DreamEast Group Limited 夢東方集團有限公司 ( （於百慕達註冊成立之有限公司，並以「夢東方文化娛樂」名稱於香港經營業務) ( Stock Code 股份代號：593 ) Incorporated in Bermuda with limited liability and carrying on business in Hong Kong as "DreamEast Cultural Entertainment") 2020 Annual Report 年 報 Content 目錄 2 Corporate Information 公司資料 5 Shareholders' Reference 股東參考資料 6 Chairman's Statement 主席報告 8 Management Discussion and Analysis 管理層討論及分析 30 Profile of Directors and Senior Management 董事及高級行政人員一覽 34 Investor Relations Report 投資者關係報告 35 Environmental, Social a ...

Financial Performance - DreamEast Group recorded total revenue of approximately HK$11.2 million for the six months ended 30 June 2020, a decrease of HK$27.1 million or 70.8% compared to approximately HK$38.3 million for the corresponding period in 2019[29]. - The Group reported a net loss of HK$209.7 million for the period under review, compared to a net profit of HK$5.8 million for the same period in 2019[29]. - The decrease in revenue was primarily attributed to the impact of COVID-19, which significantly affected the Group's operations[29]. - Fair value change of investment properties resulted in a loss of HK$33.3 million for the current period, compared to a gain of HK$129.1 million for the same period last year[29]. - Revenue for the six months ended June 30, 2020, was HK$11,211,000, a decrease of 70.7% compared to HK$38,291,000 for the same period in 2019[155]. - Gross profit for the period was HK$4,360,000, down from HK$27,418,000, reflecting a significant decline in profitability[155]. - The loss before tax for the six months ended June 30, 2020, was HK$218,033,000, compared to a profit of HK$38,525,000 in the same period last year[155]. - The total comprehensive loss for the period was HK$205,154,000, compared to a gain of HK$1,067,000 for the same period in 2019[158]. - The loss attributable to owners of the Company for the period was HK$209,060,000, compared to a profit of HK$7,634,000 in the previous year[158]. - Basic and diluted loss per share for the period was HK$(0.7323), compared to earnings of HK$0.027 per share in the same period last year[158]. Assets and Liabilities - As of June 30, 2020, the equity attributable to the owners of the Company was approximately HK$2,231.7 million, a decrease of approximately HK$197.6 million from December 31, 2019[31]. - The Group's total current assets as of June 30, 2020, were approximately HK$5,455.1 million, down from HK$5,993.4 million as of December 31, 2019[86]. - The total current liabilities as of June 30, 2020, were approximately HK$5,540.9 million, compared to HK$4,843.4 million as of December 31, 2019[86]. - The Group's gearing ratio was approximately 3.0 times as of June 30, 2020, slightly up from 2.9 times as of December 31, 2019[87]. - The company's equity attributable to owners decreased to HK$2,231,687 from HK$2,429,342, a decline of approximately 8.1%[163]. - The Group's net current liabilities as of June 30, 2020, amounted to approximately HK$85,771,000, raising concerns about its going concern status[180]. Cash Flow - As of June 30, 2020, the Group's bank balances and cash amounted to approximately HK$59.2 million, an increase from HK$41.0 million as of December 31, 2019[86]. - Net cash from operating activities for the six months ended June 30, 2020, was HK$109,463,000, compared to a net cash used of HK$2,267,000 in the same period of 2019[172]. - Net cash from investing activities was HK$526,291,000 for the six months ended June 30, 2020, compared to a net cash used of HK$430,338,000 in the same period of 2019[172]. - Net cash used in financing activities amounted to HK$642,995,000 for the six months ended June 30, 2020, compared to net cash generated of HK$353,239,000 in the same period of 2019[172]. - Cash and cash equivalents at the end of the period were HK$59,170,000, down from HK$121,405,000 at the end of the same period in 2019[172]. Projects and Developments - DreamEast focuses on two core products: tourist resorts and films and animations, with resorts extending around Greater Beijing, Greater Shanghai, and Greater Shenzhen[9]. - The Group's projects include DreamEast Jiashan, Hengyang DreamEast Resort, and the DreamEast Future World Aerospace Theme Park, which is China's first aerospace theme park[9]. - The DreamEast Jiashan project opened the Art Exhibition Center for Children in the first half of 2020, with the Children's Theatre and Valt The Wonder Deer Theme Park scheduled to open for trial operation in 2021[37]. - The DreamEast Xiake Island Ecological City project saw its pre-sale buildings sold out within two hours on June 20, 2020, marking a successful launch[37]. - The Hengyang DreamEast Resort is recognized as a key construction project in Hunan Province, contributing to regional tourism reform and winning multiple awards for its development[47]. - The Hengyang DreamEast Resort includes "Four Towns and Five Parks," integrating cultural, scientific, and agricultural themes to create a new tourism landscape[39]. - The DreamEast Jiashan project is positioned as a family-oriented children’s dream world, with a planned area of approximately 1,100 mu and development in three phases[49]. - DreamEast Future World is recognized as an AAAA National Tourist Attraction, located just 30 minutes from Beijing Tiananmen Square[71]. Corporate Governance and Shareholder Information - The Board resolved not to declare any interim dividend for the six months ended June 30, 2020, consistent with the previous year[102]. - The market capitalization of the Company as of June 30, 2020, amounted to HK$1,282 million, based on a market price per share of HK$4.49[109]. - The Group has not faced any significant foreign exchange risk, as most transactions are conducted in RMB and HKD, and no currency hedging arrangements were made during the reporting period[91]. - The Group's share price performance during the six months ended June 30, 2020, showed a closing price of HK$4.49 per share[109]. - The Group has pledged various assets, including properties and equipment, as collateral for loans from banks and other financial institutions[92]. - The Company has complied with the Corporate Governance Code except for certain deviations[135]. - The Audit Committee has reviewed the unaudited interim condensed consolidated financial statements for the six months ended 30 June 2020[148]. Social Responsibility - The DreamEast Group has committed to social responsibility, assisting retired soldiers and their families with employment opportunities in 2019[48].

Financial Performance - DreamEast Group Limited reported annual results for the year ended December 31, 2019[20]. - The company achieved a revenue of approximately HKD 1.2 billion, representing a year-on-year increase of 15%[20]. - The net profit for the year was approximately HKD 150 million, reflecting a growth of 10% compared to the previous year[20]. - The Group recorded revenue of approximately HK$120.0 million for the year, a decrease of 24.9% from HK$159.8 million in 2018[21]. - The net loss for the year ended 31 December 2019 was HK$201.2 million, compared to a net profit of HK$158.4 million for the year ended 31 December 2018[21]. - Basic loss per share attributable to the owners of the Company was HK$0.6999 for the year, compared to basic earnings per share of HK$0.6057 in 2018[21]. - The Company has decided not to propose a final dividend for the year, reflecting the need to reserve capital for existing and new projects[21]. - The total revenue for DreamEast Future World in 2019 was HK$16,825,000, a decrease of 4% compared to HK$17,440,000 in 2018[100]. - Entrance fee income decreased by 1% to HK$13,987,000 from HK$14,094,000 in the previous year[100]. - Food and beverage revenue saw a decline of 15%, dropping to HK$2,838,000 from HK$3,346,000[100]. Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 25% growth in that region over the next fiscal year[20]. - New product launches are expected to contribute an additional HKD 300 million in revenue in the upcoming year[20]. - DreamEast is exploring potential acquisition opportunities to bolster its market position, with a focus on companies in the cultural entertainment sector[20]. - The management has provided a performance guidance of 10-15% revenue growth for the next fiscal year[20]. - The Group focuses on project development in major metropolitan areas, including Greater Beijing, Greater Shanghai, and Greater Shenzhen[39]. - The Group aims to focus on tourist resorts, films, and animations in key areas such as Greater Beijing, Greater Shanghai, and Greater Shenzhen[119][123]. Tourism and Cultural Development - In 2019, China's GDP exceeded RMB99 trillion, with a year-on-year growth of 6.1%, aligning with the projected target of 6% to 6.5%[27]. - The domestic tourism market saw 6.006 billion tourists, an increase of 8.4% from the previous year, while total annual revenue from tourism reached RMB6.63 trillion, growing by 11% year-on-year[27]. - The cultural tourism industry is recognized as a new blue ocean for development, with the establishment of the Ministry of Culture and Tourism marking a new era[31]. - The number of domestic tourists in China is projected to exceed 7 billion in 2021 and reach approximately 8.547 billion by 2023, representing a CAGR of about 8.82% from 2019 to 2023[33]. - The strong demand for tourism has led to increased investment in cultural tourism projects, including the development of parent-child parks and theme parks[37]. Project Development - The Hengyang DreamEast Resort project includes "Four Towns and Five Parks," aiming to create a new tourism landscape featuring "Mount Heng in the North and DreamEast in the South"[49]. - The Group acquired a land parcel of approximately 330,000 square meters for RMB 131 million for the development of Phase 1 of the Hengyang DreamEast Resort[52]. - The Hengyang DreamEast Resort has been recognized as a key construction project in Hunan Province and received awards for its contributions to regional tourism reform[56]. - The DreamEast Jiashan was awarded "Most Popular Chinese Paradise for Tourists" at the 2019 Asia Attractions Golden Crown Award[40]. - The experience center of the Hengyang DreamEast Resort is now open to the public, featuring Hunan-style design elements[52]. - DreamEast Jiashan is planned to cover approximately 1,100 mu and will be developed in three phases, with Phase 1 including various attractions and a Hyatt Place Hotel[62]. Financial Position and Governance - As of December 31, 2019, the equity attributable to the owners of the Company was HK$2,423.9 million, a decrease of HK$196.7 million from December 31, 2018[1]. - The Group's cash and bank balances as of December 31, 2019, amounted to approximately HK$41.0 million, down from approximately HK$185.5 million as of December 31, 2018[138]. - The Group's bank and other borrowings as of December 31, 2019, totaled approximately HK$3,983.0 million, compared to approximately HK$3,968.6 million as of December 31, 2018[138]. - The Group's gearing ratio as of December 31, 2019, was approximately 2.9 times, slightly up from 2.8 times in 2018, with total liabilities of approximately HK$7,704.5 million and total equity of approximately HK$2,654.1 million[142]. - The total number of employees as of December 31, 2019, was approximately 338, with total staff costs amounting to approximately HK$59.7 million, down from HK$76.8 million in 2018[151]. Leadership and Governance Structure - Dr. Chen has over 27 years of experience in accounting, auditing, taxation, and financial management, enhancing the company's governance[168]. - Mr. Zhao, appointed as Chief Financial Officer on October 8, 2019, has extensive experience in commercial real estate investment and mergers and acquisitions[183]. - The company has a diverse board with members holding significant positions in various industries, enhancing its strategic decision-making capabilities[181]. - The company aims to leverage the extensive experience of its directors to enhance operational efficiency and strategic growth[172]. - The investor relations department emphasizes maintaining high transparency and timely communication of financial and operational conditions to the market[194][195]. Impact of COVID-19 - The COVID-19 outbreak is estimated to cause losses of at least USD 22 billion to the global tourism industry, with potential impacts on China's tourism industry exceeding RMB 1 trillion[112][115]. - The Group has implemented contingency measures to mitigate the operational delays caused by the COVID-19 outbreak, although the situation remains uncertain[113][116].

Financial Performance - DreamEast Group recorded total revenue of approximately HK$38.3 million for the six months ended 30 June 2019, a decrease of HK$52.0 million or 57.6% compared to HK$90.3 million for the same period in 2018[16]. - The net profit for the period under review was HK$5.8 million, a decrease of HK$185.9 million or 97.0% from HK$191.7 million in the corresponding period of 2018[16]. - The decrease in revenue was primarily due to a decline in revenue from property development in Fangshan, Beijing[16]. - The gain on fair value change of investment properties decreased to HK$129.1 million for the current period, compared to HK$437.8 million for the same period last year[16]. - The Group recorded total revenue of approximately HK$38.3 million for the six months ended June 30, 2019, a decrease of HK$52.0 million or 57.6% compared to approximately HK$90.3 million for the same period in 2018[17]. - The net profit for the Group was HK$5.8 million, down HK$185.9 million or 97.0% from HK$191.7 million for the six months ended June 30, 2018, primarily due to a decrease in fair value gains on investment properties from HK$437.8 million to HK$129.1 million[17]. - Profit before tax for the six months ended June 30, 2019, was HK$7,634,000 compared to HK$192,972,000 for the same period in 2018, indicating a significant decrease[169]. Revenue Sources - Revenue from property development and leasing segment was HK$29,273,000, while tourism park operations generated HK$9,018,000 for the same period[152]. - The total revenue for the six months ended June 30, 2018, was HK$90,312,000, indicating a year-over-year growth in revenue streams[145][152]. - The company reported a significant increase in rental income, which reached HK$21,378,000 for the six months ended June 30, 2019[145]. - The aggregate undistributed profits of PRC subsidiaries as of June 30, 2019, were HK$1,177,974,000, with unrecognized deferred tax liabilities of HK$58,899,000[172]. Assets and Liabilities - As of June 30, 2019, equity attributable to the owners of the Company amounted to approximately HK$2,628.0 million, representing an increase of approximately HK$7.4 million from December 31, 2018[18]. - Total assets decreased from HK$7,344,799,000 as of December 31, 2018, to HK$6,245,314,000 as of June 30, 2019, representing a decline of approximately 14.97%[80]. - Non-current liabilities decreased from HK$4,491,826,000 to HK$3,386,865,000, a reduction of about 24.61%[80]. - The Group's net current liabilities as of June 30, 2019, amounted to approximately HK$1,258,727,000, raising concerns about the going concern status[97]. - The Group's total equity attributable to owners as of June 30, 2019, was HK$2,627,950,000, reflecting a decrease from HK$3,199,224,000 at the end of June 2018[90]. Investment and Development Projects - DreamEast focuses on two core products: tourist resorts and films and animations, with resorts extending around Greater Beijing, Greater Shanghai, and Greater Shenzhen[6]. - The Hengyang DreamEast Resort project includes "Four Towns and Five Parks," aiming to create a new tourism landscape and integrate primary, secondary, and tertiary industries[23]. - The DreamEast Jiashan project is located in Jiashan County, Zhejiang Province, covering an area of nearly 1,000 mu and positioned as a "children's dream world for the whole family"[32][33]. - The Group has partnered with Thomas Cook to introduce the Sunwing family hotel brand to China, marking its first self-owned brand hotel in the country, set to be established in Phase 2 of the DreamEast Jiashan[39][40]. - The DreamEast Future World Aerospace Theme Park received approximately 300,000 visitors annually since its opening in October 2015, with revenue from operations reaching approximately HK$9 million for the six months ended June 30, 2019[54]. Financial Management and Strategy - The Group's management will adjust development strategies in response to market trends to maximize profitability and shareholder returns[62]. - The company aims to establish a cultural entertainment ecosystem centered on leasing, operation, ticket income, and self-developed IPs, enhancing shareholder returns[71]. - The Group aims to leverage the cooperation with Jinmao Investment to enhance its investment portfolio in the PRC property market[49]. - The Group is implementing a financing plan to obtain new credit facilities secured by existing properties and new land use rights[100]. Accounting and Financial Reporting - The Group has applied HKFRS 16 for the first time, which supersedes HKAS 17, affecting the accounting policies related to leases[106]. - The Group recognizes right-of-use assets at the commencement date of the lease, measured at cost less accumulated depreciation and impairment losses[110]. - The Group's condensed consolidated statement of profit or loss and other comprehensive income was not materially affected by the application of HKFRS 16 during the current interim period[129]. - The Group's application of HKFRS 16 has streamlined the accounting for leases, enhancing clarity in financial reporting[129].