Revenue Performance - For the six months ended June 30, 2019, the company's revenue decreased by approximately 8.5% to RMB 177.9 million, down from RMB 194.3 million in the same period of 2018[9]. - The print media and arts segment reported a revenue decline of 14.0% compared to the same period in 2018, primarily due to stagnation in the print media industry and a challenging macroeconomic environment[10]. - The digital media segment experienced a slight revenue increase of 2.2% year-on-year, benefiting from stable advertising performance from the company's applications[10]. - Revenue for the six months ended June 30, 2019, was RMB 177,863 thousand, a decrease of 8.4% from RMB 194,331 thousand in the same period of 2018[180]. - Advertising revenue for the six months ended June 30, 2019, was RMB 131,120 thousand, a slight decrease of 2.4% from RMB 134,130 thousand in 2018[180]. Segment Performance - The company's total reported segment loss for the first half of 2019 was RMB 33.7 million, compared to RMB 29.1 million in the same period of 2018[10]. - The EBITDA for the print media and arts segment improved to RMB (16.6) million, while the digital media segment achieved an EBITDA of RMB 6.7 million[10]. - The flagship magazine "Weekend Weekly" maintained its top position in revenue among weekly magazines despite a decline in earnings[14]. - The "INSTYLE" magazine continued to be a popular choice among luxury brand advertisers, with its reader club membership increasing during the reporting period[14]. Digital Media Growth - The management believes that digital media will become the main source of revenue and profit center in the future[10]. - "iWeekly" reached 14,800,000 smartphone and tablet users, enhancing its global content and reader loyalty through selected content from renowned international media brands[17]. - "Bloomberg Businessweek Chinese Edition" expanded its user base to 11,400,000, with subscription revenue reaching RMB 2,500,000 during the interim period[18]. - "INSTYLE iLady" accumulated over 7,200,000 users, becoming a major revenue source by providing a "see-use-buy" digital media experience[19]. - "Nowness" achieved advertising revenue of RMB 12,700,000, representing a 24.5% increase year-on-year, with a user base nearing 3,000,000[20]. - "Urban Customer" generated revenue of RMB 7,300,000, reflecting a 48.5% year-on-year growth, driven by strong participation in online cosmetics sample testing programs[20]. Strategic Initiatives - The company has strategically restructured its business into two segments: print media and arts, and digital media, to adapt to market changes[9]. - The company plans to expand its innovative business model and develop four major media platforms: fashion, culture, art, and business[22]. - The strategy includes the "4M" approach: Modern Publishing, Modern Digital, Modern Space, and Modern Art, with expectations for a rebound in advertising spending on print magazines[23]. - The company aims to enhance its digital business through the integration of online and offline experiences, creating a new media business model[24]. - The "Modern Art" business will be launched in major Chinese cities such as Beijing, Guangzhou, and Shenzhen, becoming a key driver for future profit growth[26]. Financial Position - The group recorded a net cash inflow from operating activities of RMB 8,300,000, an increase from RMB 2,700,000 in the previous year, due to effective accounts receivable management[29]. - The capital debt ratio increased to 21.8% as of June 30, 2019, up from 15.8% at the end of 2018, primarily due to an increase in lease liabilities[31]. - The group did not recommend any interim dividend for 2019, similar to 2018, to retain more financial resources[28]. - Total capital expenditure during the interim period was approximately RMB 16,000,000, down from RMB 34,900,000 in the same period last year[33]. - The group’s bank loans amounted to RMB 28,000,000 secured by the Beijing office property, with additional loans of RMB 64,200,000 secured by the Hong Kong office unit[35]. Losses and Uncertainties - The company reported a net loss of RMB 34,595,000 for the six months ending June 30, 2019[70]. - The company has significant uncertainties regarding its ability to continue as a going concern due to the reported losses and cash position[70]. - The company reported a total comprehensive loss of RMB 36,428,000 for the six months ended June 30, 2019, compared to a loss of RMB 28,716,000 for the same period in 2018, indicating an increase in losses of approximately 27% year-over-year[108]. Cash Flow and Investments - Cash flow from operating activities for the six months ended June 30, 2019, was RMB 9,401,000, up from RMB 2,660,000 in the same period of 2018, representing a significant increase of approximately 253%[117]. - The company incurred a net cash outflow from investing activities of RMB 18,911,000 for the six months ended June 30, 2019, compared to RMB 35,128,000 in the same period of 2018, showing a reduction in cash outflow of about 46%[119]. - The company reported a net cash inflow from financing activities of RMB (4,042,000) for the six months ended June 30, 2019, compared to RMB (6,078,000) in the same period of 2018, indicating an improvement in financing cash flow[119]. Corporate Governance - The audit committee reviewed the interim results and had no objections to the accounting policies adopted by the company[59]. - The company is committed to maintaining high standards of corporate governance and regularly reviews its practices[56]. - The board of directors consists of four independent non-executive directors overseeing the company's operations[56]. - The remuneration committee is responsible for recommending the remuneration policy for directors[60]. Accounting Policies and Standards - The company adopted the revised retrospective method for the first application of IFRS 16 on January 1, 2019, with no restatement of comparative information[76]. - The company has not early adopted any new or revised IFRS that are not yet effective during the reporting period[132]. - The transition to IFRS 16 has resulted in significant changes in accounting policies regarding lease measurement and recognition[150].

Business Strategy and Innovation - Modern Media has established partnerships with influential international media agencies, including Bloomberg Media Group and Time Inc., enhancing its global presence[6]. - The company has acquired controlling equity interest in Nowness, a leading online platform for creative and cultural video broadcasting, expanding its market reach[6]. - Modern Media has founded over ten magazines in mainland China and Hong Kong, contributing to its extensive digital and social media development history[6]. - Modern Media's mission is to be a global trendsetter and cultivator of Chinese elites, focusing on modernization and internationalization[10]. - The company aims to continuously evolve and modernize, striving to become a leading high-profile media group in China[11]. - The company plans to continue expanding its innovative business model in 2019, transitioning from print media to digital media and then to platform media[35]. - The development strategy has undergone three phases: from PaperZine print media to Mobile Zine digital media to Space Zine platform media[35]. - The company aims to create a lifestyle that integrates photography and visual art into everyday life, enhancing aesthetic perception and inspiration[23]. - The company seeks to maintain youthfulness and vitality through the courage and ability to create new business ventures[36]. - The company aims to expand its innovative business model and improve the transformation from print media to digital media and finally to platform media[46]. - The company plans to establish four major media platforms, including fashion, culture, art, and business, to drive innovation and growth[40]. - The management believes that the development of physical space magazine-style experience will bring new opportunities and growth momentum[40]. - The company aims to create a one-stop leisure space for consumers that integrates online and offline experiences[40]. - The company is focused on creating a new media model that integrates online and offline platforms, enhancing user experience and engagement[48]. - The group plans to establish four major media platforms focusing on fashion, culture, art, and business in 2019, aiming for new growth opportunities[75]. - The strategy will continue to extend to the "4Ms" approach: Modern Publishing, Modern Digital, Modern Space, and Modern Art, with expectations of a rebound in print magazine advertising[76]. Financial Performance - The group's business revenue grew by 3.1% in 2018, with EBITDA turning profitable, attributed to the success of new platform operating strategies and innovative plans[60]. - The reported segment revenue for print media and arts was RMB 303.1 million, a decrease of 4.2% from 2017, while digital media segment revenue increased by 26.6% to RMB 154.5 million[60]. - The digital media segment achieved a profit of RMB 9.4 million in 2018, a significant increase of 195.2% compared to the previous year[60]. - The flagship magazine "Weekend Weekly" maintained its position as the top revenue-generating weekly magazine despite a decline in overall print media revenue[62]. - The magazine "InStyle" successfully hosted multiple events, enhancing its market recognition among brand advertisers, with only a slight decrease in advertising revenue compared to 2017[63]. - The advertising revenue from the flagship business magazine "Bloomberg Businessweek" (Chinese Simplified version) increased by 11.7% in 2018, unaffected by the overall decline in the magazine advertising industry[63]. - The print magazine segment contributed approximately RMB 272.7 million in advertising revenue, down 8.0% from RMB 296.5 million in 2017, aligning with the downward trend in the magazine advertising market[62]. - The group's digital media revenue increased by 26.6% year-on-year in 2018, outperforming the overall market growth of 7.3% in the internet advertising sector[67]. - The "iWeekly" app achieved approximately 14.8 million downloads, enhancing its global content and expanding its readership[69]. - "INSTYLE iLady" accumulated over 7.2 million users by the end of 2018, with advertising revenue soaring by approximately 50.9% compared to 2017[69]. - "Bloomberg Businessweek Chinese Edition" expanded its user base to about 10.9 million, a 25.3% increase from the previous year, with subscription revenue rising from RMB 5 million to RMB 6.5 million[70]. - The "Nowness" video platform generated advertising and production revenue of RMB 23.1 million in 2018, with an app download count of 2.9 million[71]. - The art business contributed RMB 10.2 million in revenue, with plans to develop membership services in 2019 for additional profits[65]. - The company aims to achieve after-tax earnings of at least HKD 140 million, HKD 162 million, and HKD 186 million for the fiscal years ending December 31, 2017, 2018, and 2019 respectively, as per the investment agreement with Seven Wolves Investment[186]. - The after-tax earnings for the fiscal year 2018 were approximately RMB 153.7 million, equivalent to about HKD 182.1 million, exceeding the expected performance of HKD 162 million[186]. Corporate Governance - The board of directors consists of nine members, with five executive directors and four independent non-executive directors, ensuring independent oversight[98]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange, ensuring compliance with best practices[96]. - The board will review the division of responsibilities with management to ensure alignment with the company's needs[101]. - The board of directors has received regular updates on the group's business, operations, risk management, and corporate governance matters[111]. - The independent non-executive directors have confirmed their independence according to the guidelines set out in the listing rules[113]. - The audit committee, established in 2009, consists of four independent non-executive directors and is responsible for overseeing the financial reporting process and internal controls[121]. - The audit committee reviews the group's financial statements before submission to the board, focusing on accounting policies, major estimates, and compliance with accounting standards[121]. - The company has a clear separation of roles between the chairman and the CEO, with the founder serving as both to enhance business strategy execution[118]. - The independent non-executive directors have extensive experience in their respective fields, contributing to the board's diversity and decision-making[114]. - The company has established various committees under the board to handle specific governance matters, ensuring thorough oversight[120]. - The independent non-executive directors will seek re-election at the upcoming annual general meeting, having served for over nine years[116]. - The Audit Committee held two meetings in 2018, with all members present at least once[124]. - The Compensation Committee reviewed and discussed the group's compensation policy and determined the compensation for executive directors in 2018[130]. - The Nomination Committee did not appoint any new directors during the year ending December 31, 2018[135]. - The Audit Committee reported no disagreements with the selection and appointment of external auditors for the year[128]. - The Compensation Committee approved share awards under the company's share incentive plan, as per the board's approval[130]. - The Nomination Committee evaluated the independence of independent non-executive directors during the year[136]. - The Audit Committee reviewed the financial reporting, internal controls, and risk management processes of the group[125]. - The Compensation Committee held three meetings in 2018, with two members attending all meetings[129]. - The Nomination Committee assessed the board's structure and composition, considering factors such as skills and experience[134]. - The company established an Environmental, Social, and Governance (ESG) Committee in 2016, consisting of three executive directors and one subsidiary director, to implement and monitor ESG policies and strategies[137]. - The internal control system covers all significant areas of the business, including financial, operational, compliance, and risk management, ensuring shareholder investment protection[143]. - The company’s audit services for the year ending December 31, 2018, amounted to RMB 1,423,000, an increase from RMB 1,318,000 in 2017, while other non-audit services totaled RMB 236,000, up from RMB 218,000[153]. - The board has reviewed the effectiveness of the internal control system and found it satisfactory, ensuring adequate resources and training for accounting and financial reporting functions[144]. - The company secretary received no less than 15 hours of relevant professional training during the year to assist the board in governance matters[151]. - The board will periodically review measurable goals related to diversity, including professional skills, gender, age, and cultural and ethnic backgrounds[140]. - The company has a commitment to maintaining a diverse board, recognizing it as key to sustainable development[138]. - The audit committee conducts preliminary reviews of the financial control, internal control, and risk management systems before the board's formal discussions[144]. Market Challenges and Future Outlook - The company has faced challenges in business and profitability growth due to fluctuations in the macroeconomic conditions in China and Hong Kong, impacting advertising budgets from brand advertisers[182]. - The company is focused on sustainable business expansion and market penetration, aiming to diversify revenue sources and improve cost efficiency to seek profitability growth[184]. - The company plans to continue integrating the vertical supply chain and enhancing its e-commerce features while expanding integrated marketing brand consulting services[184]. - The company is committed to prudent capital management and liquidity risk management to maintain sufficient buffers against future challenges[184]. - The management is optimistic about the future, expecting to provide shareholders with new development prospects and returns as it approaches its 10th anniversary on the Hong Kong main board[40]. - The company will not declare a final dividend for the year to retain more financial resources to address market challenges[80]. - The board aims to provide sustainable returns to shareholders through a stable dividend policy, with mid-term and final dividends proposed for each fiscal year[191]. - The board considers various factors, including liquidity and financial performance, when deciding on dividend declarations[192]. - The company will not declare dividends if it believes it may become unable to meet its debt obligations post-dividend payment[195]. - The group reported a loss for the year, with details on financial performance and reserves available in the consolidated financial statements[190]. - The company's return on equity improved from -8.3% to -7.6% due to better advertising performance and reduced losses[167]. - The company's debt-to-equity ratio increased slightly from 14.7% in 2017 to 15.8% in the review year[167]. - The total outstanding borrowings were approximately RMB 101,100,000, an increase from RMB 96,100,000 in 2017[84]. - The cash outflow for investment activities was RMB 51,600,000, significantly higher than RMB 10,900,000 in the previous year, primarily due to investments in properties and equipment[82]. - The operating cash inflow for the year was approximately RMB 3,900,000, maintaining a similar level compared to RMB 4,500,000 in the previous year[82]. - The company recognizes employees as its most valuable asset and aims to attract and retain skilled personnel through competitive compensation packages and performance evaluation systems[175]. - The company maintains strong relationships with key stakeholders, including employees, customers, service providers, regulatory bodies, and shareholders, to support its business success[173]. - The company entered into an investment agreement with Xiamen Feibo Technology Co., Ltd. to acquire shares in its wholly-owned subsidiary, Shanghai Xinxuefen Cultural Communication Co., Ltd., enhancing liquidity and optimizing sales networks[187]. - The company encourages ongoing professional development for its directors and senior management to keep their knowledge and skills updated[175]. - The company has established a compliance and risk management policy to ensure adherence to significant legal and regulatory requirements affecting its operations[172].