Gala Technology Holding (2458) H1 2023 earnings summary

Executive summary

• H1 revenue rose 20.2% YoY to RMB354.4m; gross profit increased 33.8% to RMB199.2m and profit for the period rose 93.6% to RMB39.4m.

• Growth was supported by Total Football, launched in July 2022, alongside content updates and testing of a new baseball game.

Financial highlights

• Revenue was RMB354.4m versus RMB294.8m; cost of revenue rose 6.4% to RMB155.2m, and gross profit increased 33.8% to RMB199.2m.

• Gross margin improved to 56.2% from 50.5%; Total Football and Football Champion gross margins were 63.7% and 64.0%, respectively.

• Profit before tax rose 81.4% to RMB43.3m; profit attributable to owners was RMB39.3m versus RMB20.4m.

• Adjusted net profit, excluding fair-value changes on Pre-IPO Convertible Bonds and listing expenses, rose to RMB39.6m from RMB27.3m.

• Basic and diluted EPS was RMB0.29 versus RMB0.18; net other losses were RMB3.8m versus net gains of RMB1.0m, mainly due to FX fluctuations.

Outlook and guidance

• H2 priorities include sustaining Football Champion engagement and profitability, expanding Total Football into key overseas markets, and growing MLB Clutch Hit Baseball through continued iteration.

• Three games were in development, with launches expected within six months to two years; Project Code: Fishing Master testing was targeted for 2023.

• Plans include expanding casual games, overseas promotion, R&D and operations talent, and accelerating AIGC research and adoption.