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HK Bourse: Announcement From Xingye Copper International Group Ltd. -7-

28 Aug 2017 2:15 am
 
 
 
      share) is determined by reference to the closing price of the Company's ordinary shares on 26 May 2017. 
      400,000 awarded shares have been vested on 15 June 2017. 
 
 
 
 
                                                    - 17 - 
      (i)   Details of the shares held under the Share Award Scheme are set out below: 
 
                                                                      2017                                2016 
                                                   Average                                   Average 
                                                  purchase           No. of                  purchase        No. of 
                                                     price      shares held         Value       price   shares held     Value 
                                                      HK$                         RMB'000        HK$                  RMB'000 
 
                                                      0.92        4,021,000          3,256 
            At 1 January                                                                           -             -          - 
            Shares purchased during the period/ 
                                                      0.79        2,723,000          1,914 
              year                                                                               0.92    4,021,000      3,256 
            Shares granted to an employee and 
                                                        -             (400,000)      (307) 
              vested during the period/year                                                        -             -          - 
 
                                                      0.87        6,344,000          4,863 
            At 30 June/31 December                                                               0.92    4,021,000      3,256 
 
 
13.   DIVIDENDS 
 
      During the period ended 30 June 2017, no dividend was declared or distributed and the directors of the 
      Company have determined that no dividend will be paid in respect of the interim period. 
 
 
 
 
                                                             - 18 - 
MANAGEMENT DISCUSSION AND ANALYSIS 
 
BUSINESS REVIEW 
 
During the interim period of 2017, the Group's revenue amounted to RMB2,001.7 million, representing 
an increase of 34.1% over the corresponding period of last year, mainly due to the increase in sales 
volume of the copper plates and strips business and copper price. The Group's profit attributable to the 
shareholders increased by 34.7% from RMB55.3 million in the first half of 2016 to RMB74.5 million, 
mainly due to the decrease in the contingent consideration payable arising from the acquisition of the 
game business by the Group due to the fact that the share price of the Group on 30 June 2017 was lower 
than the consideration share price to be issued to Mobilefun Limited associated with the acquisition 
of Funnytime Limited, thus reducing the net finance costs by RMB15.5 million. 
 
In August 2016, the Group completed the acquisition of Funnytime Limited ("Funnytime"), which 
mainly engages in the development, distribution and operation of internet and mobile gaming products 
through its wholly-owned subsidiary Soul Dargon Limited and a domestic company Hefei Zhangyue 
Network Technology Co., Ltd. ("Zhangyue") controlled through contractual agreements. 
 
Funnytime realised total revenue of RMB34.4 million and net profit of RMB17.4 million for the year 
ended 31 December 2016. Adjusted net profit (as defined in the sale and purchase agreement dated 
21 June 2016 in relation to the acquisition of Funnytime by the Company (the "Sale and Purchase 
Agreement")) of RMB19.2 million for year 2016 achieved the performance target stipulated in the Sale 
and Purchase Agreement. Funnytime was consolidated into the Group's financial statements from the 
acquisition date, with net profit of RMB6.2 million from the acquisition date to 31 December 2016. 
 
Online Game Business 
 
Market review 
 
According to "2017 January to June China Game Industry Report", from January to June 2017, the 
number of game players in the PRC amounted to 507 million, up by 3.6% year-on-year. The number 
of client-terminal game players, web game players and mobile game players in the PRC reached 136 
million, 247 million and 435 million, respectively. 
 
Industry review 
 
From January to June 2017, the sales revenue of the PRC's game market maintained a high growth 
rate to RMB99.78 billion, up by 26.7% year-on-year. The PRC's game industry is growing larger in 
overall scale with more and more better quality game introduced to the market. The game industry 
made a sizable contribution to the internet industry and the content industry. High quality games have 
 
become the key element to market success, and are increasingly recognised by the market. In addition, 
game players' ability to appreciate high quality games has enhanced. All these factors indicate that 
high quality game strategy is becoming increasingly important for all game companies. 
 
 
 
                                                 - 19 - 
Business review 
 
In 2017, the Group has further optimized its strategic development landscape for game business. 
Hefei Zhangyue Network Technology Co., Ltd. ("Zhangyue"), the domestic operating subsidiary of 
the Group's game business, has identified three business lines: web games, mobile games and leisure 
competitive games, and established the development strategy of focusing on high quality web games, 
development of mobile game platform and scale-up of leisure competitive games. Meanwhile, Zhangyue 
paid close attention to emerging game selections such as H5 games (web games on mobile devices) 
and gave consideration to both user base and short-term yield, aiming to build a solid foundation for 
Zhangyue's long-term development. 
 
Game operation: in the first half of 2017, leisure competitive products entered the Tencent QQ Game 
Hall ("QQ Game Hall") successively, among which "Bosozoku" (), a kind of vehicle 
shooting products, was launched with 700,000 registered users per month since early June 2017. 
Currently, the "Bosozoku" is under promotion and expected to record a significant growth in terms 
of user base in the second half of the year. "Happy Racing" (), a racing product, has 
passed the QQ Game Hall testing and will be officially launched for promotion in August 2017, which 
is the second core product of Zhangyue's competitive game strategy. As for traditional web games, 
the "Heart of the Overlord" (), a new ARPG product, has been launched on Tencent 
platform and other game platforms. The "New Scions of Fate" () and the "Train 
Your Dragon" () will be tested in the QQ Game Hall in August and September of 
this year. The "Immortal Heroes" (), a product of the new H5 game, is expected to go 
online on the Tencent Wanba () platform in July, while the "Scions of Fate H5" ( 
H5) will enter the Tencent Wanba for promotion in the second half of 2017. The management 
of Zhangyue believes that through the efforts of all Zhangyue's employees and the product layout 
actively established in the first half of the year, leisure competitive game products will continuously 
gain Tencent web game platform resources and rapidly accumulate daily active users (DAU). The new 
ARPG products are also expected to deliver high income in the second half of 2017. Breakthroughs 
have been made in the new H5 game business, serving as a new growth driver in the future. 
 
Research and development ("R&D") of games: in the first half of 2017, the R&D line of the gaming 
business successfully launched the English version of "the Gods" (), a web game, in the 
US and Europe and the Russian version in Russia, both of which made certain achievements. Zhangyue 
also launched the "Martial Peak" (), a web game, in cooperation with over 50 excellent 
game operating platforms at both home and abroad. Besides, Zhangyue plans to launch the traditional 
Chinese version of the game in Hong Kong, Macao and Taiwan in the second half of the year. The 
"Chaos Storm" (), a mobile game product, has been launched on Apple's app store after 
two rounds of player test runs, and its English version will be released worldwide in the second half of 
the year. The R&D business line keeps exploring diversified businesses, including game art solutions, 
game product customization, and the overall solution to game applications, etc. 
 
 
 
 
                                                 - 20 - 
In addition, Zhangyue has been actively looking for opportunities to work with top-notch intellectual 
property ("IP") products so as to drive the rapid progress of the Group's game business. 
 
In the first half of 2017, Funnytime Limited ("Funnytime") alone, the Group's game business, realised 
a total revenue of RMB13.9 million; a net profit of RMB4.7 million and an adjusted net profit (as 
defined in Sale and Purchase Agreement) of RMB5.3 million. 
 
Outlook 
 
In the second half of 2017, Zhangyue will continue to focus on deploying high quality products, 
segmented products and global distribution of game products, and strive to gain access to top IP 
products. The management of the Group expects its game business to become a fast growing business 
unit within the Group, and to create more value for the Group's shareholders. 
 
Copper Plates and Strips Business 
 
Market and industry review 
 
In the first half of 2017, as the results of European and American elections became clear, uncertainties 
in global economy faded away. Rising US Dollar interest rates and deleveraging became the themes 
 
 
 
 

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