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].

Box Office Performance - Huanxi Media Group achieved significant box office success with films "Crazy Alien" and "My People, My Country," generating substantial revenue during the Chinese New Year and National Day holidays[7]. - The total box office receipts for movies released in China in 2019 reached a record RMB 64.3 billion, with domestic films accounting for over 64% of the total[13]. - The cumulative share of the top ten box office leaders increased by three percentage points to 45% of total receipts, indicating a growing preference among Chinese audiences for high-quality films[13]. - The box office receipts for the film "Crazy Alien" exceeded RMB 400 million on its debut, contributing to total box office receipts of RMB 2.2 billion for the year[17]. - The film "My People, My Country" recorded box office receipts of RMB 3.2 billion during the National Day holiday in 2019[17]. - The film "Crazy Alien," directed by Ning Hao and exclusively invested by the Group, generated RMB2.2 billion in box office receipts and contributed RMB700 million in revenue to the Group in 2019[45]. Streaming Platform Development - The streaming platform "huanxi.com" is positioned to become a key growth driver, having attracted more fee-paying subscribers through exclusive content and partnerships with leading internet companies like ByteDance and Maoyan Entertainment[8]. - The Group's streaming service is well-positioned to capitalize on the increasing trend of online viewing, enhancing its brand image and market coverage[8]. - "huanxi.com" has accumulated over 2 million fee-paying subscribers, indicating steady growth and potential for stable income[23]. - The total number of active users on "huanxi.com" exceeded 13 million in January and February 2020, with the app downloaded over 11 million times[32]. - The Group's streaming platform "huanxi.com" has seen increased revenue, contributing significantly to overall business growth[56]. - The Group plans to continue optimizing and updating content to boost platform development and user experience[34]. Strategic Partnerships and Collaborations - Huanxi Media's strategic cooperation with ByteDance aims to enhance content delivery and user traffic, further solidifying its position in the media industry[9]. - The Group plans to deepen cooperation with leading internet and entertainment companies, including ByteDance and Maoyan Entertainment, to enhance its streaming platform "huanxi.com" and attract significant user traffic[40][41]. - The Group signed a strategic cooperation agreement with ByteDance in January 2020 to enhance user base and branding through joint film and TV content production[28]. - The Group signed a cooperation agreement with ByteDance, with a minimum payment of RMB630,000,000 for strategic cooperation in online video fields[64]. - A strategic cooperation agreement was signed with Maoyan Weying to promote the streaming platform "huanxi.com" and co-invest in film and TV projects[62]. Content Quality and Production - The company emphasizes the importance of high-quality content by collaborating with top-tier directors to produce original films and TV shows[7]. - The Group's strategy aligns with the PRC's initiatives to promote healthy development in the film and TV industry, responding to higher content quality requirements[13]. - Huanxi Media continues to actively source premium productions globally for exclusive presentation on its streaming platform, attracting a larger subscriber base[8]. - The Group aims to capture opportunities in paid online viewing, further strengthening its competitive edge and delivering promising returns to shareholders[43]. - The Group will continue to invest in and produce quality original content while exploring opportunities with emerging directors to enhance its strategic positioning in the market[42][44]. Financial Performance - For the year ended December 31, 2019, revenue from the investment in film and TV programmes rights business amounted to HK$814,425,000, a significant increase from HK$174,346,000 in 2018[56]. - The segment profit for the investment in film and TV programmes rights business rose to HK$279,417,000 from a loss of HK$244,921,000 in the previous year[56]. - For the year ended December 31, 2019, the Group recorded revenue and film investment income of HK$814,425,000, representing a 3.7 times increase compared to HK$174,632,000 in 2018[66]. - The gross profit for the same period was HK$343,510,000, a significant increase from HK$89,315,000 in 2018[66]. - Profit attributable to owners of the Company was HK$105,103,000, a turnaround from a loss of HK$444,693,000 in 2018[66]. Director and Management Insights - Mr. Dong Ping has extensive experience in investment and operation within the Chinese media and film industry, having produced internationally renowned films[87]. - The company has a diverse portfolio of directors with extensive backgrounds in film and media, enhancing its strategic positioning in the industry[88]. - The board includes members with a proven track record in both creative and business aspects of the film industry, supporting future growth initiatives[87]. - The participation of directors Mr. Ning Hao and Mr. Xu Zheng is viewed as instrumental for the company's development in the media and entertainment industry[185]. - The Group's principal activities include investment holding and film investment, focusing on media and entertainment businesses, including film and TV program rights development and streaming platform operations[109]. Challenges and Risks - Despite the COVID-19 outbreak, the company believes the negative impact on the film industry will be short-lived, with strong recovery anticipated[37]. - The COVID-19 pandemic has led to temporary cinema closures in China, potentially impacting the Group's film and TV production and distribution plans[134]. - The financial performance for the year ending December 31, 2020, may be affected by the ongoing COVID-19 outbreak, although the financial impact cannot be reasonably estimated at this stage[135]. - The company faces operational risks due to its limited number of film investments, which could significantly impact its results[127]. - Unauthorized copying and piracy are prevalent in the PRC, complicating the enforcement of intellectual property rights[127].

Financial Performance - Huanxi Media Group's revenue from film and TV programmes rights and its streaming platform surged 11.58-fold to HK$1,068,980,000 compared to the same period last year[4]. - The Group achieved a net profit of HK$321,532,000, marking a significant turnaround from previous losses[4]. - The film "Crazy Alien" generated over RMB2.2 billion in total box office receipts, contributing significantly to the Group's revenue during the review period[5]. - The Group recorded revenue of HK$1,068,980,000 for the six months ended 30 June 2019, an increase of 11.58 times compared to HK$84,988,000 in the same period last year[12]. - Gross profit for the same period was HK$464,456,000, representing a 30.14 times increase from HK$14,914,000 year-on-year[12]. - Profit attributable to the owners of the Company was HK$321,532,000, a significant turnaround from a loss of HK$111,608,000 in the previous year[12]. - Earnings per share increased to HK$0.11 from a loss per share of HK$0.04 in the same period last year[13]. - The total comprehensive income for the period was HK$308,268,000, contrasting with a total comprehensive loss of HK$119,539,000 in the same period last year[78]. - The operating profit for the period was HK$410,551,000, a turnaround from an operating loss of HK$101,119,000 in the previous year[78]. Streaming Platform Growth - The streaming platform "huanxi.com" currently serves more than 1 million paid users, indicating strong user growth[7]. - The streaming platform is expected to become a significant growth driver for the Group's overall business[9]. - The online paid user base has rapidly expanded, presenting a significant opportunity for the Group to grow "huanxi.com" as users become accustomed to paying for video content and services[36]. Content Development and Production - The Group has been actively enriching content on "huanxi.com" by acquiring quality productions from around the world, enhancing its competitive edge[7]. - The Group's efforts in securing top film directors and producing quality content are beginning to yield results, marking the start of the harvest phase for its film and TV business[4]. - Upcoming internet drama series include "Paradise Guesthouse," a 12-episode series currently in pre-production, and "Run For Young," which has entered post-production and is expected to be released in the next one to two years[36]. - The Group expects to continue receiving fruitful returns from projects it invested in earlier, as these projects are gradually released over the next few years[37]. - Huanxi Media aims to invest in and produce works of artistic excellence to ensure box-office performance, leveraging its unique shareholding structure to access original content sources in China's film and internet drama market[37]. Financial Position and Assets - As of 30 June 2019, the Group had net current assets of HK$925,032,000, up from HK$244,714,000 at the end of 2018[17]. - Cash and cash equivalents increased to HK$296,426,000 from HK$158,528,000 as of 31 December 2018[17]. - The Group's total equity amounted to HK$1,360,992,000, compared to HK$658,668,000 at the end of 2018[17]. - Total assets increased to HK$1,826,164, up 7.9% from HK$1,693,549 in December 2018[80]. - Total liabilities decreased to HK$465,172 from HK$1,034,881, indicating a reduction of 55.0%[80]. Shareholder Information - The Board has not declared an interim dividend for the six months ended June 30, 2019, consistent with the previous year[51]. - As of June 30, 2019, the interests of directors in the company's shares indicate a significant ownership concentration, with three directors holding approximately 46% of the issued shares each[53]. - The Group's strategy focuses on creating valuable returns for shareholders while maintaining a stable supply of quality film and TV productions[40]. Risk Management and Compliance - The Group has maintained its risk management policies without significant changes since the last year-end date, ensuring effective business operations[23]. - As of June 30, 2019, the Group had no significant contingent liabilities, maintaining a stable financial position[24]. - The Group's activities expose it to various financial risks, including market risk, credit risk, and liquidity risk[102]. - There have been no changes in the Group's risk management policies since December 31, 2018[102]. Legal and Regulatory Matters - The company is currently involved in pending litigation with claims totaling RMB10,000,000 from Chengdu Watson Media Co., Ltd. and RMB70,000,000 from Wuhan Guangya Culture and Art Development Co., Ltd.[166][170]. - The company considers the claims from the Chengdu and Wuhan plaintiffs to be insignificant to the overall group[166][171]. Share Options and Employee Compensation - The company issued share options under the share option scheme totaling 4,056,000 for employees and 41,921,000 for directors in 2018[173]. - 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[178]. - The fair value of options granted is determined using an adjusted form of the Black-Scholes Model[186].

Film Industry Performance - Huanxi Media Group reported significant progress in the past year, with multiple quality films achieving impressive box office receipts and positive word-of-mouth recommendations[7]. - The total box office receipts of movies released in China in 2018 exceeded RMB 60 billion for the first time, with made-in-China films accounting for 62.15% of the total, generating RMB 37.89 billion, a 25.89% increase year-on-year[12]. - The film "Dying to Survive" achieved box office receipts of RMB 3.1 billion, ranking among the top three highest-grossing films in China for 2018[19]. - "Us and Them" generated impressive box office receipts of over RMB 1.36 billion during its release[18]. - The film "Crazy Alien" recorded box office receipts exceeding RMB 2.2 billion during the 2019 Chinese New Year holiday[22]. - The film "Tropical Memories" won the "VFF Talent Highlight Award" at the 68th Berlin International Film Festival, marking a significant achievement for the Group[24]. - The film "Li Na," a biographical project about the legendary tennis player, is anticipated to be released in 2019[27]. - The Group's film "Lost in Russia" is scheduled for release on the first day of the Chinese New Year in 2020, generating high anticipation among audiences[28]. - Director Ning Hao's film "Crazy Racer" was produced with RMB10 million and grossed over RMB100 million at the box office, demonstrating a significant return on investment[43]. - The film "Breakup Buddies," directed by Ning Hao, achieved RMB1,169 million in box office receipts, making it the highest-grossing domestic Chinese movie of 2014[43]. - The co-produced film "Dying to Survive" earned RMB3.1 billion in box office receipts in 2018, winning multiple awards including Best Leading Actor at the Taiwan Golden Horse Awards[44]. Online Video Platform Development - The online video platform market in China was valued at over RMB 110.46 billion, representing a 26.6% year-on-year increase, indicating strong growth in user engagement and content consumption[13]. - Huanxi Media has developed the online video platform "huanxi.com," which focuses on delivering curated high-quality film and TV productions, gaining market recognition and increasing user patronage[9]. - The number of internet users in China reached 802 million by late June 2018, with an internet penetration rate of 57.7%, supporting the growth of online video consumption[13]. - The proportion of pay-to-view internet drama has shown continuous growth, with 95% of the 218 online drama series released in 2018 being pay-to-view, up nearly 10 percentage points from 2017[13]. - The Group's online platform "huanxi.com" has over 1,000,000 registered users, with more than 30% being paid users[32]. - The Group is actively developing exclusive internet drama content for its platform "huanxi.com," with a 12-episode drama series expected to go into production in 2019[29]. - The Group aims to build a diverse online video platform that offers premium content, aligning with the growing trend of paid viewing[37]. Strategic Collaborations and Investments - The company has strengthened its capabilities by collaborating with renowned directors, including Zhang Yimou, to enhance its film and TV content production[8]. - The Group has secured cooperation with top directors, including seven shareholder directors, to enhance its content creation capabilities[34]. - The Group is focused on sourcing high-quality local and overseas productions for its online platform[32]. - The Group will continue to seek opportunities to collaborate with top directors and support emerging talent in the film and TV sector[34]. - The Group's collaboration with Tianjin Maoyan Weying has effectively directed traffic to its platform, boosting user engagement[35]. - The Group has exclusive investment and production rights for films directed by Ning Hao, ensuring it is the sole investor for these productions[43]. - The Group has exclusive rights to invest in at least two films directed or co-directed by Mr. Chan, with an investment amount up to 60% of the total investment in each production[45]. - The Group has priority rights to invest no less than 55% of the total investment amount in at least two of Mr. Zhang's productions[46]. - The Group has exclusive global distribution rights for two seasons of internet drama series directed by Mr. Gu[47]. - The Group has the right to purchase exclusive global distribution licenses to new media for at least two of Mr. Gu's productions[47]. Financial Performance and Risks - Revenue and film investment income reached HK$174,346,000 in 2018, a significant increase from HK$52,772,000 in 2017[55]. - Gross profit for the film and TV rights business amounted to HK$89,111,000 in 2018, compared to a gross loss of HK$6,119,000 in 2017[55]. - The Group's segmental loss amounted to HK$244,921,000 for the period, primarily due to share-based payment expenses of approximately HK$270,000,000[55]. - The Group's gearing ratio increased to 0.37 as of December 31, 2018, compared to 0.20 in 2017, indicating a higher level of debt relative to equity[70][73]. - The loss per share for the year was HK$0.16, compared to HK$0.03 in 2017, while the net asset value per share attributable to owners was HK$0.23, down from HK$0.29[69][72]. - The Group is actively seeking investment opportunities in media and entertainment-related businesses to expand its income sources and prospects[85]. - The company faces operational risks due to limited film investments, which could significantly impact operational results in both the release year and future years[137]. - Financial risks include market risk (foreign currency and interest rate risk), credit risk, and liquidity risk, detailed in note 3 of the consolidated financial statements[146]. Corporate Governance and Shareholder Information - The Group has established a well-designed remuneration management and incentive mechanism for its employees, aligning compensation with performance and industry trends[83]. - The existing directors are appointed for a term of 2 years, with retirement by rotation as per the company's bylaws[158]. - The company has arranged appropriate insurance cover for directors' and officers' liabilities arising from corporate activities[159]. - All independent non-executive directors have confirmed their independence in accordance with the Listing Rules[160]. - The company has a shareholders agreement that outlines governance rights and obligations among major shareholders[168]. - The Company entered into a cooperation agreement with Unique Swift Limited to issue 150,000,000 Shares and pay RMB100,000,000 for operating funds related to internet drama series productions[178]. - The Company will have exclusive rights to invest in three internet drama series directed by Mr. Zhang Yimou, with themes to be agreed upon[179]. - The exclusive right to invest in one of the Zhang Internet Series can be replaced by priority rights to invest in a film directed by Mr. Zhang, with a minimum investment of 60% of the total investment amount[181]. - The Company has maintained compliance with the relevant regulations regarding related party disclosures[173]. - The Company’s financial statements include disclosures regarding related party transactions as noted in the annual report[176].