Linekong Interactive Group Co., Ltd. 藍港互動集團有限公司
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Linekong Interactive Group Co., Ltd. 藍 港 互 動 集 團 有 限 公 司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 8267) QUARTERLY RESULTS ANNOUNCEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”) GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM. Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement, for which the directors (the “Directors”) of Linekong Interactive Group Co., Ltd. (the “Company” or “we”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this announcement is accurate and complete in all material aspects and not misleading or deceptive and there are no other matters the omission of which would make this announcement or any statement herein misleading. – 1 – HIGHLIGHTS For the three months For the nine months ended September 30, ended September 30, 2016 2015 2016 2015 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue 125,362 115,919 455,387 416,869 Loss for the period (75,427) (18,982) (125,982) (9,156) Adjusted net (loss)/profit (unaudited) (65,530) (8,368) (99,422) 43,337 — Adjusted net (loss)/profit refers to the (loss)/profit which excludes share-based compensation expenses. This item is deemed as useful supplemental information as stated in the statement of comprehensive profit and loss, which reflects the profitability and operating performance of the company and its subsidiaries (collectively, the “Group”) for the financial period indicated. — Revenue of the Group for the nine months ended September 30, 2016 amounted to approximately RMB455.4 million, representing an increase of approximately 9.2% as compared to approximately RMB416.9 million for the nine months ended September 30, 2015. Revenue for the three months ended September 30, 2016 amounted to approximately RMB125.4 million, representing an increase of approximately 8.1% as compared to approximately RMB116.0 million for the three months ended September 30, 2015. — Our loss for the nine months ended September 30, 2016 amounted to approximately RMB126.0 million, as compared to a loss of approximately RMB9.2 million for the nine months ended September 30, 2015. — Our adjusted net loss for the nine months ended September 30, 2016 amounted to approximately RMB99.4 million, as compared to an adjusted net profit of approximately RMB43.3 million for the nine months ended September 30, 2015. — The board of Directors (the “Board”) do not recommend any payment of dividends for the nine months ended September 30, 2016. THIRD QUARTERLY RESULTS (UNAUDITED) The Board announces the unaudited consolidated quarterly results and the unaudited interim condensed consolidated financial statements of the Group for the nine months ended September 30, 2016 together with the comparative figures for the nine months ended September 30, 2015. The results were reviewed by the audit committee of the Company, which consists of all independent non-executive Directors and non-executive Directors, of which one independent non-executive Director as the chairman of the audit committee. – 2 – INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS)/INCOME For the nine months ended September 30, 2016 Three months ended Nine months ended September 30, September 30, 2016 2015 2016 2015 Note RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue 4 125,362 115,919 455,387 416,869 Cost of revenue (74,171) (75,201) (242,386) (255,346) Gross profit 51,191 40,718 213,001 161,523 Selling and marketing expenses (54,725) (16,978) (153,647) (134,081) Administrative expenses (23,821) (19,945) (72,179) (57,044) Research and development expenses (35,195) (30,517) (105,791) (85,285) Other gains — net 6 3,269 8,940 29,303 98,578 Operating loss (59,281) (17,782) (89,313) (16,309) Finance income — net 278 4,233 3,600 6,197 Share of loss of investments using equity accounting (8,650) (2,253) (19,654) (2,927) Loss before income tax (67,653) (15,802) (105,367) (13,039) Income tax (expense)/credit 7 (7,774) (3,180) (20,615) 3,883 Loss for the period (75,427) (18,982) (125,982) (9,156) Other comprehensive income/(loss) Items that may be subsequently reclassified to profit or loss: — Changes in fair value of available- for-sale financial assets, net of tax 398 993 (636) 993 — Less: reclassification of changes in fair value of available-for- sale financial assets to profit or loss upon disposal, net of tax (1,570) (354) (1,984) (354) — Share of other comprehensive income of investments using equity method, net of tax 246 1,105 1,108 1,105 Items that will not be reclassified to profit or loss: — Currency translation differences 4,250 31,104 16,678 30,615 Other comprehensive income for the period, net of tax 3,324 32,848 15,166 32,359 – 3 – INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS)/INCOME (Continued) For the nine months ended September 30, 2016 Three months ended Nine months ended September 30, September 30, 2016 2015 2016 2015 Note RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Total comprehensive (loss)/ income for the period (72,103) 13,866 (110,816) 23,203 Loss attributable to: Owners of the Company (75,426) (18,206) (125,980) (8,378) Non-controlling interests (1) (776) (2) (778) Loss for the period (75,427) (18,982) (125,982) (9,156) Total comprehensive (loss)/ income attributable to: Owners of the Company (72,102) 14,642 (110,814) 23,981 Non-controlling interests (1) (776) (2) (778) Total comprehensive (loss)/ income for the period (72,103) 13,866 (110,816) 23,203 Loss per share (expressed in RMB per share) — Basic 8(a) (0.22) (0.05) (0.36) (0.02) — Diluted 8(b) (0.22) (0.05) (0.36) (0.02) – 4 – INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the nine months ended September 30, 2016 Attributable to owners of the Company Shares held for Non- Share Share RSU Accumulated controlling Total (Unaudited) capital premium Scheme Reserves losses Total interests equity RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at January 1, 2016 59 1,722,308 (3) 325,713 (977,657) 1,070,420 (1,907) 1,068,513 Comprehensive (loss)/income Loss for the period – – – – (125,980) (125,980) (2) (125,982) Other comprehensive (loss)/income: — Changes in fair value of available- for-sale financial assets, net of tax – – – (636) – (636) – (636) — Reclassification of changes in fair value of available-for-sale financial assets to profit or loss upon disposal, net of tax – – – (1,984) – (1,984) – (1,984) — Share of other comprehensive income of investments using equity method, net of tax – – – 1,108 – 1,108 – 1,108 — Currency translation differences – – – 16,678 – 16,678 – 16,678 Total comprehensive income/(loss) for the period – – – 15,166 (125,980) (110,814) (2) (110,816) Total contributions by and distributions to owners of the Company recognised directly in equity Employee share option and RSU Scheme: — Value of employee services – – – 26,560 – 26,560 – 26,560 — Vesting of shares – (1) 1 – – – – – Total contributions by and distributions to owners of the Company for the period – (1) 1 26,560 – 26,560 – 26,560 Balance at September 30, 2016 59 1,722,307 (2) 367,439 (1,103,637) 986,166 (1,909) 984,257 – 5 – INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) For the nine months ended September 30, 2016 Attributable to owners of the Company Shares held for Non- Share Share RSU Accumulated controlling Total (Unaudited) capital premium Scheme Reserves losses Total interests equity RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at January 1, 2015 59 1,726,828 (6) 206,182 (925,746) 1,007,317 (21) 1,007,296 Comprehensive (loss)/income Loss for the period – – – – (8,378) (8,378) (778) (9,156) Other comprehensive income/(loss): — Changes in fair value of available- for-sale financial assets, net of tax – – – 993 – 993 – 993 — Reclassification of changes in fair value of available-for-sale financial assets to profit or loss upon disposal, net of tax –