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Public company info - FingerTango Inc. , 06860.HK
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FingerTango Inc., 06860.HK - Company Profile
Chairman LIU Jie
Share Issued (share) 1,931,000,000
Par Currency U.S. Dollar
Par Value 5.0E-6
Industry E-Commerce & Internet Services
Corporate Profile Business Summary: The Group is a leading mobile game publisher and a pioneer in the SLG game publishing industry in China. Performance for the year: The Group’s revenue in the Reporting Period was approximately RMB1,051.1 million, representing a slight decrease by approximately 3.2% or RMB34.8 million as compared to the corresponding period in 2018. The profit attributable to owners of the Group in the Reporting Period was RMB38.7 million, dropped by 75.1% as compared to RMB155.6 million in the corresponding period last year. Business Review The group is a leading mobile game publisher and a pioneer in the SLG game publishing industry in China. The group’s outstanding ability in lengthening the lifecycle of games and enhancing the overall conversion rate differentiates us from other players in the industry. The group have continued to attain the attention and favourable support of the players. The Group’s revenue in the Reporting Period was approximately RMB1,051.1 million, representing a slight decrease of approximately 3.2% as compared to the corresponding period last year. The changes in Chinese game market and regulatory environment had led to the suspension of approval of online game publication for nine months. Certain pipeline games that had been scheduled to be launched during the Reporting Period were not launched due to underperformance of game testing results and the suspension of online game publication approval. The prolonged suspension of approval of online game publication has cast a negative impact on the growth momentum of the game industry which is yet to be recovered, leading to the lower anticipated revenue contribution from certain games launched during the Reporting Period being lower than previously expected. In view of the market conditions, the group have made strategic adjustment and planning in the launch of the group’s new games, and have been conducting comprehensive tests for the new titles to be launched in 2019. These included a deep optimization of playing techniques, gameplay, roles and design customizing to the players’ evolving preferences to ensure their sound performance upon official launch. On the other hand, the group have launched several new games in 2019 according to the group’s business plan. These new titles are still in the promotion period and the stage of incubation of player base. It is expected that the growth momentum of the new games and their contribution to the revenue of the Company would be gradually unleashed in 2020. With the lifting of the above-mentioned suspension, the group have acquired eight new licensed games since 2019 up to the date of this annual report, building substantial momentum for the Company to further publish new games and continuously create new income sources. During the Reporting Period, the profit attributable to the group’s shareholders was approximately RMB38.7 million, as compared to RMB155.6 million during the corresponding period last year. The decline of profit was primarily due to 1) an increase in selling and marketing expenses as the Company has engaged in more extensive advertising and promotion activities for mobile games during the Reporting Period amongst the increasingly fierce external competition environment. The unit cost of such advertising and promotion activities has also increased. Additionally, due to the lag in effect on revenue from the advertising and promotion activities, the impact of the increased sales and marketing expenses is expected to be seen over a longer period of time in the future; 2) certain pipeline games that had been scheduled to be launched during the Reporting Period were not launched due to underperformance of game testing results and the suspension of online game publication approval due to the changes in Chinese game market and regulatory environment, resulting in write-down of prepaid license fees for the these unlaunched pipeline games; and 3) the revenue contribution from certain games launched during the Reporting Period was lower than expected. The level of game monetization has continued to reflect the group’s strengths and keen ability. Despite a volatile game market caused by the prolonged suspension of approval of online game publication in China, the average revenue per month per paying user (“ARPPU”) of the Company remain steady at RMB443 during the Reporting Period as compared to RMB437 for the same period last year. The total number of accumulative registered users has reached 167.7 million as at 31 December 2019, representing a 12.0% growth as compared for the same period last year. The enormous user base enables us to better understand player preferences and market changes through strong data analytics ability, so as to launch new games with higher popularity in the market, and to conduct targeted marketing with more cost-effective strategies. The China’s game market faced fluctuations in 2019 due to a lag in the effect caused by the suspension of approval of online games publication. Despite the challenging macro situation, looking back on the past twelve months, the Company was still striving for the sustainable development of business and actively laying a foundation for healthy growth in the future. The group upheld the group’s persistence in the SLG game segment while broadening the group’s game category. Leveraging SLG’s inherent advantage of long life-cycle, the Company’s strong operating capability and the extensive industry experience of the group’s senior management team, the Company has achieved sound performance throughout the Reporting Period. The strategy of upholding the group’s persistence in the SLG game segment while broadening the group’s game category has been successful. My Duty ( 「我的使命」 ), a SLG game, and Romance of Stars ( 「星辰奇緣」 ), a MMORPG game, are still popular after more than 37 months’ and 50 months’ operation, respectively,and has achieved a monthly gross billings of up to RMB36 million and RMB32 million, respectively during the Reporting Period. The games in the growth stage continued to power-up and maintained an upward momentum, those in the mature stage saw a natural drop but steady gross billings were maintained. Four titles have generated an average monthly gross billings of RMB12 million or above in the Reporting Period. The group constantly launched updated versions and introduced iterative calculations and new gameplay. The games have maintained robust lifecycles and continued to generate steady revenue for us over a longer period of time. Prospects: Entering 2020, the rapid outbreak of coronavirus disease (the “COVID-19 outbreak”) in different cities around the world has led to a major challenge for the global economy and has caused a short-term impact on all sectors. The Group has responded quickly with comprehensive arrangements and collaborated with regional offices, subsidiaries and joint ventures, to stand in the frontline of epidemic prevention and control. The Group will keep continuous attention on the situation, assess and react actively to its impacts on the Group’s business operations. Up to the date of this annual report, the assessment is still in progress and the related financial impact on the Group could not be reasonably estimated at this stage, and will be reflected in the Group’s 2020 interim and annual financial statements. 2020 is a year full of challenges and opportunities for China’s game industry. In June 2019, China’s Ministry of Industry and Information Technology officially issued 5G commercial licenses to major telecom operators in China, marking 2019 the first year of 5G commercial development in China. The ultra-high speed and low latency of 5G network can bring more refined gaming experience for players. In addition, the ability of 5G in handling increased synchronous connections could lead to more powerful multiplayer gameplay. On the other hand, the screen frame number of smart phones can reach super smooth 60 frames per second, while 5G network speeds up transmission with higher bandwidth and speed. Mobile games will have a new look and game experience will be enhanced when 5G has become popular along with the next generation smart phones which are equipped with a full 3D and a robust engine. Market competition is expected to become increasingly keen, however. In the meantime, the growth that relies on the bonus of user increment will not be able to last. Companies need to create products with both cultural and commercial values and seek for new growth models in the increasingly intense market. The massive amount of mobile game users offers a large user base for mobile games. Player demands and market potential are awaiting exploration. Moreover, it is also a challenge for mobile game developers to win users’ attention. The emergence of new entertainment choices such as short online video clips has consumed some of the time formerly spent on playing games. Such a change in users’ behavioral pattern has posed a bigger challenge to both the game industry and the developers. The current approval policy of online game publication and increasingly strict license censorship for games launched in China will result in a more regulated game industry. Specifically, the limitation on approval has driven game developers and operators to be more innovative, and to producing more premium products. At the end of 2018, the National Radio and Television Administration announced the re-opening of new games publication approval with the first batch of approved games, which enormously boosted the morale of the game industry. However, due to the lagging effect of the new policy, it will take a certain time for the industry to adjust their strategies and operations before the growth impetus is in full play in future. Adherence to and focus on long lifecycle products, the concept of continuous operation with long-term flow, and constant offer of new gameplay to extend product lifecycle — these are the group’s initial intention and the group’s advantage and development strategy. In the face of a complex and changing market environment, the group will always insist on developing products with the first-class technology, optimizing game in full dimension, and extending the lifecycle of the group’s games with the continuous enriched and enhanced player experience, thereby improving the ability to monetization and continuing to generate stable revenue for the Company. The group is conducting comprehensive tests for the new titles to be launched in 2020 while optimizing product launch strategies and plans. Over the years, the group have accumulated an immense user database. The group will continue to leverage the group’s big data analytics ability with the group’s proprietary multi-dimensional data analysis engine which collates and structures the group’s data in a variety of ways for ad-hoc and real-time on-line analysis. Moreover, the group will enhance gameplay strategies, characters, scenes, technical depth, and other parameters and improve cross-promotion efficacy by analyzing player demographic, gameplay preference, gaming time, level-up, in-game purchase amount and user turnover rate, etc. These initiatives are being performed to ensure sound performance after the official launch. Looking forward, the group will continue to extend the group’s existing game portfolio and broaden the group’s game category while focusing on the SLG game segment. The group will implement the concept of premium game and strive to create high-quality games. At the same time, the group will continue to optimize the game content, enhance the player experience, boost player stickiness and loyalty, and actively optimize the product launch strategy. In addition, the group will continue to invest sufficient resources in the group’s research and development and operating teams, diligently deploy overseas markets, continue to attract elite talents worldwide, expand the overseas player base, and capture huge opportunities in the market. The Company will also continue to seek synergetic merger and acquisition opportunities to accelerate business growth and breakthroughs, with the aim to further reinforce the group’s leadership in mobile game operation.

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