IGG (799) H1 2024 earnings summary

Executive summary

• Achieved a 9% year-over-year revenue increase to HK$2.74 billion for the first half of 2024, driven by strong performance from new strategy games and the APP Business.

• Net profit reached HK$331 million, a significant turnaround from a loss of HK$360 million in the prior year period.

• Core business net profit exceeded HK$350 million, while the investment business recorded a slight loss of HK$25 million.

• APP Business and new games now contribute 44% of total revenue, up from 23% in 1H23.

• Declared an interim dividend of HK8.5 cents per share and spent HK$33 million on share buybacks, totaling about 40% of net profit allocated to shareholder returns.

Financial highlights

• Consolidated revenue for H1 2024: HK$2,735 million, up 9% year-over-year.

• Gross profit: HK$2,155 million, up 19% year-over-year; gross profit margin rose to 79%, up from 72% last year.

• Net profit margin at 12%, with net profit of HK$331 million, compared to a loss of HK$360 million last year.

• Cash and cash equivalents: HK$1,940 million; net cash inflow from operations: HK$600 million.

• Total assets: HK$4,100 million.

Outlook and guidance

• Focus on profit-driven growth, leveraging AI-generated content to optimize costs and enhance profitability.

• Continued investment in marketing for “Viking Rise” and expansion of the APP Business expected to drive sustained profitability.

• APP Business NP margin expected to exceed 20% as scale increases.

• Three new SLG games to be released: two in November 2024, one in Q2 2025, targeting global audiences.

• Ongoing global user acquisition and diversified marketing to extend product longevity.