¼ª±ÈÌØ: G-bits Network Technology (Xiamen) Co., Ltd. 2024 Interim Report (Summary)

Stock Code: 603444                                                              Stock Name: G-bits
           G-bits Network Technology (Xiamen) Co., Ltd.
                                       August 2024
Should there be any discrepancy between the English version and the Chinese version of this Report,
the Chinese version shall prevail.
                                 Part I Important Notes
I. The summary of the Interim Report is extracted from the full text of the Interim
Report. To gain a thorough understanding of the Company's operational achievements,
financial status, and future development plans, investors are advised to carefully read
the full Interim Report on the website www.sse.com.cn.
II. The board of directors (or the ¡°Board¡±), supervisory board, directors, supervisors,
and senior management of the Company guarantee the truthfulness, accuracy, and
completeness of the Interim report, ensuring that there are no false records,
misleading statements, or material omissions, and agree to assume joint and several
liability for this Interim Report.
III. All directors of the Company attended the board meeting for the review of the
Interim Report.
IV. This Interim Report is unaudited.
V. The profit distribution proposal or reserve capitalization proposal for the reporting
period approved by the Board
      The Company plans to distribute a cash dividend of RMB 45.00 per 10 shares
(including taxes) based on the total number of shares outstanding on the equity registration
date of the 2024 semi-annual profit distribution plan, excluding the shares repurchased. As of
August 14, 2024, the Company¡¯s total share capital is 72,041,101 shares, with 282,800
shares held in the repurchase account, resulting in a base of 71,758,301 shares. The total
proposed cash dividend is RMB 322.91 million (including taxes), accounting for 62.36% of the
net profit attributable to shareholders of the Company for the first half of 2024. This profit
distribution will not involve any capital reserve transfer to share capital or other forms of profit
distribution.
      According to Article 18 of the Rules for Repurchase of Shares by Listed Companies:
"Shares repurchased with cash, whether through tender offers or centralized bidding, are
deemed equivalent to cash dividends and should be included in the calculation of cash
dividend ratios." During first half of 2024, the Company repurchased a total of 241,500 shares
through its dedicated repurchase account via centralized bidding, with a total payment of
RMB 44.73 million (excluding transaction fees).
        In summary, the combined amount of cash dividends and repurchases for the
  first half of 2024 is estimated RMB 367.64 million, representing 71.00% of the net profit
  attributable to shareholders of the Company for the first half of 2024.
     Since its IPO in January 2017, the Company has cumulatively distributed and
repurchased a total of RMB 5.67 billion (including the announced but not yet implemented
semi-annual dividend for 2024), which is 6.30 times the net proceeds raised from the initial
public offering.
                        Part II Basic Information of the Company
I. Company Profile
                                             Stock Profile
                                                                                  Previous Stock
Types of Stocks      Stock Exchange          Stock Name          Stock Code
                                                                                      Name
                     Shanghai Stock
     A-shares                                   G-bits            603444                 N/A
                       Exchange
    Contact Information                 Board Secretary           Securities Affairs Representative
           Name                 LIANG Lili                        CAI Luxi
         Telephone              0592-3213580                      0592-3213580
                                G-bits Building, No.4 Wang Hai    G-bits Building, No.4 Wang Hai
       Office Address
                                Road, Software Park II, Xiamen    Road, Software Park II, Xiamen
            Email               ir@g-bits.com                     ir@g-bits.com
II. Key Financial Information
                                                                                  Unit: RMB Yuan
Total assets                        6,941,681,046.33         6,636,771,238.42                  4.59
Equity attributable to
shareholders of the Company
                                     H1 2024                  H1 2023               YoY+/- (%)
Operating revenue                   1,959,649,131.75         2,348,924,659.16                 -16.57
Net profit attributable to
shareholders of the Company
Net profit attributable to
shareholders of the Company
after deducting non-recurring
profits and losses
Net cash flows from
operating activities
Weighted average return on                                                         a decrease of 4.82
equity (%)                                                                         percentage points
Basic earnings per share
(RMB/share)
Diluted earnings per share
(RMB/share)
     Description:
     i. Overview of Main Game Revenue and Profits
      The Company's operating revenue primarily derives from its core self-developed
products: Asktao (PC), Asktao (Mobile), and Overmortal (Mainland version). During the
reporting period, the game gross billings1 generated from these three self-developed products
is as follows:
                                                                                 Unit: RM B million Yuan
                   Item                    H1 2024                H1 2023               YoY+/- (%)
Asktao (PC)                                          656.43                 564.35                  16.31
Asktao (M obile)                                  1,155.09               1,353.55                   -14.66
Overmortal (M ainland version)                       311.10                 688.47                  -54.81
                   Total                          2,122.62               2,606.38                   -18.56
      £¨1£©The operating revenue and profit of Asktao (PC) have increased year-over-year
during the reporting period.
      £¨2£©The operating revenue, distribution expenses and profit of Asktao (Mobile) have
all decreased year-over-year during the reporting period.
      £¨3£©The operating revenue, distribution expenses and profit of Overmortal (Mainland
Version) and Aobi Island: Dreamland have all decreased year-over-year during the reporting
period.
      £¨4£©Dragon POW! (Mainland Version), launched in August 2023, along with Beasts
Evolved 2 and Pica Town: Dream Origin Gameplay both launched in December 2023, have
contributed operating revenue and profit compared to the same period last year.
      £¨5£©The newly launched Alchemy Family, Chinese Cuisine Cruise and One Piece:
Dream Pose have contributed operating revenue compared to the same period last year.
However, these products have not yet achieved profitability.
and the Company¡¯s operating revenue is primarily due to factors such as revenue-sharing costs paid to
operators, related taxes and fees, and unutilized player items.
     The Company's overseas operating revenue for the period totaled RMB 255.03 million,
an increase of 113.77% compared to the same period last year. This growth was primarily
driven by the launch of Dragon POW! (Overseas Version), Monster Never Cry (European and
American Version), and Outpost: Infinity Siege (Steam). As of the end of the reporting period,
the overall overseas game business, considering the inclusion of development costs, has not
yet generated profits.
     ii. Overview of Company Personnel
     £¨1£©At the end of the reporting period, the total number of employees was 1,463, an
increase of 16 compared to the end of the previous year, primarily due to the increase in R&D
personnel.
     £¨2£©At the end of the reporting period, the average monthly number of employees
was 1,485, an increase of 168 compared to the same period last year (a growth of 12.76%).
Among them, the number of R&D personnel increased by 124, and the number of overseas
operational personnel increased by 45.
     The total number of employees increased year-over-year, leading to a corresponding
increase in basic salary-related expenses. However, bonuses accrued based on operating
performance decreased year-over-year, resulting in overall employee compensation
expenses remaining largely unchanged compared to the previous year.
     iii. Overview of Equity Investment Business
     The Company's investment targets mainly consist of upstream and downstream
enterprises in the game industry or industry investment funds. There were a few new equity
investments this year. The total return from investment business (including investment
income, fair value changes, asset impairment losses, etc.) during the reporting period are
detailed in the table below:
                                                                             Unit: RMB Yuan
                               Item                                   H1 2024          H1 2023
Investment income recognized under the equity method for joint
ventures and associates                                               24,252,754.63    58,257,678.97
(Profits of the investee recognized based on ownership percentage)
Provision for impairment of long-term equity investments
                                                                      -41,887,915.72     -149,355.22
(Impairment of equity investments)
Investment income
(Gain on disposal of equity investments)
Gain or loss from fair value changes of other non-current financial
assets                                                                 -4,251,370.95   -3,051,901.71
(Fair value changes of investees)
Investment income during the holding period of other non-current
financial assets                                                      10,000,000.00
(Dividends from investees)
                                 Total                                26,888,416.74    55,056,422.04
      iv. Overview of Foreign Exchange Gain/Losses
      The period-end central parity rate of the USD against the RMB was 7.1268,
representing an increase of 0.62% compared to the end of the previous year. Some of the
Company's transactions are settled in USD, and the Company holds a relatively large amount
of USD. The income generated from exchange rate changes during the period amounted to
RMB 20.73 million (of which RMB 12.66 million is attributable to shareholders of the
Company). In the same period last year, the income from exchange rate changes was RMB
in a year-over-year decrease in income of RMB 48.25 million.
      v. Overview of Operating Cash Flow
      The net cash flow from operating activities for the reporting period decreased by 1.22%
compared to the same period last year. This was primarily due to a year-on-year decrease in
game gross billings from core products, leading to an 11.02% decrease in cash inflows from
operating activities. Expenditures on distribution and revenue-sharing costs paid to game
developers decreased, resulting in a 14.19% decrease in cash outflows from operating
activities.
      vi. Overview of Deferred Game Revenue
      As of June 30, 2024, the Company's unamortized deferred game revenue balance
   amounts to RMB 516.17 million, an increase of RMB 75.66 million compared to the previous
   year-end balance of RMB 440.51 million. The main reason is the launch of new games during
   the reporting period, including Alchemy Family, Dragon POW! (Overseas Version), Chinese
   Cuisine Cruise, Monster Never Cry (European and American Version), and One Piece:
   Dream Pose. This has resulted in an increase in deferred revenue based on the progress of
   item consumption or the estimated lifespan of paying players.
         vii. Adjusted Net Profit Attributable to Shareholders of the Company
         To better reflect the operating performance of the Company's main business, the impact
   of exchange rate changes and equity investment activities on profit has been excluded. The
   adjusted net profit attributable to shareholders of the Company for reporting period decreased
   by 22.51% compared to the same period last year. The summary is as follows:
                                                                                           Unit: RMB Yuan
                         Item                                 H1 2024            H1 2023           YoY+/- (%)
Net profit attributable to shareholders of the Company        517,827,593.16     675,971,006.54             -23.39
Less: (1) The investment income from the
repurchase of partial equity in Chengdu Yuxiang                38,774,948.78
Technology Co., Ltd recognized by the Company
     (2) Changes in Equity Holdings Period (Gains or
Losses from Changes in Fair Value, Investment                   4,630,731.79      41,357,885.54             -88.80
Income, and Asset Impairment Losses, etc.)
     (3) Foreign Exchange Gains                                12,663,807.08      42,097,352.48             -69.92
     (4) Taxes and Charges Related to Investment
                                                               -2,800,013.97      -7,009,728.26             60.06
Operations and Foreign Exchange M ovements
Adjusted Net Profit Attributable to Shareholders of the
Company
   Note£º1£©The data listed in the table above are attributable to shareholders of the Company.
   data for the reporting period. For consistency in analysis, the adjusted data in the table above
   do not exclude the impact of government subsidies and revenue amortization deferrals.
   III. Quarterly Key Accounting Data during the Reporting Period
                                                                                        Unit: RMB Yuan
                                                                     Q2 2024                          Q2 2024
        Item                Q2 2024                Q1 2024                           Q2 2023
                                                                    QoQ+/- (%)                       YoY+/- (%)
                                                                 Q2 2024                          Q2 2024
         Item              Q2 2024             Q1 2024                         Q2 2023
                                                                QoQ+/- (%)                       YoY+/- (%)
Operating revenue         1,032,384,127.82     927,265,003.93         11.34   1,204,554,622.60        -14.29
Net profit attributable
to shareholders of         264,464,585.84      253,363,007.32          4.38    369,418,231.91         -28.41
the Company
Net profit attributable
to shareholders of
the Company after
deducting non-
recurring profits and
losses
Net cash flows from
operating activities
           Description:
           i. Analysis of Quarter-on-Quarter Changes from Q1 to Q2 2024
    deducting non-recurring profits and losses, increased in Q2 2024 compared to Q1 2024. This
    was primarily due to the 8th-anniversary version update for Asktao (Mobile), which led to a
    rise in operating revenue and overall profit.
    non-recurring profits and losses, was 33.67%, which is greater than the 4.38% change in net
    profit attributable to shareholders of the Company. This difference was mainly due to the
    recognition of investment income from the repurchase of partial equity in Chengdu Yuxiang
    Technology Co., Ltd in Q1 2024.
    compared to Q1 2024, primarily due to higher product sales receipts in Q2 and the payment
    of year-end bonuses for 2023 in Q1.
           ii. Analysis of Year-on-Year Changes from Q2 2023 to Q2 2024
           Operating revenue and net profit attributable to shareholders of the Company after
    deducting non-recurring profits and losses, decreased in Q2 2024 compared to the same
    period last year. This decline was primarily due to:
             reduction in revenue and profit for Overmortal (Mainland Version) in Q2 2024 compared to
             the previous year. £¨2£©Revenue recognition in Q2 2023 from deferred revenue balance
             related to the expiration of the Company¡¯s collaboration with the developer of Mole's World.
             compared to RMB 94.32 million in Q2 2023, representing a decrease of RMB 83.08 million
             (with a decrease of RMB 50.55 million attributable to shareholders of the Company).
             Guangzhou Zhuoyou Information Technology Co., Ltd., Guangzhou Alpha Network
             Technology Co., Ltd., Chengdu Vaneplus Information Technology Co., Ltd., and Guangzhou
             Youqu Interactive Network Technology Co., Ltd., leading to impairment provisions in
             accordance with accounting standards.
             IV. Shareholder Composition
             £¨I£© Number and shareholding of the Company's shareholders
Total number of ordinary shareholders at the end of the reporting period                                           27,881
Total number of preferred shareholders with voting rights restored at the end of the
reporting period
                                                    Top 10 shareholders
                                       Number of                                     Pledged, marked, or
                 Increase/decrease shares held at                                       frozen shares
    Name of                                            Shareholding Restricted                               Nature of
                   in the Reporting the end of the
  shareholder                                         percentage (%) shares held                            Shareholder
                        Period          reporting                                     Status Quantity
                                          period
                                                                                                           Domestic
LU Hongyan                               21,412,615              29.72               None
                                                                                                           individual
                                                                                                           Domestic
CHEN Tuolin                               8,240,025              11.44               None
                                                                                                           individual
Hong Kong
Securities                                                                                                 Overseas
                            -3,521,394    3,537,418               4.91               None
Clearing                                                                                                   corporation
Company Ltd.
                                                                                                           Domestic
HUANG Zhihui                              1,374,782               1.91               None
                                                                                                           individual
LI Peiying                                1,350,000               1.87               None                  Domestic
                                                                        individual
China Minsheng
Bank Co., Ltd. -
Huaxia CSI
Animation &
Game
Exchange-
Traded Open-
End Index
Securities
Investment Fund
Agricultural Bank
of China - Ping
An Low Carbon
Economy Mixed
Securities
Investment Fund
Guotai Asset
Management
Co., Ltd. - Social           666,579       666,579        0.93   None   Other
Security Fund
Portfolio 1102
China Merchants
Bank Co., Ltd. -
China Europe
Internet Pioneer
Mixed Securities
Investment Fund
Agricultural Bank
of China - CSI
Traded Open-                 273,400       476,531        0.66   None   Other
End Index
Securities
Investment Fund
Related or acting-in-concert parties
                                     N/A
among the shareholders listed above
Explanation of preferred
shareholders with voting rights
                                     N/A
restored and their shareholding
quantities
                   Part III Management Discussion and Analysis
     I. Overview of Core Business during the Reporting Period
     £¨I£© Core Business Operations of the Company
     The Company specializes in the development and operation of online games, with a
focus on cultivating innovative talent and pursuing efficient work methods. Its goal is to
provide differentiated products and services to global users, creating and sharing delightful
experiences in the entertainment industry.
     Since its establishment in 2004, the Company has immersed itself in the game industry.
Through years of rapid growth and technological accumulation, it has continually expanded in
scale and strengthened its R&D capabilities, enriching its product portfolio. Rooted in
traditional Chinese culture, the Company has developed games such as Asktao (PC), Asktao
(Mobile), and Overmortal. Asktao (PC) has been in continuous operation for 18 years since
its debut in 2006. Building on its strong user base and IP popularity, the Company launched
the mobile version of the MMORPG Asktao (Mobile) in April 2016, which has maintained
steady long-term operation for the past 8 years. In February 2021, the Company launched
Overmortal, an ink-wash style idle mobile game about the Taoist cultivation of immortality.
Since its release, it has maintained stable iterative updates. In 2023 and the first half of 2024,
the combined revenue from Asktao (PC), Asktao (Mobile), and Overmortal (Mainland version)
accounted for 71.19% and 68.17% of the Company¡¯s total revenue, respectively.
     Leiting Games, an independently operated platform by the Company, has accumulated
extensive experience and expertise in game operation over the years. As of the reporting
date, Leiting Games has successfully managed a diverse portfolio of games, including Asktao
(Mobile), Overmortal, Aobi Island: Dreamland, Dragon POW!, Chinese Cuisine Cruise, World
Flipper, Tale of Immortal (PC), Funny Fighters: Battle Royale, and Gumballs.
     The Company will continue to iterate and update existing products to enhance game
performance and user experience, as well as prolong the lifecycle of products through
continuous IP development. In terms of new product research and development, the
Company will remain focused on MMORPG, idle games, and SLG while exploring content-
oriented products. The goal is to consistently strengthen the engineering capabilities of the
R&D team and develop high-quality games that combine entertainment, playability, and
commercially viable design. Regarding product licensing, the Company will continue to focus
on classic gaming IPs, multiplayer competitive games, mid-core games, and commercially
viable games with experiential differences. This approach will be adjusted according to
market dynamics and other relevant factors.
     The Company will increase its investment in overseas markets continuously. Apart from
a few reserved IP-based products, all in-house developed products must be targeted towards
overseas markets to be considered for approval. The Company will also continue to recruit
outstanding producers and operation teams with profound insights into various cultures
worldwide to accelerate the development of its overseas business.
     £¨II£© Primary Business Model of the Company
     i. Revenue Streams
     The payment models for online games primarily include pay for virtual items, pay for
downloads, pay based on playtime, and in-game advertising. The Company's game product
revenue mainly comes from the payment model based on virtual items, wherein players can
enter the game for free, and the operator primarily profits from selling virtual items within the
game. Payment for virtual items is the prevalent revenue model adopted by the online game
industry in China.
     ii. Operating Models
     There are three main operating models for the Company¡¯s games: independent
operation, cooperative operation, and licensing operation. Among them, Asktao (PC) is
licensed to Beijing Guangyu Online Technology Co.,Ltd. Other in-house developed and
licensed products mainly adopt independent operation and cooperative operation models.
The three operation models are as follows:
responsible for promotion and operation. These games might be developed by the Company
or by external developers.
App Store and Android app store including Huawei, vivo, and Google Play, to co-publish and
promote its games, whether developed in-house or licensed.
publishers, who are responsible for managing the game's publishing and promotion. The
Company¡¯s responsibilities are limited to providing technical support and ongoing content
development.
     £¨III£© Industry Overview During the Reporting Period
     i. Industry Landscape
     According to the China Game Industry Report for January-June 2024 released by the
Game Committee of China Audio-visual and Digital Publishing Association£¨CADPA£©, the
actual sales revenue of the domestic game market in China reached RMB147.27 billion from
January to June 2024, a year-on-year growth of 2.08%. The number of game users in China
reached 0.67 billion, with a year-on-year growth of 0.88%. In the segmented market, mobile
games accounted for 73.01% of the actual sales revenue of the domestic game market,
maintaining dominance despite a slight decline. The share of actual sales revenue from PC
games continues to rise. Revenue from mini-program mobile games reached RMB 16.60
billion, with a year-on-year growth of 60.52%, which has maintained a high growth rate for
three consecutive years.
     ¡°Going global¡± remains a key development strategy for many Chinese game companies.
As one of the important ways to promote Chinese culture internationally, China-developed
games have reached nearly a hundred countries and regions, including Europe, the United
States, Japan, and South Korea. From January to June 2024, the actual sales revenue of
games developed independently by China in overseas markets reached US$8.55 billion, with
a year-on-year growth of 4.24%, which is mainly due to several newly launched products
becoming hits.
     ii. Impact of Industry Policies on the Company's Sector
     In recent years, regulatory authorities have attached great importance on the healthy
development of the game industry, implementing a series of policy aimed at various aspects
of game development, publishing, and operation. These policies introduce new requirements
and standards in areas such as minor protection, cultural values, network ecology
governance, data security, personal information protection, and the management of emerging
technologies. The goal is to guide the industry towards standardized and high-quality
development. In the long term, effective regulation is crucial for the advancement and
progress of the industry.
     In response, the Company will adhere to strategies of globalization, high quality, and
differentiation, with a commitment to cultural confidence and technological innovation, to
deliver exceptional gaming experiences to players worldwide. The Company will focus on
content development, improve its internal management system, and continue to implement
pre-, during-, and post-regulation of games, strengthen the governance of the content
ecosystem of game products, effectively protect minors, and maintain a healthy game
environment for its products. The Company will continuously monitor and analyze industry
policies, keep up with industry trends in real-time, and improve its policy risk management
capabilities.
     II. Analysis of Core Competencies During the Reporting Period
     £¨I£© Strong Independent Research and Development (R&D) Capabilities
     i. Overview of the Company¡¯s R&D Performance
     The Company attached great importance to R&D and talent development. During the
reporting period, The Company¡¯s R&D expense amounted to RMB 391.15 million, accounting
for 19.96% of its revenue. This sustained investment has laid the foundation for its innovation.
The Company¡¯s R&D team has grown year on year, with the number of employees reaching
representing 55.18%, 59.09%, and 59.54% of the total number of employees respectively.
     ii. Boost R&D Performance with the Minimum Viable Product (MVP) Approach
     Games, as a form of cultural entertainment, derive their strength from delivering fresh
and captivating experiences to users. The Company places significant emphasis on product
innovation, striving to develop games that stand out both unique and commercially. By
focusing on differentiation, the Company continuously explores innovative approaches in core
gameplay, conceptualization, art style, and other aspects, thereby enhancing the competitive
edge of its products. However, this pursuit of differentiation also escalates the complexity of
project development, necessitating enhanced capabilities in gameplay refinement, project
management, and data analysis within the development teams. Drawing from years of
experience, the Company has embraced an iterative development model known as the MVP
approach in its R&D process.
     In applying the MVP approach to the Company¡¯s R&D, at the start of a project, the
Company assembles a core team to develop a prototype based on the creative designer's
idea. Extensive user testing is then used to validate the feasibility of the core gameplay
mechanics. Throughout the development process, the game undergoes numerous iterations
and is fine-tuned based on test data. This MVP approach, starting from the demo version,
allows the Company to keep a tight rein on product direction, avoid wasteful investments, and
control R&D costs. Frequent testing during development helps the Company to control
variables between two successive tests, allowing the Company to analyze user behav ior
feedback more accurately. As a result, the Company has able to address issues that arise
during development in a timely manner, increasing R&D efficiency. As the demo evolves into
a final project, the Company continually refines and adapts the MVP approach to ensure
seamless integration among gameplay testing, art resources and commercialization design.
     While the MVP approach is effective in controlling R&D costs, it doesn't imply smaller
projects or less overall investment. The scope of the project depends on the experience of
the core team, project management skills, technological accumulation, the nature of the
project, etc. The Company is committed to nurturing excellent game producers over the long
term, and through the MVP approach, the Company filters projects and allocates more
resources in the hope of producing more innovative, engaging, and high-quality products.
     In addition, the MVP approach involves the Company¡¯s operation team working closely
with the R&D team on a variety of tests and analyses. This allows the Company to gain a
deep understanding of the market and users of its products, so that the Company can tailor
its strategies and minimize the risks and costs of release.
     iii. Construction of Middle Platforms Builds Up Strong R&D Foundation
     The Company has prioritized the establishment of solid R&D middle platforms. This
includes the Company¡¯s Technical Center, Art Center, Audio Department, and Test Center.
These pillars support every aspect of development, from R&D and art design, to soundtrack
creation and product testing. This system not only ensures development, efficiency, and high-
quality output, but also optimizes the allocation of resources across projects, minimizing
redundant costs and ensuring a stable R&D process.
     The Company¡¯s Technical Center specializes in game development, focusing on both
conventional and emerging technologies. It provides strong support including performance
testing and optimization, effectively tackling technical challenges and improving R&D
efficiency. Currently, the main tasks of the Technical Center include:
Script); building server frameworks, client frameworks and various public services rooted in
GS; creating GIP management tools (GS install package) for the unified storage and
management of various packages; developing various toolchains and common development
tools for each project team based on the GS, and providing common automated build and
deployment solutions.
Unreal engines and 3D rendering technologies; developing a powerful combat bottom layer
and combat editor to enhance the overall performance and development efficiency of combat
in games.
actively exploring the integration of AI technologies across all stages of game development,
including planning, development, and testing, to improve R&D efficiency and game
experience. The Technical Center has established AIWebHub within the Company,
consolidating various commonly used AI drawing tools and models, providing functions such
as AI drawing, online data management, computational power sharing, drawing workflow and
technical sharing, facilitating the rapid application of AI drawing in the Company's game
development processes.
     The Company¡¯s Art Center focuses on improving the quality and style of game art. It
establishes efficient pipelines for 2D, 3D, and content-oriented production lines, laying a solid
foundation for both existing and future projects. Tailoring unique art styles to fit each game's
theme, the Art Center strives to create differentiated game experiences while catering to
diverse aesthetic preferences, incorporating mainstream elements to evoke emotional
resonance with players. Through continuous testing and iteration, it seeks the optimal
balance between distinctiveness and mainstream appeal. Focusing on artistic excellence, the
Art Center sets rigorous standards and guidelines for each product, continually enhancing
design capabilities and quality control. The Art Center closely monitors the development in
new technologies and actively promotes the application of cutting -edge technologies, such as
AIGC, in game art. In the field of game image generation, these techniques are utilized in the
early stages of projects for art style exploration and continuously training and optimizing AI
models for various game art styles. These AI drawing tools help reduce the time and
resources required for producing large volumes of content, enabling a more efficient workflow
and enhancing the productivity of game art production.
     The Company¡¯s Audio Department is dedicated to creating immersive audio that
integrates with the game's narrative and gameplay. It pioneers the use of state -of-the-art
audio and AI technology to effectively create audio that enhances the g aming experience and
is tailored to player preferences.
     The Company¡¯s Test Center manages project testing for daily and version updates to
ensure that the performance is up to the standard. The center ensures a stable allocation of
testing resources, improving both the efficiency and standardization of our testing process.
By drawing on past experience, it provides reusable testing methodologies to ensure that our
games maintain a stable quality.
     £¨II£© Exceptional Game Operations
     i. Overview of Company's Game Operations
     Leiting Games, an independently operated platform, is committed to a quality -first
approach that prioritizes the user experience. The high-quality, unique, and highly engaging
games under Leiting Games' operations have gained significant popularity and earned an
excellent reputation.
     With years of experience, Leiting Games has developed a comprehensive
understanding of operating various game genres including MMORPG, Roguelike, idle games,
and casual simulation. The classic MMORPG Asktao (Mobile) has maintained stable
operations for many years, and the idle Taoist immortality cultivation game Overmortal has
shown excellent performance. Additionally, several casual games such as Aobi Island:
Dreamland, Dragon POW!, and Chinese Cuisine Cruise are highly popular among young
players.
     ii. Player-Centric Approach for Long-Term Operations
     The Company upholds a "player-centric" game design and operation philosophy,
dedicated to fostering enjoyable experiences in the entertainment industry.
     The Company deeply understands user needs and develops high-quality original games
beloved by players. After the game launches, the Company strengthens communication and
interaction with players through various channels. For example, the Asktao (Mobile) project
team conducts online activities annually and organizes offline events to interact with core
players regarding game version planning, promotion plans, and other aspects. Moreover, the
Company listens to feedback from key opinion leaders (KOLs) and collaborates with players
to refine and enrich the game experience. Additionally, the official community app for Asktao
(Mobile), Asktao in Hand, launched in June 2024, provides a convenient interactive platform
for players to access game information, share their experiences, and directly communicate
with the development team, thereby facilitating a deeper immersion into the " Asktao" universe.
     The Company actively responds to user demands, providing sincere and
comprehensive customer service. Guided by the service philosophy of "becoming an official
friend to users and creating a wonderful service experience," the Company embeds a
"Contact Customer Service" button within games. It provides players with comprehensive and
meticulous service through various channels such as a 24-hour customer service hotline,
WeChat customer service official account, customer service forums, and customer service
email, catering to users' real-time inquiries, complaints, feedback, and other requests.
Additionally, to improve response speed, the Company utilizes advanced technologies such
as AI to build an intelligent self-service system, further enhancing customer service levels. A
service quality inspection team is also established to monitor service quality daily, aiming to
enhance player experience.
     iii. Precision and Effective Marketing Promotion Strategies
     "Buying traffic" is one of the important methods for promoting game products. However,
its rising cost can negatively impact a game's profitability. Over the years, the Company has
consistently prioritized creating unique, high-quality products and tailoring its promotion
strategies accordingly. The Company¡¯s promotion plans are based on the game's features, the
target market, and our understanding of the player base ¡ª their preferred platforms, behaviors,
and spending habits. Simultaneously, the Company explores customer acquisition from various
methods, including daily live streaming, Key Opinion Customer (KOC) promotion, content
creation, e-commerce, and community re-engagement. This allows the Company to reach its
target audience effectively and precisely, while avoiding over-reliance on "buying traffic".
     The Company values user relationship management as it facilitates communication
between the Company and its players, helps understand their needs deeply, and allows the
Company to adapt content to meet evolving player demands. This approach benefits the
Company¡¯s relationship with users and enhances its reputation within the industry . With
sincerity towards the players being the core of the Company¡¯s operations, game designers ,
promotions staff, and customer support personnel organized numerous events for players.
Some activities for users of the Company are as follow:
       Since 2016, Asktao (Mobile) project team has been organizing multiple
  ¡°Designers Talk¡± events annually in different cities. Since 2017, Asktao (Mobile) has
  held a national competition every year, attracting a large number of participants,
  creating an energetic and engaging environment. Starting from 2018, Asktao (Mobile)
  project team has held an annual Asktao Conference, which gives players an
  opportunity to engage in in-depth discussions and participate in fun events, either
  online or offline. Since 2020, Asktao (Mobile) has conducted an annual event. During
  this event, the head of product operations engages in one-on-one in-depth interviews
  with players to understand their genuine needs, listen to their feedback, and address
  issues they encounter in the game.
     Overmortal hosts an annual "Offline Meet-and-Greet" event. Starting from 2023, these
events have expanded to cities such as Hangzhou, Wuhan, Shenzhen, and Beijing, where
players can engage in Q&A sessions and fun activities to strengthen their connection with the
game.
     Additionally, to better provide high-quality membership services, the Company launched
the official community platform "Leiting Games Membership Center" in November 2022. On
this platform, players can access a range of game activity benefits, get the latest game
updates and news, and enjoy various membership perks such as "Game Concierge," " Direct
Line to Planners," and "Game Gift Packs." By offering a one -stop service platform, players
can more conveniently participate in game activities and obtain information, while the
Company gains a direct platform for understanding player needs and feedback, which helps
in precisely optimizing products and services.
     The Company primarily engages in advertising promotion activities on platforms with
active user engagement by deploying advertising materials, Key Opinion Customer (KOC)
recommendations, game live streams, and various other methods. At the same time, the
Company supports UGC (user-generated content) across multiple platforms to spread the
product information faster and further. The Company also focuses on user retention with well-
designed gameplay and customer service. The Company believes that improving the user
experience is the key to higher user retention and long -term product success.
     In response to traditional ¡°buying traffic¡± methods, the Company consistently optimizes
its advertising delivery model to adapt to changes in the market and user demands. It strives
to reach the target audience with higher efficiency, enhancing the level of Return on
Investment (ROI). In terms of innovative marketing, the Company¡¯s games like Asktao
(Mobile) and Overmortal have run KOL (key opinion leader) promotional campaigns on short
video platforms based on the dates of major version updates and user activities. These
targeted promotions ensure a continuous flow of new users. Furthermore, the Company
continuously explores and experiments with various innovative marketing strategies,
including e-commerce live streaming, TikTok¡¯s Star Network advertising, TikTok cloud game,
and recruitment tasks.
  The Company¡¯s IP development aims to enrich the game's world, character portrayals,
and storylines to deepen players' immersion and emotional connection to the game.
  Asktao (Mobile), a classic IP that has been in operation for almost 18 years, represents the
Company¡¯s efforts to strengthen the Asktao brand. To build the brand, the Company is
enhancing game stories and player immersion through various Asktao IP derivatives,
including novels, audiobooks, merchandise, and short films. From 2018 to 2021, Asktao
(Mobile) successively released two official novels, Asktao: Dashing Spear and Asktao: Tao
in the Heart. The Company invited dozens of veteran players to participate in creative
discussions and trial readings for the novels, aiming to authentically represent the world of
Asktao (Mobile) as envisioned by the players. In November 2023, adopting a "Co-creation
with Fellow Daoists" approach, the Company launched the first animated series of Asktao
(Mobile) titled Wulong Daoist Adventures in Zhongzhou. This series faithfully reproduces
classic scenes and NPC characters from the game, presenting players with a more diverse
and immersive gaming world.
  Overmortal is a unique Taoist immortality cultivation-themed IP which is enhanced by
music recordings, comics, novels, animations, and more. Since its launch in 2022, the
derivative IP animation has been consistently updated on platforms such as TikTok,
Kuaishou, and Bilibili. The cumulative fan base across all platforms has exceeded 3.2 million.
Additionally, the game continues to engage and retain users through a long -term strategy of
IP content. It has released brand documentaries such as the film Ordinary Yet Extraordinary,
the comic Overmortal, the audiobook Between Demon and Immortal, the game's theme
song, animation, and more, all of which have received widespread acclaim from players.
     Based on the characteristics of games and players, the Company frequently
collaborates with products that have a high overlap with the target user base to conduct joint
activities. This approach aims to attract more user attention and recognition. Collaborative
partners include games, novels, animated films, online animated series, and other well -
known IPs.
     During the reporting period, Asktao (Mobile) collaborated with Journey to the West for
its 8th anniversary event, introducing a Monkey King-themed costume and releasing a re-
arranged version of Dare to Ask Where Is the Road (theme song of the series Journey to the
West) performed with traditional Chinese instruments. Aobi Island: Dreamland maintained
frequent content updates, its collaborated with multiple well-known IPs/brands, including the
Palace Museum¡¯s The World of the Palace, Sherlock Holmes and Balala the Fairies,
launching a series of exciting activities to provide players with a rich gaming experience.
     The Company¡¯s high-quality, unique, and intriguing games have earned the recognition
from leading platforms such as the App Store and TapTap. The Company is regularly
featured in its charts, attracting a significant number of downloads and earning widespread
attention. In addition, players' ratings and discussions on these platforms have further
increased its games' popularity. During the reporting period, several of the Company¡¯s games,
including Asktao (Mobile), Overmortal, Aobi Island: Dreamland, World Flipper, Chinese
Cuisine Cruise were featured on popular platforms such as the App Store.
     The Company leverages its excellent product quality to drive word-of-mouth marketing
through various third-party game platforms, recommendations from KOCs (key opinion
consumers), WeChat accounts, QQ groups, and its official channels. The Company¡¯s
approach includes user selection, expectation management, feature communication, and
user feedback tracking to refine and improve its operations.
     £¨III£© Discussion and Analysis of Business Operations
     i. Major Product Performance
     Overview of Launched Products:
                                 In-house
          Name                                                       Genre              Release Date
                            Developed/Licensed
       Asktao (PC)           In-house Developed             Turn-Based M M ORPG          April, 2006
     Asktao (M obile)        In-house Developed             Turn-Based M M ORPG          April, 2016
                                                             Idle Taoist Immortality
       Overmortal            In-house Developed                                        February, 2021
                                                                Cultivation Game
  Aobi Island: Dreamland          Licensed                     Casual Simulation         July, 2022
                                                           First-Person Shooting PC
  Outpost: Infinity Siege    In-house Developed                                         M arch, 2024
                                                                     Game
   M onster Never Cry        In-house Developed           Western Fantasy Idle Game     M arch, 2024
                                                          Fantasy Roguelike Shooting
      Dragon POW!                 Licensed                                              August, 2023
                                                                    Game
 Chinese Cuisine Cruise           Licensed                Business Simulation Game      January, 2024
  Funny Fighters: Battle
                             In-house Developed            Casual Competitive RPG        July, 2019
        Royale
                            Licensed, in Charge of
      World Flipper               Localization             RPG with Pinball Element     October, 2021
                                 Development
       Gumballs                   Licensed                 Roguelike and Simulation    December, 2016
Note: £¨1£©All the games are mobile games except Asktao (PC) and Outpost: Infinity Siege.
£¨2£©The products in the table are sorted according to their importance and operational
performance.
     The Company¡¯s first self-developed PC game, Asktao (PC), was launched in April 2006
and quickly became a favorite among gamers, even reaching a peak of nearly one million
concurrent users. The game's excellence was recognized with the Best Design for Digital
Balance and the Best 2D (characters/scenes) Art Design awards at the 5th annual CGDA
(China Game Developers Awards). It was also nominated as one of the Top 10 Outstanding
PC Games in 2022 by CADPA (China Audio-Video and Digital Publishing Association).
     Since its release in 2006, Asktao (PC) has won players' hearts with its high-quality
gameplay and reasonable commercialization design. To prolong the game's life cycle and
increase its IP value, the Company adapts to market trends and player feedback to update
the game consistently. Every year, the Company release four major updates, the new year,
annual, mid-year, and zodiac updates, to keep the game fresh and maintain its profitability.
     In April 2016, the Company launched Asktao (Mobile), an in-house developed MMORPG.
It retains the narrative and world setting of Asktao (PC). Harnessing the loyal user base and IP
value the PC version built over the past decade, and with extensive user research, it was
deeply optimized to adapt its core gameplay to the mobile platform. The Company also
incorporates user feedback into regular updates to ensure the game meets player expectations.
To extend the game's life cycle, the Company persistently work on enhancing the Asktao brand
and its IP value.
     Due to its exceptional performance, Asktao (Mobile) has gained industry recognition, and
was chosen as the 6th game to win the China Excellent Publication Award (Audio -Visual
Electronic Game Publication) from the CADPA. It also won several other awards as well,
including Best Original Mobile Game at the 2016 Golden Plume Awards, and Best Game Mus ic
Design at the 9th CGDA. It was voted one of the Top Ten Most Popular Original Mobile Online
Games of 2016.
     In 2024, Asktao (Mobile) continued its long-term stable operation strategy. In January, the
game launched the New Year update. In April, the game celebrated its 8th anniversary with
new features such as new costumes, anniversary pets, and special gift packs. The anniversary
celebration also included a grand gala, which attracted a large number of viewers and
maintained high levels of engagement and popularity. In July, the summer update was released,
featuring new costumes and companion pets, as well as upgrades to the game's casual
gameplay and benefits, providing players with a refreshed game experience. Additionally, apart
from the New Year, Anniversary, Summer, and National Day updates, the Company plans to
introduce a special update in November to enrich the game's content for players.
     In June 2024, Asktao (Mobile) launched its official community app, Asktao in Hand. This
app provides players with a convenient interactive platform for accessing game news, sharing
experiences, and directly communicating with the planning team, making it easier for players to
immerse themselves in the "Asktao" universe.
     During the reporting period, Asktao (Mobile) maintained an average ranking of 35th on
the App Store's bestselling game list, with a peak ranking of 10th.
     Overmortal is an in-house developed, idle Taoist immortality cultivation mobile game
with a traditional Chinese ink wash art style. The game depicts a Taoist realm inhabited by
humans, immortals, monsters, and demons. It faithfully recreates the stages and
mechanisms of Taoist spiritual cultivation, as well as displaying abilities and techniques from
similar novels of the genre. Accompanied by dynamic lighting and sound effects, players will
enjoy an immersive and engaging gaming experience.
     With outstanding game development and operational performance, Overmortal has
received high industry recognition, winning awards such as the Best Concept Art Design
award at the 12th CGDA, the Best Creativity for Mobile Games award at the 14th CGDA, and
nominations for the Top 10 Outstanding Creative Games and Top 10 Emerging Games by
the CADPA in 2021. The production team received the "Jury's Choice Game Production
Team Award" at the 15th CGDA Outstanding Game Producer Competition and was honored
with the "Outstanding Game Studio of the Year Award" at the 8th Golden Gyro Award. In
public welfare project. It has successfully implemented various intangible cultural heritage
public welfare activities, including cuju (ancient Chinese football), paper cutting, Peking opera,
shadow puppetry, and more. The game was honored with the "Outstanding Cultural Heritage
Game of the Year" award at the 8th Golden Gyro Award.
     After over three years of operation, Overmortal has accumulated over 26 million
registered users. In the subsequent operational strategy, the Company will focus more on
existing users, refining user acquisition to reduce inefficient spending. In terms of promotio n,
there will be a continued emphasis on brand exposure, moderate adjustments and control of
performance-based advertising expenses, and active exploration of innovative marketing
methods. For user operations, activities such as daily live streaming, Key Opinion Consumer
(KOC) promotion, content creation, e-commerce initiatives, and community re-engagement
will be carried out to continually enhance user engagement and interaction. Simultaneously,
Overmortal will persist in IP development, enriching game content with diverse derivative
materials such as novels, music, comics, and animations to boost brand influence and foster
a unique IP culture recognition among players.
     During the reporting period, Overmortal maintained a steady update pace, continuously
launching various events and versions, and introduced a new cultivation path, which received
positive feedback from players. Overmortal maintained an average ranking of 67th on the
App Store's bestselling game list, with a peak ranking of 27th.
     Aobi Island: Dreamland is a casual mobile game based off an existing IP launched on
July 12, 2022. The game retains many iconic elements from its web -based predecessor,
while introducing various social interaction features and integrating fas hion trends such as
modernized Chinese traditional styles. Players can engage in various in-game features such
as character development, management simulation, and outfit changing. The game has been
updated at a rapid pace since its release, providing players with a fresh and varied gaming
experience.
     Since its launch, the game has maintained a rapid iteration and update pace,
continuously introducing new events, gameplay features, and various brand/IP collaborations ,
providing players with a diverse and enriching gaming experience.
     ii. Overview of Main Reserve Products
     The Company's main reserve products are as follows£º
                           Main Reserve Products (In-house Developed)
    Products
                       Status of Game                              Planned Regions for Estimated
  Developed In-                                   Genre
                       ISBN Licensing                                    Release       Release Date
     House
                                                                      M ainland China,
                                                Idle Taoist
  Immortal Sword        ISBN License                                Hong Kong, M acao,
                                                Cultivation                                      TBD
 (Codename M 72)          Obtained                                     Taiwan, and
                                                Simulation
                                                                      Southeast Asia
                                                                      M ainland China,
                                                                    Hong Kong, M acao,
 Scepter and Sword      ISBN License           Fantasy Idle                                   First Half of
                                                                    and Taiwan, as well
 (Codename M 88)          Obtained           Cultivation Game                                     2025
                                                                    as Japan and South
                                                                           Korea
                        ISBN License
   Fortress Battle                          Tower Defense SLG           Worldwide                TBD
                          Obtained
                                             Western Fantasy
 M 11 (Codename)     ISBN License Applied                               Worldwide                TBD
                                               Idle Game
Note: The ISBN License is a mandatory government approval required to legally launch a
game in China.
                                 Main Reserve Products (Licensed)
                           ISBN                                   Authorized        Estimated Release
   Licensed Products                        Genre
                          License                                  Regions                 Date
   League of Gods£º
                           Owned        Chinoiserie RPG         M ainland China           Oct 18th,2024
      Fantasyland
                                 Main Reserve Products (Licensed)
                            ISBN                                Authorized         Estimated Release
   Licensed Products                        Genre
                           License                               Regions                  Date
                                       Science Fiction
                                     Theme Card Game
    Billion Light Years    Owned                                 Worldwide                TBD
                                       with Light SLG
                                          Elements
Stone Heros: Squad Saga     Owned     Strategy Card Battle   Europe and America           TBD
                                         Urban Horror
     Echoes of Vision      Owned                               M ainland China     Second Half of 2024
                                        M ystery Strategy
                                      Business Simulation
  Super Kairo M anager     Owned                              M ainland China             TBD
                                            Game
                                            Simulation
                                          M anagement
  Kingdom Adventurers      Owned                              M ainland China      Second Half of 2024
                                       Strategy and RPG
                                          Progression
Note: 1. The final launch status, timing, and intended release regions of games listed in the
product reserve inventory are subject to uncertainty and may depend on products and market
conditions. Please stay up to date with the latest news and announcements from Leiting
Games.
provisional and does not represent the final official name.
     The introduction of some reserve products is as follows:
     Immortal Sword (Codename M72) is an idle mobile game with a Taoist immortality
theme. You start as a novice Taoist and gradually grow into an important member of your
sect, engaging in breathtaking adventures across three realms. The game brings to life 3D
aerial combat, recreating the mid-air battles and the use of magical talismans, reminiscent of
renowned Chinese fantasy tales. The game has obtained its ISBN license and will conduct a
test in the third quarter of 2024. The official launch date is to be determined.
     Scepter and Sword (Codename M88) is an immersive idle MMORPG mobile game.
Within the game, players have the freedom to customize their characters, combine diverse
skillsets, and select their preferred class branches. Employing strategies to combat
formidable foes, players explore the realm of lost mysterious legends in this world of sword
and magic. You can build your own homes, engage in guild activities, participate in team
battles, and embark on adventurous journeys with other players, relaxing in the laid-back idle
gaming experiences. The game has obtained its ISBN license and is scheduled to be
launched in the first half of 2025.
     iii. Overseas Business Overview
     The Company has been actively expanding its overseas business. In terms of research
and development, apart from a few reserved domestic IP-based products, the Company
requires all in-house developed products must be targeted towards overseas markets to be
considered for approval. In terms of operation, the Company has established a testing and
operation system covering most countries and regions worldwide. Additionally, localization
teams deeply participate in the game development process to ensure that the products meet
the preferences of different regional markets and players.
     From January to June 2024, the Company's overseas business achieved operating
revenue of RMB 255.03 million, representing a year-on-year growth of 113.77%. During the
Reporting Period, the Company successfully launched products overseas, including Monster
Never Cry, Dragon POW!(Overseas version), Outpost: Infinity Siege(Steam).
     Furthermore, several in-house developed products from the Company have undergone
multiple rounds of testing in overseas markets, adopting the MVP approach for rapid iteration.
The Company also has a reserve of several licensed products for overseas distribution,
including Scepter and Sword (Codename M88), Stone Heros: Squad Saga, Billion Light Year,
and more.
     iv. Investment Activities Overview
     The Company continues to deepen its presence in the game market, focusing on the
research and development as well as operational aspects of online game. Simultaneously, it
invests in upstream and downstream enterprises related to the game industry, including high-
quality game developers, publishers, and industry funds.
     Below are introductions to some of the enterprises in which the Company has invested
or holds shares:
     Qingci Games, established in March 2012, specializes in online game development and
operations. It's known for The Marvelous Snail, the idle mobile game with a beautiful hand-
drawn art style, and the roguelike game Gumballs. It was listed on the Hong Kong Exchanges
in December 2021, and G-bits holds an 18.55% stake in Qingci Games.
     As of the end of 2023, the total revenue of The Marvelous Snail both domestically and
internationally has reached approximately RMB 3.26 billion, with a cumulative registered user
count exceeding 26.72 million.
     Tap Tap, founded in March 2016, manages the TapTap platform. G-bits holds a 9.67%
stake in TapTap. TapTap platform is a renowned third -party platform connecting game
developers, publishers, and players, allowing users to download high-quality games and
share their experiences with others.
     Xiamen Yongshi Technology Co., Ltd., established in December 2014, focuses on
online game development and operation. G-bits holds a 20.00% stake in Xiamen Yongshi.
Azure Lane, an anime-style game co-developed by Xiamen Yongshi, is the first domestically
produced second-dimensional game to top the Japanese iOS bestselling list. Its in-house
developed game, Eye of Deep Space has garnered over 0.14 million five-star reviews on the
App Store. Xiamen Yongshi is listed on the NEEQ. According to its 2023 annual report, it
generated a net profit of RMB 87.20 million.
     Established in June 2013, Xiamen Taojin Interactive Network Co., Ltd. focuses on
online game development and production. Xiamen Taojin created the popular roguelike
series Dungeon Survivor. G-bits holds a 30.00% stake in Xiamen Taojin. Xiamen Taojin is
listed on the NEEQ. According to its 2023 annual report, it generated a net profit of RMB
     Xiamen Zhenyouqu Information Technology Co., Ltd., established in August 2012,
mainly develops and produces online games. G-bits holds a 10.00% stake in Xiamen
Zhenyouqu. It has numerous popular games such as Sausage Party, Ulala: Idle Adventure,
and Rapid Clash. In particular, Sausage Party has over 240 million downloads on TapTap.
     Unity Technologies China, established on November 29, 2021, is a joint venture of US-
based game engine developer Unity Technologies. G-bits holds a 1.6% stake in Unity
Technologies China. Founded in 2004, Unity Technologies is one of the leading engine
development companies in the industry. Unity Technologies China is committed to creating a
more suitable engine version for Chinese developers, and its products have extensive
applications in various fields such as gaming, automotive, consumer culture and tourism,
industrial manufacturing, and film and animation. In 2023, Unity Technologies China officially
launched the Unity Technologies China Edition Engine.
     PeroPeroGames, founded in August 2017, mainly develops and produces online games.
G-bits holds a 15.00% stake in PeroPeroGames. Its parkour-themed music game Muse Dash
has accumulated sales exceeding 10 million copies, and it boasts a positive user review on
the Steam.
                                   Part IV Financial Statements
                    CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                      As at 30 June 2024
Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
                                                                                     Unit: RMB Yuan
                           Item                               30 June 2024         31 December 2023
Current assets
 Cash and Cash equivalents                                      2,166,411,990.84     2,397,018,382.09
 Settlements Provision
 Loans to banks and other financial institutions
 Financial assets held for trading                              1,694,451,974.41     1,125,621,695.38
 Derivative financial assets
 Notes receivable
 Accounts receivable                                              249,970,431.59      238,756,746.14
 Financing receivables
 Prepayments                                                       28,025,557.49        21,422,780.34
 Insurance premium receivable
 Due from reinsurers
 Receivable reinsurance contract reserve
 Other receivables                                                  9,740,235.97         5,599,445.09
   Including: Interest receivable
               Dividends receivable                                 3,600,000.00
 Financial assets purchased under agreements to resell
 Inventories
 Contract assets
 Assets classified as held for sale
 Current portion of non-current assets                             10,759,554.45        11,536,441.92
 Other current assets                                              13,809,526.60        11,746,515.71
Total current assets                                            4,173,169,271.35     3,811,702,006.67
Non-current assets
 Loans and advances
 Debt investment
 Other debt investments
 Long-term receivables                                             10,021,236.41        11,908,237.48
 Long-term equity investments                                   1,143,490,291.09     1,164,814,123.76
 Other equity instruments investments
 Other non-current financial assets                               614,056,419.81      620,273,547.42
 Investment properties                                            163,544,055.80      170,713,042.03
 Fixed assets                                                     579,723,394.28      596,402,026.29
 Construction in progress                                           7,653,698.17        1,660,948.61
 Productive biological assets
 Oil and gas assets
 Right-of-use asset                                                31,391,772.66        36,327,899.47
 Intangible assets                                                 68,936,948.49        69,766,821.60
 Development expenditures
 Goodwill                                                           3,808,266.80         3,808,266.80
 Long-term prepaid expenses                                        10,400,252.00        20,045,631.47
 Deferred tax assets                                               90,640,169.23        83,259,745.81
 Other non-current assets                                          44,845,270.24        46,088,941.01
Total non-current assets                                        2,768,511,774.98     2,825,069,231.75
Total assets                                                    6,941,681,046.33     6,636,771,238.42
Current liabilities
 Short-term borrowings
 Borrowing from the central bank
                                 Item                        30 June 2024         31 December 2023
 Deposits and balances from banks and other financial
 institutions
 Financial liabilities held for trading
 Derivative financial liabilities
 Notes payable
 Accounts payable                                                171,816,896.10      188,815,811.08
 Receipts in advance                                                 110,212.29          501,832.24
 Contract liabilities                                            494,956,541.14      417,007,621.68
 Financial assets sold under agreements to buy
 Customer deposits and balances from banks and other
 financial institutions
 Customer brokerage deposits
 Securities underwriting brokerage deposits
 Payroll and employee benefits payable                           391,961,788.72      455,196,050.52
 Taxes payable                                                   202,417,107.70      182,803,660.02
 Other payables                                                   34,935,807.54       34,516,136.28
    Including: Interest payable
                Dividend payable
 Fees and commission payable
 Payable reinsurance
 Liabilities classified as held for sale
 Current portion of non-current liabilities                       11,299,456.43        10,800,876.22
 Other current liabilities                                        14,644,555.10        13,186,313.60
Total current liabilities                                      1,322,142,365.02     1,302,828,301.64
Non-current liabilities
 Insurance reserves
 Long-term borrowings
 Bonds payable
    Including: Preference share
                Perpetual debt
 Lease liabilities                                                23,744,423.82        28,132,847.55
 Long-term Payable
 Long-term payroll and employee benefits payable
 Provisions
 Deferred income                                                     145,775.64           159,642.70
 Deferred tax liabilities                                            764,082.11           705,651.53
 Other non-current liabilities                                    49,327,426.30        57,336,347.24
 Total non-current liabilities                                    73,981,707.87        86,334,489.02
Total liabilities                                              1,396,124,072.89     1,389,162,790.66
Shareholders' equity:
 Paid-in capital                                                  72,041,101.00        72,041,101.00
 Other equity instruments
    Including: Preference share
                Perpetual debt
 Capital reserve                                               1,400,913,027.92     1,400,918,753.30
 Less: treasury shares                                            44,728,187.00
 Other comprehensive income                                       79,094,885.87        73,375,545.86
 Special reserve
 Surplus reserve                                                  36,020,550.50        36,020,550.50
 General reserve
 Retained earnings                                             3,399,313,670.46     2,881,486,077.30
 Equity attributable to shareholders of the Company            4,942,655,048.75     4,463,842,027.96
 Non-controlling interests                                       602,901,924.69       783,766,419.80
 Total shareholders¡¯ equity                                    5,545,556,973.44     5,247,608,447.76
Total liabilities and shareholders¡¯ equity                     6,941,681,046.33     6,636,771,238.42
Legal Representative: LU Hongyan          Chief Accountant: LIN Jiajin        Head of Accounting Department:
CHEN Hualiang
                       COMPANY STATEMENT OF FINANCIAL POSITION
                                      As at 30 June 2024
Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
                                                                                               Unit: RMB Yuan
                           Item                                          30 June 2024         31 December 2023
Current assets
 Cash and Cash equivalents                                                   159,476,963.35        172,514,364.01
 Financial assets held for trading                                           480,044,358.38        328,976,474.94
 Derivative financial assets
 Notes receivable
 Accounts receivable                                                          20,834,088.52         45,693,275.98
 Financing receivables
 Prepayments                                                                     853,778.15          1,158,216.36
 Other receivables                                                            50,998,240.38         70,829,561.42
   Including: Interest receivable
                 Dividends receivable                                         40,736,500.00         69,977,500.00
 Inventories
 Contract assets
 Assets classified as held for sale
 Current portion of non-current assets                                         5,317,202.49          5,555,356.97
 Other current assets                                                            425,146.89            383,623.67
Total current assets                                                         717,949,778.16        625,110,873.35
Non-current assets
 Debt investment
 Other debt investments
 Long-term receivables                                                         2,055,758.13          2,486,121.17
 Long-term equity investments                                              2,236,427,191.12      2,150,458,973.88
 Other equity instruments investments
 Other non-current financial assets                                          141,941,611.33        148,546,250.01
 Investment properties                                                       272,525,905.75        283,235,747.11
 Fixed assets                                                                  9,592,014.04         10,328,855.38
 Construction in progress
 Productive biological assets
 Oil and gas assets
 Right-of-use asset
 Intangible assets                                                              326,689.11             423,898.63
 Development expenditures
 Goodwill
 Long-term prepaid expenses                                                     281,324.75             364,995.95
 Deferred tax assets
 Other non-current assets
Total non-current assets                                                   2,663,150,494.23      2,595,844,842.13
Total assets                                                               3,381,100,272.39      3,220,955,715.48
Current liabilities
 Short-term borrowings
 Financial liabilities held for trading
 Derivative financial liabilities
 Notes payable
 Accounts payable                                                              2,446,467.64          3,091,805.96
 Receipts in advance                                                              48,753.84            534,094.42
 Contract liabilities                                                         19,866,957.50         19,695,860.98
 Payroll and employee benefits payable                                        81,289,590.13        103,614,920.85
 Taxes payable                                                                22,250,566.73         27,210,531.94
                               Item                                 30 June 2024            31 December 2023
 Other payables                                                           4,572,076.09            5,012,208.17
   Including: Interest payable
                 Dividend payable
 Liabilities classified as held for sale
 Current portion of non-current liabilities
 Other current liabilities                                                1,689,723.73            1,454,183.60
Total current liabilities                                               132,164,135.66          160,613,605.92
Non-current liabilities
 Long-term borrowings
 Bonds payable
   Including: Preference share
                 Perpetual debt
 Lease liabilities
 Long-term payable
 Long-term payroll and employee benefits payable
 Provisions
 Deferred income                                                              145,775.64            151,675.64
 Deferred tax liabilities
 Other non-current liabilities                                            1,791,927.05            1,777,206.67
Total non-current liabilities                                             1,937,702.69            1,928,882.31
Total liabilities                                                       134,101,838.35          162,542,488.23
Shareholders¡¯ equity£º
 Paid-in capital                                                            72,041,101.00        72,041,101.00
 Other equity instruments
   Including: Preference share
                 Perpetual debt
 Capital reserve                                                      1,210,013,511.42        1,210,019,236.80
 Less: treasury shares                                                   44,728,187.00
 Other comprehensive income                                                 -24,035.06              -24,035.06
 Special reserve
 Surplus reserve                                                         36,020,550.50           36,020,550.50
 Retained earnings                                                    1,973,675,493.18        1,740,356,374.01
Total shareholders¡¯ equity                                            3,246,998,434.04        3,058,413,227.25
Total liabilities and shareholders¡¯ equity                            3,381,100,272.39        3,220,955,715.48
Legal Representative: LU Hongyan             Chief Accountant: LIN Jiajin          Head of Accounting
Department: CHEN Hualiang
                           CONSOLIDATED INCOME STATEMENT
                             For the six months ended 30 June 2024
Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
                                                                                            Unit: RMB Yuan
                                  Item                                     H1 2024               H1 2023
 Including: Operating revenue                                           1,959,649,131.75      2,348,924,659.16
             Interest income
             Net earned premiums
             Net fee and commission revenue
 Including: Cost of sales                                                 230,937,298.45        269,653,185.81
               Interest expenses
               Fees and commission expenses
               Surrenders
               Net payments for insurance claims
               Net provision of insurance reserve
                                     Item                                  H1 2024             H1 2023
                 Policyholder dividends
                 Reinsurance expenses
                 Taxes and surcharges                                       12,091,873.72     13,817,803.01
                 Selling expenses                                          537,604,809.95    643,496,326.15
                 General and administrative expenses                       180,079,270.17    195,040,040.65
                 Research and development expenses                         391,149,398.94    369,828,064.89
                 Financial expenses                                        -69,567,664.10   -119,533,664.91
                  Including: Interest expense                                  896,207.32        651,783.12
                              Interest income                               49,338,496.86     45,750,292.34
Add: Other income                                                           11,732,001.03     36,216,535.75
        Investment income/(loss)                                            90,032,854.68     67,632,401.01
         Including: Share of profits or loss of associates and joint
ventures
                    Gain from derecognition of financial assets
measured at amortized cost
        Exchange gains or losses
        Net exposure hedging gains/ (losses)
        Gain/ (loss) on the changes in fair value                           -2,268,121.06       1,012,585.46
        Credit impairment losses                                              -407,959.61         957,606.19
        Assets impairment losses                                           -41,887,915.72        -149,355.22
        Gain/ (loss) from disposal of assets                                   -15,567.10         161,357.95
  Add: Non-operating income                                                    751,447.96         193,954.18
  Less: Non-operating expenses                                               1,092,566.08       1,261,219.80
  Less: Income tax expense                                                 109,522,329.41     187,643,728.41
(1) Categorized by operation continuity
    Net profit from continuing operations                                  624,675,989.31    893,743,040.67
    Net profit from discontinuing operations
(2) Categorized by ownership
    Net profit attributable to shareholders of the Company                 517,827,593.16    675,971,006.54
    Net profit attributable to non-controlling interests                   106,848,396.15    217,772,034.13
  (1) Other comprehensive income, net of tax, attributable to
shareholders of the Company
     (i) Other comprehensive income that will not be reclassified to
profit or loss
        Remeasurement gains or losses of a defined benefit plan
        Other comprehensive income using the equity method that will
not be reclassified to profit or loss
        Changes in fair value of other equity instrument investments
        Changes in fair value of enterprise's own credit risk
     (ii) Other comprehensive income to be reclassified to profit or
loss
        Other comprehensive income that can be reclassified to profit
or loss in equity method
        Changes in fair value of other debt investments
        Amount of financial assets reclassified into other
comprehensive income
        Provision for credit impairment of other debt investments
        Cash flow hedging reserves (effective part of profit and loss of
cash flow hedging)
        Exchange differences on translation of foreign currency
financial statements
        Others
  (2) Other comprehensive income, net of tax, attributable to non-            287,108.74        1,434,839.07
                                Item                                           H1 2024              H1 2023
controlling interests
  Total comprehensive income attributable to shareholders of the
Company
  Total comprehensive income attributable to non-controlling
interests
  Basic earnings per share (yuan / share)                                                7.18                 9.40
  Diluted earnings per share (yuan / share)                                              7.18                 9.39
Legal Representative: LU Hongyan               Chief Accountant: LIN Jiajin         Head of Accounting
Department: CHEN Hualiang
                             INCOME STATEMENT OF COMPANY
                             For the six months ended 30 June 2024
Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
                                                                                                Unit: RMB Yuan
                               Item                                      H1 2024                    H1 2023
Less: Total cost of sales                                                  25,428,002.75            24,331,834.66
         Taxes and surcharges                                               2,636,055.87             2,380,122.39
         Selling expenses
         Administrative expenses                                              26,677,440.36         31,248,373.61
         Research and development expenses                                    69,169,866.33         72,013,475.11
         Finance expenses                                                     -2,367,777.20         -5,433,832.03
           Including: Interest expenses (expressed with positive
value)
                     Interest income (expressed with positive
value)
Add: Other income                                                           1,827,938.26            23,071,223.30
       Investment income/(loss)                                           162,678,906.70           405,947,008.66
       Including: Share of profits or loss of associates and joint
                                                                              -1,823,242.76           -414,794.00
ventures
                    Gain from derecognition of financial assets
measured at amortized cost
       Net exposure hedging gains/ (losses)
       Gain/ (loss) on the changes in fair value                              -4,702,386.92         -2,493,559.21
       Credit impairment losses                                                1,359,209.23            302,347.91
       Assets impairment losses
       Gain/ (loss) from disposal of assets                                       979.59                   419.03
Add: Non-operating income                                                       6,863.31                 5,795.58
Less: Non-operating expenses                                                  440,453.54               255,057.24
Less: Income tax expense                                                   10,007,510.05            16,026,823.63
(1) Net profit from continuing operations                                 233,319,119.17           474,702,292.21
(2) Net profit from discontinuing operations
(1) Other comprehensive income, net of tax
   Other comprehensive income that will not be reclassified to
profit or loss
   Other comprehensive income using the equity method that
will not be reclassified to profit or loss
   Changes in fair value of other equity instrument investments
   Changes in fair value of enterprise's own credit risk
                                Item                                    H1 2024                 H1 2023
(2) Other comprehensive income to be reclassified to profit or
loss
    Other comprehensive income that can be reclassified to
profit or loss in equity method
    Changes in fair value of other debt investments
    Amount of financial assets reclassified into other
comprehensive income
    Provision for credit impairment of other debt investments
    Cash flow hedging reserves (effective part of profit and loss
of cash flow hedging)
    Exchange differences on translation of foreign currency
financial statements
    Others
(1) Basic earnings per share (yuan / share)
(1) Diluted earnings per share (yuan / share)
Legal Representative: LU Hongyan              Chief Accountant: LIN Jiajin        Head of Accounting
Department: CHEN Hualiang
                       CONSOLIDATED STATEMENT OF CASH FLOWS
                             For the six months ended 30 June 2024
Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
                                                                                            Unit: RMB Yuan
                                    Item                                     H1 2024             H1 2023
 Cash receipts from the sale of goods and the rendering of services      2,109,069,807.56     2,362,948,931.09
 Net increase in customer bank deposits and due to banks and other
financial institutions
 Net increase in loans from the central bank
 Net increase in funds borrowed from other financial institutions
 Cash premiums received on original insurance contracts
 Net cash received from re-insurance business
 Net increase in deposits and investments from insurers
 Cash received from interest, fees and commission
 Net increase in funds deposit
 Net increase in repurchase business funds
 Net income from securities trading brokerage business
 Tax refunds received
 Cash received relating to other operating activities                       79,281,353.25        96,462,452.54
                          Sub-total of cash inflows                      2,188,351,160.81     2,459,411,383.63
 Cash paid for purchase of goods and services                              247,940,247.16       387,513,135.80
 Net increase in loans and payments on behalf of customers
 Net increase in deposits with central bank and other financial
institutions
 Payments for claims for original insurance contracts
 Net increase in funds lent
 Cash paid for interest, fees and commission
 Commissions on insurance policies paid
 Cash paid to and on behalf of employee                                    636,179,184.28       610,711,025.42
 Cash paid for taxes                                                       184,541,237.26       268,724,511.21
 Cash paid relating to other operating activities                          525,407,299.68       590,812,870.56
                         Sub-total of cash outflows                      1,594,067,968.38     1,857,761,542.99
                   Net cash flows from operating activities                594,283,192.43       601,649,840.64
                                   Item                                      H1 2024               H1 2023
 Cash received from disposal of investments                               4,012,416,677.89      2,181,050,000.00
 Cash received from investment income                                        41,830,800.38         62,707,662.00
 Net proceeds from disposal of property, plant and equipment,
intangible assets and other long-term assets
 Cash received from disposal of subsidiaries and other business
units
 Cash received relating to other investing activities
                         Sub-total of cash inflows                        4,054,322,652.27      2,243,758,972.00
 Purchase of property, plant and equipment, intangible assets and
other non-current assets
 Cash paid for investments                                                4,549,776,111.00      2,756,960,000.00
 Net increase in secured loans
 Net cash paid for acquisition of a subsidiary and other operating
units
 Cash paid relating to other investing activities
                        Sub-total of cash outflows                        4,564,591,917.55      2,798,006,523.24
                 Net cash flows from investing activities                  -510,269,265.28       -554,247,551.24
 Cash received from investment                                                                    63,743,604.71
 Including: Cash receipts from capital contributions from non-
controlling interests of subsidiaries
 Proceeds from borrowings
 Cash receipts relating to other financing activities
                         Subtotal of cash inflows                                                 63,743,604.71
 Repayments for debts
 Cash payments for distribution of dividends or profit and interest
expenses
    Including: Dividends or profit paid to non-controlling shareholders
of subsidiaries
 Cash payments relating to other financing activities                         50,775,977.23        3,607,844.95
                        Subtotal of cash outflows                            338,775,977.23      432,523,956.95
                 Net cash flows from financing activities                   -338,775,977.23     -368,780,352.24
equivalents
 Add: Cash and cash equivalents at beginning of year                      2,395,180,751.59      2,622,640,821.07
Legal Representative: LU Hongyan             Chief Accountant: LIN Jiajin          Head of Accounting
Department: CHEN Hualiang
                          COMPANY STATEMENT OF CASH FLOWS
                             For the six months ended 30 June 2024
Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
                                                                                              Unit: RMB Yuan
                                 Item                                        H1 2024               H1 2023
Cash receipts from the sale of goods and the rendering of services          219,817,551.74       176,479,019.30
Tax refunds received
Cash received relating to other operating activities                         21,633,410.97        42,120,414.02
                       Sub-total of cash inflows                            241,450,962.71       218,599,433.32
Cash paid for purchase of goods and services                                  3,990,743.14         1,563,337.97
Cash paid to and on behalf of employee                                      120,345,737.91       120,964,069.28
Cash paid for taxes                                                          29,716,404.17        40,189,771.25
Cash paid relating to other operating activities                             12,396,420.60        13,796,480.26
                      Sub-total of cash outflows                            166,449,305.82       176,513,658.76
                                  Item                                      H1 2024            H1 2023
                Net cash flows from operating activities                    75,001,656.89      42,085,774.56
Cash received from disposal of investments                                 963,000,000.00     210,000,000.00
Cash received from investment income                                       196,347,646.75     286,022,510.83
Net proceeds from disposal of property, plant and equipment,
intangible assets and other long-term assets
Cash received from disposal of subsidiaries and other business units
Cash received relating to other investing activities
                       Sub-total of cash inflows                          1,159,347,646.75    496,022,510.83
Purchase of property, plant and equipment, intangible assets and
other non-current assets
Cash paid for investments                                                 1,202,291,460.00    436,100,000.00
Cash Paid for disposal of subsidiaries and other business units
Cash paid relating to other investing activities
                      Sub-total of cash outflows                          1,202,702,214.65    438,992,637.93
                Net cash flows from investing activities                    -43,354,567.90     57,029,872.90
Cash received from investment                                                                  63,743,604.71
Proceeds from borrowings
Cash receipts relating to other financing activities
                        Subtotal of cash inflows                                               63,743,604.71
Repayments for debts
Cash payments for distribution of dividends or profit and interest
expenses
Cash payments relating to other financing activities                         44,733,912.38        122,760.30
                       Subtotal of cash outflows                             44,733,912.38    225,038,872.30
                Net cash flows from financing activities                    -44,733,912.38   -161,295,267.59
                                                                                  -466.16             3,783.81
equivalents
Add: Cash and cash equivalents at beginning of year                        171,682,308.46     312,508,715.23
Legal Representative: LU Hongyan           Chief Accountant: LIN Jiajin          Head of Accounting
Department: CHEN Hualiang
                                                               CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                     For the six months ended 30 June 2024
          Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
                                                                                                                                                                                                       Unit: RMB Yuan
                                                                                                                            H1 2024
                                                                                   Equity attributable to shareholders of the Company
                                                                                                                                                                                                                           Total
          Item                       Other equity instruments                          Less:           Other                                                                                         Non-controlling
                                                                                                                                                                                                                       shareholders¡¯
                                                                                                   comprehensive Special      Surplus       General      Retained                                      interests
                      Share capital preference Perpetual        Capital reserve      Treasury                                                                            Others     Subtotal
                                                         Others                                                  reserve      reserve       reserve      earnings                                                         equity
                                      share      debt                                 Shares          income
of previous year
Changes in accounting
policies
Corrections of prior
period errors
Others
beginning of the year
                                                                       -5,725.38 44,728,187.00       5,719,340.01                                      517,827,593.16              478,813,020.79 -180,864,495.11      297,948,525.68
during the period
(1) Total
comprehensive income
(2) Shareholders¡¯
contributions and                                                                  44,728,187.00                                                                                    -44,728,187.00                     -44,728,187.00
reduction
(i) Shareholders
¡®contributions in                                                                  44,728,187.00                                                                                    -44,728,187.00                     -44,728,187.00
ordinary share
(ii) Other equity
instruments
contributions
(iii) Amount of share-
based payments
recognized in equity
(iv) Others
                                                                                                                                H1 2024
                                                                                       Equity attributable to shareholders of the Company
                                                                                                                                                                                                           Total
            Item                          Other equity instruments                         Less:         Other                                                                       Non-controlling
                                                                                                                   Special        Surplus   General   Retained                                         shareholders¡¯
                           Share capital preference Perpetual        Capital reserve     Treasury    comprehensive                                               Others   Subtotal     interests
                                                              Others                                               reserve        reserve   reserve   earnings                                            equity
                                           share      debt                                Shares        income
(3). Profit distribution                                                                                                                                                             -288,000,000.00 -288,000,000.00
(i) Transfer to surplus
reserve
(ii) Transfer to general
Reserve
(iii) Distribution to
                                                                                                                                                                                     -288,000,000.00 -288,000,000.00
shareholders
(iv) Others
(4) Transfer within
equity
(i) Capital reserves
converted to share
capital
(ii) Surplus reserves
converted to share
capital
(iii) Loss made up by
surplus reserves
(iv) Changes in the
defined benefit plan
transferred to retained
earnings
(v) Other
comprehensive income
transferred to retained
earnings
(vi) Others
(5). Special reserve
(i). Additions
(ii). Utilisation
                                                                                                                               H1 2024
                                                                                      Equity attributable to shareholders of the Company
                                                                                                                                                                                                                                         Total
         Item                          Other equity instruments                           Less:         Other                                                                                                     Non-controlling
                                                                                                                  Special        Surplus        General        Retained                                                              shareholders¡¯
                        Share capital preference Perpetual        Capital reserve       Treasury    comprehensive                                                              Others         Subtotal              interests
                                                           Others                                                 reserve        reserve        reserve        earnings                                                                 equity
                                        share      debt                                  Shares        income
(6) Others                                                                -5,725.38                                                                                                                  -5,725.38                             -5,725.38
of the period
                                                                                                                           H1 2023
                                                                                 Equity attributable to shareholders of the Company
             Item                      Other equity instruments                      Less:           Other                                                                                                  Non-controlling Total shareholders¡¯
                                                                                                                Special      Surplus        General
                        Share capital preference Perpetual        Capital reserve Treasury comprehensive                                            Retained earnings Others              Subtotal            interests            equity
                                                           Others                                               reserve      reserve        reserve
                                        share      debt                             Shares          income
of previous year
Changes in accounting
policies
Corrections of prior
period errors
Others
beginning of the year
during the period
(1) Total
comprehensive income
(2) Shareholders¡¯
contributions and         174,619.00                                 65,222,087.90                                                                                                        65,396,706.90             278,776.51        65,675,483.41
reduction
(i) Shareholders
¡®contributions in         174,619.00                                 63,568,985.71                                                                                                        63,743,604.71                               63,743,604.71
ordinary share
(ii) Other equity
instruments
                                                                                                                              H1 2023
                                                                                    Equity attributable to shareholders of the Company
           Item                           Other equity instruments                      Less:           Other                                                                                    Non-controlling Total shareholders¡¯
                                                                                                                   Special      Surplus     General
                           Share capital preference Perpetual        Capital reserve Treasury comprehensive                                         Retained earnings Others    Subtotal           interests            equity
                                                              Others                                               reserve      reserve     reserve
                                           share      debt                             Shares          income
contributions
(iii) Amount of share-
based payments                                                           1,653,102.19                                                                                            1,653,102.19         278,776.51        1,931,878.70
recognized in equity
(iv) Others
(3). Profit distribution                                                                                                        79,438.00             -216,194,695.00          -216,115,257.00   -204,000,000.00     -420,115,257.00
(i) Transfer to surplus
reserve
(ii) Transfer to general
Reserve
(iii) Distribution to
                                                                                                                                                      -216,115,257.00          -216,115,257.00   -204,000,000.00     -420,115,257.00
shareholders
(iv) Others
(4) Transfer within
equity
(i) Capital reserves
converted to share
capital
(ii) Surplus reserves
converted to share
capital
(iii) Loss made up by
surplus reserves
(iv) Changes in the
defined benefit plan
transferred to retained
earnings
(v) Other
comprehensive income
transferred to retained
earnings
                                                                                                                             H1 2023
                                                                                   Equity attributable to shareholders of the Company
            Item                         Other equity instruments                      Less:           Other                                                                                       Non-controlling Total shareholders¡¯
                                                                                                                  Special      Surplus     General
                          Share capital preference Perpetual        Capital reserve Treasury comprehensive                                         Retained earnings Others        Subtotal          interests            equity
                                                             Others                                               reserve      reserve     reserve
                                          share      debt                             Shares          income
(vi) Others
(5). Special reserve
(i). Additions
(ii). Utilisation
(6) Others                                                                271,400.42                                                                                                  271,400.42          99,502.59          370,903.00
of the period
           Legal Representative: LU Hongyan                                                 Chief Accountant: LIN Jiajin                                        Head of Accounting Department: CHEN Hualiang
                                                                    COMPANY STATEMENT OF CHANGES IN EQUITY
                                                                        For the six months ended 30 June 2024
           Prepared by: G-bits Network Technology (Xiamen) Co., Ltd.
                                                                                                                                                                                                          Unit: RMB Yuan
                                                                                                                                                H1 2024
                                                                                        Other equity instruments                           Less:          Other
                                     Item                                                                                                                           Special     Surplus        Retained        Total shareholders¡¯
                                                                       Share capital preference Perpetual          Capital reserve       Treasury     comprehensive
                                                                                                            Others                                                  reserve     reserve        earnings              equity
                                                                                       share        debt                                  Shares         income
      Changes in accounting policies
      Corrections of prior period errors
      Others
                                                                                                                                           H1 2024
                                                                                    Other equity instruments                         Less:          Other
                                    Item                                                                                                                  Special   Surplus    Retained        Total shareholders¡¯
                                                                   Share capital preference Perpetual          Capital reserve     Treasury comprehensive
                                                                                                        Others                                            reserve   reserve    earnings              equity
                                                                                   share        debt                                Shares         income
(1) Total comprehensive income                                                                                                                                                233,319,119.17       233,319,119.17
(2) Shareholders¡¯ contributions and reduction                                                                                     44,728,187.00                                                     -44,728,187.00
(i)Shareholders¡¯ contributions in ordinary share                                                                                  44,728,187.00                                                     -44,728,187.00
(ii)Other equity instruments contributions
(iii) Amount of share-based payments recognized in equity
(iv) Others
(3). Profit distribution
(i) Transfer to surplus reserve
(ii) Distribution to shareholders
(iii) Others
(4) Transfer within equity
(i) Capital reserves converted to share capital
(ii) Surplus reserves converted to share capital
(iii) Loss made up by surplus reserves
(iv) Changes in the defined benefit plan transferred to retained
earnings
(v) Other comprehensive income transferred to retained
earnings
(vi) Others
(5). Special reserve
(i). Additions
(ii). Utilisation
(6) Others                                                                                                            -5,725.38                                                                          -5,725.38
                                                                                                                                        H1 2024
                                                                               Other equity instruments                           Less:          Other
                                 Item                                                                                                                  Special     Surplus        Retained        Total shareholders¡¯
                                                              Share capital preference Perpetual          Capital reserve       Treasury comprehensive
                                                                                                   Others                                              reserve     reserve        earnings              equity
                                                                              share        debt                                  Shares         income
                                                                                                                                   H1 2023
                                                                                Other equity instruments                     Less:       Other
                                      Item                                                                                                          Special    Surplus                     Total shareholders¡¯
                                                               Share capital preference Perpetual          Capital reserve Treasury comprehensive                        Retained earnings
                                                                                                    Others                                          reserve    reserve                           equity
                                                                               share        debt                            Shares      income
  Changes in accounting policies
  Corrections of prior period errors
  Others
  (1) Total comprehensive income                                                                                                                                               474,702,292.21       474,702,292.21
  (2) Shareholders¡¯ contributions and reduction                    174,619.00                                  65,500,864.41                                                                         65,675,483.41
  (i)Shareholders¡¯ contributions in ordinary share                 174,619.00                                  63,568,985.71                                                                         63,743,604.71
  (ii)Other equity instruments contributions
  (iii) Amount of share-based payments recognized in equity                                                     1,931,878.70                                                                          1,931,878.70
  (iv) Others
  (3). Profit distribution                                                                                                                                       79,438.00    -216,194,695.00      -216,115,257.00
  (i) Transfer to surplus reserve                                                                                                                                79,438.00         -79,438.00
  (ii) Distribution to shareholders                                                                                                                                           -216,115,257.00      -216,115,257.00
  (iii) Others
  (4) Transfer within equity
                                                                                                                                       H1 2023
                                                                                    Other equity instruments                     Less:       Other
                               Item                                                                                                                   Special     Surplus                           Total shareholders¡¯
                                                                   Share capital preference Perpetual          Capital reserve Treasury comprehensive                           Retained earnings
                                                                                                        Others                                        reserve     reserve                                 equity
                                                                                   share        debt                            Shares      income
(i) Capital reserves converted to share capital
(ii) Surplus reserves converted to share capital
(iii) Loss made up by surplus reserves
(iv) Changes in the defined benefit plan transferred to retained
earnings
(v) Other comprehensive income transferred to retained
earnings
(vi) Others
(5). Special reserve
(i). Additions
(ii). Utilisation
(6) Others
  Legal Representative: LU Hongyan                                                  Chief Accountant: LIN Jiajin                                     Head of Accounting Department: CHEN Hualiang