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 ...

Financial Performance - Transmit Entertainment reported a year-on-year increase of 17.9% in income from sizable internet enterprises in the PRC, amounting to RMB540.9 billion for the first half of 2019[16]. - The income from information services, including online music and videos, online games, news, and online reading, recorded a year-on-year increase of 23%, totaling RMB370.3 billion in the first half of 2019[16]. - The revenue from internet services in China for the first half of 2019 reached RMB 540.9 billion, a year-on-year increase of 17.9%[18]. - The information services revenue, including online music, video, and games, grew by 23% to RMB 370.3 billion in the first half of 2019[18]. - The film and TV series production and distribution business reported revenue of approximately HK$415.2 million, a significant increase of approximately 900.6% compared to the previous year[28]. - The Group's revenue for the year ended June 30, 2019, amounted to approximately HK$668.1 million, representing a significant increase of approximately HK$393.5 million or 143.3% compared to the previous year[52]. - Revenue from film exhibition increased by approximately 8.8% to approximately HK$243.6 million, accounting for approximately 36.5% of total revenue[38]. - The Hong Kong box office receipts increased by approximately 6.4% in the first half of 2019 to approximately HK$1.05 billion[38]. - The Group's loss attributable to owners for the year was approximately HK$35.5 million, a significant decrease from a loss of approximately HK$189.8 million in the previous year[69]. - Gross profit was approximately HK$262.3 million, representing an increase of approximately HK$123.8 million or 89.5% year-on-year[55]. Strategic Initiatives - The Group aims to expand its pan-entertainment business by entering into contracts with various artiste agencies and managers, enhancing its talent pool and competitive edge in the Greater China region[4]. - In June 2019, the Group signed contracts with renowned scriptwriter Li Xiaoming and popular film director Wu Qiang to strengthen its content creation capabilities[4]. - The acquisition of Khorgas Houhai Culture Media Company Limited in August 2018 has bolstered the Group's film and television production capabilities, focusing on variety shows and TV series[3]. - The Group has established close cooperation with tier-one broadcast networks and online streaming platforms, enhancing its distribution and marketing efforts[3]. - The Group's strategic focus on content production and talent acquisition is expected to enhance its market position in the film and television industry[4]. - The Group's comprehensive approach aims to build a robust film and television entertainment and culture empire across the Greater China region[4]. - The Group formed collaborative relationships with various artists and scriptwriters to enhance content creation capabilities[44]. - The Group will not enter into further contract negotiations with certain agencies but will maintain long-term strategic relationships[46]. Market Trends - The overall performance of the internet services industry in the PRC remains strong despite global economic challenges, indicating a positive outlook for the Group's operations[16]. - Continued investment in research and development within the industry is anticipated to drive further growth in audio-video services[16]. - The internet communication services sector in China has seen a significant tariff reduction and speed upgrade, leading to increased online consumption potential in lower-tier cities[17]. - Online shopping users in China grew from 332 million in June 2014 to 639 million in June 2019, representing a compound annual growth rate of 13.99%[17]. - The proportion of online shopping users among national internet users increased from 52.5% in June 2014 to 74.8% in June 2019[17]. Operational Challenges - Despite the increase in revenue, the film exhibition segment recorded a loss of approximately HK$11.1 million, although this was an improvement from a loss of approximately HK$97.9 million the previous year[38]. - The gross profit margin decreased to approximately 39.3% from approximately 50.4% in the previous year, primarily due to the absence of additional revenue from "S Storm" and the lower gross profit margin from the newly acquired Houhai Culture operation, which accounted for approximately 28.5% of the Group's revenue[55]. - Selling and distribution expenses rose by approximately HK$6.6 million or 3.3% to approximately HK$207.3 million, attributed to increased advertising and promotion expenses due to larger production scales of films released during the year[58]. - Administrative expenses increased by approximately HK$16.3 million or 32.0% to approximately HK$67.3 million, driven by higher legal fees, salary expenses, and ordinary administrative expenses from the newly acquired Houhai Culture[59]. Management and Governance - The company has a diverse management team with extensive experience in various aspects of media production and marketing[156]. - The management team includes professionals with educational backgrounds from prestigious institutions such as Zhejiang University and Fudan University[152][153][157][158]. - The company aims to leverage its experienced team to explore new strategies for market expansion and product development[156]. - The diverse expertise within the management team positions the company well for future growth in the competitive media landscape[156]. Financial Position - As of June 30, 2019, the Group's bank balances and cash amounted to approximately HK$122.0 million, an increase from approximately HK$76.3 million as of June 30, 2018[87]. - The Group's total debts as of June 30, 2019, were approximately HK$313.2 million, compared to approximately HK$8.2 million as of June 30, 2018, resulting in a gearing ratio of approximately 31.6%[87]. - The Group's total non-current assets increased to approximately HK$544.9 million as of June 30, 2019, from approximately HK$165.2 million as of June 30, 2018[90]. - The net current liabilities as of June 30, 2019, were approximately HK$95.8 million, up from approximately HK$47.8 million as of June 30, 2018[90]. - The Group's current ratio as of June 30, 2019, was approximately 0.8, down from approximately 0.9 as of June 30, 2018[90]. Customer and Supplier Relations - Key customers include co-producers, distributors, and cinemagoers, with a commitment to enhancing customer loyalty through social media interaction[182]. - The Group maintains solid relationships with suppliers to ensure quality supply for high-quality films and services[182]. - Income from the top five customers accounted for approximately 48.8% of the Group's revenue for the year ended June 30, 2019, compared to 12.6% for the same period in 2018[187]. - The single largest customer contributed approximately 11.7% of the Group's revenue for the year ended June 30, 2019, up from 10.1% in 2018[187]. - Fees paid to the top five suppliers constituted approximately 18.8% of the Group's total fees paid to suppliers, a decrease from 37.0% in 2018[187]. Future Outlook - The Group plans to create a sustainable synergy between new businesses and existing entertainment resources, aiming for significant growth in the entertainment consumption sector[129]. - The Group is committed to diversifying its operations to enhance profitability and generate satisfactory returns for shareholders[135]. - The Group is currently preparing multiple copyright projects, including the suspense drama "Redemption on the Blade" and the web variety show "I Am the Sales Officer" among others[130]. - The collaboration with well-known influencers is expected to help the Group develop its self-owned beauty brand and expand its e-commerce business[135].

Financial Statements Overview - The Group's consolidated financial statements include a profit or loss statement for the six-month period ending December 31, 2018[12]. - The financial position as of December 31, 2018, is detailed in the condensed consolidated statement of financial position[12]. - The report includes a comprehensive income statement reflecting the Group's performance over the reporting period[12]. - The Group's cash flow statement for the six-month period is also presented, indicating liquidity management[12]. - The report outlines the responsibilities of the directors in preparing the financial statements in accordance with HKAS 34[12]. - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, ensuring compliance with auditing standards[12]. - The Group's financial statements are subject to independent auditor review, which is less comprehensive than a full audit[12]. - The report emphasizes that no audit opinion is expressed due to the nature of the review conducted[12]. - The interim report is prepared to comply with the relevant provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[12]. Financial Performance - Revenue for the six months ended December 31, 2018, was HK$395,277,000, an increase from HK$126,766,000 in the same period of 2017, representing a growth of 212%[33]. - Gross profit for the same period was HK$174,564,000, compared to HK$77,347,000 in 2017, indicating a growth of 126%[33]. - Profit before tax for the period was HK$54,672,000, a significant recovery from a loss of HK$31,509,000 in the previous year[33]. - Profit for the period attributable to owners of the company was HK$46,509,000, compared to a loss of HK$28,898,000 in the same period of 2017[37]. - Total comprehensive income for the period was HK$52,233,000, recovering from a loss of HK$30,367,000 in the previous year[37]. - Basic earnings per share for the period was 1.79 HK cents, compared to a loss of 1.11 HK cents in the same period of 2017[37]. Expenses and Losses - Selling and distribution expenses increased to HK$97,136,000 from HK$92,298,000, reflecting a rise of 5%[33]. - Administrative expenses rose to HK$27,492,000 from HK$22,180,000, an increase of 24%[33]. - Other gains and losses amounted to HK$17,713,000, compared to no gains in the previous year[33]. - The company reported a net foreign exchange loss of HK$4,302,000, contrasting with a gain of HK$1,742,000 in the same period of 2017[33]. Financial Position - Total assets less current liabilities amounted to HK$511,070,000[40]. - The company reported net current liabilities of HK$87,072,000[40]. - Total equity attributable to owners of the company increased to HK$172,494,000 from HK$120,080,000, reflecting a growth of approximately 43.5%[42]. - The company recorded a loss for the period of HK$30,367,000, compared to a loss of HK$29,053,000 in the previous period[80]. - Non-current liabilities, including loans from related companies, totaled HK$342,536,000[42]. - The company’s cash and cash equivalents stood at HK$449,394,000[40]. Cash Flow - For the six months ended December 31, 2018, the Group reported a net cash outflow from operating activities of HK$1,906,000, compared to an inflow of HK$65,729,000 in the previous period[104]. - The net cash used in investing activities was HK$123,445,000, significantly higher than the previous period's outflow of HK$47,677,000[104]. - The Group had net current liabilities of approximately HK$87,072,000 as of December 31, 2018, an increase from HK$47,811,000 as of June 30, 2018[110]. - The net cash from financing activities was HK$158,924,000, compared to an inflow of HK$9,272,000 in the previous period[104]. - Cash and cash equivalents at December 31, 2018, totaled HK$112,709,000, up from HK$76,336,000 at the beginning of the period[104]. Accounting Standards and Policies - The Group applied new accounting standards, including HKFRS 15, which affects revenue recognition from contracts with customers[119]. - The Group has applied HKFRS 15 retrospectively, with initial application effects recognized on July 1, 2018[132]. - HKFRS 15 introduces a 5-step approach for revenue recognition, focusing on performance obligations and control transfer[132]. - The Group's accounting policy changes may impact future revenue recognition and financial reporting[132]. - The Group has applied HKFRS 9, impacting the classification and measurement of financial assets and liabilities, as well as expected credit losses[156]. - The Group's accounting policies have been updated to comply with HKFRS 15, affecting financial reporting[142]. - The adjustments made due to HKFRS 15 reflect the Group's commitment to accurate financial reporting and compliance with accounting standards[152]. Expected Credit Loss (ECL) Assessment - The Group recognizes a loss allowance for Expected Credit Loss (ECL) on financial assets, which includes trade and other receivables, with the ECL updated at each reporting date to reflect changes in credit risk[169]. - The Group assesses ECL based on historical credit loss experience, adjusted for specific factors related to debtors and general economic conditions[170]. - The Group typically recognizes lifetime ECL for trade receivables, assessing these assets individually for significant balances and collectively using a provision matrix for others[169]. - The Group presumes that credit risk has increased significantly since initial recognition when contractual payments are more than 30 days past due[173]. - The Group's approach to measuring ECL reflects current conditions and forward-looking information[191]. Assets and Liabilities - Non-current assets include property, plant, and equipment valued at HK$99,005,000 and intangible assets valued at HK$5,600,000[196]. - Current assets total HK$262,947,000, with film production in progress valued at HK$140,058,000[196]. - Assets classified as held for sale amount to HK$28,275,000, contributing to total assets of HK$291,222,000[196]. - The financial position reflects interests in associates valued at HK$28,114,000 and a joint venture interest of HK$205,000[196]. - The total amount due from related companies is HK$143,000, with tax recoverable at HK$716,000[196]. - Bank balances and cash are reported at HK$76,336,000, indicating liquidity position[196].