Financial Performance - For the six months ended June 30, 2023, the company reported a basic profit attributable to shareholders of HKD 86,970,000, compared to a loss of HKD 1,412,000 for the same period in 2022[1]. - Revenue for the six months ended June 30, 2023, was HKD 347,231,000, an increase of 30% compared to HKD 267,462,000 for the same period in 2022[38]. - Gross profit for the same period was HKD 187,415,000, reflecting a gross margin of 54%, up from 49% in the previous year[38]. - Operating profit increased significantly to HKD 56,227,000 from HKD 18,746,000 year-on-year[38]. - Basic and diluted earnings per share for the period were HKD 7.37, a recovery from a loss of HKD 0.12 in the same period last year[38]. - The company reported a profit attributable to owners of HKD 86,970,000, compared to a loss of HKD 1,412,000 in the prior year[38]. - The company recorded unrealized gains of HKD 13.9 million from listed securities investments for the first half of 2023, compared to unrealized losses of HKD 26.2 million in the same period of 2022[52]. - The company reported a tax expense of HKD 8,706,000 for the six months ended June 30, 2023, compared to HKD 3,425,000 in the same period of 2022[99]. Dividends - The company's mid-term dividend per share remained unchanged at HKD 0.02, totaling HKD 23,600,000 for both 2023 and 2022[1]. - The company declared an interim dividend of HKD 2.00 per share, compared to no dividend in the previous year[38]. - The company will pay an interim dividend on September 29, 2023, to shareholders listed on September 12, 2023[159]. Assets and Liabilities - Trade receivables increased significantly to HKD 172,991,000 as of June 30, 2023, from HKD 60,962,000 as of December 31, 2022, indicating improved customer order and delivery conditions[21]. - The company's current ratio decreased to 4.8 as of June 30, 2023, down from 6.6 as of December 31, 2022, reflecting a change in liquidity position[21]. - The company reported a total asset value of HKD 1,261,124,000 as of June 30, 2023, compared to HKD 1,116,623,000 as of December 31, 2022[83]. - The company's total liabilities included contract liabilities of HKD 7,243,000 and accrued expenses of HKD 122,925,000 as of June 30, 2023[13]. - The company's total liabilities decreased to HKD 261,006,000 as of June 30, 2023, from HKD 170,372,000 as of December 31, 2022[1]. - The cumulative unrecognized tax losses amounted to HKD 9,335,000 as of June 30, 2023, down from HKD 92,210,000 as of December 31, 2022[79]. Cash Flow - The company’s operating cash flow for the six months ended June 30, 2023, was a net outflow of HKD 11,669,000, compared to an inflow of HKD 63,783,000 in the same period last year[45]. - As of June 30, 2023, the company's cash and bank balances amounted to HKD 908,263,000, a decrease from HKD 927,922,000 as of December 31, 2022[83]. Market and Product Development - The company plans to continue marketing efforts for the "Teenage Mutant Ninja Turtles" toy series following the successful release of the animated film in August 2023[40]. - The "Miraculous: Tales of Ladybug & Cat Noir" movie launched on Netflix in summer 2023, with expectations to drive further toy sales in the second half of the year[41]. - The company expects strong sales for the re-launched "Teenage Mutant Ninja Turtles" toy series following the successful release of the animated film "Teenage Mutant Ninja Turtles: Mutant Mayhem" in summer 2023[62]. - The animated series "Miraculous: Tales of Ladybug & Cat Noir" continues to be popular, airing in over 120 countries and on multiple digital platforms[64]. - The company is actively developing new products to align with the upcoming sequel to "Teenage Mutant Ninja Turtles: Mutant Mayhem" and a new animated series on Paramount+[63]. Employee and Governance - The company has 62 employees in Hong Kong and the United States as of June 30, 2023[86]. - The company has adopted the corporate governance code and complied with all applicable code provisions, with further details to be included in the annual report[156]. - The company has not appointed a CEO, and the board oversees management, business strategies, and financial performance[169]. - The company’s board structure will be regularly reviewed to ensure robust corporate governance[169]. - The company’s independent non-executive director, Zhou Yujun, resigned on May 19, 2023[148]. Shareholder Information - The company has a maximum limit of 118,000,000 shares for its share incentive plan, representing 10% of the total issued shares at the time of adoption[88]. - The company’s directors hold a total of 104,000,000 shares, representing 5.02% of the total shares[127]. - The company’s major shareholder, Chen Junhao, holds 626,000,000 ordinary shares, representing 53.05% of the total shares[152]. - Color Star Group holds 600,000,000 ordinary shares, accounting for 50.85% of the total shares[152]. - The company has not granted, exercised, or canceled any stock options during the reporting period[123]. - The company has a total of 118,000,000 shares available for reward under the share incentive plan[130]. - The company has 41,116,000 shares available for issuance under the 2018 Color Star Toys Plan, with an initial grant of 57,784,000 options[149]. - The company has no plans to issue further options under the 2018 Color Star Toys Plan following its termination on May 19, 2023[149]. - The company did not repurchase any shares during the reporting period[155].

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) The company achieved significant revenue growth and a turnaround to net profit for the six months ended June 30, 2023 Financial Summary for the Six Months Ended June 30, 2023 | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Revenue | HKD 347,231 Thousand | HKD 267,462 Thousand | | Gross Profit | HKD 187,415 Thousand | HKD 130,563 Thousand | | Operating Profit | HKD 56,227 Thousand | HKD 18,746 Thousand | | Profit/(Loss) Attributable to Owners of the Company | HKD 86,970 Thousand | HKD (1,412) Thousand | | Basic Earnings/(Loss) Per Share | 7.37 HK cents | (0.12) HK cents | | Interim Dividend Per Share | 2.00 HK cents | - | [Management Discussion and Analysis](index=1&type=section&id=Management%20Discussion%20and%20Analysis) This section details the company's strong financial performance and strategic brand initiatives during the reporting period [Operating Results](index=1&type=section&id=Operating%20Results) The company achieved strong performance in the first half of 2023, with significant revenue growth and a turnaround from net loss to net profit Key Performance Indicators for H1 2023 | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Global Turnover | HKD 347 Million | HKD 267 Million | | Net Profit/(Loss) Attributable to Shareholders | Net Profit HKD 87.0 Million | Net Loss HKD 1.4 Million | | Operating Profit | HKD 56.2 Million | HKD 18.7 Million | - Toy sales gross margin improved from **49%** to **54%**, primarily due to a favorable product mix, lower shipping costs, and reduced inventory write-down provisions[17](index=17&type=chunk) - Other net income included **HKD 13.9 million** in unrealized gains and **HKD 2.1 million** in realized gains from listed securities investments, compared to an unrealized investment loss of **HKD 26.2 million** in the prior period[42](index=42&type=chunk) [Brand Overview](index=2&type=section&id=Brand%20Overview) The company maintains an optimistic outlook for the second half, driven by strong performance of core IPs like Teenage Mutant Ninja Turtles and Miraculous Ladybug & Cat Noir - The core IP, Teenage Mutant Ninja Turtles, was revitalized by the success of the animated film 'Teenage Mutant Ninja Turtles: Mutant Mayhem', leading to strong toy sales in key global markets, with continued marketing planned for the fall[18](index=18&type=chunk)[19](index=19&type=chunk) - The company is actively developing new products for the Teenage Mutant Ninja Turtles IP's subsequent content, including a movie sequel and two seasons of a series to be aired on Paramount+[13](index=13&type=chunk) - Another core IP, 'Miraculous: Tales of Ladybug & Cat Noir' TV series continues to be popular globally, and its feature film's Netflix premiere received enthusiastic response, expected to drive toy sales in the second half[14](index=14&type=chunk)[18](index=18&type=chunk)[20](index=20&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated financial statements, including income, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2023, the company reported a 30% revenue increase to HKD 347 million and a significant turnaround to a net profit of HKD 87 million Condensed Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 347,231 | 267,462 | | Gross Profit | 187,415 | 130,563 | | Operating Profit | 56,227 | 18,746 | | Profit/(Loss) before income tax | 86,428 | (7,326) | | Profit/(Loss) Attributable to Owners of the Company | 86,970 | (1,412) | | Basic Earnings/(Loss) Per Share | 7.37 HK cents | (0.12) HK cents | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the company's total assets increased to HKD 1.327 billion and net assets to HKD 1.05 billion, maintaining a robust financial position with ample cash and bank balances Condensed Consolidated Statement of Financial Position Summary | Item | June 30, 2023 (HKD Thousand) | Dec 31, 2022 (HKD Thousand) | | :--- | :--- | :--- | | **ASSETS** | | | | Non-current assets | 65,863 | 60,718 | | Current assets | 1,261,124 | 1,116,623 | | Of which: Inventories | 61,735 | 23,700 | | Of which: Trade receivables | 172,991 | 60,962 | | Of which: Cash and bank balances | 908,263 | 927,922 | | **LIABILITIES AND EQUITY** | | | | Current liabilities | 261,006 | 170,372 | | Non-current liabilities | 15,807 | 20,165 | | **Net assets** | **1,050,174** | **986,804** | [Notes to the Condensed Consolidated Financial Information](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the preparation basis, accounting policies, and specific financial items within the consolidated financial information [Basis of Preparation and Accounting Policies](index=5&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with HKAS 34, with consistent accounting policies and no significant impact from new accounting standards - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the disclosure provisions of the Listing Rules[23](index=23&type=chunk) - The accounting policies adopted are consistent with those used in the 2022 annual financial statements, and new standards and amendments effective during the period had no significant impact[24](index=24&type=chunk)[25](index=25&type=chunk) [Revenue and Segment Information](index=5&type=section&id=Revenue%20and%20Segment%20Information) The group operates solely in the design, R&D, marketing, and distribution of toys and home entertainment products, with Americas as the largest revenue source and a concentration of three major clients Revenue by Region (Six Months Ended June 30) | Region | 2023 (HKD Thousand) | 2022 (HKD Thousand) | | :--- | :--- | :--- | | Americas | 240,933 | 182,144 | | Europe | 80,492 | 67,786 | | Other Asia Pacific excluding Hong Kong | 25,000 | 16,137 | | Other | 806 | 1,313 | | **Total** | **347,231** | **267,380** | - The group has only one operating segment: the design, research and development, marketing, and distribution of toys and home entertainment products[25](index=25&type=chunk) - The group's customer base includes three clients whose transactions accounted for over **10%** of total revenue, with revenues of approximately **HKD 63.01 million**, **HKD 51.73 million**, and **HKD 46.49 million** respectively[51](index=51&type=chunk) [Other Income/(Loss), Net](index=6&type=section&id=Other%20Income%2F%28Loss%29%2C%20Net) The period recorded other net income of HKD 31.85 million, a significant turnaround from a net loss of HKD 24.84 million in the prior period, driven by fair value changes in financial assets and increased interest income Other Income/(Loss), Net Details (Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | | :--- | :--- | :--- | | Net gain/(loss) on financial assets (unrealized) | 13,875 | (26,173) | | Net gain/(loss) on financial assets (realized) | 2,063 | - | | Interest income | 15,692 | 621 | | **Total** | **31,847** | **(24,835)** | [Income Tax](index=7&type=section&id=Income%20Tax) The period recorded an income tax credit of HKD 0.542 million, primarily from deferred tax movements, with accumulated unrecognized tax losses of HKD 9.335 million remaining at period-end Income Tax Credit Composition (Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | | :--- | :--- | :--- | | Current tax expense | 8,706 | 3,425 | | Deferred tax credit | (9,248) | (9,339) | | **Total income tax credit** | **(542)** | **(5,914)** | - As of June 30, 2023, the group's accumulated unrecognized tax losses amounted to **HKD 9.335 million**, with no expiry date for these tax losses[54](index=54&type=chunk) [Dividends](index=8&type=section&id=Dividends) The Board resolved to declare an interim dividend of 2 HK cents per share for the six months ended June 30, 2023, payable on September 29, 2023 - The Board resolved to pay an interim dividend of **2 HK cents** per share, totaling approximately **HKD 23.614 million**, with no dividend paid in the prior period[31](index=31&type=chunk)[55](index=55&type=chunk) [Earnings/(Loss) Per Share](index=8&type=section&id=Earnings%2F%28Loss%29%20Per%20Share) Basic earnings per share for the six months ended June 30, 2023, significantly improved to 7.37 HK cents, with diluted earnings per share being equal due to anti-dilutive potential ordinary shares Basic Earnings/(Loss) Per Share Calculation | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Owners of the Company | HKD 86.970 Million | Loss HKD 1.412 Million | | Weighted average number of ordinary shares in issue | 1,180,000,000 shares | 1,180,000,000 shares | | **Basic Earnings/(Loss) Per Share** | **7.37 HK cents** | **(0.12) HK cents** | - Diluted earnings per share are equal to basic earnings per share due to the anti-dilutive effect of potential ordinary shares from the exercise of share options[1](index=1&type=chunk) [Trade and Other Receivables and Payables](index=9&type=section&id=Trade%20and%20Other%20Receivables%20and%20Payables) As of June 30, 2023, net trade receivables significantly increased to HKD 173 million, reflecting improved Q2 orders and shipments, with a healthy aging profile and a corresponding increase in trade payables Trade Receivables Aging Analysis | Aging | June 30, 2023 (HKD Thousand) | Dec 31, 2022 (HKD Thousand) | | :--- | :--- | :--- | | 0-60 days | 158,849 | 38,537 | | 61-90 days | 14,065 | 19,606 | | Over 90 days | 77 | 2,819 | | **Total** | **172,991** | **60,962** | - Trade receivables and inventories were at higher levels at the interim period-end, reflecting improved customer orders and shipments in Q2 2023[68](index=68&type=chunk) [Financial Analysis](index=10&type=section&id=Financial%20Analysis) This section analyzes the company's liquidity, financial resources, treasury investments, and foreign exchange risk exposures [Liquidity and Financial Resources](index=10&type=section&id=Liquidity%20and%20Financial%20Resources) The group maintains ample liquidity with HKD 908.263 million in cash and bank balances and a healthy current ratio of 4.8, despite seasonal working capital demands Liquidity Indicators | Metric | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and bank balances | HKD 908.263 Million | HKD 927.922 Million | | Current Ratio | 4.8 | 6.6 | - The toy business is subject to seasonality, with additional working capital demands during the peak sales season in the second half, typically leading to a significant increase in trade receivables[68](index=68&type=chunk) [Treasury Investments](index=10&type=section&id=Treasury%20Investments) As of June 30, 2023, the group held treasury investments in listed securities totaling HKD 69.62 million, primarily diversified blue-chip stocks in overseas and Hong Kong markets - Total treasury investments amounted to **HKD 69.624 million**, with **HKD 56.966 million** in overseas listed securities and **HKD 12.658 million** in Hong Kong listed securities[37](index=37&type=chunk) - The top ten holdings include well-known companies such as The Walt Disney Company, Amazon.com, Inc., NVIDIA Corporation, Apple Inc., and Microsoft Corporation[37](index=37&type=chunk) [Foreign Exchange Risk](index=10&type=section&id=Foreign%20Exchange%20Risk) The group's primary foreign exchange risk stems from USD-denominated sales, which is mitigated by the HKD-USD peg, thus no hedging is undertaken - The primary foreign currency risk is from USD sales, but due to the HKD-USD linked exchange rate system, the group does not hedge its foreign currency risk[69](index=69&type=chunk) [Other Matters](index=10&type=section&id=Other%20Matters) This section covers corporate governance, share repurchase activities, and details regarding dividend payments and share transfers [Corporate Governance](index=10&type=section&id=Corporate%20Governance) During the reporting period, the company complied with the Corporate Governance Code, with the exception of the combined Chairman and CEO roles, and the Audit Committee reviewed the interim financial information - The company has complied with the Corporate Governance Code, except for the non-segregation of the roles of Chairman and Chief Executive Officer, as the company has no designated CEO[70](index=70&type=chunk) - The Audit Committee has reviewed accounting principles and practices with management and has reviewed the unaudited condensed consolidated financial information for the period[71](index=71&type=chunk) [Share Repurchase](index=10&type=section&id=Share%20Repurchase) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's shares during the six months ended June 30, 2023 - The company did not redeem, purchase, or sell any of its shares during the period[5](index=5&type=chunk) [Dividend Payment and Share Transfer](index=11&type=section&id=Dividend%20Payment%20and%20Share%20Transfer) To qualify for the interim dividend, shareholders must submit transfer documents by September 8, 2023, with share transfer registration suspended from September 11-12, and dividend payment on September 29, 2023 - The company will suspend share transfer registration from September 11 to 12, 2023, and the interim dividend will be paid on September 29, 2023, to shareholders registered on September 12[7](index=7&type=chunk)

Shareholder Structure - The company has a significant shareholder, Chen Junhao, holding 626,000,000 shares, representing 53.05% of the total issued shares[6]. - The company also has a major shareholder, 彩星集團, which owns 600,000,000 shares, accounting for 50.85% of the total issued shares[6]. - As of December 31, 2022, the board members collectively hold a total of 104,000,000 shares, which is 5.02% of the total issued shares[2]. Lease Agreements - The company has entered into lease agreements for properties in Hong Kong and the UK, with total monthly rents of HKD 354,320 and HKD 27,380, and GBP 5,700 respectively[15]. - The estimated value of the right-of-use assets from the lease agreements is approximately HKD 14,500,000[16]. - The board believes that the lease agreements align with the company's business needs and provide administrative convenience[16]. Financial Performance - The company's performance in 2022 was below expectations due to economic uncertainties, cautious consumer behavior, and unfavorable currency exchange rates, leading to a decrease in sales from the previous year[24]. - The gross profit margin for toy sales decreased to 47% in 2022, down from 49% in 2021, attributed to increased product discounts and inventory write-downs to reduce stock levels[34]. - The overall toy sales volume in the largest market, the United States, declined by 4% compared to 2021, with sales revenue remaining relatively unchanged[31]. - The global revenue for Playmates Toys Limited for the year ended December 31, 2022, was HKD 540 million, a decrease of 19% compared to HKD 625 million in 2021[55]. - The operating profit for the period was HKD 34.5 million, down from HKD 37.8 million in 2021, with net profit attributable to shareholders at HKD 9.7 million, compared to HKD 43 million in the previous year[56]. Future Outlook - The company anticipates improved performance in 2023, driven by the upcoming release of the "Teenage Mutant Ninja Turtles: Mutant Mayhem" animated film and the re-launch of the "Ninja Turtles" toy line[27]. - The company is optimistic about the operating environment despite challenges and uncertainties, driven by major entertainment events[53]. - The company anticipates that the upcoming release of the "Miraculous Ladybug & Cat Noir" movie will generate renewed interest and attract new audiences[53]. Inventory and Receivables - The company has implemented decisive measures to reduce inventory levels, which resulted in additional costs and profit pressure[24]. - Inventory as of December 31, 2022, was HKD 23,700,000, representing 4.7% of revenue, compared to HKD 58,007,000 or 9.3% of revenue in 2021, reflecting a strategic reduction in inventory levels[76]. - The company reported accounts receivable of HKD 60,962,000 as of December 31, 2022, down from HKD 124,378,000 in 2021, indicating a significant reduction in outstanding receivables[76]. Corporate Governance - The audit committee consists of four independent non-executive directors, ensuring effective oversight of financial reporting and risk management[10]. - The company has not changed its auditor in the past three years, indicating stability in its financial oversight[11]. - The board consists of three executive directors and four independent non-executive directors, ensuring a balance of power and independence[139]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange rules and has complied with all applicable code provisions, except for the separation of roles between the Chairman and CEO[145]. - The board is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance group performance[145]. Employee and Social Responsibility - The company encourages employee training and development to enhance skills and knowledge, ensuring fair compensation in line with industry standards[76]. - Charitable and other donations for the year amounted to HKD 2,950,000, significantly up from HKD 81,000 in 2021[97]. - The company maintains a gender ratio of 48:52 among employees as of December 31, 2022, and aims to continue this balance[200]. Risk Management - The company has established a risk management and internal control system to identify and mitigate current risks[87]. - The internal control system is based on the COSO framework, focusing on managing risks to achieve business objectives and ensuring compliance with applicable laws[186]. Dividend and Financial Reserves - As of December 31, 2022, the company's distributable reserves amounted to HKD 310,735,000, an increase from HKD 305,049,000 in 2021[93]. - The company declared an interim dividend of HKD 0.02 per share, totaling HKD 23,600,000 based on 1,180,000,000 shares issued as of March 10, 2023[92].

Financial Performance - The company's revenue for the first half of 2022 was HKD 267,462,000, representing a 25% increase compared to HKD 213,988,000 in the same period of 2021[13] - Gross profit for the first half of 2022 was HKD 130,563,000, with a gross margin of 49%, down from 52% in the previous year, attributed to increased shipping costs and inventory write-downs[14] - Operating profit for the first half of 2022 was HKD 18,746,000, compared to HKD 15,498,000 in the same period of 2021[14] - The company recorded a loss before tax of HKD 7,326,000, a decline from a profit of HKD 14,459,000 in the same period of 2021[20] - Net loss attributable to shareholders for the first half of 2022 was HKD 1,412,000, compared to a profit of HKD 14,483,000 in the same period of 2021[20] - Total revenue for the six months ended June 30, 2022, was HKD 267,380,000, an increase of 25.1% compared to HKD 213,639,000 for the same period in 2021[37] - Revenue from the Americas increased to HKD 182,144,000, up 33.1% from HKD 151,993,000 in the previous year[37] - The company reported a net loss before tax of HKD 24,835,000 for the six months ended June 30, 2022, compared to a profit of HKD 387,000 in the same period of 2021[40] - The cost of goods sold for the six months ended June 30, 2022, was HKD 125,949,000, representing an increase of 32.5% from HKD 94,968,000 in 2021[41] - Research and development expenses for the period were HKD 7,864,000, up 25.6% from HKD 6,264,000 in the previous year[41] Assets and Liabilities - As of June 30, 2022, the company's total assets less current liabilities amounted to $126,735,000, compared to $1,009,014,000 as of December 31, 2021, indicating a decrease of approximately 87.5%[22] - The company's non-current assets, including property, plant, and equipment, totaled $115,000,000 as of June 30, 2022, down from $1,119,000,000 as of December 31, 2021[22] - The total equity as of June 30, 2022, was $125,185,000, a decrease from $995,198,000 as of December 31, 2021, representing a decline of approximately 87.4%[24] - The company's current assets net value was $119,129,000 as of June 30, 2022, compared to $954,942,000 as of December 31, 2021, indicating a decrease of approximately 87.5%[22] - The company’s total liabilities decreased to HKD 152,163,000 as of June 30, 2022, from HKD 165,702,000 as of December 31, 2021[57] Cash Flow - The cash generated from operating activities for the six months ended June 30, 2022, was $8,230,000, a significant increase from $41,682,000 in the same period of the previous year[26] - The net cash increase for cash and cash equivalents was $2,355,000 for the six months ended June 30, 2022, compared to $35,861,000 in the prior year, reflecting a decrease of approximately 93.4%[26] - The company reported a net cash outflow from investing activities of $1,903,000 for the six months ended June 30, 2022, compared to a cash inflow of $528,000 in the same period of the previous year[26] Inventory and Receivables - The company's inventory increased to HKD 67,815,000 as of June 30, 2022, from HKD 58,007,000 as of December 31, 2021, representing an increase of about 16.5%[70] - Trade receivables as of June 30, 2022, were HKD 79,111,000, a decrease from HKD 141,091,000 as of December 31, 2021[53] - The company reported trade receivables of HKD 59,270,000 as of June 30, 2022, down from HKD 124,378,000 as of December 31, 2021, indicating a decrease of approximately 52.3%[70] Corporate Governance and Structure - The company has adopted the corporate governance code and complied with all applicable code provisions, except for the separation of the roles of Chairman and CEO[151] - The audit committee reviewed the accounting standards and practices used by the group, discussing internal controls and financial reporting matters[151] - The company has significant shareholders, with Chen Junhao holding 626,000,000 shares, representing 53.05% of the issued share capital[147] - TGC Assets Limited also holds 626,000,000 shares, equivalent to 53.05% of the company, due to its beneficial ownership by Chen Junhao[148] - The company has not disclosed any new product launches or technological advancements during the reporting period, suggesting a potential area for future focus[10] Market and Product Development - The company anticipates a challenging operating environment in the second half of 2022 due to high inflation and reduced consumer spending on non-essential items[16] - The "Miraculous: Tales of Ladybug & Cat Noir" toy series continues to expand, with plans for new product lines in 2023[17] - The company is the global licensee for "Star Trek" toys and plans to launch a collectible series in summer 2022, along with new action figures for "Star Trek: Prodigy" later in the year[18] - The company remains committed to delivering innovative toys and building a profitable long-term brand business[16] Employment and Compensation - The company employed 57 staff members in Hong Kong and the United States as of June 30, 2022, with no significant changes in compensation policy[74] Miscellaneous - The company’s main office is located in Hong Kong, with a registered office in Bermuda[157] - The company is listed on the Hong Kong Stock Exchange under stock code 869[158] - The company has engaged various banks, including Bank of East Asia and DBS Bank (Hong Kong) Limited, for its banking needs[158] - The company’s website is www.playmatestoys.com, providing further information about its operations[159]

Financial Performance - Playmates Toys reported a global revenue of HKD 625 million for the year ended December 31, 2021, representing a 116% increase compared to HKD 289 million in 2020[10]. - The gross profit margin for toy sales remained at 49%, consistent with the previous year, despite rising costs in finished goods and logistics[10]. - The company recorded an operating profit of HKD 37.8 million in 2021, compared to an operating loss of HKD 32.5 million in 2020[11]. - Net profit attributable to shareholders was HKD 43 million, a significant turnaround from a net loss of HKD 30.1 million in 2020[11]. - The U.S. market accounted for approximately 55% of total revenue, while Europe contributed about 31%[10]. - The company anticipates ongoing operational and cost challenges in 2022 due to the impact of the COVID-19 pandemic and global supply chain disruptions[11]. Product Development and Market Strategy - The company plans to expand the "Miraculous: Tales of Ladybug & Cat Noir" toy line, which is expected to be a major driver of performance in 2022[8]. - New product launches are planned for the "MonsterVerse" and Toho Classic Monsters, alongside a new series of collectibles based on "Star Trek: Prodigy"[8]. - The "Spy Ninjas" product line will continue to expand in 2022, leveraging the popularity of the YouTube series[17]. - The company has become the global licensee for all characters, vehicles, and ships from ViacomCBS's "Star Trek" franchise, with a collectible series set to launch in summer 2022[18]. - A new line of action figures based on the Paramount+ and Nickelodeon animated series "Star Trek: Prodigy" will be released in late 2022[18]. Operational Challenges and Risks - The company is heavily reliant on third-party licenses, with current revenue coming from several brands, indicating potential vulnerability to sales declines in those brands[33]. - The company faces economic and political risks that could impact its strategic execution capabilities[33]. - Compliance risks related to product safety and legal regulations are a priority, with established processes to ensure adherence to applicable laws[33]. - The company acknowledges that reliance on major customers could adversely affect its financial performance if purchasing patterns change[33]. - The largest supplier accounted for 22% of total purchases, while the top five suppliers combined represented 86%[46]. - The largest customer contributed 30% of total sales, with the top five customers together accounting for 75%[46]. Financial Position and Reserves - As of December 31, 2021, trade receivables amounted to HKD 124,378,000, a significant increase from HKD 41,291,000 in 2020[52]. - Inventory stood at HKD 58,007,000, representing 9.3% of revenue, compared to 3.6% in 2020[52]. - The current ratio was 4.8 as of December 31, 2021, down from 7.9 in the previous year[52]. - Cash and bank balances totaled HKD 893,997,000, a decrease from HKD 949,943,000 in 2020[52]. - The company declared an interim dividend of HKD 0.02 per share, totaling HKD 23,600,000 based on 1,180,000,000 shares issued[47]. - The distributable reserves as of December 31, 2021, were HKD 305,049,000, up from HKD 235,860,000 in 2020[51]. Corporate Governance and Management - The company has experienced significant management changes, with key executives having extensive backgrounds in finance and investment management[20][21][22][23][25][26][27]. - The company’s financial performance and future developments are discussed in the annual report, particularly in the "Chairman's Report" and "Management Discussion and Analysis" sections[32]. - The company has a focus on international market operations and product development, with over 25 years of experience in the toy industry among its executives[26]. - The company’s financial key performance indicators are analyzed in the annual report, providing insights into its operational effectiveness[32]. - The board of directors has undergone changes, with several appointments and resignations noted during the year[61]. Risk Management and Compliance - The company has implemented internal controls to protect critical data, including customer and financial information[36]. - The company maintains a strong focus on compliance with applicable laws and regulations, ensuring ongoing training for staff[44]. - The group has established a special bonus system and stock option plan for employees based on performance[56]. - The company has established an internal control system based on the globally recognized COSO framework, which includes five components to ensure effective risk management and compliance[135]. - The board of directors is responsible for overseeing the overall risk management framework, integrating it into daily business activities, including business planning and internal controls[136]. Environmental, Social, and Governance (ESG) Initiatives - The report covers the company's performance in environmental, social, and governance (ESG) aspects for the year 2021, aligning with previous reporting scopes[150]. - The report was prepared in accordance with the Hong Kong Stock Exchange's ESG reporting guidelines and has been reviewed and approved by the board[151]. - The company has established a corporate social responsibility policy focusing on four pillars: business, employees, community, and environment[158]. - An independent consultant was appointed to conduct a materiality assessment to identify significant environmental, social, and governance issues[167]. - The company identified 27 key environmental, social, and governance issues and prioritized them based on stakeholder feedback[167]. Employee and Workplace Safety - The total number of employees at the end of the reporting period was 54[191]. - Employee turnover rate for the overall workforce was 22.22%[197]. - Male employee turnover rate was 20.83%, while female employee turnover rate was 23.33%[197]. - Turnover rate in Hong Kong was 26.92%, compared to 17.86% in the United States[197]. - The company emphasizes the importance of a safe and healthy work environment for employees[198].

0 中 期 報 告 Playmates ( TOYS ) 目錄 概覽 2 品牌概覽 3 簡明綜合財務資料 簡明綜合收益表及簡明綜合全面收益表 5 簡明綜合財務狀況表 6 簡明綜合現金流量表 8 簡明綜合權益變動表 9 簡明綜合財務資料附註 10 按上市規則所需提供之資料 21 公司資料 28 管理層討論及分析 本報告內所用之商標及版權如下： Godzilla vs. Kong©2021之版權屬於傳奇影業，版權所有，不得翻印。©2021之版權屬於TOHO CO., LTD，版權所有， 不得翻印。• Guru Studio ©2021之版權屬於Guru Animation Studio Ltd.，版權所有，不得翻印。• 傳奇影 業TM & ©2021之版權屬於傳奇影業，版權所有，不得翻印。• Miraculous：Tales of Ladybug & Cat Noir – Miraculous™之商標屬於ZAGTOON-METHOD，版權所有，不得翻印。©2021 ZAGTOON－版權所有，不得 翻印。• Pikwik Pack ©2021之版權屬於Guru Animation Studio Ltd，版權所有，不 ...

Playmates (TOYS) PLAYMATES TOYS LIMITED 彩星玩具有限公司 (於百慕達註冊成立之有限公司) (股份代號：869) 二零二零年年報 目錄 | --- | --- | |------------------------|-------| | | | | | 頁 | | 公司資料 2 | | | 主席報告書 3 | | | 管理層討論及分析 4 | | | 董事及高級管理人員 | 8 | | 董事會報告書 10 | | | 企業管治報告書 26 | | | 環境、社會及管治報告書 | 37 | | 獨立核數師報告書 48 | | | 綜合收益表 54 | | | 綜合全面收益表 55 | | | 綜合財務狀況表 56 | | | 綜合現金流量表 57 | | | 綜合權益變動表 58 | | | 財務報表附註 60 | | | 五年財務摘要 108 | | 1 公司資料 | --- | --- | |----------------------------------|-------------------------------------| | 董事 | 法律顧問 | | ...

| --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------| | | | | | | | | | | | | @ 目錄 品牌概覽 3 簡明綜合財務資料 簡明綜合收益表及簡明綜合全面收益表 5 簡明綜合財務狀況表 6 簡明綜合現金流量表 8 簡明綜合權益變動表 9 簡明綜合財務資料附註 10 按上市規則所需提供之資料 21 公司資料 28 管理層討論及分析 概覽 2 本報告內所用之商標及版權如下： Ben 10TM & © 2020之版權屬於時代華納旗下的Cartoon Network，版權所有，不得翻印。• Billboard © 2020 Billboard，版權 所有，不得翻印。• Billie Eilish © 2020 LASH Music, LLC.，版權所有，不得翻印。• Bravado © 2020之版權屬於Bravado International Group Merchandising Services, Inc.，版權所有，不得翻印。‧ Cartoon NetworkTM & © 2020之版權屬於時代華 ...

Financial Performance - For the year ended December 31, 2019, Playmates Toys reported a global revenue of HKD 359 million, a decrease of 24% compared to HKD 474 million in 2018[10]. - The company reported a loss before tax of HKD 16 million, compared to a profit of HKD 4.4 million in 2018, with a net loss attributable to shareholders of HKD 37 million[11]. - Total revenue for the year ended December 31, 2019, was $45.992 million, a decrease from $474.182 million in 2018, representing a decline of approximately 90.3%[195]. - Gross profit for the same period was $23.622 million, down from $250.889 million in 2018, indicating a decrease of about 90.6%[195]. - Operating loss for the year was $4.561 million, compared to an operating profit of $13.318 million in 2018, reflecting a significant downturn[195]. - Net loss attributable to shareholders for the year was $4.779 million, compared to a profit of $0.562 million in 2018, marking a shift from profit to loss[195]. - Basic and diluted loss per share was $(0.41) for 2019, compared to earnings of $0.05 per share in 2018[195]. - Cash and bank balances as of December 31, 2019, stood at $128.917 million, a slight decrease from $1,008.131 million in 2018[199]. - Total current assets amounted to $146.635 million, down from $1,190.045 million in 2018, indicating a significant reduction in liquidity[199]. - Total equity as of December 31, 2019, was $126.318 million, compared to $1,017.739 million in 2018, showing a substantial decline in shareholder equity[199]. - The company reported a net cash outflow from operating activities, reflecting challenges in maintaining cash flow[200]. Market and Product Development - The United States remained the largest market, accounting for 56.6% of total revenue, while Europe contributed 29.1%, other Americas 9.2%, and Asia-Pacific 4.9%[10]. - New product launches planned for 2020 include "Power Players," "MonsterVerse," and "Disney Frozen 2 Storytelling Dolls"[7]. - The company is focusing on maintaining the long-term success of established brands like "Teenage Mutant Ninja Turtles" and "Ben 10" while introducing new products[7]. - The fourth season of "Ben 10" is set to premiere in spring 2020, with expectations for continued positive contributions to revenue[14]. - "Power Players" toys are scheduled for release in the U.S. in early 2020, with plans for international market expansion throughout the year[15]. - The company has partnered with Legendary Pictures and Toho to develop a new product line based on the "MonsterVerse" series, coinciding with the release of "Godzilla vs. Kong" in fall 2020[17]. - The animated series "Miraculous: Tales of Ladybug & Cat Noir" is currently broadcast in over 120 countries, with plans to launch a new line of toys in specific international markets starting in fall 2020[18]. - The company has launched Disney's "Frozen 2" storytelling dolls featuring interactive technology, with the first batch including Elsa, Anna, and Olaf, set to release in spring 2020[19]. - A new toy line based on the artist Billie Eilish, who has over 19 billion streams and more than 100 million social media followers, is being developed in collaboration with Bravado[21]. - The company is collaborating with Guru Studio to launch a new line of preschool toys based on the "Pikwik Pack" series, which will air on Disney Junior in the U.S. and other major markets[22]. Risk Management and Compliance - The anticipated impact of the COVID-19 pandemic is expected to severely affect the supply chain at least in the first half of 2020[11]. - The company is closely monitoring risks related to the pandemic and collaborating with suppliers to mitigate adverse impacts[11]. - The company faces economic and political risks that could impact its strategic execution capabilities[37]. - The toy industry is inherently unpredictable, with reliance on third-party licenses and major customers, which could adversely affect financial performance if sales decline[37]. - Compliance risks related to product safety and legal regulations are a priority, with established processes to ensure adherence to applicable laws[37]. - The company has implemented internal controls to protect critical data, including customer and financial information, from fraud or theft[40]. - The company has established procedures and policies to ensure compliance with insider information disclosure regulations, providing guidelines to all directors and relevant employees regarding insider trading restrictions[131]. - The company has not faced any legal actions related to corruption or money laundering during the reporting year[169]. Environmental Impact - The company is committed to reducing its environmental impact and requires suppliers to comply with applicable environmental laws[47]. - Direct greenhouse gas emissions (Scope 1) increased to 20,731 kg CO2 equivalent in 2019 from 18,752 kg in 2018, representing an increase of 10.4%[147]. - Indirect greenhouse gas emissions (Scope 2) decreased to 38,784 kg CO2 equivalent in 2019 from 46,785 kg in 2018, a reduction of 17.1%[147]. - Total greenhouse gas emissions (Scope 1, 2, and 3) decreased to 75,237 kg CO2 equivalent in 2019 from 84,214 kg in 2018, a decline of 10.7%[147]. - Total waste generated in 2019 was 76,741 kg, down from 78,143 kg in 2018, indicating a reduction of 1.8%[148]. - Total energy consumption decreased to 69,164 MWh in 2019 from 81,131 MWh in 2018, a decrease of 14.7%[150]. - Total packaging material used decreased to 1,517 tons in 2019 from 1,939 tons in 2018, a reduction of 21.8%[152]. - The total water consumption was 3,508 cubic meters in 2019, slightly down from 3,580 cubic meters in 2018[151]. - The company plans to enhance environmental performance by identifying and managing environmental risks and improving resource efficiency[154]. - The company has complied with all applicable environmental laws and regulations during the year[145]. Corporate Governance - The board does not recommend the payment of dividends for the year[52]. - The company has established an audit committee, remuneration committee, and nomination committee, primarily composed of independent non-executive directors[110]. - The audit committee consists of three independent non-executive directors, ensuring independent oversight of financial reporting and risk management[92]. - The company has not changed its auditor in the past three years, indicating stability in its financial oversight[94]. - The company has adopted the corporate governance code principles and complied with all applicable code provisions, except for the separation of roles between the chairman and CEO[99]. - The board is responsible for maintaining a comprehensive risk management and internal control system, ensuring shareholder interests and asset protection[125]. - The internal control system is evaluated based on the globally recognized COSO framework, focusing on monitoring environment, risk assessment, and communication[126]. - The board conducted an annual review of the risk management and internal control systems, finding them effective and sufficient without identifying significant issues affecting financial, operational, compliance controls, and risk management functions[129]. - The company emphasizes the importance of communication with shareholders, ensuring that all significant matters are presented for individual resolutions at the annual general meeting[134]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance group performance[99]. Employee and Community Engagement - The group had a total of 66 employees in Hong Kong and the United States as of December 31, 2019, down from 70 employees in 2018[59]. - Charitable donations for the year amounted to HKD 518,000, a decrease of 59.3% from HKD 1,272,000 in 2018[60]. - The company encourages employees to participate in local charitable organizations and has supported several charities during the year[170]. - The company has established a whistleblowing policy for reporting suspected criminal activities, including corruption and fraud[170].

Financial Performance - Revenue for the first half of 2019 was HKD 157.156 million, a 15% increase from HKD 136.694 million in the same period of 2018[5] - Gross profit for the first half of 2019 was HKD 80.014 million, compared to HKD 64.490 million in 2018, resulting in a gross margin of 51% versus 47% in the previous year[6] - Operating loss for the first half of 2019 was HKD 31.071 million, improved from a loss of HKD 41.536 million in 2018[5] - Net loss attributable to shareholders for the first half of 2019 was HKD 19.901 million, compared to HKD 30.543 million in the same period of 2018[5] - Revenue for the six months ended June 30, 2019, was HKD 157,156 thousand, a decrease from HKD 136,694 thousand in the same period of 2018, representing a decline of approximately 15%[17] - Gross profit for the same period was HKD 80,014 thousand, compared to HKD 64,490 thousand in 2018, indicating an increase of about 24%[17] - Operating loss for the six months was HKD 31,071 thousand, an improvement from a loss of HKD 41,536 thousand in the previous year, reflecting a reduction of approximately 25%[17] - The group reported a pre-tax loss of HKD 19,901,000 for the six months ended June 30, 2019, compared to a loss of HKD 30,543,000 in the same period of 2018[59] - Basic and diluted loss per share for the period was HKD 1.69, compared to HKD 2.58 in the previous year, reflecting a reduction of approximately 34%[17] Cash Flow and Assets - Net cash generated from operating activities was HKD 48,314 thousand, compared to HKD 53,591 thousand in the same period of 2018, showing a decrease of about 10%[23] - Cash and cash equivalents as of June 30, 2019, totaled HKD 1,065,127 thousand, an increase from HKD 1,011,879 thousand at the beginning of the period[23] - Total assets less current liabilities amounted to HKD 1,003,158 thousand, a slight decrease from HKD 1,017,739 thousand as of December 31, 2018[18] - The company’s total equity as of June 30, 2019, was HKD 1,001,536 thousand, down from HKD 1,017,739 thousand at the end of 2018[21] - The group’s total assets included right-of-use assets amounting to HKD 5,482,000 as of January 1, 2019, reflecting the impact of the new lease accounting standard[43] - As of June 30, 2019, the net book value of property, plant, and equipment was HKD 4,351,000, a decrease from HKD 6,773,000 as of December 31, 2018, reflecting a depreciation of HKD 2,396,000 during the period[60] - Trade receivables as of June 30, 2019, amounted to HKD 47,170,000, significantly down from HKD 159,458,000 as of December 31, 2018, with an allowance for customer discounts of HKD 15,300,000[62] - The group's inventory as of June 30, 2019, was HKD 18,567,000, down 23.4% from HKD 24,237,000 as of December 31, 2018[81] Marketing and Product Development - Regular expenses increased by 15% compared to the previous year, reflecting higher marketing and sales costs associated with the "Ninja Turtles" brand[6] - The second season of "Rise of the Teenage Mutant Ninja Turtles" is set to premiere in fall 2019, with product launches in multiple international markets[8] - The company is developing a product line for the upcoming "Godzilla vs. Kong" movie, expected to be released in 2020[12] - A new animated series "ZAG HEROEZ: Power Players" is scheduled to air in fall 2019, with toy lines launching in early 2020[11] - The company plans to expand its product offerings for "Ben 10" in 2019 and 2020, with the third season continuing to air[10] Financial Commitments and Liabilities - The total financial commitments under licensing agreements as of June 30, 2019, amounted to HKD 120,934,000, an increase from HKD 87,220,000 as of December 31, 2018, indicating growth in licensing activities[74] - The company reported a total of 4,174 million HKD in liabilities as of June 30, 2019, indicating a significant financial position[28] Accounting and Compliance - The implementation of Hong Kong Financial Reporting Standard 16 resulted in the capitalization of leases, affecting the financial statements from January 1, 2019[32] - The incremental borrowing rate used for discounting lease liabilities was set at 5%[39] - The company has not applied any new standards or interpretations that are not yet effective during the reporting period[32] - The transition to the new lease accounting standard did not have a significant impact on the company's existing contracts[35] - The company expects to reflect changes in accounting policies in the annual financial statements for 2019[31] - The total issued shares were reported at 2,131 million as of June 30, 2019[28] - The company has recognized a cumulative impact adjustment to the equity balance as of January 1, 2019, due to the new lease standard[39] - The company continues to assess the impact of the new lease standard on its financial position and performance[36] - As of January 1, 2019, the lease liabilities recognized amounted to HKD 5,482,000 after accounting for operating lease obligations and discount effects[41] Corporate Governance - The company has adopted the corporate governance code and complied with all applicable code provisions, except for the separation of the roles of Chairman and CEO[100] - The company has not designated a CEO; the board oversees management and business strategies[100] - The company’s directors confirmed compliance with the standard code of conduct during the reporting period[101] - The company’s directors hold various stock options, with Du Shusheng holding 2,000,000 options[91] - The company has a strong internal control system reviewed by the audit committee[100] Employee and Shareholder Information - The group had a total of 66 employees in Hong Kong and the United States as of June 30, 2019[83] - The company’s directors collectively hold 600,000,000 shares, representing 50.85% of the issued share capital[94] - Director Du Shusheng holds 10,000,000 shares, accounting for 0.85% of the company’s total shares[91] - Director Chen Guangqiang holds 2,600,000 shares, which is 0.13% of the total shares[93] - The total issued share capital remained at HKD 30,000,000 as of June 30, 2019, with 3,000,000,000 shares outstanding, consistent with the previous reporting period[69] - The group did not declare any interim dividend for the current period, compared to HKD 35,409,000 declared in the same period of 2018[57] Miscellaneous - Playmates Toys Limited is listed on the Hong Kong Stock Exchange under the stock code 869[110] - The company is headquartered in Hong Kong, with its main office located at 100 Canton Road, Tsim Sha Tsui, Kowloon[109] - The registered office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda[108] - The auditor for Playmates Toys Limited is Crowe (HK) CPA Limited[110] - The company's website is www.playmatestoys.com[111]