Dear shareholders of Rastar Group,

By the end of April 20, 2021, the total number of shareholders reached 51,985, including 718 institutional investors. On behalf of all the employees of Rastar Group, I’d like to take this opportunity to give our sincere thanks and best regards to all the shareholder, customers and cooperation partners.

2020 is such a special year. The sudden outbreak of COVID-19 has affected industries and companies to varying degrees. On the one hand, the club relegation was unsuccessful, and the ticket revenue dropped sharply; on the other hand, there was a large decline in toy business. Multiple factors led to a year-on-year decline in the overall net profit of the company.

Without great difficulties, there will be no great cause. Thanks to the efforts of all my colleagues, this year, we strived forward with one heart and mind in spite of challenges and difficulties. All business segments of the company continued to develop steadily, and the annual net operating cash flow reached RMB 650 million, which strongly supported the continuous decline of the company’s interest-bearing debt. By the end of 2020, the overall asset-liability ratio of the company has dropped to 45%, and the financial structure has been continuously optimized.

Nothing is difficult to a man who wills. In the past year, we not only learned something but also made some achievements. The game business structure of the company has been continuously optimized, with balanced development at home and abroad. Furthermore, we had richer product reserves and the overall profit quality has been significantly improved. In 2020, Rastar Games achieved a net profit of more than RMB 160 million, an increase of nearly 30% year-on-year, and overseas turnover accounted for more than 50%, making the game go to sea with remarkable results. After 10 years’ accumulation and precipitation, we have made innovations in archaistic strategy and quadratic element, and launched such excellent games as The Legend of Three Kingdoms—Works of King, New Three Kingdoms For Honor, Aurora Legend, and The Throne of Girl. In addition to these, we have obtained the IP license of well-known The Duke of Mount Deer, which makes the IP matrix more complete. At the same time, we pay more attention to the serialization of research projects in the subdivision areas where we are good at, and gradually form two independent product groups. Xinghui Teamtop, a wholly-owned subsidiary of Rastar Group, was selected as “Top 30 Cultural Enterprises in Guangzhou in 2020”, which shows that Xinghui Teamtop has grown into a backbone cultural enterprise with strong competitiveness and influence in South China.

Rastar Group started its business with toys, and it meets the trend when the traditional industry entered a new era. In 2020, Rastar Toys released new toys such as Pagani series puzzle assembling blocks, Ferrari and Lamborghini building kits, McLaren remote control cars, and expanded BMW and Land Rover children’s bicycle product series in outdoor cycling sub-categories. The Covid-19 epidemic has blocked offline business, but it has bred new business opportunities in the cloud: Rastar Toys took the opportunity of the 127th CIEF in the cloud to promote online exchanges and cooperation through online live broadcast platform, and polished the business card of Rastar Toys “Made in China”.

2021 is a year worth striving for. The RCD Espanyol de Barcelona, which is of great concern to domestic fans, is currently at the top of La Liga 2 with a score of 74 points, and is in the running for first place. The toy business turns up. Rastar Games and Bilibili have become partners, and the original self-developed Dreamland Memory will be distributed exclusively by Bilibili Games in Chinese mainland. This is a highly innovative movie-style urban fantasy adventure mobile game, which will bring immersive experience to players. After more than two years of painstaking efforts, the 3D antique strategy boutique game created by the company is nearing completion, which is expected to be launched this year and will provide players with a higher quality entertainment experience.

We must not let our vision be blocked by floating clouds. It’s perfect time to set sail. Innovative spirit is always the quality held by an excellent enterprise, and it is also the gene and the driving force for sustainable development of Rastar Group. Due to Covid-19 outbreak, many enterprises are facing challenges. However, misfortune may be a blessing in disguise. What comes with the challenges is the opportunity. Rastar Group will, as always, adhere to the duty of “building the cultural core of the main theme and positive energy”, uphold the aim of being sincere and innovative, and shoulder the mission of developing cultural enterprises. Moreover, it will faithfully inherit and carry forward China’s excellent traditional culture, and continue to provide users with healthy and high-quality product experience.

The wide sea allows the fish to leap about and vast sky the birds to fly. 2021 is the grand opening year of the 14th Five-Year Plan of China, and also the beginning of the second decade after the listing of Rastar Group on the A-share Growth Enterprise Market. We are of one mind with all shareholders. We are willing to work together to build up the feelings of home and country and shoulder our social responsibility to carry forward the excellent Chinese traditional culture. We will strive to open up overseas cultural markets, provide consumers with healthy and happy cultural and entertainment products, and build a first-class Chinese-style backbone cultural enterprise.
 

Chen Yansheng, Chairman of Rastar Group
Shantou, April 2021