37 Interactive Entertainment Network
Technology Group Co., Ltd.
2022 Interim Report (Summary)
August 2022
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 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.
There is uncertainty with respect to the plans and other forward-looking statements in this
Report, which shall not be deemed as promises to investors. Investors and other stakeholders
shall be fully aware of the risk and understand the difference between plans, forecasts and
promises.
Possible risks facing the Company and countermeasures have been detailed in “VII Risks
Facing the Company and Countermeasures” under “Part III Management Discussion and
Analysis” herein, which investors are kindly reminded to pay attention to.
The Board has approved an interim dividend plan as follows: based on 2,217,864,281 shares,
a cash dividend of RMB 3.5 (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 ......................................................................................... 7
Part III Management Discussion and Analysis .............................................................................................................. 10
Part IV Corporate Governance .................................................................................................................................... 34
Part V Environmental and Social Responsibility ........................................................................................................... 38
Part VI Share Changes and Shareholder Information ................................................................................................... 41
Part VII Financial Statements ...................................................................................................................................... 47
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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Documents Available for Reference
I The financial statements signed and stamped by the Company’s legal representative, and Chief Financial Officer; and
II The originals of the announcements and documents disclosed to the public by the Company on the newspaper designated by the
CSRC for information disclosure during the Reporting Period.
The documents above are available at the Board Secretary’s Office of the Company.
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
Company Law Company Law of the People's Republic of China
Securities Law Securities Law of the People's Republic of China
Guideline No. 1 of the Shenzhen Stock Exchange for Self-regulation of Listed
Guideline for Compliant Operation
Companies—Compliant Operation of Main Board Listed Companies
Articles of Association of Wuhu Shunrong Auto Parts Co., Ltd./Articles of
Association of Wuhu Shunrong Sanqi Interactive Entertainment Network
Articles of Association Technology Co., Ltd./Articles of Association of Wuhu 37 Interactive Entertainment
Network Technology Group Co., Ltd./Articles of Association of 37 Interactive
Entertainment Network Technology Group Co., Ltd.
Expressed in the Chinese currency of Renminbi, expressed in tens of thousands of
RMB, RMB’0,000
Renminbi
Reporting Period/the Reporting Period The period from 1 January 2022 to 30 June 2022
Period-end/end of the Reporting Period 30 June 2022
Clientless or browser kernel-based micro-client games that are based on web
Browser games development 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
Mobile games
other mobile terminals
Wuhu Shunrong Auto Parts Co., Ltd./Wuhu Shunrong Sanqi Interactive
Company/ the Company/ the Listed Entertainment Network Technology Co., Ltd./ Wuhu 37 Interactive Entertainment
Company/ 37 Interactive Entertainment Network Technology Group Co., Ltd./ 37 Interactive Entertainment Network
Technology Group Co., Ltd.
37 Interactive Entertainment (Shanghai) 37 Interactive Entertainment (Shanghai) Technology Co., Ltd.
Jiangsu Aurora/Aurora Network/Jiangsu
Jiangsu Aurora Network Technology Co., Ltd.
Aurora Network
Zengame Technology Zengame Technology Holding Limited and its business entities
X.D. XD Inc. and its business entities
Resonance Phase I Fund Qingdao Resonance Phase I Venture Capital Fund Partnership (Limited Partnership)
Goertek Goertek Inc.
Generation Z The new generation born during 1995-2009
EyuGame Shanghai Eyu Network Technology Co., Ltd.
Karma Game Karma Game HK Limited and its subsidiaries
StarUnion Interactive Entertainment ChengDu StarUnion Interactive Entertainment Technology Co., Ltd.
Flintwood Technology Beijing Flintwood Technology Co., Ltd.
Zhenshuo Network Wuhu Zhenshuo Network Technology Co., Ltd.
Lihoo Network Guangzhou Lihoo Network Co., Ltd.
Jianguo Guangnian Technology Chengdu Jianguo Guangnian Technology Co., Ltd.
Dobala Shanghai Dobala Network Technology Co., Ltd.
ZX Future Beijing ZX Future Technology Co., Ltd.
Longyou Game Chengdu Longyou Tianxia Technology Co., Ltd.
Meng52 Beijing Meng52 Network Technology Co., Ltd.
Woowii Games Shanghai Woowii Network Technology Co., Ltd.
UEGAME Beijing UE Interactive Software Co., Ltd.
Unknown Matrix Guangzhou Unknown Matrix Network Co., Ltd.
Mercury Culture Shanghai Mercury Culture Communication Co., Ltd.
RPG Role playing game
ARPG Action role playing game
SLG Strategy game
MMORPG Massive multiplayer online role-playing game
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 abbreviation of "Virtual Reality", which uses computers to simulate and
VR produce a three-dimensional virtual space. It provides users with sensory
experience such as realistic visual and auditory experience.
The abbreviation of "Augmented Reality", which uses computer technology to
apply virtual information to the real world, where the real environment and
AR
virtual objects exist simultaneously in one picture or space through
superimposition in real time.
5G 5th generation mobile communication technology.
AI Artificial Intelligence
A mobile application data analytical company that specializes in mobile
Sensor Tower application data analytics. It provides global mobile application economy with
data at enterprise level.
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
37 Interactive
Stock name Stock code 002555
Entertainment
Place of listing Shenzhen Stock Exchange
Company name in Chinese 三七互娱网络科技集团股份有限公司
Abbr. (if any) 三七互娱
Company name in English (if any) 37 INTERACTIVE ENTERTAINMENT NETWORK TECHNOLOGY GROUP CO.,LTD.
Legal representative Li Weiwei
II Contact Information
Board Secretary Securities Affairs Representative
Name Ye Wei Wang Sijie
Room 7001, 7/F, Tower B1, Wanjiang Room 7001, 7/F, Tower B1, Wanjiang
Office address Fortune Plaza, 88 Ruixiang Road, Wuhu Fortune Plaza, 88 Ruixiang Road, Wuhu
City, Anhui Province 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
Room 7001, 7/F, Tower B1, Wanjiang Fortune Plaza, 88 Ruixiang
Registered address
Road, Wuhu City, Anhui Province
Zip code 241000
Room 7001, 7/F, Tower B1, Wanjiang Fortune Plaza, 88 Ruixiang
Office address
Road, Wuhu City, Anhui Province
Zip code 241000
Company website http://www.37wan.net/
Email address ir@37.com
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
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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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
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 2021 Annual Report.
3. Other Information
Indicate by tick mark whether any change occurred to other information in the Reporting Period.
□ Applicable Not applicable
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes No
H1 2022 H1 2021 Change (%)
Operating revenue (RMB) 8,092,238,684.40 7,538,949,378.53 7.34%
Net profit attributable to the Listed
1,695,164,644.39 853,717,855.65 98.56%
Company’s shareholders (RMB)
Net profit attributable to the Listed
Company’s shareholders after
1,643,486,319.50 637,526,551.32 157.79%
deducting non-recurring profits and
losses (RMB)
Net cash flows from operating
1,804,079,584.54 1,253,919,152.46 43.88%
activities (RMB)
Basic earnings per share
0.77 0.39 97.44%
(RMB/share)
Diluted earnings per share
0.77 0.39 97.44%
(RMB/share)
Weighted average return on equity
14.72% 10.15% 4.57%
(%)
30 June 2022 31 December 2021 Change (%)
Total assets (RMB) 16,304,212,773.63 14,437,181,242.76 12.93%
Equity attributable to the Listed
11,721,459,112.09 10,773,716,314.49 8.80%
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
328,439.88
(inclusive of impairment allowance write-offs)
Government grants through profit or loss (exclusive Mainly due to refund of value-
of government grants consistently given in the added tax and government
Company’s ordinary course of business at fixed 17,214,562.12 grants other than super-
quotas or amounts as per governmental policies or deduction in the calculation of
standards) taxable amount for VAT
Gain or loss on fair-value changes on trading
financial assets and liabilities & income from
disposal of trading financial assets and liabilities
36,659,086.36
and available-for-sale financial assets (exclusive of
the effective portion of hedges that arise in the
Company’s ordinary course of business)
Reversed portions of impairment allowances for
receivables which are tested individually for 28,947.30
impairment
Non-operating income and expenses other than
2,475,127.73
the above
Less: Income tax effects 4,983,678.44
Non-controlling interests effects (net of tax) 44,160.06
Total 51,678,324.89
Particulars about other gains and losses that meet the definition of non-recurring profits and losses:
□ Applicable Not applicable
No such cases for the Reporting Period.
Explanation of why the Company reclassifies as recurrent a non-recurring profits and losses item 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 Management Discussion and Analysis
I Principal Activity of the Company in the Reporting Period
As one of the top 20 global public game companies, key cultural export companies of China, companies nominated for “Top 30
Cultural Enterprises of China”, civilized institutions in Guangdong Province, and Top 30 Cultural Enterprises of Guangzhou, 37
Interactive Entertainment is an outstanding listed Chinese A-share company engaged in comprehensive cultural and entertainment
offerings.
The Company focuses on cultural and creative businesses based on the development, publishing, and operation of online
games. Meanwhile, it continues to make extensive investments in segments such as Metaverse, film and television, music, artist
agency, animation, social entertainment, e-sports, culture and health, and new consumption, with an aim to build a comprehensive
ecosystem and drive mutual empowerment of business value and cultural value. It has been steadily advancing its development
strategy of “boutiqueization, diversification and globalization”. With “bringing joy to the world” as its mission, the Company is
dedicated to becoming an excellent and sustainable entertainment enterprise.
The Company has been operating in a steady and healthy manner. It adhered to the strategy of “integration of R&D and
operation”, continued to pursue its strategic objectives, as well as kept driving product diversification and global marketing. During
the Reporting Period, the Company recorded operating revenue of RMB 8.092 billion, with a year-over-year (YoY) increase of 7.34%;
and a net profit attributable to the Listed Company’s shareholders of RMB 1.695 billion, up by 98.56% YoY. With the continual
rollout of the Company’s “globalization” strategy, the overseas revenue amounted to RMB 3.033 billion during the first half of 2022,
increasing by 48.33% YoY, a record high.
As a public company, the Company focuses on corporate social responsibility and social welfare. During the Reporting Period,
under the leadership of the Party Committee, the Company steadily carried on with its “social value co-creation plan”. It continued
to input resources to provide support in six areas—rural education, rural industrial development, industry-university-research
talent training, functional game development, employee career development, and scientific and technological innovation, to help
achieve common prosperity around the country. Meanwhile, it actively mobilized internal and external resources to promote talent
cultivation and charitable volunteer services, playing its part as a corporate citizen.
(I) Industry Overview for the Reporting Period
1. Changes in industry-related economic situation and their impacts on the Company
Against the backdrop of a booming digital economy, China's game industry is also leveraging the advantages of resources and
users. It pushes the boundaries and accelerates the pace of industrial development through methods such as technology drivers,
industrial integration and cultural innovation. The game industry has seriously implemented the requirements of the central
government, maintained righteousness and innovation, forged ahead, strove to take up the cultural mission, continuously
strengthened the content construction, continued to regulate the development of the industry and made efforts to expand
overseas markets. The industry's ecosystem has continued to be improved, the strength and competitiveness have been
continuously enhanced, and the pace of high-quality development has become more determined. It insists on giving priority to
social benefits, and actively assumes social responsibilities, which has increasingly become an industry consensus. The game
industry has ushered in new development opportunities.
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According to the China's Game Industry Report from January to June 2022 jointly released by Game Publishing Committee of
China Audio-video and Digital Publishing Association (CADPA) and China Game Industry Research Institute, from January to June
2022, the actual sales revenue of China's game market was RMB 147.789 billion, a YoY decrease of 1.80%, the first YoY decline in
recent years. The scale of Chinese game users dropped by 0.13% YoY. The decline in both the market revenue and user scale is
mainly due to the reduction of user income, a decrease in consumption intention and the increasing operating costs of game
companies during the COVID-19 pandemic. The declining trend in user scale indicates that the game industry has basically lost its
"demographic dividend" and may have entered an era of competition for existing users. At the same time, strengthening the
global market layout has become a breakthrough strategy for China's original games to achieve sustainable development. From
January to June 2022, the actual sales revenue of China's homegrown games in the overseas market rose by 6.16% YoY to USD
8.989 billion, marking steady growth for China’s games in "going global". From the average growth rate in the past five years, the
share of China's game export has shown a stable increase. Exported games have maintained better growth in the three aspects of
download, use length and payment of users.
On the whole, the threshold of game development and barriers to competition has been substantially raised in the current
game industry. 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. Against this backdrop, the Company adheres to the development strategy of
“boutiqueization, diversification and globalization”. It takes the main business as its core and deepens the strategy of "integration
of R&D and operation" and "dual engines at home and abroad", with an aim to drive high-quality, sustainable development. During
the Reporting Period, the Company kept its leading role in R&D capabilities by strengthening the output of quality games.
Moreover, it advanced the "diversification" strategy from the aspects of R&D and publishing, and reserved varied quality games 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 systems,
consolidated refined operation, increased operating efficiency, and prolonged the life cycle of quality games. The Company's
overseas business has grown rapidly and the pace of exporting has been accelerated. With the strategy of "tailored games", the
Company has explored the global market through diversified high-quality games, and the overseas business has become the new
growth engine of the Company.
In addition, with the continuous upgrading of industry technology, the development efficiency and product experience of
games have been constantly improved, and the business transformation has accelerated. The rise of "Metaverse" and other
emerging concepts have triggered extensive attention from many industries and investors. As one with a forward-looking
strategic vision, the Company follows industry changes closely and focuses on exploring Metaverse and the related technologies.
Based on its early investment layout, it continues to extend its investment to high-quality upstream and downstream enterprises
in the fields including optical modules, AR glasses, VR/AR content, cloud game and spatial intelligence technology, covering links
such as optics, display, whole machine, application and system. The Company has identified new business forms combined with
its existing advantages and leading technologies to realize the collaboration of internal and external resources in the field of
technology, promoting the benign complementation of its business and capital operation.
2. Changes in industrial policy environment and their impacts on the Company
(1) In May 2022, the Opinions on Promoting the Implementation of the National Cultural Digitalization Strategy was issued
by the General Office of the CPC Central Committee and the State Council. The document elevated "cultural digitalization" to a
national strategy, made a top-level design for cultural digitalization, and provided an important platform for cultural inheritance
and dissemination.
With the introduction of "new infrastructure" policies in cultural fields including information infrastructure, integration
infrastructure and innovation infrastructure, the relevant artificial intelligence, 5G and data center construction have become the
technological basis for driving the development of cultural industries. Meanwhile, the cultural consumption market is increasingly
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diverse, personalized and experience-focused. The integration of culture and technology has infiltrated technology into all
aspects, including production and consumption, of the digital culture segment, which is essential for promoting cultural
digitalization and empowering the real economy.
The Company sticks to innovation promotion. It continuously improves its technological capabilities by relying on multiple
innovative technologies such as artificial intelligence, big data and block chain, and explores new digital culture experience
through diversified combination of digital technology and its business. On one hand, the Company closely follows the
development trend of Metaverse technology and industry, creates the Metaverse Game Art Museum, integrates the brand with
game IPs, traditional culture and social interaction, and deepens the application scenarios of Metaverse. Additionally, the
Company continues to explore the new experience of immersive social interactions by launching a range of digital collections that
are developed based on self-developed game IPs, the corporate mascot "Onion" and national culture park IPs. On the other hand,
the Company always values the guidance of positive energy. In the development of self-developed games and function games, it
integrates the excellent traditional Chinese culture, presents famous ancient paintings, non-legacy craftsmanship and traditional
customs in a digital way, and inherits the excellent traditional culture.
(2) On 6 June 2021, the Guidelines on Enhancing the Protection of Minors of the Steering Group of the Protection of Minors of
the State Council (hereinafter referred to as the “Guidelines”) were officially issued. Revolving around the implementation of the
Civil Code and the Law on the Protection of Minors, the Guidelines refined and specified the relevant articles of law, raising a total
of 25 tasks. Specifically, in terms of cyber protection, the Guidelines raised requirements such as improving the system of
regulations and policies, making more efforts to prevent minors from Internet addiction, and strengthening the online protection of
minors' personal information.
On 30 August 2021, the National Press and Publication Administration issued the Notice on Further Imposing Strict
Administrative Measures to Prevent Minors from Becoming Addicted to Online Games (hereinafter referred to as the "Notice"),
which addresses further strict management measures to resolutely prevent minors from being addicted to online games and
effectively protect their physical and mental health in terms of the problem of excessive use and even addiction to online games of
minors.
On 14 March 2022, the Cyberspace Administration of China solicited public opinions again on the Regulations on the
Protection of Minors Online (Draft for Comment). Public consultation was held again on issues including minors' poor awareness
and ability to use the Internet safely and properly, online illegal and bad information that affect minors' physical and mental health,
abuse of minors' personal information and Internet addiction.
As one of the first game enterprises to launch the real-name registration and anti-addiction system, the Company has
implemented anti-addiction throughout the entire process of R&D and operation. The Company has completed the connection to
the national real-name authentication system and has, under the latest requirements, upgraded the anti-addiction system for
minors in all its games since 1 September 2021. Up to now, all the Company's games have connected to the anti-addiction system
and launched the age suitability reminders. During the Reporting Period, facial recognition technology was also introduced to
further prevent minors from using adult accounts fraudulently.
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 guardians. 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.
In addition to various anti-addiction protection measures for minors, the Company has launched the "Guardianship Project of
Online Games for Minors' Parents" many years ago, and connected parents to do a good job in supervising minors on the basis of
the implementation of the new anti-addiction rules, allowing parents to limit or prohibit minor's game time in accordance with the
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actual situation. The Company has set up the special process and the customer compliant specialists to deal with all kinds of
problems related to minor players. The Company will further upgrade the guardianship project for parents in the future, further
upgrade and improve the protection system for minors through the positive synergy of multiple dimensions, and build a green and
healthy game ecosystem to protect the healthy growth of minors.
(3) On 10 June 2021, the Data Security Law of the People's Republic of China (hereinafter referred to as the "Data Security
Law") was adopted at the 29th session of the Standing Committee of the 13th National People's Congress of the People's Republic
of China. The Data Security Law is enacted for the purposes of regulating data processing activities, safeguarding data security,
promoting data development and utilization, and protecting the legal rights and interests of individuals and organizations.
In June 2022, the State Administration for Market Regulation and the Cyberspace Administration of China announced to carry
out data security management certification, with the release of the Implementation Rules on Data Security Management
Certification. Network operators are encouraged to standardize the processing and strengthen the security protection of network
data through certification.
In the process of management system construction for information security, the Company has identified and evaluated
information security risks of products and services around more than ten aspects such as information asset management, access
control, password management, information security event management, information security management in business continuity
management, compliance management, etc., established information security policy, risk level evaluation and disposal measures
for each sub-business module, improved system documents and management processes, and formed a complete information
security management system.
In terms of information security management and user privacy protection, based on strict management policies and process
system, the Company adopts industry-leading technologies and benchmark them with international standards, strictly controls
information security risks, and guarantees data security to ensure the security of users' personal information to the maximum
extent. In user privacy protection, for example, the Company implements the seven principles of legality, consistent authority and
responsibility, minimum sufficient information collection, individual consent, user participation, and ensuring security in the
management of the whole life cycle of user data. Around the security of user private information, the Company has also adopted a
variety of technical means to prevent illegal access to unauthorized information by personnel. Meanwhile, the Company also
encrypts, anonymizes and de-identifies sensitive information assets to protect them from being illegal cracked. Such technologies
and measures strongly ensure the security of user privacy information. The Company ensures that it runs the business in strict
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. In 2021, the Company has obtained the international-standard ISO/IEC 27001 certification for information security
management system issued by SGS, an internationally recognized inspection, testing and certification institution, which means that
the Company's information security management has been recognized by a third-party impartial institution which is internationally
authoritative.
(II) Overview of the Company’s main businesses in the Reporting Period
1. Main businesses and business models of the Company
During the Reporting Period, the Company's main businesses included the development, publishing, and operation of online
games. The operating modes of the Company’s online games mainly include independent operation and third-party joint operation.
Under the independent operation mode, the Company obtains the licenses of games through independent R&D or being an
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
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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 along with game
developers.
2. Overview of the Company’s main businesses and products
The Company specializes in the development and publishing of games for global players, with the world’s leading game
development brand “Three Seven Games”, as well as professional game publishing brands “37Mobile”, “37GAMES” and “37Online”.
During the Reporting Period, the domestic game industry entered a period of high-quality development. Game players'
requirements for the quality of online games have increased significantly, the effect of the boutique strategy has been obvious, and
the development of high-quality games has been certified. The Company precisely grasped the industry development trends, made
continuous improvements in operation, and remained a top performer in the industry, while adhering to the "boutiqueization,
diversification and globalization" strategy.
37 Interactive Entertainment
Three Seven Games 37Mobile 37GAMES 37Online
(game development) (publishing of mobile (overseas publishing) (publishing of mobile &
games) browser games)
(I) Mobile game business
During the Reporting Period, the Company recorded operating revenue of RMB 7.739 billion,from mobile games, a YoY
increase of 9.51%. The mobile game offering has become more diversified, game quality sees considerable improvement, and the
mobile game business maintains the leading position in domestic and overseas markets. During the Reporting Period, multiple
games including The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决), All for Glory (荣耀大天使), and The Soul Land: Wu Hun
Jue Xing (斗罗大陆：武魂觉醒) performed well in the growth stage. Meanwhile, its overseas business accelerated again. Various
globally published games, such as Puzzles & Survival, Song of the Castle in the Sky (云上城之歌), and The Road to Be
Shopkeeper (叫我大掌柜), made outstanding contributions, proving the Company's boutiqueization advantages in long-term
game operation and promoting business transformation and upgrade as well as steady development.
① Research and development of mobile games
The Company places high emphasis on R&D investments and R&D talent cultivation, and refines management to improve
quality and efficiency. The Company's game development brand of “Three Seven Games” is mainly based in Guangzhou, while the
Company has also established R&D subsidiaries or R&D branches in Suzhou, Xiamen, Wuhan and Beijing to attract multi-category
talents. A professional layout has been established in multiple market segments like SLG, MMORPG, card games and simulation,
making the Company a benchmark for the R&D of innovative games in the industry.
The Company's R&D arm profoundly implemented the strategy of "boutiqueization, diversification, and globalization", and its
self-developed reserve product projects included game genres such as MMORPG, SLG, card games, and simulation games, while
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the Company considered the plan of global publishing of products at the early stage of the projects. The Company carries on with
the "boutiqueization” strategy and keeps exploring and practicing cutting-edge technologies in R&D. For instance, the battle
strategy mobile card game The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决), as a milestone of the Company’s self-developed
products, ranked as high as the Top 4 of iOS grossing chart shortly after its launch, with the highest monthly gross billing exceeding
RMB 700 million, which is a strong proof of the Company's R&D strength. The game is developed using the Next-Gen 3D engine and
the PBR (Physically Based Rendering) technology. Through technologies such as real-time seamless day-night switch and dynamic
volume-based ray tracing, it creates The Soul Land that meets the fantasies of each fan of The Soul Land with its multi-aspect
gameplay design and construction of a friendly social system.
The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决) has unified the Company's R&D process and underlying logic in the
field of next-gen games, developed a set of systems that can be inherited and constantly iterated, effectively improved the
efficiency of game R&D and broke the ceiling for idea creation, and laid a solid foundation for the Company's boutiqueization
strategy.
On top of that, the Company continues to work on key areas including MMORPG, SLG, card games and simulation games. It has
nearly 10 self-developed products in the pipeline, including mobile games Ba Ye (霸业), Code Magic M (代号魔幻M), Code Gu Feng
(代号古风), Code WTB 3D (代号3D版WTB), Code GOE (代号GOE), Code G2 (代号G2), Code D8 (代号D8) , Code Soul MMO (代号斗
罗MMO), etc., covering genres and themes such as western magic, different-world fantasy, medieval history, history of the Three
Kingdoms, ancient style, female-oriented, and oriental fantasy. Global publishing planning was carried out at the early stage of all
these projects as part of the “boutiqueization, diversification and globalization” strategy.
In addition, on the basis of the self-development brand, the Company also strengthens its self-development capability by
acquiring R&D teams, and cooperates with EyuGame, Karma Game, and other excellent game developers in a long-term and in-
depth manner through its investments, forming a rich external R&D reserve and diversifying the presence on the product supply
side. With the strong advantage created by the implementation of the "integration of R&D and operation" strategy over the years
and the expertise in market insights, user preference identification and analysis at the early stage of a project, the Company is able
to use its own numerical experience to polish the products together with the developers to ensure that the quality of the products
reaches a better level before launching. The Company also assists the R&D team in polishing and adjusting the products with the
feedback from the operation department, so as to improve the success rate of the products and prolong the product life cycle.
Meanwhile, the Company actively embraces technological innovation in R&D brought by digital technologies. It leverages
artificial intelligence, big data and other technologies to increase R&D efficiency through a series of technology platforms. Take
“Zeus”, a self-developed middle platform for game development, as an example. Supported by one-stop service module, the Zeus
platform can provide service and coordination flexibly and freely. It can effectively realize the automation and standardization
across the whole process of R&D, deployment and operation, and clear a path for interconnectivity between systems of different
departments, thus greatly automating systems and business processes. On top of that, the Company’s homegrown data analysis
system "Athena", monitoring and early warning system “Poseidon" and user profiling system "Ares" can help the research team
find and solve problems in a quicker and more accurate way, substantially improve the quality of products, reduce development
costs, and provide assistance for the refined operation of games. Furthermore, the Company continues to explore deep application
of the AI technology to games. It has created “Cupid”, an AI-powered R&D platform, with the help of which the research on "3D key
point detection-based AI motion capture" has been carried out to conduct spatial modeling of videos, and use AI algorithms to
achieve high-precision and high-performance motion capture, thus effectively reducing R&D cost and improving R&D efficiency.
The Company continues to explore diversification in product types, themes, gameplay, etc., studies and improves rendering
technologies for engines such as Unity, and keeps improving art quality. It is dedicated to in-depth exploration and becoming 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.
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 Publishing of mobile games
During the Reporting Period, the strategy of “boutiqueization, diversification and globalization” was continuously deepened,
the advantage of “integration of R&D and operation” was strong, and the product matrix was of high quality and diversified. The
highest monthly gross billing of the Company’s globally published mobile games exceeded RMB 2 billion,, with the total number of
newly registered global users surpassing 130 million and the highest number of global MAUs of over 40 million. As many as 6
existing games recorded more than RMB 100 million of monthly average gross billing across the world, of which the earliest one
launched has been running for nearly four years. These long-period and diversified products underpin the Company’s healthy
operating performance, showcasing its long-term operation capability.
1) Domestic market
During the Reporting Period, the Company brought diversified experiences to players through high-quality independently-
developed and agency games, and insisted on refined operation ideas. Also, it kept exploring innovative marketing with the
younger consumers, improving publishing efficiency through precise marketing methods such as interesting and sentimental
marketing ideas and cross-sector collaboration between games and IPs. By doing so, its publishing and operation capabilities have
been substantially improved for various games such as MMORPG, SLG, card games and simulation games. Remarkable results have
been achieved. The Company is ranked among the top in terms of market share in China's mobile game publishing market.
For instance, The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决) is published in a manner that emphasizes both "branding
+ sales effects", in which the Company aims to construct a publishing system focusing on underlying gameplays, game content, user
experience, and creation of community cultures with the game as the foundation. Highly loyal to the original novel and animation,
the Company has consolidated the foundation of content-based publishing with excellent game quality. The publishing plan was
made based on content. With the enormous momentum of the Dou Luo IP, the Company is able to constantly expand user
boundaries and target audience by attracting potential game players.
The Company's Chinese style simulation game The Road to Be Shopkeeper (叫我大掌柜) is developed based on the core
gameplay, theme and style of the game, establishing cross-sector collaboration with national tourist attractions, singers, bands,
animation IPs, restaurant brands, etc. to find users' interest points, effectively broadening the breadth of brand communication,
and promoting the brand's image shaping towards the young generation.
The different-world adventure theme MMORPG Song of the Castle in the Sky (云上城之歌), also breaks through the boundary
of the marketing circle by introducing "virtual idol + original music" and establishing collaboration with animation IP. Productive
game geeks-based marketing was also actively explored to expand the circle of users and drive the market of younger users.
The Company insisted on systematic digital marketing to accurately grasp user needs by delivering creative marketing plans.
Through sophisticated operation of launched games, the Company provides players with meticulous and comprehensive long-term
service, with a purpose of improving player satisfaction, activity and retention rate to prolong the product life cycle. Multiple games
witnessed a second phase of growth in gross billing during the Reporting Period. In terms of multi-channel marketing, the Company
had formed a unique marketing approach featuring "branding + sales effects". On the one hand, by selecting spokespersons that
are consistent with the product’s connotation, the Company produced high-quality micro-film-style promotional materials for
promotion. By doing so, it can quickly "break the circle" and reach a wider user group; on the other hand, combinations were made
with the short video platform to provide rich material output and to meet the different cultural consumption needs of users in
different angles, to further expand the scope of users, and then to enlarge brand value and influence.
In addition, the independently developed intelligent ad distribution and operation platform "Quantum-Destiny" provides
support for the Company’s three game publishing platforms of “37Online”, “37Mobile” and “37GAMES”. Connected to mainstream
media platforms and channels at home and abroad, this system can help improve the three publishing platforms in terms of
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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intelligent and fine operation, thus increasing publishing efficiency. 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, achieving AI-supported automation of ad distribution and creation of ad contents. On the other
hand, "Destiny" is a comprehensive operational decision system for statistics, analysis and prediction of game data. The system can
accurately predict the life cycle of games through data analysis models, so as to improve user stickiness and stabilize product life
cycle.
Currently, the "Quantum-Destiny" system has been connected to over 20 mainstream media platforms and channels across
the world, and is able to provide support for the launch of more than 300 games at the same time. Cumulatively, the system has
created over 3,000 connected activities and more than 200,000 ad distribution plans. With this system, the time taken to distribute
a day’s ads on games has been shortened by five times from six hours to merely one hour, representing a remarkable improvement
in efficiency.
2) Overseas market
The Company started to work on the overseas market in 2012. With years of overseas operations, the Company made
substantial breakthroughs with respect to the strategic expansion of global footprint during the Reporting Period. Its overseas
operating revenue amounted to RMB 3.033 billion, up by 48.33% YoY. Its overseas brand, 37GAMES, covered many countries and
regions, whose products included SLGs, MMORPG, simulation and card games.
During the Reporting Period, the Company's overseas business has grown rapidly and the pace of exporting has been
accelerated. According to data.ai, the Company saw strong expansion of multiple games in overseas markets. In 2022, the Company
soared to No. 25 among the global top 52 publishers released by data.ai, ranked second on the overseas grossing chart of the top 30
Chinese game companies, and climbed to No. 2 on the overseas revenue chart of Chinese game companies in April 2022.
Supported by years of accumulation of experience in publishing games overseas, the Company now adopts the strategy of
"tailored games" to open up the global market with diversified high-quality games. On the one hand, the Company has formed a
product matrix with MMORPG, SLG, card games and simulation games as the cornerstones in overseas market, and focuses on
publishing different genres of games in different regions according to the characteristics of the markets. On the other hand, the
Company has tailored its operation and promotion strategies to different markets in the publishing and promotion side, and made
differentiation in game content and promotion materials in view of the characteristics of local users to better capture and retain
local players. Using this strategy, during the Reporting Period, the Company's Puzzles & Survival, The Road to Be Shopkeeper (叫我
大掌柜), Song of the Castle in the Sky (云上城之歌), The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决) and other products
achieved overseas revenue growth. The Company holds a solid position among the top in overseas revenue chart of Chinese game
publishers, with overseas business becoming the second driver of the Company's steady development.
For example, Puzzles & Survival, the Company's phenomenal overseas product that integrates the "match-3 + SLG" gameplay, is
attractive and its gameplay is innovative, perfectly integrating the most popular match-3 gameplay in the European and American
markets with the traditional heavy SLG gameplay, offering a unique audio-visual experience to users, while deeply implementing the
strategy of "tailored games". It achieves outstanding performance in Europe, the US, Japan, Korea and other countries and regions,
and becomes a classic case of SLG fusion game that successfully gain new user groups. This game has won the “Best Gameplay
Innovation” award for Asia Pacific by Sensor Tower. As of the end of June 2022, Puzzles & Survival is booming around the world,
with the cumulative grossing billing surpassing RMB 4.2 billion. According to Sensor Tower, during H1 2022, the game held a stable
position at Top 5 on the overseas grossing chart of Chinese mobile games.
After the game Song of the Castle in the Sky (云上城之歌) was launched on the Korean market, it successfully entered the top
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5 of the grossing charts in the Korean region and ranked as high as 11th on the overseas grossing chart of Chinese mobile games
released by Sensor Tower. It is also the highest grossing Chinese mobile game on the Korean market during H1 2022. Meanwhile,
the game became a real hit when it was launched on the Japanese market. It was ranked as high as fifth on the grossing growth
chart of mobile games and 13th on the grossing chart on the Japanese market during H1 2022 according to Sensor Tower.
In addition, the overseas layout of China's game industry shoulders the important task of cultural transmission. As the
"window" of China's cultural exchange, games have become an important way of foreign exchange and dissemination of excellent
traditional Chinese culture with the advantage of natural landing and direct contact with people. In 2021, the Company was once
again listed in the 2021-2022 national key export enterprises of culture by the Ministry of Commerce, the Central Propaganda
Department, the Ministry of Finance, the Ministry of Culture and Tourism, and the General Administration of Radio, Film and
Television. It tried to integrate excellent traditional Chinese culture into game themes, content and gameplay, and promotion
materials, and constantly advanced foreign players to take interest in the Chinese Culture in their experience and exploration of
games by promoting the deep integration of quality games and traditional Chinese culture.
For example, The Road to Be Shopkeeper (叫我大掌柜), a globally published game of the Company, integrated historical and
cultural elements in innovative ways, adding elements rich in Chinese history and culture such as the Maritime Silk Road, dragon
boat racing and shadow play, so as to arouse the interest of global users to experience and explore traditional Chinese culture in the
product. The product achieved good responses after it was published in countries such as South Korea, Japan, and Vietnam, and has
been ranking among the top in grossing charts in various regions.
After the self-developed mobile card game The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决) was launched in 2021 in
overseas markets, it quickly topped the grossing charts and free-play charts of Apple and Google in multiple overseas regions,
achieving outstanding performance. Self-developed products are increasingly recognized by overseas players. In the future, the
Company plans to publish the product in Japan, South Korea, the U.S., Europe and other regions continuously, and integrates IP
culture with user content creation for cultural dissemination, allowing local players to feel the unique charm of China's high-quality
cultural IP.
The Company deeply fostered category segments, gained insight into user needs and sought to "break the circle" by exploring
the integration of "unique themes + reasonable gameplay". Ant Legion, another SLG mobile game launched in 2022, whose
distinctive realistic theme of ants has been well received by European and American players, ranked 11th on the overseas revenue
growth chart of Chinese mobile games for May 2022 according to Sensor Tower.
3) Game pipeline
During the Reporting Period, the Company's popular multi-category games performed well, including Song of the Castle in the
Sky (云上城之歌), Puzzles & Survival, The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决), The Road to Be Shopkeeper (叫我大
掌柜), The Soul Land H5 (斗罗大陆H5), Puzzle Continent (谜题大陆), All for Glory (荣耀大天使), and The Soul Land: Wu Hun Jue
Xing (斗罗大陆：武魂觉醒).
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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Game Pipeline of 37 Interactive Entertainment
MMORPG: Code Magic M (代号魔幻 M) (self-developed), Code Gu Feng (代号古风) (self-developed), Code WTB 3D (代号 3D 版
WTB) (self-developed), Code Soul MMO (代号斗罗 MMO) (self-developed), Code XXZ (代号 XXZ), Code Magical K Project (代号魔
幻 K 计划), and Immortal Awakening (不朽觉醒).
To be SLG: Ba Ye (霸业) (self-developed), Code GOE (代号 GOE) (self-developed), Code G2 (代号 G2) (self-developed), and Code S (代号
S).
published
overseas Card games: Kong Zhi Yao Sai: Qi Hang (空之要塞：启航), Heroes of Crown (上古王冠), and Tie Gan San Guo (铁杆三国).
SIM: Code Old Times (代号旧时光).
MMORPG: Code Magic M (代号魔幻 M) (self-developed), Code Gu Feng (代号古风) (self-developed), Code WTB 3D (代号 3D 版
WTB) (self-developed), Code Soul MMO (代号斗罗 MMO) (self-developed), Code XXZ (代号 XXZ), Shu Guang Ji Hua (曙光计划),
Dream of Voyager (梦想大航海), and Code Magical K Project (代号魔幻 K 计划).
To be SLG: Ba Ye (霸业) (self-developed), Code GOE (代号 GOE) (self-developed), Underground Kingdom (小小蚁国), Code Three
published Kingdoms CB (代号三国 CB), and Code DG (代号 DG).
domestically
Card games: Code D8 (代号 D8) (self-developed), Kong Zhi Yao Sai: Qi Hang (空之要塞：启航), Light Adventure (光明冒险), Zui
Hou De Yuan Shi Ren (最后的原始人), and Code Er Ci Yuan ZQ (代号二次元 ZQ).
SIM: Code Forest (代号森林), and Code Partner (代号合伙人).
In 2022, adhering to the strategy of product boutiqueization, diversification and market globalization, the Company deepened
the cultivation of MMORPG, card games, SLG and simulation games, with the following self-developed game pipeline:
Ba Ye (霸业), an SLG mobile game with the theme of the Three Kingdoms, Code Gu Feng (代号古风), an MMORPG mobile
game with a beautiful ancient style, Code Magic M (代号魔幻M), a Western magic MMORPG mobile game, Code GOE (代号GOE),
an SLG mobile game with the history of the medieval times, Code WTB 3D (代号3D版WTB), a Chibi 3D MMORPG mobile game with
the theme of different-world adventure, Code G2 (代号G2), a western SLG mobile game, Code D8 (代号D8), a fairy tale-themed
mobile card game, and Code Soul MMO (代号斗罗MMO), an MMOARPG mobile game with theme of the Soul Land IP, among other
blockbuster self-developed games.
Additionally, through agency and customization, the Company reserved at home and abroad a product matrix covering diverse
genres and themes, such as:
MMORPG: Code XXZ (代号XXZ), an innovative MMO IP mobile game, Shu Guang Ji Hua (曙光计划), an MMORPG mobile game
with the theme of future technology, Code Magical K Project (代号魔幻K计划), a Western magic MMORPG mobile game, Immortal
Awakening (不朽觉醒), another Western magic MMORPG mobile game, and Dream of Voyager (梦想大航海), a voyage shooter
MMORPG mobile game;
SLG: Underground Kingdom (小小蚁国), an SLG mobile game with the theme of realistic ants, Code Three Kingdoms CB (代号
三国CB), an SLG mobile game with the theme of the Three Kingdoms, Code S (代号S), a Western magic SLG mobile game, and Code
DG (代号DG), an urban construction in the medieval times/casual match-3 SLG mobile game;
Card games: Kong Zhi Yao Sai: Qi Hang (空之要塞：启航), a steampunk style mobile card game, Light Adventure (光明冒险), a
different-world adventure mobile game integrated with card gameplay, Tie Gan San Guo (铁杆三国), Heroes of Crown (上古王冠), a
high-quality magic card mobile game, a mobile card game with the theme of the Three Kingdoms, Zui Hou De Yuan Shi Ren (最后的
原始人), a turn-based idle mobile card game, and Code Er Ci Yuan ZQ (代号二次元ZQ), an anime mobile card game;
Simulation games: Code Partner (代号合伙人), a mobile simulation game with the theme of realistic business, Code Old Times
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(代号旧时光), a business-themed mobile simulation game, and Code Forest (代号森林), a mobile farm simulation game.
Note: Non-code products have obtained publication numbers.
(2) Browser games
During the Reporting Period, the Company’s browser game business achieved operating revenue of RMB 341 million, which
was lower than that of the same period of last year. It was mainly affected by both the shift of users to mobile phones and the
decrease in the number of browser game products. During the Reporting Period, the Company strengthened partnership with
domestic 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.
3. Business investments
In terms of investment layout, on the one hand, the Company focuses on its main business of games, actively develops quality
game R&D companies through strategic investments with a strategic focus on quality content, establishes long-term and in-depth
cooperation, enriches the supply of high-quality products in MMORPG, SLG, card games, simulation games and other categories,
forms a rich external R&D reserve, diversifies the layout on the product supply side, and makes a strategic layout for the long-term
sustainable development of the Company.
High-quality game developers invested by the Company primarily include:
Various excellent developers in proficient tracks for years and with good reputations such as EyuGame, Karma Game,
StarUnion, Zen-game Technology, X.D., Flintwood Technology, Zhenshuo Network, Lihoo Network, Jianguo Guangnian Technology,
Dobala, ZX Future, Longyou Game, Meng52, Woowii Games, UEGAME, Unknown Matrix and Mercury Culture.
On the other hand, the Company has always adhered to the concept of long-term value investment, and continuously explores
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around the main business of games, while focusing on the new trends of cultural entertainment consumption and technology
development of the next generation, following the footsteps of the development of Metaverse era, selecting high-quality tracks for
forward-looking layout, realizing the mutual achievement of internal resources, and feeding the Company's main business of games,
which has now formed a closed loop of investment ecology covering virtual reality industry chain, film and television, music, artist
agency, animation, social entertainment, e-sports, culture and health, social media, new consumption and other fields.
Along with the rise of "Metaverse" and other emerging concepts, the curtain of technological change has been drawn. 37
Interactive Entertainment, as an enterprise that insists on technological innovation and keeps up with the changes in the industry, is
firmly optimistic about the future development of the relevant fields.
At present, the Company continues to extend on the basis of early investment in VR/AR content, enters fields involving
multi-Metaverse infrastructure such as arithmetic, semiconductor, optics, display, whole machine, application and infrastructure
technology, and invests in many high-quality enterprises in the fields including optical module, optical display, AR glasses, VR
content, cloud game, spatial intelligence technology and semiconductor materials. In the future, the Company will continue to
focus on new-generation technologies such as artificial intelligence, rendering engine and interactive sensing. Through
investments in the field of technology, it will realize the collaboration of internal and external resources and grasp the forward-
looking trend of the game industry.
Furthermore, the Company carried out a capital increase of no more than RMB 50 million of its own funds to the Resonance
Phase I Fund, cooperating with industry leaders such as Goertek and miHoYo to focus on AR/VR and other new business
opportunities. By doing so, the Company promoted the benign complementation of its business and capital operation and achieved
capital appreciation, thereby further enhancing its overall competitiveness.
As of the date of this report, cultural & creative and technology enterprises funded or acquired by the Company included:
Metaverse: Archiact, WaveOptics, Raxium, Digilens, Deep Mirror, INMO Technology, Optiark Semiconductor, Enkris
Semiconductor, KP Cloud Games, Ximmerse Technology, and GravityXR
Film and television: Huace Film&TV, Youying Culture, Zhonghui Television, etc.
Music: FenghuaQiushi
Artist agency: Original Plan, and T Entertainment
Animation: YHKT Entertainment
E-sports: AG E-Sports Club
Social Entertainment: Wuli Planet and Wonderful Party
Consumption: Nowwa Coffee, LINLEE, Yangji Mountain, Savasana, Duokitty, Dong Eating, GuanZhan, Weeget, HomeRun
Technology, EZVALO
In the future, the Company will continue to expand its product matrix, improve the quality game supply capability, and offer
quality, diverse gaming experience to players. Also, it will continuously keep pace with the times, embrace future changes, continue
to tap the incremental market of Generation Z, explore the collaboration of resources within the cultural innovation ecosystem,
and build a "young and diversified" cultural innovation brand trusted by the future Chinese young generation. Meanwhile, it will
drive startups with investment, participate in promoting social technology innovation, and collaborate with invested enterprises to
achieve sustainable and high-quality growth.
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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II Core Competitiveness Analysis
During the Reporting Period, the Company steadily promoted the development strategy of "boutiqueization, diversification
and globalization" and formed the following core competitiveness:
1. Industry-leading R&D strength
The Company carries on with its strategy of “integration of R&D and operation”, as well as emphasizes R&D investments and
talent cultivation. After years of efforts in R&D, the Company is ranked among the top in terms of R&D strengths. The Company's
independently developed products are characterized by high output, a high success rate and a long period, and center on
"boutiqueization, diversification and globalization". With the support of cutting-edge technologies like Next-Gen 3D engine, AI, and
big data analysis platforms, the Company has established a professional layout in multiple market segments like MMORPG, card
games, SLG, and simulation. With sophisticated efforts in gameplay, art quality, music and other details, as well as continued
investments in product iteration and user experience, the "boutiqueization” strategy is embedded into the entire life cycle of the
Company’s homegrown products, making it a benchmark for the R&D of quality games in the industry.
Adhering to the long-term development idea, the Company opened up development channels for professionals, and embraced
employee diversity. Moreover, it encouraged innovation by employees and increased the proportion of senior R&D staff to build an
excellent team. The Company vigorously refined the mechanism for R&D project approval, shortened the evaluation cycle and
established diversified indicators, so as to stimulate employees’ innovative vitality. At the same time, the Company adjusted the
incentive mechanism for the R&D department, established a tiered incentive system for different categories of products, promoted
the incentive for new categories of products, and encouraged employees to be creative and step out of their comfort zone. The
Company has also established a project lifecycle management process for game development, which run through many links, such
as idea creation, project approval, process and review, to achieve the risk control of the entire R&D process, greatly improve the
success rate of product R&D while effectively controlling the cost, and lay the foundation for creating diverse, high-quality games.
Internal management continued to improve, with leaner and more scientific management in terms of game development. At the
same time, the way of selecting the track for R&D personnel allocation by the producer makes him or her focus more on the
category segment he or she is good at, further concentrate resources, form a joint force and improve R&D efficiency.
2. Excellent publishing strength
During the Reporting Period, the Company maintained its leading position in mobile game and browser game publishing
business. 37 Interactive Entertainment enriched the product supply via independent R&D, investments, and cooperation with
excellent developers, improved the ability in publishing diverse, high-quality games and promoted the publishing strength to a new
height. Meanwhile, the Company has accumulated rich experience in overseas game publishing thanks to years of practice. With its
overseas business covering over 200 countries and regions, the Company has substantially expanded its global presence. In H1 2022,
the Company expanded its product matrix and offered diversified gaming experience to players by offering quality games in
different types and on varied themes to the global market, including Song of the Castle in the Sky (云上城之歌), Puzzles & Survival,
The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决), The Road to Be Shopkeeper (叫我大掌柜), The Soul Land H5 (斗罗大陆H5),
Puzzle Continent (谜题大陆), All for Glory (荣耀大天使), The Soul Land: Wu Hun Jue Xing (斗罗大陆：武魂觉醒), and Ant Legion,
all of which have recorded an excellent performance. Going forward, the Company will further play its existing advantages in
overseas markets, constantly expand the scale of overseas business based on its strong game R&D capacity and localized marketing
capabilities, and make new contributions to promoting the Chinese culture industry and boosting cultural confidence.
The Company constantly sought innovative publishing approaches, and thus created a barrier to entry for competitors in
game publishing. First, the Company developed its own AI system to improve the ability of accurate ad placement. With this system,
the Company has optimized placement methods, improved the quality of materials, took advantage of high-quality materials, and
thereby effectively controlled the marketing cost. Second, the efficiency of publishing, including tool construction and data
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algorithm to help form a real-time monitoring system and reduce cost waste. The Company puts forward the publishing idea of
“branding + sales effects”, grasps the market changes to carry out high-quality publicity, and attracts target users for better
distribution results. 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 quality of games, attract users
through better content and prolong the product life cycle.
3. Advantage of the model of “integration of R&D and operation”
As the Company’s business mode of "integration of R&D and operation” becomes sophisticated, it is conducive to making 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 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 Company has been deeply involved in the field of cultural and creative industries for many years. Its core management
team has long been on the front lines of the industry, and has forward-looking capabilities for strategic layout. During the Reporting
Period, thanks to its outstanding performance in terms of the development speed and personnel training and development, the
Company won the title of "the Best Employer" of CNG. The Company has established a fully-fledged personnel training system. It
has completed the personnel system reform, made new promotion mechanism, remuneration management system and incentive
mechanism. The new promotion and remuneration management system does not only make the employee’s growth path clearer,
more open and more transparent but also motivates their enthusiasm and creativity in a better way. The Company lays emphasis
on the sharing of development achievements and is committed to improving the career development level of employees. During
the Reporting Period, the Company steadily carried on with the value co-creation plan for a further investment of RMB500 million
in six directions, including the employee development plan before 2025, so as to encourage employees to better strive and create
value and promote the long-term, sustainable and healthy development of the Company, realizing joint creation, responsibility
sharing, growth sharing and common prosperity between the Company and its employees. During the Reporting Period, the
Company launched a fourth employee stock ownership plan to further improve the benefit sharing mechanism between workers
and company owners, as well as to boost employee cohesiveness and the Company’s core competitiveness. The Company has
always adhered to the entrepreneurial spirit like marathoners and been clear about its goals. It aims to promote sustainable
development, and progressively realize long-term goals rather than short-term ones.
III Core Business Analysis
Overview
See contents under the heading “I Principal Activity of the Company in the Reporting Period”.
Year-over-year changes in key financial data:
Unit: RMB
Change
H1 2022 H1 2021 Main reason for change
(%)
Operating revenue 8,092,238,684.40 7,538,949,378.53 7.34%
Increased cost of royalties as a result of
Cost of sales 1,260,101,099.90 1,120,509,771.85 12.46% increased revenue from agency games
during the Reporting Period
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
23
Decreased traffic cost for All for Glory
(荣耀大天使), The Soul Land: Wu Hun
Jue Xing (斗罗大陆：武魂觉醒) and
Distribution and selling
4,340,050,646.56 4,785,388,947.28 -9.31% other games that had been launched in
expenses
the same period last year entered the
growth stage during the Reporting
Period
General and
administrative 209,169,882.37 222,001,708.95 -5.78%
expenses
Increased exchange losses during the
Financial expenses -15,752,742.70 -25,875,545.40 39.12% Reporting Period compared with the
same period last year
Income tax expenses 176,029,935.00 162,728,946.02 8.17%
During the Reporting Period, the
Company adjusted the personnel
Research and structure according to strategic game
development 496,920,352.58 673,649,742.25 -26.23% categories, increased investment in
investments strategic products such as strategy
games while reducing that in certain
other non-strategic products
Increased cash received from the sales
Net cash flows from of goods or rendering services during
1,804,079,584.54 1,253,919,152.46 43.88%
operating activities the Reporting Period compared with
the same period last year
Increased net cash outflow in
purchases and redemptions of wealth
Net cash flows used
management instruments and term
in/from investing -1,200,993,676.79 -835,664,111.30 -43.72%
deposits during the Reporting Period
activities
compared with the same period last
year
The Company received cash from the
Net cash flows used
private placement in the same period
in/from financing -631,142,239.07 1,737,499,012.55 -136.32%
last year while there was no such cash
activities
inflow in the Reporting Period.
Decreased net cash flows from
Net increase in cash financing activities during the
-7,427,387.19 2,153,528,582.00 -100.34%
and cash equivalents Reporting Period compared with the
same period last year
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 2022 H1 2021
As % of operating As % of operating Change (%)
Amount Amount
revenue (%) revenue (%)
Total operating
8,092,238,684.40 100% 7,538,949,378.53 100% 7.34%
revenue
By operating division
Online games 8,092,238,684.40 100.00% 7,538,949,378.53 100.00% 7.34%
By product category
Mobile games 7,738,933,571.90 95.63% 7,067,163,703.89 93.74% 9.51%
Browser games 340,738,772.48 4.21% 460,286,420.34 6.11% -25.97%
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
24
Others 12,566,340.02 0.16% 11,499,254.30 0.15% 9.28%
By operating segment
Domestic 5,059,634,965.68 62.52% 5,494,392,013.23 72.88% -7.91%
Overseas 3,032,603,718.72 37.48% 2,044,557,365.30 27.12% 48.33%
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 YoY change in
Gross profit
Operating revenue Cost of sales operating in cost of gross profit
margin
revenue (%) sales (%) margin (%)
By operating division
Online games 8,092,238,684.40 1,260,101,099.90 84.43% 7.34% 12.46% -0.71%
By product category
Mobile games 7,738,933,571.90 1,152,883,265.74 85.10% 9.51% 17.91% -1.07%
Browser games 340,738,772.48 98,367,265.71 71.13% -25.97% -27.54% 0.62%
By operating segment
Domestic 5,059,634,965.68 732,864,738.48 85.52% -7.91% -14.69% 1.15%
Overseas 3,032,603,718.72 527,236,361.42 82.61% 48.33% 101.65% -4.60%
Core business data restated according to the changed methods of measurement that occurred in the Reporting Period:
□Applicable Not applicable
The Company is subject to the disclosure requirements for listed companies engaged in software and IT services as stated in
Guideline No. 3 of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.
Operating division contributing over 10% of operating revenue or operating profit:
Applicable □ Not applicable
Unit: RMB
YoY change in YoY change YoY change in
Gross profit
Operating revenue Cost of sales operating in cost of gross profit
margin
revenue (%) sales (%) margin (%)
By operating division of customers
Online games 8,092,238,684.40 1,260,101,099.90 84.43% 7.34% 12.46% -0.71%
By product category
Mobile games 7,738,933,571.90 1,152,883,265.74 85.10% 9.51% 17.91% -1.07%
Browser games 340,738,772.48 98,367,265.71 71.13% -25.97% -27.54% 0.62%
By operating segment
Domestic 5,059,634,965.68 732,864,738.48 85.52% -7.91% -14.69% 1.15%
Overseas 3,032,603,718.72 527,236,361.42 82.61% 48.33% 101.65% -4.60%
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 2022 H1 2021
Breakdown of cost As % of cost of As % of cost of Change (%)
Amount Amount
sales sales
Royalties 1,141,980,274.76 90.63% 1,014,617,869.61 90.55% 12.55%
Cost of servers 94,340,256.68 7.49% 83,168,344.41 7.42% 13.43%
Amortization of
13,850,699.29 1.10% 15,326,627.17 1.37% -9.63%
copyright money
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
25
Other costs 9,929,869.17 0.78% 7,396,930.66 0.66% 34.24%
Total 1,260,101,099.90 100.00% 1,120,509,771.85 100.00% 12.46%
Any over 30% YoY movements in the data above and why:
Applicable □ Not applicable
1. Overseas revenue increased by 48.33% YoY, primarily driven by the increased gross billing of multiple well-performing games
that have been published globally, including Puzzles & Survival, The Road to Be Shopkeeper (叫我大掌柜), and Song of the Castle
in the Sky (云上城之歌).
2. Overseas costs increased by 101.65% YoY, primarily driven by the increased cost of royalties as a result of increased revenue
from overseas published agency games.
3. Other costs increased by 34.24% YoY, primarily driven by the increased cost of online training.
IV Analysis of Non-Core Businesses
Applicable □ Not applicable
Unit: RMB
As % of profit before
Amount Reason/source Recurrent or not
income tax expenses
Mainly due to gains on
investments from
disposal of equity
investments, dividends
Investment income 52,339,291.74 2.82% during the period of Not
holding equity
investments, and
wealth management
products
Mainly due to changes
Gain/loss on changes
-34,650,521.66 -1.87% in fair value of equity Not
in fair value
investments
Impairment losses on
long-term equity
Mainly due to
investments are not
Impairment loss on impairment losses on
-13,724,202.25 -0.74% recurrent while
assets long-term equity
impairment losses on
investments and credit
credit risk are
recurrent
Mainly due to
Non-operating income 5,246,517.14 0.28% Not
compensation income
Mainly due to
donations and
Non-operating
2,771,389.41 0.15% expenditures on Not
expenses
retirement of fixed
assets
Mainly due to refund
of VAT and other Refund VAT is
government grants recurrent while other
Other income 60,426,373.93 3.26%
given in the Company’s government grants are
ordinary course of not.
business
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
26
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
30 June 2022 31 December 2021
Change in percentage (%) Reason for any significant change
Amount As % of total assets Amount As % of total assets
Monetary funds 5,059,884,639.38 31.03% 4,618,532,776.92 31.99% -0.96% No significant change
Accounts receivable 1,493,792,623.54 9.16% 1,264,319,473.08 8.76% 0.40% No significant change
Inventories 34.50 0.00% 0.00% 0.00% No significant change
No significant change occurred to this
item as a percentage of total assets, while
the closing balance was higher than the
opening balance mainly due to new equity
Long-term equity
714,617,174.92 4.38% 509,058,912.99 3.53% 0.85% investments made during the Reporting
investments
Period. See “8. Long-term equity
investments” under Note VII of “Part X
Financial Statements” for further
information.
Fixed assets 871,573,384.28 5.35% 892,006,774.60 6.18% -0.83% No significant change
No significant change occurred to this
item as a percentage of total assets, while
the closing balance was higher than the
Construction in
134,045,030.85 0.82% 77,637,189.70 0.54% 0.28% opening balance mainly due to the
progress
investments in the Guangzhou
Headquarters Building construction
project during the Reporting Period.
Right-of-use assets 47,116,082.01 0.29% 59,925,125.24 0.42% -0.13% No significant change
No significant change occurred to this
item as a percentage of total assets, while
the closing balance was higher than the
Short-term loans 607,450,000.00 3.73% 445,635,500.00 3.09% 0.64%
opening balance mainly due to the
increased bank loans during the Reporting
Period.
Contract liabilities 247,579,719.63 1.52% 260,658,631.26 1.81% -0.29% No significant change
The closing balance was higher than the
opening balance mainly due to additional
Long-term loans 341,000,000.00 2.09% 20,000,000.00 0.14% 1.95%
three-year bank loan during the Reporting
Period
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
27
No significant change occurred to this
item as a percentage of total assets, while
the closing balance was lower than the
Lease liabilities 27,270,304.28 0.17% 39,641,414.25 0.27% -0.10% opening balance mainly due to the
decreased lease payables as a result of
rental payments made during the
Reporting Period.
Trading financial
2,301,576,209.18 14.12% 2,098,526,001.60 14.54% -0.42% No significant change
assets
Prepayments 989,143,622.79 6.07% 1,055,295,139.07 7.31% -1.24% No significant change
Intangible assets 1,069,748,653.80 6.56% 1,088,487,381.04 7.54% -0.98% No significant change
Goodwill 1,589,065,048.53 9.75% 1,589,065,048.53 11.01% -1.26% No significant change
Accounts payable 1,658,805,699.77 10.17% 1,565,004,179.17 10.84% -0.67% No significant change
2. Major Assets Overseas
Applicable □ Not applicable
Asset value Management Control measures to protect Return generated As % of the Material impairment
Asset Source Location
(RMB) model asset safety (RMB) Company’s equity risk or not
A sound business supervision
Income from Hong Kong in
Monetary mechanism and a sound risk
investments and 773,881,975.50 China, the US, 6.60% Not
funds control mechanism have been
operations etc.
put in place
A sound business supervision
Hong Kong in
Other equity Investments in mechanism and a sound risk
356,999,146.88 China, Canada, -30,704,814.31 3.05% Not
assets overseas companies control mechanism have been
etc.
put in place
3. Assets and Liabilities at Fair Value
Applicable □ Not applicable
Unit: RMB
Gain/loss on fair- Cumulative fair- Impairment
Beginning Purchased in the Sold in the Other
Item value changes in the value changes allowance made in Ending amount
amount Reporting Period Reporting Period changes
Reporting Period through equity the Reporting Period
Financial assets
1. Trading financial
2,098,526,001.60 -29,650,521.66 5,809,074,659.14 5,580,496,087.98 4,122,158.08 2,301,576,209.18
assets (exclusive of
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
28
derivative financial
assets)
2. Other equity -
326,561,477.94 2,030,569.03 325,592,046.97
investments 136,972,878.67
Other non-current
561,680,630.03 -5,000,000.00 91,711,400.00 13,422,800.00 3,869,258.59 638,838,488.62
financial assets
-
Total of the above 2,986,768,109.57 -34,650,521.66 5,900,786,059.14 5,593,918,887.98 10,021,985.70 3,266,006,744.77
136,972,878.67
Financial liabilities
Contents of other changes:
Other changes were incurred by exchange rate fluctuations, etc.
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes No
4. Restricted Asset Rights as at the End of the Reporting Period
Unit: RMB
Item Ending carrying amount(RMB) Reason for restriction
Monetary funds 8,918,291.19 Money frozen by bank and security deposits
Fixed assets 462,078,884.17 As collateral for bank loan to the Company
Other current assets 400,459,217.29 Principals and interest of term deposits with a maturity within one year as pledges
Other non-current assets 201,209,863.02 Principals and interest of term deposits with a maturity of over one year as pledges
Total 1,072,666,255.67 --
VI Principal Subsidiaries and Joint Stock Companies
Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB
Relationship with Principal activity Registered
Name Total assets Net assets Operating revenue Operating profit Net profit
the Company capital
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
29
37 Interactive Publishing and 10,000,000.00 11,895,317,090.51 3,806,943,755.17 8,064,087,340.35 1,336,570,184.93 1,194,146,589.62
Entertainment Subsidiary operation of online
(Shanghai) games
Development of
Jiangsu Aurora Subsidiary 6,250,000.00 3,964,381,928.01 2,694,504,046.63 989,912,696.70 523,999,155.83 492,731,924.43
online games
Subsidiaries obtained or disposed of in the Reporting Period:
□Applicable Not applicable
Other information on principal subsidiaries and joint stock companies:
N/A
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
30
VII Risks Facing the Company and Countermeasures
1. Changes in industry policies, risks of violation and countermeasures
In recent years, the authority in charge has attached great importance to the development of game industry, made a
series of major decisions and arrangements and issued a series of policies and measures to guide the industry to develop in
a standardized and healthy way. For example, clear new standards and requirements have been put forward for protection
of minors and anti-addiction of online games. Further strict management measures have been taken to promote
standardized management of game industry. At the same time, information security and protection of users' privacy have
drawn much attention from the society. In the long term, the regulation of the online game industry is becoming more and
more standardized, which is conducive to the healthy development of the industry. The ente rprises with standardized
operation will benefit from it. However, in the future, if the Company fails to make corresponding adjustments timely in
accordance with changes in industry policies or has a deviation in understanding management regulations in it s operation,
there may be a risk that the Company will be punished by relevant departments or the works will not go online as planned,
which will have a significant negative impact on the Company's business development and brand image. In this regard, 37
Interactive Entertainment will strictly abide by various industry policies, rules and regulations, actively implement relevant
requirements for industry development, establish an internal sound quality management and control mechanism,
strengthen industry policy risk management capability, and fully reduce and avoid the business risks caused by changes in
industry policies.
2. Market competition risks and countermeasures
The online game industry is facing increasingly fierce competition as it gradually matu res. At the same time, online
game users are maturing with higher quality demand for game products. The industry is characteristic of fast product
transition, limited product life cycle and volatile player preferences, among others. Intense market competit ion will
challenge the Company’s development in terms of products and market channels.
In response, the Company will continue to implement the strategy of "boutiqueization, diversification and
globalization". On the one hand, it will strengthen its core competitiveness of its own business, pay continuous attention to
self-research investment, carry out R&D and innovation in product creativity, gameplay, theme, art and technology, and
keep up with industry technology development trend; at the same time, it will maintain close cooperation with excellent
developers to guarantee the supply of quality products, and continue to expand game categories through independently -
developed and agency games to deepen the competitive edge of "integration of R&D and operation". Meanwhile, the
Company will speed up the pace of exporting, give full play to the edges of it in overseas markets, face diversified operatio ns
of overseas markets, deepen the cultivation of key markets, and broaden the categories of games and increase market share.
In addition, the Company will dig deeper into operational data through independently developed AI systems, and timely
adjust operational and R&D strategies, to meet the core demands of users, further play the role of new ideas of digital
marketing operation, deepen the business strategy of multi-channel marketing and long-term service, and continuously
enhance core competitiveness in the market.
Facing the current industrial competition pattern, the top-performing enterprise has obvious edges in technology R&D
ability, channel operation ability, product promotion ability, user scale and market share. The Company will continue to
consolidate and cement its competitive edges, actively respond to changes in the industry, reduce market competition risks
and seize market opportunities.
3. Risks of core personnel turnover and countermeasures
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
31
A stable and high-quality talent team 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 reasonable incentives and manages the core
personnel, the employees’ enthusiasm and creativity will be affected, which will have an adverse 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 attract and retain outstanding
management talents and business elites, the Company has vigorously reformed the project mechanism, shortened the
review cycle and established diversified objectives, so as to stimulate the innovative vitality of employees. In terms of
employee performance management, the Company has set up diversified KPIs based on employees' contribution and ability,
as well as reasonable team objectives to encourage employees’ creativity. Through refining the remuneration system with
diversified incentives such as employee stock ownership plans, the Company increases the attractiveness to core staffs and
R&D personnel. During the Reporting Period, the Company continuously promoted the reform of rank system, ability sys tem
and development system, optimized talent structure, differentiated talent management and activated talents.
In addition, the Company cares about the long-term development of employees. The Company has established “37
Interactive Entertainment Learning and Development Center” to provide sufficient training and learning opportunities for
employees and help them grow rapidly. The Company actively carried out training for newcomers and professional abilities
such as "Marathon Leadership Training Camp", "Huangpu New Army", "X+ Plan" and "37TALK", explored seedlings of game
industry, promoted talent upgrading to meet the needs of business upgrading, paid attention to internal sharing, established
a team of internal professional lecturers among employees, spread culture of sharing, built a talent echelon and upgraded
talent development system.
Centering on the cultural concept of "health, happiness and sustainability", the Company upgraded colorful welfare
system, strengthened humanistic care and promoted retention of talents. The colorful welfare system encompasses
interest-free loan, love fund, commercial insurance and employee health management. In addition, seasonal activities on
holidays, annual physical examination, singles' fellowship, "Family Day", "Boss Face-to-Face", "37 Battle Talk", "Carnival",
“Healthy 37ers” and other thematic activities were regularly held. Inter-departments' team building promoted the
connection between employees and their friends, relatives and colleagues. In addition, the Company built employee clubs
with interest activities such as e-sports, table games and dances, created cultural atmosphere that meets the characteristics
of Generation Z, strengthened employees' sense of belonging, balanced employees' work and life, and took care of
employees' physical and mental health in various forms.
4. Technology iteration and innovation risk and countermeasures
The game industry has seen rapid technology iteration and faster changes in cutting -edge technologies, and demand for
new types of products has emerged among young users. Against this backdrop, if a game company fails to grasp the industry
development trend in a forward-looking manner and promptly innovate its technology and products, its R&D and application
of key technologies will be outdated, resulting in the risk of products falling behind the market.
In response, the Company continued to focus on changes in the industry's cutting-edge technologies. First, it closely
followed industry changes and probed into cutting-edge technologies through investment layout to maintain sensitive to
leading technologies. Second, it intensified the incubation of internal technologies, valued investment in self -developed
games, improved self-development system, established an effective R&D system framework, and introduced diversified
incentives to encourage employees to explore new technologies. By taking these actions, the Company has reserved
products and technologies for the industry development trend.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
32
For example, the Company built the "Yi Lan" game market intelligence system, which comprehensively and accurately
collects and refines product and industry data. It also intelligently generates competitor and market analysis reports as wel l
as accurately refines report content based on business scenarios, including game project approval, operation and promotion.
With the support of this system, all business lines of the Group can comprehensively, accurately and rapidly understand
market changes and development trends, and can effectively grasp the industry development changes.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
33
Part IV Corporate Governance
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
particip Date of
Meeting Type the Resolutions of the meeting
ation disclosure
meeting
ratio
1. The Proposal on the Re-election of Non-
independent Directors for the Sixth Board of
Directors was approved;
2. The Proposal on the Re-election of
Independent Directors for the Sixth Board of
Directors was approved;
3. The Proposal on the Allowance Plan for the
Independent Directors of the Sixth Board of
Directors was approved;
The First 4. The Proposal on the Re-election of Shareholder
Extraordinary Extraordinary Supervisor for the Sixth Supervisory Committee
General General 24 March 25 March was approved;
49.62%
Meeting of Meeting of 2022 2022 5. The Proposal on the Change of the Company
Shareholders Shareholders Name was approved;
of 2022 6. The Proposal on the Change of the Registered
Address was approved;
7. The Proposal on the Amendment of the
Articles of Association and the Rules of Procedure
for the General Meeting of Shareholders was
approved; and
8. The Proposal on the Request to the General
Meeting of Shareholders to Authorize the Board
of Directors to Handle Matters in Relation to the
Private Placement of Shares was approved.
1. The 2021 Work Report of the Board of
Directors was approved;
2. The 2021 Work Report of the Supervisory
Committee was approved;
3. The Chinese versions of the full 2021 Annual
Report and its Summary, along with the English
The 2021 Summary, were approved;
Annual
Annual
General 17 May 18 May 4. The 2021 Final Account Report was approved;
General 50.88%
Meeting of 2022 2022 5. The 2021 Final Dividend Plan was approved;
Meeting of
Shareholders 6. The Proposal on Appointment of Independent
Shareholders
Auditor for Annual Financial Statements and
Internal Control for 2022 was approved;
7. The Proposal on the Expected Guarantee Line
for Subsidiaries in 2022 was approved;
8. The Proposal on the Fourth Employee Stock
Ownership Plan (Draft) and Its Summary was
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
34
approved;
9. The Proposal on the Methods for the
Administration of the Fourth Employee Stock
Ownership Plan was approved; and
10. The Proposal on the Request to the General
Meeting of Shareholders to Authorize the Board
of Directors to Handle Matters in Relation to the
Fourth Employee Stock Ownership Plan was
approved.
2. Extraordinary General Meetings of Shareholders Convened at the Request of Preferred Shareholders
with Resumed Voting Rights
□ Applicable Not applicable
II Changes of Directors, Supervisors and Senior Management
Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Liu Jun Director Elected 24 March 2022
Lu Rui Independent Director Elected 24 March 2022
Tao Feng Independent Director Elected 24 March 2022
Resigned upon
Chen Jianlin Independent Director maturity of the 24 March 2022
tenure
Resigned upon
Liu Guangqiang Independent Director maturity of the 24 March 2022
tenure
II Interim Dividend Plan
Applicable □ Not applicable
Bonus issue from profit (share/10 shares) 0
Cash dividend/10 shares (RMB) (tax inclusive) 3.5
Share base (share) 2,217,864,281
Cash dividends (RMB) (tax inclusive) 776,252,498.35
Cash dividends in other forms (such as share repurchase)
0.00
(RMB)
Total cash dividends (including those in other forms) (RMB) 776,252,498.35
Distributable profit (RMB) 4,281,838,166.45
Total cash dividends (including those in other forms) as %
100.00%
of total profit to be distributed
Applicable cash dividend policy
If it is difficult to identify the development stage of the Company but it has a significant capital expenditure arrangement,
when making profit distribution, cash dividends shall account for no less than 20% in the profit distribution.
Details of the cash and/or stock dividend plan
Upon approval by the Board of Directors, the Company’s 2022 interim dividend plan is as follows: Based on the total
issued share capital on the date of record, a cash dividend of RMB 3.5 (tax inclusive) per 10 shares is planned to be
distributed to all the shareholders of the Company, with the remaining undistributed profit carried forward to the next
year; and there will be no bonus issue from either profit or capital reserves.
The above interim dividend plan is consistent with the Company’s performance growth, and also in line with relevant
provisions of the Company Law, the Securities Law, the Articles of Association and the Company’s shareholder return plan.
Therefore, it is legal, valid and reasonable.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
35
IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
Applicable □ Not applicable
1. Equity Incentives
N/A
2. Implementation of Employee Stock Ownership Plans
Applicable □ Not applicable
Outstanding employee stock ownership plans during the Reporting Period:
Number
As % of the total
Awardee coverage of Total shares held Change Funding source
share capital
awardees
The Third Employee Stock
Ownership Plan: the
leadership team of the
Company (directors, Shares under the
employee stock
supervisors and senior
They held 9,119,783 ownership plan
management); chief officers
329 shares in total at the N/A 0.41% were transferred
and deputy chief officers; key from repurchased
period-end.
management and shares for no
technological staff (mid-level compensation.
employees); and other
employees approved by the
Company
The Fourth Employee Stock
Ownership Plan: the
directors (exclusive of Shares under the
independent directors), employee stock
They held
supervisors, senior ownership plan
16,301,534 shares in
management, key 574 N/A 0.74% were transferred
total at the period- from repurchased
management and staff who
end. shares for no
have direct and substantial
impact on and contribution compensation.
to the Company’s future
operations and growth
Shares held by directors, supervisors and senior management under employee stock owne rship plans during the Reporting
Period:
Number of shares Number of shares
As % of the total
Name Office title held at the period- held at the period-
share capital
begin end
Hu Yuhang, Yang Jun,
Liu Jun, He Yang, Directors,
Cheng Lin, Liu supervisors, and 1,212,000 2,697,000 0.12%
Fengyong, Ye Wei, senior management
and Zhu Huaimin
Change of the asset management institution during the Reporting Period:
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
36
□ Applicable Not applicable
Share ownership changes due to share disposal by holders and other reasons during the Reporting Period:
□ Applicable Not applicable
3. Other Incentive Measures for Employees
□ Applicable Not applicable
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
37
Part V Environmental and Social Responsibility
I Material Environmental Issues
Indicate whether the Company or any of its subsidiaries falls into major pollutant-discharge entities published by
environmental protection authorities.
□ Yes No
Administrative punishments received during the Reporting Period due to environmental issues:
Name of the Company or Reason for Regulation Impact on the
Punishment Rectification
subsidiary punishment violated Company
N/A N/A N/A N/A N/A N/A
Other environmental information in relation to major pollutant-discharge entities:
N/A
Actions taken during the Reporting Period to reduce carbon emissions and the results:
Applicable □ Not applicable
37 Interactive Entertainment regards corporate carbon neutrality as a vital link in responding to the national call for
green development and in promoting the Company's sustainable development. Through carbon inventory, climate change
opportunity and risk assessment, group-wide Environmental Protection Month and other campaigns, the Company manages
its carbon emissions and encourages employees to develop green living habits.
Reasons for the non-disclosure of other environmental information:
During the Reporting Period, the Company received no punishments due to violation of environmental protection laws
and regulations.
II Corporate Social Responsibility (CSR)
During the Reporting Period, under the leadership of the Party Committee, the Company steadily carried on with its
“social value co-creation plan”. It continued to input resources to provide support in six areas—rural education, rural
industrial development, industry-university-research talent training, functional game development, employee career
development, and scientific and technological innovation, to help achieve common prosperity around the country.
Meanwhile, it actively mobilized internal and external resources to promote talent cultivation and charitable volunteer
services, playing its part as a corporate citizen.
1. Efforts in poverty alleviation and rural revitalization
(1) Focus on education revitalization to support rural talent empowerment
37 Interactive Entertainment takes active steps in rural revitalization, with a focus on rural education revitalization.
Since its establishment of Guangdong Youxin Foundation in 2014, the Company has continued to invest to promote the
balanced development of education in less developed areas. The Company has been for years carrying out the "Youxin Peers"
high school education assistance program, the county high school free reading program, the "Vocational Wisdom Calling"
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
38
career program, and the high school enrollment guarantee program for ethnic minority girls, providing high school students
with financial, knowledge and intellectual support. In the first half of 2022, 37 Interactive Entertainment, through
Guangdong Youxin Foundation, invested RMB 2,410.8 thousand in education, supporting 2,322 outstanding high school
students. Some of the sponsored students who took the college entrance examination were admitted to Xiamen University
and other renowned "Double First-Class" Universities.
In active response to the call for "Consolidating the Achievements of Poverty Alleviation and Helping Rural
Revitalization", 37 Interactive Entertainment pledged a donation of more than RMB 1 million at the 2022 Guangdong Poverty
Alleviation Day event. The Company will continue to support the rural education and help develop young talents in Qingyuan,
Guangdong, and Bijie, Guizhou, among places Guangzhou offers partner assistance.
(2) Participate in rural assistance to promote characteristic industries
37 Interactive Entertainment, under the leadership of the authorities of Haizhu District, Guangzhou, further deepened
its support for the characteristic industries of Guiding County, Guizhou, following the Party and government's East -West
Cooperation policies.
The Company's project team conducted investigations in Yunwu Town, Guiding County, gaining an in-depth
understanding of the whole process, including planting, picking, production and sales, of the local characteristic tea indust ry.
To make product packaging more distinctive and broaden sales channels, the project team leveraged the Company's
resources to develop a special assistance plan. They carried out the cultural and creative design for "Yunwu Gong Cha",
expanded sales and promotion channels, and linked cooperation opportunities with upstream and downstream companies.
Moreover, the tea gift box "Cha Xiang Yun Gui", a product of rural revitalization under the cooperation between Guangdong
and Guizhou, was successfully launched.
In the first half of 2022, 37 Interactive Entertainment invested RMB 416.7 thousand to support the tea industry with
rural characteristics. In the future, the Company will continue to explore the industry assistance model of "product
upgrading + supply chain building + market-oriented promotion", supporting local spring tea products to reach a wider
market and helping rural characteristic industries to improve quality and efficiency.
2. Fulfillment of other social responsibilities
(1) Deepen industry-university-research cooperation to expand channels for talent development
To enrich its talent pool, 37 Interactive Entertainment cooperated with the schools and departments of renowned
domestic universities to develop Industry-University-Research talents, carrying out a range of characteristic activities such as
subject research, project training, and sustainable development and innovation challenges.
During the Reporting Period, the Company and Guangdong Youxin Foundation jointly sponsored the first "College
Innovation Challenge on Sustainable Development", which attracted 564 students from 48 universities at home and abroad
to compete in teams. At the final site, 10 teams from Tsinghua University, Beijing Institute of Technology, China Academy of
Art and other well-known universities presented the professional judges the highlights of digital works in social responsibility,
technical features and art style, among others, interpreting their innovative understanding of sustainable development.
The Company also launched the first round of review of the "Creating the Future—Sustainable Development University
Support Program" through Guangdong Youxin Foundation. Efforts will be made in financial support, technology linkage and
intellectual empowerment to support six social practice projects for college students, including "Promot ing the Spirit of the
Soviet Area and Inheriting Hakka Culture" and "Light Mind—A Multi-Polar Mind Community Platform". In cooperation with
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
39
the academic, public welfare and business communities, the Company will build an innovation action system for sustai nable
development and cultivate talents who care about society and shoulder missions.
(2) Advance digital empowerment to lead positive social values
In active response to policies including the Opinions on Promoting the Implementation of the National Cultu ral
Digitalization Strategy, 37 Interactive Entertainment leveraged its digital technologies to participate in the digitalization of
cultural industries, delivering positive values to society.
During the Reporting Period, the Company released the functional game Come to the Ice Games (来一场冰嬉运动会),
digitally and well reproducing Ice Play, a painting by royal painters Zhang Weibang and Yao Wenhan at the will of the Qing
Emperor Qianlong, leading players to experience the grand occasion of ancient ice sports. Another functional game Star Life
Paradise (星星生活乐园) was published to provide scene learning for children with autism. The Company launched a project
to popularize Chinese medicine culture through functional games in cooperation with Guangdong Provincial Hospital of
Chinese Medicine. During Environmental Protection Month, the release of the functional game "My Small Goal of Carbon
Elimination" (我的消碳小目标) drove 3,000 pledges of reduction of personal carbon footprint.
Exploration in digital collections was also intensified. The Company worked with China Culture and Creativity Tech., Co.,
Ltd., a subsidiary of China Cultural Media Group, to create a series of digital collections of national culture parks, using digital
artworks to show the public China's national spirit reflected in the cultures of the Yangtze River, the Great Wall, the Yellow
River, the Grand Canal and the Long March. The first phase of 12,500 collections received enthusiastic responses, attracting
the public to enjoy the beauty of Chinese culture.
(3) Promote employee development and care for their physical and mental health
To better develop its talents, 37 Interactive Entertainment created a systematic training value system. It covers new staff
guide, general career skills development, internal mentor training, leadership improvement and other fields, enabling
employees to learn and make progress at different stages of their career.
Guided by its corporate culture of "Happy Work and Healthy Life", the Company released the "Healthy 37ers" program i n
March 2022 to care for employees' physical and mental health. During the Reporting Period, the Company carried out 20
health popularization and first-aid skills training sessions, providing basic health care and first-aid knowledge to 537
employees. Routine activities were conducted across 11 clubs, including ultra-running groups, basketball, football and yoga,
attracting 2,537 people to exercise regularly and develop a healthy lifestyle. The Company also launched a psychological care
and consultation platform and emotion management courses to guide employees to handle difficulties in life and work with
a positive attitude.
(4) Care for social development and engage in community voluntary services
To further support the incubation of young talents in clinical medicine and promote the overall development of medical
and health services as well as the development of Healthy China, 37 Interactive Entertainment plans to donate RMB 5 million
to the First Affiliated Hospital of Sun Yat-Sen University to further intensify its support for outstanding talent cultivation. The
first-phase donation of RMB 2 million was completed during the Reporting Period.
During the Reporting Period, the Party Committee of 37 Interactive Entertainment issued a call for "Voluntary Servi ces
under the Leadership of Party Building". Following the call, 330 employee volunteers contributed 1,320 hours to community
COVID-19 response, companionship for children with special needs, condolences to groups in difficulties, the realization of
community residents' "little wishes", and other public welfare activities. Therefore, while enhancing employees' sense of
social responsibility, the Company delivered a positive social trend.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
40
Part VI Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares as Shares as
New dividend dividend
Number Percentage (%) Other Subtotal Number Percentage (%)
issues converted converted from
from profit capital reserves
1. Restricted shares 687,046,078 30.98% -41,416,199 -41,416,199 645,629,879 29.11%
1.1 Shares held by the
government
1.2 Shares held by state-
owned corporations
1.3 Shares held by other
687,046,078 30.98% -41,416,199 -41,416,199 645,629,879 29.11%
domestic investors
Including: Shares held
by domestic corporations
Shares held by
687,046,078 30.98% -41,416,199 -41,416,199 645,629,879 29.11%
domestic natural persons
1.4 Shares held by
overseas investors
Including: Shares held
by overseas corporations
Shares held by
overseas natural persons
2. Un-restricted shares 1,530,818,203 69.02% 41,416,199 41,416,199 1,572,234,402 70.89%
2.1 RMB-denominated
1,530,818,203 69.02% 41,416,199 41,416,199 1,572,234,402 70.89%
common shares
2.2 Domestically listed
foreign shares
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
41
2.3 Overseas listed
foreign shares
2.4 Others
3. Total shares 2,217,864,281 100.00% 0 0 2,217,864,281 100.00%
2. Changes in Restricted Shares
Applicable □ Not applicable
Unit: share
Name of Beginning Shares with restriction lifted Increase in restricted shares Ending restricted Reason for
Lifting date
shareholder restricted shares in the Reporting Period in the Reporting Period shares restriction
Subject to regulations in respect
of changes in shareholdings of
Locked-up shares of
Li Weiwei 271,059,764 29,475,000 0 241,584,764 directors, supervisors and senior
senior management
management in the Company
Law, etc.
Subject to regulations in respect
of changes in shareholdings of
Locked-up shares of
Zeng Kaitian 184,008,280 0 0 184,008,280 directors, supervisors and senior
senior management
management in the Company
Law, etc.
Subject to regulations in respect
of changes in shareholdings of
Locked-up shares of
Hu Yuhang 151,198,263 0 0 151,198,263 directors, supervisors and senior
senior management
management in the Company
Law, etc.
Subject to regulations in respect
of changes in shareholdings of
Locked-up shares of
Wu Weihong 76,149,721 14,760,000 61,389,721 directors, supervisors and senior
senior management
management in the Company
Law, etc.
Subject to regulations in respect
of changes in shareholdings of
Locked-up shares of
Yang Jun 2,095,050 520,050 0 1,575,000 directors, supervisors and senior
senior management
management in the Company
Law, etc.
Subject to regulations in respect
Locked-up shares of of changes in shareholdings of
Liu Jun 0 0 3,972,601 3,972,601
senior management directors, supervisors and senior
management in the Company
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
42
Law, etc.
Subject to regulations in respect
of changes in shareholdings of
Locked-up shares of
Zhang Yun 2,535,000 633,750 0 1,901,250 directors, supervisors and senior
senior management
management in the Company
Law, etc.
Total 687,046,078 45,388,800 3,972,601 645,629,879 -- --
II Shareholders and Their Holdings as at the Period-End
Unit: share
Number of preferred shareholders with resumed voting
Number of common shareholders 125,221 0
rights (if any) (see note 8)
5% or greater common shareholders or the top 10 common shareholders
Increase/decrease Restricted Un-restricted Pledged, marked or frozen status
Name of Nature of Shareholding Common shares
in the Reporting common shares common shares
shareholder shareholder percentage held Status Shares
Period held held
Domestic natural
Li Weiwei 14.52% 322,113,019 0 241,584,764 80,528,255
person
Domestic natural
Zeng Kaitian 11.06% 245,344,374 0 184,008,280 61,336,094 Pledged 13,500,000
person
Domestic natural
Hu Yuhang 9.09% 201,597,684 0 151,198,263 50,399,421 Pledged 18,100,000
person
Hong Kong
Securities Overseas
7.46% 165,397,375 79,416,269 0 165,397,375
Clearing corporation
Company Ltd.
Domestic natural
Wu Weihong 3.23% 71,567,862 -10,285,100 61,389,721 10,178,141
person
Domestic natural
Wu Weidong 2.76% 61,143,457 -1,700,000 0 61,143,457
person
Domestic natural
Xu Zhigao 1.64% 36,453,903 -399,200 0 36,453,903
person
National Social
Security Fund- Other 0.82% 18,282,188 18,282,188 0 18,282,188
Portfolio 112
37 Interactive
Entertainment Other 0.74% 16,301,534 16,301,534 0 16,301,534
Network
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
43
Technology
Group Co., Ltd.-
The Fourth
Employee Stock
Ownership Plan
Industrial and
Commercial Bank
of China Limited-
GF China
Securities Media Other 0.64% 14,241,330 3,775,329 0 14,241,330
Trading Open-
ended Index
Securities
Investment Fund
Strategic investor or general corporation
becoming a top-10 common Not applicable
shareholder in a rights issue (if any)
1. Among the top 10 shareholders of the Company, Wu Weihong and Wu Weidong are siblings, which makes them shareholders actin g in
Related or acting-in-concert parties concert.
among the shareholders above 2. The Company is not aware of whether there is, among the other top 10 shareholders, any related parties or acting-in-concert parties as
defined in the Measures on the Administration of Acquisition of Listed Companies.
Explain if any of the shareholders above
was involved in entrusting/being
N/A
entrusted with voting rights or waiving
voting rights
Special account for share repurchases (if
N/A
any) among the top 10 shareholders
Top 10 un-restricted common shareholders
Shares by class
Name of shareholder Un-restricted common shares held
Class Shares
Hong Kong Securities Clearing Company RMB-denominated
165,397,375 165,397,375
Ltd. common shares
RMB-denominated
Li Weiwei 80,528,255 80,528,255
common shares
RMB-denominated
Zeng Kaitian 61,336,094 61,336,094
common shares
RMB-denominated
Wu Weidong 61,143,457 61,143,457
common shares
RMB-denominated
Hu Yuhang 50,399,421 50,399,421
common shares
Xu Zhigao 36,453,903 RMB-denominated 36,453,903
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
44
common shares
National Social Security Fund-Portfolio RMB-denominated
18,282,188 18,282,188
112 common shares
37 Interactive Entertainment Network
RMB-denominated
Technology Group Co., Ltd.-The Fourth 16,301,534 16,301,534
common shares
Employee Stock Ownership Plan
Industrial and Commercial Bank of
China Limited-GF China Securities Media RMB-denominated
14,241,330 14,241,330
Trading Open-ended Index Securities common shares
Investment Fund
China Construction Bank Corporation-
Lombarda China Elderly-related RMB-denominated
14,104,508 14,104,508
Industry Mixed Securities Investment common shares
Fund
Related or acting-in-concert parties
among the top 10 un-restricted
common shareholders, as well as The Company is not aware of whether there is, among the top 10 shareholders, any related parties or acting-in-concert parties as defined
between the top 10 un-restricted in the Measures on the Administration of Acquisition of Listed Companies.
common shareholders and the top 10
common shareholders
Top 10 common shareholders engaged
None
in securities margin trading (if any)
Indicate 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.
IV Changes in the Shareholdings of Directors, Supervisors and Senior Management
□ Applicable Not applicable
No such changes in the Reporting Period. For the relevant information, see the 2021 Annual Report.
V Change of the Controlling Shareholder or Actual Controller
Change of the controlling shareholder in the Reporting Period:
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
45
□ Applicable Not applicable
No such cases in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable Not applicable
No such cases in the Reporting Period.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
46
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
1. Consolidated Balance Sheet
Prepared by 37 Interactive Entertainment Network Technology Group Co., Ltd.
30 June 2022
Unit: RMB
Item 30 June 2022 1 January 2022
Current assets:
Monetary funds 5,059,884,639.38 4,618,532,776.92
Transaction settlement funds
Loans to other banks
Trading financial assets 2,301,576,209.18 2,098,526,001.60
Derivative financial assets
Notes receivable
Accounts receivable 1,493,792,623.54 1,264,319,473.08
Accounts receivable financing
Prepayments 989,143,622.79 1,055,295,139.07
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 80,538,595.69 89,898,027.86
Including: Interest receivable
Dividends receivable 14,481,435.97 14,481,435.97
Redemptory monetary capital for
sale
Inventories 34.50
Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets 452,827,965.93 60,264,139.07
Total current assets 10,377,763,691.01 9,186,835,557.60
Non-current assets:
Loans and advances to customers
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
47
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 714,617,174.92 509,058,912.99
Other equity investments 325,592,046.97 326,561,477.94
Other non-current financial assets 638,838,488.62 561,680,630.03
Investment properties
Fixed assets 871,573,384.28 892,006,774.60
Construction in progress 134,045,030.85 77,637,189.70
Productive living assets
O il and gas assets
Right-of-use assets 47,116,082.01 59,925,125.24
Intangible assets 1,069,748,653.80 1,088,487,381.04
Development expenditure
Goodwill 1,589,065,048.53 1,589,065,048.53
Long-term deferred expenses 127,820,789.36 97,947,759.66
Deferred income tax assets 19,319,251.93 17,700,526.83
Other non-current assets 388,713,131.35 30,274,858.60
Total non-current assets 5,926,449,082.62 5,250,345,685.16
Total assets 16,304,212,773.63 14,437,181,242.76
Current liabilities:
Short-term loans 607,450,000.00 445,635,500.00
Loans from the central bank
Loans from other banks
Trading financial liabilities
Derivative financial liabilities
Notes payable 670,000,000.00 208,000,000.00
Accounts payable 1,658,805,699.77 1,565,004,179.17
Advances from customers
Contract liabilities 247,579,719.63 260,658,631.26
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 302,561,536.89 455,632,387.06
Taxes payable 191,448,447.16 188,987,667.45
Other payables 202,400,827.20 199,296,971.30
Including: Interest payable 676,058.29
Dividends payable
Handling charges and
commissions payable
Reinsurance payables
Liabilities held for sale
Non-current liabilities due within
40,078,024.93 23,773,918.12
one year
Other current liabilities 39,350,831.92 52,341,276.62
Total current liabilities 3,959,675,087.50 3,399,330,530.98
Non-current liabilities:
Insurance contract reserve
Long-term loans 341,000,000.00 20,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 27,270,304.28 39,641,414.25
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
48
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income
Deferred income tax liabilities 100,681,886.98 120,873,287.67
Other non-current liabilities
Total non-current liabilities 468,952,191.26 180,514,701.92
Total liabilities 4,428,627,278.76 3,579,845,232.90
Shareholders' equity:
Share capital 2,217,864,281.00 2,217,864,281.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 2,697,160,867.84 2,978,593,891.37
Less: Treasury shares 299,999,563.27
Other comprehensive income -135,653,501.52 -184,243,331.38
Special reserves
Surplus reserves 166,559,856.09 166,559,856.09
General risk reserves
Retained earnings 6,775,527,608.68 5,894,941,180.68
Total equity attributable to
11,721,459,112.09 10,773,716,314.49
shareholders of the Company
Non-controlling interests 154,126,382.78 83,619,695.37
Total shareholders' equity 11,875,585,494.87 10,857,336,009.86
Total liabilities and shareholders’
16,304,212,773.63 14,437,181,242.76
equity
Legal representative: Li Weiwei Chief Financial Officer:
Ye Wei
Board Secretary: Ye Wei
2. Balance Sheet of the Company
Unit: RMB
Item 30 June 2022 1 January 2022
Current assets:
Monetary funds 1,613,307,098.52 998,498,059.53
Trading financial assets 390,320,547.95 753,493,150.68
Derivative financial assets
Notes receivable
Accounts receivable
Accounts receivable financing
Prepayments 1,954,949.00
Other receivables 2,484,316,316.85 1,180,095,000.00
Including: Interest receivable
Dividends receivable
Inventories
Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets 6,814,021.96 5,345,366.16
Total current assets 4,496,712,934.28 2,937,431,576.37
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
49
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 9,536,455,641.04 9,516,402,451.17
Other equity investments
Other non-current financial assets 29,040,909.54 29,040,909.54
Investment properties
Fixed assets
Construction in progress
Productive living assets
O il and gas assets
Right-of-use assets 7,793,228.41 8,855,941.39
Intangible assets
Development expenditure
Goodwill
Long-term deferred expenses
Deferred income tax assets
Other non-current assets
Total non-current assets 9,573,289,778.99 9,554,299,302.10
Total assets 14,070,002,713.27 12,491,730,878.47
Current liabilities:
Short-term loans 300,000,000.00 350,000,000.00
Trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable
Advances from customers
Contract liabilities
Employee benefits payable 501,985.00 2,653,397.00
Taxes payable 4,757,163.19 8,909,954.92
Other payables 7,047,494.45 1,122,108,240.45
Including: Interest payable 403,784.73
Dividends payable
Liabilities held for sale
Non-current liabilities due within
20,759,782.76 2,205,420.44
one year
Other current liabilities
Total current liabilities 333,066,425.40 1,485,877,012.81
Non-current liabilities:
Long-term loans 341,000,000.00 20,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 4,863,526.88 7,298,895.06
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income
Deferred income tax liabilities 399,760.27 873,287.67
Other non-current liabilities
Total non-current liabilities 346,263,287.15 28,172,182.73
Total liabilities 679,329,712.55 1,514,049,195.54
Shareholders' equity:
Share capital 2,217,864,281.00 2,217,864,281.00
Other equity instruments
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
50
Including: Preferred shares
Perpetual bonds
Capital reserves 6,342,348,497.01 6,622,294,870.41
Less: Treasury shares 299,999,563.27
Other comprehensive income -60,000,000.00 -60,000,000.00
Special reserves
Surplus reserves 608,622,056.26 608,622,056.26
Retained earnings 4,281,838,166.45 1,888,900,038.53
Total shareholders' equity 13,390,673,000.72 10,977,681,682.93
Total liabilities and shareholders’
14,070,002,713.27 12,491,730,878.47
equity
3. Consolidated Income Statement
Unit: RMB
Item H1 2022 H1 2021
1. Total operating revenue 8,092,238,684.40 7,538,949,378.53
Including: Operating revenue 8,092,238,684.40 7,538,949,378.53
Interest income
Premium income
Handling charge and
commission income
2. Total operating costs and expenses 6,306,032,404.23 6,792,689,615.37
Including: Cost of sales 1,260,101,099.90 1,120,509,771.85
Interest expense
Handling charge and
commission expenses
Surrenders
Net claims paid
Net amount provided as
policy reserve
Expenditure on policy
dividends
Reinsurance premium
expenses
Taxes and surcharges 15,543,165.52 17,014,990.44
Distribution and selling
4,340,050,646.56 4,785,388,947.28
expenses
General and
209,169,882.37 222,001,708.95
administrative expenses
Research and
496,920,352.58 673,649,742.25
development expenses
Financial expenses -15,752,742.70 -25,875,545.40
Including: Interest
14,221,315.74 11,764,539.22
expense
Interest
54,966,479.25 30,785,993.18
income
Add: Other income 60,426,373.93 76,652,164.24
Investment income (“-” for
52,339,291.74 73,957,894.70
loss)
Including: Share of profits
and losses of joint ventures and -23,711,051.21 -7,279,101.80
associates
Gain on
derecognition of financial assets
measured at amortised cost (“-” for
loss)
Gain on exchange (“-” for
loss)
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
51
Net gain on exposure hedges
(“-” for loss)
Gain on changes in fair value
-34,650,521.66 106,592,018.27
(“-” for loss)
Impairment loss on credit (“-
-2,933,013.92 1,130,937.77
” for loss)
Impairment loss on assets (“-
-10,791,188.33
” for loss)
Gain on disposal of assets (“-
328,439.88 254,206.01
” for loss)
3. Operating profit (“-” for loss) 1,850,925,661.81 1,004,846,984.15
Add: Non-operating income 5,246,517.14 2,204,522.71
Less: Non-operating expenses 2,771,389.41 713,926.50
4. Profit before income tax expenses
1,853,400,789.54 1,006,337,580.36
(“-” for loss)
Less: Income tax expenses 176,029,935.00 162,728,946.02
5. Net profit (“-” for net loss) 1,677,370,854.54 843,608,634.34
5.1 Classified by continuity of
operations
5.1.1 Net profit from continuing
1,677,370,854.54 843,608,634.34
operations (“-” for net loss)
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
1,695,164,644.39 853,717,855.65
shareholders of the Company
5.2.2 Net profit attributable to
-17,793,789.85 -10,109,221.31
non-controlling interests
6. Other comprehensive income, net
48,589,829.86 -11,218,110.68
of tax
Other comprehensive income
attributable to shareholders of the 48,589,829.86 -11,218,110.68
Company, net of tax
6.1 Other comprehensive income
that will not be reclassified -3,000,000.00 -2,500,000.00
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
-3,000,000.00 -2,500,000.00
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 subsequently 51,589,829.86 -8,718,110.68
to profit or loss
6.2.1 Share of the other
comprehensive income of the investee
accounted for using equity method 296,531.34
that will be reclassified subsequently
to profit or loss
6.2.2 Changes in fair value
of other equity investments
6.2.3 Other
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
52
comprehensive income arising from
the reclassification of financial assets
6.2.4 Allowance for credit
impairments in other debt
investments
6.2.5 Cash flow hedge
reserve
6.2.6 Exchange differences
on translation of foreign currency 51,293,298.52 -8,718,110.68
financial statements
6.2.7 Others
Other comprehensive income
attributable to non-controlling
interests, net of tax
7. Total comprehensive income 1,725,960,684.40 832,390,523.66
Total comprehensive income
attributable to shareholders of the 1,743,754,474.25 842,499,744.97
Company
Total comprehensive income
attributable to non-controlling -17,793,789.85 -10,109,221.31
interests
8. Earnings per share:
8.1 Basic earnings per share 0.77 0.39
8.2 Diluted earnings per share 0.77 0.39
Where business combinations under common control occurred in the current period, the net profit achieved by the
acquirees before the combinations was RMB 0.00 with the amount for the same period of last year being RMB 0.00.
Legal representative: Li Weiwei Chief Financial Officer:
Ye Wei
Board Secretary: Ye Wei
4. Income Statement of the Company
Unit: RMB
Item H1 2022 H1 2021
1. Operating revenue 0.00 0.00
Less: Cost of sales 0.00 0.00
Taxes and surcharges 21,018.70 30,644.49
Distribution and selling
expenses
General and administrative
4,287,012.24 6,139,344.71
expenses
Research and development
expenses
Financial expenses -9,337,655.96 -4,741,019.01
Including: Interest expense 3,935,106.31 2,429,147.82
Interest income 13,798,152.46 7,162,870.38
Add: Other income 1,896,774.41 4,634,292.84
Investments income (“-” for
3,199,148,357.25 43,717,534.24
loss)
Including: Share of profits
and losses of joint ventures and
associates
Gain on
derecognition of financial assets
measured at amortised cost (“-” for
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
53
loss)
Net gain on exposure hedges
(“-” for loss)
Gain on changes in fair value
5,867,726.04 1,752,876.71
(“-” for loss)
Impairment loss on credit (“-
-5,000.00 10,000.00
” for loss)
Impairment loss on assets (“-
” for loss)
Gain on disposal of assets (“-
” for loss)
2. Operating profit (“-” for loss) 3,211,937,482.72 48,685,733.60
Add: Non-operating income 2.59
Less: Non-operating expenses 31,234.89
3. Profit before income tax expenses
3,211,906,250.42 48,685,733.60
(“-” for loss)
Less: Income tax expenses 4,389,906.11
4. Net profit (“-” for net loss) 3,207,516,344.31 48,685,733.60
4.1 Net profit from continuing
3,207,516,344.31 48,685,733.60
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income, net
of tax
5.1 Other comprehensive income
that will not be reclassified
subsequently to profit or loss
5.1.1 Changes caused by
remeasurement of defined benefit
pension schemes
5.1.2 Share of the other
comprehensive income of the investee
accounted for using equity method
that will not be reclassified
subsequently to profit or loss
5.1.3 Changes in fair value
of other equity investments
5.1.4 Changes in the fair
value of the company's own credit risk
5.1.5 Others
5.2 Other comprehensive income
that will be reclassified subsequently
to profit or loss
5.2.1 Share of the other
comprehensive income of the investee
accounted for using equity method
that will be reclassified subsequently
to profit or loss
5.2.2 Changes in fair value
of other equity investments
5.2.3 Other
comprehensive income arising from
the reclassification of financial assets
5.2.4 Allowance for credit
impairments in other debt
investments
5.2.5 Cash flow hedge
reserve
5.2.6 Exchange differences
on translation of foreign currency
financial statements
5.2.7 Others
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
54
6. Total comprehensive income 3,207,516,344.31 48,685,733.60
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 2022 H1 2021
1. Cash flows from operating activities:
Cash received from the sales of
8,191,423,031.24 7,676,444,468.63
goods or rendering services
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 13,071,839.40 6,041,391.30
Cash received relating to other
102,190,719.08 96,901,049.99
operating activities
Sub-total of cash inflows from
8,306,685,589.72 7,779,386,909.92
operating activities
Cash paid for purchases of goods
1,248,044,739.23 1,263,433,673.37
and services
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
952,696,588.30 930,199,318.50
employees
Payments of taxes and levies 245,557,026.85 176,556,465.72
Cash paid relating to other
4,056,307,650.80 4,155,278,299.87
operating activities
Sub-total of cash outflows used in
6,502,606,005.18 6,525,467,757.46
operating activities
Net cash flows from operating
1,804,079,584.54 1,253,919,152.46
activities
2. Cash flows from investing activities:
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
55
Cash received from disposal of
174,210,882.65 258,995,260.75
investments
Cash received from investment
36,747,137.98 53,461,764.70
income
Cash received from disposal of
fixed assets, intangible assets and 515,224.24 691,899.95
other long-term assets
Net cash received from disposal
of subsidiaries and other business
units
Cash received relating to other
5,576,074,659.14 2,157,163,728.00
investing activities
Sub-total of cash inflows from
5,787,547,904.01 2,470,312,653.40
investing activities
Cash paid for acquisition of fixed
assets, intangible assets and other 55,905,510.45 148,350,121.61
long-term assets
Cash paid to acquire investments 163,561,411.21 361,478,743.09
Net increase in pledged loans
granted
Net cash paid for the acquisition
of subsidiaries and other business 4,650,000.00
units
Cash paid relating to other
6,769,074,659.14 2,791,497,900.00
investing activities
Sub-total of cash outflows used in
6,988,541,580.80 3,305,976,764.70
investing activities
Net cash flows from/used in investing
-1,200,993,676.79 -835,664,111.30
activities
3. Cash flows from financing activities:
Cash received from capital
92,000,000.00 2,980,232,843.10
contributions
Including: Cash received from
capital contributions by non- 92,000,000.00 76,700,000.00
controlling interests of subsidiaries
Cash received from borrowings 947,450,000.00 247,468,500.00
Cash received relating to other
financing activities
Sub-total of cash inflows from
1,039,450,000.00 3,227,701,343.10
financing activities
Cash repayments of borrowings 448,653,250.00 889,324,326.07
Cash paid for interest and
827,115,684.90 9,562,304.72
dividends
Including: Dividends paid by
subsidiaries to non-controlling 405,402.09
interests
Cash paid relating to other
394,823,304.17 591,315,699.76
financing activities
Sub-total of cash outflows used in
1,670,592,239.07 1,490,202,330.55
financing activities
Net cash flows from/used in financing
-631,142,239.07 1,737,499,012.55
activities
4. Effect of foreign exchange rate
20,628,944.13 -2,225,471.71
changes on cash and cash equivalents
5. Net increase/decrease in cash and
-7,427,387.19 2,153,528,582.00
cash equivalents
Add: Cash and cash equivalents at
4,618,393,735.38 1,774,081,508.55
beginning of the period
6. Cash and cash equivalents at end of
4,610,966,348.19 3,927,610,090.55
the period
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
56
6. Cash Flow Statement of the Company
Unit: RMB
Item H1 2022 H1 2021
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
1,218,682,414.28 599,338,422.69
operating activities
Sub-total of cash inflows from
1,218,682,414.28 599,338,422.69
operating activities
Cash paid for purchases of goods
and services
Cash paid to and on behalf of
3,493,659.49 961,537.33
employees
Payments of taxes and levies 3,399,378.83 2,178,758.00
Cash paid relating to other
3,633,945,952.16 2,370,904,582.14
operating activities
Sub-total of cash outflows used in
3,640,838,990.48 2,374,044,877.47
operating activities
Net cash flows from/used in operating
-2,422,156,576.20 -1,774,706,454.78
activities
2. Cash flows from investing activities:
Cash received from disposal of
investments
Cash received from investment
3,208,188,686.02 1,043,717,534.24
income
Cash received from disposal of
fixed assets, intangible assets and
other long-term assets
Net cash received from disposal
of subsidiaries and other business
units
Cash received relating to other
2,750,000,000.00 550,000,000.00
investing activities
Sub-total of cash inflows from
5,958,188,686.02 1,593,717,534.24
investing activities
Cash paid for acquisition of fixed
assets, intangible assets and other
long-term assets
Cash paid to acquire investments 568,434,240.00
Net cash paid for the acquisition
of subsidiaries and other business
units
Cash paid relating to other
2,690,000,000.00 1,300,000,000.00
investing activities
Sub-total of cash outflows used in
2,690,000,000.00 1,868,434,240.00
investing activities
Net cash flows from/used in investing
3,268,188,686.02 -274,716,705.76
activities
3. Cash flows from financing activities:
Cash received from capital
2,903,532,843.10
contributions
Cash received from borrowings 640,000,000.00 150,000,000.00
Cash received relating to other
financing activities
Sub-total of cash inflows from
640,000,000.00 3,053,532,843.10
financing activities
Cash repayments of borrowings 350,500,000.00
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
57
Cash paid for interest and
817,906,910.83 2,311,666.67
dividends
Cash paid relating to other
2,816,160.00
financing activities
Sub-total of cash outflows used in
1,171,223,070.83 2,311,666.67
financing activities
Net cash flows from/used in financing
-531,223,070.83 3,051,221,176.43
activities
4. Effect of foreign exchange rate
changes on cash and cash equivalents
5. Net increase/decrease in cash and
314,809,038.99 1,001,798,015.89
cash equivalents
Add: Cash and cash equivalents at
998,498,059.53 274,246.17
beginning of the period
6. Cash and cash equivalents at end of
1,313,307,098.52 1,002,072,262.06
the period
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
58
7. Consolidated Statement of Changes in Shareholders’ Equity
H1 2022
Unit: RMB
H1 2022
Equity attributable to shareholders of the Company
Non-
Other equity instruments Other Spec Total
Item Less: General controllin
Share Capital comprehe ial Surplus Retained Oth shareholders'
Preferred Perpetua Oth Treasury risk Sub-total g
capital reserves nsive rese reserves earnings ers equity
shares l bonds ers shares reserves interests
income rves
-
1. Balance as at the 2,217,86 2,978,593 299,999,5 166,559, 5,894,941 10,773,716, 83,619,69 10,857,336,00
184,243,3
end of prior year 4,281.00 ,891.37 63.27 856.09 ,180.68 314.49 5.37 9.86
31.38
Add:
Adjustments for
changed accounting
policies
Adjustments for
corrections of
previous errors
Adjustments for
business
combinations under
common control
Others
-
2. Balance as at 2,217,86 2,978,593 299,999,5 166,559, 5,894,941 10,773,716, 83,619,69 10,857,336,00
184,243,3
beginning of year 4,281.00 ,891.37 63.27 856.09 ,180.68 314.49 5.37 9.86
31.38
3. Increase/ decrease - -
48,589,82 880,586,4 947,742,797 70,506,68 1,018,249,485
in the period (“-” for 281,433,0 299,999,5
decrease) 9.86 28.00 .60 7.41 .01
23.53 63.27
3.1 Total -
48,589,82 1,695,164 1,743,754,4 1,725,960,684
comprehensive 17,793,78
income 9.86 ,644.39 74.25 .40
9.85
3.2 Capital
20,053,18 20,053,189. 88,705,87 108,759,069.2
contribution and
withdrawal by 9.87 87 9.35 2
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
59
shareholders
3.2.1 Common shares
contribution and 88,705,87
88,705,879.35
withdrawal by 9.35
shareholders
3.2.2 Capital
contribution and
withdrawal by
holders of other
equity instruments
3.2.3 Share-based
20,053,18 20,053,189.
payments included in 20,053,189.87
shareholders’ equity 9.87 87
3.2.4 Others
- - - -
3.3 Profit distribution 814,578,2 814,578,216 405,402.0 814,983,618.4
16.39 .39 9 8
3.3.1 Appropriation
to surplus reserves
3.3.2 Appropriation
to general risk
reserves
- - - -
3.3.3 Distribution to
814,578,2 814,578,216 405,402.0 814,983,618.4
shareholders
16.39 .39 9 8
3.3.4 Others
3.4 Internal transfers - -
within shareholders’ 299,999,5 299,999,5
equity 63.27 63.27
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.
60
pension schemes
transferred into
retained earnings
3.4.5 Other
comprehensive
income transferred
into retained earnings
- -
3.4.6 Others 299,999,5 299,999,5
63.27 63.27
3.5 Special reserves
3.5.1 Increase in the
period
3.5.2 Used in the
period
- -
3.6 Others 1,486,650 1,486,650.1 -1,486,650.13
.13 3
-
4. Balance as at the 2,217,86 2,697,160 166,559, 6,775,527 11,721,459, 154,126,3 11,875,585,49
135,653,5
end of the period 4,281.00 ,867.84 856.09 ,608.68 112.09 82.78 4.87
01.52
H1 2021
Unit: RMB
H1 2021
Equity attributable to shareholders of the Company
Non-
Other equity instruments Other Spe Total
Item Less: General controllin
Share Capital comprehen cial Surplus Retained Oth shareholders'
Preferre Perpetu Oth Treasury risk Sub-total g
capital reserves sive rese reserves earnings ers equity
d shares al bonds ers shares reserves interests
income rves
-
1. Balance as at the 2,112,251, 114,693,5 3,959,512 6,037,383,62 28,068,07 6,065,451,703.
149,074,27
end of prior year 697.00 19.91 ,681.41 5.95 7.78 73
2.37
Add:
-
Adjustments for -
3,040,560 -2,224.58 -3,042,785.39
changed accounting 3,040,560.81
policies .81
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.
61
Adjustments
for business
combinations under
common control
Others
-
2. Balance as at 2,112,251, 114,693,5 3,956,472 6,034,343,06 28,065,85 6,062,408,918.
149,074,27
beginning of year 697.00 19.91 ,120.60 5.14 3.20 34
2.37
3. Increase/ decrease -
105,612,5 2,838,552 4,868,57 405,276,4 3,343,091,59 66,590,77 3,409,682,375.
in the period (“-” for 11,218,110
decrease) 84.00 ,124.46 3.36 26.09 7.23 8.69 92
.68
3.1 Total - -
853,717,8 842,499,744. 832,390,523.6
comprehensive 11,218,110 10,109,22
income 55.65 97 6
.68 1.31
3.2 Capital
contribution and 105,612,5 2,838,552 2,944,164,70 76,700,00 3,020,864,708.
withdrawal by 84.00 ,124.46 8.46 0.00 46
shareholders
3.2.1 Common shares
contribution and 105,612,5 2,795,939 2,901,551,67 76,700,00 2,978,251,679.
withdrawal by 84.00 ,095.73 9.73 0.00 73
shareholders
3.2.2 Capital
contribution and
withdrawal by holders
of other equity
instruments
3.2.3 Share-based
42,613,02 42,613,028.7
payments included in 42,613,028.73
shareholders’ equity 8.73 3
3.2.4 Others
- - -
4,868,57
3.3 Profit distribution 448,441,4 443,572,856. 443,572,856.2
3.36
29.56 20 0
3.3.1 Appropriation to 4,868,57
4,868,573.36 4,868,573.36
surplus reserves 3.36
3.3.2 Appropriation to
general risk reserves
- - -
3.3.3 Distribution to
448,441,4 448,441,429. 448,441,429.5
shareholders
29.56 56 6
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
62
3.3.4 Others
3.4 Internal transfers
within shareholders’
equity
3.4.1 Capital reserves
transferred into
capital (or share
capital)
3.4.2 Surplus reserves
transferred into
capital (or share
capital)
3.4.3 Surplus reserves
for making up losses
3.4.4 Changes in
defined benefit
pension schemes
transferred into
retained earnings
3.4.5 Other
comprehensive
income transferred
into retained earnings
3.4.6 Others
3.5 Special reserves
3.5.1 Increase in the
period
3.5.2 Used in the
period
3.6 Others
-
4. Balance as at the 2,217,864, 2,953,245 4,868,57 4,361,748 9,377,434,66 94,656,63 9,472,091,294.
160,292,38
end of the period 281.00 ,644.37 3.36 ,546.69 2.37 1.89 26
3.05
8. Statement of Changes in Shareholders’ Equity of the Company
H1 2022
Unit: RMB
Item H1 2022
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
63
Other equity instruments Other Special Total
Share Less: Treasury Surplus Retained Oth
Preferre Perpetu Oth Capital reserves comprehensiv reserv shareholders'
capital shares reserves earnings ers
d shares al bonds ers e income es equity
1. Balance as at the 2,217,864
6,622,294,870.41 299,999,563.27 -60,000,000.00 608,622,056.26 1,888,900,038.53 10,977,681,682.93
end of prior year ,281.00
Add: Adjustments
for changed
accounting policies
Adjustments
for corrections of
previous errors
Others
2. Balance as at 2,217,864
6,622,294,870.41 299,999,563.27 -60,000,000.00 608,622,056.26 1,888,900,038.53 10,977,681,682.93
beginning of year ,281.00
3. Increase/ decrease
in the period (“-” for -279,946,373.40 -299,999,563.27 2,392,938,127.92 2,412,991,317.79
decrease)
3.1 Total
comprehensive 3,207,516,344.31 3,207,516,344.31
income
3.2 Capital
contribution and
20,053,189.87 20,053,189.87
withdrawal by
shareholders
3.2.1 Common shares
contribution and
withdrawal by
shareholders
3.2.2 Capital
contribution and
withdrawal by holders
of other equity
instruments
3.2.3 Share-based
payments included in 20,053,189.87 20,053,189.87
shareholders’ equity
3.2.4 Others
3.3 Profit distribution -814,578,216.39 -814,578,216.39
3.3.1 Appropriation to
surplus reserves
3.3.2 Distribution to
-814,578,216.39 -814,578,216.39
shareholders
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
64
3.3.3 Others
3.4 Internal transfers
within shareholders’ -299,999,563.27 -299,999,563.27
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 -299,999,563.27 -299,999,563.27
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 2,217,864
6,342,348,497.01 -60,000,000.00 608,622,056.26 4,281,838,166.45 13,390,673,000.72
end of the period ,281.00
H1 2021
Unit: RMB
H1 2021
Other equity instruments Less:
Other Special
Item Treasu Surplus Retained Oth Total shareholders'
Share capital Preferre Perpetu Capital reserves comprehensiv reserv
Others ry reserves earnings ers equity
d shares al bonds e income es
shares
1. Balance as at the
2,112,251,697.00 3,759,929,582.87 -60,000,000.00 442,062,200.17 1,160,408,295.15 7,414,651,775.19
end of prior year
Add: Adjustments
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
65
for changed
accounting policies
Adjustments
for corrections of
previous errors
Others
2. Balance as at
2,112,251,697.00 3,759,929,582.87 -60,000,000.00 442,062,200.17 1,160,408,295.15 7,414,651,775.19
beginning of year
3. Increase/ decrease
in the period (“-” for 105,612,584.00 2,838,552,124.46 4,868,573.36 -399,755,695.96 2,549,277,585.86
decrease)
3.1 Total
comprehensive 48,685,733.60 48,685,733.60
income
3.2 Capital
contribution and
105,612,584.00 2,838,552,124.46 2,944,164,708.46
withdrawal by
shareholders
3.2.1 Common shares
contribution and
105,612,584.00 2,795,939,095.73 2,901,551,679.73
withdrawal by
shareholders
3.2.2 Capital
contribution and
withdrawal by holders
of other equity
instruments
3.2.3 Share-based
payments included in 42,613,028.73 42,613,028.73
shareholders’ equity
3.2.4 Others
3.3 Profit distribution 4,868,573.36 -448,441,429.56 -443,572,856.20
3.3.1 Appropriation to
4,868,573.36 -4,868,573.36
surplus reserves
3.3.2 Distribution to
-443,572,856.20 -443,572,856.20
shareholders
3.3.3 Others
3.4 Internal transfers
within shareholders’
equity
3.4.1 Capital reserves
transferred into
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
66
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
2,217,864,281.00 6,598,481,707.33 -60,000,000.00 446,930,773.53 760,652,599.19 9,963,929,361.05
end of the period
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
67
