ZENGAME (02660) issues profit warning, expecting a year-on-year decrease of approximately 35% to 45% in the net profit attributable to shareholders for the fiscal year 2024.

ZENGAME (02660) announced that the group is expected to achieve a decrease in the profit attributable to owners of the company for the year ending December 31, 2024, compared to the year ending December 31, 2023, by approximately 35% to 45%. The expected decrease is mainly due to: (i) lower-than-expected sales of new products and gameplays, as well as a general downturn in the gaming market in 2024, resulting in a decline in group revenue by about 15% to 25%; (ii) higher game operation costs, leading to a decrease in the group's gross profit margin by about 5% to 10%; and (iii) the transfer of retained earnings of RMB 500 million from the indirect wholly-owned subsidiary Shenzhen ZENGAME Co., Ltd. to the group, benefiting the group and its shareholders overall, and resulting in additional tax expenses of approximately RMB 70 million.