and cash equivalents decrease in net cash flows used in
investing and financing activities
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
18
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 2020 H1 2019
As % of operating As % of operating Change (%)
Amount Amount
revenue (%) revenue (%)
Total operating
7,988,675,195.57 100% 6,070,957,503.06 100% 31.59%
revenue
By operating division
Online games 7,988,675,195.57 100.00% 6,070,957,503.06 100.00% 31.59%
By product category
Mobile games 7,412,153,082.93 92.78% 5,426,572,514.55 89.39% 36.59%
Browser games 564,975,213.48 7.07% 644,384,988.51 10.61% -12.32%
Others 11,546,899.16 0.14% 100.00%
By operating segment
Domestic 7,019,815,819.74 87.87% 5,573,514,047.04 91.81% 25.95%
Overseas 968,859,375.83 12.13% 497,443,456.02 8.19% 94.77%
Operating division, product category or operating segment contributing over 10% of operating revenue or operating profit:
√ Applicable □ Not applicable
Unit: RMB
YoY change in YoY change in YoY change in
Operating Gross profit
Cost of sales operating cost of sales gross profit
revenue margin
revenue (%) (%) margin (%)
By operating division
Online games 7,988,675,195.57 863,666,663.98 89.19% 31.59% 2.94% 3.01%
By product category
Mobile games 7,412,153,082.93 729,296,931.11 90.16% 36.59% 7.95% 2.61%
Browser games 564,975,213.48 128,538,647.98 77.25% -12.32% -21.32% 2.75%
By operating segment
Domestic 7,019,815,819.74 716,853,000.99 89.79% 25.95% 6.76% 1.84%
Overseas 968,859,375.83 146,813,662.99 84.85% 94.77% -12.35% 18.52%
Core business data restated according to the changed methods of measurement that occurred in the Reportin g 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.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
19
Operating division contributing over 10% of operating revenue or operating profit:
√ Applicable □ Not applicable
Unit: RMB
Gross YoY change in YoY change in YoY change in
Operating revenue Cost of sales profit operating cost of sales gross profit
margin revenue (%) (%) margin (%)
By operating division of customers
Online games 7,988,675,195.57 863,666,663.98 89.19% 31.59% 2.94% 3.01%
By product category
Mobile games 7,412,153,082.93 729,296,931.11 90.16% 36.59% 7.95% 2.61%
Browser games 564,975,213.48 128,538,647.98 77.25% -12.32% -21.32% 2.75%
By operating segment
Domestic 7,019,815,819.74 716,853,000.99 89.79% 25.95% 6.76% 1.84%
Overseas 968,859,375.83 146,813,662.99 84.85% 94.77% -12.35% 18.52%
Ongoing sales contracts with a single contract amount that is over RMB50 million and accounts for over 30% of the Company’s
audited operating revenue in the most recent accounting year:
□Applicable √ Not applicable
Breakdown of the cost of sales for the core business:
Unit: RMB
H1 2020 H1 2019
Breakdown of cost Change (%)
Amount As % of cost of sales Amount As % of cost of sales
Royalties 756,529,181.79 87.60% 713,853,625.84 85.09% 5.98%
Cost of servers 77,914,092.53 9.02% 52,216,599.22 6.22% 49.21%
Amortization of
22,029,060.95 2.55% 72,014,090.09 8.58% -69.41%
copyright money
Other costs 7,194,328.71 0.83% 902,246.36 0.11% 697.38%
Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
1. The online and mobile games divisions recorded a year-over-year increase of 31.59% and 36.59% respectively in operating
revenue, primarily because the Company’s mobile game development and launch business continued to grow in the Reporting
Period, resulting in a significant increase in operating revenue.
2. Overseas operating revenue increased 94.77% year-over-year, primarily because the Company launched a number of new games
overseas in the Reporting Period.
III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Amount As % of profit before Reason/source Recurrent or not
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
20
income tax expenses
Mainly due to gains on investments
from disposal of equity investments,
Investment income 108,093,257.02 5.42% dividends during the period of holding Not
equity investments, and wealth
management products
Gain/loss on
Mainly due to changes in fair value of
changes in fair 115,130,432.61 5.78% Not
equity investments
value
Loss on doubtful
Mainly due to impairment loss on accounts is recurrent
Impairment loss on
51,573,042.74 2.59% accounts and other receivables and while impairment loss on
assets
long-term equity investments long-term equity
investments is not.
Non-operating
2,297,869.41 0.12% Mainly due to compensation income Not
income
Mainly due to donations for
Non-operating governments and medical institutions
7,429,745.23 0.37% Not
expenses in the fight against the COVID-19
pandemic
Mainly due to refund of VAT and other Refund VAT is recurrent
Other income 95,213,596.55 4.78% government grants given in the while other government
Company’s ordinary course of business grants are not.
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
30 June 2020 31 December 2019
Change in
As % of
As % of percentage Reason for any significant change
Amount Amount total
total assets (%)
assets
Year-over-year increase of
RMB1,834 million in net cash flows
from operating activities as a result
Monetary funds 3,476,651,621.54 27.88% 1,788,431,889.15 20.40% 7.48%
of increasing revenue, as well as
decrease in net cash flows used in
investing and financing activities
Accounts Stepped-up efforts in the collection
1,275,085,408.62 10.22% 1,717,575,938.59 19.59% -9.37%
receivable of accounts receivable
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
21
Long-term equity
466,187,441.61 3.74% 514,224,823.77 5.87% -2.13%
investments
Transfer of office building from
Fixed assets 920,231,133.44 7.38% 36,385,942.05 0.42% 6.96% construction in progress to fixed
assets in the Reporting Period
Transfer of office building from
Construction in
0.00% 751,293,007.77 8.57% -8.57% construction in progress to fixed
progress
assets in the Reporting Period
New undue discounted bank
Short-term loans 889,324,326.07 7.13% 0.00 0.00% 7.13% acceptance bills in the Reporting
Period
Repayment of mortgage loan for
Long-term loans 0.00 0.00% 265,883,241.55 3.03% -3.03% office building purchase in the
Reporting Period
Payment made in the Reporting
Other
Period for acquisition of land use
non-current 1,107,475,299.02 8.88% 58,269,048.52 0.66% 8.22%
rights together with the relevant
assets
tax and fees
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss
on Cumulative Impairment
Purchased
fair-value fair-value allowance Sold in the
Beginning in the Other
Item changes in changes made in the Reporting Ending amount
amount Reporting changes
the through Reporting Period
Period
Reporting equity Period
Period
Financial assets
1. Trading
financial assets
2,042,903,416 7,062,542.6 4,754,790,0 -4,726,866,
(exclusive of 286,785.89 2,078,176,380.47
.32 2 00.00 364.36
derivative
financial assets)
4. Other equity 119,521,347.6 -125,795,9 5,717,169.5
573,436.28 125,811,953.38
investments 0 26.21 0
Other
389,489,978.6 108,067,88 32,615,650. -102,136,15 2,314,604.
non-current 430,351,973.16
8 9.99 00 0.48 97
financial assets
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
22
2,551,914,742 115,130,43 -125,795,9 4,793,122,8 -4,829,002, 3,174,827.
Total of the above 0.00 2,634,340,307.01
.60 2.61 26.21 19.50 514.84 14
Financial
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
liabilities
Contents of other changes:
Other changes were incurred by exchange rate fluctuations during the shareholding period.
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the End of the Reporting Period
Item Ending carrying amount(RMB) Reason for restriction
Monetary funds 12,989,136.84 Money frozen by bank and security deposits
Trading financial assets 1,401,658,473.29 Security deposits for notes
Total 1,414,647,610.13 --
V Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Total investment amount in H1 2020 Total investment amount in H1 2019
Change (%)
(RMB) (RMB)
5,787,414,868.16 2,518,507,340.85 129.80%
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
23
2. Major Equity Investments Made in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Type of Index (if
Any Date
Term the Investment Antici Investment any) to
Way of The Fundin Co-in legal (if any)
Amount of of investee progress as of pated income in the disclose
Investee Principal activity investm Company’s g vesto matter of
investment invest ’s the balance incom Reporting d
ent interest source r involved disclos
ment product sheet date e Period informat
or not ure
s ion
Technology development; basic software
services; application software services;
computer system services; computer
technology training (not for national Ownership
enrollment); data processing (except for
Beijing bank card centers that are processing data change
Meng52 and cloud computing data centers with a Game completed
PUE value of 1.5 or more); organization of Capital Self-fun Perma
Network 28,600,000.00 22.00% None develop with the 13,398,234.25 Not
cultural and artistic exchange activities; increase ded nent
Technolog conference services; exhibition activities; ment industrial and
y Co., Ltd. product design; packaging and decoration commercial
design; computer animation design;
design, production, agency, and release of administration
ads; sales of computers, software, and
auxiliary equipment; and Internet-based
cultural activities.
Technology development, transfer, and
consultancy and services of network and Ownership
Shanghai computer technologies, design, change
production, and agency of ads, publication
Dobala Game completed
of ads through self-owned media, planning Capital Self-fun Perma
Network of cultural and artistic exchanges, 5,000,000.00 10.00% None develop with the Not
organization and planning of public increase ded nent
Technolog ment industrial and
relation activities, conference services,
y Co., Ltd. exhibition services, creative services, and commercial
sales of computers, software, and auxiliary administration
equipment.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
24
Operations of parking lots; property
management; engineering and technical
research and experimental development;
R&D of electronic, communication, and
automatic control technologies; software
development; information system
integration services; information
technology consultancy services;
electromechanical equipment installation
services; special equipment installation
(except for elevators and boilers);
electronic equipment installation services;
general equipment repair; special
equipment repair; electrical equipment Ownership
Guangzho repairs; sales of general mechanical change
equipment; professional contracting of Internet
u Kapark electromechanical equipment installation completed
Capital Self-fun Perma -based
Network projects; R&D, installation, and 15,000,000.00 12.00% None with the Not
maintenance of parking berths with increase ded nent car
Technolog industrial and
automatic are collection function; motor parking
y Co., Ltd. vehicle agency management business; commercial
battery charging services for electric administration
vehicles; car rental; sales of auto parts; car
rescue services; motor vehicle
performance inspection services; network
information technology promotion
services; advertising services; installation
and construction of street nameplates,
road signs, and advertising board;
designated driver services; computer
network system engineering services;
intelligent installation services; site leasing
(excluding warehouses); car sales; car
cleaning services; and car repair and
maintenance.
Licensed items: Food. General items:
Shanghai Operati Ownership
Technical development, transfer,
Lixing consultancy, and services of information Capital Self-fun Perma on of a change
7,000,000.00 11.67% None Not
Technolog technology, computer hardware, and increase ded nent coffee completed
network technology; sales of furniture,
y Co., Ltd. kitchen equipment, household appliances, brand with the
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
25
hotel equipment, instruments and industrial and
apparatus, building materials, metal
materials, hardware and electrical commercial
equipment, mechanical equipment, administration
automobile and motorcycle accessories,
household supplies, kitchenware, feedstuff,
flowers, jewelry, handicrafts (except for
ivory and its products), automobile
supplies, road traffic safety equipment,
automobiles, chemical raw materials and
products (except for hazardous chemicals,
monitored chemicals, fireworks and
firecrackers, civil explosives, and precursor
chemicals), advertising equipment, printing
materials, packaging materials, mineral
products, electronic products, elevators,
mechanical equipment, molds, and
lubricants (including online retail). The
following items are exclusive to branch
offices: catering services.
Network consultancy and information
security management consultancy; Ownership
technology development, technology Game-b change
promotion, and technical services:
ased completed
Information technology, computer Capital Self-fun Perma
GUGI INC. technology, and computer software and 10,615,650.00 5.46% None social with the Not
hardware; design and development: toys increase ded nent
softwar industrial and
and anime; network sales: computer
software and hardware, toys, and anime; e commercial
telecommunications value-added services; administration
and operating Internet cultural services.
Total -- -- 66,215,650.00 -- -- -- -- -- -- 0.00 13,398,234.25 -- -- --
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
26
3. Major Non-Equity Investments Ongoing in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Reason for failing
Way Investment Industry Cumulative
Investment in Cumulative Anticipat to reach the Date (if
of in fixed of Funding Project income as of Index (if any) to disclosed
Name of project the Reporting investment as of ed scheduled progress any) of
invest assets or investm source progress the information
Period the period-end income and anticipated disclosure
ment not ent period-end
income
Announcement No.
Land Lot AH040124 in Comme
2020-003 on a
Pazhou West Zone, rcial Self-funde 7 January
Other Yes 890,579,700.00 1,105,179,700.00 0.00 0.00 N/A Wholly-Owned Subsidiary
Haizhu District, propert d 2020
Bidding for the Use Rights
Guangzhou y
of State-Owned Land
Office space on 12/F,
14/F and 17/F to 23/F,
Self-funde
as well as parking Comme Announcement No.
d and
space on -3/F and -4/F rcial 26 April 2017-034 on a Subsidiary
Other Yes 75,112,348.66 957,843,541.68 mortgage 0.00 0.00 N/A
of Zhongrong Plaza, propert 2017 Intending to Purchase
loan-fund
666 Huangbu Road y Office and Parking Space
ed
Central, Tianhe
District, Guangzhou
Total -- -- -- 965,692,048.66 2,063,023,241.68 -- -- 0.00 0.00 -- -- --
4. Financial Assets at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
27
Gain/loss on fair-value
Type of Initial investment Cumulative fair-value Purchased in the Sold in the Cumulative
changes in the Reporting Ending amount Funding source
assets cost changes through equity Reporting Period Reporting Period income
Period
Stock 278,899,199.76 101,862,285.85 -52,759,111.69 101,486,150.48 24,362,105.75 184,632,631.62 Self-funded
Other 2,647,448,274.12 13,268,146.76 -73,036,814.52 4,793,122,819.50 4,727,516,364.36 70,599,981.21 2,449,707,675.39 Self-funded
Total 2,926,347,473.88 115,130,432.61 -125,795,926.21 4,793,122,819.50 4,829,002,514.84 94,962,086.96 2,634,340,307.01 --
5. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Accounti Gain/loss on
Code Cumulative Purchas Fun
Initial ng Beginning fair-value Sold in the Gain/loss in
Variety of of Name of fair-value ed in the Ending carrying Accounting ding
measure carrying changes in the Reporting the Reporting
securities securit securities investment cost changes Reportin amount title sour
ment amount Reporting Period Period
ies through equity g Period ce
method Period
Domestic/ Fair Trading Self-
00244
foreign ZNHI 21,743,091.99 value 2,725,492.78 557,035.08 3,282,527.86 financial fund
5-SZSE
stock method assets ed
Other
Domestic/ Fair Self-
02660- ZENGAM non-current
foreign 18,000,000.00 value 14,301,324.38 7,683,996.94 22,231,519.71 fund
HKEX E financial
stock method ed
assets
Domestic/ Fair Trading Self-
96018
foreign SNK 1,036.35 value 23,021,920.43 -3,861,552.17 19,447,154.15 financial fund
0-KRX
stock method assets ed
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
28
Other
Domestic/ Fair Self-
02400- non-current
foreign XD INC 100,055,903.60 value 103,133,292.11 100,422,951.19 88,989,266.99 20,640,508.22 116,646,208.80 fund
HKEX financial
stock method ed
assets
CMGE Other
Domestic/ Fair Self-
00302- Technolo non-current
foreign 14,101,880.71 value 15,438,704.59 -2,940,145.19 12,496,883.49 3,721,597.53 fund
HKEX gy Group financial
stock method ed
Limited assets
Other
Domestic/ 83360 Fair Self-
Southern non-current
foreign 4-NEE 64,997,287.11 value 15,784,332.79 15,784,332.79 fund
Pictures financial
stock Q method ed
assets
Domestic/ 83506 Fair Other Self-
foreign 7-NEE Mokylin 60,000,000.00 value 7,240,888.31 -52,759,111.69 7,240,888.31 equity fund
stock Q method investments ed
Total 278,899,199.76 -- 181,645,955.39 101,862,285.85 -52,759,111.69 0.00 101,486,150.48 24,362,105.75 184,632,631.62 -- --
Disclosure date of the
announcement on the board’s
6 December 2019
approval of the securities
investments
Disclosure date of the
announcement on the general
meeting of shareholders’ 25 December 2019
approval of the securities
investment (if any)
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
29
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
6. Use of Raised Funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
7. Significant Projects Invested with Non-Raised Funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
VII Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
30
Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB
Relationship
Name with the Principal activity Registered capital Total assets Net assets Operating revenue Operating profit Net profit
Company
Development of mobile
Jiangsu Aurora Subsidiary 6,250,000.00 4,931,895,434.41 3,389,070,354.63 1,212,422,839.46 600,800,831.35 629,776,283.93
and browser games
Launch and operation
Guangzhou 37 Subsidiary 11,764,706.00 7,328,807,906.38 1,495,082,563.16 5,121,786,020.32 1,033,382,969.23 918,920,434.10
of mobile games
Subsidiaries obtained or disposed of in the Reporting Period:
□ Applicable √ Not applicable
Other information on principal subsidiaries and joint stock companies:
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
31
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Operating Performance Forecast for January-September 2020
Warning of a forecast negative net profit for the January-September period of the current year or a considerable YoY change therein,
as well as the reasons:
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
1. Market competition risks and countermeasures
The online gaming industry is facing increasingly fierce competition as it gradually matures. Meanwhile, the development of
various Internet-based cultural creative segments other than online games is further exacerbating external competition. At the
same time, online game users are also becoming more sophisticated, and onl ine game users have increasingly higher quality
requirement 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 pr oducts,
and continue to connect users with quality games. In terms of market channels, the Company will further bring in play the role of
new ideas in traffic operation, deepen the business strategy of multi -channel marketing, targeted advertising and long-term
services, and continuously enhance its core market competitiveness.
2. Business risks and countermeasures
The online gaming industry is characterized by fast product update, limited life cycle and fast change of user preference. Game
enterprises need to increase their investment in technology development and closely keep in pa ce with trend of the industrial
technologies. If the technology, products and other aspects of the game undergo major changes, and game enterprises fail to keep
up with the development of industry technology, their products will fail to meet the market dem ands. At the same time,
information security and user privacy protection arouse great public concerns. If the Company leaks users’ information due to
negligence, there will be a significant damage 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 to
dig deeper into operational data through independently developed AI systems, continuously update the understanding of changes
in target users' preferences, and timely adjust operational and R&D strategies, to meet the core demands of users.
A strict internal control system for information security management and user privacy protection has been set up to ensure
the security of users’ information to the maximum extent. In terms of information security, the Company has developed a serie s of
internal control systems to define and classify security incidents and to respond to possible data security problems. Information
security audits take place once every six months for systematic control of information security risks. In terms of privacy pr otection,
the Privacy Policy has been established, which provides in details the rules and standards for collection and use of users’ personal
information and sets forth the reasonable and feasible security measures adopted for protection of users’ personal informatio n. In
this way the Company will make sure with greatest efforts that all users’ personal information are protected at the highest level.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
32
The Company ensures that it runs the business in compliance with applicable laws and regulations throughout the world, and
protects the users’ right to manage personal information. A response procedure has been stipulated to inform users of any possible
cost and necessary actions needed to be taken.
3. 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 the
Company to maintain its core competitive advantage. If the Company fails to effectively build a core talent team, give reasonabl e
incentives and manages the core personnel, the employees’ enthusiasm and creativity will be affected, which will have an adve rse
impact 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 high
project bonus, and given discretion of research and creation. In order to flexibly attract and retain quality management and
business talents, taking into account the Company’s long-term and recent interests and the Company’s long-term, sustainable and
sound development, the Company implemented the employee stock ownership plan during the Reporting Period to establish and
improve the benefit sharing mechanism between workers and owners, further improve the corporate govern ance structure of the
Company and effectively mobilize the enthusiasm of workers and employees. The Company maintains the stability of core
technology and management personnel by signing agreements with core personnel, creating a favorable working environment and
building a great corporate culture. Meanwhile, the Company helps employees to realize their potential through a well -trained
employee training system, and rationally manages the team by using a clear rule of survival of the fittest to reinforce the team’s
dynamics.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
33
Part V Significant Events
I Annual and Extraordinary General Meetings of Shareholders Convened during the Reporting
Period
1. General Meetings of Shareholders Convened during the Reporting Period
Investor
Date of the Date of Index to disclosed
Meeting Type participation
meeting disclosure information
ratio
The 2019 Annual Annual General
23 April
General Meeting of Meeting of 44.13% 22 April 2020 http://www.cninfo.com.cn
2020
Shareholders Shareholders
The First Extraordinary Extraordinary
General Meeting of General Meeting of 42.78% 15 May 2020 16 May 2020 http://www.cninfo.com.cn
Shareholders of 2020 Shareholders
2. Extraordinary General Meetings of Shareholders Convened at the Request of Preferred Shareholders with
Resumed Voting Rights
□ Applicable √ Not applicable
II Interim Dividend Plan
√ Applicable □ Not applicable
Bonus issue from profit (share/10 shares) 0
Cash dividend/10 shares (RMB) (tax inclusive) 3
Bonus issue from capital reserves (share/10 shares) 0
Share base (share) 2,112,251,697
Cash dividends (RMB) (tax inclusive) 633,675,509.10
Cash dividends in other forms (such as share repurchase) (RMB) 0.00
Total cash dividends (including those in other forms) (RMB) 633,675,509.10
Distributable profit (RMB) 873,232,208.83
Total cash dividends (including those in other forms) as % of total
100%
profit to be distributed
Applicable cash dividend policy
If the Company is in the growth stage and has a significant capital expenditure arrangement, when making profit distribution,
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
34
cash dividends shall account for no less than 20% in the profit distribution.
Details of the cash and/or stock dividend plan
In view of the Company’s sustained and solid profitability and good financial position, as well as the expe ctations and
confidence for the Company’s future development, and fully considering the interests and reasonable demands of investors, the
Company’s Board of Directors proposed a 2020 interim dividend plan in accordance with the No. 3 Listed Companies Regulatory
Guidelines, the Company Law, the Articles of Association and the Company’s shareholder return plan, under the principle of
profit distribution and the premise of ensuring the normal operation and long-term development of the Company.
Upon approval by the Board of Directors, the Company’s 2020 interim dividend plan is as follows: Based on the total issued
share capital on the date of record, a cash dividend of RMB3 (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 for
Employees
√ Applicable □ Not applicable
The Proposal on the Third Employee Stock Ownership Plan (Draft) and Its Summary, along with related proposals, was
approved at the Fourth Meeting of the Fifth Board of Directors and the Fourth Extraordinary General Meeting of Shareholders of
2019 of the Company. The company performance requirement for this employee stock ownership plan is a net profit (based on net
profit attributable to shareholders of the Company and exclusive of share -based payments under this employee stock ownership
plan) not lower than RMB1.5 billion for 2019.
According to the Independent Auditor’s Report Hua Xing Suo (2020) Shen Zi GD—No. 026 issued by Huaxing Certified Public
Accountants LLP, the net profit attributable to shareholders of the Company for 2019 was RMB2.115 billion (RMB2.185 billion after
excluding the share-based payments under this employee stock ownership plan in 2019). As such, the company performance
requirement for this employee stock ownership plan was fulfilled. Therefore, 30% shares under this employee stock ownership plan
would be unlocked for the 12 months commencing from 27 July 2019 (the date when the Company announced that the final batch
of target shares were transferred to this employee stock ownership plan). For further information, please visit
http://www.cninfo.com.cn.
The lock-up period for the first batch of shares (6,704,261 shares) under the third employee stock ownership plan expired on
26 July 2020. For further information, please refer to the Reminder of the Expiry of the Lock-up Period of the First Batch of Shares
under the Third Employee Stock Ownership Plan disclosed by the Company on http://www.cninfo.com.cn dated 23 July 2020.
IV Other Significant Events
√ Applicable □ Not applicable
The Proposal on the 2020 Private Placement Plan, along with related proposals, was approved at the Eleventh Meeting of the
Fifth Board of Directors and the 2019 Annual General Meeting of Shareholders of the Company. According to the Plan, the Company
intended to raise funds not exceeding RMB4.5 billion (inclusive) by offering shares of no more than 5% of the total pre -offering
share capital. The raised funds after deducting the issuance expenses would be invested in the online games development and
operation project (RMB1.6 billion), the 5G-based cloud gaming platform project (RMB1.65 billion) and the Guangzhou headquarters
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
35
building project (RMB1.25 billion). On 27 April 2020, the Company received the Acceptance of Application for Administrative
Permission (acceptance No.: 200844) issued by the China Securities Regulatory Commission (hereinafter, the “CSRC”) on 26 Apri l
2020. Upon preliminary examination of the Application for Private Placement by Listed Company submitted by the Company,
together with related materials, the CSRC decided to accept the application for further review on the ground that the applica tion
materials were in compliance with the prescribed form.
On 1 June 2020, the Company received the First Feedback Concerning Application for Administration Permission (No. 200844)
issued by the CSRC on 29 May 2020. Upon the receipt of the Feedback, the Company, together with the relevant intermediary
agencies, carefully analyzed and discussed the issues raised in the Feedback, and made a corresponding reply, upon relevant checks,
as required by the Feedback. The reply has been disclosed to the public. Please refer to the Reply of Wuhu 37 Interactive
Entertainment Network Technology Group Co., Ltd. Concerning the Feedback to Its Private Placement Application Documents
disclosed by the Company on http://www.cninfo.com.cn dated 24 June 2020.
The Proposal on Reducing the Total Funds to Be Raised in the 2020 Private Placement, along with related proposals, was
approved at the Thirteenth Meeting of the Fifth Board of Directors of the Company. As such, the total funds to be raised was agreed
to be reduced to an amount not exceeding RMB4.463 billion. The raised funds after deducting the issuance expenses would be
invested in the online games development and operation project (RMB1.6 billion), the 5G-based cloud gaming platform project
(RMB1.65 billion) and the Guangzhou headquarters building project (RMB1.213 billion).
On 9 July 2020, the Company received the Letter on Preparations for the Issuance Appraisal Committee Meeting on the
Application of 37 Interactive Entertainment for Private Placement (hereinafter, the “Letter”) issue d by the CSRC. The Company,
together with Orient Securities Investment Banking Co., Ltd. and other relevant intermediary agencies, carried out careful ch ecks in
respect of the issues raised in the Letter, and made a corresponding reply as required. For further information, please refer to the
Reply of Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd. and Orient Securities Investment Banking Co., L td.
on the Letter on Preparations for the Issuance Appraisal Committee Meeting on the Application of 37 Interactive Entertainment for
Private Placement disclosed by the Company on http://www.cninfo.com.cn dated 18 July 2020.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
36
Part VI Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares
Shares
as
as
dividend
Percenta New dividend Percenta
Number converte Other Subtotal Number
ge (%) issues converte ge (%)
d from
d from
capital
profit
reserves
1. Restricted shares 794,755,467 37.63% -84,000,441 -84,000,441 710,755,026 33.65%
1.1 Shares held by
other domestic 794,755,467 37.63% -84,000,441 -84,000,441 710,755,026 33.65%
investors
Shares
held by domestic 794,755,467 37.63% -84,000,441 -84,000,441 710,755,026 33.65%
natural persons
2. Un-restricted shares 1,317,496,230 62.37% 84,000,441 84,000,441 1,401,496,671 66.35%
2.1 RMB-denominated
1,317,496,230 62.37% 84,000,441 84,000,441 1,401,496,671 66.35%
common shares
3. Total shares 2,112,251,697 100.00% 0 0 2,112,251,697 100.00%
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Shares with Increase in
Beginning restriction restricted Ending
Name of Reason for
restricted lifted in the shares in the restricted Lifting date
shareholder restriction
shares Reporting Reporting shares
Period Period
Subject to regulations in respect of
Locked-up shares of
Li Weiwei 302,743,539 0 0 302,743,539 changes in shareholdings of directors,
senior management
supervisors and senior management
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
37
Subject to regulations in respect of
Locked-up shares of
Zeng Kaitian 276,978,130 -31,633,800 0 245,344,330 changes in shareholdings of directors,
senior management
supervisors and senior management
Subject to regulations in respect of
Locked-up shares of
Wu Weihong 112,002,562 -28,000,641 0 84,001,921 changes in shareholdings of directors,
senior management
supervisors and senior management
Post-offering
Hu Yuhang 4,315,518 0 0 4,315,518 17 July 2020
restricted shares
Subject to regulations in respect of
Locked-up shares of
Wu Weidong 98,195,668 -24,375,000 0 73,820,668 changes in shareholdings of directors,
senior management
supervisors and senior management
Subject to regulations in respect of
Locked-up shares of
Yang Jun 520,050 0 0 520,050 changes in shareholdings of directors,
senior management
supervisors and senior management
Subject to regulations in respect of
Locked-up shares of
Qi Jifeng 0 0 9,000 9,000 changes in shareholdings of directors,
senior management
supervisors and senior management
Total 794,755,467 -84,009,441 9,000 710,755,026 -- --
II Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings as at the Period-End
Unit: share
Number of preferred
shareholders with resumed
Number of common shareholders 55,993 0
voting rights (if any) (see note
8)
5% or greater common shareholders or the top 10 common shareholders
Shareho Increase/decre Pledged or frozen
Restricted Un-restricted
Nature of lding Common ase in the status
Name of shareholder common common
shareholder percent shares held Reporting
shares held shares held Status Shares
age Period
Domestic
Li Weiwei 19.11% 403,658,052 0 302,743,539 100,914,513 Pledged 29,000,000
natural person
Domestic
Zeng Kaitian 11.62% 245,344,374 -81,781,400 245,344,330 44 Pledged 9,810,000
natural person
Hong Kong Securities Overseas 6.98% 147,487,787 73,694,639 0 147,487,787
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
38
Clearing Company Ltd. corporation
Domestic
Wu Weihong 5.30% 112,002,562 0 84,001,921 28,000,641
natural person
Domestic
Hu Yuhang 5.00% 105,612,651 31,975,100 4,315,518 101,297,133 Pledged 5,050,000
natural person
Domestic
Wu Weidong 4.66% 98,427,557 0 73,820,668 24,606,889
natural person
Domestic
Wu Xushun 3.50% 73,937,782 0 0 73,937,782
natural person
National Social Security
Other 1.21% 25,503,030 25,503,030 0 25,503,030
Fund—Portfolio 111
Wuhu 37 Interactive
Entertainment Network
Technology Group Co., Other 1.06% 22,347,537 0 0 22,347,537
Ltd.—third employee
stock ownership plan
China Universal Asset
Management (CUAM) -
Bank of
Ningbo—Zhuhai Rongxi Other 0.95% 20,089,263 -17,839,168 0 20,089,263
Equity Investment
Partnership (Limited
Partnership)
Strategic investor or general corporation
becoming a top-10 common shareholder Not applicable
in a rights issue (if any) (see note 3)
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.
Related or acting-in-concert parties
2. The Company is not aware of whether there is, among the other top 10 shareholders, any related
among the shareholders above
parties or acting-in-concert parties as defined in the Measures on the Administration of Acquisition of
Listed Companies.
Top 10 un-restricted common shareholders
Un-restricted common shares Shares by class
Name of shareholder
held Class Shares
Hong Kong Securities Clearing Company
147,487,787 RMB-denominated common shares 147,487,787
Ltd.
Hu Yuhang 101,297,133 RMB-denominated common shares 101,297,133
Li Weiwei 100,914,513 RMB-denominated common shares 100,914,513
Wu Xushun 73,937,782 RMB-denominated common shares 73,937,782
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
39
Wu Weihong 28,000,641 RMB-denominated common shares 28,000,641
National Social Security Fund—Portfolio
25,503,030 RMB-denominated common shares 25,503,030
111
Wu Weidong 24,606,889 RMB-denominated common shares 24,606,889
Wuhu 37 Interactive Entertainment
Network Technology Group Co., Ltd.—third 22,347,537 RMB-denominated common shares 22,347,537
employee stock ownership plan
China Universal Asset Management (CUAM)
- Bank of Ningbo—Zhuhai Rongxi Equity
20,089,263 RMB-denominated common shares 20,089,263
Investment Partnership (Limited
Partnership)
National Social Security Fund—Portfolio
15,831,558 RMB-denominated common shares 15,831,558
416
Related or acting-in-concert parties among 1. Among the top 10 shareholders of the Company, Wu Xushun is the father of Wu Weihong and Wu
the top 10 un-restricted common Weidong, which makes them shareholders acting in concert.
shareholders, as well as between the top 10 2. The Company is not aware of whether there is, among the other top 10 shareholders, any related
un-restricted common shareholders and parties or acting-in-concert parties as defined in the Measures on the Administration of Acquisition of
the top 10 common shareholders Listed Companies.
Top 10 common shareholders engaged in
securities margin trading (if any) (see note None
4)
Indicate by tick mark whether any of the top 10 common shareholders or the top 10 un-restricted common shareholders of the
Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
Part VII Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□ Yes √ No
They are unaudited by such an auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
40
1. Consolidated Balance Sheet
Prepared by Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd.
30 June 2020
Unit: RMB
Item 30 June 2020 31 December 2019
Current assets:
Monetary funds 3,476,651,621.54 2,152,508,643.76
Transaction settlement funds
Loans to other banks
Trading financial assets 2,078,176,380.47 2,042,903,416.32
Derivative financial assets
Notes receivable
Accounts receivable 1,275,085,408.62 1,287,915,082.56
Accounts receivable financing
Prepayments 648,900,877.82 661,089,054.70
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables 80,200,345.60 84,842,613.18
Including: Interest receivable
Dividends receivable 10,400,000.00 10,400,000.00
Redemptory monetary capital for sale
Inventories
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 171,339,570.64 125,885,754.42
Total current assets 7,730,354,204.69 6,355,144,564.94
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 466,187,441.61 468,792,240.20
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
41
Other equity investments 125,811,953.38 119,521,347.60
Other non-current financial assets 430,351,973.16 389,489,978.68
Investment properties
Fixed assets 920,231,133.44 47,102,974.14
Construction in progress 797,245,599.78
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 16,210,163.97 16,997,408.09
Development expenditure
Goodwill 1,614,909,880.35 1,614,909,880.35
Long-term deferred expenses 32,136,689.41 38,593,956.25
Deferred income tax assets 26,766,154.05 26,566,306.68
Other non-current assets 1,107,475,299.02 270,895,599.02
Total non-current assets 4,740,080,688.39 3,790,115,290.79
Total assets 12,470,434,893.08 10,145,259,855.73
Current liabilities:
Short-term loans 889,324,326.07
Loans from the central bank
Loans from other banks
Trading financial liabilities
Derivative financial liabilities
Notes payable 540,000,000.00 300,000,000.00
Accounts payable 1,492,117,378.94 1,418,946,404.24
Advances from customers 196,924,263.69
Contract liabilities 236,490,124.28
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 399,363,683.28 278,936,676.53
Taxes payable 178,142,122.00 161,110,700.51
Other payables 156,831,656.54 141,387,120.09
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
42
Including: Interest payable
Dividends payable
Handling charges and commissions payable
Reinsurance payables
Liabilities held for sale
Non-current liabilities due within one year 31,158,472.31
Other current liabilities 56,387,620.73 71,925,723.44
Total current liabilities 3,948,656,911.84 2,600,389,360.81
Non-current liabilities:
Insurance contract reserve
Long-term loans 250,017,634.02
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 721,630.66
Deferred income tax liabilities 1,102,695.20 422,626.71
Other non-current liabilities
Total non-current liabilities 1,102,695.20 251,161,891.39
Total liabilities 3,949,759,607.04 2,851,551,252.20
Shareholders' equity:
Share capital 2,112,251,697.00 2,112,251,697.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 156,939,080.75 73,153,800.49
Less: Treasury shares
Other comprehensive income -84,201,739.17 -94,582,500.13
Special reserves
Surplus reserves 227,390,965.90 227,390,965.90
General risk reserves
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
43
Retained earnings 5,777,154,510.18 4,711,093,895.82
Total equity attributable to shareholders of the
8,189,534,514.66 7,029,307,859.08
Company
Non-controlling interests 331,140,771.38 264,400,744.45
Total shareholders' equity 8,520,675,286.04 7,293,708,603.53
Total liabilities and shareholders’ equity 12,470,434,893.08 10,145,259,855.73
Legal representative: Li Weiwei Chief Financial Officer: Ye Wei
Board Secretary: Ye Wei
2. Balance Sheet of the Company
Unit: RMB
Item 30 June 2020 31 December 2019
Current assets:
Monetary funds 324,975.12 765,545.81
Trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable
Accounts receivable financing
Prepayments 5,000.00
Other receivables 375,998,167.92 1,010,549,806.19
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 3,066,714.15 2,895,886.32
Total current assets 379,389,857.19 1,014,216,238.32
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
44
Long-term equity investments 6,574,316,138.89 6,487,297,853.18
Other equity investments 7,240,888.31 7,240,888.31
Other non-current financial assets 31,706,772.79 31,706,772.79
Investment properties
Fixed assets
Construction in progress
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets
Development expenditure
Goodwill
Long-term deferred expenses
Deferred income tax assets
Other non-current assets
Total non-current assets 6,613,263,799.99 6,526,245,514.28
Total assets 6,992,653,657.18 7,540,461,752.60
Current liabilities:
Short-term loans
Trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 122,179.29 14,203.83
Advances from customers
Contract liabilities
Employee benefits payable 136,748.20 120,059.83
Taxes payable 3,740,774.87 1,958,201.03
Other payables 6,051,829.21 6,806,054.20
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 10,051,531.57 8,898,518.89
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
45
Non-current liabilities:
Long-term loans
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 10,051,531.57 8,898,518.89
Shareholders' equity:
Share capital 2,112,251,697.00 2,112,251,697.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 3,709,796,608.05 3,622,063,902.37
Less: Treasury shares
Other comprehensive income -52,759,111.69 -52,759,111.69
Special reserves
Surplus reserves 340,080,723.42 340,080,723.42
Retained earnings 873,232,208.83 1,509,926,022.61
Total shareholders' equity 6,982,602,125.61 7,531,563,233.71
Total liabilities and shareholders’ equity 6,992,653,657.18 7,540,461,752.60
3. Consolidated Income Statement
Unit: RMB
Item H1 2020 H1 2019
1. Total operating revenue 7,988,675,195.57 6,070,957,503.06
Including: Operating revenue 7,988,675,195.57 6,070,957,503.06
Interest income
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
46
Premium income
Handling charge and commission income
2. Total operating costs and expenses 6,257,275,520.69 4,908,533,506.03
Including: Cost of sales 863,666,663.98 838,986,561.51
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 22,337,290.11 20,392,371.96
Distribution and selling expenses 4,549,628,282.98 3,632,067,521.84
General and administrative expenses 166,919,490.05 88,053,838.68
Research and development expenses 644,896,512.00 324,699,670.32
Financial expenses 9,827,281.57 4,333,541.72
Including: Interest expense 34,655,637.60 18,926,518.37
Interest income 23,176,748.76 8,475,803.74
Add: Other income 95,213,596.55 49,294,108.11
Investment income (“-” for loss) 108,093,257.02 18,932,969.82
Including: Share of profits and losses of joint ventures and
13,131,170.06 -6,172,892.49
associates
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) 115,130,432.61 41,603,452.48
Impairment loss on credit (“-” for loss) -7,237,074.09 33,094,388.44
Impairment loss on assets (“-” for loss) -44,335,968.65 -14,789,077.01
Gain on disposal of assets (“-” for loss) 75,379.94 -77,711.53
3. Operating profit (“-” for loss) 1,998,339,298.26 1,290,482,127.34
Add: Non-operating income 2,297,869.41 3,082,997.15
Less: Non-operating expenses 7,429,745.23 2,674,771.67
4. Profit before income tax expenses (“-” for loss) 1,993,207,422.44 1,290,890,352.82
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
47
Less: Income tax expenses 110,659,828.94 131,634,742.44
5. Net profit (“-” for net loss) 1,882,547,593.50 1,159,255,610.38
5.1 Classified by continuity of operations
5.1.1 Net profit from continuing operations (“-” for net loss) 1,882,547,593.50 1,159,255,610.38
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 1,699,736,123.46 1,033,074,405.38
5.2.2 Net profit attributable to non-controlling interests 182,811,470.04 126,181,205.00
6. Other comprehensive income, net of tax 10,361,892.43 -25,288.71
Other comprehensive income attributable to shareholders of the
10,380,760.96 -25,288.71
Company, net of tax
6.1 Other comprehensive income that will not be reclassified
subsequently to profit or loss
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
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
10,380,760.96 -25,288.71
subsequently to profit or loss
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
10,380,760.96 -25,288.71
currency financial statements
6.2.7 Others
Other comprehensive income attributable to non-controlling -18,868.53
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
48
interests, net of tax
7. Total comprehensive income 1,892,909,485.93 1,159,230,321.67
Total comprehensive income attributable to shareholders of the
1,710,116,884.42 1,033,049,116.67
Company
Total comprehensive income attributable to non-controlling
182,792,601.51 126,181,205.00
interests
8. Earnings per share:
8.1 Basic earnings per share 0.80 0.49
8.2 Diluted earnings per share 0.80 0.49
Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees
before 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 Wei
Board Secretary: Ye Wei
4. Income Statement of the Company
Unit: RMB
Item H1 2020 H1 2019
1. Operating revenue 0.00 0.00
Less: Cost of sales 0.00 0.00
Taxes and surcharges 21,933.20 8,651.83
Distribution and selling expenses
General and administrative expenses 2,375,644.75 664,215.31
Research and development expenses
Financial expenses 389,882.06 5,026,558.14
Including: Interest expense 8,467,829.41
Interest income 810.35 3,444,301.05
Add: Other income 439,106.01 25,780.49
Investments income (“-” for loss) -714,419.97 789,008,294.71
Including: Share of profits and losses of joint ventures and
-714,419.97 -979,081.27
associates
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)
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
49
Impairment loss on credit (“-” for loss) 44,468.66 -2,270.00
Impairment loss on assets (“-” for loss)
Gain on disposal of assets (“-” for loss)
2. Operating profit (“-” for loss) -3,018,305.31 783,332,379.92
Add: Non-operating income 0.63
Less: Non-operating expenses
3. Profit before income tax expenses (“-” for loss) -3,018,304.68 783,332,379.92
Less: Income tax expenses -567.49
4. Net profit (“-” for net loss) -3,018,304.68 783,332,947.41
4.1 Net profit from continuing operations (“-” for net loss) -3,018,304.68 783,332,947.41
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
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
50
5.2.7 Others
6. Total comprehensive income -3,018,304.68 783,332,947.41
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 2020 H1 2019
1. Cash flows from operating activities:
Cash received from the sales of goods or rendering services 8,468,127,558.75 5,978,803,476.57
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 6,317,294.49 18,148,222.30
Cash received relating to other operating activities 106,875,881.05 53,303,204.02
Sub-total of cash inflows from operating activities 8,581,320,734.29 6,050,254,902.89
Cash paid for purchases of goods and services 1,036,250,684.73 663,495,847.03
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 580,145,971.94 384,362,339.55
Payments of taxes and levies 196,576,891.94 234,010,246.88
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
51
Cash paid relating to other operating activities 4,318,120,638.78 4,152,031,533.06
Sub-total of cash outflows used in operating activities 6,131,094,187.39 5,433,899,966.52
Net cash flows from operating activities 2,450,226,546.90 616,354,936.37
2. Cash flows from investing activities:
Cash received from disposal of investments 224,285,017.49 105,816,280.71
Cash received from investment income 53,388,661.32 16,060,855.44
Cash received from disposal of fixed assets, intangible assets and
614,635.00 204,690.00
other long-term assets
Net cash received from disposal of subsidiaries and other business
433,449,673.50
units
Cash received relating to other investing activities 4,678,500,000.00 2,488,320,540.52
Sub-total of cash inflows from investing activities 4,956,788,313.81 3,043,852,040.17
Cash paid for acquisition of fixed assets, intangible assets and
968,397,533.12 59,645,209.49
other long-term assets
Cash paid to acquire investments 86,020,569.50 78,068,522.99
Net increase in pledged loans granted
Net cash paid for the acquisition of subsidiaries and other
business units
Cash paid relating to other investing activities 4,854,790,000.00 2,430,000,000.00
Sub-total of cash outflows used in investing activities 5,909,208,102.62 2,567,713,732.48
Net cash flows from/used in investing activities -952,419,788.81 476,138,307.69
3. Cash flows from financing activities:
Cash received from capital contributions
Including: Cash received from capital contributions by
non-controlling interests of subsidiaries
Cash received from borrowings
Cash received relating to other financing activities 889,324,326.07
Sub-total of cash inflows from financing activities 889,324,326.07
Cash repayments of borrowings 281,176,106.33 383,609,640.58
Cash paid for interest and dividends 788,329,296.95 138,359,549.65
Including: Dividends paid by subsidiaries to non-controlling
120,000,000.00 122,000,000.00
interests
Cash paid relating to other financing activities 302,007,312.87
Sub-total of cash outflows used in financing activities 1,069,505,403.28 823,976,503.10
Net cash flows used in financing activities -180,181,077.21 -823,976,503.10
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
52
4. Effect of foreign exchange rate changes on cash and cash equivalents 10,777,687.85 -128,092.91
5. Net increase in cash and cash equivalents 1,328,403,368.73 268,388,648.05
Add: Cash and cash equivalents at beginning of the period 2,135,260,406.77 1,515,740,344.79
6. Cash and cash equivalents at end of the period 3,463,663,775.50 1,784,128,992.84
6. Cash Flow Statement of the Company
Unit: RMB
Item H1 2020 H1 2019
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 650,095,006.21 1,355,608,209.24
Sub-total of cash inflows from operating activities 650,095,006.21 1,355,608,209.24
Cash paid for purchases of goods and services
Cash paid to and on behalf of employees 545,424.75 360,009.16
Payments of taxes and levies 21,933.20 1,736,261.21
Cash paid relating to other operating activities 1,016,292,709.85 2,256,700,554.73
Sub-total of cash outflows used in operating activities 1,016,860,067.80 2,258,796,825.10
Net cash flows used in operating activities -366,765,061.59 -903,188,615.86
2. Cash flows from investing activities:
Cash received from disposal of investments 4,999,610.00
Cash received from investment income 1,000,000,000.00 1,289,987,375.98
Cash received from disposal of fixed assets, intangible assets and
other long-term assets
Net cash received from disposal of subsidiaries and other business
404,709,910.00
units
Cash received relating to other investing activities
Sub-total of cash inflows from investing activities 1,000,000,000.00 1,699,696,895.98
Cash paid for acquisition of fixed assets, intangible assets and
other long-term assets
Cash paid to acquire investments 8,000,000.00
Net cash paid for the acquisition of subsidiaries and other business
units
Cash paid relating to other investing activities
Sub-total of cash outflows used in investing activities 8,000,000.00
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
53
Net cash flows from investing activities 1,000,000,000.00 1,691,696,895.98
3. Cash flows from financing activities:
Cash received from capital contributions
Cash received from borrowings
Cash received relating to other financing activities
Sub-total of cash inflows from financing activities
Cash repayments of borrowings 369,000,000.00
Cash paid for interest and dividends 633,675,509.10 8,520,671.25
Cash paid relating to other financing activities 302,007,312.87
Sub-total of cash outflows used in financing activities 633,675,509.10 679,527,984.12
Net cash flows used in financing activities -633,675,509.10 -679,527,984.12
4. Effect of foreign exchange rate changes on cash and cash equivalents
5. Net decrease/increase in cash and cash equivalents -440,570.69 108,980,296.00
Add: Cash and cash equivalents at beginning of the period 765,545.81 4,325,959.18
6. Cash and cash equivalents at end of the period 324,975.12 113,306,255.18
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
54
7. Consolidated Statement of Changes in Shareholders’ Equity
H1 2020
Unit: RMB
H1 2020
Equity attributable to shareholders of the Company
Other equity
instruments
Less: Speci Gener Total
Item Pre Per Non-controlling
Other
Capital Treasu al Surplus al risk Retained Othe shareholders'
fer pet interests
Share capital Ot comprehensi Sub-total
red ual reserves ry reser reserves reserv earnings rs equity
her ve income
sh bo shares ves es
s
are nd
s s
1. Balance as
at the end of 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
prior year
Add:
Adjustments
for changed
accounting
policies
Adjustments
for corrections
of previous
errors
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
55
Adjustments
for business
combinations
under
common
control
Others
2. Balance as
at beginning of 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
year
3. Increase/
decrease in
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
the period (“-”
for decrease)
3.1 Total
comprehensiv 10,380,760.96 1,699,736,123.46 1,710,116,884.42 182,792,601.51 1,892,909,485.93
e income
3.2 Capital
contribution
and 83,785,280.26 83,785,280.26 3,947,425.42 87,732,705.68
withdrawal by
shareholders
3.2.1 Common
shares
contribution
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
56
and
withdrawal by
shareholders
3.2.2 Capital
contribution
and
withdrawal by
holders of
other equity
instruments
3.2.3
Share-based
payments
83,785,280.26 83,785,280.26 3,947,425.42 87,732,705.68
included in
shareholders’
equity
3.2.4 Others
3.3 Profit
-633,675,509.10 -633,675,509.10 -120,000,000.00 -753,675,509.10
distribution
3.3.1
Appropriation
to surplus
reserves
3.3.2
Appropriation
to general risk
reserves
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
57
3.3.3
Distribution to -633,675,509.10 -633,675,509.10 -120,000,000.00 -753,675,509.10
shareholders
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
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
58
schemes
transferred
into retained
earnings
3.4.5 Other
comprehensiv
e 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 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
the period
H1 2019
Unit: RMB
H1 2019
Item Equity attributable to shareholders of the Company Non-controlling Total
Share capital Other equity Capital Less: Treasury Other Spe Surplus Genera Retained Oth Sub-total interests shareholders'
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
59
instruments reserves shares comprehensi cial reserves l risk earnings ers equity
ve income res reserve
Per O
Prefe erv s
pet t
rred es
ual h
shar
bon e
es
ds rs
1. Balance as
at the end of 2,124,870,253.00 298,739,967.21 46,376,346.58 170,477,835.88 3,332,211,003.19 5,972,675,405.86 141,026,934.06 6,113,702,339.92
prior year
Add:
Adjustments
for changed -26,836,801.80 26,836,801.80
accounting
policies
Adjustments
for
corrections
of previous
errors
Adjustments
for business
combination
s under
common
control
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
60
Others
2. Balance as
at beginning 2,124,870,253.00 298,739,967.21 19,539,544.78 170,477,835.88 3,359,047,804.99 5,972,675,405.86 141,026,934.06 6,113,702,339.92
of year
3. Increase/
decrease in
the period -12,618,556.00 -106,500,613.64 302,007,311.87 -25,288.71 615,093,573.38 193,941,803.16 11,692,555.24 205,634,358.40
(“-” for
decrease)
3.1 Total
comprehensi -25,288.71 1,033,074,405.38 1,033,049,116.67 126,181,205.00 1,159,230,321.67
ve income
3.2 Capital
contribution
and
-12,618,556.00 -106,500,613.64 302,007,311.87 -421,126,481.51 7,511,350.24 -413,615,131.27
withdrawal
by
shareholders
3.2.1
Common
shares
contribution
-12,618,556.00 -106,500,613.64 302,007,311.87 -421,126,481.51 -421,126,481.51
and
withdrawal
by
shareholders
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
61
3.2.2 Capital
contribution
and
withdrawal
by holders of
other equity
instruments
3.2.3
Share-based
payments
included in
shareholders
’ equity
3.2.4 Others 7,511,350.24 7,511,350.24
3.3 Profit
-417,980,832.00 -417,980,832.00 -122,000,000.00 -539,980,832.00
distribution
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
risk reserves
3.3.3
Distribution -417,980,832.00 -417,980,832.00 -122,000,000.00 -539,980,832.00
to
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
62
shareholders
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
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
63
pension
schemes
transferred
into retained
earnings
3.4.5 Other
comprehensi
ve 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 2,112,251,697.00 192,239,353.57 302,007,311.87 19,514,256.07 170,477,835.88 3,974,141,378.37 6,166,617,209.02 152,719,489.30 6,319,336,698.32
the period
8. Statement of Changes in Shareholders’ Equity of the Company
H1 2020
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
64
Unit: RMB
H1 2020
Other equity instruments Less: Other Total
Item Special Surplus Retained
Share capital Preferre Perpetual Capital reserves Treasur comprehensiv Others shareholders'
Others reserves reserves earnings
d shares bonds y shares e income equity
1. Balance as at the end of
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
prior year
Add: Adjustments for
changed accounting
policies
Adjustments for
corrections of previous
errors
Others
2. Balance as at beginning
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
of year
3. Increase/ decrease in
the period (“-” for 87,732,705.68 -636,693,813.78 -548,961,108.10
decrease)
3.1 Total comprehensive
-3,018,304.68 -3,018,304.68
income
3.2 Capital contribution
and withdrawal by 87,732,705.68 87,732,705.68
shareholders
3.2.1 Common shares
contribution and
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
65
withdrawal by
shareholders
3.2.2 Capital contribution
and withdrawal by holders
of other equity
instruments
3.2.3 Share-based
payments included in 87,732,705.68 87,732,705.68
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
-633,675,509.10 -633,675,509.10
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
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
66
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
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
the period
H1 2019
Unit: RMB
H1 2019
Other equity instruments Other
Less: Total
Item Capital compreh Special Surplus Retained
Share capital Preferred Perpetual Treasury Others shareholders'
Others reserves ensive reserves reserves earnings
shares bonds shares equity
income
1. Balance as at the end of prior 2,124,870,253.00 3,952,461,239.82 170,477,835.88 612,706,036.45 6,860,515,365.15
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
67
year
Add: Adjustments for changed
accounting policies
Adjustments for
corrections of previous errors
Others
2. Balance as at beginning of year 2,124,870,253.00 3,952,461,239.82 170,477,835.88 612,706,036.45 6,860,515,365.15
3. Increase/ decrease in the period
-12,618,556.00 -106,500,613.64 302,007,311.87 365,352,115.41 -55,774,366.10
(“-” for decrease)
3.1 Total comprehensive income 783,332,947.41 783,332,947.41
3.2 Capital contribution and
-12,618,556.00 -106,500,613.64 302,007,311.87 -421,126,481.51
withdrawal by shareholders
3.2.1 Common shares contribution
-12,618,556.00 -106,500,613.64 302,007,311.87 -421,126,481.51
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’ equity
3.2.4 Others
3.3 Profit distribution -417,980,832.00 -417,980,832.00
3.3.1 Appropriation to surplus
reserves
3.3.2 Distribution to shareholders -417,980,832.00 -417,980,832.00
3.3.3 Others
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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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
2,112,251,697.00 3,845,960,626.18 302,007,311.87 170,477,835.88 978,058,151.86 6,804,740,999.05
period
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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(The End)
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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