[年报]三七互娱(002555):2021年年度报告摘要（英文版）
原标题:三七互娱:2021年年度报告摘要（英文版） 37 Interactive Entertainment Network Technology Group Co., Ltd. 2021 Annual Report (Summary) April 2022 Part I Important Notes, Table of Contents and Definitions The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of 37 Interactive Entertainment Network Technology Group Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the truthfulness, accuracy and completeness of the contents of this Report, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein. Li Weiwei, the Company’s legal representative, and Ye Wei, the Company’s Chief Financial Officer & Board Secretary, hereby guarantee that the financial statements carried in this Report are truthful, accurate and complete. All the Company’s directors have attended the Board meeting for the review of this Report. This Report contains plans and other forward-looking statements, which shall not be deemed as promises to investors. Investors are reminded to exercise caution when making investment decisions. The Company is subject to the disclosure requirements for listed companies engaged in software and IT services. The Board has approved a final dividend plan as follows: based on 2,217,864,281 shares, a cash dividend of RMB 3.7 (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. Table of Contents Part I Important Notes, Table of Contents and Definitions ................................................................................................. 2 Part II Corporate Information and Key Financial Information ............................................................................................. 6 Part III Management Discussion and Analysis .................................................................................................................. 11 Part IV Corporate Governance .......................................................................................................................................... 62 Part V Environmental and Social Responsibility ................................................................................................................ 84 Part VI Share Changes and Shareholder Information ....................................................................................................... 88 Part VII Financial Statements ............................................................................................................................................ 97 Definitions
The independent auditor hired by the Company:
√ Applicable □ Not applicable
Period: □ Applicable √ Not applicable VI Key Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No
deducting non-recurring profits and losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern. □ Yes √ No Indicate by tick mark whether the lower of the net profit attributable to the Listed Company’s shareholders before and after deducting non-recurring profits and losses was negative. □ Yes √ No VII Key Financial Information by Quarter Unit: RMB
what have been disclosed in the Company’s quarterly or interim reports. □ Yes √ No VIII Non-recurring Profits and Losses √ Applicable □ Not applicable Unit: RMB
□ 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. Part III Management Discussion and Analysis I Industry Overview for the Reporting Period 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. 1. Changes in industry-related economic situation and their impacts on the Company Against the backdrop of a booming digital economy, China's game industry is also leveraging the advantages of resources and users. It pushes the boundaries and accelerates the pace of industrial development through methods such as technology drivers, industrial integration and cultural innovation. The game industry has seriously implemented the requirements of the central government, maintained righteousness and innovation, forged ahead, strove to take up the cultural mission, continuously strengthened the content construction, continued to regulate the development of the industry and made efforts to expand overseas markets. The industry's ecosystem has continued to be improved, the strength and competitiveness have been continuously enhanced, and the pace of high-quality development has become more determined. It insists on giving priority to social benefits, and actively assumes social responsibilities, which has increasingly become an industry consensus. The game industry has ushered into new development opportunities. According to the 2021 China's Game Industry Report jointly released by Game Publishing Committee of China Audio-video and Digital Publishing Association (CADPA) and China Game Industry Research Institute, the actual sales revenue of China’s game market still remained a trend of growth in 2021, and products with high quality led the innovation and development in many fields of the industry. The scale and capacity of users had a trend of saturation. It would become the focus of competition in future market to mine user segmentation needs. In 2021, the actual sales revenue of China's game market was RMB296.513 billion, an increase of RMB17.826 billion over 2020 and a year-over-year (YoY) increase of 6.4%. The scale of Chinese game users has kept growing steadily, with the user scale reaching 666 million, a year-over-year increase of 0.22% The dividends of the game population had a trend of saturation. Meanwhile, the protection of minors reaped effective results because of the new anti-addiction regulation, and the user structure had a trend of being healthy and reasonable. On the other hand, the actual sales revenue of China's independently-developed games in the overseas market has kept relatively high growth momentum. The number of countries and regions of overseas markets has increased significantly. The types of products for global market have become more diversified. In 2021, China's actual sales revenue of independently-developed games in the overseas market was USD18.013 billion, an increase of USD2,563 million over 2020 and a YoY increase of 16.59%. The growth rate decreased by 17% YoY, mainly due to the fading of the surge effect on global ACG economy under COVID-19 last year. From the average growth rate in the past five years, the share of China's game export has shown a stable increase. Exported games have maintained better growth in the three aspects of download, use length and payment of users. On the whole, the current game industry is still in a period of historical change from high-speed growth to high-quality development. Players are posing higher requirements for online games. The threshold of game development and barriers to competition have been substantially raised. Top game companies embracing strengths in the R&D and publishing of quality products and operation are more likely to benefit from the new situation. Against this backdrop, the Company adheres to the development strategy of “boutiqueization, diversification and globalization”. It takes the main business as its core and deepens the strategy of "integration of R&D and operation" and "dual engines at home and abroad", with an aim to drive high-quality, sustainable development. During the Reporting Period, the Company kept its leading role in R&D capabilities by raising R&D investments and strengthening the output of quality games. Moreover, it advanced the "diversification" strategy from the aspects of R&D and publishing, and reserved varied quality games on different themes through independent development, investment in R&D-oriented companies, and enhanced cooperation with developers capable of producing quality games. In addition, the Company, through independently developed AI systems, consolidated refined operation, increased operating efficiency, and prolonged the life cycle of quality games. The Company's overseas business has grown rapidly and the pace of exporting has been accelerated. With the strategy of "tailored games", the Company has explored the global market through diversified high-quality games, and the overseas business has become the new growth engine of the Company. In addition, with the continuous upgrading of industry technology, the development efficiency and product experience of games have been constantly improved, and the business transformation has accelerated. The rise of "Metaverse" and other emerging concepts have triggered extensive attention from many industries and investors. As the one with a proactive strategic vision, the Company continues to extend on the basis of early investment in VR/AR content, and enters fields involving multi-metaverse infrastructure such as arithmetic, semiconductor, optics, display, whole device, application and infrastructure technology, invests in many high-quality enterprises in the fields including optical module, optical display, AR glasses, VR content, cloud game, spatial intelligence technology and semiconductor materials, and carries out integration of technology and high-quality content. Through the investment layout in the field of technology, the Company has realized the collaboration of internal and external resources. The investments of the Company create new momentum for the existing game business to open new fields, and makes the Company's understanding of pan-entertainment more advanced and deeper. The relevant investment will feed the existing business ecosystem of 37 Interactive Entertainment and further stimulate its innovation and attempts to new business in the process of the new generation of industry change. The Company will continue exploring various possibilities of the combination with its existing advantages and leading technologies for application in the Metaverse, keep an eye on new things and new opportunities, explore new businesses, continue accumulating key technologies and build core strengths. 2. Changes in industrial policy environment and their impacts on the Company (1) On 6 June 2021, the Guidelines on Enhancing the Protection of Minors of the Steering Group of the Protection of Minors of the State Council (hereinafter referred to as the “Guidelines”) were officially issued. Revolving around the implementation of the Civil Code and the Law on the Protection of Minors, the Guidelines refined and specified the relevant articles of law, raising a total of 25 tasks. Specifically, in terms of cyber protection, the Guidelines raised requirements such as improving the system of regulations and policies, making more efforts to prevent minors from Internet addiction, and strengthening the online protection of minors' personal information. On 30 August 2021, the National Press and Publication Administration issued the Notice on Further Imposing Strict Administrative Measures to Prevent Minors from Becoming Addicted to Online Games (hereinafter referred to as the "Notice"), which addresses further strict management measures to resolutely prevent minors from being addicted to online games and effectively protect their physical and mental health in terms of the problem of excessive use and even addiction to online games of minors. The Notice requires that online time for minors shall be strictly limited. All online game businesses can only provide online game services to minors for one hour from 20:00 to 21:00 on Fridays, Saturdays, Sundays and statutory holidays, and shall not provide online game services to minors in any form at other times; the requirements of real-name registration and login of online game for online game user accounts shall be strictly implemented, and no game service can be provided in any form to users without real-name registration and login; publication management department at all levels shall strengthen supervision and inspection of the implementation of measures to prevent minors from being addicted to online games. For online game businesses that fail to strictly implement the measures, they shall be severely punished by laws and regulations. In response to the above Notice, the Company has now completed the connection to the national real-name authentication system, and all its independent online games have launched the upgraded version of "real-name registration and anti-addiction system for minors". The Company has also strictly implemented the restrictions on the length, time and transactions of games for minors in accordance with the latest requirements. In addition, considering that the implementation of "anti-addiction" is connected to the user system, the Company has reconstructed the user system in the design process, and increased the real-name registration of players and anti-addiction system for minors in all aspects, including online face recognition technology to prevent the problem of minors using adult accounts fraudulently. The technology currently has been launched in some independent games of the Company's platform, and it will be promoted to all game products in the future. The Company actively proceeds with the online game age suitability reminders and strengthens the online management of age suitability reminders for new products. Age suitability reminders have currently been launched on the official channels of all independent games in the Company. For products that have not been reviewed by the editorial team for description terms of age suitability reminders and have not completed the age suitability reminders process, they will not be officially operated on the official website platform. Additionally, the Company added contents applicable to children to its Privacy Policy in line with the user habits of juveniles under 14 years old and their guardians. It contributed to turning China's gaming industry more standardized by actively participating in the compilation of group standards for the gaming industry led by the China Audio-video and Digital Publishing Association ("CADPA"), such as the Specifications on Age Ratings of Online Games, the Specifications on Parent Monitoring Platforms, and Online Game Terminology. In addition to various anti-addiction protection measures for minors, the Company has launched the "Guardianship Project of Online Games for Minors' Parents" many years ago, and connected parents to do a good job in supervising minors on the basis of the implementation of the new anti-addiction rules, allowing parents to limit or prohibit minor's game time in accordance with the actual situation. The Company has set up the special process and the customer compliant specialists to deal with all kinds of problems related to minor players. The Company will further upgrade the guardianship project for parents in the future, further upgrade and improve the protection system for minors through the positive synergy of multiple dimensions, and build a green and healthy game ecosystem to protect the healthy growth of minors. (2) On 10 June 2021, the Data Security Law of the People's Republic of China (hereinafter referred to as the "Data Security Law") was adopted at the 29th session of the Standing Committee of the 13th National People's Congress of the People's Republic of China. The Data Security Law is enacted for the purposes of regulating data processing activities, safeguarding data security, promoting data development and utilization, and protecting the legal rights and interests of individuals and organizations. In the process of management system construction for information security, the Company has identified and evaluated information security risks of products and services around more than ten aspects such as information asset management, access control, password management, information security event management, information security management in business continuity management, compliance management, etc., established information security policy, risk level evaluation and disposal measures for each sub-business module, improved system documents and management processes, and formed a complete information security management system. In terms of information security management and user privacy protection, based on strict management policies and process system, the Company adopts industry-leading technologies and benchmark them with international standards, strictly controls information security risks, and guarantees data security to ensure the security of users' personal information to the maximum extent. In user privacy protection, for example, the Company implements the seven principles of legality, consistent authority and responsibility, minimum sufficient information collection, individual consent, user participation, and ensuring security in the management of the whole life cycle of user data. Around the security of user private information, the Company has also adopted a variety of technical means to prevent illegal access to unauthorized information by personnel. Meanwhile, the Company also encrypts, anonymizes and de-identifies sensitive information assets to protect them from being illegal cracked. Such technologies and measures strongly ensure the security of user privacy information. The Company ensures that it runs the business in compliance with applicable laws and regulations throughout the world, and protects the users’ right to manage personal information. A response procedure has been stipulated to inform users of any possible cost and necessary actions needed to be information security management system issued by SGS, an internationally recognized inspection, testing and certification institution, which marks that the Company's information security management has been met the current international authoritative, strictly and widely used information security standard requirements. (3) On 7 June 2021, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and the National Development and Reform Commission jointly released the Work Arrangements for Deepening the Extensive Deployment and Application of IPv6 (hereinafter referred to as "the Work Arrangements"), which clarify the main goals and key tasks for the extensive deployment of IPv6 in 2021, and make careful and accurate arrangements mainly from the aspects of enhancing network carrying capacity, optimizing the service performance of apps, improving terminal support capacity, strengthening the R&D of key technologies, promoting the formulation of standard specifications, and reinforcing security assurance, and aim to promote the extensive deployment and application of IPv6 in a down-to-earth manner by taking multiple measures. As one of the first batch of Internet enterprises responding to the Action Plan for Advancing the Extensive Deployment of Internet Protocol Version 6 (IPv6), the Company has completed the phased goals for upgrading and transformation of TOP100 domestic Internet apps to IPv6 with its products rated as excellent products in the overall assessment. Next, the Company will add more products to the IPv6 upgrading plan to promote the integrated innovation of the Next Generation Internet and businesses. II Principal Activity of the Company in the Reporting Period As one of the top 20 global public game companies, key cultural export companies of China, companies nominated for “Top 30 Cultural Enterprises of China”, civilized institutions in Guangdong Province, and Top 30 Cultural Enterprises of Guangzhou, 37 Interactive Entertainment is an outstanding listed Chinese A-share company engaged in comprehensive cultural and entertainment offerings. The Company focuses on cultural and creative businesses based on the development, publishing, and operation of online games. It also invests in the VR segment as part of its Metaverse plan. Meanwhile, it continues to invest in segments such as film and television, music, artist agency, animation, social entertainment, e-sports, cultue and health, and new consumption, with an aim to build a comprehensive ecosystem and drive mutual empowerment of business value and cultural value. It has been steadily advancing its development strategy of “boutiqueization, diversification and globalization”. With “bringing joy to the world” as its mission, the Company is dedicated to becoming an excellent and sustainable entertainment enterprise. The Company has been operating in a steady and healthy manner. It adhered to the strategy of “integration of R&D and operation”, continued to pursue its strategic objectives, as well as kept driving product diversification and global marketing. During the Reporting Period, the Company recorded operating revenue of RMB16.216 billion, with a year-over-year (YoY) increase of 12.62%; and a net profit attributable to the Listed Company’s shareholders of RMB2.876 billion, up by 4.15% YoY. With the continual rollout of the Company’s “globalization” strategy, the overseas business soared to a new high in 2021 and the operating revenue from the overseas game business amounted to RMB4.777 billion, increasing by 122.94% YoY. As a public company, 37 Interactive Entertainment focuses on corporate social responsibility and social welfare. In 2021, it continued to support rural education and industrial development, respond to major social events, etc., playing its part in building a better society. In addition, the Company plans to further invest RMB500 million by 2025 in six areas, including scientific and technological innovation, rural education, rural industrial development, industry-university-research talent training, functional game development, and employee career development, to create shared value with all sectors of society. 1. Main businesses and business models of the Company During the Reporting Period, the Company's main businesses included the development, publishing, and operation of online games. The operating modes of the Company’s online games mainly include independent operation and third-party joint operation. Under the independent operation mode, the Company obtains the licenses of games through independent R&D or being an operator of other games, and publishes and operates these products through its own or third-party channels. The Company is fully responsible for the operation, promotion and maintenance of the games; providing unified management services for online promotion, online customer service and top-up payment; and updating games along with game developers based on the real-time feedback of users and games. Under the third-party joint operation mode, the Company cooperates with one or more game operators or game application platforms to jointly operate games. And the aforesaid parties are responsible for the management of their own channels, including operation, promotion, the recharge and charge system, while the Company provides technical support services along with game developers. 2. Overview of the Company’s main businesses and products The Company specializes in the development and publishing of games for global players, with the world’s leading game development brand “Three Seven Games”, as well as professional game publishing brands “37Mobile”, “37GAMES” and “37Online”. During the Reporting Period, the domestic game industry entered a period of high-quality development. Game players' requirements for the quality of online games have increased significantly, the effect of the boutique strategy has been obvious, and the development of high-quality games has been certified. The Company precisely grasped the industry development trends, made continuous improvements in operation, and remained a top performer in the industry, while adhering to the "boutiqueization, diversification and globalization" strategy. 37 Interactive Entertainment
During the Reporting Period, the Company recorded operating revenue of RMB 15.364 billion from mobile games, a YoY increase of 15.55%. The mobile game offering has become more diversified, game quality sees considerable improvement, and the mobile game business maintains the leading position in domestic and overseas markets. During the Reporting Period, the Company's newly launched games such as The Soul Land: Hun Shi Dui Jue (斗罗大陆：魂师对决), All for Glory (荣耀大天使), The Soul Land: Wu Hun Jue Xing (斗罗大陆：武魂觉醒), and globally published games such as Puzzles & Survival, The Road to Be Shopkeeper (叫我大掌柜), and Song of the Castle in the Sky (云上城之歌) performed well, continuously promoting boutiqueization, diversification, and market globalization, and achieving milestones. ① Research and development of mobile games The Company continuously exerts more efforts for R&D, emphasizes R&D investments and R&D talent cultivation, and refines management to improve quality and efficiency. During the Reporting Period, the Company's R&D investments amounted to RMB1.25 billion, up by 12.37% YoY, with an R&D expense ratio of 7.71% and more than 1900 R&D personnel, accounting for 48.97% of the total number of employees. The Company's self-developed team is mainly based in Guangzhou, while the Company has also established R&D subsidiaries or R&D branches in Suzhou, Xiamen, Wuhan and Chengdu to attract multi-category talents. In addition, on the basis of self-developed brand, the Company also strengthens its self-development capability by acquiring R&D teams, and cooperates with Shanghai Eyugame, Karma Game, and other excellent game developers in a long-term and in-depth manner through its investments, forming a rich external R&D reserve and diversifying the presence on the product supply side. （未完）  |