文 | 《BUG》栏目 徐苑蕾 自上映以来，由陈可辛执导、欢喜传媒主控出品的《酱园弄·悬案》票房与口碑双双遭遇滑 铁卢，从备受瞩目的暑期档种子选手，沦为最令观众失望的影片之一。 这部集结了章子怡、雷佳音、杨幂、赵丽颖、易烊千玺、谢娜等顶流明星的"史诗级阵 容"电影，上映首周便遭遇口碑反噬，豆瓣开分仅 5.9 分（目前 5.7 分），创下陈可辛导演 生涯最低纪录。 截至发稿，上映一个月的《酱园弄·悬案》累计票房为 3.75 亿元，或远未达到片方的投资 回本线。 2024 年，欢喜传媒曾因《红毯先生》票房不及预期导致业绩由盈转亏，这一次 或将再度因押注名导失利而陷入业绩泥潭。 顶流阵容失灵 口碑票房双崩 然而，影片自 6 月 21 日正式公映后，市场反应却急转直下。影片豆瓣开分仅 5.9 分（截 至发稿评分下降至 5.7 分），不仅远低于及格线，更创下陈可辛导演生涯最低分的纪录。 翻看各大平台的观众评论，"明星 PPT ""剧情稀碎""诈骗式营销"成为高频词。豆瓣上最高 点赞数的短评如此写道："像 1000 响的炮仗一样噼里啪啦地放过去了。以后拍电影可以不 搞全明星阵容了吗，每个人都抱着必出神图的决心在浮夸做作地 ...

Core Insights - The summer movie season of 2025 is officially underway, with high expectations for the film industry, as this period accounts for approximately 30% of annual box office revenue [1] - The supply of quality films this summer is robust, with over 60 domestic and international films scheduled for release, including highly anticipated titles that are expected to drive market growth [1] - The positive performance of the recent Dragon Boat Festival box office serves as a prelude to the summer season, confirming the resilience of demand for quality content [2] - The low box office base from the previous summer season in 2024 suggests that this year's summer box office may experience more flexible growth, enhancing the certainty of performance recovery for related companies [3] Company Focus - Huayi Media, the company behind "The Sauce Garden Case," is highlighted as a key player, with another major film, "The Stage," also scheduled for release this summer, potentially boosting its box office performance and overall value [5] - "The Sauce Garden Case" has garnered significant attention, with over 700,000 pre-release views and leading various marketing metrics, indicating strong market anticipation [7][8] - The film's unique qualities, including a star-studded cast and high production values, position it well for success, with market estimates suggesting a potential box office of 3 billion to 5 billion [14] Market Trends - The film industry is increasingly driven by quality content, with audiences willing to pay for superior films, as evidenced by the competitive landscape of this summer's offerings [10] - "The Stage," set to release on July 17, is expected to complement "The Sauce Garden Case" and cater to the audience's demand for light entertainment, further enhancing Huayi Media's market presence [15][20] - The strategic content planning by Huayi Media, including collaborations with renowned directors and diverse film genres, indicates a strong ambition to capture a larger market share and meet audience preferences [25][26]

Market Overview - The Hong Kong stock market experienced a collective pullback on May 28, with the Hang Seng Index down by 0.53%, the Hang Seng Tech Index down by 0.15%, and the Hang Seng China Enterprises Index down by 0.31% [1] - Despite the overall decline, the energy sector showed resilience, with companies like Yanzhou Coal Mining and China Shenhua Energy seeing gains of 2.31% and 1.2% respectively [1] Sector Performance - The consumer sector showed a clear "high cut low" trend, with brands like Pop Mart and Mixue experiencing significant pullbacks after reaching new highs, dropping 7.12% and 5.53% respectively [2] - The technology sector also faced mixed results, with Kuaishou's net profit exceeding expectations, leading to a 5.95% increase in its stock price, while other tech giants like Meituan and Tencent saw declines [2] Capital Flows - Southbound capital saw a net inflow of 291.12 billion yuan in May, with a significant portion directed towards defensive sectors, particularly the financial sector, which attracted 223.9 billion yuan [4] - The trend indicates a structural change in capital flows, with individual investors dominating the southbound capital, making the market more sensitive to changes in sentiment [4] Valuation and Market Sentiment - Analysts suggest that the current valuation of the Hong Kong stock market is at a historical average level, with potential for recovery in both valuation and earnings, particularly in sectors benefiting from domestic demand policies [6] - The market is expected to experience a rebound in the third quarter, supported by improved liquidity and the return of quality companies to the Hong Kong market [6] Future Outlook - The ongoing listing of quality companies and the influx of capital are expected to enhance the asset quality and liquidity of the Hong Kong market [6] - Analysts predict that the combination of domestic growth policies and the resurgence of the AI industry will reshape the valuation of the technology sector, leading to a dual recovery in valuation and earnings for the Hong Kong market [6]

Group 1 - The Hong Kong stock market's film and entertainment sector continued its strong performance in the afternoon session [1] - Stars Group (06698.HK) saw an increase of over 12% [1] - Alibaba Pictures (01060.HK) rose by more than 10% [1] - Other companies such as Lehua Entertainment (02306.HK) and Huayi Brothers Media (01003.HK) also experienced gains [1]

Box Office Performance - In 2023, the total box office receipts in China were RMB 42.5 billion, representing a 22.6% decrease compared to the previous year[10]. - During the nine-day Spring Festival movie showtime in 2025, box office receipts reached over RMB 10 billion, with 187 million attendees, indicating a strong recovery in China's film industry[22][24]. - The overall box office receipts of the film industry in China decreased compared to last year, impacting the Group's performance[50]. - The Group's film "Full River Red" was a major contributor to last year's revenue, topping the box office in China during the Chinese New Year holiday in 2023[50]. - The film "Crazy Alien," directed by Ning Hao, grossed RMB 2.2 billion at the box office in China[34]. - The film "Dying to Survive," co-produced by Xu Zheng, earned RMB 3.1 billion in box office receipts and won multiple awards[35]. - The film "Breakup Buddies," directed by Ning Hao, grossed RMB 1.17 billion, making it the highest-grossing domestic Chinese movie of its release year[34]. - The box office receipts of films directed by Zhang Xiaoling exceeded RMB 3.1 billion, establishing him as one of the most commercially successful directors in China[39]. - Zhang Xiaoling's film "I Belonged to You" achieved box office receipts of over RMB 800 million, setting a record for its genre[39]. - The film "Full River Red," directed by Mr. Zhang, grossed RMB 4.5 billion in box office receipts in the PRC[44]. Film Production and Releases - The Group released several films during the year, including "The Hedgehog," which won the Best Screenplay at the Shanghai International Film Festival[11]. - The Group is actively preparing films with diverse themes, including "The Stage" and "She's Got No Name," featuring renowned directors and impressive casts[15]. - The Group plans to release several films in 2025, including "The Stage," "Li Na," and "She's Got No Name," showcasing diverse themes and notable directors[23][25]. - The Group is preparing to work on "Full River Red II" to continue the success of the previous box office champion, "Full River Red"[26]. - The Group has invested in films like "Intercross" and "Deep In The Mountains," aiming to diversify its offerings to meet audience demands[51]. - Some blockbusters invested by the Group have been delayed to debut in 2025, temporarily affecting revenue contributions[50]. - The Group plans to release several upcoming films, including "Li Na," "The Stage," and "She's Got No Name," featuring notable actors such as Hu Ge and Zhang Ziyi[51]. - Following the success of "Full River Red," the Group intends to collaborate again with director Zhang Yimou on a new project[51]. Online Video Platform Development - The Group's online video platform "huanxi.com" has enriched its content with award-winning films and TV programs, including "Lullaby," which won multiple Goya Awards, and "A Chiara," which received the Europa Cinemas Label Award[16][19]. - The Group aims to optimize "huanxi.com" by gathering international film and television masterpieces, including films like "Eiffel" and "My Brothers and I," which have received multiple nominations at prestigious film festivals[27][28]. - The online video platform "Huanxi Premier" is being developed to optimize content by aggregating global film and television works, including award-nominated films[30]. - The Group continues to enrich its online video platform "huanxi.com" to consolidate its competitive advantages[49]. - The Group's online video platform, "huanxi.com," continues to develop steadily, enhancing user experience with a selection of premium films[54]. Financial Performance - For the year ended December 31, 2024, the Group recorded a revenue of HK$34,180,000, a significant decrease from HK$1,332,794,000 in 2023[50]. - The Group experienced a net loss of HK$260,818,000 for the year, compared to a net profit of HK$159,135,000 in 2023[50]. - The Group's loss per share for 2024 was HK$0.07, down from a profit per share of HK$0.04 in 2023[61]. - As of December 31, 2024, the Group's net current assets were HK$473,962,000, down from HK$735,495,000 in 2023[64]. - The Group's current ratio as of December 31, 2024, was approximately 1.65, compared to 1.95 in 2023[64]. - The total equity of the Group amounted to HK$1,154,415,000 as of December 31, 2024, down from HK$1,453,568,000 in 2023[64]. - The Group recorded a revenue and film investment loss of HK$34,180,000, a significant decrease from HK$1,332,794,000 in 2023[58]. - The overall film and television market faced challenges due to a slowdown in macroeconomic growth and declining audience sentiment[49]. Strategic Collaborations and Content Development - The Group will collaborate with Alibaba Culture Entertainment Co. Ltd. to enhance online operations and content creation for blockbuster cinema projects[17][20]. - The "Content is King" strategy remains central to the Group's success, with ongoing collaborations with top Chinese directors like Zhang Yimou and Ning Hao to produce quality content[26][28]. - The company continues to believe that "content is king" in the film and television industry, focusing on collaboration with top Chinese directors to produce high-quality content[29]. - The company is preparing to collaborate again with director Zhang Yimou on the film "Man Jiang Hong II," following the success of "Man Jiang Hong," which was the top-grossing film of 2023[29]. - The Group aims to deepen cooperation with renowned Chinese directors to create diverse films that meet the viewing demands of Chinese consumers[30]. - The company plans to leverage the synergy between content and platform to expand its competitive advantage in the recovering film and television industry[30]. - The Group has exclusive rights to invest in a Chinese internet drama series co-directed by Wong Kar Wai, consisting of 18 episodes[38]. - The Group has exclusive rights to invest in three internet drama series directed by Mr. Zhang, with investment amount not less than 60% of the total film investment during the cooperation period[44]. Management and Governance - Mr. Xiang Shaokun, aged 62, has been the Chief Executive Officer since September 18, 2015, and has extensive experience in mergers and acquisitions[96]. - The company has a diverse board with expertise in media, law, and film production, enhancing its strategic decision-making capabilities[96]. - The company has arranged appropriate insurance cover for directors' and officers' liabilities arising from corporate activities[183]. - All independent non-executive directors have confirmed their independence in accordance with the Listing Rules[181]. - The company will continue to assess the financial risks related to market, credit, and liquidity as outlined in the consolidated financial statements[170]. Risk Management and Future Outlook - The Group faces operational risks due to its limited number of film investments, which could significantly impact its financial results[157]. - The Group is closely monitoring the impact of the pandemic on the media market and is taking proactive measures to minimize its effects on business operations and financial results[166]. - The Directors believe that the involvement of key industry figures will be instrumental in the Company's development and risk mitigation in the media and entertainment sector[165]. - The board believes that collaborations with notable figures in the industry will significantly contribute to the company's media and entertainment business development and risk mitigation[167].

Core Insights - The Chinese film market is showing strong recovery signals since 2025, with record-breaking box office performances during the Spring Festival, indicating a growing demand for high-quality content [1] - Huayi Media is seizing the opportunity to enhance its content production capabilities, collaborating with renowned director Zhang Yimou on the sequel "Man Jiang Hong 2" [1][2] - The upcoming films "Xitai" and "Jiangyuan Nong" are expected to attract a wide audience through differentiated content, contributing to Huayi Media's potential for a breakout year [1][9] Film Highlights - "Man Jiang Hong 2" aims to surpass the original's box office of 45.44 billion, targeting over 60 billion, leveraging the strong brand effect of the original film [2] - The film retains the original cast and introduces new story elements, enhancing its long-tail value and potential for box office success [2] - "Xitai," featuring Chen Peisi, is anticipated to be a phenomenon in comedy, benefiting from a strong cast and a successful stage play adaptation [4][5] - "Jiangyuan Nong," directed by Peter Chan and featuring a star-studded cast, is based on a significant historical case, indicating high production quality and market potential [6][8] Market Outlook - Huayi Media's diverse film slate, including "Man Jiang Hong 2," "Xitai," and "Jiangyuan Nong," is expected to create a resonance effect between box office performance and audience reception [9] - The release of these films may help Huayi Media overcome current performance challenges and establish a sustainable growth trajectory [10] - The focus on high-quality content positions Huayi Media favorably in the market, suggesting potential for long-term returns for investors [10]

Financial Performance - For the fiscal year ending December 31, 2024, the company reported total revenue of HKD 34,180,000, a significant decrease from HKD 1,332,794,000 in 2023, representing a decline of approximately 97.4%[2] - The company's gross loss for the year was HKD 185,137,000, compared to a gross profit of HKD 906,261,000 in the previous year, indicating a shift in profitability[2] - The net loss attributable to the company's owners for the year was HKD 260,818,000, compared to a profit of HKD 159,135,000 in 2023, marking a substantial turnaround in financial performance[3] - The group's revenue for the year 2024 was HKD 84,965,000, a decrease of 94% compared to HKD 1,412,137,000 in 2023[14] - The net loss for the year was HKD 260,818,000, a stark contrast to the net profit of HKD 159,135,000 in 2023[41] - The company reported a loss attributable to shareholders of HKD 260,818,000 in 2024, compared to a profit of HKD 159,135,000 in 2023, indicating a significant decline in profitability[24] - Basic loss per share was HKD (0.07) in 2024, compared to a profit of HKD 0.04 per share in 2023[24] Assets and Equity - Total assets decreased to HKD 1,948,156,000 in 2024 from HKD 2,234,243,000 in 2023, reflecting a decline of approximately 12.8%[4] - The company's total equity also fell to HKD 1,154,415,000 in 2024 from HKD 1,453,568,000 in 2023, a decrease of about 20.5%[5] - Cash and cash equivalents decreased significantly to HKD 144,987,000 in 2024 from HKD 310,146,000 in 2023, a decline of approximately 53.5%[4] - As of December 31, 2024, the group's net current assets were HKD 473,962,000, a decrease from HKD 735,495,000 in 2023, and cash and cash equivalents were HKD 144,987,000, down from HKD 310,146,000[48] - The current ratio as of December 31, 2024, was approximately 1.65, down from 1.95 in 2023[48] - The total equity as of December 31, 2024, was HKD 1,154,415,000, compared to HKD 1,453,568,000 in 2023, with borrowings of HKD 42,440,000[48] Income and Expenses - The company has incurred a significant impairment loss on financial assets and contract assets, amounting to HKD 21,898,000 in 2024, compared to HKD 3,384,000 in 2023[2] - Employee benefit expenses (excluding director remuneration) decreased to HKD 46,153,000 in 2024 from HKD 48,361,000 in 2023, a reduction of approximately 4.5%[21] - Total revenue costs, sales and distribution costs, and administrative expenses amounted to HKD 425,293,000 in 2024, down from HKD 884,113,000 in 2023, representing a decrease of about 52.1%[21] - The current tax expense for 2024 was HKD 2,775,000, significantly lower than HKD 65,067,000 in 2023[20] - Deferred tax for 2024 showed a credit of HKD (13,936,000), compared to HKD (12,117,000) in 2023[20] Investments and Future Plans - The company has invested in new media and entertainment-related businesses, focusing on film and television production and online video platforms[6] - The company plans to explore market expansion opportunities and new product development in the upcoming fiscal year[6] - The group plans to deepen collaborations with renowned directors to produce more high-quality films, aiming to strengthen its market position[44] - The group is preparing for the release of several upcoming films, including collaborations with well-known directors, to meet diverse audience demands[42] - The group has invested in several major films scheduled for release in 2025, which are expected to contribute to revenue and improve performance[46] - The group plans to release films including "The Stage," "Solo Performance," and "Sauce Garden" in 2025[58] Revenue Sources and Other Income - Government grants received amounted to HKD 12,227,000 in 2024, up from HKD 9,030,000 in 2023[16] - Other income increased to HKD 26,141,000 in 2024, compared to HKD 11,463,000 in 2023[16] - The group recognized revenue from investor film investments of approximately HKD 112,086,000 in 2024, a recovery from a loss of HKD 268,210,000 in 2023[36] Operational Highlights - The online video platform "Happy Premiere" continued to develop steadily, launching a series of notable overseas films to enhance user experience[43] - The online video platform "Happy Premiere" will feature globally acclaimed films, including "Eiffel" and "My Brothers and I"[60] - The group has ongoing strategies to expand its user base and revenue streams through partnerships with major distribution channels[43] - The group emphasizes "Content is King" as the key to success in the film industry, continuing collaborations with top Chinese directors[59] - The group aims to deepen cooperation with renowned directors to create diverse films that meet Chinese consumer viewing demands[61] Governance and Compliance - The company has adhered to corporate governance principles and standards throughout the reporting period[62] - The audit committee has reviewed the accounting principles and internal controls related to the financial reports for the year ending December 31, 2024[65] - The financial statements for the year ending December 31, 2024, have been verified by PwC and are consistent with the audited figures[66] - The board of directors includes both executive and non-executive members, ensuring a diverse governance structure[68] Market Outlook - The Chinese film industry is expected to recover with favorable policies and measures, with a projected box office exceeding RMB 10 billion during the Spring Festival period in 2025, indicating a revitalization of consumer demand[57] - The group continues to monitor capital needs and mitigate foreign exchange risks associated with its operations[51] - The group has no significant contingent liabilities as of December 31, 2024[53]

Financial Performance - Revenue and film investment (loss)/income for the period was HK$115,209,000, compared to HK$1,393,279,000 in the same period last year, with a net loss of HK$89,049,000 compared to a net profit of HK$400,769,000 in the previous year[9] - The Group faced fierce competition and lower-than-expected box office receipts for films released during the period, contributing to the net loss[10] - The Group's revenue and film investment (loss)/income for the six months ended 30 June 2024 was HK$115,209,000, a significant decrease from HK$1,393,279,000 in the same period last year, with a net loss of HK$89,049,000 compared to a net profit of HK$400,769,000 in 2023[12] - Loss per share for the six months ended 30 June 2024 was HK$0.02, compared to a profit per share of HK$0.11 in the same period last year, and net asset value per share was HK$0.36, down from HK$0.40 at the end of 2023[11][12] - Revenue and film investment income, net for the six months ended 30 June 2024 was HK$115.209 million, a significant decrease from HK$1,393.279 million in the same period in 2023[62] - Gross loss for the six months ended 30 June 2024 was HK$70.346 million, compared to a gross profit of HK$1,113.160 million in the same period in 2023[62] - Operating loss for the six months ended 30 June 2024 was HK$90.282 million, compared to an operating profit of HK$460.568 million in the same period in 2023[62] - Loss before tax for the six months ended 30 June 2024 was HK$89.104 million, compared to a profit before tax of HK$457.442 million in the same period in 2023[62] - Loss for the period attributable to owners of the company was HK$89.049 million, compared to a profit of HK$400.769 million in the same period in 2023[62] - Total comprehensive loss for the period was HK$122,209 thousand, compared to a total comprehensive income of HK$331,029 thousand in the same period last year[63] - Loss per share for the period was HK$0.02, compared to a profit per share of HK$0.11 in the same period last year[63] - The company reported a loss attributable to owners of HK$89,049,000 for the six months ended 30 June 2024, compared to a profit of HK$400,769,000 in the same period in 2023[102] - Basic loss per share was HK$0.02, compared to a profit of HK$0.11 per share in the previous year[103] - The company's total comprehensive loss for the six months ended 30 June 2024 was HK$122,209,000, primarily due to a loss for the period of HK$89,049,000 and other comprehensive loss of HK$33,160,000[132] Film Releases and Investments - The Group released two films during the period: *The Movie Emperor* and *Strangers When We Meet*, and completed post-production on several others, including *She's Got No Name*, *Li Na*, *The Stage*, *Unspoken*, and *The Mountain*[6] - The Group invested in films such as *Deep In The Mountains*, *Caught by the Tides*, and *Intercross*, aiming to cater to diverse audience preferences[6] - Blockbusters like *She's Got No Name*, *Li Na*, and *The Stage* are expected to debut later, potentially improving future revenue and results[10] - The Group plans to release several major films, including "The Murderer" directed by Chen Kaige, "The Last Race" directed by Peter Chan, and "The Stage" directed by Chen Peisi, expected to contribute to future revenue and improve performance[12] - The Group released two films during the summer holiday: "Evacuate from the 21st Century" and "The Hedgehog," with several more films planned for release in the second half of 2024 and the first half of 2025[28] - The Group plans to collaborate with top Chinese directors, including Zhang Yimou, following the success of "Full River Red," to create more films with high artistic and commercial value[29] - The total production costs for the film "The Movie Emperor" (formerly "Red Carpet") amounted to RMB 260,789,360 (approximately HK$ 281,012,000), with director Mr. Ning receiving a fee of HK$ 30,000,000 included in these costs[139][140] - The Group invested RMB 12,000,000 for 10% of the income rights in a film through an agreement with Tibet Jindouyun, and the balance of HK$ 1,065,000 from Shanghai Dirty Monkey was fully received during the reporting period[142] Online Video Platform - The online video platform "huanxi.com" featured international films and TV shows, including *Mandibules*, *Between Two Worlds*, *Contra*, and *All Creatures Great And Small – Season 3*[7] - The Group continues to focus on global content acquisition for its online platform, enhancing its competitive edge[7] - The Group will continue to optimize its online video platform "huanxi.com" by adding more outstanding films and internet dramas, including international award-winning productions[31] Content Strategy and Industry Recovery - The Group maintained a strong content reserve to prepare for the recovery of the film and TV industry[5] - The Group's strategy includes adjusting film release timing and investing in diverse productions to meet market demands[5] - The Group aims to strengthen its core competitiveness by deploying its "Content is King" strategy, collaborating with outstanding directors and professional production teams to create diverse, high-quality film and television productions[32] Financial Position and Assets - The Group's net current assets as of 30 June 2024 were HK$628,465,000, down from HK$735,495,000 at the end of 2023, with cash and cash equivalents decreasing to HK$102,223,000 from HK$310,146,000[13] - The Group's current ratio as of 30 June 2024 was approximately 1.85, slightly lower than 1.95 at the end of 2023, with total equity of HK$1,331,359,000, down from HK$1,453,568,000 at the end of 2023[13] - The Group had no borrowings as of 30 June 2024, with a gearing ratio of Nil, unchanged from the end of 2023[13] - Total assets decreased to HK$2,066,791 thousand as of 30 June 2024, down from HK$2,234,243 thousand as of 31 December 2023[65] - Total equity decreased to HK$1,331,359 thousand as of 30 June 2024, down from HK$1,453,568 thousand as of 31 December 2023[66] - Film and TV programmes rights decreased to HK$1,025,765 thousand as of 30 June 2024, down from HK$1,039,970 thousand as of 31 December 2023[65] - Cash and cash equivalents decreased to HK$102,223 thousand as of 30 June 2024, down from HK$310,146 thousand as of 31 December 2023[65] - Reserves decreased to HK$1,294,794 thousand as of 30 June 2024, down from HK$1,417,003 thousand as of 31 December 2023[66] - Film investment funds from investors decreased to HK$523,714 thousand as of 30 June 2024, down from HK$535,195 thousand as of 31 December 2023[66] - Film rights investments fair value at 30 June 2024 was HK$138,913 thousand, a decrease from HK$193,673 thousand at 31 December 2023[79] - Level 3 financial instruments closing balance at 30 June 2024 was HK$137,993 thousand, down from HK$192,731 thousand at 31 December 2023[85] - Additions to Level 3 financial instruments for the six months ended 30 June 2024 were HK$24,451 thousand, compared to HK$77,220 thousand in 2023[85] - Changes in fair values of Level 3 financial instruments for the six months ended 30 June 2024 were a loss of HK$4,544 thousand, compared to a loss of HK$79,343 thousand in 2023[85] - Derecognition or settlement of Level 3 financial instruments for the six months ended 30 June 2024 was HK$70,551 thousand, compared to HK$42,240 thousand in 2023[85] - Prepayments for film and TV programmes rights under development decreased to HK$378,433,000 from HK$387,152,000[114] - Completed film and TV programmes rights increased to HK$822,355,000 from HK$566,362,000[116] - Film and TV programmes rights under production decreased to HK$296,528,000 from HK$495,008,000[116] - Film rights investments (financial assets at FVTPL) decreased to HK$138,913,000 from HK$193,673,000[116] - Licensed film and TV programmes rights decreased to HK$66,590,000 from HK$79,908,000[116] - Trade receivables increased significantly to HK$148,763,000 from HK$24,554,000[119] - Other receivables decreased to HK$73,871,000 from HK$86,168,000[119] - Trade payables decreased to HK$107,666,000 from HK$110,002,000[125] - Other payables decreased to HK$47,260,000 from HK$50,988,000[125] - Accruals decreased significantly to HK$1,608,000 from HK$13,787,000[125] - Commitments for the acquisition and production of film and TV program rights as of 30 June 2024 were HK$172,720,000, a decrease from HK$284,915,000 as of 31 December 2023[136] - The company's share capital remained unchanged at HK$500,000,000 authorized and HK$36,565,000 issued and fully paid as of 30 June 2024[131] Cash Flow and Liquidity - Net cash used in operating activities for the six months ended 30 June 2024 was HK$197,296 thousand, compared to HK$164,873 thousand generated in the same period in 2023[68] - Cash and cash equivalents decreased by HK$203,199 thousand to HK$102,223 thousand at the end of the period, down from HK$310,146 thousand at the beginning[68] - The company's cash flow, cash on hand, and assets are mainly denominated in Hong Kong dollars and Renminbi, with foreign currencies needed for investments and cooperation with Mainland China and overseas film companies[14][17] Shareholding and Directors - Mr. Dong Ping holds 1,474,334,354 shares, representing 40.32% of the company's issued shares[45] - Mr. Ning Hao holds 1,474,334,354 shares, representing 40.32% of the company's issued shares[45] - Mr. Xu Zheng holds 1,474,334,354 shares, representing 40.32% of the company's issued shares[45] - Mr. Li Xiaolong holds 15,060,000 shares, representing 0.41% of the company's issued shares[45] - Mr. Wang Hong holds 200,000 shares, representing 0.01% of the company's issued shares[45] - Newwood Investments Limited, directly owned by Mr. Dong, holds 461,711,082 shares[46] - Pacific Wits Limited, directly owned by Mr. Ning, holds 438,625,528 shares[46] - Tairong Holdings Limited, directly owned by Mr. Xu, holds 438,625,528 shares[46] - Panfaith Investments Limited, directly owned by Mr. Li Xiaolong, holds 15,060,000 shares[46] - Dong Ping holds 1,474,334,354 shares, representing 40.32% of the total shareholding[49] - Newwood Investments Limited holds 1,474,334,354 shares, representing 40.32% of the total shareholding[49] - Numerous Joy Limited holds 92,342,216 shares, representing 2.53% of the total shareholding[49] - Highrise Castle Limited holds 800,000 shares, representing 0.02% of the total shareholding[49] - Ning Hao holds 1,474,334,354 shares, representing 40.32% of the total shareholding[50] - Pacific Wits Limited holds 1,474,334,354 shares, representing 40.32% of the total shareholding[50] - Xu Zheng holds 1,474,334,354 shares, representing 40.32% of the total shareholding[50] - Tairong Holdings Limited holds 1,474,334,354 shares, representing 40.32% of the total shareholding[50] - Bilibili Inc. holds 346,626,954 shares, representing 9.48% of the total shareholding[50] - FMR LLC. holds 210,993,854 shares, representing 5.77% of the total shareholding[50] - The Group's board of directors consists of 2 executive directors, 3 non-executive directors, and 3 independent non-executive directors, all bringing diverse industry expertise and experience[36] - The Board has resolved not to declare an interim dividend for the six months ended 30 June 2024, consistent with the same period in 2023[42][43] - The company did not declare an interim dividend for the six months ended 30 June 2024, consistent with the previous year[101] Employee and Management - The Group had 85 full-time employees and 2 part-time employees as of 30 June 2024, down from 86 full-time and 4 part-time employees at the end of 2023[22] - As of June 30, 2024, the Group employed 85 full-time employees (down from 86 on December 31, 2023) and 2 part-time employees (down from 4 on December 31, 2023)[26] - Key management personnel compensation for the six months ended 30 June 2024 was HK$ 7,636,000, a decrease from HK$ 15,914,000 in the same period of 2023[144] - Employee benefit expenses (excluding Directors' remuneration) decreased to HK$21,854,000 from HK$23,690,000 year-over-year[95] Investments and Expansion - The Group is seeking investment opportunities in media and entertainment-related businesses to expand income sources and prospects[21] - The Group is actively seeking investment opportunities, particularly in media and entertainment-related businesses, to diversify revenue streams and enhance future prospects[25] Financial Instruments and Risks - The company adopted a new share option scheme on 25 June 2024, with 365,647,236 options available for grant and a service provider sublimit of 36,564,723 options as of 30 June 2024[52] - No options were granted, exercised, or cancelled under the 2014 Share Option Scheme during the period ended 30 June 2024, and the scheme expired on 17 June 2024[52] - The company had no outstanding share options as of 30 June 2024, with all previously granted options under the 2014 Share Option Scheme having lapsed[52] - The company did not purchase, sell, or redeem any of its listed securities during the six months ended 30 June 2024[54] - There were no material events after the reporting period[55] - The company has adopted new or revised HKFRS standards effective from 1 January 2024, with no material impact on the financial information[71] - Management's significant judgements and estimates in preparing the interim financial information were consistent with those applied in the 2023 annual financial statements[74] - The company is exposed to financial risks including market risk (foreign exchange and interest rate), credit risk, and liquidity risk, with no changes in risk management policies since 31 December 2023[75] Box Office and Licensing Revenue - The Group's box office performance in the previous year, including the success of *Full River Red*, contributed to a net profit of HK$400,769,000[10] - Share of box office income for the six months ended 30 June 2024 was HK$63,374 thousand, a significant decrease from HK$1,317,186 thousand in the same period in 2023[87] - Sub-licensing of film and TV programmes rights revenue for the six months ended 30 June 2024 was HK$52,489 thousand, down from HK$66,521 thousand in 2023[87] - Other media related revenue for the six months ended 30 June 2024 was HK$3,890 thousand, compared to HK$9,295 thousand in 2023[87] - Film investment loss for the six months ended 30 June 2024 was HK$4,544 thousand, compared to a profit of HK$277 thousand in 2023[87] - Total revenue for the six months ended 30 June 2024 was HK$119,753 thousand, a significant decrease from HK$1,393,002 thousand in 2023[87] Expenses and Costs - Advertising and marketing expenses significantly reduced to HK$153,391,000 from HK$325,270,000 in the previous year[95] - Amortisation of film and TV programmes rights decreased to HK$185,555,000 from HK$280,119,000 year-over-year[95] - Total cost of revenue, selling and distribution costs, and administrative expenses decreased to HK$393,018,000 from HK$668,712,000[95] - Additions to property, plant and equipment were HK$19,000, down from HK$37,000 in the same period in 2023[108] - Depreciation of right-of-use assets was HK$6,666,000, slightly up from HK$6,484,000 in the previous year[109] Other Financial Information - The company recognized a gain on film investment funds from investors of approximately HK$185,554

Financial Performance - For the six months ended June 30, 2024, the company reported a revenue of HKD 115,209,000, a significant decrease from HKD 1,393,279,000 in the same period of 2023, representing a decline of approximately 91.7%[2] - The company experienced a gross loss of HKD 70,346,000 for the period, compared to a gross profit of HKD 1,113,160,000 in the previous year, indicating a substantial shift in profitability[2] - Operating loss for the period was HKD 90,282,000, a stark contrast to the operating profit of HKD 460,568,000 reported in the same period last year[2] - The net loss attributable to the company's owners was HKD 89,049,000, compared to a profit of HKD 400,769,000 in the prior year, marking a significant downturn[2] - Total comprehensive loss for the period amounted to HKD 122,209,000, compared to a comprehensive income of HKD 331,029,000 in the previous year[3] Assets and Equity - As of June 30, 2024, total assets were reported at HKD 2,066,791,000, down from HKD 2,234,243,000 at the end of 2023, reflecting a decrease of approximately 7.5%[4] - The company's total equity decreased to HKD 1,331,359,000 from HKD 1,453,568,000, indicating a decline of about 8.4%[5] - Cash and cash equivalents decreased significantly to HKD 102,223,000 from HKD 310,146,000, representing a decline of approximately 67.0%[4] - The company reported a decrease in film and television rights prepayments to HKD 378,433,000 from HKD 387,152,000, a reduction of about 1.9%[4] Revenue Sources - For the six months ended June 30, 2024, the group's revenue from box office income was HKD 63,374,000, a significant decrease from HKD 1,317,186,000 in the same period of 2023[9] - The revenue from film and television rights licensing was HKD 52,489,000, down from HKD 66,521,000 year-over-year[9] - The total net income from film investments was HKD 119,753,000, compared to HKD 1,393,002,000 in the previous year, indicating a substantial decline[9] Expenses - Employee benefit expenses (excluding director remuneration) decreased to HKD 21,854,000 from HKD 23,690,000[12] - Advertising and marketing expenses dropped significantly to HKD 153,391,000 from HKD 325,270,000, reflecting a strategic cost-cutting measure[12] Shareholder Information - The company reported a basic loss per share of HKD (0.02) for the six months ended June 30, 2024, compared to a profit of HKD 0.11 in the same period of 2023[16] - The company did not declare an interim dividend for the six months ended June 30, 2024, consistent with the previous year[14] - The company has adhered to the corporate governance principles and standards set forth in the listing rules throughout the reporting period[40] Accounts Receivable and Payable - As of June 30, 2024, accounts receivable from box office revenue amounted to HKD 40,733,000, a significant increase from HKD 1,007,000 as of December 31, 2023[21] - The company reported accounts receivable from film and television rights totaling HKD 67,688,000, up from HKD 16,615,000 year-over-year[21] - Total accounts receivable, net of provisions, reached HKD 148,763,000, compared to HKD 24,554,000 in the previous period[21] - As of June 30, 2024, accounts payable stood at HKD 107,666,000, slightly down from HKD 110,002,000 as of December 31, 2023[24] - Other payables decreased to HKD 47,260,000 from HKD 50,988,000 year-over-year[24] Future Plans and Market Outlook - The company launched films "Mr. Red Carpet" and "Morning Clouds, Evening Rain" during the reporting period, while also preparing multiple films for release[27] - The group plans to release several major films, including "Sauce Garden Alley" and "Solo Performance," which are expected to contribute to future revenue and improve performance[29] - The Chinese film screening market has recently regained momentum, with audience enthusiasm for cinema increasing during the summer vacation[38] - The company plans to release multiple films from the second half of 2024 to the first half of 2025, including "Sauce Garden" and "Solo Performance" directed by Chen Kaige, featuring notable actors[38] Strategic Initiatives - The company maintained a strong content reserve to prepare for the recovery of the film industry[27] - The company is actively investing in diverse film projects to meet audience demands[27] - The online video platform "Happy Premiere" continues to optimize its content, introducing award-winning films and series, enhancing its competitive edge in the industry[39] - The company aims to strengthen its core competitiveness by collaborating with top directors and creative teams to produce high-quality and diverse audiovisual works[39] Governance and Compliance - The board of directors consists of two executive directors, three non-executive directors, and three independent non-executive directors, bringing diverse expertise to the group[42] - The audit committee expressed satisfaction with the review of the group's accounting principles and practices for the six months ending June 30, 2024[46] - There were no significant contingent liabilities as of June 30, 2024[35] - The group has no pledged assets as of June 30, 2024[32] Accounting Standards - The company has not adopted any new accounting standards that would have a significant impact on its financial statements for the current period[7] - The company did not purchase, sell, or redeem any of its listed securities during the reporting period[45]

Investment Rating - The report initiates coverage with an "Outperform" rating for Huanxi Media, reflecting confidence in its strategy and growth potential [2][54]. Core Insights - Huanxi Media emphasizes the belief that "content is king" in the film industry, binding top directors and creative teams to consistently produce high-quality content. The company has established a unique equity structure that aligns the interests of shareholder directors with the company's long-term goals [2][12]. - The film industry is experiencing a rapid recovery, with significant box office growth expected in 2024. Huanxi Media is well-positioned to capitalize on this trend through its strong film reserves and strategic partnerships [28][43]. - The company is actively developing its online video platform, "Huanxi Premier," aiming to create a Chinese equivalent of Netflix, which combines subscription and pay-per-view models [47][80]. Summary by Sections 1. Content is King, Pioneering a New Model in the Film Industry - Huanxi Media has successfully integrated renowned directors as shareholders, fostering a collaborative environment that enhances content quality. This model reduces performance pressure on directors while aligning their interests with the company's success [2][12][75]. 2. Rapid Recovery of the Film Industry, AI Assisting Cost Reduction and Efficiency - The Chinese film market has shown strong recovery, with total box office revenue reaching 549 billion yuan in 2023, a significant increase from previous years. The report anticipates continued growth in 2024, driven by high-quality content [28][43]. 3. Rich Film Reserves, Actively Developing Online Video Platform - Huanxi Media's film "Man Jiang Hong" achieved a total box office of 4.54 billion yuan, becoming the highest-grossing suspense film in Chinese history. The company has a robust pipeline of upcoming films, including collaborations with top directors [43][44]. - The online video platform "Huanxi Premier" is designed to curate high-quality films and TV programs, enhancing user experience through strategic partnerships with major entertainment companies [47][81]. 4. Earnings Forecast and Investment Recommendations - Revenue projections for Huanxi Media are estimated at HKD 817 million, HKD 902 million, and HKD 969 million for 2024, 2025, and 2026, respectively. Net profit is expected to be HKD 123 million, HKD 178 million, and HKD 193 million over the same period [54][76].