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].

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].