Finance Association, March 29 (Reporter Chen Kang) Zhejiang Digital Culture (600633.SH), an enterprise that is indirectly involved in the investment, Lianlian Digital (02598.HK) landed in Hong Kong stocks yesterday, drawing attention once again to the company's multi-industry layout. At the performance conference held today, the company mentioned that the “Innovation Track+” investment field already covers various fields such as digital entertainment, high-tech, big data, cloud computing, and financial media. Zhejiang Digital Culture and its subsidiaries initiated the establishment of more than 16 funds or participated in the establishment as major investors.

Among them, Qingtao Energy is known as a super unicorn in the field of new energy, which has attracted the attention of a large number of investment institutions. At the results meeting, Liang Nan, director of the company, replied to investors, “Oriental Starry Sky Venture Capital Co., Ltd., the holding subsidiary of the company, participated in 7.7% of Shanghai Fengrui Venture Capital (Limited Partnership) as a limited partner and held 11.8902% of the shares in Qingtao (Kunshan) Energy Development Co., Ltd.” Furthermore, the company also has an equity relationship with Yufeng Future, which is seizing the “low altitude economy” circuit.

Zhejiang Digital Culture mentioned at the performance conference that the large-scale model for the vertical field of social governance launched by Hangzhou Urban Brain Co., Ltd., a subsidiary of the company, is in the process of filing, and the company will continue to expand the “Zhejiang Model” of digital governance to markets outside the province by optimizing this big model. Previously, Communication Brain Technology Company, a subsidiary of Zhejiang Digital Culture, had developed and launched the first vertical model in the media industry.

Zhejiang Digital Culture has four major businesses: “Digital Culture +”, “Digital Technology +”, “Data Operation +”, and “Innovation Track +”. In 2023, it achieved revenue of 3,078 billion yuan, a year-on-year decrease of 40.65%; net profit to mother was 663 million yuan, an increase of 34.91% over the previous year. Among them, revenue for the fourth quarter was 790 million yuan, a year-on-year decrease of 36.88%, and net profit of 288.422 million yuan, which turned into a year-on-year loss.

In response, the company explained at the performance meeting, “The year-on-year decline in revenue in the fourth quarter was mainly affected by a combination of factors such as macroeconomics and industry environment. Winger Network optimized and adjusted its business structure to further focus on its main business and products. The net profit loss was due to confirmed impairment losses of 116 million yuan in long-term equity investments, loss of impairment of goodwill of 51.091 million yuan, intangible asset impairment losses of 21.72 million yuan, and a reduction of 188 million yuan in net profit attributable to shareholders of listed companies in the current period.”

Regarding the question of “whether goodwill impairment and equity investment losses in the fourth quarter will continue to exist,” the company stated, “Whether a company with the same investment depreciates again needs to be judged based on comprehensive factors such as industry conditions and the company's actual operating conditions in that year.”

Zhejiang Digital Culture's main business (online game operation, online social networking) all recorded high gross profit margins in 2023. Among them, the gross margin of the game business reached 92.17%, and the gross margin of the social business was 57.18%. Chairman Tong Jie said at the performance conference that games related to Wingman are operating well. Among them, the DAU (number of daily active users) of the Wingman Whipped Egg game app had surpassed 1 million by the end of January 2024, making it the first whipped egg game with a DAU of over 1 million in China.

In terms of digital technology and data operation business, the company explained at the performance conference that the Fuchun Cloud Technology Data Center currently has more than 10,000 cabinets across the country, the Zhejiang Big Data Trading Center has cooperated with 8 cities and counties to build “regional data trading zones”, and in terms of industry trading zone construction, it has launched 5 special industry zones.

Regarding whether there are plans to establish an “intelligent computing center,” Tong Jie said, “We are still paying attention to the demonstration based on actual conditions such as the market environment.”