Boyaa Interactive International : THIRD QUARTERLY RESULTS ANNOUNCEMENT FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2019

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Boyaa Interactive International Limited

博雅互動國際有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 0434)

THIRD QUARTERLY RESULTS ANNOUNCEMENT FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2019

FINANCIAL HIGHLIGHTS
	For the nine months		For the year
		ended
	ended 30 September	Year-on-Year	31 December
	2019	2018	Change*	2018
	RMB'000	RMB'000	%	RMB'000
	(unaudited)	(unaudited)		(audited)
Revenue	245,503	368,972	-33.5	453,234
- Web-based games	107,211	129,959	-17.5	168,362
- Mobile games	138,292	239,013	-42.1	284,872
Gross profit	168,748	250,101	-32.5	304,970
Profit attributable to	82,068
owners of the Company	188,002	-56.3	201,532
Non-IFRS adjusted	82,540
net profit***	190,749	-56.7	204,753
	For the three months
	ended 30 September	Year-on-Year
	2019	2018	Change*
	RMB'000	RMB'000	%
	(unaudited)	(unaudited)
Revenue	85,041	84,737	+0.4
- Web-based games	36,982	33,740	+9.6
- Mobile games	48,059	50,997	-5.8
Gross profit	59,578	56,117	+6.2
Profit attributable to	18,954
owners of the Company	34,224	-44.6
Non-IFRS adjusted	18,995
net profit***	34,893	-45.6

- 1 -

REVENUE BY GAMES
	For the nine months
	ended 30 September	Year-on-Year
	2019	2018	Change*
	RMB'000		RMB'000	%
	(unaudited)		(unaudited)
Texas Hold'em Series	180,526	279,906	-35.5
Other Card and Board*****	64,977		89,066	-27.0
Total	245,503		368,972	-33.5
	For the three months
	ended 30 September	Year-on-Year
	2019	2018	Change*
	RMB'000		RMB'000	%
	(unaudited)		(unaudited)
Texas Hold'em Series	62,732	60,187	+4.2
Other Card and Board*****	22,309		24,550	-9.1
Total	85,041		84,737	+0.4
REVENUE BY LANGUAGE VERSIONS OF GAMES
	For the nine months
	ended 30 September	Year-on-Year
	2019	2018	Change*
	RMB'000		RMB'000	%
	(unaudited)		(unaudited)
Simplified Chinese	34,881	130,202	-73.2
Other languages	210,622		238,770	-11.8
Total	245,503		368,972	-33.5
	For the three months
	ended 30 September	Year-on-Year
	2019	2018	Change*
	RMB'000		RMB'000	%
	(unaudited)		(unaudited)
Simplified Chinese	10,003	13,816	-27.6
Other languages	75,038	70,921	+5.8
Total	85,041	84,737	+0.4

- 2 -

OPERATIONAL HIGHLIGHTS
	For the three months ended	Year-	Quarter-
	30 September	30 June	30 September	on-Year	on-Quarter
	2019	2019	2018	Change*	Change**
	(unaudited)	(unaudited)	(unaudited)	%	%
Paying Players (in thousands)	373	398	535	-30.3	-6.3
- Web-based games	13	15	17	-23.5	-13.3
- Mobile games	360	383	518	-30.5	-6.0
Daily Active Users ("DAUs") (in thousands) ****	2,388	2,405	3,183	-25.0	-0.7
- Web-based games	204	190	201	+1.5	+7.4
- Mobile games	2,184	2,215	2,982	-26.8	-1.4
Monthly Active Users ("MAUs") (in thousands) ****	6,881	7,429	10,990	-37.4	-7.4
- Web-based games	477	551	839	-43.1	-13.4
- Mobile games	6,404	6,878	10,151	-36.9	-6.9
Average Revenue Per Paying User ("ARPPU") of
Texas Hold'em Series (in RMB)
- Web-based games	1,026	818.3	664.4	+54.4	+25.4
- Mobile games	132.3	118.5	126.8	+4.3	+11.6
ARPPU for Other Card and Board (in RMB)
- Web-based games	15.0	16.7	29.3	-48.8	-10.2
- Mobile games	25.2	22.6	18.0	+40.0	+11.5

• Year-on-YearChange % represents a comparison between the current reporting period and the corresponding period last year.

• Quarter-on-QuarterChange % represents a comparison between the quarter ended 30 September 2019 and the immediately preceding quarter.
• Non-IFRSadjusted net profit was derived from the unaudited profit for the period excluding share-based compensation expenses.
• The numbers of DAUs and MAUs shown above are calculated based on the number of active players in the last calendar month of the relevant reporting period.
• The categories of "Fight the Landlord" and "others" set out in the summary in the previous quarterly results announcement are combined and referred to as "Other Card and Board" above.

- 3 -

The board of directors (the "Board") of Boyaa Interactive International Limited (the "Company" or "we" or "our" or "us") is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (the "Group" or "we" or "our" or "us") for the three and nine months ended 30 September 2019 (the "Reporting Period") (the "Third Quarterly Results"). The Third Quarterly Results have been reviewed by Pan-China (H.K.) CPA Limited, the auditor of the Company, in accordance with International Standard on Review Engagements 2410 "Review of interim financial information performed by the independent auditor of the entity" issued by the International Auditing and Assurance Standards Board, and by the audit committee of the Company. This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).

BUSINESS OVERVIEW AND OUTLOOK

In terms of financial performance, we recorded a revenue of approximately Renminbi ("RMB")

85.0 million for the three months ended 30 September 2019, increased by approximately 6.0% as compared to the second quarter of 2019, representing a year-on-year increase of approximately 0.4% as compared to the same period in 2018, which was mainly due to the impact of the Policy Risk Factor (as defined below) on our revenue being controlled, and an increase in revenue benefiting from the promotion activities conducted by the Group in the third quarter of 2019. We recorded a revenue of approximately RMB245.5 million for the nine months ended 30 September 2019, representing a year-on-year decrease of approximately 33.5% as compared to the same period in 2018. The decrease was primarily attributable to

(1) the impact from the incident of Apple Inc. carrying out rectification and inspection on the applications launched on its system starting from the second quarter of 2017; (2) the effect of policy risk regarding the market rumor of "The Implementation of the "Administrative Measures of Online Chess and Card Games" by the Chinese government aiming to shut down the Texas Hold'em poker games and prohibit the operation of the Texas Hold'em poker games starting from 1 June 2018". Although such policies have not yet been introduced, certain platforms have removed relevant products, which affected our revenue to a certain extent (the "Policy Risk Factor"); and (3) the decrease in revenue generated from web-based games due to the industry trend of a gradual transfer of web-based games to mobile terminals.

- 4 -

We recorded an unaudited non-IFRS adjusted net profit of approximately RMB19.0 million in the third quarter of 2019, decreased by approximately 18.1% as compared to the second quarter of 2019, mainly attributable to the increase of staff benefit expenses and advertising costs, representing a year-on-year decrease of approximately 45.6% as compared to the same period in 2018. Such decrease is mainly attributable to one-offnon-operating factors including the decrease of fair value of financial assets such as equity investments in partnerships due to market factors. For the nine months ended 30 September 2019, we recorded an unaudited non-IFRS adjusted net profit of approximately RMB82.5 million, representing a decrease of approximately 56.7% as compared to the nine months ended 30 September 2018, mainly attributable to the decrease in revenue and the decrease of fair value of financial assets such as equity investments in partnerships due to market factors for the nine months ended 30 September 2019. Excluding the impacts of the one-offnon-operating factors including the fair value movements of financial assets such as the equity investments in partnerships, the unaudited non-IFRS adjusted net profits for the three months ended 30 September 2019 and the nine months ended 30 September 2019 would have decreased by approximately 27.3% and 42.0% as compared to the corresponding periods in 2018, respectively.

In terms of the operating performance, we recorded a slight decline in the numbers of paying players and users during the third quarter of 2019 as compared to the second quarter of 2019. In particular, the number of paying players decreased by 6.3% from approximately 0.40 million in the second quarter of 2019 to approximately 0.37 million in the third quarter of 2019. The number of DAUs decreased by 0.7% from approximately 2.41 million in the second quarter of 2019 to 2.39 million in the third quarter of 2019. The number of MAUs decreased by 7.4% from approximately 7.43 million in the second quarter of 2019 to approximately 6.88 million in the third quarter of 2019, whereas the ARPPU grew in both Texas Hold'em mobile and web-based games and the mobile versions of other card and board games.

- 5 -

During the third quarter of 2019, we held the 2019 "Boyaa" Landlords Competition in Changshan and the 2019 "Boyaa" Chess Competition in Shenzhen and Changsha successfully. "Boyaa" Competitions aim to promote the philosophy of public welfare by way of card and board games, and to guide and encourage our users to actively participate in public welfare undertakings. We donated a total of RMB63,390 for public welfare and the public welfare program for students in poverty to the Red Cross Society of China, Shenzhen Branch through these events. Holding of public welfare events involve game users actively participating in the Boyaa games and public welfare undertakings, and thus further increase the loyalty of our users, and strengthen the influence of our "Boyaa" brand. Inheritance and dissemination of the traditional culture of Chinese card and board games in the form of public welfare competition have brought good experience for users of Boyaa games.

In the future, the Company will continue to conduct more intensive market surveys, launch innovative game rules, improve the experience of our game players, remain dedicated to product refinement and operation diversification, ramp up the quality of our games in an all- rounded manner, and spare no effort to build our brand for online and offline match series. On top of consolidating our existing market, more efforts will be made to further expand our overseas market as well as other chess and card games business, so as to offset the impact arising from the Policy Risk Factor. The Company will strictly comply with various laws and regulations of the People's Republic of China (the "PRC"), develop high-quality puzzle games and matches, and continue with its journey to forge a century-old brand for chess and card games.

- 6 -

MANAGEMENT DISCUSSION AND ANALYSIS

Revenue

Our revenue for the three months ended 30 September 2019 amounted to approximately RMB85.0 million, representing a year-on-year increase of approximately 0.4% from approximately RMB84.7 million recorded for the same period in 2018. The year-on-year increase was primarily due to the impact of the Policy Risk Factor from the second quarter of 2018 on our revenue being stablised, and a slight increase in revenue resulting from the promotion activities conducted by the Group in the third quarter of 2019. For the three months ended 30 September 2019, revenue generated from our mobile games and web-based games accounted for approximately 56.5% and 43.5% of our total revenue, respectively, as compared to approximately 60.2% and 39.8%, respectively, for the three months ended 30 September 2018.

Cost of revenue

Our cost of revenue for the three months ended 30 September 2019 amounted to approximately RMB25.5 million, representing a year-on-year decrease of approximately 11.0% from approximately RMB28.6 million recorded for the same period in 2018. The year-on-year decrease was primarily due to the reduction in commission charges by platforms and third party payment vendors.

Gross profit and gross profit margin

As a result of the foregoing, our gross profit for the three months ended 30 September 2019 amounted to approximately RMB59.6 million, representing a year-on-year increase of approximately 6.2% from approximately RMB56.1 million recorded for the same period in 2018.

Our gross profit margin were approximately 70.1% and 66.2%, respectively, for the three months ended 30 September 2019 and the same period in 2018.

Selling and marketing expenses

Our selling and marketing expenses for the three months ended 30 September 2019 amounted to approximately RMB6.5 million, representing a year-on-year increase of approximately 13.0% from approximately RMB5.7 million recorded for the same period in 2018. The year-on- year increase was mainly attributable to the increase in advertising and promotional activities expenses.

- 7 -

Administrative expenses

Our administrative expenses for the three months ended 30 September 2019 amounted to approximately RMB33.0 million, representing a year-on-year increase of approximately 14.3% from approximately RMB28.9 million recorded for the same period in 2018. The year-on-year increase was mainly attributable to the increase in other professional service fees and employee benefit expenses.

Other gains - net

For the three months ended 30 September 2019, we recorded other gains (net) of approximately RMB1.5 million, compared to approximately RMB11.8 million recorded for the same period in 2018. The other gains (net) primarily consisted of fair value gains/(losses) on financial assets at fair value through profit or loss relating to the non-quoted investments in equity investment partnerships and certain wealth management products we purchased, government subsidies and dividends from financial assets at fair value through other comprehensive income.

Finance income - net

Our net finance income for the three months ended 30 September 2019 was approximately RMB3.8 million, compared to approximately RMB5.2 million recorded for the same period of 2018. The year-on-year change was primarily due to decrease in interest income as compared to the same period of 2018.

Share of result of associates

We held investments in five associates, namely Shenzhen Fanhou Technology Co., Ltd. (深圳 市飯後科技有限公司), Shenzhen Huifu World Network Technology Co., Ltd. (深圳市匯富 天下網絡科技有限公司), Shenzhen Easething Technology Co., Ltd. (深圳市易新科技有限 公司), Shenzhen Jisiwei Intelligent Technology Co., Ltd. (深圳市極思維智能科技有限公司) and Shanghai Allin Network Technology Co., Limited (上海傲英網絡科技有限公司) and its subsidiaries as at 30 September 2019 (31 December 2018: six), all of which were online game or internet technology companies. We recorded a share of loss of associates of approximately RMB0.2 million for the three months ended 30 September 2019, compared to a share of profit of associates of approximately RMB0.2 million recorded for the same period in 2018.

- 8 -

Income tax expenses

Our income tax expenses for the three months ended 30 September 2019 were approximately RMB6.2 million, representing an increase of approximately 40.0% from approximately RMB4.4 million recorded for the three months ended 30 September 2018. The effective tax rate were 24.5% and 11.4%, respectively, for the three months ended 30 September 2019 and the same period in 2018. The effective tax rate for the three months ended 30 September 2019 was higher than that for the same period in 2018.

Profit attributable to owners of the Company

As a result of the foregoing, our profit attributable to owners of the Company for the three months ended 30 September 2019 amounted to approximately RMB19.0 million, representing

• year-on-yeardecrease of approximately 44.6%, from the profit attributable to owners of the Company of approximately RMB34.2 million recorded for the same period in 2018.

Non-IFRS Measure - Adjusted net profit

To supplement our consolidated financial statements which are presented in accordance with International Financial Reporting Standards ("IFRS"), we also use unaudited non-IFRS adjusted net profit as an additional financial measure to evaluate our financial performance by eliminating the impact of items that we do not consider indicative of the performance of our business. The term "adjusted net profit" is not defined under IFRS. Other companies in the industry which the Group operates in may calculate such non-IFRS item differently from the Group. The use of adjusted net profit has material limitations as an analytical tool, as adjusted net profit does not include all items that impact our net profit for the Reporting Period and should not be considered in isolation or as a substitute for analysis of the Group's results as reported under IFRS.

Our unaudited non-IFRS adjusted net profit for the three months ended 30 September 2019 of approximately RMB19.0 million was derived from our unaudited profit of the same period excluding share-based compensation expenses of approximately RMB0.01 million, RMB0.01 million and RMB0.02 million included in cost of revenue, selling and marketing expenses and administrative expenses, respectively, as compared to our unaudited non-IFRS adjusted net profit for the three months ended 30 September 2018 of approximately RMB34.9 million derived from our unaudited profit for the same period excluding share-based compensation expenses of approximately RMB0.1 million, RMB0.2 million and RMB0.3 million included in cost of revenue, selling and marketing expenses and administrative expenses, respectively.

- 9 -

Cash and cash equivalents

As at 30 September 2019, we had cash and cash equivalents of approximately RMB813.0 million (31 December 2018: approximately RMB390.3 million), which primarily consisted of cash at bank and in hand and short-term bank deposits, which were mainly denominated in RMB (as to approximately 74.9%), United States dollars ("USD") (as to approximately 14.5%) and other currencies (as to approximately 10.6%). We currently do not hedge transactions undertaken in foreign currencies. Due to our persistent efforts in managing our exposure to foreign currencies through constant monitoring to limit as much as possible the amount of foreign currencies held by us, fluctuations in currency exchange rates do not have any material adverse impact on our financial results.

Net proceeds from our initial public offering, after deducting the underwriting commission and other estimated expenses in connection with the offering which the Company received, amounted to approximately Hong Kong dollars ("HKD") 837.9 million. Up to 30 September 2019, a total amount of approximately RMB674.6 million from the net proceeds from our initial public offering had been utilised for the following purposes:

1. approximately RMB303.6 million for our marketing activities and business expansion;
2. approximately RMB101.2 million for investments in technologies and complementary online games or businesses; and
3. approximately RMB269.8 million for research and development activities, working capital and other general corporate purposes, including but not limited to the investment in our technology infrastructure and enhancement of our game portfolio.

- 10 -

Financial assets at fair value through other comprehensive income

We accounted for financial assets at fair value through other comprehensive income (transferred from available-for-sale financial assets upon adoption of IFRS 9 on 1 January 2018) at their respective fair values. As at 30 September 2019, the fair value of our unlisted and listed investments classified as financial assets at fair value through other comprehensive income amounted to approximately RMB47.1 million (31 December 2018: approximately RMB64.5 million). These financial assets at fair value through other comprehensive income consisted of both listed and unlisted equity securities, which are mainly represented by our equity investment in Dalian Zeus Entertainment Co., Ltd. ("Zeus Entertainment"). Zeus Entertainment is mainly engaged in research and development and publication of web-based and mobile games.

We consider that none of the other unlisted and listed investments classified as financial assets at fair value through other comprehensive income in our investment portfolio is a significant investment as none of such investments has a carrying amount that accounts for more than 5.0% of our total assets as at 30 September 2019.

Financial assets at fair value through profit or loss

As at 30 September 2019, we also recorded financial assets at fair value through profit or loss amounted to approximately RMB1,209.4 million (31 December 2018: approximately RMB1,409.0 million), which consisted of non-quoted investments in asset management plans and equity investment partnerships included in non-current assets, and non-quoted investments in certain wealth management products included in current assets. As at 30 September 2019, the fair values of the investments in asset management plans were determined by an independent professional valuer engaged by the Company using valuation techniques in combination of discount cash flow model and market comparable approach; the fair values of the investments in equity investment partnerships were determined by an independent professional valuer engaged by the Company using market comparable approach; and the fair values of investments in wealth management products, which have an initial term ranging from immediate to 360 days, were determined based on the estimated rate of return of investments. For the nine months ended 30 September 2019, we recorded realised/unrealised fair value gains on financial assets at fair value through profit or loss of approximately RMB5.6 million (for the nine months ended 30 September 2018: approximately RMB54.9 million).

- 11 -

The investments in wealth management products under financial assets at fair value through profit or loss were made in line with our treasury and investment policies, after taking into account, among others, the level of risk, return on investment, liquidity and the term to maturity. Generally, the Company has in the past selected wealth management products that are principal guaranteed and relatively low risk products. Prior to making an investment, the Company had also ensured that there remains sufficient working capital for the Company's business needs even after the investments in wealth management products. Each of such investments made during the nine months ended 30 September 2019 does not constitute a notifiable transaction or a connected transaction of the Company under the Listing Rules. As agreed with the financial institutions, the underlying investment portfolio of the wealth management products of the Company were primarily represented by inter-bank loan market instruments and exchange traded fixed-income financial instruments, such as inter-bank loans, government bonds, central bank bills and similar products, which were highly liquid with a relatively short term of maturity, and which were considered to akin to placing deposits with banks whilst enabling the Group to earn an attractive rate of return.

On 28 December 2016, the Group, through Shenzhen Dong Fang Bo Ya Technology Co., Ltd. ("Boyaa Shenzhen"), established a limited partnership namely Jiaxing Boyaa ChunLei Equity Investments Limited Partnership Enterprise ("Jiaxing Boyaa") with Shanghai Tailai Tianji Asset Management Co., Ltd. During the nine months ended 30 September 2019, the Group's accumulated contribution of RMB300.0 million represented 99.0% of the total capital contribution of Jiaxing Boyaa. The fair value of the investment in Jiaxing Boyaa as at 30 September 2019 was approximately RMB320.7 million. Jiaxing Boyaa is established for carrying out equity investments, venture capital investments and investments in securities, subject to certain investment restrictions. We are optimistic about the on-going performance of Jiaxing Boyaa. Nevertheless, we will closely monitor the performance of Jiaxing Boyaa on an on-going basis.

We consider that, save for our capital investment in Jiaxing Boyaa as a limited partnership, no other single investment that was designated as financial assets at fair value through profit or loss in our investment portfolio is a significant investment as none of the relevant investments has a carrying amount that accounts for more than 5.0% of our total assets as at 30 September 2019.

- 12 -

Borrowings

For the nine months ended 30 September 2019, we did not have any short-term or long-term bank borrowings and we had no outstanding, utilised or unutilised banking facilities.

Capital expenditures

For the nine months ended 30 September 2019, our capital expenditure amounted to approximately RMB12.1 million (for the nine months ended 30 September 2018: approximately RMB4.3 million). The capital expenditure mainly included purchasing equipment, motor vehicles and leasehold improvements of approximately RMB12.1 million (for the nine months ended 30 September 2018: approximately RMB4.3 million), which was funded by using our cash flows generated from our operations.

Contractual obligations

As at 30 September 2019, the Group had commitments for future minimum lease payments under non-cancellable operating leases in respect of servers and office buildings which amounted to approximately RMB14.9 million (31 December 2018: approximately RMB18.0 million).

Save as disclosed above, the Group did not have other significant outstanding commitments as at 30 September 2019.

Pledge/charge of the Group's assets

As at 30 September 2019, none of the Group's assets was pledged or charged.

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SIGNIFICANT INVESTMENT

As at 30 September 2019, the Group's significant investment of Jiaxing Boyaa was classified as financial assets at fair value through profit or loss. Jiaxing Boyaa mainly carried out equity investments and venture capital investments. We set out below the details of the companies invested by Jiaxing Boyaa (the "Investee Companies"), all of which are unlisted entities established and operated in the PRC.

		Equity
		interests held
		by Jiaxing
Name of Investee Companies	Principal business activities	Boyaa
Shanghai Niwo Information	Development and operation of interactive	14.07%
Service Co., Ltd.*	media platforms across various high-
(上海大途弘安信息科技	speed railway stations, coach stations and
有限公司)	airports in China
Nong Fa Zi Ran (Shanghai)	Fruit planting with ecological agricultural	14.28%
Agricultural Technology	technologies and intelligent management
Co., Ltd.*	system in relation to fertilization,
( 農法自然（上海）農業科技	irrigation, cultivation and prevention of
有限公司)	pests in China
Shandong Zhendong Network	Promotion of online games	5.00%
Technology Co., Ltd.*
(山東震東網絡科技有限公司)
Dalian Jijie Technology	Promotion of online games	5.00%
Co., Ltd.*
(大連集杰科技有限公司)
Yunnan Xiyuan Network	Promotion of online games	5.00%
Technology Co., Ltd.*
(雲南西元網絡科技有限公司)
Shenzhen Gule Time	Promotion of online games	5.00%
Technology Co., Ltd.*
(深圳市谷樂時光科技
有限公司)

- 14 -

		Equity
		interests held
		by Jiaxing
Name of Investee Companies	Principal business activities	Boyaa
Shanghai Shandian	Research and development and provision	18.20%
Technology Co., Ltd*	of software for intelligence management
(上海閃店聯信息科技	systems and procurement of the
有限公司)	relevant hardware to facilitate business
	management to enterprises in China
Centaurs Technologies Co., Ltd.	Research and development and provision	4.37%
(深圳市人馬互動科技	of information technology solutions in
有限公司)	relation to intelligent voice recognition
	and interaction and video live broadcast in
	China

• For identification purpose only

The fair value of Jiaxing Boyaa is determined by valuing its underlying investments as a whole, rather than conducting an independent valuation of each underlying investment. Market comparison method is adopted in the fair value estimation. It is based on the assumption that the securities of companies with similar characteristics will be traded by investors at similar valuation multiples and the securities of these comparable companies can be effectively determined by the market. Accordingly, by using the market comparison method, once the comparable companies are identified and the applicable valuation multiple is determined, the fair value of the target company can be estimated.

The valuation of Jiaxing Boyaa is assisted by an independent professional valuer engaged by the Company, in which the fair value of Jiaxing Boyaa is determined by using the average price to book ratio of the comparable companies identified in accordance with the industries of the Investee Companies, and then multiplied by the book value of Jiaxing Boyaa at the end of the Reporting Period, adjusted by the lack of marketability discount factors as the Investee companies are not listed. When selecting the comparable companies in the valuation, the independent professional valuer considers (1) the similarity of the business nature with the relevant Investee Companies; and (2) the same geographical locations of business operations as that of the relevant Investee Companies.

As at 30 September 2019, the fair value of Jiaxing Boyaa was estimated to be approximately RMB320.7 million.

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FINANCIAL INFORMATION
INTERIM CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 2019
		30 September	31 December
		2019		2018
	Notes		RMB'000	RMB'000
			(unaudited)	(audited)
ASSETS
Non-current assets		42,644
Property, plant and equipment			37,442
Right-of-use assets		11,642		-
Intangible assets		492		1,384
Interest in associates		16,414		16,964
Financial assets at fair value through other		47,063
comprehensive income	3	64,525
Deferred income tax assets		36,398	34,494
Prepayments and other receivables		36,623	25,435
Financial assets at fair value through profit or loss	5		543,140	589,331
			734,416		769,575
Current assets
	19,164
Trade receivables	4		18,365
Prepayments and other receivables		34,225	28,262
Financial assets at fair value through profit or loss	5	666,222	819,714
Term deposits		183,189	500,947
Cash and cash equivalents	6		812,976	390,350
			1,715,776		1,757,638
Total assets		2,450,192		2,527,213
EQUITY AND LIABILITIES
Equity attributable to owners of the Company		234
Share capital			235
Share premium		367,994	543,721
Repurchased shares		(2,897)	(2,060)
Shares held for restricted share units scheme
("RSU Scheme")		(14)	(14)
Reserves		(96,076)	(87,524)
Retained earnings			1,892,744	1,810,676
			2,161,985		2,265,034
Non-controlling interests			-		-
Total equity			2,161,985		2,265,034

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INTERIM CONSOLIDATED BALANCE SHEET (CONTINUED)

AS AT 30 SEPTEMBER 2019

		30 September	31 December
		2019		2018
	Notes		RMB'000	RMB'000
			(unaudited)	(audited)
LIABILITIES
Non-current liabilities		17,330
Deferred income tax liabilities			18,811
Lease liabilities		6,393		-
		23,723		18,811
Current liabilities
	68,780
Trade and other payables	8		69,363
Lease liabilities		4,492		-
Contract liabilities		14,883		18,005
Dividend payable		3,512		-
Current income tax liabilities		172,817		156,000
		264,484		243,368
Total liabilities		288,207		262,179
Total equity and liabilities			2,450,192		2,527,213
Net current assets			1,451,292		1,514,270
Total assets less current liabilities			2,185,708		2,283,845

- 17 -

INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND NINE MONTHS ENDED 30 SEPTEMBER 2019

			Three months ended			Nine months ended
			30 September			30 September
		2019		2018	2019		2018
	Notes		RMB'000			RMB'000			RMB'000		RMB'000
		(unaudited)		(unaudited)		(unaudited)	(unaudited)
Revenue	2	85,041		84,737	245,503		368,972
Cost of revenue	9	(25,463)	(28,620)	(76,755)	(118,871)
Gross profit		59,578		56,117	168,748		250,101
Selling and marketing expenses	9	(6,495)	(5,748)	(15,117)	(26,853)
Administrative expenses	9	(33,034)	(28,893)	(86,510)	(100,464)
Other gains - net	10	1,526		11,777			16,154		74,655
Operating profit		21,575		33,253	83,275		197,439
Finance income	11	4,871			5,971		17,257		15,086
Finance costs	11	(1,121)		(791)		(2,436)	(880)
Finance income - net	11	3,750		5,180				14,821		14,206
Share of (loss)/profit of associates		(210)	193			(370)	1,641
Profit before income tax		25,115		38,626	97,726		213,286
Income tax expenses	12	(6,161)	(4,402)	(15,658)	(25,284)
Profit for the period		18,954		34,224	82,068		188,002
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss:
- Currency translation differences		8,590		18,528	10,805		20,944
Items that will not be reclassified subsequently to
profit or loss:
- Changes in fair value of financial assets at
fair value through other comprehensive
income, net of tax		(6,119)	(23,677)	(16,046)	(71,871)
Other comprehensive income/(loss) for the period,
net of tax		2,471		(5,149)	(5,241)	(50,927)
Total comprehensive income for the period			21,425			29,075	76,827		137,075

- 18 -

INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)

FOR THE THREE MONTHS AND NINE MONTHS ENDED 30 SEPTEMBER 2019

			Three months ended		Nine months ended
			30 September		30 September
		2019			2018	2019		2018
	Notes		RMB'000		RMB'000		RMB'000		RMB'000
		(unaudited)	(unaudited)	(unaudited)	(unaudited)
Profit attributable to:
- Owners of the Company		18,954			34,224	82,068		188,002
- Non-controlling interests			-		-		-		-
		18,954			34,224	82,068		188,002
Total comprehensive income attributable to:
- Owners of the Company		21,425			29,075	76,827		137,075
- Non-controlling interests			-		-		-		-
		21,425			29,075	76,827		137,075
Earnings per share
(expressed in RMB cents per share)
- Basic	13		2.86				5.12	12.38		27.84
- Diluted	13		2.84				5.07	12.26		27.41
Dividends	14		-			-		-		-

- 19 -

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019

												(unaudited)
								Attributable to owners of the Company
										Shares held							Non-
		Share	Share	Repurchased	for RSU			Retained			controlling	Total
		capital	premium			shares	Scheme	Reserves	earnings	Total	interests	equity
		RMB'000	RMB'000			RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Balance at 1 January 2019	235		543,721	(2,060)	(14)	(87,524)	1,810,676	2,265,034	-	2,265,034
Profit for the period		-	-			-	-	-	82,068		82,068		-	82,068
Other comprehensive
(loss)/income
- Changes in fair value of
financial assets at fair value
through other comprehensive
income, net of tax		-	-			-	-	(16,046)	-	(16,046)	-	(16,046)
- Currency translation
differences		-	-			-	-	10,805	-	10,805		-	10,805
Total comprehensive (loss)/income
for the period		-	-			-	-	(5,241)	82,068	76,827		-	76,827
Employee share option and
RSU schemes
- Value of employee services		-	-			-	-	472		-	472		-	472
- Exercise and lapse of
share options and RSUs		-	3,783				-	-	(3,783)	-	-	-	-
Special dividend		-	(175,426)			-	-	-	-	(175,426)	-	(175,426)
Buy-back of shares		-	-	(4,922)	-	-	-	(4,922)	-	(4,922)
Cancellation of shares	(1)	(4,084)	4,085	-	-	-	-	-	-
Total transactions with owners,
recognised directly in equity	(1)	(175,727)	(837)	-	(3,311)	-	(179,876)	-	(179,876)
Balance at 30 September 2019		234		367,994	(2,897)	(14)	(96,076)	1,892,744	2,161,985		-	2,161,985

- 20 -

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019

									(unaudited)
					Attributable to owners of the Company
																Non-
							Shares held
	Share	Share	Repurchased	for RSU			Retained				controlling	Total
	capital	premium	shares	Scheme	Reserves	earnings	Total	interests	equity
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Balance at 1 January 2018	249		642,365	(27,283)	(15)	93,634	1,515,211		2,224,161		-	2,224,161
Adjustment on adoption of IFRS 9	-	-	-	-	(101,407)	101,407			-	-	-
Adjusted balance at
1 January 2018	249		642,365		(27,283)	(15)	(7,773)	1,616,618		2,224,161		-	2,224,161
Profit for the period	-	-	-	-	-	188,002		188,002		-	188,002
Other comprehensive
(loss)/income
- Changes in fair value of
financial assets at fair value
through other comprehensive
income, net of tax	-	-	-	-	(71,871)	-	(71,871)	-	(71,871)
- Currency translation differences	-	-	-	-	20,944	-	20,944		-	20,944
Total comprehensive (loss)/income
for the period	-	-	-	-	(50,927)	188,002		137,075		-	137,075
Employee share option and
RSU schemes
- Value of employee services	-	-	-	-	2,747	-	2,747		-	2,747
- Proceeds from shares issued	-	1,915	-	-	-	-	1,915		-	1,915
- Exercise and lapse of share
options and RSUs	-	11,868	-	-	(11,868)	-		-	-	-
Buy-back of shares	-	-	(76,222)	-	-	-	(76,222)	-	(76,222)
Cancellation of shares	(13)	(103,492)	103,505		-	-	-		-	-	-
Total transactions with owners,
recognised directly in equity	(13)	(89,709)	27,283		-	(9,121)	-	(71,560)	-	(71,560)
Balance at 30 September 2018	236		552,656		-		(15)	(67,821)	1,804,620		2,289,676		-	2,289,676

- 21 -

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019

	Nine months ended
	30 September
	2019		2018
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Cash flows from operating activities	64,034
Cash generated from operations		160,615
Income tax paid	(4,483)	(22,947)
Net cash generated from operating activities	59,551		137,668
Cash flows from investing activities
(12,071)
Purchase of property, plant and equipment	(4,282)
Purchase of financial assets at fair value	-
through other comprehensive income	(25,353)
Purchase of financial assets at fair value through profit or loss	(641,547)	(1,905,163)
Placement of term deposits with original maturities	(286,870)
over three months	(589,250)
Proceeds from maturity of term deposits with original	614,204
maturities over three months		169,134
Proceeds from disposals of financial assets at fair	832,000
value through profit or loss		2,053,305
Proceeds from disposals of property, plant and equipment	130		277
Dividends from financial assets at fair value through	-
other comprehensive income	134
Proceeds from deregistration of an associate	150		-
Return on financial assets at fair value through profit or loss	16,800		33,614
Interest received	19,089		13,242
Net cash generated from/(used in) investing activities	541,885		(254,342)
Cash flows from financing activities
(4,922)
Buy-back of shares	(76,222)
Special dividend paid	(171,914)	-
Proceeds from issuance of ordinary shares	-	1,915
Payment of lease liabilities	(4,463)	-
Net cash used in financing activities	(181,299)	(74,307)
Net increase/(decrease) in cash and cash equivalents	420,137		(190,981)
Cash and cash equivalents at the beginning of the period	390,350		858,193
Exchange gain on cash and cash equivalents	2,489		22,567
Cash and cash equivalents at the end of the period	812,976		689,779

- 22 -

Notes:

1. GENERAL INFORMATION, BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

Boyaa Interactive International Limited (the "Company") was incorporated in the Cayman Islands. The address of its registered office is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 12 November 2013 (the "Listing").

The Company is an investment holding company. The Company and its subsidiaries (together, the "Group") are principally engaged in the development and operations of online card and board game business in the People's Republic of China (the "PRC"), Hong Kong and other countries and regions.

The interim consolidated balance sheet as at 30 September 2019, the interim consolidated statement of profit or loss and other comprehensive income for the three and nine months then ended, the interim consolidated statement of changes in equity and the interim consolidated statement of cash flows for the nine months then ended, and a summary of significant accounting policies and other explanatory notes (collectively defined as the "Interim Condensed Consolidated Financial Information") of the Group have been approved by the Board of Directors (the "Board") on 28 November 2019.

This Interim Condensed Consolidated Financial Information is presented in Renminbi ("RMB"), unless otherwise stated.

The Interim Condensed Consolidated Financial Information is prepared in accordance with International Accounting Standards ("IAS") 34 'Interim Financial Reporting' issued by the International Accounting Standards Board. This Interim Condensed Consolidated Financial Information should be read in conjunction with the annual consolidated financial statements of the Group for the year ended 31 December 2018 as set out in the 2018 annual report of the Company (the "2018 Financial Statements").

Except as described below, the accounting policies applied are consistent with those used in the 2018 Financial Statements, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income, which were carried at fair value.

Taxes on income in the interim periods are accrued using the tax rates that would be applicable to expected total annual earnings.

In the current interim period, the Group has applied, for the first time, the following new IFRS that is mandatorily effective for the financial year ending 31 December 2019.

IFRS 16

Leases

Except for the adoption of IFRS 16, other new standards, amendments or interpretations which are effective from 1 January 2019 do not have a material effect on the Group's financial statements.

- 23 -

The Group applies the practical expedient to grandfather the definition of a lease on transition. This means that it will apply IFRS 16 to contracts that were previously identified as leases under IAS 17 "Leases" and IFRIC-Int 4 "Determining whether an Arrangement contains a Lease".

The Group has transitioned to IFRS 16 in accordance with the modified retrospective approach and, therefore, the information presented for 2018 has not been restated. The right-of-use asset for property lease was measured at the amount equal to the lease liability, adjusted by the amount of any prepayments relating to that lease recognised in the consolidated balance sheet as at 31 December 2018.

The reconciliation of operating lease commitment to lease liabilities is set out below:
	RMB'000
	(unaudited)
Operating lease commitments at 1 January 2019	17,998
Short-term leases	(3,638)
Effect of discounting	(1,476)
Lease liabilities at 1 January 2019	12,884

The weighted average incremental borrowing rate applied to lease liabilities on 1 January 2019 was 6.8%.

The adjustment of the opening balances (affected items only) below results from the initial application of the IFRS 16 as at 1 January 2019. The prior-year amounts were not adjusted.

	31 December	IFRS 16	1 January
	2018	Adjustment	2019
	RMB'000	RMB'000	RMB'000
	(audited)	(unaudited)	(unaudited)
Assets:
Right-of-use assets	-	12,884	12,884
Liabilities:
Lease liabilities	-	12,884	12,884

The directors of the Company anticipate that the new standards that have been issued but are not effective for the financial year beginning on 1 January 2019 do not have a material impact on the Group's consolidated financial statements.

- 24 -

2. REVENUE AND SEGMENT INFORMATION

	Three months ended		Nine months ended
	30 September		30 September
	2019	2018	2019	2018
	RMB'000		RMB'000		RMB'000	RMB'000
	(unaudited)		(unaudited)		(unaudited)	(unaudited)
Disaggregation of revenue from contracts
with customers by game forms:
- Web-based games	36,982	33,740	107,211	129,959
- Mobile games	48,059	50,997	138,292	239,013
	85,041		84,737		245,503	368,972

Substantially all the revenue generated are recognised at a point in time.

The directors of the Company consider that the Group's operations are operated and managed as a single segment. The directors of the Company, being the chief operating decision maker of the Group, review the operating results of the Group as a whole when making decisions about resource allocations and assessing performances. Hence it is determined that the Group has only one operating segment. Accordingly no segment information is presented.

The Group offers its games in various language versions in order to enable game players to play the games in different geographical locations. All revenue derived from the PRC (including Hong Kong). A breakdown of revenue derived from different language versions of the Group's games is as follows:

	Three months ended		Nine months ended
	30 September		30 September
	2019		2018	2019	2018
	RMB'000	RMB'000		RMB'000	RMB'000
	(unaudited)	(unaudited)		(unaudited)	(unaudited)
Simplified Chinese	10,003		13,816	34,881	130,202
Other languages	75,038		70,921	210,622	238,770
	85,041		84,737		245,503	368,972

- 25 -

The Group has a large number of game players, none of whom contributed 10% or more of the Group's revenue for the three and nine months ended 30 September 2019 and 2018.

The Group's non-current assets other than deferred income tax assets, financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income were located as follows:

	30 September		31 December
	2019	2018
		RMB'000		RMB'000
		(unaudited)		(audited)
Mainland China	90,508	64,987
Other locations	17,307	16,238
		107,815		81,225

3. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

		Nine months
		ended	Year ended
	30 September	31 December
	2019		2018
		RMB'000	RMB'000
		(unaudited)	(audited)
Balance at the beginning of the period/year	64,525		-
Transfer from available-for-sale financial assets
upon adoption of IFRS 9		-	128,280
Additions		-	43,670
Fair value changes	(18,359)	(109,007)
Currency translation differences	897		1,582
Balance at the end of the period/year		47,063		64,525

Financial assets at fair value through other comprehensive income include the following:

	30 September		31 December
	2019	2018
		RMB'000		RMB'000
		(unaudited)		(audited)
Listed equity securities	43,720	60,719
Unlisted equity investments	3,035	3,035
Preference shares of private companies	308	771
		47,063		64,525

- 26 -

4. TRADE RECEIVABLES

	30 September	31 December
	2019		2018
		RMB'000	RMB'000
		(unaudited)	(audited)
Trade receivables	24,259		22,955
Less: loss allowance	(5,095)	(4,590)
		19,164		18,365

Trade receivables were arising from the development and operation of online game business. Platforms and third party payment vendors collect the payment from the paying players and remit the cash net of commission charges which are pre-determined according to the relevant terms of the agreements entered into between the Group and platforms or third party payment vendors. The credit terms of trade receivables granted to the platforms and third party payment vendors are usually 30 to 120 days. Ageing analysis based on recognition date of the gross trade receivables at the respective balance sheet dates is as follows:

		30 September		31 December
		2019	2018
			RMB'000		RMB'000
			(unaudited)		(audited)
0 - 60 days	16,785	16,718
61	- 90 days	638	995
91	- 180 days	1,404	1,737
Over 180 days	5,432	3,505
			24,259		22,955

- 27 -

5. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	30 September		31 December
	2019	2018
		RMB'000		RMB'000
		(unaudited)		(audited)
Included in non-current assets
Non-quoted investments in:
- asset management plans	70,005	104,033
- equity investment partnerships	473,135	485,298
	543,140	589,331
Included in current assets
Non-quoted investments in:
- asset management plan	31,779	6,875
- wealth management products	634,443	812,839
	666,222	819,714
		1,209,362		1,409,045

At the end of the Reporting Period, wealth management products in an aggregate amount of approximately RMB350,000,000 (31 December 2018: nil) were frozen by relevant PRC judicial authority. Details are set out in note 15.

1. CASH AND CASH EQUIVALENT
   At the end of the Reporting Period, cash and bank in an aggregate amount of approximately RMB286,814,000 (31 December 2018: nil) were frozen by relevant PRC judicial authority. Details are set out in note 15.
2. SHARE-BASEDPAYMENTS
3. 1. Share options
      On 7 January 2011, the Board of the Company approved the establishment of a share option scheme (i.e. the Pre-IPO Share Option Scheme) with the objective to recognise and reward the contribution of eligible directors and employees to the growth and development of the Group. The contractual life of all options under Pre-IPO Share Option Scheme is eight years from the grant date.
      On 23 October 2013, the Board of the Company approved the establishment of a share option scheme (i.e. the Post-IPO Share Option Scheme) with the objective to recognise and reward the contribution of eligible directors and employees to the growth and development of the Group. The contractual life of all options under Post-IPO Share Option Scheme is ten years from the grant date.

- 28 -

Movements in the number of share options outstanding:
	Number of share options
	2019		2018
	(unaudited)	(unaudited)
At 1 January	8,323,315		10,707,790
Exercised	-	(813,991)
Lapsed	(811,888)	(1,195,484)
At 30 September	7,511,427		8,698,315

No share options exercised during the nine months ended 30 September 2019.

Share options exercised during the nine months ended 30 September 2018 resulted in 813,991 shares being issued, with exercise proceeds of approximately RMB1,915,000. The related weighted average share price at the time of exercise was HKD3.28 per share.

Details of the exercise prices and the respective numbers of share options which remained outstanding as at 30 September 2019 and 2018 are as follows:

	Exercise price	Number of share options
	Original	Equivalent
Expiry date	currency	to HKD	2019	2018
			(unaudited)		(unaudited)
31 January 2019	USD0.05	HKD0.388	-	11,888
1 March 2020	USD0.10	HKD0.775	2,749	2,749
30 June 2020	USD0.15	HKD1.163	66,249	66,249
6 September 2025	HKD3.108	HKD3.108	7,442,429	8,617,429
			7,511,427		8,698,315

1. RSUs
   Pursuant to a resolution passed by the Board of the Company in 2013, the Company set up a RSU Scheme with the objective to incentivise directors, senior management and employees for their contribution to the Group, to attract, motivate and retain skilled and experienced personnel to strive for the future development and expansion of the Group by providing them with the opportunity to own equity interests in the Company.
   RSUs held by a participant that are vested may be exercised (in whole or in part) by the participant serving an exercise notice in writing on The Core Trust Company Limited and copied to the Company.
   The RSU Scheme will be valid and effective for a period of eight years, commencing from the date of the first grant of the RSUs.

- 29 -

Movements in the number of RSUs outstanding:
	Number of RSUs
	2019		2018
	(unaudited)	(unaudited)
At 1 January	7,781,613		20,480,853
Lapsed	(8,368)	(842,606)
Vested and transferred	(1,924,000)	(11,711,609)
At 30 September	5,849,245		7,926,638
Vested but not transferred as at 30 September	5,849,245		6,724,469

The related weighted average share price at the time when the RSUs were vested and transferred was HKD1.56 per share (30 September 2018: HKD3.10 per share).

8.	TRADE AND OTHER PAYABLES
		30 September		31 December
		2019	2018
			RMB'000		RMB'000
			(unaudited)		(audited)
	Trade payables	465	378
	Other taxes payables	43,442	43,253
	Accrued expenses	2,999	3,125
	Accrued commission charges by platforms	14,502	15,138
	Accrued advertising expenses	1,574	1,718
	Salary and staff welfare payables	5,186	5,250
	Others	612	501
			68,780		69,363

- 30 -

Trade payables were mainly arising from the leasing of servers. The credit terms of trade payables granted by the vendors are usually 30 to 90 days. The ageing analysis of trade payables based on recognition date is as follows:

	30 September		31 December
	2019	2018
		RMB'000		RMB'000
		(unaudited)		(audited)
0 - 30 days	155	76
31 - 60 days	37		-
61 - 90 days		-		-
Over 90 days	273	302
		465		378

9. EXPENSES BY NATURE

Expenses included in cost of revenue, selling and marketing expenses and administrative expenses are analysed as follows:

	Three months ended		Nine months ended
	30 September		30 September
	2019		2018	2019	2018
	RMB'000	RMB'000		RMB'000	RMB'000
	(unaudited)	(unaudited)		(unaudited)	(unaudited)
Commission charges by platforms and
third party payment vendors
(included in cost of revenue)	22,425		25,543	67,624	104,746
Employee benefit expenses
(excluding share-based
compensation expenses)	23,798		22,274	61,889	83,280
Share-based compensation expenses	41		669	472	2,747
Servers expenses	2,459		2,682	6,967	8,849
Office rental expenses	559		2,072	1,905	6,417
Depreciation of right-of-use assets	1,086		-	3,125	-
Depreciation of property, plant and
equipment	2,561		1,825	6,537	6,243
Travelling and entertainment expenses	2,836		897	5,103	2,907
Other professional service fees	3,351		1,165	10,097	4,330
Auditor's remuneration	475		550	1,425	1,650
Advertising expenses	3,759		2,390	7,648	16,147
Amortisation of intangible assets	283		352	893	1,058
Reversal of loss allowances on trade
receivables, net	(435)	-	(435)	-
Other expenses	1,794		2,842	5,132	7,814
	64,992		63,261		178,382	246,188

- 31 -

Research and development expenses during the three and nine months ended 30 September 2019 and 2018, are analysed as below:

	Three months ended		Nine months ended
	30 September		30 September
	2019		2018	2019	2018
	RMB'000	RMB'000		RMB'000	RMB'000
	(unaudited)	(unaudited)		(unaudited)	(unaudited)
Employee benefit expenses
(excluding share-based
compensation expenses)	15,798		16,652	41,110	49,831
Depreciation of right of use assets	244		-	745	-
Office rental expenses	-	531		-	1,699
Other expenses	1,492		1,264	4,548	4,694
	17,534		18,447		46,403	56,224

No research and development expenses were capitalised for the three and nine months ended 30 September 2019 and 2018.

10. OTHER GAINS - NET
	Three months ended	Nine months ended
	30 September	30 September
	2019		2018		2019	2018
	RMB'000	RMB'000	RMB'000	RMB'000
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Realised/unrealised fair value gains on
financial assets at fair value through
profit or loss	737		7,485		5,637	54,902
Foreign exchange (losses)/gains, net	(1,537)	140		(1,250)	(1,227)
Government subsidies and tax rebates	480		3,730		8,692	10,590
Dividends from financial assets at fair
value through other comprehensive
income	-	-	-	134
Dividends from financial assets at fair
value through profit or loss	766		291		2,888	12,562
(Loss)/gain on disposal of property, plant
and equipment	(4)	141		(668)	140
Gain on deregistration of an associate	265		-	265	-
Others	819		(10)	590	(2,446)
	1,526		11,777		16,154	74,655

- 32 -

11. FINANCE INCOME - NET
	Three months ended	Nine months ended
	30 September	30 September
	2019		2018		2019	2018
	RMB'000	RMB'000	RMB'000	RMB'000
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Finance income
Interest income	3,849		6,342		16,343	13,242
Interest income on non-current loans to
employees	244		703		757	1,844
Foreign exchange gains/(losses), net	778		(1,074)	157	-
	4,871		5,971		17,257	15,086
Finance costs
Discounting effects of non-current loans
to employees	(931)	(616)	(1,833)	(705)
Interest expenses on lease liabilities	(190)	-	(603)	-
Foreign exchange losses, net	-	(175)	-	(175)
	(1,121)	(791)	(2,436)	(880)
Finance income - net	3,750		5,180		14,821	14,206

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12. INCOME TAX EXPENSES

The income tax expenses of the Group for the three and nine months ended 30 September 2019 and 2018 are analysed as follows:

	Three months ended	Nine months ended
	30 September	30 September
	2019		2018		2019	2018
	RMB'000	RMB'000	RMB'000	RMB'000
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Current income tax - PRC
- Provision for the period	1,521		2,146		3,852	8,596
- Under/(over)-provision in prior
periods	409		-	858	(1,137)
	1,930		2,146		4,710	7,459
Current income tax - Hong Kong
- Provision for the period	4,616		3,838		11,997	14,358
- Under/(over)-provision in prior
periods	-	-	-	-
	4,616		3,838		11,997	14,358
Deferred income tax	(385)	(1,582)	(1,049)	3,467
	6,161		4,402		15,658	25,284

1. Cayman Islands income tax
   The Company is incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Law of Cayman Islands and accordingly, is exempted from Cayman Islands income tax.
2. Hong Kong profits tax
   Hong Kong profits tax has been provided at the rate of 8.25% on assessable profits up to HKD2,000,000 and 16.5% on any part of assessable profits over HKD2,000,000 for the three months and nine months ended 30 September 2019 and 2018.

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1. PRC corporate income tax ("CIT")
   The income tax provision of the Group in respect of operations in the PRC has been calculated at the tax rate of 25% on the estimated assessable profits for the three and nine months ended 30 September 2019 and 2018, based on the existing legislation, interpretations and practices in respect thereof.
   An indirect wholly owned subsidiary of the Company, Shenzhen Dong Fang Bo Ya Technology Co., Ltd. ("Boyaa Shenzhen") has successfully renewed its "High and New Technology Enterprise" ("HNTE") qualification in 2018 and as a result, Boyaa Shenzhen enjoys a preferential tax rate of 15% from 1 January 2018 to 31 December 2021. Therefore, the actual income tax rate for Boyaa Shenzhen was 15% for the three and nine months ended 30 September 2019 (for the three and nine months ended 30 September 2018: 15%).
   A direct wholly owned subsidiary of the Company, Boyaa On-line Game Development (Shenzhen) Co., Ltd. ("Boyaa PRC") renewed its HNTE qualification in 2016 and as a result, Boyaa PRC enjoys a preferential tax rate of 15% from 1 January 2016 to 31 December 2019. Therefore, the actual income tax rate for Boyaa PRC was 15% for the three and nine months ended 30 September 2019 (for the three and nine months ended 30 September 2018: 15%).
   According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engaged in research and development activities are entitled to claim 175% of the research and development expenses so incurred in a period as tax deductible expenses in determining its tax assessable profits for that period ("Super Deduction"). Boyaa Shenzhen and Boyaa PRC has claimed such Super Deduction in ascertaining its tax assessable profits for the three and nine months ended 30 September 2019 and 2018.
2. PRC withholding tax ("WHT")
   According to the applicable PRC tax regulations, dividends distributed by a company established in the PRC to a foreign investor with respect to profits derived after 1 January 2008 are generally subject to a 10% WHT. If a foreign investor incorporated in Hong Kong meets the conditions and requirements under the double taxation treaty arrangement entered into between the PRC and Hong Kong authorities, the relevant withholding tax rate will be reduced from 10% to 5%.
   As at 30 September 2019, the retained earnings of the Group's PRC subsidiaries not yet remitted to holding companies incorporated outside of the PRC, for which no deferred income tax liability had been provided, were approximately RMB1,211,610,000 (31 December 2018: approximately RMB1,189,895,000). Such earnings are expected to be retained by the PRC subsidiaries for reinvestment purposes and would not be remitted to their foreign investor in the foreseeable future based on management's estimation of overseas funding requirements.

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1. Tax reconciliation
   The tax on the Group's profit before tax differ from the theoretical amount that would arise using the weighted average tax rate applicable to profits of consolidated entities in the respective jurisdictions as follows:

	Nine months ended
	30 September
	2019		2018
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Profit before income tax	97,726		213,286
Add/(less): Share of loss/(profit) of associates	370		(1,641)
	98,096		211,645
Tax calculated at a tax rate of 25%	24,524		52,911
Tax effects of:
- Tax concession on assessable profits of
Boyaa Shenzhen and Boyaa PRC	(2,717)	(10,562)
- Different tax rates available to different subsidiaries
of the Group other than PRC	(6,604)	(6,773)
- Expenses not deductible for tax purposes	5,390		2,227
- Income not subject to tax	(1,062)	(7,293)
- Super Deduction	(4,731)	(4,089)
- Under/(over)-provision in prior periods	858		(1,137)
Income tax expenses	15,658		25,284

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13. EARNINGS PER SHARE

1. Basic

Basic earnings per share is calculated by dividing the profit of the Group attributable to the owners of the Company by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares held for the RSU Scheme and repurchased shares.

	Three months ended		Nine months ended
	30 September		30 September
	2019		2018	2019	2018
	RMB'000	RMB'000		RMB'000	RMB'000
	(unaudited)	(unaudited)		(unaudited)	(unaudited)
Profit attributable to owners
of the Company	18,954		34,224	82,068	188,002
Weighted average number
of ordinary shares in issue
(thousand shares)	662,756		668,589	662,646	675,369
Basic earnings per share
(expressed in RMB cents per
share)	2.86		5.12		12.38	27.84

1. Diluted
   Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
   For the three and nine months ended 30 September 2019 and 2018, the Group had two categories of dilutive potential ordinary shares, namely share options and RSUs. A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market share price of the Company's shares) based on the monetary value of the subscription rights attached to the outstanding share options and RSUs. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options and RSUs.

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	Three months ended		Nine months ended
	30 September		30 September
	2019	2018	2019	2018
	RMB'000		RMB'000		RMB'000	RMB'000
	(unaudited)		(unaudited)		(unaudited)	(unaudited)
Profit used to determine diluted
earnings per share	18,954	34,224	82,068	188,002
Weighted average number
of ordinary shares in issue
(thousand shares)	662,756	668,589	662,646	675,369
Adjustment for RSUs
(thousand shares)	5,670	6,865	6,512	10,482
Adjustment for share options
(thousand shares)	-	42	6	73
Weighted average number of
ordinary shares for calculating
diluted earnings per share
(thousand shares)	668,426	675,496	669,164	685,924
Diluted earnings per share
(expressed in RMB cents per
share)	2.84		5.07		12.26	27.41

1. DIVIDENDS
   The Board of the Company has resolved not to declare an interim dividend for the nine months ended 30 September 2019 (for the nine months ended 30 September 2018: nil).
2. MATERIAL EVENT
   In March 2019, the Company discovered that Group was not able to continue to use the idle cash of approximately RMB635 million in its individual bank accounts (the "Relevant Idle Cash Reserves") for fixed-term deposits or wealth management (the "Incident"). At the relevant time, the Company considered that the Incident may be implicated as a result of the Case (as defined below) involving individual Employees (as defined below), as such, the Company has engaged its PRC legal advisers (the "PRC Legal Advisers") to advise on this matter in March 2019. Upon engagement of the PRC Legal Advisers, the PRC Legal Advisers have submitted applications to the relevant PRC court and procuratorate on behalf of the Company in relation to the Incident, including an application to utilize the Relevant Idle Cash Reserves. The Company did not receive any reply from the relevant PRC court and procuratorate in relation to those applications.

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Upon advice of the PRC Legal Advisers, the Company filed another application to the relevant PRC court on 21 August 2019 seeking to utilize the Relevant Idle Cash Reserves for wealth management (the "Application"). On 27 August 2019, the Company received a reply (the "Reply") from the relevant PRC court that the Relevant Idle Cash Reserves were frozen due to a prosecution (the "Case") made by the relevant PRC judicial authority against its individual current or former employees (the "Employees") for their alleged illegal activities conducted through one of the Company's onshore online gaming platforms (the "Alleged Crime"). Therefore, the Application was rejected. As advised by the PRC Legal Advisers, if the relevant PRC judicial authority finds that the Employees are guilty of the Alleged Crime and some or all of the Relevant Idle Cash Reserves contain income generated as a result of such conduct, such income may be confiscated. The Company is discussing with its PRC Legal Advisers as to the next step forward.

The Company is not a party prosecuted in the Case and it was implicated due to the Alleged Crime of its individual Employees. As such, other than the Reply, the Company did not receive any formal notification on the Case from the relevant PRC judicial authority. As advised by the PRC Legal Advisers, the relevant PRC judicial authority is in the process of investigating the Case, and no trial dates have been fixed. Save as disclosed above, the Company has no details on the contents of the Case.

As at the date of this announcement, the Case is ongoing and all other bank accounts of the Company (the "Other Bank Accounts") remain in normal operations and are not affected by the Case. As advised by the PRC Legal Advisers, since (i) no prosecution has been made against the Company, its directors and senior management in relation to the Case and they did not receive any formal notification on the Case from any relevant PRC judicial authority; and (ii) the prosecution in relation to the Case was made against the Employees only, the risk that the Company, its directors and its senior management will be subject to any prosecution by the relevant PRC judicial authority in relation to the Alleged Crime is remote.

In light of the fact that (i) based on the above advice of the PRC Legal Advisers, the risk that the Company, its directors and senior management will be subject to any prosecution by the relevant PRC judicial authority in relation to the Alleged Crime is remote; (ii) the Relevant Idle Cash Reserves of the Company are only used for the purpose of Idle Fund Management, which is the Company's general practice and the Relevant Idle Cash Reserves only constitute a portion of total idle cash reserves of the Company; (iii) the Company is of the view that it has sufficient cash reserves available in the Other Bank Accounts for its day- to-day operations; (iv) the Company does not have any loan borrowing at the end of Reporting Period; and

1. the Company will actively monitor the development of the Case and the Incident and assess their impact on the operation of the Company, the Board is of the view that the Case and the Incident will not have any material adverse impact on the business, operation and financial conditions of the Group.

As at the 30 September 2019, the Group's financial assets at fair value through profit or loss of approximately RMB350 million and cash and cash equivalents of approximately RMB287 million were frozen.

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RECONCILIATION FROM UNAUDITED NET PROFIT TO UNAUDITED NON-IFRS ADJUSTED NET PROFIT

FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019

	For the nine months ended
	30 September	Year-on-Year
	2019		2018		Change*
	RMB'000	RMB'000	%
	(unaudited)	(unaudited)
Revenue	245,503		368,972		(33.5)
Cost of revenue	(76,755)	(118,871)	(35.4)
Gross profit	168,748		250,101		(32.5)
Selling and marketing expenses	(15,117)	(26,853)	(43.7)
Administrative expenses	(86,510)	(100,464)	(13.9)
Other gains - net	16,154		74,655	(78.4)
Operating profit	83,275		197,439		(57.8)
Finance income - net	14,821		14,206		4.3
Share of (loss)/profit of associates	(370)	1,641	(122.5)
Profit before income tax	97,726		213,286		(54.2)
Income tax expenses	(15,658)	(25,284)	(38.1)
Profit for the period	82,068		188,002		(56.3)
Non-IFRS adjustment (unaudited)
Share-based compensation expenses
included in cost of revenue	115		572		(79.9)
Share-based compensation expenses
included in selling and marketing expenses	124		749	(83.4)
Share-based compensation expenses
included in administrative expenses	233		1,426	(83.7)
Non-IFRS adjusted net profit (unaudited)	82,540		190,749		(56.7)

• Year-on-YearChange % represents a comparison between the current reporting period and the corresponding period last year.

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RECONCILIATION FROM UNAUDITED NET PROFIT TO UNAUDITED NON-IFRS ADJUSTED NET PROFIT (CONTINUED)

FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

		For the three months ended	Year-on-	Quarter-on-
	30 September	30 June	30 September	Year	Quarter
	2019		2019		2018		Change*	Change **
		RMB'000	RMB'000		RMB'000	%	%
		(unaudited)	(unaudited)		(unaudited)
Revenue	85,041		80,258		84,737		0.4	6.0
Cost of revenue		(25,463)	(26,305)	(28,620)	(11.0)	(3.2)
Gross profit		59,578		53,953			56,117		6.2	10.4
Selling and marketing	(6,495)
expenses	(4,275)	(5,748)	13.0	51.9
Administrative expenses	(33,034)	(27,750)	(28,893)	14.3	19.0
Other gains - net		1,526		572			11,777		(87.0)	166.8
Operating profit	21,575		22,500		33,253		(35.1)	(4.1)
Finance income - net	3,750		2,745		5,180		(27.6)	36.6
Share of (loss)/profit of	(210)
associates	19		193		(208.8)	(1,205.3)
Profit before income tax	25,115		25,264		38,626		(35.0)	(0.6)
Income tax expenses	(6,161)	(2,229)	(4,402)	40.0	176.4
Profit for the period	18,954		23,035		34,224		(44.6)	(17.7)
Non-IFRS adjustment
(unaudited)
Share-based compensation
expense included in cost of	10
revenue		37		144		(93.1)	(73.0)
Share-based compensation
expense included in selling	11
and marketing expenses		38		181		(93.9)	(71.1)
Share-based compensation
expense included in	20
administrative expenses		71		344		(94.2)	(71.8)
Non-IFRS adjusted net
profit (unaudited)		18,995		23,181			34,893		(45.6)	(18.1)

• Year-on-YearChange % represents a comparison between the current reporting period and the corresponding period last year.

• Quarter-on-QuarterChange % represents a comparison between the quarter ended 30 September 2019 and the immediately preceding quarter.

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EXTRACT OF INDEPENDENT AUDITOR'S REVIEW REPORT

The following is an extract of the independent auditor's report on Review of Interim Condensed Consolidated Financial Information of the Group for the nine months ended 30 September 2019:

"BASIS FOR QUALIFIED CONCLUSION

As disclosed in note 26 to the interim condensed consolidated financial information, the Group's financial assets at fair value through profit or loss of approximately RMB350 million and cash and cash equivalents of approximately RMB287 million as at 30 September 2019 (hereinafter referred to as the "Relevant Idle Cash Reserves") were frozen.

At the date of this report, the Relevant Idle Cash Reserves were still frozen and the outcome has yet to be determined. Accordingly, we were unable to obtain sufficient appropriate evidence we considered necessary to ascertain the amount of the Relevant Idle Cash Reserves that will be confiscated. Given the scope limitation, there were no other satisfactory procedures that we could perform to determine whether any adjustments to the carrying amounts of the Relevant Idle Cash Reserves as at 30 September 2019 were necessary.

QUALIFIED CONCLUSION

Based on our review, except for the possible effects of the matter described in the Basis for Qualified Conclusion section of our report, nothing has come to our attention that causes us to believe that the interim condensed consolidated financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"."

The Board wishes to remind investors that the above financial information is based on the Group's unaudited management accounts. Investors are cautioned not to unduly rely on such information and are advised to exercise caution when dealing in the securities of the Company.

By order of the Board of

Boyaa Interactive International Limited

Dai Zhikang

Chairman and Executive Director

Hong Kong, 28 November 2019

As at the date of this announcement, the executive directors of the Company are Mr. Dai Zhikang and Ms. Tao Ying; the independent non-executive directors of the Company are Mr. Cheung Ngai Lam, Mr. Choi Hon Keung Simon and Mr. Sun Zihua.

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