37 Interactive Entertainment Network
Technology Group Co., Ltd.
2023 Interim Report
August 2023
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.
Xu Zhigao, 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.
Any plans, development strategies and other forward-looking statements in this Report
shall not be deemed as earnings forecasts or 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 Company is subject to the disclosure requirements for listed companies engaged in
software and IT services.
The Board has approved an interim dividend plan as follows: based on the total issued
share capital (exclusive of shares in the Company’s account for repurchased shares) on the date
of record, a cash dividend of RMB 4.5 (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............................................................................................5
Part III Management Discussion and Analysis.................................................................................................................... 8
Part IV Corporate Governance...........................................................................................................................................26
Part V Environmental and Social Responsibility............................................................................................................... 29
Part VI Share Changes and Shareholder Information....................................................................................................... 32
Part VII Financial Statements............................................................................................................................................ 37
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
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Definitions
Term Definition
CSRC China Securities Regulatory Commission
SZSE/the Stock Exchange Shenzhen Stock Exchange
Wuhu Shunrong Auto Parts Co., Ltd./Wuhu Shunrong Sanqi Interactive Entertainment
Company/ the Company/ the Listed Network Technology Co., Ltd./ Wuhu 37 Interactive Entertainment Network
Company/ 37 Interactive Entertainment Technology Group Co., Ltd./ 37 Interactive Entertainment Network Technology Group
Co., Ltd.
Company Law Company Law of the People's Republic of China
Securities Law Securities Law of the People's Republic of China
Articles of Association of 37 Interactive Entertainment Network Technology Group
Articles of Association
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 2023 to 30 June 2023
Period-end/end of the Reporting Period 30 June 2023
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 other
Mobile games
mobile terminals
EyuGame Shanghai Eyu Network Technology Co., Ltd. and its subsidiaries
StarUnion Interactive Entertainment ChengDu StarUnion Interactive Entertainment Technology Co., Ltd.
Yanqu Network Xiamen Yanqu Network Technology Co., Ltd.
Karma Game Karma Game HK Limited and its business entities
Zhenshuo Network Wuhu Zhenshuo Network Technology Co., Ltd.
Lihoo Network Guangzhou Lihoo Network Co., Ltd.
Dobala Shanghai Dobala Network 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. and its subsidiaries
Chumen Network Guangzhou Chumen Network Technology Co., Ltd.
Unknown Matrix Guangzhou Unknown Matrix Network Co., Ltd.
91Act Chengdu Gedou Technology Co., Ltd.
RPG Role playing game
SLG Strategy game
MMORPG Massive multiplayer online role-playing game
The abbreviation of "Virtual Reality", which uses computers to simulate and produce
VR 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
AR virtual information to the real world, where the real environment and virtual objects
exist simultaneously in one picture or space through superimposition in real time.
The abbreviation of “Extended Reality”, a collective term for AR, VR, MR and other
XR technologies that are used to combine the real and the virtual through computers to
create a virtual environment that allows human-computer interaction
AI Artificial Intelligence
The abbreviation of “Artificial Intelligence Generated Content”, including images,
AIGC
texts, audios, videos, etc.
5G 5th generation mobile communication technology.
A mobile application data analytical company that specializes in mobile application
Sensor Tower data analytics. It provides global mobile application economy with data at enterprise
level.
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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 Xu Zhigao
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 Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
Yes □ No
Reasons for the retrospective restatement:
Change to the accounting policies
H1 2022 Change (%)
H1 2023
Before Restated Restated
Operating revenue (RMB) 7,760,573,887.29 8,092,238,684.40 8,092,238,684.40 -4.10%
Net profit attributable to the Listed
1,226,061,335.07 1,695,164,644.39 1,695,164,644.39 -27.67%
Company’s shareholders (RMB)
Net profit attributable to the Listed
Company’s shareholders after
1,115,491,118.74 1,643,486,319.50 1,643,486,319.50 -32.13%
deducting non-recurring profits and
losses (RMB)
Net cash flows from operating activities
2,319,957,176.41 1,804,079,584.54 1,804,079,584.54 28.60%
(RMB)
Basic earnings per share (RMB/share) 0.55 0.77 0.77 -28.57%
Diluted earnings per share (RMB/share) 0.55 0.77 0.77 -28.57%
Weighted average return on equity (%) 9.54% 14.72% 14.72% -5.18%
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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31 December 2022 Change (%)
30 June 2023
Before Restated Restated
Total assets (RMB) 19,873,663,212.76 17,094,617,736.46 17,095,183,320.91 16.25%
Equity attributable to the Listed
12,543,776,012.49 12,183,346,432.51 12,184,007,604.82 2.95%
Company’s shareholders (RMB)
Reasons for the change to the accounting policies and the correction of accounting errors:
The Ministry of Finance issued Interpretation No. 16 for the Accounting Standards for Business Enterprises (C.K. [2022] No.
31) on 30 November 2022, which stipulates the “accounting treatments for deferred income taxes associated with assets and
liabilities arising from a single transaction to which the initial recognition exemption does not apply”. For a single transaction that
is not a business combination and does not affect either accounting profit or taxable income (or deductible losses) at the time
the transaction occurs, and where the initial recognition of assets and liabilities results in taxable temporary differences and
deductible temporary differences in equal amounts (including lease transactions where the lessee initially recognises a lease
liability on the commencement date of the lease term and records it in the right-of-use assets, and transactions where a
provision is recognised and recorded in the cost of the relevant assets because of the existence of a disposal obligation for a fixed
asset, etc., hereinafter referred to as a “single transaction to which this Interpretation applies”), the provisions pertaining to
exemption from the initial recognition of deferred income tax liabilities and assets as stipulated in Articles 11.2 and 13 of
Accounting Standard No. 18 for Business Enterprises - Income Tax shall not apply. An enterprise shall recognise the corresponding
deferred income tax liabilities and deferred income tax assets at the time of the transaction in accordance with the relevant
provisions of Accounting Standard No. 18 for Business Enterprises - Income Tax and other relevant regulations for taxable
temporary differences and deductible temporary differences arising from the initial recognition of assets and liabilities in respect
of the transaction.
The Company has implemented the said accounting policy since 1 January 2023, and has adjusted the cumulative effect to
the opening retained earnings and other related financial statement items, without adjusting the information in the comparable
period. For details of the adjusted items and amounts, please refer to “36. Changes to Significant Accounting Policies and
Accounting Estimates” under Item V of Part X herein.
IV Accounting Data Differences under China’s Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable Not applicable
No difference for the Reporting Period.
V Non-recurring profits and losses
Applicable □ Not applicable
Unit: RMB
Items Amount Note
Gain or loss on disposal of non-current assets (inclusive of
921,886.15
impairment allowance write-offs)
Government grants through profit or loss (exclusive of government Mainly due to
38,444,105.33
grants consistently given in the Company’s ordinary course of government grants other
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business at fixed quotas or amounts as per governmental policies than the rebates of
or standards) value-added tax
Gain or loss on fair-value changes on trading financial assets and
liabilities & income from disposal of trading financial assets and
liabilities and available-for-sale financial assets (exclusive of the 73,618,264.81
effective portion of hedges that arise in the Company’s ordinary
course of business)
Non-operating income and expenses other than the above 14,339,446.48
Less: Income tax effects 16,736,793.45
Non-controlling interests effects (net of tax) 16,692.99
Total 110,570,216.33
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 Operations of the Company in the Reporting Period
Focusing on cultural and creative operations based on the development, publishing, and operation of online games, the
Company has been steadily advancing with the development strategy of “boutiqueization, diversification and globalization”,
adhering to the strategy of “integration of R&D and operation”, as well as driving high-quality development and boutiqueization.
(I) Industry review
In 2023, the industry actively responded to policy calls, implemented management requirements, and continued to develop
towards high-quality and premium games. According to the China's Game Industry Report from January to June 2023 (hereinafter
referred to as the "Report") jointly released by Game Publishing Committee of China Audio-video and Digital Publishing
Association (CADPA) and China Game Industry Research Institute, the domestic game market showed signs of recovery with user
growth reaching a new high in the first half of this year. From January to June 2023, the actual sales revenue of China's game
market was RMB144.263 billion, a year-over-year (YoY) decrease of 2.39% and an increase of 22.2% compared with the prior half
year, indicating an obvious recovery trend. During the same period, there were 668 million game users in China, with a YoY
increase of 0.35%, hitting a new record high.
In overseas markets, from January to June 2023, the actual sales revenue of China's self-developed games in overseas
markets was USD8.206 billion, down 8.72% YoY. The US, Japan and South Korea remained the major overseas markets for China's
mobile games, accounting for 31.77%, 19.65% and 8.50%, respectively. The combined share of Germany, the UK and France
markets also approached 10%. Emerging markets in the Middle East, Latin America and Southeast Asia continued to show
upward momentum. Against the backdrop of overall stagnation in the global game market, China's game industry is gradually
emerging from its low point and showing an upward trend.
On the other hand, China's game industry thoroughly implemented the guiding principles of the 20th CPC National Congress,
and actively engaged in the high-quality development of the industry, achieving outstanding results in many aspects, including
minor protection, user information security, technological innovation and application, traditional culture communication, and
overseas market expansion.
Against this backdrop, the Company focused on its core business and continued to enhance its premium game development
capability and expand its core overseas advantages, steadily promoting high-quality and sustainable business growth to provide
premium cultural content to the public.
In minor protection, the Company has always taken a proactive and diligent attitude to steadily advance various works on
the protection of minors online, paying attention to every aspect throughout the game R&D and operation process. From the
perspectives of preventing online addiction and improving online literacy, the Company strives to create a bright and healthy
online environment for minors. The Company took a leading role in drafting and issuing the group standard Management System
on Minors Online Protection for Internet Companies, and collaborated with industry associations to formulate group standards
including the Social Responsibility Management System of Video Game Industry Companies and the Guidelines for Ecological
Governance of Network Information Content. Meanwhile, the Company participated in the development of group standards
including the Evaluation Criteria for Premium Games, Game Innovation Metrics, Online-game Classification, and Norms for Game
Distribution and Promotion, providing guidance for corporate social responsibilities. In addition, the new version of the
Company's functional game Star Life Paradise (星星生活乐园) for training children with autism was officially launched during the
Reporting Period, breaking geographical and spatial limitations with games and providing assistance to autistic groups nationwide
on a larger scale.
In terms of user information security, the Company continuously improved and optimised its systems related to entity
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responsibility, data security, and the registration of new technologies and applications, and established relevant systems for
account management, network content security, and data security, along with ongoing enhancements and investments in
compliance. 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 against international standards, strictly
controls information security risks, and guarantees data security to ensure the security of users' personal information to the
maximum extent.
In terms of technological innovation and application, the Company adheres to technology-driven innovation, closely follows
the latest trends in scientific and technological innovation, actively embraces cutting-edge technologies like generative AI, and
explores the potential for deep integration of AI and other emerging technologies with the Company's business, continuously
improving creative efficiency. At the same time, focusing on promoting the cross-industry integration of game technologies, the
Company launched a series of popular science games with rich themes covering medicine, traditional Chinese medicine,
aerospace, intangible cultural heritage, and more to maximise the positive social impact of games by leveraging the unique
interactivity and vividness of games. Furthermore, the Company also ventures into the fields of computing power, artificial
intelligence, optical displays, XR integrated devices, entertainment content, semiconductors and materials, space computing
engines, and the AIGC gaming and social platform, among other entertainment technology domains. By strategically embracing
"hard technology" investments and integrating ecological resources, the Company seizes opportunities for business innovation
brought by cutting-edge technology, thereby further propelling the high-quality development of its corporate ecosystem.
In terms of promoting traditional culture, the Company focuses on youth-oriented expression, continuously excavating
historical and cultural resources, hoping to showcase the beauty of Chinese traditional culture in an integrated way through
"Games+". For example, the Company incorporated Peking opera facial makeup, Cantonese culture, and the ancient Maritime Silk
Road into its globally published game The Road to Be Shopkeeper ( 叫 我 大 掌 柜 ), helping overseas players gain a deeper
understanding of Chinese culture; the Company also built a metaverse space integrating intangible cultural heritage displays,
digital experiences, and interactive check-ins using techniques like digital modelling and the Unity engine, promoting the digital
communication and inheritance of traditional culture in the new era. By harnessing the power of digital technology, the Company
enables the realisation of cultural resonance and a more vibrant and multidimensional depiction of China's stories through
various means such as producing high-quality content, developing functional games with cultural elements, and integrating new
technologies.
As a socially responsible public company, 37 Interactive Entertainment thoroughly implements the spirit of the 20th CPC
National Congress, actively practicing socialist core values, and persists in using Party building to guide corporate development.
We fulfil corporate social responsibilities by assisting with rural talent revitalisation, promoting collaborative industrial poverty
alleviation, enabling positive value dissemination through digital empowerment, nurturing young talent through industry-
academia collaboration, and participating in charity to build a better society together.
(II) The Company’s principal operations and products
The Company specializes in the development and publishing of games for global players, with the excellent game
development brand “Three Seven Games”, as well as professional game publishing brands “37Mobile”, “37GAMES” and
“37Online”. 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.
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37 Interactive Entertainment
Three Seven Games 37Mobile 37GAMES 37Online
(game development) (publishing of mobile (overseas publishing) (publishing of mobile &
games) browser games)
1. Mobile game business
During the Reporting Period, the Company's robust development was solidified by a portfolio of long-period games including
The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决), Puzzles & Survival, Song of the Castle in the Sky (云上城之歌), The Road
to Be Shopkeeper (叫我大掌柜), Underground Kingdom (小小蚁国), Peerless King (绝世仙王), among others. Newly launched
games such as Fan Ren Xiu Xian Zhuan: Ren Jie Pian (凡人修仙传：人界篇) and Zui Hou De Yuan Shi Ren (最后的原始人)
performed well, sustaining a strong long-term operational advantage and propelling the Company's business transformation and
upgrade.
(1) Deeper integration of R&D and operation, as well as enhanced quality and efficiency through AI empowerment
During the Reporting Period, the Company's advantage of "integration of R&D and operation" remained steadfast, with a
diverse range of high-quality products in its portfolio and a continuous enhancement of long-term operational capabilities. On a
global basis, the highest monthly gross billing of the Company’s mobile games exceeded RMB2 billion, the total number of newly
registered users surpassed 198 million, and the highest number of monthly active users (MAU) was over 49 million. As many as 7
existing games recorded more than RMB100 million of monthly average gross billing worldwide, and long-period product
categories accounted for over 50% of total revenue.
As a benchmark for the R&D of innovative games in the industry, the Company's game development brand of “Three Seven
Games” established a network of R&D talent spanning multiple regions. A professional layout has been established in multiple
market segments like SLG, MMORPG, and card games, forming a continuously evolving next-gen product development system
that is inheritable and iterative.
On one hand, the Company's R&D team avoids staying within comfort zones and actively expands into various categories,
developing products with a global perspective. The Company carefully worked out details regarding gameplay design, art quality,
music effects, etc., and continued to invest in product iteration, user experience and other aspects, remaining “Dedicated to
Making Premium Games”.
On the other hand, the Company consistently explores the deep application of innovative technologies in games, translating
advanced digital technologies like big data and AI into productivity, allowing developers to focus on innovative gameplay while
refining game development management to be more precise and scientific. The Company has conducted a series of technological
research and applications, including AI balance testing, art material translation, AI imitation learning, game Q&A bots, NLP
sentiment analysis, and data trend forecasting, enhancing both efficiency and quality in R&D. For instance, the self-developed
mobile card game The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决) effectively utilised AI numerical balance testing to
improve player experiences and prolong the game's life cycle.
Against this backdrop, the company's R&D capabilities continued to strengthen, delving deeper into advantageous tracks
and consistently expanding the boundaries of self-development capabilities. It has built a self-developed product portfolio that
includes high-quality mobile games such as The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决), Ba Ye (霸业), Fuyao Dream
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(扶摇一梦), Kong Zhi Yong Zhe (空之勇者), Dragon and Alice (龙与爱丽丝) and Shi Luo Zhi Men: Xu Zhang (失落之门：序章),
driving further transformation in the Company's product structure.
In addition to its homegrown brands, the Company also strengthens its self-development capability with the help of external
R&D teams, and cooperates with 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 advantages
created by the implementation of the "integration of R&D and operation" strategy over the years, the Company is able to
capitalize on its own experience to refine products together with other game developers. Meanwhile, feedback from the
operation department can be used to assist the R&D team in improving and refining products, so as to further improve the
success rate.
Furthermore, the Company actively embraces the technological innovation brought about by digital technology,
continuously iterating and optimizing technologies through decision-based AI and generative AI in recent years. It has created a
comprehensive product portfolio embedded with AI and big data technologies, spanning the entire research and operation
process. This has led to the creation of a mature and complete game industrialisation pipeline, enabling the Company to achieve
optimal resource allocation during the game research and operation process, enhance game quality, and improve user
experience.
For example, the Company actively explores the application of industrialised AI in gaming, integrating AIGC technology into
its self-developed art design platform called "Turing". This empowers the generation, storage, and management of design assets
such as text, images, audio, and video. Leveraging this system, artists can conveniently explore stylistic creativity and utilise
various accumulated art assets to train art models tailored to project needs. This approach gradually finds its way into the
production of multiple art scenes, including characters, scenes, UI, and promotional materials, enhancing overall asset reuse
efficiency and collaborative design production.
(2) Accelerated diversification, and enhanced long-term operational capabilities
During the Reporting Period, the Company brought diversified experiences to players through high-quality independently-
developed and agency games. Also, it explored innovative marketing with the younger consumers, improving publishing
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efficiency through precise marketing methods such as interesting and sentimental marketing ideas and cross-sector
collaboration between games and IPs. Fan Ren Xiu Xian Zhuan: Ren Jie Pian (凡人修仙传：人界篇), Ba Ye (霸业), Zui Hou De
Yuan Shi Ren ( 最 后 的 原 始 人 ), and other premium games were launched, delivering differentiated and fresh experiences to
players, and accelerating the Company's diversification.
Adapted from a novel of the same name, the blockbuster MMORPG mobile game Fan Ren Xiu Xian Zhuan: Ren Jie Pian (凡
人 修 仙 传 ： 人 界 篇 ), which is developed by EyuGame under the Company and published by the Company, has garnered
attention in the market. Its respect for the original plot, creative and entertaining gameplay, and rich artistic expression have
resonated with players, making it a market hit. Additionally, the Company maximises its publishing and operational advantages,
strategically spreading the game's unique features and content highlights through targeted promotion and branding efforts.
With a combination of high-quality production, innovative gameplay, and comprehensive marketing strategies, the product
proved a success in the MMO track and won the hearts of many players.
Ba Ye ( 霸 业 ), a self-developed Three Kingdoms-themed strategy mobile game showcasing top-notch artistic quality, has
exhibited steady performance since its June launch. Distinguished from other Three Kingdoms SLG mobile games in the industry,
it emphasises the true battle scenarios between the ancient Chinese kingdoms of Wei, Shu, and Wu, creating a vivid "Three
Kingdoms world" for players. The prehistoric civilisation-themed card game Zui Hou De Yuan Shi Ren (最后的原始人) stands out
with its distinctive and engaging gameplay, captivating storyline, and entertaining pet collection and nurturing system. It offers
players a thrilling and challenging adventure in a primitive survival setting, immersing them in the unique charm of the primitive
world.
The Company consistently adheres to long-term operation, providing players with meticulous and comprehensive long-term
services. It deeply integrates the highlights of its intellectual property (IP) to continuously innovate in terms of reflow methods
and activities, consistently prolonging the product life cycle. Its existing products, including Puzzles & Survival, The Road to Be
Shopkeeper (叫我大掌柜), The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决), Peerless King (绝世仙王), Song of the Castle
in the Sky (云上城之歌), Underground Kingdom (小小蚁国), and Kong Zhi Yao Sai: Qi Hang (空之要塞：启航), continue to
exhibit strong vitality and potential. During the Reporting Period, they have contributed stable performance to the Company's
business development.
Moreover, in response to industry development, the Company actively explores the small game channel, striving to break
the circle and match user preferences with innovative gameplay and themes. The Company refines its existing projects, adhering
to a multi-channel marketing approach of “branding + sales effects”. This approach helps expand user groups, tap into new
market potential, and cultivate new growth drivers.
(3) With a global vision, the Company effectively explored markets and disseminated the essence of the traditional
Chinese culture.
According to China's Game Industry Report from January to June 2023, the actual sales revenue of China's self-developed
games in overseas markets was USD8.206 billion, down 8.72% YoY. The main reasons are that the consumption willingness and
capacity of users in major overseas markets have been adversely affected by economic downturn, and the market competition
has become increasingly fierce, leading to higher overseas market marketing costs.
Against this backdrop, the Company firmly stands among the top tier of Chinese game companies expanding overseas,
maintaining a robust trend in its overseas operations. During the Reporting Period, the Company achieved overseas operating
revenue of RMB3.027 billion. In the global market, it has established a product portfolio anchored in MMORPG, SLG, card games,
and simulation games. Multiple benchmark products for overseas expansion such as Puzzles & Survival, Song of the Castle in the
Sky (云上城之歌), The Road to Be Shopkeeper (叫我大掌柜), Peerless King ( M) (绝世仙王( M)), and Ant Legion have
shown steady performance.
Supported by years of accumulation of experience in publishing games overseas, the Company now adopts the strategy of
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"tailored games" to open up the global market, and deeply integrates the gameplay themes and promotional materials of its
products with excellent traditional Chinese culture. This approach creates a communication method that resonates with diverse
regional, national, and audience groups, promoting the global expression of Chinese stories.
The domestically themed simulation game The Road to Be Shopkeeper (叫我大掌柜), launched by the Company in 2020,
adopted a localised distribution strategy in various regions worldwide. The Company collaborated with official cultural
institutions in Guangzhou to promote Cantonese culture, authentically representing the prosperity of the ancient Maritime Silk
Road. By incorporating elements of traditional Chinese culture such as the lion dance, traditional festivals, Dunhuang Caves, and
Peking Opera, players vividly experience the charm of ancient Chinese trade and culture, allowing overseas users to immerse
themselves in the beauty of Chinese culture and achieving a historic breakthrough for historical simulation games in the
European and American regions.
The Company's phenomenal overseas product, Puzzles & Survival, deeply implements the strategy of "tailored games". By
continuously exploring local channels, refining creative elements, upgrading advertising creativity, and expanding the user base,
the product’s brand influence has grown. It becomes a classic case of SLG fusion game that successfully gains new user groups.
This game has won the "Best Gameplay Innovation" award for Asia Pacific by Sensor Tower, maintaining strong vitality since its
launch in 2020. From its launch to the end of the Reporting Period, Puzzles & Survival has accumulated approximately RMB8
billion in gross billing, achieving an innovative fusion of gaming categories and the integration of game themes and regional
cultures.
The different-world adventure theme MMORPG Song of the Castle in the Sky (云上城之歌) achieved remarkable results in
the Korean and Japanese markets through its combined marketing and operational strategy of branding + sales effects. It was
awarded the "APAC Awards Best Localization Mobile Game in Korea" by Sensor Tower in 2022, becoming the highest grossing
overseas game in the Korean market in 2022 and ranking 3rd in Sensor Tower's 2022 Grossing Chart of China Mobile Games on
the Japanese Market. Peerless King ( M) (绝世仙王( M)) stood out in the fiercely competitive MMORPG game market
in Korea due to its distinctive promotional strategies and differentiated gaming experience, gaining popularity among users.
(4) Collaborating with partners for mutual growth, as well as creating a diverse and rich product pipeline
The Company focuses on its core gaming business, continuously expanding the boundaries of self-development capabilities,
and delving into core genre tracks, with a rich pipeline of self-developed quality mobile games. Furthermore, the Company
consistently prioritises high-quality content as its strategic direction. Through multi-dimensional approaches such as financial
support, business assistance, and post-investment empowerment, the Company empowers numerous game developers with
strong product reputation. This includes in-depth collaborations with reputable game developers such as EyuGame, StarUnion,
Yanqu Network, Karma Game, Zhenshuo Network, Lihoo Network, Dobala, Meng52, Woowii Games, UEGAME, Chumen Network,
Unknown Matrix, 91Act, and others. These collaborations involve agency and customisation to enrich the Company's supply of
high-quality products and deepen the diversification of its product portfolio.
Part of the Company's game pipeline is as follows:
Intended publishing
Developer Name of game Game category, theme and style
area
Self-
Fuyao Dream (扶摇一梦) Ancient style MMORPG Global
developed
Self-
Shi Luo Zhi Men: Xu Zhang (失落之门：序章) Western magic MMORPG Global
developed
Self- Different-world adventure (Chibi
Kong Zhi Yong Zhe (空之勇者) Global
developed 3D) MMORPG
Self- Chinese comic oriental fantasy
Code Soul MMO (代号斗罗 MMO) Global
developed MMORPG
Self-
Code Battle Song M (代号战歌 M) Western magic MMORPG Global
developed
Self- Code Zheng Qi SLG (代号正奇 SLG) Realistic Three Kingdoms SLG Global
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
13
Intended publishing
Developer Name of game Game category, theme and style
area
developed
Self-
Code Xiu Xian (代号休闲 SLG) Chibi war SLG Global
developed
Self-
Code G2N (代号 G2N) Realistic European Medieval SLG Global
developed
Self-
Dragon and Alice (龙与爱丽丝) Myth card game Global
developed
Self-
Code RR (代号 RR) Chibi western magic Global
developed
Self-
Code Little Game A (代号小游戏 A) Chibi oriental fantasy Global
developed
Self-
Code Little Game B (代号小游戏 B) Chibi oriental fantasy Global
developed
Self-
Code Little Game C (代号小游戏 C) Realistic western magic Global
developed
Agency Shu Guang Ji Hua (曙光计划) Future technologies MMORPG Global
Zhu Shen Huang Hun: Zheng Fu (诸神黄昏：
Agency Western magic MMORPG Global
征服)
Agency Code Dragon Knight (代号龙骑士) Japanese-style Chibi MMORPG Domestic
Agency Hong Huang Yi Shou Lu (洪荒异兽录) Immortality cultivation MMORPG Domestic
Agency Ping Xing Gui Ji (平行轨迹) Future city MMORPG Global
Agency Li Huo Zhi Jing (离火之境) Oriental fantasy MMORPG Domestic
Agency Puzzles & Chaos Western magic SLG Overseas
Agency Mecha Domination Giant beast SLG Overseas
Yuan Ye Chuan Shuo: Shi Qian Wan Nian
Agency Prehistoric civilisation SLG Global
(原野传说：史前万年)
Agency Wan Sheng Zhi Guo (万乘之国) Multi-civilisation SLG Domestic
Agency Code Three Kingdoms (代号三国 CB) The Three Kingdoms SLG Domestic
Agency Bugtopia Insects SLG Overseas
Agency Homeland and New World (故土与新世界) Magic chibi SLG Domestic
Agency Code Er Ci Yuan ZQ (代号二次元 ZQ) Oriental fantasy card game Domestic
Agency Kong Zhi Yao Sai: Qi Hang (空之要塞：启航) Steampunk card game Overseas
Agency Lost Star Ring (失落星环) Interstellar card game Global
Agency Dreamweaver Forest (织梦森林) Farming simulation game Global
Agency Gold Medal Partner (金牌合伙人) Business running simulation game Domestic
Agency Yes Your Highness Medieval simulation game Overseas
Agency Code Liu Li (代号琉璃) Ancient style simulation game Overseas
Agency Code Leisure (代号休闲) Modern resort leisure game Overseas
2. Browser game business
According to China's Game Industry Report from January to June 2023, the actual sales revenue of browser games in China
decreased by 11.87% YoY to RMB2.385 billion during the period from January to June 2023, continuing the downward trend.
During the Reporting Period, the Company’s browser game business achieved operating revenue of RMB253 million, accounting
for more than 10% of the total revenue industry-wide, showing stable performance and aligning with the industry's overall trend.
(III) The Company’s principal operations and business models
The Company is principally engaged in the development, publishing, and operation of online games. The business models 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
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
14
promotion, online customer service and top-up payment; and updating games along with game developers based on the real-time
feedback of users and games.
Under the third-party joint operation mode, the Company cooperates with one or more game operators or game application
platforms to jointly operate games. And the aforesaid parties are responsible for the management of their own channels, including
operation, promotion, the recharge and charge system, while the Company provides technical support services along with game
developers.
(IV) The Company’s presence on the market and primary growth drivers
Focusing on cultural and creative businesses based on the development, publishing, and operation of online games, the
Company is an excellent comprehensive entertainment provider in China’s A-stock market. It is 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, and MSCI ESG A-rated Companies,
among others. With “bringing joy to the world” as its mission, the Company is dedicated to becoming an excellent and
sustainable entertainment provider.
During the Reporting Period, the Company steadily advanced with the development strategy of “boutiqueization,
diversification and globalization”, adhered to the strategy of "dual engines at home and abroad", as well as continuously
promoted high-quality and sustainable development, with no significant changes to its primary growth drivers.
II Core Competitiveness Analysis
The Company’s core competitiveness remained largely the same during the Reporting Period.
1. Strong and efficient publishing capability——global vision and long-term development strategy
The Company keeps exploring innovative ways of publishing, building a solid foundation in terms of publishing, and fully
empowering its partners to grow together. During the Reporting Period, the Company remained in the top five of the global revenue
ranking of China's mobile game publishers (according to Sensor Tower), with a strong publishing capability. 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. It possesses strong capabilities for operation and optimization in numerical management,
process optimization, event planning, etc. By continuously improving the quality of games and attracting players with better
content, the Company is able to prolong the product life cycle effectively. In addition, various tools, data and algorithms are used to
optimise the distribution approaches. With intelligent and automated distribution, as well as high-quality content, the Company is
able to effectively control the marketing costs and improve the ability of precise distribution.
Meanwhile, based on overseas market insights and years of rich publishing experience, the Company has adopted a strategy of
"tailored games" to open up the global market and bring players diversified gaming experience. Moving forward, the Company will
further leverage its first-mover advantage in overseas markets and continuously expand its overseas business to make new
contributions to promoting the development of China's cultural industry and boosting cultural confidence.
2. Excellent industrywide icon for R&D——strong foundation built through hard work
The Company carries on with its strategy of “integration of R&D and operation”, adheres to the strategy of “boutiqueization,
diversification and globalization”, as well as emphasizes R&D investments and talent cultivation. Its independently developed
products are characterized by high output, a high success rate and a long period, with a professional layout in multiple market
segments like MMORPG, card games, and SLG. The Company's R&D team is not confined to their comfort zone. They have been
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
15
actively working on diversified categories and developing products with a global vision. With sophisticated efforts in gameplay,
art quality, music and other details, as well as continued investments in product iteration and user experience, the Company
remains “Dedicated to Making Premium Games”, making it an icon for the R&D of quality games in the industry.
Upholding the philosophy of long-term development, the Company has put in place a diversified talent system through internal
training and external recruitment, focuses on employee diversity, and opens up development channels for professionals. Moreover,
it focuses on the development of talent in innovation to achieve effective results and build an excellent team. The Company
vigorously refines the mechanism for R&D project approval, shortens the evaluation cycle and establishes diversified indicators, so
as to stimulate employees’ innovative vitality. At the same time, the Company has established a tiered incentive system with
diverse incentives for different categories of products to encourage 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 runs through many links,
such as idea creation, project approval, process and review, to achieve the risk control of the entire R&D process. On top of
effectively controlling the costs, this process enables finer and more scientific game development and management, greatly
improves the success rate of product development, and helps lay a foundation for creating diverse, fine games. Additionally, the
personnel allocation approach of “specific producers for specific game categories” enables a producer to focus more on the game
category he or she is good at, which can help further pool resources and improve R&D efficiency.
3. Stable, enterprising and practical team —— aiming high while being down-to-earth
The Company has been deeply engaged in the cultural and creative industry for many years. Its core management team is
deeply involved in the front line of business, working hard together with all the employees. Always upholding the spirit of
marathon-like perseverance, the Company has been forging ahead with breakthroughs, as well as pursuing better financial results
and faster growth while maintaining sound operation. In the process of development, the Company constantly upgrades and
improves its talent development system. The scientific promotion mechanism, remuneration management system and incentive
mechanism enable clearer, more open and more transparent growth paths for employees, as well as motivate 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 “Social 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, as well as to achieve joint creation, responsibility sharing, growth sharing
and common prosperity between the Company and its employees.
With “bringing joy to the world” as its mission, the Company is advancing towards the vision of “becoming an excellent and
sustainable entertainment provider”.
III Analysis of Principal Operations
Overview
See contents under the heading “I Principal Operations of the Company in the Reporting Period”.
Year-over-year changes in key financial data:
Unit: RMB
H1 2023 H1 2022 Change (%) Main reason for change
This is primarily driven by the game
Operating revenue 7,760,573,887.29 8,092,238,684.40 -4.10% products in operation being at different
stages of their life cycle. The games in
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
16
operation during the Reporting Period
were mainly new games at an introduction
stage, while those during the same period
last year were mainly existing games at a
mature stage, with a relatively stable gross
billing.
Increased cost of royalties as a result of
Cost of sales 1,664,617,407.90 1,260,101,099.90 32.10% increased revenue from agency games
during the Reporting Period
Distribution and
4,279,408,761.57 4,340,050,646.56 -1.40%
selling expenses
General and
Increased remunerations and share-based
administrative 257,073,397.84 209,169,882.37 22.90%
payments for the management
expenses
Increased interest income from deposits
Financial expenses -111,641,061.71 -15,752,742.70 -608.71% during the Reporting Period compared with
the same period last year
Expiry of tax preferences for certain
Income tax expenses 205,127,044.68 176,029,935.00 16.53%
subsidiaries during the Reporting Period
In the second half of 2022, the Company
optimised the structure of game categories
Research and
under development, reducing investment
development 388,284,125.67 496,920,352.58 -21.86%
in some non-strategic categories and
investments
increasing investment in strategic
categories.
Decreased payments for information
Net cash flows from service charges during the Reporting
2,319,957,176.41 1,804,079,584.54 28.60%
operating activities Period compared with the same period last
year
Increased net cash flows used in the
Net cash flows used purchase and recovery of wealth
in/from investing -1,303,177,463.32 -1,200,993,676.79 -8.51% management products and term deposits
activities during the Reporting Period compared with
the same period last year
Combined effects of increased cash
Net cash flows used received from borrowings, increased
in/from financing -340,841,192.32 -631,142,239.07 46.00% dividend payout and increased financings
activities received with term deposits in pledge
during the Reporting Period
Increased net cash flows from operating
Net increase in cash and financing activities during the
681,497,084.43 -7,427,387.19 9,275.46%
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 2023 H1 2022
As % of operating As % of operating Change (%)
Amount Amount
revenue (%) revenue (%)
Total operating revenue 7,760,573,887.29 100.00% 8,092,238,684.40 100.00% -4.10%
By operating division
Online games 7,760,573,887.29 100.00% 8,092,238,684.40 100.00% -4.10%
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
17
By product category
Mobile games 7,476,618,498.58 96.34% 7,738,933,571.90 95.63% -3.39%
Browser games 253,306,881.77 3.26% 340,738,772.48 4.21% -25.66%
Others 30,648,506.94 0.39% 12,566,340.02 0.16% 143.89%
By operating segment
Domestic 4,733,223,812.70 60.99% 5,059,634,965.68 62.52% -6.45%
Overseas 3,027,350,074.59 39.01% 3,032,603,718.72 37.48% -0.17%
Operating division, product category or operating segment contributing over 10% of operating revenue or operating profit:
Applicable □ Not applicable
Unit: RMB
Gross YoY change in YoY change in YoY change in
Operating revenue Cost of sales profit operating cost of sales gross profit
margin revenue (%) (%) margin (%)
By operating division
Online games 7,760,573,887.29 1,664,617,407.90 78.55% -4.10% 32.10% -5.88%
By product category
Mobile games 7,476,618,498.58 1,582,779,524.07 78.83% -3.39% 37.29% -6.27%
Browser games 253,306,881.77 72,102,493.75 71.54% -25.66% -26.70% 0.41%
By operating segment
Domestic 4,733,223,812.70 841,381,684.12 82.22% -6.45% 14.81% -3.30%
Overseas 3,027,350,074.59 823,235,723.78 72.81% -0.17% 56.14% -9.80%
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
Gross YoY change in YoY change in YoY change in
Operating revenue Cost of sales profit operating cost of sales gross profit
margin revenue (%) (%) margin (%)
By operating division of customers
Online games 7,760,573,887.29 1,664,617,407.90 78.55% -4.10% 32.10% -5.88%
By product category
Mobile games 7,476,618,498.58 1,582,779,524.07 78.83% -3.39% 37.29% -6.27%
Browser games 253,306,881.77 72,102,493.75 71.54% -25.66% -26.70% 0.41%
By operating segment
Domestic 4,733,223,812.70 841,381,684.12 82.22% -6.45% 14.81% -3.30%
Overseas 3,027,350,074.59 823,235,723.78 72.81% -0.17% 56.14% -9.80%
Breakdown of the cost of sales for principal operations:
Unit: RMB
H1 2023 H1 2022
Breakdown of cost Change (%)
Amount As % of cost of sales Amount As % of cost of sales
Royalties 1,495,733,421.12 89.86% 1,141,980,274.76 90.63% 30.98%
Cost of servers 97,763,750.37 5.87% 94,340,256.68 7.49% 3.63%
Amortization of
45,617,203.76 2.74% 13,850,699.29 1.10% 229.35%
copyright money
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
18
Other costs 25,503,032.65 1.53% 9,929,869.17 0.78% 156.83%
Total 1,664,617,407.90 100.00% 1,260,101,099.90 100.00% 32.10%
Any over 30% YoY movements in the data above and why:
Applicable □ Not applicable
1. Cost of sales in the business of online games increased by 32.10% YoY, primarily driven by a 37.29% YoY increase in the cost of
sales of mobile games. Royalties, in particular, increased by 30.98% YoY, mainly because the revenue from agency games such as
Fan Ren Xiu Xian Zhuan: Ren Jie Pian ( 凡 人 修 仙 传 ： 人 界 篇 ), Puzzles & Survival, and Underground Kingdom ( 小 小 蚁 国 )
increased as a percentage of the total revenues during the Reporting Period.
2. Overseas cost of sales increased by 56.14% YoY, primarily driven by the increased royalties.
3. The amortizatized cost of copyright money increased by 229.35% YoY, primarily driven by the increased games with copyrights
that were launched during the Reporting Period.
4. Other costs, mainly labour cost and technical service cost, increased by 156.83% YoY, primarily driven by the increased labour
cost.
IV Analysis of Non-principal Operations
Applicable □ Not applicable
Unit: RMB
As % of profit
Amount before income tax Reason/source Recurrent or not
expenses
Mainly due to gains on investments from
disposal of equity investments, dividends
Investment income -3,937,725.83 -0.28% during the period of holding equity No
investments, and wealth management
products
Gain/loss on Mainly due to changes in fair value of
66,445,566.71 4.70% No
changes in fair value equity investments
Impairment loss on
350,866.28 0.02% Mainly due to impairment loss on credit Yes
assets
Non-operating Mainly due to the write-off of inactive
17,988,142.97 1.27% No
income payables and compensation income
Non-operating Mainly due to expenditure on donations
3,648,696.49 0.26% No
expenses and loss of security deposits
Refund VAT is
Mainly due to refund of VAT and other
recurrent while
Other income 67,310,526.91 4.77% government grants given in the
other government
Company’s ordinary course of business
grants are not.
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
30 June 2023 31 December 2022 Change in
As % of As % of total percentage Reason for any significant change
Amount Amount
total assets assets (%)
The ending balance was higher
than the beginning balance
Monetary funds 8,232,496,377.64 41.42% 5,129,481,882.65 30.01% 11.41%
mainly due to net cash flows
from operating activities. For
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
19
further information, see “II 5.
Consolidated Cash Flow
Statement”, “53. Cash flow
statement items” and “54.
Supplementary information for
the cash flow statement” under
Note VII, in “Part X Financial
Statements”.
Accounts
1,432,993,006.78 7.21% 1,433,563,842.43 8.39% -1.18% No significant change
receivable
Long-term
equity 606,075,958.69 3.05% 621,794,374.74 3.64% -0.59% No significant change
investments
Fixed assets 834,923,391.50 4.20% 850,030,034.92 4.97% -0.77% No significant change
No significant change occurred to
this item as a percentage of total
assets, while the ending balance
was higher than the beginning
Construction in
326,705,519.85 1.64% 242,508,087.97 1.42% 0.22% balance mainly due to the
progress
investments in the Guangzhou
Headquarters Building
construction project during the
Reporting Period.
No significant change occurred
to this item as a percentage of
total assets, while the ending
balance was lower than the
Right-of-use
26,401,292.25 0.13% 31,967,946.49 0.19% -0.06% beginning balance mainly due to
assets
the depreciation provisions and
the termination of certain lease
contracts during the Reporting
Period.
Mainly due to the increased note
Short-term loans 1,929,285,500.00 9.71% 901,046,888.89 5.27% 4.44% financings and bank loans during
the Reporting Period
Contract
240,892,166.88 1.21% 259,519,734.14 1.52% -0.31% No significant change
liabilities
Mainly due to additional three-
Long-term loans 468,500,000.00 2.36% 323,000,000.00 1.89% 0.47% year bank loan during the
Reporting Period
No significant change occurred to
this item as a percentage of total
assets, while the ending balance
was lower than the beginning
Lease liabilities 9,251,557.84 0.05% 16,786,536.53 0.10% -0.05%
balance mainly due to the
decreased lease payables as a
result of rental payments made
during the Reporting Period.
Mainly because the Company
recovered mature bank’s wealth
Trading financial
1,881,228,387.25 9.47% 2,792,984,819.12 16.34% -6.87% management instruments and
assets
structured deposits during the
Reporting Period
No significant change occurred to
this item as a percentage of total
assets, while the ending balance
Prepayments 961,831,277.89 4.84% 855,193,135.12 5.00% -0.16%
was higher than the beginning
balance mainly due to the
increased prepayments for
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
20
advertising as a result of new
game launches during the
Reporting Period.
Mainly due to the provisions for
Intangible assets 1,056,362,674.08 5.32% 1,059,676,921.41 6.20% -0.88% amortizations of land use rights
and office software, etc.
Goodwill 1,589,065,048.53 8.00% 1,589,065,048.53 9.30% -1.30% No significant change
Mainly due to the increased
Other non- balance of over-one-year
1,291,742,516.94 6.50% 1,024,113,999.86 5.99% 0.51%
current assets deposits purchased to increase
return on capital
Mainly due to the increased
Accounts internet traffic costs payable as a
2,133,387,322.93 10.73% 1,648,560,259.52 9.64% 1.09%
payable result of new game launches
during the Reporting Period
2. Major Assets Overseas
Applicable □ Not applicable
Material
Manag Control measures Return As % of the
impairm
Asset Source Asset value (RMB) Location ement to protect asset generated Company’s
ent risk
model safety (RMB) equity
or not
A sound business
Hong
supervision
Other Investments in Kong in
mechanism and a
equity overseas 374,763,431.10 China, 26,116,193.19 2.99% No
sound risk control
assets companies Canada,
mechanism have
etc.
been put in place
A sound business
Hong supervision
Income from
Monetary Kong in mechanism and a
investments 1,533,603,734.57 12.23% No
funds China, the sound risk control
and operations
US, etc. mechanism have
been put in place
3. Assets and Liabilities at Fair Value
Applicable □ Not applicable
Unit: RMB
Gain/loss on Impairment
fair-value allowance
Cumulative fair- Purchased in Sold in the
Beginning changes in made in Other Ending
Item value changes the Reporting Reporting
amount the the changes amount
through equity Period Period
Reporting Reporting
Period Period
Financial assets
1. Trading
financial assets
(exclusive of 2,792,984,819. 66,445,566. 4,584,374,135. 5,565,650,000 3,073,865. 1,881,228,387
derivative 12 71 98 .40 84 .25
financial
assets)
2. Other equity - 1,579,940. 271,570,153.4
269,990,212.51
investments 209,106,263.84 94 5
3. Other non- 685,698,473.75 60,000,000.00 24,171,912.50 3,010,574. 724,537,135.8
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
21
current 63 8
financial assets
Total of the 3,748,673,505. 66,445,566. - 4,644,374,135. 5,589,821,912 7,664,381. 2,877,335,676
above 38 71 209,106,263.84 98 .90 41 .58
Financial
-84,380.59 -85,962.89 -1,582.30 0.00
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
Item Ending carrying amount(RMB) Reason for restriction
Monetary funds 39,766,271.81 Money frozen by bank and security deposits
Principals and interest of term deposits with a maturity
Monetary funds 828,731,432.35
within one year as pledges
Principals and interest of term deposits with a maturity
Non-current assets due within one year 176,927,777.97
of over one year (due before 30 June 2024) as pledges
Principals and interest of term deposits with a maturity
Other non-current assets 1,098,749,010.30
of over one year as pledges
Fixed assets-buildings and constructions 667,241,110.72 As collateral for bank loan to the Company
Total 2,811,415,603.15
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
Relationsh
ip with Principal activity Registered Operating Operating
Name Total assets Net assets Net profit
the capital revenue profit
Company
Anhui 37 Jiyu
Development of
Network 6,250,000. 2,341,245,041. 1,590,134,312 741,525,914. 395,759,642. 366,664,988.
Subsidiary mobile and
Technology Co., 00 82 .66 59 54 93
browser games
Ltd.
37 Interactive
Entertainment Publishing and
10,000,000 15,366,065,51 5,476,585,393 7,758,505,95 991,252,080. 833,840,460.
(Shanghai) Subsidiary operation of
.00 8.99 .20 8.33 34 52
Technology Co., mobile games
Ltd.
Subsidiaries obtained or disposed of in the Reporting Period:
√ Applicable □ Not applicable
Name of subsidiary How it was obtained or disposed of Effects on the overall operations and performance
No material effects on the overall operations and
Chengdu Shouyin Technology Co., Ltd. Transfer
performance of the Company
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
22
Other information on principal subsidiaries and joint stock companies:
N/A
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 enterprises 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 its 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, the Company 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 matures. 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 competition 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 operations 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,
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.
23
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 system 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", 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 has established recreational clubs for employees, covering e-sports, table games,
dancing, badminton, footfall and yoga, created cultural atmosphere that meets the characteristics of the younger generation,
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 technologies and products for the
industry development trend.
5. Risk associated with being investigated by the China Securities Regulatory Commission with no clear conclusion yet
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
24
On 27 June 2023, the Company, Mr. Li Weiwei (the actual controller and Chairman of the Board of the Company), and Mr.
Zeng Kaitian (the Vice Chairman of the Board of the Company) received the "Notification of the China Securities Regulatory
Commission on Case Filing" (CSRC Case No. 03720230061, No. 03720230062, No. 03720230063) from the said commission
(hereinafter referred to as the "CSRC") respectively. For suspected information disclosure violations, according to the Securities
Law of the People's Republic of China, the Law of the People's Republic of China on Administrative Penalties and other applicable
laws and regulations, the CSRC decided to file a case against the Company, Li Weiwei and Zeng Kaitian.
During the period of investigation, the Company will actively cooperate with the CSRC’s investigation and fulfil its
information disclosure obligations in strict accordance with applicable laws, regulations and regulatory requirements.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
25
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 the Date of
Meeting Type participation Resolutions of the meeting
meeting disclosure
ratio
1. The 2022 Work Report of the Board of Directors was
approved;
2. The 2022 Work Report of the Supervisory Committee was
approved;
3. The full 2022 Annual Report and its Summary were approved;
4. The 2022 Final Account Report was approved;
5. The 2022 Final Dividend Plan was approved;
6. The Proposal on Appointment of Independent Auditor for
Annual Financial Statements and Internal Control for 2023 was
The 2022 Annual Annual General
23 May 24 May approved;
General Meeting Meeting of 50.25%
of Shareholders Shareholders 2023 2023 7. The Proposal on the Expected Guarantee Line for Subsidiaries
in 2023 was approved;
8. The Proposal on the Remuneration Plan for Directors was
approved item by item.
(1) The Sub-proposal on the Remunerations for Non-
independent Directors; and
(2) The Sub-proposal on the Remunerations for Independent
Directors.
9. The Proposal on the Amendments to the Management Rules
for External Investments 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
Xu Zhigao General Manger Appointed 24 May 2023 Job arrangements
Li Weiwei General Manger Resigned 24 May 2023 Job arrangements
II Interim Dividend Plan
Applicable □ Not applicable
Bonus issue from profit (share/10 shares) 0
Cash dividend/10 shares (RMB) (tax inclusive) 4.5
Share base (share) 2,217,864,281
Cash dividends (RMB) (tax inclusive) 998,038,926.45
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
26
Cash dividends in other forms (such as share repurchase) (RMB) 0.00
Total cash dividends (including those in other forms) (RMB) 998,038,926.45
Distributable profit (RMB) 4,138,773,875.47
Total cash dividends (including those in other forms) as % of total
100%
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 2023 interim dividend plan is as follows: With a fixed dividend
payout ratio, based on the total issued share capital (exclusive of shares in the Company’s account for repurchased shares) on the
date of record, a cash dividend of RMB 4.5 (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.
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 of Total number As % of the total
Awardee coverage Change Funding source
awardees of shares held share capital
The Third Employee Stock
The Proposal on Extending the
Ownership Plan: the leadership Shares under the
Duration of the Third Employee
team of the Company (directors, employee stock
Stock Ownership Plan was
supervisors and senior ownership plan
approved at the Eighth Meeting
management); chief officers and No more th were transferred
1,279,486 of the Sixth Board of Directors 0.06%
deputy chief officers; key an 400 from
on 27 April 2023. As such, it has repurchased
management and technological
been approved to extend the shares for no
staff (mid-level employees); and
duration of the said plan by 36 compensation.
other employees approved by
months to 26 July 2026.
the Company
The Fourth Employee Stock
Ownership Plan: the directors Shares under the
(exclusive of independent employee stock
ownership plan
directors), supervisors, senior
No more th were transferred
management, key management 16,301,534 N/A 0.74%
an 650 from
and staff who have direct and repurchased
substantial impact on and shares for no
contribution to the Company’s compensation.
future operations and growth
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
27
Shares held by directors, supervisors and senior management under employee stock ownership plans during the Reporting Period:
Number of shares held Number of shares held As % of the total share
Name Office title
at the period-begin at the period-end capital
Xu Zhigao, Yang Jun, Liu Jun, He Directors, supervisors,
Yang, Cheng Lin, Liu Fengyong, Ye and senior 1,485,000 1,585,000 0.07%
Wei, and Zhu Huaimin management
Change of the asset management institution during the Reporting Period:
□ Applicable Not applicable
Share ownership changes due to share disposal by holders and other reasons during the Reporting Period:
Applicable □ Not applicable
As at the end of the Reporting Period, 1,279,486 shares were held under the Third Employee Stock Ownership Plan, accounting
for 0.06% of the total share capital.
Exercise of shareholder rights during the Reporting Period:
N/A
Other information about employee stock ownership plans during the Reporting Period:
Applicable □ Not applicable
(1) The Proposal on Extending the Duration of the Third Employee Stock Ownership Plan was approved at the Eighth Meeting of
the Sixth Board of Directors on 27 April 2023. As such, it has been approved to extend the duration of the said plan by 36 months
to 26 July 2026.
(2) The first lock-up period of the Fourth Employee Stock Ownership Plan ended on 30 June 2023. As the 2022 annual operating
results failed to reach the target, the unlockable shares of all the awardees in the first lock-up period of the Employee Stock
Ownership Plan should not be unlocked.
Changes in the members of the employee stock ownership plan management committee:
□ Applicable Not applicable
Impact of employee stock ownership plans on the finance of the Company during the Reporting Period and the relevant
accounting treatments:
Applicable □ Not applicable
As per the Accounting Standard No. 11 for Business Enterprises—Share-based Payments, the amortized share-based payments
were approximately RMB76.0793 million for H1 2023.
Termination of employee stock ownership plans during the Reporting Period:
□ Applicable Not applicable
Other information:
N/A
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.
28
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
Reason for Impact on the
Company or Regulation violated Punishment Rectification
punishment Company
subsidiary
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 has incorporated sustainable development into its corporate vision and actively practiced
corporate citizenship responsibility in recent years. Collaborating with the industry, the company has taken proactive actions to
address climate change and promote zero-carbon transformation in line with its business ambitions.
In June 2023, the company released its first TCFD Progress Report on Climate Risk Management, detailing its climate risk
management efforts in governance, strategy, risk management, performance metrics, and more. Through specific practices such
as refined operational management, green building design promotion, green power certificates, carbon market transactions, and
environmental protection-themed month initiatives, the Company demonstrated its interim achievements in advancing carbon
neutrality.
Reasons for the non-disclosure of other environmental information:
The Company is not a major pollutant-discharge entity published by environmental protection authorities. During the
Reporting Period, the Company received no punishments due to violation of environmental protection laws and regulations.
II Corporate Social Responsibility (CSR)
1. Continued support for rural talent revitalisation
In 2014, 37 Interactive Entertainment initiated the establishment of the Guangdong Youxin Foundation, which continuously
focuses on promoting high-quality and balanced development of high school education in underdeveloped areas, as well as
nurturing young talent. The Company provides support to high school students in terms of financial resources, teaching materials,
and information resources, collaborating with teachers, schools, educational administrative departments, non-profit
organisations, and volunteers to create a diverse talent cultivation system.
Through the Guangdong Youxin Foundation, the Company has carried out various programs, such as the "Youxin Peers" high
school education assistance program, the high school enrolment guarantee program for ethnic minority girls, the county high
school free reading program, the "Vocational Wisdom Calling" career program, and digital empowerment public courses. To
further cultivate high school students' interest in cutting-edge technology and enhance their scientific literacy, the Company's
employee volunteers have organised multiple sharing activities around themes like innovative technology and better living.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
29
During the Reporting Period, 37 Interactive Entertainment spent RMB3,278 thousand in rural education support through the
Guangdong Youxin Foundation, helping 2,557 outstanding high school students.
2. Collaboratively promoting special industry assistance
In 2023, 37 Interactive Entertainment signed a Rural Revitalization Cooperation Memorandum with the Guangzhou
Municipal Commerce Bureau and formulated a special assistance plan for Huangjin Town, Fengshun County, Meizhou City, where
the Company is providing support, to collaborative advance the development of local characteristic industries. During the
Reporting Period, 37 Interactive Entertainment conducted multiple visits to Huangjin Town and leveraged its expertise in creative
content expression to launch a cultural and creative gift box featuring the local representative intangible cultural heritage
agricultural product "Huangjin Ginger Candy".
To better showcase the rich opportunities for rural women's employment and income increase brought about by the
upgraded rural industry in the new era and help local town enterprises comprehensively demonstrate the iterative process of the
intangible heritage craftsmanship -- ginger candy-making, from traditional methods to large-scale production, the Company
created a special cultural promotional video titled Sweet "Ginger" Love, showcasing the phase achievements of rural
revitalisation and targeted assistance efforts. Under the guidance of relevant government departments, on the day of the video's
release conference, the Huangjin Ginger Candy production enterprises also reached cooperation intentions with several
participating companies, successfully expanding its sales channels.
During the Reporting Period, 37 Interactive Entertainment spent RMB730 thousand to support the development of
characteristic industries such as tea and ginger in Anhui, Guizhou, Guangdong, and other regions.
3. Digitally empowering positive value spreading
37 Interactive Entertainment actively responds to policy requirements such as the Overall Plan for the Construction of Digital
China and the Opinions on Promoting the Implementation of the National Digital Cultural Strategy by creating high-quality digital
cultural products to facilitate the innovative dissemination of outstanding traditional Chinese culture and positive social values.
During the Reporting Period, 37 Interactive Entertainment introduced the concept of "Responsibility Aesthetics" and
launched a series of cultural and artistic games that integrate the essence of traditional Chinese culture, national treasure-level
cultural symbols, and modern corporate social responsibility concepts; the Company also collaborated with the Guangdong
Provincial Hospital of Chinese Medicine to develop Xiao Shen Nong Xun Bai Cao ( 小 神 农 寻 百 草 ), a functional game that
promotes traditional Chinese medicine culture and knowledge to community residents; additionally, the Company released a
new version of the functional game Star Life Paradise ( 星 星 生 活 乐 园 ) to provide digital tool support for social interaction
training for children with autism; the Company also carried out the research and optimisation of the aerospace popular science
functional game Fly to the Sky: Dream of Soaring (飞天：梦想启航), aiming to provide a new channel for teenagers to revisit
high school physics knowledge and enhance their scientific literacy.
4. Collaborative cultivation of young talents through industry-research cooperation
37 Interactive Entertainment continues to deepen cooperation with more than ten renowned domestic universities,
including Sun Yat-sen University, Sichuan University, Lanzhou University, and Jinan University, to achieve resource sharing and
complementary advantages in the fields of industry-research integration skills training courses, innovation challenge
competitions, specialised research topics, and campus thematic sharing, providing comprehensive empowerment for outstanding
university students.
To foster the sustainable development capabilities and innovative practical abilities of young talents, the Company organised
the second "SDG Sustainable Development Innovation Challenge", supporting students to express their understanding of topics
such as rural revitalisation, cultural heritage and promotion, carbon neutrality, and more through animation, public service videos,
and digital collections. A total of 344 students from 81 universities participated. Ultimately, three works from teams representing
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
30
Guangzhou Academy of Fine Arts, Guangdong University of Foreign Studies, China Academy of Art, and Zhongnan University of
Economics and Law stood out.
The Company also collaborated with six universities including Sun Yat-sen University, South China University of Technology,
and South China Normal University to launch the University Student Empowerment Program, providing scholarships, support for
social practice, and innovative and entrepreneurial activities for 281 outstanding students.
5. Charitable participation in building a better society
During the Reporting Period, under the leadership of the Party Committee of 37 Interactive Entertainment, employees from
various business units actively participated in services related to companionship for children with special needs, condolences to
groups in difficulties, operation of charity supermarkets, and donation of outdoor worker supplies. A total of 2,266 volunteer
hours were contributed, actively conveying positive and benevolent forces to society.
To further expand support for the cultivation of outstanding talents in society and promote the sustainable development of
clinical medical reserve talents and the national medical and health industry, 37 Interactive Entertainment intends to donate
RMB50 million to the First Affiliated Hospital, Sun Yat-sen University. The second-phase donation of RMB20 million was
completed 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.
31
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
dividend
Percenta New dividend Percentage
Number converted Other Subtotal Number
ge (%) issues converted (%)
from capital
from profit
reserves
1. Restricted shares 582,338,908 26.26% 27,340,427 27,340,427 609,679,335 27.49%
1.1 Shares held by
the government
1.2 Shares held by
state-owned
corporations
1.3 Shares held by
other domestic 582,338,908 26.26% 27,340,427 27,340,427 609,679,335 27.49%
investors
Including: Shares
held by domestic
corporations
Shares
held by domestic 582,338,908 26.26% 27,340,427 27,340,427 609,679,335 27.49%
natural persons
1.4 Shares held by
overseas investors
Including: Shares
held by overseas
corporations
Shares
held by overseas
natural persons
2. Un-restricted
1,635,525,373 73.74% -27,340,427 -27,340,427 1,608,184,946 72.51%
shares
2.1 RMB-
denominated 1,635,525,373 73.74% -27,340,427 -27,340,427 1,608,184,946 72.51%
common shares
2.2 Domestically
listed foreign shares
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%
Reasons for share changes:
Applicable □ Not applicable
During the Reporting Period, the shares held by the newly appointed general manager in the Company were locked up according
to applicable laws, regulations and regulatory documents.
Approval of share changes:
□ Applicable Not applicable
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
32
Transfer of share ownership:
□ Applicable Not applicable
Progress on share repurchases:
Applicable □ Not applicable
As of 30 June 2023, the Company had cumulatively repurchased 4,962,434 shares (or 0.22% of the total share capital) with its
securities account for repurchased shares by the way of centralized bidding. With the highest trading price being
RMB16.94/share and the lowest being RMB16.53/share, the total amount used was RMB83,094,240.93 (exclusive of transaction
costs). And the total payment inclusive of the transaction costs stood at RMB83,105,950.55.
The Proposal on the Adjusted Upper Price Limit for the Share Repurchase was approved at the 11th Meeting of the Sixth Board of
Directors on 3 July 2023. As such, it was approved to adjust the upper price limit for the share repurchase from no more than
RMB22.55/share to no more than RMB47/share.
As of 31 July 2023, the Company had cumulatively repurchased 9,426,747 shares (or 0.43% of the total share capital) with its
securities account for repurchased shares by the way of centralized bidding. With the highest trading price being
RMB33.22/share and the lowest being RMB16.53/share, the total amount used was RMB223,137,102.94 (exclusive of
transaction costs).
Progress on reducing the repurchased shares by way of centralized bidding:
□ Applicable Not applicable
Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to the
Company’s common shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
Applicable □ Not applicable
During the Reporting Period, the Company implemented share repurchases with its securities account for repurchased shares by
the way of centralized bidding. For details of the repurchases, see the announcements on repurchase progress. As per the
Accounting Standards for Business Enterprises, the aforesaid repurchased shares were excluded in the calculation of basic
earnings per share.
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable Not applicable
2. Changes in Restricted Shares
Applicable □ Not applicable
Unit: share
Shares with Increase in
Beginning
Name of restriction lifted restricted shares Ending restricted Reason for
restricted Lifting date
shareholder in the Reporting in the Reporting shares restriction
shares
Period Period
Subject to regulations in respect
Locked-up
of changes in shareholdings of
shares of
Li Weiwei 241,584,764 0 0 241,584,764 directors, supervisors and senior
senior
management in the Company
management
Law, etc.
Locked-up Subject to regulations in respect
shares of of changes in shareholdings of
Zeng Kaitian 184,008,280 0 0 184,008,280
senior directors, supervisors and senior
management 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.
33
Law, etc.
Subject to regulations in respect
Locked-up
of changes in shareholdings of
shares of
Hu Yuhang 151,198,263 0 0 151,198,263 directors, supervisors and senior
senior
management in the Company
management
Law, etc.
Subject to regulations in respect
Locked-up
of changes in shareholdings of
shares of
Xu Zhigao 0 0 27,340,427 27,340,427 directors, supervisors and senior
senior
management in the Company
management
Law, etc.
Subject to regulations in respect
Locked-up
of changes in shareholdings of
shares of
Yang Jun 1,575,000 0 0 1,575,000 directors, supervisors and senior
senior
management in the Company
management
Law, etc.
Subject to regulations in respect
Locked-up
of changes in shareholdings of
shares of
Liu Jun 3,972,601 0 0 3,972,601 directors, supervisors and senior
senior
management in the Company
management
Law, etc.
Total 582,338,908 0 27,340,427 609,679,335 -- --
II Issuance and Listing of Securities
□ Applicable Not applicable
III Shareholders and Their Holdings as at the Period-End
Unit: share
Number of preferred shareholders with
Number of common shareholders 78,778 0
resumed voting rights (if any) (see note 8)
5% or greater common shareholders or the top 10 common shareholders
Increase/decr Un- Pledged, marked or
Shareholdin Restricted
Name of Nature of Common ease in the restricted frozen status
g common
shareholder shareholder shares held Reporting common
percentage shares held Status Shares
Period shares held
Domestic
Li Weiwei natural 14.52% 322,113,019 0 241,584,764 80,528,255
person
Domestic
Zeng Kaitian natural 11.06% 245,344,374 0 184,008,280 61,336,094
person
Domestic
Hu Yuhang natural 9.09% 201,597,684 0 151,198,263 50,399,421 Pledged 19,650,000
person
Hong Kong
Overseas
Securities Clearing 8.01% 177,721,241 15,310,515 0 177,721,241
corporation
Company Ltd.
Domestic
Xu Zhigao natural 1.64% 36,453,903 0 27,340,427 9,113,476
person
Domestic
Wu Weihong natural 1.59% 35,253,178 -36,314,684 0 35,253,178
person
China Minsheng
Other 1.17% 25,872,061 21,630,461 0 25,872,061
Banking Corp., Ltd.
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
34
－China Securities
Cartoon Games
Trading Open-
ended Index
Securities
Investment Fund
Domestic
Wu Weidong natural 1.01% 22,431,357 -38,165,200 0 22,431,357
person
Shanghai
Dongyonghong
Domestic
Business
non-state-
Management 0.90% 20,000,000 20,000,000 0 20,000,000
owned
Partnership
corporation
(Limited
Partnership)
37 Interactive
Entertainment
Network
Technology Group Other 0.74% 16,301,534 0 0 16,301,534
Co., Ltd.-The Fourth
Employee Stock
Ownership Plan
Strategic investor or general
corporation becoming a top-10
N/A
common shareholder in a rights
issue (if any) (see note 3)
1. Among the top 10 shareholders of the Company, Wu Weihong, Wu Weidong and Shanghai
Dongyonghong Business Management Partnership (Limited Partnership) are shareholders acting 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.
Explain if any of the shareholders
above was involved in
entrusting/being entrusted with N/A
voting rights or waiving voting
rights
Special account for share
repurchases (if any) among the top N/A
10 shareholders (see note 11)
Top 10 un-restricted common shareholders
Shares by class
Name of shareholder Un-restricted common shares held
Class Shares
Hong Kong Securities Clearing RMB-denominated
177,721,241 177,721,241
Company 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
Hu Yuhang 50,399,421 50,399,421
common shares
RMB-denominated
Wu Weihong 35,253,178 35,253,178
common shares
China Minsheng Banking Corp., Ltd.
－China Securities Cartoon Games RMB-denominated
25,872,061 25,872,061
Trading Open-ended Index common shares
Securities Investment Fund
RMB-denominated
Wu Weidong 22,431,357 22,431,357
common shares
Shanghai Dongyonghong Business 20,000,000 RMB-denominated 20,000,000
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
35
Management Partnership (Limited common shares
Partnership)
37 Interactive Entertainment
Network Technology Group Co., RMB-denominated
16,301,534 16,301,534
Ltd.-The Fourth Employee Stock common shares
Ownership Plan
China Construction Bank
Corporation－Dongfanghong RMB-denominated
13,274,100 13,274,100
Qidong Three-year Mixed Securities common shares
Investment Fund
Related or acting-in-concert parties 1. Among the top 10 un-restricted common shareholders of the Company, Wu Weihong, Wu Weidong
among the top 10 un-restricted and Shanghai Dongyonghong Business Management Partnership (Limited Partnership) are shareholders
common shareholders, as well as
acting in concert.
between the top 10 un-restricted
2. The Company is not aware of whether there is, among the other top 10 un-restricted common
common shareholders and the top
10 common shareholders shareholders and top 10 common shareholders, any related parties or acting-in-concert parties.
Top 10 common shareholders
engaged in securities margin None
trading (if any) (see note 4)
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 2022 Annual Report.
V Change of the Controlling Shareholder or Actual Controller
Change of the controlling shareholder in the Reporting Period:
□ 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.
36
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 2023
Unit: RMB
Item 30 June 2023 1 January 2023
Current assets:
Monetary funds 8,232,496,377.64 5,129,481,882.65
Transaction settlement funds
Loans to other banks
Trading financial assets 1,881,228,387.25 2,792,984,819.12
Derivative financial assets
Notes receivable
Accounts receivable 1,432,993,006.78 1,433,563,842.43
Accounts receivable financing
Prepayments 961,831,277.89 855,193,135.12
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables 52,707,980.09 87,419,373.81
Including: Interest receivable
Dividends receivable
Redemptory monetary capital for sale
Inventories
Contract assets
Assets held for sale
Non-current assets due within one year 279,376,846.42 225,739,517.70
Other current assets 78,075,017.09 62,124,622.63
Total current assets 12,918,708,893.16 10,586,507,193.46
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.
37
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 606,075,958.69 621,794,374.74
Other equity investments 271,570,153.45 269,990,212.51
Other non-current financial assets 724,537,135.88 685,698,473.75
Investment properties
Fixed assets 834,923,391.50 850,030,034.92
Construction in progress 326,705,519.85 242,508,087.97
Productive living assets
Oil and gas assets
Right-of-use assets 26,401,292.25 31,967,946.49
Intangible assets 1,056,362,674.08 1,059,676,921.41
Development expenditure
Goodwill 1,589,065,048.53 1,589,065,048.53
Long-term deferred expenses 128,031,967.87 99,473,412.05
Deferred income tax assets 99,538,660.56 34,357,615.22
Other non-current assets 1,291,742,516.94 1,024,113,999.86
Total non-current assets 6,954,954,319.60 6,508,676,127.45
Total assets 19,873,663,212.76 17,095,183,320.91
Current liabilities:
Short-term loans 1,929,285,500.00 901,046,888.89
Loans from the central bank
Loans from other banks
Trading financial liabilities 84,380.59
Derivative financial liabilities
Notes payable 1,503,000,000.00 555,000,000.00
Accounts payable 2,133,387,322.93 1,648,560,259.52
Advances from customers
Contract liabilities 240,892,166.88 259,519,734.14
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 217,860,624.83 374,469,366.73
Taxes payable 247,166,060.59 294,163,918.06
Other payables 212,905,566.26 210,926,206.25
Including: Interest payable
Dividends payable
Handling charges and commissions payable
Reinsurance payables
Liabilities held for sale
Non-current liabilities due within one year 79,258,772.61 45,909,085.65
Other current liabilities 71,118,462.53 51,763,224.36
Total current liabilities 6,634,874,476.63 4,341,443,064.19
Non-current liabilities:
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
38
Insurance contract reserve
Long-term loans 468,500,000.00 323,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 9,251,557.84 16,786,536.53
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income
Deferred income tax liabilities 105,831,047.90 101,348,616.16
Other non-current liabilities
Total non-current liabilities 583,582,605.74 441,135,152.69
Total liabilities 7,218,457,082.37 4,782,578,216.88
Shareholders' equity:
Share capital 2,217,864,281.00 2,217,864,281.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 2,852,169,276.30 2,776,585,669.95
Less: Treasury shares 83,105,950.55 83,105,950.55
Other comprehensive income -99,115,449.05 -153,044,746.45
Special reserves
Surplus reserves 666,869,940.33 666,869,940.33
General risk reserves
Retained earnings 6,989,093,914.46 6,758,838,410.54
Total equity attributable to shareholders of the
12,543,776,012.49 12,184,007,604.82
Company
Non-controlling interests 111,430,117.90 128,597,499.21
Total shareholders' equity 12,655,206,130.39 12,312,605,104.03
Total liabilities and shareholders’ equity 19,873,663,212.76 17,095,183,320.91
Legal representative: Xu Zhigao Chief Financial Officer: Ye Wei Board Secretary: Ye Wei
2. Balance Sheet of the Company
Unit: RMB
Item 30 June 2023 1 January 2023
Current assets:
Monetary funds 781,432,619.92 808,790,749.20
Trading financial assets 801,350,136.99 802,418,630.14
Derivative financial assets
Notes receivable
Accounts receivable
Accounts receivable financing
Prepayments 464,932.07
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
39
Other receivables 3,338,597,150.51 3,829,192,595.78
Including: Interest receivable
Dividends receivable
Inventories
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 6,192,380.98 5,937,414.70
Total current assets 4,928,037,220.47 5,446,339,389.82
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 9,688,222,755.95 9,614,010,297.65
Other equity investments
Other non-current financial assets 76,589,599.00 76,589,599.00
Investment properties
Fixed assets
Construction in progress
Productive living assets
Oil and gas assets
Right-of-use assets 5,667,802.45 6,730,515.43
Intangible assets
Development expenditure
Goodwill
Long-term deferred expenses
Deferred income tax assets
Other non-current assets
Total non-current assets 9,770,480,157.40 9,697,330,412.08
Total assets 14,698,517,377.87 15,143,669,801.90
Current liabilities:
Short-term loans 300,250,000.00
Trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable
Advances from customers
Contract liabilities
Employee benefits payable 68,000.00 922,157.55
Taxes payable 2,637,642.12 9,115,058.72
Other payables 40,843,776.85 40,786,313.26
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one year 63,124,584.48 30,122,770.55
Other current liabilities
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
40
Total current liabilities 406,924,003.45 80,946,300.08
Non-current liabilities:
Long-term loans 468,500,000.00 323,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2,490,966.44 4,983,409.97
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income
Deferred income tax liabilities 288,849.68 803,191.39
Other non-current liabilities
Total non-current liabilities 471,279,816.12 328,786,601.36
Total liabilities 878,203,819.57 409,732,901.44
Shareholders' equity:
Share capital 2,217,864,281.00 2,217,864,281.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 6,497,849,211.88 6,421,769,953.60
Less: Treasury shares 83,105,950.55 83,105,950.55
Other comprehensive income -60,000,000.00 -60,000,000.00
Special reserves
Surplus reserves 1,108,932,140.50 1,108,932,140.50
Retained earnings 4,138,773,875.47 5,128,476,475.91
Total shareholders' equity 13,820,313,558.30 14,733,936,900.46
Total liabilities and shareholders’ equity 14,698,517,377.87 15,143,669,801.90
3. Consolidated Income Statement
Unit: RMB
Item H1 2023 H1 2022
1. Total operating revenue 7,760,573,887.29 8,092,238,684.40
Including: Operating revenue 7,760,573,887.29 8,092,238,684.40
Interest income
Premium income
Handling charge and commission income
2. Total operating costs and expenses 6,492,830,653.62 6,306,032,404.23
Including: Cost of sales 1,664,617,407.90 1,260,101,099.90
Interest expense
Handling charge and commission expenses
Surrenders
Net claims paid
Net amount provided as policy reserve
Expenditure on policy dividends
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
41
Reinsurance premium expenses
Taxes and surcharges 15,088,022.35 15,543,165.52
Distribution and selling expenses 4,279,408,761.57 4,340,050,646.56
General and administrative expenses 257,073,397.84 209,169,882.37
Research and development expenses 388,284,125.67 496,920,352.58
Financial expenses -111,641,061.71 -15,752,742.70
Including: Interest expense 33,953,476.02 14,221,315.74
Interest income 147,092,025.34 54,966,479.25
Add: Other income 67,310,526.91 60,426,373.93
Investment income (“-” for loss) -3,937,725.83 52,339,291.74
Including: Share of profits and losses of joint
-12,257,097.35 -23,711,051.21
ventures and associates
Gain on derecognition of financial assets
measured at amortised cost (“-” for loss)
Gain on exchange (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 66,445,566.71 -34,650,521.66
Impairment loss on credit (“-” for loss) 350,866.28 -2,933,013.92
Impairment loss on assets (“-” for loss) -10,791,188.33
Gain on disposal of assets (“-” for loss) 128,077.35 328,439.88
3. Operating profit (“-” for loss) 1,398,040,545.09 1,850,925,661.81
Add: Non-operating income 17,988,142.97 5,246,517.14
Less: Non-operating expenses 3,648,696.49 2,771,389.41
4. Profit before income tax expenses (“-” for loss) 1,412,379,991.57 1,853,400,789.54
Less: Income tax expenses 205,127,044.68 176,029,935.00
5. Net profit (“-” for net loss) 1,207,252,946.89 1,677,370,854.54
5.1 Classified by continuity of operations
5.1.1 Net profit from continuing operations (“-” for
1,207,252,946.89 1,677,370,854.54
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 shareholders of the
1,226,061,335.07 1,695,164,644.39
Company (“-” for net loss)
5.2.2 Net profit attributable to non-controlling
-18,808,388.18 -17,793,789.85
interests (“-” for net loss)
6. Other comprehensive income, net of tax 53,929,297.40 48,589,829.86
Other comprehensive income attributable to
53,929,297.40 48,589,829.86
shareholders of the Company, net of tax
6.1 Other comprehensive income that will not be
-3,000,000.00
reclassified subsequently to profit or loss
6.1.1 Changes caused by remeasurement of
defined benefit pension schemes
6.1.2 Share of the other comprehensive
income of the investee accounted for using equity method
that will not be reclassified subsequently to profit or loss
6.1.3 Changes in fair value of other equity
-3,000,000.00
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
53,929,297.40 51,589,829.86
reclassified subsequently to profit or loss
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
42
6.2.1 Share of the other comprehensive
income of the investee accounted for using equity method -524,693.70 296,531.34
that will be reclassified subsequently to profit or loss
6.2.2 Changes in fair value of other equity
investments
6.2.3 Other 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
54,453,991.10 51,293,298.52
foreign currency financial statements
6.2.7 Others
Other comprehensive income attributable to non-
controlling interests, net of tax
7. Total comprehensive income 1,261,182,244.29 1,725,960,684.40
Total comprehensive income attributable to
1,279,990,632.47 1,743,754,474.25
shareholders of the Company
Total comprehensive income attributable to non-
-18,808,388.18 -17,793,789.85
controlling interests
8. Earnings per share:
8.1 Basic earnings per share 0.55 0.77
8.2 Diluted earnings per share 0.55 0.77
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: Xu Zhigao Chief Financial Officer: Ye Wei Board Secretary: Ye Wei
4. Income Statement of the Company
Unit: RMB
Item H1 2023 H1 2022
1. Operating revenue 9,433.96
Less: Cost of sales
Taxes and surcharges 40,349.85 21,018.70
Distribution and selling expenses
General and administrative expenses 7,355,482.54 4,287,012.24
Research and development expenses
Financial expenses -1,188,161.14 -9,337,655.96
Including: Interest expense 11,116,569.01 3,935,106.31
Interest income 12,897,500.79 13,798,152.46
Add: Other income 4,454,284.28 1,896,774.41
Investments income (“-” for loss) 1,212,602.75 3,199,148,357.25
Including: Share of profits and losses of joint
ventures and associates
Gain on derecognition of financial
assets measured at amortised cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 9,087,945.21 5,867,726.04
Impairment loss on credit (“-” for loss) -5,000.00
Impairment loss on assets (“-” for loss)
Gain on disposal of assets (“-” for loss)
2. Operating profit (“-” for loss) 8,556,594.95 3,211,937,482.72
Add: Non-operating income 1,478.73 2.59
Less: Non-operating expenses 31,234.89
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
43
3. Profit before income tax expenses (“-” for loss) 8,558,073.68 3,211,906,250.42
Less: Income tax expenses 2,454,842.97 4,389,906.11
4. Net profit (“-” for net loss) 6,103,230.71 3,207,516,344.31
4.1 Net profit from continuing operations (“-” for net
6,103,230.71 3,207,516,344.31
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
6. Total comprehensive income 6,103,230.71 3,207,516,344.31
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 2023 H1 2022
1. Cash flows from operating activities:
Cash received from the sales of goods or rendering
8,013,861,147.65 8,191,423,031.24
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
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
44
Net proceeds from acting trading of securities
Refunds of taxes and levies 1,719,882.70 13,071,839.40
Cash received relating to other operating activities 148,031,300.57 102,190,719.08
Sub-total of cash inflows from operating activities 8,163,612,330.92 8,306,685,589.72
Cash paid for purchases of goods and services 1,473,884,579.03 1,248,044,739.23
Net increase in loans and advances to customers
Net increase in deposits in the central bank and other
banks and financial institutions
Payments for claims on original insurance contracts
Net increase in loans to other banks
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and on behalf of employees 887,376,046.67 952,696,588.30
Payments of taxes and levies 379,073,806.45 245,557,026.85
Cash paid relating to other operating activities 3,103,320,722.36 4,056,307,650.80
Sub-total of cash outflows used in operating activities 5,843,655,154.51 6,502,606,005.18
Net cash flows from operating activities 2,319,957,176.41 1,804,079,584.54
2. Cash flows from investing activities:
Cash received from disposal of investments 127,010,330.31 174,210,882.65
Cash received from investment income 78,491,745.68 36,747,137.98
Cash received from disposal of fixed assets, intangible
1,499,959.98 515,224.24
assets and other long-term assets
Net cash received from disposal of subsidiaries and
other business units
Cash received relating to other investing activities 7,872,668,719.59 5,576,074,659.14
Sub-total of cash inflows from investing activities 8,079,670,755.56 5,787,547,904.01
Cash paid for acquisition of fixed assets, intangible
139,259,591.32 55,905,510.45
assets and other long-term assets
Cash paid to acquire investments 117,602,305.30 163,561,411.21
Net increase in pledged loans granted
Net cash paid for the acquisition of subsidiaries and
26,589.40
other business units
Cash paid relating to other investing activities 9,125,959,732.86 6,769,074,659.14
Sub-total of cash outflows used in investing activities 9,382,848,218.88 6,988,541,580.80
Net cash flows from/used in investing activities -1,303,177,463.32 -1,200,993,676.79
3. Cash flows from financing activities:
Cash received from capital contributions 320,000.00 92,000,000.00
Including: Cash received from capital contributions by
320,000.00 92,000,000.00
non-controlling interests of subsidiaries
Cash received from borrowings 1,426,000,000.00 947,450,000.00
Cash received relating to other financing activities 65,000,000.00
Sub-total of cash inflows from financing activities 1,491,320,000.00 1,039,450,000.00
Cash repayments of borrowings 222,250,000.00 448,653,250.00
Cash paid for interest and dividends 1,028,631,589.17 827,115,684.90
Including: Dividends paid by subsidiaries to non-
405,402.09
controlling interests
Cash paid relating to other financing activities 581,279,603.15 394,823,304.17
Sub-total of cash outflows used in financing activities 1,832,161,192.32 1,670,592,239.07
Net cash flows from/used in financing activities -340,841,192.32 -631,142,239.07
4. Effect of foreign exchange rate changes on cash and
5,558,563.66 20,628,944.13
cash equivalents
5. Net increase/decrease in cash and cash equivalents 681,497,084.43 -7,427,387.19
Add: Cash and cash equivalents at beginning of the
3,320,472,098.94 4,618,393,735.38
period
6. Cash and cash equivalents at end of the period 4,001,969,183.37 4,610,966,348.19
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
45
6. Cash Flow Statement of the Company
Unit: RMB
Item H1 2023 H1 2022
1. Cash flows from operating activities:
Cash received from the sales of goods or rendering
10,000.00
services
Refunds of taxes and levies
Cash received relating to other operating activities 1,117,210,020.74 1,218,682,414.28
Sub-total of cash inflows from operating activities 1,117,220,020.74 1,218,682,414.28
Cash paid for purchases of goods and services
Cash paid to and on behalf of employees 1,501,203.60 3,493,659.49
Payments of taxes and levies 3,912,982.44 3,399,378.83
Cash paid relating to other operating activities 627,828,879.40 3,633,945,952.16
Sub-total of cash outflows used in operating activities 633,243,065.44 3,640,838,990.48
Net cash flows from/used in operating activities 483,976,955.30 -2,422,156,576.20
2. Cash flows from investing activities:
Cash received from disposal of investments
Cash received from investment income 17,239,041.11 3,208,188,686.02
Cash received from disposal of fixed assets, intangible
assets and other long-term assets
Net cash received from disposal of subsidiaries and
other business units
Cash received relating to other investing activities 2,400,000,000.00 2,750,000,000.00
Sub-total of cash inflows from investing activities 2,417,239,041.11 5,958,188,686.02
Cash paid for acquisition of fixed assets, intangible
assets and other long-term assets
Cash paid to acquire investments
Net cash paid for the acquisition of subsidiaries and
other business units
Cash paid relating to other investing activities 2,380,000,000.00 2,690,000,000.00
Sub-total of cash outflows used in investing activities 2,380,000,000.00 2,690,000,000.00
Net cash flows from/used in investing activities 37,239,041.11 3,268,188,686.02
3. Cash flows from financing activities:
Cash received from capital contributions
Cash received from borrowings 490,000,000.00 640,000,000.00
Cash received relating to other financing activities
Sub-total of cash inflows from financing activities 490,000,000.00 640,000,000.00
Cash repayments of borrowings 14,250,000.00 350,500,000.00
Cash paid for interest and dividends 1,006,413,029.76 817,906,910.83
Cash paid relating to other financing activities 2,816,160.00
Sub-total of cash outflows used in financing activities 1,020,663,029.76 1,171,223,070.83
Net cash flows from/used in financing activities -530,663,029.76 -531,223,070.83
4. Effect of foreign exchange rate changes on cash and cash
equivalents
5. Net increase/decrease in cash and cash equivalents -9,447,033.35 314,809,038.99
Add: Cash and cash equivalents at beginning of the
205,561,434.10 998,498,059.53
period
6. Cash and cash equivalents at end of the period 196,114,400.75 1,313,307,098.52
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
46
7. Consolidated Statement of Changes in Shareholders’ Equity
H1 2023
Unit: RMB
H1 2023
Equity attributable to shareholders of the Company
Other equity
Spec Gener Non- Total
Item instruments Less: Other
Capital ial Surplus al risk Retained Othe controlling shareholders'
Share capital Prefer Perpe Ot Treasury comprehensive Sub-total
reserves rese reserves reserv earnings rs interests equity
red tual he shares income
rves es
shares bonds rs
1. Balance
as at the 2,217,864,281 2,776,585,669 83,105,950. - 666,869,940. 6,758,177,238. 12,183,346,432 128,583,656 12,311,930,089.
end of prior .00 .95 55 153,044,746.45 33 23 .51 .71 22
year
Add:
Adjustments
for changed 661,172.31 661,172.31 13,842.50 675,014.81
accounting
policies
Adjustments
for
corrections
of previous
errors
Adjustments
for business
combination
s under
common
control
Others
2. Balance
as at 2,217,864,281 2,776,585,669 83,105,950. - 666,869,940. 6,758,838,410. 12,184,007,604 128,597,499 12,312,605,104.
beginning of .00 .95 55 153,044,746.45 33 54 .82 .21 03
year
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
47
3. Increase/
decrease in -
230,255,503.9
the period 75,583,606.35 53,929,297.40 359,768,407.67 17,167,381. 342,601,026.36
2
(“-” for 31
decrease)
3.1 Total -
1,226,061,335. 1,279,990,632. 1,261,182,244.2
comprehens 53,929,297.40 18,808,388.
07 47 9
ive income 18
3.2 Capital
contribution
and
1,641,006.8
withdrawal 75,857,731.35 75,857,731.35 77,498,738.22
7
by
shareholder
s
3.2.1
Common
shares
contribution
1,419,479.9
and 1,419,479.94
4
withdrawal
by
shareholder
s
3.2.2 Capital
contribution
and
withdrawal
by holders
of other
equity
instruments
3.2.3 Share-
based
payments
75,857,731.35 75,857,731.35 221,526.93 76,079,258.28
included in
shareholder
s’ equity
3.2.4 Others
-
3.3 Profit -
995,805,831.1 -995,805,831.15
distribution 995,805,831.15
5
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
48
3.3.1
Appropriati
on to 0.00
surplus
reserves
3.3.2
Appropriati
on to
general risk
reserves
3.3.3
Distribution -
-
to 995,805,831.1 -995,805,831.15
995,805,831.15
shareholder 5
s
3.3.4 Others
3.4 Internal
transfers
within
shareholder
s’ 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
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
49
benefit
pension
schemes
transferred
into
retained
earnings
3.4.5 Other
comprehens
ive 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 -274,125.00 -274,125.00 -274,125.00
4. Balance
as at the 2,217,864,281 2,852,169,276 83,105,950. 666,869,940. 6,989,093,914. 12,543,776,012 111,430,117 12,655,206,130.
-99,115,449.05
end of the .00 .30 55 33 46 .49 .90 39
period
H1 2022
Unit: RMB
H1 2022
Equity attributable to shareholders of the Company
Other equity Gene
Speci Non- Total
Item instruments Less: Other ral
Capital al Surplus Retained Othe controlling shareholders'
Share capital Prefer Perpe Ot Treasury comprehensive risk Sub-total
reserves reser reserves earnings rs interests equity
red tual her shares income reser
ves
shares bonds s ves
1. Balance
2,217,864,28 2,978,593,891 299,999,56 - 166,559,856. 5,894,941,180. 10,773,716,314 83,619,695. 10,857,336,009.
as at the
end of prior 1.00 .37 3.27 184,243,331.38 09 68 .49 37 86
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
50
year
Add:
Adjustments
for changed
accounting
policies
Adjustments
for
corrections
of previous
errors
Adjustments
for business
combination
s under
common
control
Others
2. Balance
as at 2,217,864,28 2,978,593,891 299,999,56 - 166,559,856. 5,894,941,180. 10,773,716,314 83,619,695. 10,857,336,009.
beginning of 1.00 .37 3.27 184,243,331.38 09 68 .49 37 86
year
3. Increase/
decrease in - -
880,586,428.0 70,506,687. 1,018,249,485.0
the period 281,433,023.5 299,999,56 48,589,829.86 947,742,797.60
(“-” for 0 41 1
3 3.27
decrease)
3.1 Total -
1,695,164,644. 1,743,754,474. 1,725,960,684.4
comprehens 48,589,829.86 17,793,789.
ive income 39 25 0
85
3.2 Capital
contribution
and
88,705,879.
withdrawal 20,053,189.87 20,053,189.87 108,759,069.22
by 35
shareholder
s
3.2.1 88,705,879. 88,705,879.35
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
51
Common 35
shares
contribution
and
withdrawal
by
shareholder
s
3.2.2 Capital
contribution
and
withdrawal
by holders
of other
equity
instruments
3.2.3 Share-
based
payments
20,053,189.87 20,053,189.87 20,053,189.87
included in
shareholder
s’ equity
3.2.4 Others
-
3.3 Profit -
814,578,216.3 -405,402.09 -814,983,618.48
distribution 814,578,216.39
9
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
risk reserves
3.3.3
Distribution -
-
to 814,578,216.3 -405,402.09 -814,983,618.48
shareholder 814,578,216.39
9
s
3.3.4 Others
3.4 Internal - -
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
52
transfers 299,999,563.2 299,999,56
within 7 3.27
shareholder
s’ 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
comprehens
ive income
transferred
into
retained
earnings
- -
3.4.6 Others 299,999,563.2 299,999,56
7 3.27
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
53
3.5 Special
reserves
3.5.1
Increase in
the period
3.5.2 Used
in the period
3.6 Others -1,486,650.13 -1,486,650.13 -1,486,650.13
4. Balance
as at the 2,217,864,28 2,697,160,867 - 166,559,856. 6,775,527,608. 11,721,459,112 154,126,382 11,875,585,494.
end of the 1.00 .84 135,653,501.52 09 68 .09 .78 87
period
8. Statement of Changes in Shareholders’ Equity of the Company
H1 2023
Unit: RMB
H1 2023
Item Other equity instruments Other
Less: Treasury Special Total shareholders'
Share capital Preferred Perpetual Oth Capital reserves comprehensive Surplus reserves Retained earnings Others
shares reserves equity
shares bonds ers income
1. Balance as at the
2,217,864,281.00 6,421,769,953.60 83,105,950.55 -60,000,000.00 1,108,932,140.50 5,128,334,381.00 14,733,794,805.55
end of prior year
Add:
Adjustments for
142,094.91 142,094.91
changed accounting
policies
Adjustments for
corrections of
previous errors
Others
2. Balance as at
2,217,864,281.00 6,421,769,953.60 83,105,950.55 -60,000,000.00 1,108,932,140.50 5,128,476,475.91 14,733,936,900.46
beginning of year
3. Increase/
decrease in the
76,079,258.28 -989,702,600.44 -913,623,342.16
period (“-” for
decrease)
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
54
3.1 Total
comprehensive 6,103,230.71 6,103,230.71
income
3.2 Capital
contribution and
76,079,258.28 76,079,258.28
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
76,079,258.28 76,079,258.28
in shareholders’
equity
3.2.4 Others
3.3 Profit
-995,805,831.15 -995,805,831.15
distribution
3.3.1 Appropriation
to surplus reserves
3.3.2 Distribution
-995,805,831.15 -995,805,831.15
to shareholders
3.3.3 Others
3.4 Internal
transfers within
shareholders’
equity
3.4.1 Capital
reserves
transferred into
capital (or share
capital)
3.4.2 Surplus
reserves
transferred into
capital (or share
capital)
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
55
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 6,497,849,211.88 83,105,950.55 -60,000,000.00 1,108,932,140.50 4,138,773,875.47 13,820,313,558.30
end of the period
H1 2022
Unit: RMB
H1 2022
Other equity instruments Other
Item Less: Treasury Special Total shareholders'
Share capital Preferred Perpetual Capital reserves comprehensive Surplus reserves Retained earnings Others
Others shares reserves equity
shares bonds income
1. Balance as at
the end of prior 2,217,864,281.00 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
year
Add:
Adjustments for
changed
accounting
policies
Adjustments for
corrections of
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
56
previous errors
Others
2. Balance as at
2,217,864,281.00 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
3. Increase/
decrease in the
-279,946,373.40 -299,999,563.27 2,392,938,127.92 2,412,991,317.79
period (“-” for
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
-814,578,216.39 -814,578,216.39
distribution
3.3.1
Appropriation to
surplus reserves
3.3.2 Distribution
-814,578,216.39 -814,578,216.39
to shareholders
3.3.3 Others
3.4 Internal -299,999,563.27 -299,999,563.27
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
57
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 -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 end of the 2,217,864,281.00 6,342,348,497.01 -60,000,000.00 608,622,056.26 4,281,838,166.45 13,390,673,000.72
period
Should there be any discrepancy between the English version and the Chinese version of this Report, the Chinese version shall prevail.
58
