Box Office Performance - Huanxi Media Group's film "Full River Red" achieved total box office receipts of over RMB 4.5 billion, making it the highest-grossing Chinese film of 2023[13]. - The total box office receipts for films in the PRC exceeded RMB 53 billion in 2023, reflecting an increase of over 80% compared to the previous year[14]. - The film "Full River Red," produced by the Group, achieved total box office receipts of RMB 4.54 billion, becoming the highest-grossing suspense film in Chinese film history and topping the 2023 box office charts[33]. - The film "Dying to Survive," co-produced by Mr. Ning, earned RMB 3.1 billion in box office receipts[46]. - The film "Breakup Buddies," directed by Mr. Ning, grossed RMB 1.17 billion in box office receipts, making it the highest-grossing domestic Chinese movie of the year in 2014[46]. - The film "The Island," directed and starred by Huang Bo, earned over RMB 1.35 billion in box office receipts in 2018[79]. - The film "Dying to Survive" co-produced by Xu Zheng earned RMB 3.1 billion in box office receipts in 2018, winning multiple awards including Best Leading Actor and Best New Director at the 55th Taiwan Golden Horse Awards[71]. - The film "Crazy Alien," directed by Mr. Ning, generated revenue of RMB 700 million for the Group in 2019, with a guaranteed minimum distribution amount of RMB 2.8 billion[46]. Film Production and Strategy - The Group has completed post-production for several major films, including "Papa" and "Anita," which are expected to attract significant audience interest[20]. - The Group is actively preparing and completing post-productions of several popular films, including "Li Na" and "Call Me Crazy," which are expected to appeal to diverse audience preferences[36]. - The Group plans to invest in and produce films with various themes and styles, including "The Hedgehog" and "Evacuate From The 21st Century," to meet audience demands[41]. - The Group's strategy emphasizes "Content is King," focusing on collaboration with top directors to produce high-quality original content, ensuring reliable box office returns[40]. - The Group aims to further expand its film portfolio by collaborating with renowned directors, ensuring a steady stream of engaging content for audiences[40]. - The Group will continue to implement the "content is king" strategy, focusing on collaborations with top Chinese directors to accelerate the release of high-quality content[42]. - The Group is actively developing and producing multiple high-quality films with top directors in China, including projects by Chen Kaige and Chen Peisi[84]. - The Group plans to release multiple films in 2024 and Q1 2025, including "The Murderer" and "Li Na," which are expected to attract considerable audience interest[62]. Financial Performance - For the year ended 31 December 2023, the Group recorded a revenue increase to HK$1,332,794,000, a sharp increase of approximately 97 times compared to HK$13,630,000 in 2022[83]. - The Group achieved a turnaround from a loss to a profit, reporting a profit before tax of HK$212,085,000, compared to a loss before tax of HK$223,272,000 in 2022[88]. - The net profit for the year was HK$159,135,000, recovering from a net loss of HK$221,812,000 in 2022[88]. - The Group expects a decrease in revenue from film and TV programme rights in Q1 2024, with an impairment loss of HK$106,196,000 recognized for 2023[88]. - The profit per share for the Group amounted to HK$0.04, compared to a loss per share of HK$0.06 in 2022[110]. - The net asset value per share attributable to owners of the Company was HK$0.40, up from HK$0.36 in 2022[110]. Online Video Platform Development - The online video platform "huanxi.com" has been optimized to provide diverse film and TV experiences, with plans for continued high-profile productions[21]. - The Group continues to optimize its online video platform "huanxi.com," enhancing the content ecosystem and attracting a wider user base through collaborations with major Internet and entertainment companies[25]. - The online video platform "Huanxi Premier" continues to develop by optimizing content ecology and attracting a broader user base through collaborations with major internet and entertainment companies[66]. - The content advantage of "huanxi.com" is expected to attract a wider user base and expand revenue streams through alliances with major channels[86]. Market Trends and Recovery - The film market is experiencing a strong recovery following the lifting of anti-epidemic policies, with a continuous release of quality films[14]. - The Central Government has declared 2024 as the "Year of Consumption Promotion," aiming to boost consumer demand post-epidemic, with a focus on cultural and entertainment consumption[23]. - During the 2024 Chinese New Year holiday, the number of moviegoers reached 160 million, and box office receipts totaled RMB 8 billion, marking increases of 26.4% and 18.5% respectively compared to 2023[23]. - The Group's film investment loss net for the year was significantly impacted by the pandemic, which previously affected cinema operations in China[88]. Corporate Governance and Management - The Group's chairman has extensive experience in the media and film industry, contributing to the company's strategic direction[4]. - The Group's major shareholders include Dong Ping and Ning Hao, both holding significant interests in the company[188]. - The Board consists of eight members, including two executive Directors, three non-executive Directors, and three independent non-executive Directors[184]. - The Company has made appropriate insurance arrangements for its directors and senior officers against legal actions arising from corporate activities[171]. Shareholder Information - As of December 31, 2023, the Group's net current assets were HK$735,495,000, an increase from HK$654,367,000 in 2022, with cash and cash equivalents rising to HK$310,146,000 from HK$53,634,000[91]. - The current ratio improved to approximately 1.95 in 2023, compared to 1.77 in 2022, indicating better short-term financial health[91]. - Total equity increased to HK$1,453,568,000 in 2023 from HK$1,328,436,000 in 2022, with no borrowings reported in 2023, down from HK$108,267,000 in 2022[91]. - The Group's gearing ratio was Nil as of December 31, 2023, compared to 0.08 in 2022, reflecting a stronger capital structure[91].

Financial Performance - For the year ending December 31, 2023, the company recorded revenue and film investment losses of HKD 1,332,794,000, a significant increase of approximately 97 times compared to HKD 13,630,000 in 2022[19] - The company achieved a turnaround from a loss to a profit, reporting a pre-tax profit of HKD 212,085,000, compared to a pre-tax loss of HKD 223,272,000 in 2022[19] - The net profit for the year was HKD 159,135,000, recovering from a net loss of HKD 221,812,000 in the previous year[19] - The company reported a total comprehensive income of HKD 125,132,000 for the year ended December 31, 2023, compared to a loss of HKD 326,833,000 in the previous year[49] - Operating profit for the year was HKD 212,872,000, a significant improvement from a loss of HKD 221,211,000 in the prior year[39] - The company achieved a gross profit of HKD 906,261,000, compared to a gross loss of HKD 92,621,000 in the previous year[47] - The company reported a net profit attributable to shareholders of HKD 159,135,000 for 2023, compared to a net loss of HKD 221,812,000 in 2022[98] - Basic earnings per share for 2023 was HKD 0.04, recovering from a loss of HKD 0.06 per share in 2022[115] Revenue and Expenses - The company incurred a loss of HKD 268,210,000 from film investments during the year[47] - Revenue from box office participation reached HKD 1,292,534,000 in 2023, with no prior year comparison available[84] - Total costs of revenue, selling and distribution expenses, and administrative expenses amounted to HKD 884,113,000 in 2023, significantly higher than HKD 235,141,000 in 2022[70] - The company incurred advertising and marketing expenses of HKD 319,356,000 in 2023, a substantial increase from HKD 5,568,000 in 2022[70] - The company reported administrative expenses of HKD 138,224,000, compared to HKD 123,322,000 in the previous year[47] Assets and Equity - Total assets increased to HKD 2,234,243,000 from HKD 2,210,335,000 year-over-year[50] - The total equity of the company rose to HKD 1,453,568,000, up from HKD 1,328,436,000 in the previous year[42] - As of December 31, 2023, the company had contract assets of HKD 59,712,000, a significant increase from HKD 10,434,000 in 2022[9] - The company’s total assets rose to HKD 1,334,951,000 in 2023, up from HKD 938,792,000 in 2022[100] - As of December 31, 2023, the group's net current assets amounted to HKD 735,495,000, an increase from HKD 654,367,000 in 2022[144] - The group's cash and cash equivalents reached HKD 310,146,000, significantly up from HKD 53,634,000 in 2022[144] - The current ratio as of December 31, 2023, was approximately 1.95, compared to 1.77 in 2022[144] - The group reported no borrowings as of December 31, 2023, compared to borrowings of HKD 108,267,000 in 2022[144] Government Support and Subsidies - The company received government subsidies amounting to HKD 9,030,000 from the Chinese government in 2023, compared to zero in 2022[62] - Total government grants increased significantly to HKD 9,030,000 in 2023 from HKD 576,000 in 2022, reflecting a growth of 1,466%[85] Film Production and Strategy - The company is actively preparing for the production and release of various films, including collaborations with notable directors and actors, aiming to meet diverse audience demands[27] - The company has established several joint ventures to produce and release two films, with participation rights ranging from 50% to 55%[5] - The company has ongoing film projects with notable directors, aiming to enhance its film portfolio for the next one to two years[112] - The company plans to deepen collaborations with renowned directors to produce high-quality films, leveraging its creative strengths and rich film reserves[113] - The group plans to release several films in 2024 and 2025, including "Sauce Garden" and "Solo Performance," directed by notable filmmakers[155] - The group emphasizes a "content is king" strategy, focusing on collaboration with top Chinese directors to produce high-quality original content[151] - The group aims to enhance its competitive advantage by developing a diversified premium video content platform[156] Risk Management and Future Outlook - The company expects a decrease in revenue from film and television rights in the first quarter of 2024, leading to an impairment loss of HKD 106,196,000 for the year[19] - The group continues to review its risk management policies to improve overall control and reduce credit risk[147] - The group confirmed a film investment loss of approximately HKD 79,343,000 for the year, compared to HKD 2,730,000 in the previous year[130] - The group’s cash flow and assets are primarily denominated in HKD and RMB, with ongoing monitoring of capital needs to mitigate foreign exchange risks[118] Employment and Compensation - As of December 31, 2023, the company employed 85 full-time employees, a slight decrease from 87 in 2022, and maintained a robust compensation management system[32] - Employee benefit expenses (excluding director remuneration) decreased to HKD 48,361,000 in 2023 from HKD 56,290,000 in 2022[70] Dividends - The company did not declare or recommend any dividends for the year 2023, consistent with 2022[70] - The group has no proposed dividends for the year, consistent with the previous year[120]

Financial Performance - For the six months ended June 30, 2023, the company reported total revenue of HKD 1,393,279,000, a significant increase from HKD 14,573,000 in the same period of 2022[3] - The gross profit for the same period was HKD 1,113,160,000, compared to a gross loss of HKD 35,672,000 in the previous year[3] - The operating profit for the six months was HKD 460,568,000, a turnaround from an operating loss of HKD 95,382,000 in 2022[3] - The net profit attributable to the company's owners for the period was HKD 400,769,000, compared to a net loss of HKD 93,579,000 in the same period last year[3] - The total comprehensive income for the period was HKD 331,029,000, compared to a comprehensive loss of HKD 150,653,000 in 2022[8] - The company reported a profit attributable to shareholders of HKD 400,769,000 for the six months ended June 30, 2023, compared to a loss of HKD 93,579,000 in the same period of 2022, representing a significant turnaround[63] - Basic earnings per share for the first half of 2023 were HKD 0.11, compared to a loss of HKD 0.03 per share in the prior year[63] Assets and Liabilities - The company's total assets increased to HKD 2,356,429,000 from HKD 2,210,335,000 in the previous year[20] - The company's total equity increased to HKD 1,659,465,000 as of June 30, 2023, up from HKD 1,328,436,000 at the end of 2022, representing a growth of approximately 25%[35] - The company's borrowings decreased to HKD 65,761,000 as of June 30, 2023, down from HKD 108,267,000 at the end of 2022, indicating a reduction of approximately 39%[35] - The company's total liabilities decreased to HKD 696,964,000 from HKD 881,899,000, reflecting a reduction of approximately 21%[35] - The group's net current assets amounted to HKD 1,011,645,000, an increase of approximately 54% from HKD 654,367,000 as of December 31, 2022[1] - The current ratio as of June 30, 2023, was approximately 2.50, compared to 1.77 on December 31, 2022[1] - The group's debt-to-equity ratio as of June 30, 2023, was 0.04, down from 0.08 as of December 31, 2022, indicating improved financial stability[1] Revenue Sources - The company recognized box office revenue of HKD 1,317,186,000, with other media-related income of HKD 9,295,000 for the six months ended June 30, 2023[23] - The company operates primarily in the People's Republic of China and Hong Kong, with most revenue and film investment income coming from Chinese clients[24] - The group recorded revenue and film investment income of HKD 1,393,279,000 for the reporting period, a significant increase of approximately 95 times from HKD 14,573,000 for the same period last year[1] Expenses and Costs - Employee benefits expenses (excluding director remuneration) decreased to HKD 23,690,000 from HKD 27,811,000 year-on-year, a reduction of approximately 15.5%[26] - The total cost of revenue, sales and distribution costs, and administrative expenses amounted to HKD 668,712,000, significantly higher than HKD 110,879,000 in the previous year[26] Film and Content Production - The group successfully released the film "Full River Red," which grossed RMB 4.54 billion, ranking sixth in China's box office history and becoming the box office champion for the 2023 Spring Festival[1] - The group has multiple films in post-production, expected to be released in the second half of 2023 and 2024, ensuring a diverse range of content for audiences[1] - The group is focusing on expanding its film and television rights portfolio to enhance revenue streams[67] - The online video platform "Huanxi Premier" continues to develop, with new content including the César Award-nominated film "Serre Moi Fort" and the Cannes Film Festival nominee "Three Floors" set to be introduced in the second half of the year[102] - The group plans to release multiple films in theaters in the second half of the year, with the comedy "Xue Ba" already showcased, highlighting a strong recovery in audience consumption and favorable policies in the Chinese film industry[113] Governance and Compliance - The group has adhered to the corporate governance code and has confirmed compliance with the standards throughout the reporting period[104] - The board of directors consists of two executive directors, three non-executive directors, and three independent non-executive directors, ensuring a diverse range of expertise[115] Other Financial Information - The company did not declare an interim dividend for the six months ended June 30, 2023, consistent with the previous year[30] - The company reported a fair value loss of HKD 9,000 on financial assets measured at fair value through profit or loss, compared to a loss of HKD 1,193,000 in the previous year[25] - The company recorded a net foreign exchange gain of HKD 5,602,000, a significant increase from HKD 124,000 in the prior year[25] - The group has not made any purchases, sales, or redemptions of its listed securities during the six months ending June 30, 2023[106] - The group has no significant liabilities as of June 30, 2023, indicating a stable financial position[111] - The group continues to enhance its content production capabilities and quality through collaboration with excellent directors and creative teams[114] - The group plans to deepen collaborations with internet and entertainment companies to promote "Huanxi Premier" and capitalize on the trend of paid online viewing[114]

Revenue and Financial Performance - The Group's revenue decreased due to the delay in releasing several major films, with only one film produced by the Group launched during the year[17]. - For the year ended December 31, 2022, the Group recorded revenue of HK$13,630,000, a significant decrease from HK$158,353,000 in 2021, and a net loss of HK$221,812,000, compared to a net loss of HK$235,557,000 in 2021[111]. - The decrease in revenue was primarily due to the postponement of screenings for several blockbuster films, as cinema operational rates in China were adversely affected by the pandemic[111]. - The Group implemented stringent cost control measures, resulting in reduced administrative expenses and a recognized income tax credit, contributing to a decrease in net loss[111]. - No final dividend is recommended for the year ended December 31, 2022, consistent with the previous year where no dividend was paid[175]. Film Production and Releases - The film "Full River Red," invested and controlled by the Group, is scheduled for release during the Spring Festival of 2023, with related income and costs to be accounted for in the interim results for the six months ending June 30, 2023[17]. - The Group has completed post-production for several blockbusters set to debut in 2023, including titles featuring well-known directors and actors, which are expected to attract audiences[20]. - The Group plans to release several blockbuster films in 2023, including "Papa" (學爸), "Something About Us" (紅毯先生), and "Li Na" (獨自•上場), aiming to achieve commendable revenues[32]. - The film "Full River Red" (滿江紅), produced by the Group, topped the box office chart during the Chinese New Year holiday of 2023 and is expected to significantly contribute to the Group's revenue and performance in 2023[31]. - The Group's strategy focuses on producing premium and diverse films and TV productions, collaborating with outstanding directors and professional creative teams[32]. Online Streaming and Content Development - The Group continues to source quality films and TV productions globally for release on its platform "huanxi.com," enhancing its content offerings[23]. - The Group aims to enhance its online video platform "huanxi.com" by including more quality films and TV productions, while also premiering "Full River Red" on the platform soon[37]. - The online video platform "huanxi.com" continued to develop, introducing more films and internet dramas to optimize content and attract more user groups[117]. - The Group is expanding its user base through collaborations with major channels to enhance the coverage of its platform "Huanxi Premier"[121]. - The Group's proactive approach in preparing for the next boom in the film industry is expected to yield high-quality films that will be well received when the market recovers[118]. Risk Management and Corporate Governance - The Company has established risk management and internal control systems to address significant business, operational, financial, compliance, and other risks[70]. - High-priority risks identified include strategic risks in the entertainment industry, operational risks related to media project quality, and compliance risks with various regulations[78]. - The Board, with the assistance of a Consultant, reviewed the effectiveness of the Group's risk management and internal control systems for 2022 and deemed them effective[77]. - The audit committee reviewed the company's corporate governance policies and compliance with legal and regulatory requirements, ensuring adherence to the Corporate Governance Code[127]. - The Company has adopted a whistle-blowing policy to allow employees to report irregularities[79]. Director and Management Information - The Company has independent non-executive directors with significant experience in finance and media, enhancing its governance structure[160][164]. - The Company is focused on developing new strategies for market expansion and enhancing its online video platform capabilities[172]. - The Company continues to strengthen its board with experienced professionals to navigate the evolving media landscape[171]. - All existing Directors received training on regulatory development and other relevant topics during the year ended 31 December 2022[1]. - The Company is committed to providing continuous professional development training for all Directors[87]. Market Trends and Industry Challenges - The pandemic has provided opportunities for the streaming media industry to thrive, with online viewing becoming a significant leisure activity for the public[24]. - The pandemic has significantly impacted the film industry, with a notable drop in the number of films produced and box office receipts in China[119]. - The film industry faced significant challenges due to the pandemic, with a notable decrease in domestic film releases and box office revenue hitting a near-record low[122]. - The company is committed to monitoring the ongoing impact of the pandemic on the media market and taking proactive measures to mitigate its effects on operations and financial performance[123]. - The Chinese government's policies to boost consumption, including tax concessions and lifting restrictions, are expected to foster recovery in the cultural industry, which is a key project for economic recovery[29].

Financial Performance - The company reported a total comprehensive loss of HKD 326,833,000 for the year ended December 31, 2022, compared to a loss of HKD 201,096,000 in the previous year, representing an increase of 62.5%[4] - The company's revenue from film investments and other income was HKD 13,630,000, a decrease from HKD 158,353,000 in the previous year, indicating a significant decline in revenue[3] - The company experienced a net loss attributable to owners of HKD 221,812,000 for the year, slightly improved from a loss of HKD 235,557,000 in the prior year, showing a decrease of 5.5%[4] - The company's revenue for 2022 was HKD 16,360,000, a decrease of 80.3% compared to HKD 82,767,000 in 2021[31] - The net loss attributable to shareholders for 2022 was HKD 221,812,000, compared to a loss of HKD 235,557,000 in 2021, indicating a slight improvement[45] - The company reported a basic and diluted loss per share of HKD 0.06, compared to HKD 0.07 in the previous year, indicating a slight improvement in loss per share[4] - The net loss for the year was HKD 221,812,000, a slight improvement from HKD 235,557,000 in the previous year[87] - The company reported a basic loss per share of HKD (0.06) for 2022, compared to HKD (0.07) in 2021[45] Assets and Liabilities - Total assets decreased to HKD 2,210,335,000 from HKD 2,261,696,000, a decline of about 2.3% year-over-year[5] - The company's cash and cash equivalents dropped to HKD 53,634,000 from HKD 115,369,000, a decrease of approximately 53.5%[5] - The total liabilities increased to HKD 881,899,000 from HKD 606,427,000, representing an increase of 45.2%[23] - The company's non-current assets, including property, plant, and equipment, decreased to HKD 786,000 from HKD 1,341,000, a decline of 41.3%[5] - As of December 31, 2022, accounts receivable (net of impairment) amounted to HKD 301,252,000, down from HKD 445,560,000 in 2021[78] - The company's total liabilities included unsecured borrowings of HKD 33,833,000 and secured borrowings of HKD 74,434,000 as of December 31, 2022[83] - The company's gross loss provision increased to HKD 10,128,000 in 2022 from HKD 6,990,000 in 2021[76] - The company's prepaid expenses related to film and television projects amounted to HKD 113,636,000, down from HKD 139,547,000 in the previous year[76] Revenue and Expenses - The total cost of revenue, selling and distribution expenses, and administrative expenses amounted to HKD 235,141,000 in 2022, down from HKD 384,594,000 in 2021, a decrease of approximately 39%[67] - The financial expenses for 2022 were HKD (2,061,000), a decrease from financial income of HKD 2,388,000 in 2021[37] - The company recognized impairment losses of approximately HKD 2,112,000 for completed film and television rights in 2022, compared to zero in 2021[73] Government Support - The company received government subsidies of approximately HKD 576,000 in 2022, compared to zero in 2021[33] - Government grants increased from HKD 286,000 in 2021 to HKD 576,000 in 2022, showing a growth of 101%[60] Film Production and Investments - The company’s investment in film production showed a significant decline, with net income from film investments dropping to HKD (2,730,000) in 2022 from HKD 75,586,000 in 2021[31] - The company reported a net loss of approximately HKD 2,730,000 from film investments in 2022, compared to a net income of HKD 75,586,000 in 2021[74] - The value of completed film and television rights decreased from HKD 43,145,000 in 2021 to HKD 37,725,000 in 2022, a decline of about 12%[73] - The company has engaged in joint ventures to produce and release three films in 2022, down from four films in 2021[75] - The total amount of film and television rights prepayments was HKD 813,690,000 in 2022, slightly down from HKD 883,170,000 in 2021[71] - The company has completed post-production for several major films, which are scheduled for release in 2023, aiming to improve overall performance[117] Future Outlook - The company plans to continue expanding its media and entertainment business, focusing on online video platforms and film investments[30] - The company is preparing for a recovery in the film market, with the film "Full River Red" expected to be a successful release in 2023[89] - The company plans to release several major films in 2023, including "Learning Dad," "Mr. Red Carpet," and "Solo on Stage," which are expected to contribute significantly to revenue[122] - The company anticipates that the pandemic situation will ease, allowing for a richer content reserve and improved performance in 2023[122] - The company continues to enhance its online video platform by introducing more outstanding films and web series to attract a broader user base[118] Employee and Corporate Governance - As of December 31, 2022, the company employed 87 full-time employees and 4 part-time employees, a decrease from 101 and 5 respectively in 2021[99] - The board of directors includes executive directors Mr. Dong Ping (Chairman) and Mr. Xiang Shaokun (CEO) as well as non-executive directors Mr. Ning Hao, Mr. Xu Zheng, and Ms. Li Ni, along with independent non-executive directors Mr. Huang Dequan, Mr. Li Xiaolong, and Mr. Wang Hong[152] Dividends - The company did not declare or recommend any dividends for the year, consistent with the previous year[67] - The group has not declared or proposed any dividends for the year ended December 31, 2022[141]

Financial Performance - During the six months ended June 30, 2022, the Group recorded revenue and film investment income of HK$14,573,000, a decrease from HK$151,726,000 in the same period of 2021[8]. - The net loss for the period was HK$93,579,000, slightly improved from a net loss of HK$97,206,000 in the previous year[8]. - The decrease in revenue was primarily due to the postponement of blockbuster films' releases as cinema operations in Mainland China were adversely affected by the COVID-19 pandemic[8]. - The gross loss for the period was HK$35,672,000, compared to a gross loss of HK$14,727,000 in the previous year, indicating a significant decline in profitability[81]. - The total comprehensive loss for the period was HK$150,653,000, which is an increase from HK$85,826,000 in the same period last year, reflecting worsening financial performance[82]. - The company reported a loss for the period of HK$93,579,000 for the six months ended June 30, 2022[87]. - Total expenses for the six months ended June 30, 2022, amounted to HK$110,879,000, a significant decrease from HK$241,996,000 in the same period of 2021[121]. Revenue Sources - For the six months ended June 30, 2022, the Group's revenue from sub-licensing of film and TV programmes rights was HK$2,557, a decrease of 96% compared to HK$62,990 in 2021[115]. - The share of box office income was nil for the six months ended June 30, 2022, compared to HK$1,678 in 2021[115]. - Other media related revenue decreased to HK$8,372 from HK$71,856, representing a decline of approximately 88%[115]. - Film investment income, net, was HK$10,929, down 92% from HK$136,524 in the same period of 2021[115]. - The total revenue and film investment income, net, for the period was HK$14,573, a decrease of 90% compared to HK$151,726 in 2021[115]. Asset and Liability Management - As of June 30, 2022, the Group's net current assets were HK$692,137,000, a decrease from HK$760,108,000 as of December 31, 2021[13]. - The Group's cash and cash equivalents dropped to HK$46,728,000 as of June 30, 2022, compared to HK$115,369,000 as of December 31, 2021[13]. - Total liabilities increased from HK$606,427,000 as of December 31, 2021, to HK$720,516,000 as of June 30, 2022, reflecting an increase of about 18.8%[86]. - The total current liabilities related to film and TV programmes rights were HK$958,932,000 as of June 30, 2022, compared to HK$639,406,000 at the end of 2021, indicating an increase of 49.9%[141]. - The Group's trade receivables totaled HK$111,523,000 as of June 30, 2022, down from HK$136,088,000 at the end of 2021, reflecting a decline of 18.1%[142]. Shareholder Information - As of June 30, 2022, Mr. Dong Ping, Mr. Ning Hao, and Mr. Xu Zheng each hold approximately 40.24% of the issued shares, totaling 1,471,434,354 shares[50]. - Major shareholders include Dong Ping and Newwood Investments Limited, each holding approximately 40.24% of ordinary shares, totaling 1,468,734,354 shares[58]. - Bilibili Inc. is a significant shareholder with 346,626,954 ordinary shares, representing 9.48% of the total shareholding[59]. - The total number of ordinary shares held by the top shareholders indicates a concentration of ownership, with the top four shareholders controlling over 60% of the company[58]. - The Company has been notified of substantial shareholders holding 5% or more of the issued share capital, as disclosed in the Directors' Interests section[57]. Corporate Governance - The Group has complied with the Corporate Governance Code throughout the reporting period[40]. - The Board currently comprises two executive directors, three non-executive directors, and three independent non-executive directors[42]. - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2022, consistent with the previous year[52]. Future Outlook - The Group is expected to release several completed films in the second half of 2022 or 2023, which are anticipated to improve revenue[11]. - Economic activities in China have shown signs of recovery post-pandemic, with increased operating rates of cinemas[31]. - The Group is seeking investment opportunities in media and entertainment-related businesses to expand income sources and prospects[27]. - Future plans include delivering original premium productions and enhancing cooperation with internet and entertainment entities[38]. Employee and Management Information - As of June 30, 2022, the Group employed 100 full-time employees, a slight decrease from 101 as of December 31, 2021[29]. - The total remuneration for key management personnel was HK$7,284,000 for the six months ended June 30, 2022, slightly up from HK$7,124,000 in 2021[196]. - The remuneration committee determines the compensation for directors and key executives based on individual performance and market trends[197]. Financial Risk Management - The Group's activities expose it to various financial risks, including market risk, credit risk, and liquidity risk, which remain unchanged since December 31, 2021[97]. - The Group's financial risk management policy has remained unchanged since December 31, 2021[100].

Financial Performance - Huanxi Media recorded revenue of HK$158,353,000 for the year ended December 31, 2021, a decrease from HK$633,176,000 in 2020, and reported a loss of HK$235,557,000[58]. - For the year ended December 31, 2021, the Group reported a net revenue of HK$158,353,000, a decrease of 75% from HK$633,176,000 in 2020, and a loss of HK$235,557,000 compared to a loss of HK$236,391,000 in 2020[62]. - The segment loss for the film and TV programmes rights business was HK$133,168,000, compared to a loss of HK$144,636,000 in 2020, indicating a slight improvement despite ongoing challenges[43]. - The decline in revenue and segment loss was primarily due to delays in the release of blockbusters caused by the Pandemic, alongside reduced box office revenue and increased amortized expenses for licensed content[43]. - The Group's cash and cash equivalents decreased to HK$115,369,000 in 2021 from HK$142,140,000 in 2020[61]. - The Group's current ratio as of December 31, 2021, was approximately 2.31, down from 3.48 in 2020[61]. - Total equity increased to HK$1,655,269,000 in 2021 from HK$1,446,433,000 in 2020[61]. - The Group's total borrowings rose to HK$100,281,000 in 2021, compared to HK$50,036,000 in 2020, resulting in a gearing ratio of 0.06[61]. - The Group's loss per share for the year was HK$0.07, unchanged from 2020, while the net asset value per share increased to HK$0.45 from HK$0.42 in 2020[62]. Box Office and Film Production - Huanxi Media Group's cinema box office income was significantly impacted by the pandemic, with total box office receipts in China reaching RMB 47,258 million in 2021, more than doubling from RMB 20,400 million in 2020[7]. - Domestic films contributed RMB 39,927 million, accounting for approximately 85% of total box office receipts, with eight out of the top ten highest-grossing films being domestic productions[7]. - The film "Dying to Survive" co-produced by the Group earned RMB 3.1 billion in box office receipts, showcasing the Group's strong investment returns[33]. - The film "Crazy Alien," directed by a prominent shareholder director, grossed RMB 2.2 billion in China, further highlighting the Group's successful projects[33]. - The film "Warm Hug" received positive feedback and outstanding box office receipts, reflecting the Group's ability to produce appealing content despite market challenges[9]. - The Group plans to launch multiple films in 2022 and the first half of 2023, including "Papa" and "Something About Us" among others[13]. - The film "Papa," invested in and produced by the Group, is scheduled for release in early Q3 2022, indicating ongoing investment in film production[45]. - Other films in various stages of production include "Something About Us," "Li Na," and "Call Me Crazy," showcasing the Group's commitment to expanding its film portfolio[45]. Online Video Platform Development - The Group's online video platform "huanxi.com" has been vigorously developed to capitalize on the increasing popularity of online viewing trends[6]. - The Group has accumulated over 11 million fee-paying subscribers on "huanxi.com" and the app has been downloaded over 38 million times[20]. - The online video platform industry has seen significant growth due to the pandemic, making online viewing a crucial leisure activity[17]. - The Group's collaboration with major tech companies has expanded the audience coverage of "huanxi.com" significantly[18]. - The Group's online video platform successfully attracted viewers who shifted from cinemas, demonstrating the effectiveness of its dual strategy in content creation and online platform development[42]. Strategic Partnerships and Collaborations - A cooperation agreement was established with Shanghai Hanna Pictures for investment and development of quality film and TV productions over the next three years, with the first film "Papa" set to release in July 2022[10]. - The Group signed a cooperation agreement with MIGU to jointly build the largest digital cinema in the world and invest in quality film and TV content[15]. - The Group has exclusive rights to invest in at least three films directed by prominent filmmakers, enhancing its strategic partnerships in the industry[41]. - The Group has established cooperation agreements with notable figures in the film industry to enhance its production capabilities[146]. - The Group entered into a cooperation agreement with Unique Swift Limited for exclusive investment rights in certain internet drama series and films, enhancing its media production capabilities[151]. Content Creation and Talent Development - The Group has actively invested in and produced quality cinema and TV productions to enhance its content reserves, preparing for future growth in the film and TV industry[6]. - The Group aims to enhance its content offerings by collaborating with top directors and discovering new talent to produce premium original film and TV productions[25]. - The Group has enlisted many award-winning film directors to strengthen its creative team, enhancing the quality of its film and TV content[10]. - The Group is committed to building "huanxi.com" as a leading online video platform through continuous user development efforts[26]. - The Group is actively enriching its content reserves to prepare for future peaks in the film industry despite ongoing market challenges[50]. Market Challenges and Future Outlook - The pandemic's impact on cinema admissions has not yet returned to pre-pandemic levels, indicating ongoing challenges in the market[6]. - The Group's management team is leveraging its investment acumen and flexible operations model to capitalize on the rapid growth of the film and TV industry[29]. - The ongoing COVID-19 pandemic may impact the Group's production and distribution plans, with financial effects currently unquantifiable, necessitating close monitoring of the situation[151]. - The Group is committed to taking proactive measures to minimize the pandemic's impact on its operations and financial performance[151]. - The Group plans to accelerate the launch of quality content and optimize its business structure to consolidate competitive advantages and deliver long-term value to shareholders[27]. Shareholder and Corporate Governance - The company has outstanding share options totaling 130,700,000, representing approximately 3.57% of the total issued shares as of December 31, 2021[123]. - The company aims to enhance shareholder returns through share repurchases, reflecting confidence in its long-term industry prospects[131]. - The Board consists of eight members, including two executive directors, three non-executive directors, and three independent non-executive directors, all aware of their fiduciary duties[194]. - The company has established a comprehensive compensation management and incentive mechanism for employees, aligning salaries with job value, performance, and industry trends[83]. - The company emphasizes the importance of talent acquisition and development as a key asset for business growth[83].

Online Video Platform Performance - The Group's online video platform "huanxi.com" has been downloaded over 35 million times and has accumulated over 10 million fee-paying subscribers[8]. - The Group's box office income was affected by the pandemic, but there was a shift in audience preference towards streaming movies online, benefiting the online video platform[3]. - The Group has strengthened cooperation with major channel partners, enhancing its influence in online video media through various applets on platforms like Kuaishou and Douyin[8]. - The Group is actively developing the "huanxi.com" online video platform to capitalize on the growing online viewing trend[47]. - The Group plans to collaborate with leading internet and entertainment companies to expand distribution channels for "huanxi.com" content[47]. Financial Performance - The Group recorded revenue and film investment income of HK$151,726,000, a decrease from HK$492,065,000 in the same period last year, resulting in a net loss of HK$97,206,000 compared to a profit of HK$20,331,000 in the previous year[15][18]. - The total revenue for the Group for the six months ended June 30, 2021, was HK$151,726,000, down from HK$492,065,000 in 2020, reflecting a decline of 69.1%[115]. - The Group's loss per share for the six months ended June 30, 2021, was HK$0.03, compared to earnings per share of HK$0.01 in the same period last year[16][18]. - The total comprehensive loss for the period was HK$85,826,000, compared to a loss of HK$3,873,000 in the same period last year, indicating a significant decline in performance[89]. - The segment loss before tax for continuing operations was HK$97,206,000, compared to a profit of HK$38,787,000 in the previous year[121]. Revenue Sources - During the Period, the Group recorded other media-related revenue of HK$71,856,000, which increased over four times compared to HK$14,297,000 in the corresponding period of last year[8]. - For the six months ended June 30, 2021, the Group's revenue from sub-licensing of film and TV programmes rights was HK$62,990,000, a decrease of 86.8% from HK$477,693,000 in 2020[115]. - The share of box office income increased significantly to HK$1,678,000 from HK$75,000 in the previous year[115]. - Other media-related revenue was HK$71,856,000, compared to HK$14,297,000 in 2020, marking a growth of 403.5%[115]. - The net film investment income for the period was HK$15,202,000, a recovery from a loss of HK$492,065,000 in the same period last year[115]. Strategic Initiatives - The Group entered a three-year cooperation agreement with Shanghai Hanna Pictures for joint investment in quality film and TV productions, with the first project being the film "Papa" starring Huang Bo[5]. - The Group plans to gradually release blockbusters such as "Li Na," "Papa," "The Mountain," and "Leaping Over The Dragon Gate," which are expected to contribute to revenue improvement[15][18]. - The Group is focusing on producing high-quality original films and TV works to secure a stable supply of remarkable content[47]. - The Group emphasizes the importance of content and aims to cultivate high-quality and diversified film content through collaborations with outstanding directors[43]. - The Group is currently working on several films in production, including "Evacuate from the 21st Century" and "Unspoken," expected to be released next year[48]. Financial Position - As of June 30, 2021, the Group had net current assets of HK$1,042,107,000, an increase from HK$730,619,000 at the end of 2020[17][19]. - Cash and cash equivalents rose to HK$252,372,000 from HK$142,140,000 at the end of 2020[17][19]. - The total equity of the Company increased to HK$1,780,056,000 from HK$1,446,433,000 at the end of 2020[17][19]. - Total borrowings increased to HK$116,489,000 from HK$50,036,000 at the end of 2020, resulting in a gearing ratio of 0.06 compared to 0.03 previously[17][19]. - The total assets increased to HK$2,232,986,000 as of June 30, 2021, up from HK$1,745,611,000 at the end of 2020, reflecting a growth of approximately 27.9%[91]. Shareholder Information - As of June 30, 2021, the total number of ordinary shares issued was 3,676,812,362, an increase from 3,472,732,362 shares as of December 31, 2020[20]. - The Company has pledged contract assets and other receivables totaling approximately HK$78,240,000 to secure borrowings of approximately HK$66,050,000 as of June 30, 2021[27]. - The Group's cash flow and assets are mainly denominated in Hong Kong dollars and Renminbi, with a focus on minimizing foreign exchange risks[24]. - The Group has no significant contingent liabilities as of June 30, 2021[30]. - The Group's financial risk management policies have remained unchanged since December 31, 2020, addressing market risk, credit risk, and liquidity risk[109]. Employee and Management Information - The Group employed 96 employees as of June 30, 2021, down from 101 employees as of December 31, 2020[40]. - Employee benefit expenses increased to HK$25,248,000 for the six months ended June 30, 2021, from HK$21,366,000 in 2020, reflecting a rise of approximately 18.0%[130]. - The remuneration for key management personnel increased from HK$6,864,000 in 2020 to HK$7,115,000 in 2021, reflecting a growth of approximately 3.7%[197]. - Short-term benefits for directors and key executives rose to HK$7,124,000 in 2021 from HK$6,873,000 in 2020, indicating an increase of about 3.6%[197]. - The remuneration committee determines the compensation of directors based on individual performance and market trends[199]. Share Options and Capital Structure - The total number of share options outstanding as of June 30, 2021, was 130,700,000, representing approximately 3.55% of the total issued shares[81]. - The share option scheme was adopted and approved by shareholders at the annual general meeting held on June 17, 2014[77]. - The maximum number of shares that can be granted under the share option scheme is limited to 10% of the issued share capital at the time of approval[182]. - The exercise price for options granted was HK$2.08, with a risk-free interest rate of 1.91%[184]. - The Group's share premium increased to HK$3,541,960,000 as of June 30, 2021, compared to HK$3,102,745,000 at the beginning of the year[170].

Box Office Performance - In 2020, total box office receipts in China amounted to RMB 20,417 million, with domestic films contributing RMB 17,093 million, accounting for 83.72% of the total[8]. - The top 10 highest-grossing films in 2020 were all domestically produced, reflecting the audience's recognition of quality domestic films[8]. - The film "Leap" generated box office receipts exceeding RMB 100 million within just two days of release, ultimately totaling RMB 830 million[12]. - "My People, My Homeland" also performed exceptionally well, ranking among the top 10 highest-grossing films in China for 2020 and one of the top three globally[12]. - "Warm Hug" achieved nearly RMB 200 million in box office receipts on its first day, with total receipts reaching RMB 860 million[12]. - The Group's productions, including "Leap," "My People, My Homeland," and "Warm Hug," achieved robust box office receipts, demonstrating the competitiveness of premium films[42]. - The film "囧媽" was released on an online platform in collaboration with ByteDance due to the pandemic, generating considerable revenue for the Group[49]. - The film "Crazy Alien" generated revenue of RMB700 million, which had a guaranteed minimum distribution amount of RMB2.8 billion[28]. Online Video Platform Growth - The number of downloads and fee-paying subscribers for the online video platform "huanxi.com" has shown strong growth momentum, driven by the "Stay-at-Home Economy" during the pandemic[6]. - The Group's online video platform has promising long-term growth potential due to the increased demand for digital content during the pandemic[6]. - The number of online video users in China surged to 927 million by December 2020, a 76.33 million increase from March 2020, representing 93.7% of the total netizen population[14]. - The Group's online video platform "huanxi.com" has over 8 million fee-paying subscribers and the app has been downloaded over 33 million times[52]. - The Group's strategic focus on quality content production and digital platform expansion positions it well for future growth in the evolving media landscape[6]. - The Group's strategic cooperation with online video platforms and TV terminals facilitated the development of the "huanxi.com" business[42]. - The Group's philosophy of "Importance of Contents" guided its efforts to produce premium film and TV productions during the challenging market environment[42]. Impact of the Pandemic - The Chinese film industry faced significant challenges due to the pandemic, with cinemas closed from early 2020 until July 20, leading to a difficult period of over six months[8]. - The pandemic caused delays in film releases, impacting box office receipts due to prevention and control measures[43]. - The Chinese film market is recovering from the pandemic, supported by government policies and subsidies for affected companies[20]. - The Group will continue to monitor the pandemic's impact on the media market and take proactive measures to minimize its effects on business operations and financial results[56]. - The financial performance of the Group for the year ending December 31, 2021, may be affected by the ongoing pandemic, although the financial impact cannot be reasonably estimated at this stage[107]. Strategic Partnerships and Investments - The Group secured a strategic investment of HK$ 513 million from Bilibili Inc., along with a cooperation agreement to enhance content distribution[15]. - The collaboration with Bilibili will allow for exclusive broadcasting of the Group's film and TV content, increasing audience reach and revenue potential[15]. - The Group's online video platform "huanxi.com" expanded its coverage through strategic partnerships with major platforms and devices, including Huawei and Xiaomi[16]. - The Group has established partnerships with major platforms including Huawei Video, Xiaomi TV, and LeTV Super TV, covering approximately 18 million (18,000,000) active terminals and 55 million (55,000,000) users[20]. - The Group entered into a subscription agreement with Bilibili on 30 August 2020, issuing 346,626,954 ordinary shares at a subscription price of HK$1.480 per share, raising approximately HK$1.476 per share net[57]. Financial Performance - For the year ended December 31, 2020, revenue from the film and TV programmes rights business amounted to HK$633,176,000, a decrease from HK$814,425,000 in 2019[43]. - The Group recorded a loss of HK$144,636,000 in the film and TV programmes rights business for 2020, compared to a profit of HK$279,417,000 in 2019[43]. - For the year ended 31 December 2020, the Group recorded revenue of HK$633,176,000, a decrease of 22.2% from HK$814,425,000 in 2019, and a net loss of HK$236,391,000 compared to a net profit of HK$105,103,000 in 2019[56]. - The loss per share for the year was HK$0.07, a decline from earnings per share of HK$0.03 in 2019, while the net asset value per share attributable to owners increased to HK$0.42 from HK$0.36[57]. - The Group's gearing ratio improved to 0.03 as of 31 December 2020, down from 0.04 in 2019, indicating a stronger capital structure[57]. Leadership and Management - The Company has a strong leadership team with extensive backgrounds in law, media, and film production, positioning it well for future growth[68][70]. - The Board consists of eight members, including two executive Directors, three non-executive Directors, and three independent non-executive Directors[161]. - The Group maintains a clear operational and financial independence from Mr. Ning's and Mr. Xu's Companies, ensuring no conflicts of interest[161]. - The participation of Mr. Ning and Mr. Xu is viewed as instrumental for the Company's development in the media and entertainment industry[147]. Shareholder Interests - As of December 31, 2020, substantial shareholders holding 5% or more of the company's issued share capital include Dong Ping with 1,468,734,354 shares, representing approximately 42.37%[172]. - The company is actively monitoring the interests of substantial shareholders and their implications for corporate governance[172]. - The company is committed to transparency regarding shareholder interests as mandated by the Securities and Futures Ordinance[172]. VIE Group and Compliance - The VIE Group, which includes Beijing Huanxi Shou Ying Culture Company Limited and its subsidiaries, is involved in film and TV production and internet audio-visual services in the PRC[180]. - The company has established contractual arrangements to gain financial and operational control over the VIE Group, ensuring compliance with PRC laws[181]. - The financial results of the VIE Group are consolidated into the company's financial statements as indirect subsidiaries under HKFRS 10[182]. - The VIE Group holds necessary permits for audio-visual program publication and telecommunications services[184].

Financial Performance - For the six months ended June 30, 2020, the Group recorded revenue of HK$492,065,000, a decrease from HK$1,068,980,000 for the same period in 2019, representing a decline of approximately 54%[10]. - The net profit for the same period was HK$20,331,000, down from HK$321,532,000 in 2019, indicating a decrease of about 94%[12]. - The Group's earnings per share decreased to HK$0.01 from HK$0.11 in the previous year[13]. - Gross profit for the same period was HK$127,185,000, compared to HK$464,456,000 in 2019, indicating a decrease of about 73%[93]. - Operating profit for the six months ended June 30, 2020, was HK$38,619,000, down from HK$410,551,000 in 2019, representing a decline of approximately 91%[93]. - The total comprehensive loss for the period was HK$3,873,000, compared to a total comprehensive income of HK$308,268,000 in 2019[93]. - The company reported a net cash outflow from operating activities of HK$121,814,000 for the six months ended June 30, 2020, compared to a net cash inflow of HK$81,087,000 for the same period in 2019[99]. - The company incurred a total comprehensive loss of HK$3,873,000 for the six months ended June 30, 2020, compared to a profit of HK$308,268,000 for the same period in 2019[96]. Business Operations and Strategy - The Group's strategy to invest in quality film and TV content has proven effective, as evidenced by the successful release of the movie "Lost in Russia" on streaming platforms, which generated significant revenue[6]. - The Group expects improved results as more movies are released in cinemas following the pandemic[6]. - The Group plans to release several highly anticipated films, including "Leap" and "Li Na," which are expected to drive significant revenue growth[42]. - The Group is developing "huanxi.com" into a paid viewing platform, aiming to optimize content and accelerate user base growth[45]. - The Group is committed to investing in and producing more quality original films and TV series to strengthen its presence in the film and TV industry of China[47]. - The anticipated release of blockbusters is expected to become a growth driver for the Group's business[44]. - The Group's strategy includes co-investing in films and TV projects to further its business development[46]. - The company is actively pursuing new strategies to mitigate the financial impact of the pandemic on its operations[196]. Shareholder Information - As of June 30, 2020, the total number of ordinary shares held by Mr. Dong Ping, Mr. Ning Hao, and Mr. Xu Zheng is 1,463,774,354, representing 46.40% of the issued shares[61]. - The shareholding structure indicates a significant concentration of ownership with Mr. Dong and his associated entities[67]. - The company has not been notified of any substantial shareholders with interests of 5% or more in the company's issued share capital, aside from those disclosed[68]. - The shareholders' agreement among key stakeholders outlines governance rights and obligations following share subscriptions[67]. Financial Position - As of June 30, 2020, the group had net current assets of HK$482,776,000, a decrease from HK$512,922,000 as of December 31, 2019[17]. - The total equity of the company was HK$1,127,516,000, slightly down from HK$1,130,230,000 at the end of 2019[17]. - Total assets decreased from HK$1,855,506,000 as of December 31, 2019, to HK$1,525,498,000 as of June 30, 2020, representing a decline of approximately 17.8%[95]. - Total liabilities decreased to HK$397,982,000 from HK$725,276,000, showing a reduction in financial obligations[135]. - The company reported cash flows from investing activities of HK$569,000 for the six months ended June 30, 2020, compared to HK$842,000 for the same period in 2019[99]. Market and Industry Outlook - The film industry is expected to gradually recover as the pandemic situation improves, with cinemas reopening and audience attendance increasing[40]. - The cinemas in the PRC resumed operations starting mid-July 2020, indicating a gradual recovery of the film market[189]. - The company will continue to assess the impact of COVID-19 on its business operations and financial results[190]. Corporate Governance - The company has complied with the Corporate Governance Code and the relevant provisions throughout the review period ending June 30, 2020[50][54]. - All directors confirmed full compliance with the Model Code for Securities Transactions during the review period[51][55]. - There have been no changes in directors' information since January 1, 2020, as required by the Listing Rules[53][57]. Share Option Scheme - The share option scheme approved on June 17, 2014, is valid for 10 years and aims to incentivize eligible participants contributing to the group[199]. - The total expenses from share-based payment transactions for the first half of 2020 were significantly lower compared to the same period in 2019[197]. - The share option scheme includes directors, employees, and other contributors as eligible participants, promoting broader engagement within the company[200].