CMGE Technology Group Limited (Stock Code: 0302) released additional information regarding its annual report for the year ended 31 December 2024. According to the announcement, the company recognized several impairment losses due to industry challenges and underperforming projects.
The impairment of trade receivables amounted to approximately RMB175.8 million, mainly attributed to extended payment cycles from third-party publishing channels under challenging market conditions. Meanwhile, a further RMB79.73 million impairment was recorded on contract assets and other receivables, including RMB47.2 million related to an unsettled prepaid sum to a game developer in Chengdu and RMB12.5 million linked to a terminated share purchase agreement with Future Kemy Limited.
A total write-off of RMB211.8 million in prepayments occurred due to delayed or abandoned game development projects. This involved prepaid minimum guarantees, prepaid licence fees, and prepaid investment funds for games that did not meet anticipated timelines or revenue expectations.
Goodwill impairments reached RMB529.9 million for Wenmai Hudong, mainly because of lower-than-expected revenue performance from World of Castellan and cancellations or postponements of other scheduled titles. Shanghai Zhoujing saw a goodwill impairment of RMB16.8 million after the project Street Basketball did not meet test targets and lacked a clear launch plan.
Other intangible assets impairments comprised RMB157.7 million from Legend of Sword and Fairy: World, which did not achieve desired testing outcomes in June and December 2024, and RMB53.9 million from 11 IP and content provider licences that ended earlier than planned due to insufficient revenues.
In assessing these impairments, the company’s management maintained communication with partners and game developers, evaluated operational viability, and engaged an independent valuer where required. The Board concluded that the recorded impairment amounts were fair and reasonable.
For the Post-IPO Share Option Scheme, the announcement disclosed the respective closing prices of the company’s shares immediately before the grant dates of outstanding share options as at 31 December 2024. These prices were HK$2.81 on 29 March 2021, HK$1.95 on 20 January 2023, and HK$1.15 on 24 April 2024.