IGG Inc Interim Results Announcement: Six Months Ended 30 June 2023

IGG Inc. navigated a transitional period during the first half of 2023, characterized by a strategic pivot toward new gaming titles and aggressive operational optimization. The company reported revenue of HK$2.5 billion, a 1% year-over-year increase, as the growth of new titles such as Doomsday: Last Survivors and Viking Rise helped offset the maturing performance of its flagship game, Lords Mobile. Despite achieving a 72% gross profit margin and successfully reducing research, development, and administrative expenses by 30% through the integration of AIGC technology, the firm recorded a net loss of HK$360 million. This deficit was primarily driven by heavy investment in marketing and promotion, though the company successfully returned to profitability by June 2023.

The company maintains a stable financial foundation with HK$1.48 billion in cash and cash equivalents, despite a rise in its gearing ratio to 34.6%. Capital allocation remains focused on long-term infrastructure, specifically the construction of a self-use office building in Fuzhou, which accounts for HK$250 million in capital commitments. Governance remains centralized under a unified chairman and CEO role, supported by a structured contract arrangement for its PRC-based entities. These contracts, which ensure compliance with foreign investment restrictions, represent a minor portion of the group’s total assets and revenue, mitigating potential regulatory risks.

Operational focus during this period centered on talent retention and performance incentives. While the company terminated its legacy Share Option Scheme in June 2023, it continues to manage various share award schemes to align employee interests with corporate goals. As of mid-2023, the company reported no material acquisitions or disposals, signaling a period of internal consolidation. By leveraging technological efficiencies and scaling its newer business segments, the organization aims to sustain the profitability achieved at the close of the reporting period while managing its equity incentive landscape and capital structure.