Business Strategy and Development - Transmit Entertainment Limited focuses on diversified development in film, television, and variety show content creation, aiming to enhance business value through a full industry chain model[2]. - The Group is actively expanding its revenue base by exploring opportunities in online streaming, short videos, celebrity cultivation, and traffic monetization[3]. - The company emphasizes collaboration with partners to enrich its industry layout and establish a comprehensive upstream and downstream industry chain[3]. - The Group aims to develop a pan entertainment ecosystem by integrating upstream and downstream industry chains, focusing on film and television production, and expanding revenue channels[76]. - The Group plans to leverage online collaboration platforms to create high-quality film and TV content while exploring business opportunities in online streaming and short videos[76]. - The strategy includes nurturing talented artistes and developing a self-owned full industry chain model to enhance profitability and competitive edges[78]. Financial Performance - For the year ended June 30, 2024, the revenue from TV series and variety show production and distribution was approximately HK$186.0 million, representing an increase of approximately 667.5% compared to the previous year[24]. - The Group's revenue for the year amounted to approximately HK$292.6 million, representing an increase of approximately HK$126.2 million or 75.8% compared to last year, mainly driven by the TV series production and distribution segment and the film exhibition segment, which contributed approximately HK$186.0 million and HK$55.9 million respectively[34]. - The Group's gross loss was approximately HK$71.4 million, a significant decline from a gross profit of approximately HK$46.2 million in the previous year, mainly due to impairments on several TV series in production and the sale of film and television copyrights[36][37]. - Other gains and losses and other income amounted to approximately HK$94.4 million, representing an increase of approximately HK$42.0 million or approximately 80.0% compared to last year, mainly including cinema operation right income and cinema promotion income[38][42]. - The Group's loss attributable to owners amounted to approximately HK$350.5 million, compared to a loss of approximately HK$186.9 million in the previous year, primarily due to the adverse impact of the post-pandemic restoration period and impairment of goodwill amounting to approximately HK$223.8 million[40][41]. Market Trends and Consumer Behavior - The number of internet users in China increased from 1.079 billion in June 2023 to 1.099 billion in June 2024, with online video users expanding from 1.044 billion to 1.068 billion, accounting for 97.1% of total internet users[17]. - The total retail sales of social consumer goods in China from January to August 2024 increased by 3.4% year-on-year, while retail sales of services increased by 6.9%[15]. - The total revenue of advertisement and consumer expenditure in the Chinese market is projected to reach US$362.5 billion by 2028, representing a compound growth rate of 7.1% per annum[17]. - The business activity index of various service industries, including telecommunications and broadcasting, was above 60%, indicating strong potential for service consumption growth[15]. Revenue Sources and Segments - The Group's revenue from film exhibition amounted to approximately HK$55.9 million, representing a decrease of approximately 21.9% compared to the last year, primarily due to weak consumer sentiment in the Hong Kong film industry[28]. - The revenue from pan entertainment recorded approximately HK$50.6 million, a decrease of approximately 28.3% compared to approximately HK$70.6 million last year, mainly due to a decline in revenue from artiste management[30]. - The Group's proportion of revenue from Mainland China was 80.9%, indicating that it remains the major source of income and business growth[23]. Management and Leadership - Ms. Zhao Wenzhu, aged 39, has over 14 years of experience in mass communications and has held various leadership roles in multiple media companies[88]. - Ms. Zhao has been the President of the Company since September 17, 2018, and was appointed as an executive Director on November 26, 2018[88]. - Ms. Zhao will resign from her positions as executive Director and President of the Company effective September 30, 2024[88]. - The Company has a diverse management team with extensive experience in various sectors, including mass communications and finance[88][90]. - The management team is focused on growth initiatives and strategic development within the media industry[88]. Corporate Governance and Compliance - The Company is committed to maintaining high standards of corporate governance practices, as detailed in the Corporate Governance Report[178]. - The Group has complied with relevant laws and regulations that significantly impact its business operations during the year ended June 30, 2024[113]. - The Group has obtained all necessary approvals, permits, and licenses for its business and operations for the year ended June 30, 2024[112]. - The Group respects the environment and is dedicated to sustainable development, as highlighted in the annual report[107]. Shareholding and Ownership - As of June 30, 2024, Mr. Zhang Liang, Johnson holds a total of 1,924,375,914 shares, representing approximately 74.14% of the company's issued shares[161]. - The total number of issued shares as of June 30, 2024, is 2,595,613,733[162]. - Nice Rich Group Limited, wholly owned by Mr. Zhang Liang, Johnson, holds 1,836,391,914 shares, accounting for 70.75% of the company's shares[165]. - The largest customer contributed approximately 29.0% of the Group's revenue for the year ended June 30, 2024, compared to 10.5% in the previous year[122]. Risk Management - The Group's capital risk management and financial risk management objectives and policies are detailed in notes 31 and 32 of the consolidated financial statements[106]. - The Group has not entered into any financial instruments for hedging purposes but will monitor foreign exchange and interest rate exposures closely[70]. - The Directors do not foresee significant risks from exchange rate fluctuations, as RMB fluctuations had no major impact on costs and operations during the year[70].

Financial Performance - For the six months ended December 31, 2023, the Group's salaries and other allowances decreased to HK$3,351,000 from HK$4,401,000, representing a decline of approximately 24%[6] - The remuneration of directors and key management personnel was determined based on individual performance and market trends, with total compensation for the period being HK$3,651,000 compared to HK$4,753,000 in the previous period, a decrease of approximately 23%[6] - The Group's revenue during the Period under Review amounted to approximately HK$69.7 million, representing a decrease of approximately HK$8.1 million or approximately 10.4% compared to the corresponding period last year[70] - Revenue from the pan entertainment and other segments was approximately HK$32.0 million, a decrease of approximately 19.9% compared to approximately HK$39.9 million for the same period last year[63] - The Group recorded a gross profit of approximately HK$17.2 million, a decrease of approximately HK$18.9 million or approximately 52.3% compared to the corresponding period last year, with a gross profit margin of approximately 24.7%[72] - Other gains and losses and other income amounted to approximately HK$23.2 million, representing a decrease of approximately HK$17.9 million or approximately 43.6% compared to the corresponding period last year[79] - The Group's loss attributable to the owners during the Period under Review was approximately HK$23.7 million, compared to a loss of approximately HK$16.9 million in the same period last year[82] Revenue Sources - For the six months ended December 31, 2023, the revenue from TV series and variety show production and distribution was approximately HK$7.6 million[48] - The film exhibition revenue during the same period was approximately HK$30.2 million, representing a decrease of approximately 13.9% compared to the previous year[49] - The proportion of revenue from Mainland China was approximately 56.7%, continuing to be the major source of revenue for the Group[47] Financial Assets and Liabilities - Financial assets at fair value through profit or loss (FVTPL) decreased to HK$6,632,000 as of December 31, 2023, down from HK$10,850,000 as of June 30, 2023, indicating a decline of approximately 39%[13] - The total fair value of financial assets as of December 31, 2023, was HK$6,632,000, with a notable decrease from the previous reporting period[13] - The Group's financial liabilities and assets are assessed using valuation techniques that include discounted cash flow methods, reflecting the credit risk of counterparties[13] - The Group's significant unobservable inputs for fair value measurements include discount rates used in estimating future cash flows[27] - The fair value measurement hierarchy for financial assets includes Level 2 for certain financial assets and Level 3 for others, indicating varying degrees of input observability[15] Impairment and Intangible Assets - An impairment loss of intangible assets amounting to approximately HK$12.1 million was recognized during the review period, primarily due to the adverse impact of the post-pandemic recovery phase on the company's operations[89] - The carrying amount of intangible assets allocated to the cash-generating unit of Wenlan was approximately HK$41.0 million as of December 31, 2023, down from approximately HK$48.8 million as of June 30, 2023[89] - The estimated recoverable amount of the cash-generating unit related to Wenlan was below its carrying amount, leading to the recognition of an impairment loss[98] Cost Control and Expenses - Administrative expenses decreased by approximately HK$13.9 million or approximately 34.9% to approximately HK$26.0 million, primarily due to effective internal cost control measures[81] - During the review period, the Group's total salaries and wages amounted to approximately HK$11.5 million, a decrease from approximately HK$17.8 million in the same period of the previous year[154] - The Group employed a total of 82 permanent employees as of December 31, 2023, down from 90 as of June 30, 2023[154] Future Strategies and Market Conditions - The Group is actively exploring innovative business models such as web series, online movies, and short videos[48] - The Group's strategy includes advancing brand diversification development[47] - The company anticipates intensified market competition in the post-pandemic era, which may further squeeze revenues and profit margins[95] - The implementation of government regulations, such as caps on actor salaries and episode limits, is expected to impact revenue and profit margins[131] Cash Flow and Financial Position - As of December 31, 2023, the Group's bank balances and cash amounted to approximately HK$71.4 million, a decrease from approximately HK$85.1 million as of June 30, 2023[143] - The Group's total debts were approximately HK$53.6 million and HK$110.1 million for bank and other borrowings and loans from related companies, respectively, compared to approximately HK$98.3 million and HK$83.4 million as of June 30, 2023[144] - The Group's gearing ratio was approximately 18.7% as of December 31, 2023, down from approximately 19.7% as of June 30, 2023[144] - The current ratio was approximately 0.87 as of December 31, 2023, compared to approximately 0.83 as of June 30, 2023[145] Shareholder Information - The Group's major shareholder, Nice Rich Group Limited, holds 1,836,391,914 shares, representing a 70.75% interest in the Company[191] - Mr. Zhang Liang, Johnson, is deemed to be interested in all shares registered in the name of Nice Rich, which he wholly owns[194] Compliance and Governance - The Group's financial statements are prepared in accordance with HKAS 34, ensuring compliance with relevant regulations[173] - The review of the condensed consolidated financial statements was conducted in accordance with Hong Kong Standard on Review Engagements 2410[172] - The Group's management discussion and analysis section provides insights into operational strategies and market conditions[163]

Financial Performance - Revenue for the six months ended December 31, 2023, was HKD 69,695,000, a decrease of 10.4% from HKD 77,775,000 in the same period of 2022[1] - Gross profit for the period was HKD 17,233,000, down from HKD 36,132,000, reflecting a significant decline in profitability[1] - The company reported a net loss of HKD 27,625,000 for the period, compared to a loss of HKD 13,412,000 in the previous year, indicating a worsening financial position[2] - The total comprehensive loss attributable to owners of the company was HKD 21,260,000, compared to a profit of HKD 30,475,000 in the prior period, highlighting a significant shift in overall performance[2] - Basic loss per share for the period was HKD 0.91, compared to HKD 0.65 in the same period last year, reflecting increased losses on a per-share basis[2] - The group reported a loss attributable to shareholders of approximately HKD 23.7 million, compared to a loss of approximately HKD 16.9 million for the same period in 2022[133] Income and Expenses - Other income increased to HKD 35,248,000 from HKD 26,559,000, showing a positive trend in non-operational revenue sources[1] - The company’s financing costs decreased to HKD 6,779,000 from HKD 9,341,000, suggesting improved management of debt obligations[1] - Total employee costs decreased to HKD 11,523 thousand in the six months ended December 31, 2023, down 35% from HKD 17,794 thousand in the same period of 2022[61] - Administrative expenses decreased by approximately HKD 13.9 million or 34.9% to about HKD 26.0 million, primarily due to effective internal cost control measures[156] Assets and Liabilities - The total assets as of December 31, 2023, were HKD 557,107,000, a slight increase from HKD 545,524,000 as of June 30, 2023[4] - The company’s cash and cash equivalents decreased to HKD 71,424,000 from HKD 85,108,000, indicating a reduction in liquidity[4] - The company reported a net current liability of HKD 83,817,000 as of December 31, 2023, indicating potential liquidity challenges[29] - The total equity as of December 31, 2023, was HKD 148,877,000, down from HKD 399,027,000 on July 1, 2022, reflecting a significant decrease in shareholder value[25] - The total liabilities as of December 31, 2023, were HKD 187,817,000, slightly down from HKD 190,071,000 as of June 30, 2023[114] Impairment and Losses - An impairment loss of intangible assets of approximately HKD 12.1 million was recognized during the review period due to the current market environment and increased competition post-pandemic[47] - The group recognized an impairment loss of approximately HKD 12.1 million on intangible assets during the review period due to adverse market conditions and increased competition post-COVID-19[162] - The company reported a loss of HKD 12,088,000 due to impairment of intangible assets for the six months ended December 31, 2023, compared to no impairment loss in the same period of 2022[88] Revenue Segments - Revenue from entertainment services, including influencer and actor services, is recognized at the point of service delivery, indicating a focus on timely revenue recognition[31] - The television production and distribution and pan-entertainment segments generated total revenue of approximately HKD 39.5 million, a decrease of about 7.5% year-on-year, with revenue from mainland China accounting for approximately 56.7% of total revenue[47] - Revenue from cinema operations was HKD 17,529,000 for the six months ended December 31, 2023, down from HKD 18,676,000 in the same period of 2022, indicating a decrease of approximately 6.1%[80] - Revenue from external customers for the television production and distribution segment was HKD 7,584 thousand, while the film screening segment generated HKD 30,150 thousand, totaling HKD 69,695 thousand for the six months ended December 31, 2023, a decrease of 10% from HKD 77,775 thousand in 2022[76] Future Outlook and Strategy - The group plans to develop and produce a series of popular IPs, including "Ideal City 2" and "Love Has Destiny," to enhance its content offerings[111] - The group aims to build a sustainable entertainment brand through the production of multiple seasons of "I Like You, I Am Too," leveraging strong viewership and online popularity[111] - The management anticipates no significant revenue growth in the artist management business during the forecast period, with expected declines compared to previous financial budgets[173] - The group plans to continue focusing on film and television production in mainland China and expand its entertainment ecosystem, exploring monetization channels from live streaming, short videos, and influencer incubation[129] Corporate Governance and Compliance - The company has adopted a set of rules regarding director securities trading, ensuring compliance with the listing rules[178] - The company will continue to review its corporate governance practices to meet increasing regulatory requirements and shareholder expectations[179] Miscellaneous - The board of directors did not recommend the payment of any interim dividend for the review period[47] - The company has not engaged in any significant investment projects or acquisitions during the review period[176] - The company has not purchased, sold, or redeemed any of its listed securities during the review period[177] - The management has expressed gratitude to employees and stakeholders for their support during the second half of 2023[181] - The company is committed to modernizing and maturing its operational levels for future growth[181]

Financial Performance - For the six months ended December 31, 2022, the total revenue was HK$77,775,000, with segment revenues of HK$2,855,000 from film and TV series production, HK$35,012,000 from film exhibition, and HK$39,908,000 from pan entertainment services[26]. - The group reported a loss of HK$4,332,000 for the same period, with specific losses of HK$1,625,000 from film and TV series production, HK$1,344,000 from film exhibition, and a profit of HK$14,180,000 from pan entertainment[27]. - The Group reported total staff costs of HK$17,794,000 for the period, a decrease of 23% from HK$23,138,000 in the previous year[37]. - Directors' emoluments decreased to HK$1,907,000 from HK$2,048,000, reflecting a reduction of approximately 7%[37]. - Gross profit for the Group was approximately HK$36.1 million, a decrease of approximately HK$56.1 million or approximately 60.8% year-on-year, with a gross profit margin of approximately 46.5%, an increase of approximately 30.8 percentage points from 15.7% in the previous year[200]. - Film exhibition revenue increased by approximately 84.0% year-on-year to approximately HK$35.0 million, accounting for approximately 45.0% of the total revenue, benefiting from the relaxation of cinema shutdown measures by the Hong Kong Government[188]. - Revenue from the pan entertainment and other segments was approximately HK$39.9 million, a decrease of approximately 39.5% compared to HK$65.9 million in the same period last year[192]. - The Group's revenue for the six months ended 31 December 2022 was approximately HK$77.8 million, representing a decrease of approximately HK$509.4 million or approximately 86.8% compared to the same period last year[199]. Assets and Liabilities - The company has not presented the analysis of segment assets and liabilities as they are not regularly provided to the Chief Operating Decision Maker (CODM)[29]. - The geographical breakdown of non-current assets (excluding financial assets) has not been detailed in the report[30]. - As of 31 December 2022, trade receivables included HK$44,129,000 that were past due, a decrease from HK$71,500,000 as of 30 June 2022[48]. - The company reported trade receivables overdue by more than 90 days amounting to HK$40,575,000 as of December 31, 2022, compared to HK$22,635,000 as of June 30, 2022[72]. - The company has no collateral held against overdue receivables, indicating a potential risk in collection[72]. - The Group's bank and other borrowings amounted to HK$106,220,000 as of 31 December 2022, an increase from HK$84,228,000 as of 30 June 2022, indicating a growth of approximately 26%[79]. - As of 31 December 2022, the Group's trade and other payables stood at HK$130,424,000, up from HK$109,101,000 as of 30 June 2022, reflecting an increase of about 19.5%[100]. Taxation - The company is not required to pay any income tax in the Cayman Islands for the reporting periods[34]. - For the six months ended December 31, 2022, the income tax expense was HK$81,000, a significant decrease from HK$2,399,000 in the same period of 2021[56]. - The Group's subsidiary obtained EIT exemption from 1 January 2020 to 31 December 2024, enhancing its tax efficiency[40]. Expenses and Costs - The cost of services provided for film exhibition increased to HK$15,980,000 from HK$10,295,000, representing a rise of approximately 55%[37]. - The amortization of intangible assets was HK$8,938,000, slightly up from HK$8,778,000 in the previous year[37]. - The total depreciation of right-of-use assets increased significantly to HK$27,595,000 from HK$17,074,000, indicating a rise of approximately 62%[37]. - Interest expenses for loans from related party Guangzhou Puji amounted to HK$1,351,000 for the six months ended December 31, 2022, compared to HK$983,000 for the same period in 2021, reflecting a year-on-year increase of approximately 37.5%[138]. - The remuneration for directors and key management personnel totaled HK$4,753,000 for the six months ended 31 December 2022, a decrease from HK$5,680,000 in the same period of 2021, representing a decline of approximately 16.3%[108]. Investments and Financial Assets - The Group's financial assets at fair value through profit or loss (FVTPL) were valued at HK$2,824,000 as of 31 December 2022, an increase from HK$2,410,000 as of 30 June 2022, showing a growth of about 17.2%[112]. - The fair value of derivative financial assets, specifically purchased call options, was reported at HK$2,097,000 as of December 31, 2022, down from HK$3,576,000 as of June 30, 2022[129]. - The company’s financial assets and liabilities are categorized into a fair value hierarchy, with the fair value measurements classified into levels 1 to 3 based on the observability of inputs used[125]. - The fair value change in profit or loss for investments in film and TV series producers was a decrease of HK$1,344 for the six months ended 31 December 2022[163]. - The total fair value of financial assets and liabilities as of 31 December 2022 was assessed using level 3 valuation techniques, primarily based on discounted cash flow methods[146]. Projects and Productions - The Group is currently producing several projects, including the urban mystery TV series "Frozen Surface" and the costume romantic mystery drama "Holding my Koi Husband"[195]. - The Group plans to develop and produce films and TV series based on popular copyrighted works, including "The Ideal City 2" and "Love Destiny"[195]. - The Group's artistes participated in various TV series and movies, enhancing their market influence during the review period[189]. Share Capital and Bonds - For the six months ended 31 December 2022, the company reported a total issued and fully paid share capital of HK$6,489,000 from 2,595,613,733 shares[117]. - The Group's bonds payable included a principal amount of HK$1,500,000 due in February 2023, down from HK$14,500,000 as of 30 June 2022[103]. - The company issued perpetual bonds totaling RMB78,520,000 (approximately HK$94,224,000) and RMB58,990,000 (approximately HK$70,788,000) to related parties for the purpose of repaying outstanding loan balances[123]. Miscellaneous - The company has established a management agreement for cinema operations expected to generate income from May 26, 2021, to May 25, 2024[58]. - The company completed the disposal of subsidiaries for a cash consideration of HK$84,000 on 31 December 2022, which included entities primarily engaged in movie investment and distribution[147]. - The gain on disposal of subsidiaries amounted to HK$14,180, after accounting for net liabilities disposed of totaling HK$13,266[155].

Business Strategy and Development - The Group's business focuses on film, television, and variety show content creation and production, with a strategy aligned with the "Stay-at-Home Economy"[2] - The Group aims to develop a self-owned retail brand targeting young consumers, leveraging online streaming, short videos, and celebrity cultivation[3] - The Group is actively expanding its business through collaborations and establishing a more sophisticated upstream and downstream industry chain[3] - The Group's strategy includes nurturing talented artists and creating popular film and television copyrights to build a full industry chain model[2] - The Group is focused on traffic monetization as part of its business direction, enhancing its engagement with young audiences[3] - The Group's diversified development approach includes pan entertainment businesses along the value chain, enhancing its market presence[2] - The Group will continue to focus on film and television production and celebrity agency business in Mainland China, aiming to establish a pan-entertainment ecosystem and integrate industry chains[105][108] - Several projects are currently in preparation, including the urban mystery TV series "Frozen Surface" and the love-story variety show "Adventure in Winter" to create self-owned brands with diverse content[106][108] - The Group plans to develop a series of popular copyrights, including "Romance in the City," "Queen of the Sea," and "Locard's Theory" to enhance its content portfolio[106][108] - The Group aims to diversify its revenue base by exploring self-owned retail brands targeting young consumers and capitalizing on the "Stay-at-Home Economy" through online streaming and short videos[105][108] Financial Performance - The total revenue of China's entertainment and media industry is projected to reach approximately US$526.9 billion by 2026, with a compound annual growth rate of 5.7% from 2022 to 2026, higher than the global rate of 4.6%[14] - The proportion of revenue from Mainland China for Transmit Entertainment increased by 8.5 percentage points year-on-year to approximately 92.2% from approximately 83.7% last year[25] - The film, TV series, and variety show production and distribution business recorded revenue of approximately HK$507.8 million, representing a substantial increase of approximately 147.3% compared to last year[27] - The Group's total revenue for the year amounted to approximately HK$704.0 million, representing an increase of approximately HK$247.0 million or 54.0% compared to last year[42] - Gross profit was approximately HK$126.1 million, representing a decrease of approximately HK$5.0 million or approximately 3.8% compared to last year[46] - The gross profit margin for the year was approximately 17.9%, a decrease of approximately 10.8 percentage points compared to last year[46] - Other gains and losses and other income amounted to approximately HK$65.8 million, representing a decrease of approximately HK$120.0 million or approximately 64.5% compared to last year[52] - The Group's loss attributable to the owners amounted to approximately HK$92.2 million, compared to a loss of approximately HK$7.6 million last year[55] Economic and Market Conditions - The ongoing pandemic and rising inflation levels have introduced increased risks and uncertainty in the global economy, impacting overall market conditions[13] - The macroeconomic data suggests that service sector indices, including telecommunication and TV broadcasting, are at higher levels, indicating released consumption potential[13] - The audience's weekly online hours in China increased from 8.5 hours in December 2001 to 29.5 hours in June 2022, indicating a growing trend in online consumption[16] - The size of online video users in China expanded from 0.161 billion in December 2007 to 0.995 billion in June 2022[16] - The financial performance of online streaming platforms and cinema occupancy rates is not expected to rebound in the short term, indicating a mid-to-long term economic downturn[72] Management and Governance - The Group's management team has extensive experience in the film and television industry, with key personnel holding significant roles in various subsidiaries[136][138] - The Group's commitment to corporate governance is reflected in the appointment of a company secretary with over 20 years of experience[137] - The management team includes individuals with extensive backgrounds in production, direction, and channel operations, enhancing the company's capabilities in the industry[1] - The management emphasizes the importance of monitoring foreign exchange and interest rate risks, although no significant currency fluctuation risks are anticipated[97] - The company is committed to maintaining transparency and accuracy in its financial reporting and disclosures[117] Challenges and Risks - The increase in loss for the year was primarily due to an impairment on goodwill of approximately HK$43.7 million in the film and TV series production segment and HK$23.9 million in the artiste management segment, attributed to delays caused by the COVID-19 pandemic[56][60][63] - The adverse impact of COVID-19 on the film and TV industry has led to significant slowdowns and postponements in production schedules, affecting revenue generation[65][70] - The impairment loss on goodwill was recognized due to the deteriorating economic environment caused by the COVID-19 pandemic, particularly affecting film and TV series production, licensing, distribution, and artiste management sectors[72] - The Group's management will closely monitor market conditions and adjust business strategies in response to the ongoing challenges posed by the COVID-19 pandemic[78] Employee and Operational Insights - The total salaries and wages for the year ended June 30, 2022, amounted to approximately HK$37.5 million, down from approximately HK$58.4 million for the year ended June 30, 2021, representing a decrease of about 35.0%[88] - The Group employed a total of 140 permanent employees as of June 30, 2022, a reduction from 220 employees as of June 30, 2021[88] - The Group has adopted employee benefit schemes including a provident fund scheme for its employees in Hong Kong[189] Customer and Supplier Relationships - The Group has maintained solid relationships with key customers, including co-producers, distributors, online video-streaming platforms, and cinemagoers, enhancing customer loyalty[156] - For the year ended June 30, 2022, income from the top five customers accounted for approximately 73.5% of the Group's revenue, up from 37.3% in the previous year[189] - The single largest customer contributed approximately 65.5% of the Group's revenue for the same period, compared to 20.7% in the prior year[189] - Fees paid to the top five suppliers constituted approximately 18.3% of the Group's total fees, a decrease from 21.5% in the previous year[189] Future Outlook - The management is optimistic about future performance, with a focus on achieving sustainable growth and profitability[119] - The company is actively considering mergers and acquisitions as part of its growth strategy to enhance its competitive edge[119] - The company aims to leverage its extensive industry connections to foster partnerships and collaborations[115]

Financial Performance - Revenue for the six months ended December 31, 2021, was HK$587,203,000, an increase from HK$160,779,000 in the same period of 2020[8] - Gross profit for the period was HK$92,229,000, slightly down from HK$93,149,000 year-on-year[8] - Profit before tax was HK$15,242,000, a significant recovery from a loss of HK$63,565,000 in the previous year[8] - Profit for the period was HK$12,843,000, compared to a loss of HK$63,612,000 in the same period last year[8] - Total comprehensive income for the period was HK$19,822,000, recovering from a total comprehensive loss of HK$44,591,000 in the previous year[8] - The profit attributable to owners of the company for the period was HK$10,554,000, compared to a loss of HK$75,997,000 in the previous period[11] - Total comprehensive income attributable to owners of the company was HK$17,533,000, a significant improvement from a loss of HK$57,334,000[11] - Basic earnings per share increased to HK$0.41 from a loss of HK$2.93 per share[11] Cost Management - Selling and distribution expenses decreased significantly to HK$34,045,000 from HK$92,924,000, indicating improved cost management[8] - Administrative expenses were reduced to HK$45,398,000 from HK$48,688,000, reflecting ongoing efforts to streamline operations[8] - Finance costs were reduced to HK$9,725,000 from HK$32,954,000, contributing to the overall improvement in profitability[8] - Total staff costs decreased to HK$23,138,000 from HK$32,412,000, representing a reduction of approximately 28.7%[94] - Depreciation of property, plant, and equipment significantly decreased to HK$226,000 from HK$4,701,000, a decline of approximately 95.2%[94] Asset and Liability Management - Non-current assets decreased from HK$1,415,000,000 to HK$1,130,000,000, primarily due to changes in goodwill and right-of-use assets[13] - Total liabilities decreased from HK$868,998,000 to HK$606,466,000, indicating improved financial stability[15] - Net current assets improved to HK$26,522,000 from a net liability of HK$31,314,000[13] - The company reported a total equity of HK$512,375,000, up from HK$249,808,000, reflecting a stronger balance sheet[15] Revenue Sources - Film and TV series production, distribution, and licensing income amounted to HK$502,244,000, compared to HK$35,968,000 in the prior year, indicating a substantial increase[44] - Revenue from pan entertainment services, including celebrity agency and actor services, is recognized at the point of service delivery[47] - Income from box office takings for film exhibition is recognized upon ticket sales and film release[47] - Revenue from the sale of goods is recognized when the goods are delivered and titles have passed[47] - The company reported a total of HK$587,203,000 in revenue, with HK$500,031,000 recognized at a point in time and HK$87,172,000 recognized over time[44] Cash Flow and Investments - Net cash from operating activities for the six months ended December 31, 2021, was HK$49,552,000, a decrease of 50.7% compared to HK$100,533,000 for the same period in 2020[27] - Net cash used in investing activities was HK$64,798,000 for the six months ended December 31, 2021, slightly higher than HK$63,124,000 in the same period of 2020[27] - Net cash from financing activities was HK$22,368,000 for the six months ended December 31, 2021, compared to a net cash used of HK$20,965,000 in the previous year[27] - Cash and cash equivalents at the end of the period were HK$113,106,000, down from HK$137,519,000 at the end of the previous year[27] Borrowings and Financial Strategy - The Group's total borrowings, including bank and other borrowings, increased by approximately 19.0% from the previous period[154] - The Group's financial strategy includes securing new borrowings to support ongoing projects and operations, with a focus on maintaining manageable debt levels[162] - The total amount repayable within one year or on demand was HK$79,640,000 as of December 31, 2021, compared to HK$78,556,000 as of June 30, 2021, reflecting a slight increase of 1.4%[158] - The Group's bank borrowings as of December 31, 2021, totaled HK$115,020,000, an increase from HK$96,556,000 as of June 30, 2021, representing a growth of approximately 19.2%[154] Goodwill and Intangible Assets - The carrying amount of goodwill allocated to Khorgas Group increased to HK$436,968,000 from HK$429,805,000[115] - The carrying amount of goodwill allocated to Wenlan is HK$44,184,000, up from HK$43,558,000[115] - The recoverable amount calculation for Wenglan used a five-year financial budget with an annual revenue growth rate ranging from 3% to 14%, and a pre-tax discount rate of 25.0%[117] - The company has made significant investments in intangible assets, with a value of HK$82,571,000 as of December 31, 2021[13] Market Presence and Strategic Initiatives - The company is focusing on expanding its market presence and enhancing its product offerings through new technology and strategic initiatives[14] - Revenue from the Mainland China market was HK$568,173,000, while revenue from Hong Kong was HK$19,030,000, indicating a strong reliance on the Mainland market[76] Government Support and Subsidies - The Group received government subsidies amounting to HK$2,523,000 during the period, down from HK$4,971,000 in the previous year, highlighting a decline in external support[81] - Other income for the six months ended December 31, 2021, totaled HK$19,595,000, a decrease from HK$25,684,000 in the same period of 2020, primarily due to a reduction in government subsidies received[81]

Financial Performance - The Group reported annual results for the year ended June 30, 2021, with a focus on film, television, and variety show production[31]. - The Group's total revenue for the year ended 30 June 2021 was approximately HK$457.0 million, representing a decrease of approximately HK$8.5 million or 1.8% compared to the previous year[59]. - Revenue from film, TV series, and variety show production and distribution was approximately HK$205.3 million, a decrease of 33.1% compared to the previous year[44]. - Film exhibition revenue decreased by approximately 55.1% to approximately HK$62.8 million, accounting for about 13.7% of total revenue[50]. - Revenue from Mainland China increased by 19.1 percentage points year-on-year to approximately 83.7% of total revenue[43]. - Revenue from the pan entertainment and other segments was approximately HK$188.8 million, a significant increase of approximately 920.2% compared to approximately HK$18.5 million last year[58]. - The Group recorded a gross profit of approximately HK$131.1 million, a decrease of approximately HK$42.6 million or 24.5% year-on-year, with a gross profit margin of approximately 28.7%[64]. - The Group's loss attributable to owners for the year amounted to approximately HK$7.6 million, a significant decrease from a loss of approximately HK$126.6 million in the previous year[75]. - The total comprehensive income for the year was approximately HK$16.5 million, compared to a total comprehensive expense of approximately HK$128.1 million in the previous year[75]. Business Strategy and Development - The Group aims to develop a self-owned full industry chain model, enhancing its soft power through collaboration with scriptwriters, directors, and artistes[3]. - The Group is actively exploring business opportunities in the stay-at-home economy, targeting young consumers through online streaming, short videos, and celebrity cultivation[4]. - The Group emphasizes expanding its business dimension by collaborating with partners to enrich the industry layout with physical products[4]. - The Group's strategy includes nurturing talented artistes and creating popular film and television copyrights[3]. - The Group plans to focus on creative production and branding of series and variety shows to align with current entertainment trends[37]. - The management believes that the strategy of reallocating financial resources from the film exhibition business to higher growth potential areas will positively impact future performance[53]. - The Group plans to focus on film and television production and expand its artiste agency business in Mainland China, aiming to diversify revenue through online platforms and retail brands targeting young consumers[121]. Market Trends and Consumer Engagement - The Group is committed to seizing new opportunities arising from the pan entertainment business[4]. - The number of internet users in China reached 1.011 billion in June 2021, with a CAGR of 7.33% from 2016[33]. - The number of online video users in China increased from 514 million in June 2016 to 944 million in June 2021, representing a CAGR of 12.93%[33]. - The new urban idol drama "The Trick of Life and Love" launched in May 2021 and gained significant audience engagement across multiple platforms[45]. - The reality show "The Detectives' Adventures" aired in May 2021 and became a trending topic on social media, indicating strong viewer interest[45]. Financial Position and Risk Management - The Group's bank balances and cash amounted to approximately HK$103.8 million as of June 30, 2021, compared to approximately HK$112.3 million as of June 30, 2020[90]. - The total debts of the Group as of June 30, 2021, were approximately HK$96.6 million, an increase from approximately HK$67.0 million as of June 30, 2020, resulting in a gearing ratio of approximately 21.6%[91]. - The Group's net current liabilities improved to approximately HK$31.3 million as of June 30, 2021, from approximately HK$126.3 million as of June 30, 2020[98]. - The Group's financial resources are deemed sufficient to support its business and operations, with considerations for other financing activities under favorable market conditions[99]. - The Group's capital risk management and financial risk management objectives are detailed in Notes 44 and 45 of the consolidated financial statements[161]. Management and Governance - The company has expanded its management team with experienced professionals from the financial services and media sectors, enhancing its operational capabilities[137]. - The independent non-executive directors bring diverse expertise in finance and business operations, enhancing corporate governance[139]. - The management team is committed to maintaining transparency and effective communication with stakeholders regarding future performance and strategic initiatives[138]. - The leadership team is focused on fostering a culture of innovation to drive the development of new entertainment content and services[138]. Environmental and Social Responsibility - The Group is committed to sustainable development and has outlined its environmental policies and performance in the Environmental, Social and Governance Report[162]. - The Group respects the environment and is committed to sustainable development, as highlighted in the annual report[162].

Financial Performance - Revenue for the six months ended December 31, 2020, was HK$160,779,000, a decrease of 47.5% compared to HK$306,633,000 for the same period in 2019[11]. - Gross profit for the same period was HK$93,149,000, down 42% from HK$160,568,000 in 2019[11]. - Loss for the period attributable to owners of the Company was HK$79,715,000, compared to a loss of HK$19,586,000 in the previous year, representing a significant increase in losses[13]. - Total comprehensive expense for the period was HK$48,309,000, compared to HK$22,508,000 in 2019, indicating a worsening financial position[11]. - Basic loss per share for the period was HK$3.07, compared to HK$0.75 in the same period last year, reflecting increased losses per share[16]. - The total comprehensive expense for the period was HK$22,508,000, compared to a loss of HK$19,586,000 in the previous period[25]. - The total loss before tax for the period was HK$67,283,000, reflecting the overall financial challenges faced by the company[55]. Operational Costs - Administrative expenses increased to HK$48,688,000, up from HK$30,472,000 in 2019, indicating rising operational costs[11]. - Total staff costs increased to HK$32,412,000, up 29.5% from HK$25,017,000 in the previous year[93]. - The cost of services provided decreased significantly to HK$9,797,000, down 73.1% from HK$36,437,000 in the prior period[93]. Assets and Liabilities - As of December 31, 2020, total assets less current liabilities amounted to HK$1,060,194, a decrease from HK$1,182,623 as of June 30, 2020[21]. - Current liabilities increased significantly to HK$837,921 from HK$475,322, indicating a rise in short-term financial obligations[19]. - The net current liabilities stood at (HK$202,619), worsening from (HK$126,304) in the previous period[19]. - Non-current assets totaled HK$1,262,813, down from HK$1,308,927, reflecting a decline in long-term asset values[19]. - The company reported a net asset value of HK$157,296, a decrease from HK$205,605, indicating a reduction in overall equity[21]. - Total equity decreased by 23.4% from HK$205,605 to HK$157,296, reflecting challenges in maintaining shareholder value[21]. Revenue Streams - Film and TV series production and distribution income was HK$35,968,000, down 81.2% from HK$191,565,000 year-on-year[48]. - Film exhibition income decreased by 73.4% to HK$26,585,000 from HK$99,995,000 in the previous year[48]. - Pan entertainment income significantly increased to HK$98,226,000, compared to HK$11,629,000 in the same period last year, marking a growth of 743.5%[48]. - Revenue from Hong Kong and Macau was HK$28,317,000, down 74.2% from HK$110,085,000 in 2019[68]. - Revenue from the People's Republic of China (PRC) was HK$127,238,000, a decline of 33.7% from HK$191,965,000 in 2019[68]. Cash Flow - For the six months ended December 31, 2020, the net cash from operating activities was HK$100,533,000, an increase from HK$97,450,000 in the same period of 2019[28]. - The net cash used in investing activities amounted to HK$63,124,000, slightly decreased from HK$64,710,000 in the prior year[28]. - The net cash from financing activities was a negative HK$20,965,000, contrasting with a positive inflow of HK$12,913,000 in the same period last year[28]. - The cash and cash equivalents at December 31, 2020, were HK$137,519,000, down from HK$167,223,000 at the end of 2019[28]. Impairment and Losses - Impairment losses on trade receivables under the expected credit loss model amounted to HK$25,684,000, compared to HK$7,473,000 in the previous year[11]. - The company recognized an impairment loss of approximately HK$11,075,000 for right-of-use assets due to the impact of the COVID-19 pandemic[98]. - The accumulated losses as of December 31, 2020, were HK$645,675,000, reflecting an increase from HK$565,960,000 at the beginning of the period[25]. Strategic Focus - The Company is focusing on restructuring and cost management strategies to improve financial performance in the upcoming periods[11]. - The company is focusing on expanding its market presence and enhancing its product offerings in response to the challenging market conditions[70]. - The Group's strategic focus on the "Stay-at-Home Economy" helped broaden its revenue base during challenging market conditions[197]. Government Support - The company received government subsidies of HK$4,971,000 under the Employment Support Scheme during the current interim period[73]. Market Trends - The Group's focus on innovative business models includes web series, online movies, and short videos to adapt to changing entertainment tastes[191]. - The Group's brand diversification strategy is aligned with the "Stay-at-Home Economy" trend[189].

Business Strategy and Development - The Group aims to develop a self-owned full industry chain model, enhancing its soft power through integrated resources in scriptwriting, direction, and celebrity management [3]. - The Group is actively exploring business opportunities in the stay-at-home economy, targeting young consumers through online streaming, short videos, and celebrity cultivation [4]. - The Group emphasizes collaboration with partners to expand its business dimensions and establish a more sophisticated upstream and downstream industry chain [4]. - The Group's strategy includes nurturing talented artistes and creating popular film and television copyrights to drive growth [3]. - The Group is focused on enriching its industry layout with physical products to seize new opportunities in the pan-entertainment business [4]. - The Group's strategy focuses on the stay-at-home economy and brand diversity, adapting to the digital transformation of the traditional film and television production industry [45]. - The Group is actively expanding its pan-entertainment businesses, including establishing companies with leading film and television platforms and launching retail brands targeting young consumers [39]. - The Group plans to launch multiple self-owned retail brands targeting young consumers, including a teen trend lifestyle brand and a high-class stylish unisex cosmetic brand, to diversify its revenue base [152]. - The Group aims to create a sustainable synergy with existing resources in film and television, leveraging the rapid growth of domestic online entertainment consumption [146]. - The Group is committed to fulfilling the consumption needs of young female consumers by targeting beauty and lifestyle segments through precise marketing strategies [146]. Financial Performance - The Group's revenue for the year was approximately HK$465.5 million, a decrease of approximately HK$202.6 million or 30.3% compared to the previous year, primarily due to the lack of new film releases and reduced cinema attendance [69][72]. - Gross profit decreased to approximately HK$173.7 million, down approximately HK$88.6 million or 33.8%, with a gross profit margin of approximately 37.3%, slightly down from 39.3% the previous year [70][72]. - Revenue from film, TV series, and variety show production and distribution was approximately HK$307.1 million, a decrease of 26.0% compared to the previous year due to no new movie releases [46]. - Revenue from film exhibition decreased by approximately 42.6% to approximately HK$139.9 million, accounting for approximately 30.0% of total revenue [56]. - Advertising, marketing, and pan-entertainment businesses recorded total revenue of approximately HK$18.5 million, representing an increase of approximately 97.5% compared to approximately HK$9.4 million last year [60]. - The Group's pan-entertainment segment recorded a loss of approximately HK$24.4 million during the year under review [60]. - The Group's loss attributable to owners for the year was approximately HK$126.6 million, compared to a loss of approximately HK$35.5 million the previous year [84][87]. - Other gains and losses and other income increased to approximately HK$41.8 million, representing an increase of HK$9.4 million or approximately 28.9%, mainly due to rent concessions for cinemas [74][76]. Market Trends and Consumer Behavior - Global consumer spending on mobile applications exceeded US$50.0 billion in H1 2020, a 10% increase compared to H2 2019, with a record monthly expenditure of US$6.8 billion in May 2020 [34]. - In August 2020, total retail sales of consumer goods in China reached RMB3,357.1 billion, marking a year-on-year increase of 0.5%, the first positive growth for the year [35]. - The proportion of revenue from mainland China increased by 7.3 percentage points year-on-year, rising to approximately 64.6% from 57.3% [45]. - The Group's initiatives include the cultivation of new artistes and the establishment of a self-owned retail brand targeting young consumers [4]. - The management is conservatively assessing the future recovery of cinema attendance post-pandemic [57]. Challenges and Risks - The Group's film exhibition segment faced unprecedented challenges due to the COVID-19 pandemic and local social movements, leading to a substantial decline in cinemagoers [56]. - The decline in revenue was attributed to delays in TV series and variety show productions due to COVID-19, sluggish film exhibition business, and the impact of HKFRS 16 on expenses [85][87]. - The management assessed that the box office revenue is expected to decline in the forthcoming year due to changes in the movie industry atmosphere in Hong Kong and a slowdown in the production of international blockbuster movies [95]. - The adverse impact of social movements since the second half of 2019 has resulted in fewer cinemagoers, further contributing to the impairment [95]. - The outbreak of COVID-19 since the first quarter of 2020 has also led to a significant reduction in the number of cinemagoers [95]. Corporate Governance and Management - The company is focused on expanding its presence in the entertainment industry while ensuring financial stability and growth [167]. - The management team is committed to maintaining high standards of corporate governance and transparency in operations [168]. - The company aims to leverage the expertise of its directors to explore new market opportunities and strategies for growth [167]. - The independent non-executive directors bring a wealth of knowledge from their previous roles in listed companies, enhancing corporate governance [168]. - The company has a diverse board with members having extensive experience in various industries including finance, insurance, and media [167][168]. Employee and Operational Insights - As of June 30, 2020, the Group employed 308 permanent employees, an increase from 260 employees as of June 30, 2019, with total salaries and wages amounting to approximately HK$50.5 million, up from HK$46.2 million in the previous year [127][129]. - The Group's remuneration packages for employees are based on performance and experience, with regular reviews of policies and packages [128]. - The company has not authorized any significant investments or capital asset additions for the fiscal year ending June 30, 2020 [123]. Acquisitions and Investments - The Group completed the acquisition of 60% equity interests in Wenlan Culture, enhancing its business value and brand influence in the idol group industry [61]. - The acquisition of the Target Company was completed on March 12, 2020, and was accounted for using the acquisition method [117]. - The Group acquired the entire equity of Huhehaote Houhai Cultural Media Co., Ltd. for a total consideration of RMB 450 million, payable in three installments from 2018 to 2020, with profit guarantees of at least RMB 40 million and RMB 60 million for the fiscal years ending December 31, 2018, and 2019, respectively [122]. Financial Position and Risk Management - As of June 30, 2020, the Group's bank balances and cash amounted to approximately HK$112.3 million, a decrease from approximately HK$122.0 million as of June 30, 2019 [107]. - The Group's total debts as of June 30, 2020, were approximately HK$67.0 million, HK$51.5 million, and HK$147.5 million, compared to HK$65.2 million, HK$22.0 million, and HK$226.0 million as of June 30, 2019, respectively [107]. - The gearing ratio as of June 30, 2020, was approximately 14.9%, down from approximately 31.6% as of June 30, 2019 [107]. - The current ratio as of June 30, 2020, was approximately 0.8, unchanged from June 30, 2019 [110]. - The Group's capital risk management and financial risk management objectives and policies are detailed in Notes 44 and 45(b) of the consolidated financial statements [193].

TRANSMIT ENTERTAINMENT TRANSMIT ENTERTAINMENT LIMITED 傳遞娛樂有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號：1326 INTERIM REPORT 中期報告 2019/20 CONTENTS 目錄 02 Corporate Information 公司資料 04 Report on Review of Condensed Consolidated Financial Statements 簡明綜合財務報表審閱報告 06 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 簡明綜合損益及其他全面收益表 08 Condensed Consolidated Statement of Financial Position 簡明綜合財務狀況表 10 Condensed Consolidated Stateme ...