Financial Performance - For the six months ended June 30, 2023, total revenue increased by 18.5% to approximately RMB191.2 million compared to RMB161.3 million in the same period of 2022[10]. - Gross profit for the same period rose by 22.8% to RMB45.0 million, with a gross profit margin of 23.6%, up from 22.7% in 2022[10]. - The net loss attributable to equity holders increased significantly by 502.7%, amounting to RMB3.1 million, compared to a loss of RMB0.5 million in the prior year[10]. - Revenue from the CMS business slightly increased by 0.5% to approximately RMB119.4 million, accounting for 62.5% of total revenue[14]. - Revenue from the OBM business surged by 68.7%, rising from approximately RMB42.5 million to RMB71.8 million[15]. - The U.S. market contributed approximately 82.6% of total revenue, showing a 15% increase in sales compared to the previous year[16]. - The total comprehensive loss for the period was RMB 4.0 million, compared to a comprehensive income of RMB 2.4 million in the same period of 2022[85]. - Basic and diluted loss per share attributable to equity holders was RMB (0.23) cents, compared to RMB (0.05) cents in the previous year[85]. Assets and Liabilities - Total assets increased by 11.7% to RMB556.5 million, while total liabilities rose by 33.3% to RMB132.0 million[10]. - The current ratio improved to 182.3%, up from 164.6% in the previous period, indicating better short-term financial health[10]. - As of June 30, 2023, total cash and cash equivalents amounted to approximately RMB 117.6 million, an increase of approximately RMB 70.1 million compared to December 31, 2022[45]. - The total bank borrowings as of June 30, 2023, were approximately RMB 77.1 million, up from RMB 71.9 million as of December 31, 2022[50]. - The company's net assets reached RMB 424,480,000 as of June 30, 2023, compared to RMB 398,998,000 at the end of 2022, marking a growth of about 6.4%[89]. - Trade and other receivables increased significantly to RMB 95,448,000 from RMB 70,080,000, representing a growth of approximately 36.3%[88]. Cash Flow and Financing - Cash generated from operating activities was RMB 37,758,000, a significant improvement from a cash usage of RMB 35,555,000 in the previous year[98]. - Net cash generated from financing activities amounted to RMB 33,999,000, compared to RMB 28,498,000 in the prior year[98]. - The company reported a loss for the period of RMB 521,000, which was offset by a total comprehensive income of RMB 2,176,000 for the period[92]. - The company recognized equity-settled share-based payment expenses amounting to RMB 5,405,000 during the period[92]. Operational Highlights - The company plans to diversify its business and broaden revenue streams through acquisitions of intellectual property rights and collaborations with upstream and downstream companies[80]. - The operating environment remains uncertain due to factors such as inflation, rising interest rates, and geopolitical developments[79]. - Research and development costs for the period were RMB 11,102,000, up 30.5% from RMB 8,494,000 in 2022[138]. - The company is engaged in the design, development, production, sales, and marketing of various products, including cosplay items and personal care products[100]. Segment Performance - The CMS business generated revenue of RMB 119.4 million, accounting for 62.5% of total revenue, while the OBM business generated RMB 71.8 million, a significant increase of 68.7% from the previous year[73]. - Revenue from clothing and others segment was RMB 155.9 million, accounting for 81.6% of total revenue, with a growth of 4.1% compared to the previous year[76]. - Segment results for the fabric care, personal hygiene, and home care products segment amounted to RMB 38,319,000 for the first half of 2023, compared to RMB 31,870,000 in the same period of 2022, indicating an increase of about 20.1%[124]. Investment Properties and Assets - The carrying amount of investment properties decreased to RMB75,763,000 as of June 30, 2023, from RMB83,746,000 as of December 31, 2022, representing a decline of approximately 9.5%[158]. - The fair value of the Group's investment properties was RMB95,837,000 as of June 30, 2023, down from RMB108,875,000 as of December 31, 2022, indicating a decrease of about 12%[161]. - Right-of-use assets amounted to RMB4,974,000 as of June 30, 2023, compared to RMB4,676,000 as of December 31, 2022, showing an increase of approximately 6.4%[154]. Credit and Receivables Management - The expected credit loss (ECL) allowance for trade and other receivables was RMB 2,491,000 for the period, reflecting ongoing credit risk management efforts[124]. - The aging analysis of trade receivables shows that 0-30 days receivables increased to RMB 53,784,000 from RMB 31,352,000, a growth of 72%[186]. - The Group requires advance deposits from customers and applies an internal credit assessment policy before accepting new customers[182].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不對因本公佈全 部或任何部分內容而產生或因依賴該等內容而引致之任何損失承擔任何責任。 China Partytime Culture Holdings Limited 中 國 派 對 文 化 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1532） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 之 中 期 業 績 公 佈 中國派對文化控股有限公司（「本公司」）之董事（「董事」）會（「董事會」）欣然宣佈， 本公司及其附屬公司（統稱為「本集團」）截至二零二三年六月三十日止六個月 之未經審核簡明綜合業績，連同二零二二年同期之比較數字如下： 簡明綜合損益及其他全面收益表 截至二零二三年六月三十日止六個月 截至六月三十日止六個月 二零二三年 二零二二年 附註 人民幣千元 人民幣千元 （未經審核） （未經審核） 收益 6 191,189 161,315 銷售成本 (146,160) (124,640) 毛利 45,029 36,675 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不 負責，對其準確性或完整性亦不發表聲明，並表明不會就本公佈全部或任何部 分內容而產生或因依賴該等內容而引致之任何損失承擔任何責任。 China Partytime Culture Holdings Limited 中 國 派 對 文 化 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1532） 補 充 公 佈 有 關 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 之 年 報 茲提述中國派對文化控股有限公司（「本公司」）於二零二三年四月二十七日刊 發之截至二零二二年十二月三十一日止年度之年報（「二零二二年年報」）。除另 有界定者外，本公佈所用詞彙與二零二二年年報所界定者具有相同涵義。 有關購股權計劃之補充資料 董事謹此向本公司股東及有意投資者提供以下與購股權計劃有關之更多資料： (i) 於截至二零二二年十二月三十一日止年度初，根據購股權計劃可供授出 之購股權數目為75,000,000股股份。年內，計劃授權上限已經更新，並獲股 東於二零二二年六月二十四日舉行之本公司股東週年大會上批准。於截 至二零二二年 ...

Financial Performance - The Group's turnover for the year ended December 31, 2022, was approximately RMB 301.1 million, representing an increase of 24.3% compared to 2021[14]. - The gross profit margin was approximately 24.9%, while the net loss margin was approximately 4.8%[14]. - The Group recorded a loss attributable to owners of the Company of approximately RMB 15.1 million, a decrease of 14.6% from a loss of approximately RMB 17.7 million in 2021[14]. - Revenue increased from RMB242.2 million in 2021 to RMB301.1 million in 2022, representing a growth of 24.3%[32]. - CMS business revenue decreased by 2.7% to RMB195.0 million, accounting for 64.8% of total revenue, while OBM business revenue surged by 154.0% to RMB106.1 million, making up 35.2% of total revenue[27]. - Revenue from the CMS business decreased from approximately RMB200.5 million in 2021 to approximately RMB195.0 million in 2022, representing a decrease of approximately 2.7%[47]. - Revenue from the OBM business increased from approximately RMB41.8 million in 2021 to approximately RMB106.1 million in 2022, representing an increase of approximately 154.1%[49]. - The Group's total revenue from fabric care, personal hygiene, and home care products was RMB18.6 million, a new addition to the revenue stream[30]. - Clothing and other products generated revenue of RMB249.4 million, representing a 22.9% increase from the previous year[30]. Acquisitions and Investments - The Group acquired Zhejiang Kelee, which is engaged in the research and development, manufacturing, and sale of fabric care, personal hygiene, and home care products[13]. - The Group acquired High Kelee Investment Holdings Limited, which focuses on R&D, manufacturing, and sales of fabric care and personal hygiene products[38]. - The company acquired 100% of the issued share capital of High Kelee for a total consideration of HK$42.8 million, with HK$8.8 million paid in cash and the remainder settled through the issuance of 170 million shares at HK$0.2 each[110]. - The Group invested RMB6 million for a 15% equity interest in Diamond Virtue Limited in December 2022[39]. - The guaranteed net profit for Zhejiang Kelee for the years ending December 31, 2022, and 2023 was set at no less than RMB 20 million in total, with each year required to be at least RMB 10 million[115]. Financial Position - The Group maintained a healthy financial position with net current assets of RMB 59.9 million and a net cash position at the financial year-end[14]. - As of December 31, 2022, the total bank balances and cash decreased to approximately RMB47.6 million, a decrease of approximately RMB52.1 million compared to December 31, 2021, mainly due to net repayment of borrowings of approximately RMB22.3 million and capital expenditure of approximately RMB40 million[84]. - The Group's borrowings amounted to approximately RMB71.9 million as of December 31, 2022, with a current ratio of 164.6% and a gearing ratio of 19.6%[85]. Operational Efficiency - The establishment of the "Party Culture Industrial Park" in Yiwu aims to enhance production efficiency and collaboration within the industry[33]. - 65% of the gross floor areas of Yiwu and Yichun Production Plants were sub-leased as of December 31, 2022[36]. Cost and Expenses - Cost of sales increased by approximately RMB49.8 million, from approximately RMB176.2 million in 2021 to approximately RMB226.0 million in 2022[59]. - Selling expenses increased by approximately RMB0.4 million, from approximately RMB5.1 million in 2021 to approximately RMB5.5 million in 2022[61]. - Administrative and other operating expenses increased by approximately RMB9.0 million, from approximately RMB86.7 million in 2021 to approximately RMB95.7 million in 2022[62]. - The income tax expense increased from an income tax credit of approximately RMB433,000 in 2021 to approximately RMB3.7 million in 2022, primarily due to an increase in deferred tax recognized[76]. - Finance costs slightly increased from approximately RMB4.5 million in 2021 to approximately RMB4.6 million in 2022, mainly due to an increase in the average borrowings interest rate[74]. Employee and Compensation - Total staff costs for the year amounted to approximately RMB77.5 million, an increase from RMB70.5 million in 2021[97]. - The company has adopted a stock option plan to recognize and reward employee contributions, aiming to retain talent for continued growth[104]. - The employee compensation policy is regularly reviewed by the compensation committee based on performance, qualifications, and market statistics[104]. - As of December 31, 2022, the company had approximately 567 employees, with total employee costs amounting to RMB 77.5 million, an increase from RMB 70.5 million in 2021[103]. Governance and Compliance - The company has fully complied with the Corporate Governance Code for the year ended December 31, 2022, demonstrating commitment to high standards of corporate governance[127][132]. - The board consists of five directors, including two executive directors and three independent non-executive directors, ensuring a balanced governance structure[139][142]. - The independent non-executive directors play a significant role in providing impartial views on the company's strategies and performance, ensuring shareholder interests are considered[146][147]. - The company has established an internal control system to maintain checks and balances within its operations[128]. - The chairman and CEO roles are segregated, with Mr. Teng Hao as Chairman and Mr. Xu Chengwu as CEO, ensuring effective leadership and management[144][145]. Risk Management and Internal Control - The Audit Committee is responsible for reviewing the interim and annual reports and overseeing the Company's financial reporting system[193]. - Risk assessment and internal control reports were evaluated, focusing on the effectiveness of the risk management and internal control system[200]. - The effectiveness of the internal audit function performed by an independent professional adviser was reviewed[200]. Future Outlook - The operating environment remains uncertain in 2023, but the Group is committed to delivering sustainable growth[19]. - The Group aims to diversify its business and broaden revenue streams by acquiring intellectual property rights and collaborating with companies in upstream and downstream industries[20]. - The Group will continue to evaluate and identify target companies with investment value that can generate synergies within the industry[20].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不 負責，對其準確性或完整性亦不發表聲明，並表明不會就本公佈全部或任何部 分內容而產生或因依賴該等內容而引致之任何損失承擔任何責任。 China Partytime Culture Holdings Limited 中 國 派 對 文 化 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1532） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 之 年 度 業 績 公 佈 中國派對文化控股有限公司（「本公司」）之董事會（「董事會」）欣然宣佈，本公司 及其附屬公司（統稱為「本集團」）截至二零二二年十二月三十一日止年度之經審 核綜合業績，連同截至二零二一年十二月三十一日止年度之比較數字如下： 綜合損益及其他全面收益表 二零二二年 二零二一年 附註 人民幣千元 人民幣千元 收益 5 301,113 242,212 銷售成本 (226,055) (176,226) 毛利 75,058 65,986 其他收入 6 21,634 19,534 出售一間附屬公司的收益 – 1,030 分佔聯營公司虧損 (212) (3 ...

Revenue and Profitability - For the six months ended June 30, 2022, total revenue increased by 58.3% to approximately RMB161.3 million compared to RMB101.9 million for the same period in 2021[8]. - Revenue from the CMS business rose by approximately 28.2% from RMB92.7 million to RMB118.8 million, accounting for 73.6% of total revenue[12]. - Revenue from the OBM business surged by approximately 360.0% from RMB9.2 million to RMB42.5 million[13]. - Sales to the U.S. market increased by approximately 82%, contributing about 88% of total revenue for the six months ended June 30, 2022[14]. - The Group's revenue from wigs was RMB 11.6 million, representing 7.2% of total revenue, while clothing and others accounted for RMB 149.7 million, or 92.8%[75]. - For the six months ended June 30, 2022, the company reported revenue of RMB 161,315,000, an increase from RMB 101,928,000 in the same period of 2021, representing a growth of approximately 58.4%[88]. - The gross profit for the same period was RMB 36,675,000, compared to RMB 27,533,000 in 2021, indicating a gross profit margin improvement[88]. - The increase in revenue and gross profit during the period was the primary reason for the reduction in loss attributable to equity holders[76]. - Revenue from contract manufacturing services for the six months ended June 30, 2022, was RMB 118,768,000, compared to RMB 92,680,000 in the same period of 2021, marking an increase of approximately 28.2%[139]. - The original brand manufacturing business generated revenue of RMB 42,547,000 for the six months ended June 30, 2022, compared to RMB 9,248,000 in the same period of 2021, indicating a substantial increase[139]. Financial Position - Total assets grew by 13.6% to RMB553.6 million from RMB487.2 million[8]. - Total liabilities increased by 47.9% to RMB181.3 million from RMB122.6 million[8]. - The gearing ratio increased to 34.9%, up from 27.8%, indicating a rise in financial leverage[8]. - As of June 30, 2022, total cash and cash equivalents were approximately RMB 90.0 million, a decrease of approximately RMB 9.7 million from December 31, 2021[42][47]. - Current assets as of June 30, 2022, totaled RMB 258,080,000, an increase from RMB 170,077,000 at the end of 2021[90]. - The net current assets increased to RMB 83,117,000 as of June 30, 2022, compared to RMB 53,626,000 at the end of 2021[90]. - As of June 30, 2022, total equity increased to RMB 372,315,000 from RMB 364,540,000 as of December 31, 2021, representing a growth of approximately 2.1%[92]. - Net assets rose to RMB 372,315,000, up from RMB 364,540,000, indicating a growth of about 2.1%[92]. - The company's reserves increased to RMB 359,909,000 as of June 30, 2022, compared to RMB 352,328,000 at the end of 2021, reflecting a growth of approximately 2.3%[96]. Expenses and Losses - Gross profit margin decreased to 22.7% from 27.0%, reflecting a decline of 4.3 percentage points[8]. - Administrative and other operating expenses increased by approximately RMB 12.1 million, from approximately RMB 33.4 million to approximately RMB 45.4 million[24][29]. - The loss attributable to equity holders for the six months ended June 30, 2022, was approximately RMB 0.5 million, a significant decrease from a loss of RMB 5.2 million for the same period in 2021[75]. - The company incurred a loss of RMB 327,000 for the period, a significant reduction from a loss of RMB 5,154,000 in the previous year, reflecting an improvement in financial performance[88]. - The total comprehensive income attributable to owners of the company for the period was RMB 2,176,000, compared to a loss of RMB 3,044,000 in 2021[88]. - The company reported a basic loss per share of RMB 0.000484 for the six months ended June 30, 2022, compared to a loss of RMB 0.00567 for the same period in 2021, showing an improvement in loss per share[153]. Acquisitions and Investments - The Group entered into a sales and purchase agreement to acquire High Kelee Investment Holdings Limited for a total consideration of HK$42.8 million, with HK$8.8 million paid in cash and the remainder settled through the issuance of 170 million shares[52]. - Following the acquisition, High Kelee became a wholly-owned subsidiary, and the financial results will be consolidated into the Group's financial statements[54]. - The company completed the acquisition of High Kelee in July 2022, which is expected to enhance its business in fabric care, personal hygiene, and home care products[82]. - The company is actively seeking opportunities to diversify its business and broaden revenue streams through acquisitions and collaborations[83]. Cash Flow and Financing - For the six months ended June 30, 2022, cash flows from operating activities resulted in a net cash outflow of RMB 39,250,000, compared to a net inflow of RMB 130,000 in the same period of 2021[102]. - The company generated RMB 107,602,000 from borrowings during the financing activities for the six months ended June 30, 2022[102]. - The total current tax expense for the six months ended June 30, 2022, was RMB 906,000, compared to RMB 794,000 in 2021, reflecting an increase of approximately 14.1%[150]. - The company’s total income tax expenses for the six months ended June 30, 2022, were RMB 807,000, a decrease from RMB 1,247,000 in 2021, indicating a reduction of approximately 35.4%[150]. Operational Efficiency and Strategy - The company aims to improve operational efficiency and increase revenue as top priorities for 2022[82]. - The company aims to better utilize its assets by sub-leasing parts of its production plants to local enterprises[15]. - The board believes that ongoing litigation has no material impact on the company's business and finances[81]. Accounting and Reporting - The interim financial information for the six months ended June 30, 2022, is presented in thousands of Renminbi (RMB'000) and is unaudited[109][111]. - The Group's revenue and results are analyzed by operating and reportable segments, with strategic decisions made based on adjusted segment operating results[122][124]. - The Group adopted new and amended Hong Kong Financial Reporting Standards effective from January 1, 2022, but these had no material impact on the financial results[114][117]. - Management made significant accounting judgments and estimates that may affect the reported amounts of assets and liabilities, income, and expenses[120][123]. - The financial report does not include all information required in annual consolidated financial statements and should be read in conjunction with the annual report for the year ended December 31, 2021[108][110]. Assets and Liabilities - The total reportable segment assets as of June 30, 2022, amounted to RMB 553,608,000, compared to RMB 487,152,000 as of December 31, 2021, indicating an increase of approximately 13.6%[132]. - The reportable segment liabilities as of June 30, 2022, were RMB 181,293,000, up from RMB 122,612,000 as of December 31, 2021, reflecting an increase of approximately 47.5%[133]. - The fair value of the Group's investment properties as of June 30, 2022, was RMB101,177,000, down from RMB102,184,000 as of December 31, 2021[168]. - The carrying value of investment properties pledged as collateral for bank loans was RMB30,316,000 as of June 30, 2022, compared to RMB31,164,000 as of December 31, 2021[174]. - The net book amount of property, plant, and equipment as of June 30, 2022, was RMB164,661,000, compared to RMB184,261,000 as of December 31, 2021[193]. - The accumulated depreciation for property, plant, and equipment as of June 30, 2022, was RMB235,817,000, reflecting a charge of RMB16,062,000 for the period[190]. Market and Risk Factors - The Group's exposure to currency risk arises from sales to overseas customers primarily denominated in USD, with no current foreign currency hedging policy in place[62]. - The Group's investment properties experienced a decrease in fair value, indicating potential market challenges affecting rental income streams[171]. - The cash flow projections used for impairment testing were based on a five-year approved business plan[199]. - The estimated cost of capital was a key factor in determining the discount rates used in the cash flow projections[197].

Financial Performance - The turnover for the year ended December 31, 2021, amounted to approximately RMB 242.2 million, representing a decrease of 5.1% compared to 2020[14]. - The gross profit margin and net loss margin were approximately 27.2% and 7.2% respectively[14]. - The Group recorded a loss for the year attributable to owners of the Company of approximately RMB 17.7 million, a decrease of 74.1% from a loss of approximately RMB 68.4 million in 2020[14]. - Revenue decreased from RMB 255.3 million in 2020 to RMB 242.2 million in 2021, representing a decrease of 5.1%[39]. - Gross profit increased to RMB 65.986 million in 2021, up 2.6% from RMB 64.284 million in 2020[28]. - Gross profit margin improved to 27.2% in 2021, up from 25.2% in 2020, an increase of 2.0 percentage points[28]. - Cash generated from operations was RMB 25.238 million, a significant improvement of 312% compared to a cash usage of RMB 11.894 million in the previous year[28]. - Bank balances and cash increased by 103.8% to RMB 99.661 million from RMB 48.908 million in 2020[28]. - Revenue from the CMS business increased from approximately RMB 167.4 million in 2020 to approximately RMB 200.5 million in 2021, representing an increase of approximately 19.7% and accounting for about 82.8% of total revenue[87]. - Revenue from the OBM business decreased from approximately RMB 87.8 million in 2020 to approximately RMB 41.8 million in 2021, representing a decrease of approximately 52.5%[88]. Business Strategy and Development - The Group plans to diversify its business and broaden revenue streams by acquiring intellectual property rights with potential growth[21]. - The Group aims to collaborate with companies in upstream and downstream industries to create synergies and enhance business operations[21]. - The Group established an associate company focused on cultural tourism development, which is expected to create synergies with its cultural products[13]. - The Group plans to strengthen research and development capabilities and broaden its customer base by expanding its OBM business in the PRC market[66]. - The Group aims to seek cooperation with other intellectual property right owners and collaborate with companies in upstream and downstream industries to enhance production efficiency[66]. - The company established a "Party Culture Industrial Park" to enhance production efficiency and foster collaboration within the industry[40]. Market and Economic Conditions - The COVID-19 pandemic has adversely affected the Group's development plans, and 2022 is expected to remain challenging due to economic uncertainties[20]. - Over 90% of revenue was generated from sales to overseas customers across more than 10 countries, indicating significant reliance on international markets[50]. - The popularity of animation characters significantly influences market demand and revenue from related products, which may fluctuate based on market trends[57]. - Foreign currency exchange rate fluctuations may adversely affect profit margins, as most revenue is denominated in USD[56]. - The U.S. market contributed 67% of total revenue for the year ended 31 December 2021, up from 34.2% in 2020[93]. - Revenue from the PRC market contributed 12.5% of total revenue for the year ended 31 December 2021, compared to 5.4% in 2020[92]. Operational Efficiency - The Group's operational efficiency and effectiveness will be a focus for improvement in the upcoming year[21]. - 65% of the gross floor areas of the Yiwu and Yichun production plants were sub-leased as of December 31, 2021, up from 35% in 2020[42]. - Gross income from leasing factory premises was approximately RMB 4.932 million in 2021, down from RMB 5.424 million in 2020[45]. - The company maintained long-term business relationships with customers from over 20 countries, with the top five customers averaging over seven years of partnership[84]. - The company has over 70 suppliers and does not enter into long-term procurement agreements, mitigating risks from supplier loss[79]. Financial Position and Capital Management - The Group maintained a healthy financial position with net current assets of RMB 53.6 million and a net cash position at the financial year end[14]. - The Group's borrowings amounted to approximately RMB 89.3 million as of December 31, 2021, with a current ratio of 146.1% and a gearing ratio of 27.8%[119]. - The total amount of bank balances and cash as of December 31, 2021, was approximately RMB 99.7 million, an increase of approximately RMB 50.8 million compared to December 31, 2020[118]. - The net proceeds from the placing were approximately HK$31.0 million, intended for repayment of current debts and general working capital[145]. - As of December 31, 2021, approximately HK$15.7 million of the net proceeds were used to repay part of the principal and interests of the borrowings[146]. Governance and Compliance - The Company has fully complied with the Corporate Governance Code for the year ended 31 December 2021[166]. - The Group's internal control system includes three Independent Non-executive Directors, representing nearly half of the Board, ensuring adequate balance of power[167]. - The Board consists of five directors, including two executive directors and three independent non-executive directors[179]. - The Chairman and CEO roles are separated, with Ms. Chen Sheng as Chairman and Mr. Xu Chengwu as CEO[180]. - The Board has complied with listing rules by maintaining at least three independent non-executive directors, representing one-third of the Board[181]. - The Company provides sufficient resources for Board Committees to discharge their duties and seek independent professional advice when necessary[198].

[Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides essential corporate details, including board composition, contact information, and registration specifics [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the company's board members and their roles in the audit, remuneration, and nomination committees, clarifying the composition of executive and independent non-executive directors - The Board of Directors comprises **three executive directors** (including Chairperson Ms. Chen Sheng and CEO Mr. Xu Chengwu) and **three independent non-executive directors**[4](index=4&type=chunk) - The Audit Committee is chaired by Mr. Zheng Jinmin, the Remuneration Committee by Mr. Chen Wenhua, and the Nomination Committee by Ms. Peng Xu[4](index=4&type=chunk) [Company Contact and Registration Information](index=3&type=section&id=Company%20Contact%20and%20Registration%20Information) This section provides detailed information on the company's registered office, China headquarters, principal place of business, Hong Kong business location, share registrar, legal counsel, auditor, stock code, company website, and investor relations contact - The company's registered office is in the Cayman Islands, with its China headquarters located in Yichun Economic and Technological Development Zone, Jiangxi Province[4](index=4&type=chunk) - The Hong Kong share registrar and transfer office is Tricor Investor Services Limited, and the auditor is Grant Thornton Hong Kong Limited[7](index=7&type=chunk) - The company's stock code is **1532**, and its website is **www.partytime.com.cn**[7](index=7&type=chunk) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) This section presents a concise overview of the company's key financial performance and position indicators for the reporting period [Profit and Loss Summary](index=5&type=section&id=Profit%20and%20Loss%20Summary) For the six months ended June 30, 2021, the company's revenue decreased by 13.2% year-on-year, gross profit declined by 12.0%, but loss attributable to equity holders significantly narrowed by 88.1% Key Profit and Loss Indicators (For the six months ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 101,928 | 117,378 | (13.2%) | | Gross Profit | 27,533 | 31,296 | (12.0%) | | Loss attributable to equity holders | (5,154) | (43,319) | (88.1%) | | Gross Profit Margin | 27.0% | 26.7% | 0.3% | | Net Loss Margin | (5.1%) | (36.9%) | 31.8% | | Basic Loss Per Share (RMB cents) | (0.57) | (4.83) | (88.2%) | [Financial Position Summary](index=5&type=section&id=Financial%20Position%20Summary) As of June 30, 2021, the company's total assets and liabilities both increased, total equity grew by 6.5%, and bank balances and cash significantly rose by 52.3% Key Financial Position Indicators (As at period end) | Indicator | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 493,600 | 460,112 | 7.3% | | Total Liabilities | 119,305 | 108,584 | 9.9% | | Equity attributable to equity holders | 374,295 | 351,528 | 6.5% | | Bank Balances and Cash | 74,474 | 48,908 | 52.3% | [Key Financial Ratios](index=5&type=section&id=Key%20Financial%20Ratios) As of June 30, 2021, the company's current ratio and gearing ratio both improved, indicating enhanced liquidity Key Financial Ratios (As at period end) | Indicator | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Current Ratio | 163.2% | 131.7% | | Gearing Ratio | 24.0% | 25.4% | [Directors' Business Review and Management Discussion and Analysis](index=5&type=section&id=Directors'%20Business%20Review%20and%20Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's business operations, investment activities, future prospects, and detailed financial performance analysis [Business Review](index=6&type=section&id=Business%20Review) The Group primarily engages in the design, development, production, sales, and marketing of cosplay products (including costumes and wigs) and non-cosplay apparel (mainly lingerie), exporting to over 20 countries and regions globally, with business categorized into Contract Manufacturing Services (CMS) and Original Brand Manufacturing (OBM) - The Group primarily engages in the design, development, production, sales, and marketing of cosplay products (costumes and wigs) and non-cosplay apparel (lingerie)[11](index=11&type=chunk)[13](index=13&type=chunk) - Products are mainly exported to **over 20 countries and regions globally**, including the United States, Germany, the United Kingdom, Japan, and Australia[11](index=11&type=chunk)[13](index=13&type=chunk) - Business is categorized into **Contract Manufacturing Services (CMS)** and **Original Brand Manufacturing (OBM)**[12](index=12&type=chunk)[14](index=14&type=chunk) [Main Business and Products](index=6&type=section&id=Main%20Business%20and%20Products) The company's core business involves global export of cosplay products and lingerie, offering both contract manufacturing and original brand manufacturing services based on customer needs - Key products include **cosplay costumes, cosplay wigs, and lingerie**[11](index=11&type=chunk)[13](index=13&type=chunk) - Business models are divided into **Contract Manufacturing Services (CMS)** and **Original Brand Manufacturing (OBM)**[12](index=12&type=chunk)[14](index=14&type=chunk) [Revenue by Business Category](index=6&type=section&id=Revenue%20by%20Business%20Category) For the six months ended June 30, 2021, CMS business revenue increased by 14.3% year-on-year to **RMB 92.68 million**, accounting for 90.9% of total revenue, while OBM business revenue significantly decreased by 74.5% to **RMB 9.248 million** Revenue by Business Category (For the six months ended June 30) | Business Category | 2021 (RMB thousands) | Percentage of Total | 2020 (RMB thousands) | Percentage of Total | Revenue Increase (Decrease) (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | CMS Business | 92,680 | 90.9% | 81,104 | 69.1% | 14.3% | | OBM Business | 9,248 | 9.1% | 36,274 | 30.9% | (74.5%) | | **Total** | **101,928** | **100.0%** | **117,378** | **100.0%** | **(13.2%)** | [Revenue by Product Category](index=6&type=section&id=Revenue%20by%20Product%20Category) For the six months ended June 30, 2021, wig product revenue significantly decreased by 68.9% year-on-year, while apparel and other product revenue increased by 11.5% Revenue by Product Category (For the six months ended June 30) | Product Category | 2021 (RMB thousands) | Percentage of Total | 2020 (RMB thousands) | Percentage of Total | Revenue Increase (Decrease) (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Wigs | 11,189 | 11.0% | 35,990 | 30.7% | (68.9%) | | Apparel and Others | 90,739 | 89.0% | 81,388 | 69.3% | 11.5% | | **Total** | **101,928** | **100.0%** | **117,378** | **100.0%** | **(13.2%)** | [Investment Review](index=7&type=section&id=Investment%20Review) In 2018, the company subscribed to CSG convertible bonds for the Nickelodeon theme park project, but due to project delays, unassigned rights, and CSG's default, the company recorded a fair value loss in 2019 and sold the bonds for **HKD 10 million** in March 2021, recognizing a disposal gain of approximately **RMB 2.8 million** to mitigate losses and exit the investment - In March 2018, the company's subsidiary subscribed to **HKD 70 million** CSG convertible bonds issued by Charm Success Global Investment Limited (CSG) for the Nickelodeon theme park project[20](index=20&type=chunk)[22](index=22&type=chunk) - Due to project funding delays, unassigned rights, and CSG's failure to pay interest, the company recorded a fair value loss of approximately **RMB 60.5 million** in 2019[25](index=25&type=chunk)[29](index=29&type=chunk) - On March 15, 2021, the company sold the CSG convertible bonds for **HKD 10 million** (approximately **RMB 8.34 million**), recognizing a disposal gain of approximately **RMB 2.8 million**, aiming to reduce losses and exit the investment[31](index=31&type=chunk)[34](index=34&type=chunk) [CSG Convertible Bond Investment](index=7&type=section&id=CSG%20Convertible%20Bond%20Investment) The CSG convertible bond investment resulted in significant losses due to project delays and issuer default, leading the company to sell the bonds at a lower price to cut losses and obtain immediate funds, while reserving the right to take legal action against the defaulting party - Charm Success Global Investment Limited, the issuer of the CSG convertible bonds, defaulted due to project funding delays, unassigned theme park rights, and unpaid interest[25](index=25&type=chunk)[29](index=29&type=chunk) - The company recorded a fair value loss of approximately **RMB 60.5 million** in 2019 and a fair value gain of approximately **RMB 3.9 million** in 2020[25](index=25&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk) - In March 2021, the company sold the CSG convertible bonds for **HKD 10 million**, recognizing a disposal gain of approximately **RMB 2.8 million** to reduce losses and generate immediate available funds[31](index=31&type=chunk)[34](index=34&type=chunk) - The Board does not rule out the possibility of initiating legal proceedings against the CSG issuer and related parties to recover losses incurred due to the default[32](index=32&type=chunk)[35](index=35&type=chunk) [Business Prospects](index=9&type=section&id=Business%20Prospects) Influenced by the COVID-19 pandemic, the business outlook for 2021 remains challenging, with the company focusing on improving operational efficiency, diversifying business, and expanding revenue streams through acquiring growth-potential intellectual property and collaborating with upstream and downstream companies to deliver higher shareholder returns - The COVID-19 pandemic has adversely affected the global economy and consumer confidence, making the **business outlook for 2021 challenging**[33](index=33&type=chunk)[36](index=36&type=chunk) - The Group will continue to **enhance operational efficiency and effectiveness**[39](index=39&type=chunk)[40](index=40&type=chunk) - The Board will seek opportunities to **diversify business and broaden revenue streams** through acquiring intellectual property with growth potential and collaborating with upstream and downstream industry companies[39](index=39&type=chunk)[40](index=40&type=chunk) [Financial Review](index=10&type=section&id=Financial%20Review) This section provides a detailed review of the company's financial performance during the reporting period, including changes in revenue, gross profit margin, various costs and expenses, as well as financial resources, liquidity, capital expenditure, and pledged assets [Revenue and Gross Profit Margin](index=10&type=section&id=Revenue%20and%20Gross%20Profit%20Margin) For the six months ended June 30, 2021, total revenue decreased by 13.2%, primarily due to weak OBM business sales performance; CMS business revenue grew by 14.3%, with non-surgical mask production contributing approximately **RMB 44.3 million**; gross profit margin slightly increased to **27.0%**, mainly benefiting from higher profit margins on non-surgical mask sales - Total revenue decreased by **13.2%**, mainly due to the severe impact of the COVID-19 pandemic on OBM business sales performance[15](index=15&type=chunk)[46](index=46&type=chunk)[49](index=49&type=chunk) - CMS business revenue increased by **14.3%** to approximately **RMB 92.7 million**, accounting for **90.9%** of total revenue[44](index=44&type=chunk)[49](index=49&type=chunk) - The Group diverted some production lines to non-surgical mask production, contributing approximately **RMB 44.3 million** in revenue, recognized under cosplay costumes within CMS business[47](index=47&type=chunk)[50](index=50&type=chunk) - Gross profit margin slightly increased from **26.7% to 27.0%**, primarily due to the higher profit margin contribution from non-surgical mask sales[48](index=48&type=chunk)[51](index=51&type=chunk) [Costs and Expenses](index=12&type=section&id=Costs%20and%20Expenses) Other income increased by approximately **RMB 3.5 million** to **RMB 8.0 million** year-on-year, mainly from rental income, utility fee income, and gain on disposal of financial assets; selling expenses as a percentage of revenue decreased; administrative and other operating expenses decreased by approximately **RMB 1.6 million**, primarily due to reduced R&D costs; impairment loss on property, plant, and equipment was approximately **RMB 4.5 million**; finance costs decreased by approximately **RMB 0.8 million**; and income tax expense increased by approximately **RMB 0.5 million** - Other income increased by approximately **RMB 3.5 million** to approximately **RMB 8.0 million**, mainly due to increased rental income and utility fee income from the Party Culture Industrial Base, and a gain of approximately **RMB 2.8 million** from the disposal of financial assets at fair value through profit or loss[55](index=55&type=chunk)[60](index=60&type=chunk) - Selling expenses as a percentage of revenue decreased from **2.3% to 1.7%**[56](index=56&type=chunk)[61](index=61&type=chunk) - Administrative and other operating expenses decreased by approximately **RMB 1.6 million** to approximately **RMB 33.4 million**, primarily due to a reduction in R&D costs of approximately **RMB 1.0 million**[57](index=57&type=chunk)[62](index=62&type=chunk) - Impairment loss on property, plant, and equipment of approximately **RMB 4.5 million** was recognized during the period due to continuous decline in turnover[58](index=58&type=chunk)[62](index=62&type=chunk) - Finance costs decreased by approximately **RMB 0.8 million** to approximately **RMB 2.7 million**, mainly due to reduced interest payments on other short-term borrowings[64](index=64&type=chunk)[68](index=68&type=chunk) - Income tax expense increased by approximately **RMB 0.5 million** to approximately **RMB 1.2 million**, primarily due to an increase in deferred tax recognized during the period[65](index=65&type=chunk)[69](index=69&type=chunk) [Financial Resources and Liquidity](index=13&type=section&id=Financial%20Resources%20and%20Liquidity) As of June 30, 2021, the Group's total cash and cash equivalents increased by approximately **RMB 25.6 million** to **RMB 74.5 million**, primarily benefiting from the net proceeds from share placement, with current ratio and gearing ratio at **163.2%** and **24.0%** respectively - As of June 30, 2021, total cash and cash equivalents were approximately **RMB 74.5 million**, an increase of approximately **RMB 25.6 million** compared to December 31, 2020[66](index=66&type=chunk)[70](index=70&type=chunk) - The increase was mainly due to the completion of a placement of **179,544,600 shares** in June 2021, with net proceeds of approximately **HKD 31.0 million**[66](index=66&type=chunk)[70](index=70&type=chunk) - As of June 30, 2021, the current ratio was **163.2%**, and the gearing ratio was **24.0%**[67](index=67&type=chunk)[71](index=71&type=chunk) [Capital Expenditure and Pledged Assets](index=14&type=section&id=Capital%20Expenditure%20and%20Pledged%20Assets) During the reporting period, the Group invested approximately **RMB 8.1 million** in property, plant, and equipment, with bank loans secured by right-of-use assets, buildings, and investment properties - For the six months ended June 30, 2021, the Group invested approximately **RMB 8.1 million** in property, plant, and equipment[75](index=75&type=chunk)[80](index=80&type=chunk) - Bank loans are secured by right-of-use assets with a carrying amount of approximately **RMB 6.8 million**, buildings of approximately **RMB 83.0 million**, and investment properties of approximately **RMB 27.2 million**[76](index=76&type=chunk)[81](index=81&type=chunk) [Events After Reporting Date](index=14&type=section&id=Events%20After%20Reporting%20Date) Subsequent to the reporting period, the company acquired a patent in July 2021 and received a writ of summons for legal proceedings concerning a proposed sale of the company's controlling stake, which the Board considers groundless - On July 9, 2021, the company acquired a **75% equity interest** in Hmda Culture International Co., Limited for a cash consideration of **HKD 11 million** to obtain a patent, with the transaction completed on July 30[78](index=78&type=chunk)[83](index=83&type=chunk) - On July 30, 2021, the company and certain former directors and shareholders received a writ of summons for legal proceedings concerning a proposed sale of the company's controlling stake[85](index=85&type=chunk)[88](index=88&type=chunk) - The Board considers the allegations against the company in the writ of summons to be **groundless and baseless**[85](index=85&type=chunk)[88](index=88&type=chunk) [Other Management Discussion](index=15&type=section&id=Other%20Management%20Discussion) This section discusses the company's foreign currency risk management, employee and remuneration policies, and the use of proceeds from share placement, highlighting the company's operational and financial management strategies [Foreign Currency Exposure](index=15&type=section&id=Foreign%20Currency%20Exposure) The company faces currency risk from its predominantly USD-denominated overseas sales, currently lacking a Group foreign currency hedging policy, but management will monitor and consider hedging significant foreign currency exposures - The company's currency risk primarily arises from **USD-denominated overseas sales**[86](index=86&type=chunk)[89](index=89&type=chunk) - There is currently **no Group foreign currency hedging policy**, but management will monitor foreign exchange risk and consider hedging when necessary[86](index=86&type=chunk)[89](index=89&type=chunk) [Employees and Remuneration Policy](index=15&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2021, the company had approximately **924 employees**, with total staff costs of approximately **RMB 32.6 million** during the period; remuneration policy is regularly reviewed based on market practice, employee performance, and company financial performance, with no significant changes - As of June 30, 2021, the company had approximately **924 employees**[87](index=87&type=chunk)[90](index=90&type=chunk) - Total staff costs for the period were approximately **RMB 32.6 million**[87](index=87&type=chunk)[90](index=90&type=chunk) - Remuneration policy is regularly reviewed based on market practice, employee performance, and company financial performance, with **no significant changes**[87](index=87&type=chunk)[90](index=90&type=chunk) [Use of Proceeds](index=16&type=section&id=Use%20of%20Proceeds) The net proceeds from the June 2021 share placement were approximately **HKD 31.0 million**, with approximately **HKD 15.7 million** allocated to repay existing debt principal and interest, and approximately **HKD 15.3 million** for general working capital and intellectual property acquisition; as of June 30, 2021, approximately **HKD 4.3 million** had been used for general working capital - Net proceeds from the June 2021 share placement were approximately **HKD 31.0 million**[93](index=93&type=chunk)[95](index=95&type=chunk) - The net proceeds are intended for repaying approximately **HKD 15.7 million** of existing debt principal and interest, and approximately **HKD 15.3 million** for general working capital and intellectual property acquisition[93](index=93&type=chunk)[95](index=95&type=chunk) - As of June 30, 2021, approximately **HKD 4.3 million** had been used for general working capital[94](index=94&type=chunk)[96](index=96&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the condensed consolidated statement of profit or loss and other comprehensive income, detailing the company's financial performance for the reporting period [Profit or Loss Statement](index=17&type=section&id=Profit%20or%20Loss%20Statement) For the six months ended June 30, 2021, the company recorded a loss for the period of **RMB 5,154 thousand**, a significant reduction from **RMB 43,319 thousand** in the prior period, with revenue at **RMB 101,928 thousand** and gross profit at **RMB 27,533 thousand** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 101,928 | 117,378 | | Cost of sales | (74,395) | (86,082) | | Gross profit | 27,533 | 31,296 | | Other income | 7,972 | 4,506 | | Selling expenses | (1,768) | (2,642) | | Net impairment loss on property, plant and equipment | (4,512) | (37,294) | | Reversal of impairment loss on investment properties | 3,313 | – | | Fair value loss on financial assets at fair value through profit or loss | (349) | – | | Administrative and other operating expenses | (33,440) | (35,035) | | Operating loss | (1,251) | (39,169) | | Finance costs | (2,656) | (3,461) | | Loss before income tax | (3,907) | (42,630) | | Income tax expense | (1,247) | (689) | | **Loss for the period** | **(5,154)** | **(43,319)** | | Other comprehensive income/(expense) for the period | 2,110 | (569) | | Total comprehensive expense for the period | (3,044) | (43,888) | | Basic and diluted loss per share (RMB cents) | (0.57) | (4.83) | [Condensed Consolidated Statement of Financial Position](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the condensed consolidated statement of financial position, outlining the company's assets, liabilities, and equity at the end of the reporting period [Statement of Financial Position](index=18&type=section&id=Statement%20of%20Financial%20Position) As of June 30, 2021, the Group's total assets were **RMB 493,600 thousand**, total liabilities were **RMB 119,305 thousand**, and total equity was **RMB 374,295 thousand**, with net current assets significantly increasing to **RMB 71,868 thousand** Condensed Consolidated Statement of Financial Position (As at period end) | Indicator | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | **Non-current assets** | | | | Right-of-use assets | 9,082 | 9,258 | | Investment properties | 62,069 | 58,915 | | Property, plant and equipment | 203,612 | 217,707 | | Deferred tax assets | 25,719 | 26,172 | | **Current assets** | | | | Inventories | 19,546 | 14,119 | | Trade and other receivables | 88,449 | 67,639 | | Bank balances and cash | 74,474 | 48,908 | | **Current liabilities** | | | | Trade and other payables | 25,071 | 19,289 | | Contract liabilities | 3,962 | 170 | | Short-term borrowings | 81,488 | 81,429 | | **Total assets** | **493,600** | **460,112** | | **Total liabilities** | **119,305** | **108,584** | | **Total equity** | **374,295** | **351,528** | | Net current assets | 71,868 | 32,646 | [Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the condensed consolidated statement of changes in equity, detailing movements in the company's equity components during the reporting period [Statement of Changes in Equity](index=19&type=section&id=Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2021, the company's total equity increased from **RMB 351,528 thousand** at the beginning of the period to **RMB 374,295 thousand**, primarily due to net proceeds from share issuance of **RMB 25,811 thousand**, despite a loss for the period of **RMB 5,154 thousand** Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | Share Capital (RMB thousands) | Share Premium (RMB thousands) | Capital Reserve (RMB thousands) | Statutory Reserve (RMB thousands) | Exchange Reserve (RMB thousands) | Retained Profits (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | January 1, 2021 | 7,352 | 196,839 | 85,160 | 36,409 | 5,482 | 20,286 | 351,528 | | Loss for the period | – | – | – | – | – | (5,154) | (5,154) | | Other comprehensive income | – | – | – | – | 2,110 | – | 2,110 | | Transactions with owners: | | | | | | | | | - Transfer to statutory reserve | – | – | – | 92 | – | (92) | – | | - Issue of share capital | 1,495 | 24,316 | – | – | – | – | 25,811 | | **June 30, 2021** | **8,847** | **221,155** | **85,160** | **36,501** | **7,592** | **15,040** | **374,295** | - Net proceeds from share capital issued during the period amounted to **RMB 25,811 thousand**, primarily from share placement[106](index=106&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the condensed consolidated statement of cash flows, detailing the company's cash movements from operating, investing, and financing activities [Cash Flow Statement](index=21&type=section&id=Cash%20Flow%20Statement) For the six months ended June 30, 2021, net cash inflow from operating activities was **RMB 130 thousand**, net cash outflow from investing activities was **RMB 632 thousand**, and net cash inflow from financing activities was **RMB 26,011 thousand**, resulting in a net increase in cash and cash equivalents of **RMB 25,509 thousand** Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 130 | (26,206) | | Net cash (used in)/generated from investing activities | (632) | 2,635 | | Net cash generated from financing activities | 26,011 | 18,632 | | Net increase/(decrease) in cash and cash equivalents | 25,509 | (4,939) | | Cash and cash equivalents at beginning of period | 48,908 | 78,761 | | Effect of foreign exchange rate changes | 57 | (244) | | **Cash and cash equivalents at end of period** | **74,474** | **73,578** | - Operating cash flow shifted from a net outflow in the prior period to a **net inflow**, indicating improved operating performance[109](index=109&type=chunk) - Cash inflow from financing activities primarily stemmed from proceeds from share issuance of **RMB 26,160 thousand**[109](index=109&type=chunk) [Notes to the Interim Financial Report](index=21&type=section&id=Notes%20to%20the%20Interim%20Financial%20Report) This section provides detailed notes to the interim financial report, offering additional context and breakdowns for the financial statements [GENERAL INFORMATION](index=22&type=section&id=GENERAL%20INFORMATION) The company was incorporated in the Cayman Islands, with shares listed on the Main Board of the Hong Kong Stock Exchange, primarily engaged in the production and sale of cosplay products, lingerie, and factory leasing; the ultimate controlling shareholder is Mr. Chen Shengbi - The company was incorporated in the Cayman Islands on **February 12, 2015**, with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited[111](index=111&type=chunk)[114](index=114&type=chunk) - Its principal activities include the design, development, production, sales, and marketing of cosplay products (including costumes and wigs) and lingerie, as well as factory leasing[112](index=112&type=chunk)[115](index=115&type=chunk) - The ultimate controlling shareholder is **Mr. Chen Shengbi**, through his wholly-owned company Master Professional Holdings Limited[113](index=113&type=chunk)[115](index=115&type=chunk) [BASIS OF PREPARATION](index=23&type=section&id=BASIS%20OF%20PREPARATION) The condensed consolidated interim financial information is prepared in accordance with the Listing Rules of the Stock Exchange and Hong Kong Accounting Standard 34, is unaudited, presented in RMB thousands, and should be read in conjunction with the annual consolidated financial statements - The condensed consolidated interim financial information is prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[117](index=117&type=chunk)[120](index=120&type=chunk) - This information is **unaudited** and presented in **RMB thousands**[118](index=118&type=chunk)[119](index=119&type=chunk) - It should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2020[117](index=117&type=chunk)[120](index=120&type=chunk) [SIGNIFICANT ACCOUNTING POLICIES](index=24&type=section&id=SIGNIFICANT%20ACCOUNTING%20POLICIES) This period's financial information follows the accounting policies adopted in the 2020 annual consolidated financial statements, incorporating new and revised Hong Kong Financial Reporting Standards effective from January 1, 2021, with no significant impact on the results and financial position for the current and prior periods - The condensed consolidated interim financial information follows the accounting policies adopted in the 2020 annual consolidated financial statements[121](index=121&type=chunk)[124](index=124&type=chunk) - New and revised Hong Kong Financial Reporting Standards effective from **January 1, 2021**, including amendments to Interest Rate Benchmark Reform – Phase 2, have been adopted[122](index=122&type=chunk)[125](index=125&type=chunk) - The adoption of new standards has **no significant impact** on the preparation and presentation of results and financial position for the current and prior periods[122](index=122&type=chunk)[125](index=125&type=chunk) [ESTIMATES AND JUDGEMENTS](index=25&type=section&id=ESTIMATES%20AND%20JUDGEMENTS) The preparation of condensed consolidated interim financial information involves management making accounting judgments, estimates, and assumptions, with these judgments and estimates sharing the same primary sources of significant estimation uncertainty as those applied in the 2020 annual consolidated financial statements - The preparation of financial information requires management to make accounting judgments, estimates, and assumptions, affecting the reported amounts of assets, liabilities, income, and expenses[127](index=127&type=chunk) - The primary sources of significant judgments and estimation uncertainty made in the current period are the **same as those applied in the 2020 annual consolidated financial statements**[127](index=127&type=chunk) [SEGMENT INFORMATION](index=25&type=section&id=SEGMENT%20INFORMATION) The Group's operating segments include wigs, apparel and others, and factory leasing, with strategic decisions based on the adjusted operating results of these segments; segment results exclude unallocated finance costs, bank interest income, gain on disposal of financial assets, unallocated income, corporate expenses, and income tax expense - The Group's principal product and service lines are identified as operating segments, including **wigs, apparel and others, and factory leasing**[127](index=127&type=chunk)[130](index=130&type=chunk) - Segment results represent operating results before unallocated finance costs, bank interest income, gain on disposal of financial assets at fair value through profit or loss, unallocated income, corporate expenses, and income tax expense[127](index=127&type=chunk) Revenue and Results by Operating and Reportable Segments (For the six months ended June 30) | Segment | 2021 Revenue (RMB thousands) | 2021 Segment Results (RMB thousands) | 2020 Revenue (RMB thousands) | 2020 Segment Results (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Wigs | 11,189 | (9,074) | 35,990 | (15,764) | | Apparel and Others | 90,739 | 25,281 | 81,388 | 7,125 | | Factory Leasing | – | (3,411) | – | (304) | | **Total** | **101,928** | **12,796** | **117,378** | **(8,943)** | Reportable Segment Assets and Liabilities (As at period end) | Indicator | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Reportable segment assets | 493,600 | 460,112 | | Reportable segment liabilities | 119,305 | 108,584 | [REVENUE](index=29&type=section&id=REVENUE) The Group's revenue primarily derives from the sale of wigs, apparel, and other products, with Contract Manufacturing Services (CMS) contributing the vast majority of revenue, while Original Brand Manufacturing (OBM) revenue significantly declined - The Group's revenue refers to the net invoiced value of goods sold, primarily from the sale of **wigs, apparel, and other products**[139](index=139&type=chunk)[140](index=140&type=chunk) Revenue by Product Category (For the six months ended June 30) | Product Category | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Wigs | 11,189 | 35,990 | | Apparel and Others | 90,739 | 81,388 | | **Total** | **101,928** | **117,378** | Revenue by Business Model (For the six months ended June 30) | Business Model | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Contract Manufacturing Services Business | 92,680 | 81,104 | | Original Brand Manufacturing Business | 9,248 | 36,274 | | **Total** | **101,928** | **117,378** | [OTHER INCOME](index=31&type=section&id=OTHER%20INCOME) For the six months ended June 30, 2021, other income increased from **RMB 4,506 thousand** to **RMB 7,972 thousand**, primarily benefiting from increased gain on disposal of financial assets at fair value through profit or loss, rental income, and utility fee income Other Income Details (For the six months ended June 30) | Income Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Exchange gain | – | 331 | | Bank interest income | 84 | 113 | | Government grants | 439 | 912 | | Gain on disposal of financial assets at fair value through profit or loss | 2,835 | – | | Rental income from operating leases of plant and machinery | 827 | 818 | | Rental income from operating leases of investment properties | 1,208 | 1,563 | | Income related to net investment in leases | 245 | 658 | | Utility service fee income | 1,283 | – | | Subcontracting income | 513 | – | | Others | 538 | 111 | | **Total** | **7,972** | **4,506** | - Gain on disposal of financial assets at fair value through profit or loss was **RMB 2,835 thousand**, representing a new major source of income for the period[148](index=148&type=chunk) - Utility service fee income increased from zero to **RMB 1,283 thousand**[148](index=148&type=chunk) [LOSS BEFORE INCOME TAX](index=32&type=section&id=LOSS%20BEFORE%20INCOME%20TAX) For the six months ended June 30, 2021, loss before income tax significantly narrowed to **RMB 3,907 thousand**, primarily benefiting from a substantial reduction in impairment loss on property, plant, and equipment and the reversal of impairment loss on investment properties Loss Before Income Tax Details (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories recognized | 44,499 | 67,034 | | Depreciation – property, plant and equipment | 16,417 | 18,615 | | Depreciation – investment properties | 1,442 | 626 | | Depreciation – right-of-use assets | 115 | 350 | | Impairment loss on property, plant and equipment | 4,512 | 37,294 | | Reversal of impairment loss on investment properties | (3,313) | – | | Net exchange loss/(gain) | 693 | (331) | | Fair value loss on financial assets at fair value through profit or loss | 349 | – | | Research and development costs | 8,556 | 9,646 | | Government grants | (439) | (912) | | Staff costs | 32,646 | 25,610 | - Impairment loss on property, plant, and equipment significantly decreased from **RMB 37,294 thousand** in 2020 to **RMB 4,512 thousand** in 2021[151](index=151&type=chunk) - Reversal of impairment loss on investment properties of **RMB 3,313 thousand** had a positive impact on narrowing the loss[151](index=151&type=chunk) [INCOME TAX EXPENSES](index=33&type=section&id=INCOME%20TAX%20EXPENSES) For the six months ended June 30, 2021, income tax expense increased to **RMB 1,247 thousand**, primarily due to an increase in deferred tax; Chinese subsidiaries are subject to a **25% corporate income tax rate**, with some high-tech enterprises enjoying a preferential rate of **15%** Income Tax Expense Details (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Current tax – PRC corporate income tax | 794 | 620 | | Current tax – Hong Kong profits tax | – | 69 | | Deferred tax | 453 | – | | **Income tax expense** | **1,247** | **689** | - Chinese subsidiaries are subject to a **25% corporate income tax rate**, with some high-tech enterprises eligible for a **15% preferential tax rate** for three years[154](index=154&type=chunk)[157](index=157&type=chunk) - Hong Kong profits tax for the period was **zero** due to no assessable profits[153](index=153&type=chunk)[156](index=156&type=chunk) [DIVIDENDS](index=34&type=section&id=DIVIDENDS) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2021, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2021 (2020: nil)[158](index=158&type=chunk)[160](index=160&type=chunk) [LOSS PER SHARE](index=34&type=section&id=LOSS%20PER%20SHARE) For the six months ended June 30, 2021, basic loss per share was **RMB (0.57) cents**, a significant reduction from **RMB (4.83) cents** in the prior period, with no diluted shares outstanding, thus no diluted earnings per share presented - Basic loss per share was **RMB (0.57) cents** (2020: **RMB (4.83) cents**), indicating a significant narrowing of loss[160](index=160&type=chunk) - Calculation is based on loss attributable to equity holders of the company of **RMB 5,154 thousand** and a weighted average of **907,643,000 ordinary shares** outstanding[158](index=158&type=chunk)[160](index=160&type=chunk) - Diluted earnings per share is not presented as there were **no dilutive shares** outstanding during the period[159](index=159&type=chunk)[160](index=160&type=chunk) [RIGHT-OF-USE ASSETS](index=35&type=section&id=RIGHT-OF-USE%20ASSETS) As of June 30, 2021, the carrying amount of right-of-use assets was approximately **RMB 9,082 thousand**, primarily prepaid land lease payments in China, of which **RMB 6,781 thousand** was pledged to secure bank loans Movement in Right-of-Use Assets (As at period end) | Item | Prepaid land lease payments (RMB thousands) | Other properties leased for own use (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Carrying amount at January 1, 2020 | 10,211 | 786 | 10,997 | | Depreciation for the year | (239) | (412) | (651) | | Transferred to investment properties | (714) | (374) | (1,088) | | Carrying amount at December 31, 2020 | 9,258 | – | 9,258 | | Carrying amount at January 1, 2021 | 9,258 | – | 9,258 | | Depreciation for the period | (115) | – | (115) | | Transferred to investment properties | (61) | – | (61) | | **Carrying amount at June 30, 2021** | **9,082** | **–** | **9,082** | - Right-of-use assets primarily refer to **prepaid land lease payments** for leased land located in China[163](index=163&type=chunk)[166](index=166&type=chunk) - As of June 30, 2021, right-of-use assets of approximately **RMB 6,781 thousand** were pledged to secure bank loans[163](index=163&type=chunk)[166](index=166&type=chunk) [INVESTMENT PROPERTIES](index=36&type=section&id=INVESTMENT%20PROPERTIES) As of June 30, 2021, the carrying amount of investment properties increased to **RMB 62,069 thousand**, with a reversal of impairment loss of **RMB 3,313 thousand** recorded for the period; fair value is assessed using the income approach, with key inputs being estimated rent and discount rate Movement in Carrying Amount of Investment Properties (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Carrying amount at January 1 | 58,915 | 20,754 | | Additions | – | 10,893 | | Transferred from right-of-use assets | 61 | 1,088 | | Transferred from property, plant and equipment | 1,222 | 59,112 | | Depreciation | (1,442) | (1,665) | | Reversal of/(provision for) impairment loss | 3,313 | (20,000) | | **Carrying amount** | **62,069** | **58,915** | - As of June 30, 2021, the fair value of investment properties was **RMB 84,208 thousand**, with a reversal of impairment loss of **RMB 3,313 thousand** recorded[174](index=174&type=chunk)[175](index=175&type=chunk) - Fair value is assessed using the income approach, with key unobservable inputs being estimated rent (**RMB 12-15 per square meter**) and discount rate (**6%-6.5%**)[177](index=177&type=chunk)[179](index=179&type=chunk) - As of June 30, 2021, investment properties with a carrying amount of **RMB 27,233 thousand** were pledged as collateral for bank loans[179](index=179&type=chunk) [PROPERTY, PLANT AND EQUIPMENT](index=39&type=section&id=PROPERTY%20PLANT%20AND%20EQUIPMENT) As of June 30, 2021, the net carrying amount of property, plant, and equipment was approximately **RMB 203,612 thousand**, with new additions of approximately **RMB 8,056 thousand** and an impairment loss of **RMB 4,512 thousand** recognized during the period; certain buildings were pledged to secure bank loans Movement in Net Carrying Amount of Property, Plant and Equipment (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Buildings | 143,733 | 145,378 | | Plant and machinery | 15,589 | 16,050 | | Motor vehicles | 493 | 630 | | Furniture and fixtures | 536 | 756 | | Leasehold improvements | 43,261 | 54,893 | | **Total** | **203,612** | **217,707** | - Additions during the period amounted to approximately **RMB 8,056 thousand**, primarily for buildings[185](index=185&type=chunk)[188](index=188&type=chunk) - An impairment loss of **RMB 4,512 thousand** was recognized during the period, mainly due to continuous decline in turnover[192](index=192&type=chunk)[204](index=204&type=chunk)[207](index=207&type=chunk) - As of June 30, 2021, buildings with a total value of approximately **RMB 83,023 thousand** were pledged to banks[199](index=199&type=chunk) [TRADEMARK](index=41&type=section&id=TRADEMARK) As of June 30, 2021, the cost and accumulated amortization of trademarks were both **RMB 500 thousand**, resulting in a net carrying amount of zero Net Carrying Amount of Trademark (As at period end) | Item | Trademark (RMB thousands) | | :--- | :--- | | Cost | 500 | | Accumulated amortization | 500 | | **Net carrying amount** | **–** | [INVENTORIES](index=41&type=section&id=INVENTORIES) As of June 30, 2021, total inventories increased to **RMB 19,546 thousand**, primarily composed of raw materials, representing a 38.4% year-on-year increase Inventories Details (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Raw materials | 18,144 | 12,748 | | Work-in-progress | 899 | 961 | | Finished goods | 503 | 410 | | **Total** | **19,546** | **14,119** | - Raw materials inventory increased from **RMB 12,748 thousand** to **RMB 18,144 thousand**, an increase of approximately **42.3%**[210](index=210&type=chunk) [TRADE AND OTHER RECEIVABLES](index=42&type=section&id=TRADE%20AND%20OTHER%20RECEIVABLES) As of June 30, 2021, total trade and other receivables increased to **RMB 88,449 thousand**; net trade receivables were **RMB 62,208 thousand**, with the 0-30 day aging category being the largest; prepayments, other tax receivables, and deposits significantly increased Trade and Other Receivables Details (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables – from third parties | 62,989 | 62,807 | | Less: Provision for expected credit losses | (781) | (696) | | **Net trade receivables** | **62,208** | **62,111** | | Deposits, prepayments and other receivables | 26,241 | 5,528 | | **Total** | **88,449** | **67,639** | Aging Analysis of Trade Receivables (As at period end) | Aging | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | 0–30 days | 31,884 | 9,272 | | 31–60 days | 10,869 | 7,752 | | 61–90 days | – | 7,781 | | 91–365 days | 15,847 | 37,306 | | Over 1 year | 3,608 | – | | **Total** | **62,208** | **62,111** | - Prepayments, other tax receivables, and deposits significantly increased from a total of **RMB 5,486 thousand** as of December 31, 2020, to a total of **RMB 25,893 thousand** as of June 30, 2021[212](index=212&type=chunk) - Provision for expected credit losses increased from **RMB 696 thousand** to **RMB 781 thousand**[215](index=215&type=chunk)[218](index=218&type=chunk) [FINANCIAL ASSET AT FAIR VALUE THROUGH PROFIT OR LOSS](index=44&type=section&id=FINANCIAL%20ASSET%20AT%20FAIR%20VALUE%20THROUGH%20PROFIT%20OR%20LOSS) As of June 30, 2021, financial assets at fair value through profit or loss amounted to **RMB 651 thousand**, entirely comprising unlisted equity investments; the CSG convertible bonds were sold during the period, resulting in a fair value loss of **RMB 349 thousand** Financial Assets at Fair Value Through Profit or Loss Details (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Unlisted convertible bonds | – | 5,557 | | Unlisted equity investments | 651 | – | | **Total** | **651** | **5,557** | - The CSG convertible bonds were sold to an independent third party on **March 15, 2021**, for a cash consideration of **HKD 10 million** (approximately **RMB 8,340 thousand**)[237](index=237&type=chunk) - Unlisted equity investments recorded a fair value loss of **RMB 349 thousand** during the period, with a fair value of **RMB 651 thousand** at period end[240](index=240&type=chunk) [NET INVESTMENT IN LEASES](index=49&type=section&id=NET%20INVESTMENT%20IN%20LEASES) As of June 30, 2021, net investment in leases amounted to **RMB 9,998 thousand**, primarily from subleasing factory premises to third parties, with **RMB 3,065 thousand** due within one year and **RMB 6,933 thousand** due after one year Net Investment in Leases Details (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Gross investment in leases | 10,639 | 10,661 | | Less: Unearned finance income | (641) | (886) | | **Net investment in leases** | **9,998** | **9,775** | | Portion due within one year | 3,065 | 2,996 | | Portion due after one year | 6,933 | 6,779 | - The Group entered into three lease contracts for certain factory premises, with initial lease terms of two to four years, and all leased factory premises are subleased to third parties to earn rental income[248](index=248&type=chunk) - Net investment in leases refers to two sublease arrangements entered into by the Group with sublessees for factory premises, typically with an initial lease term of **four years**[248](index=248&type=chunk) [DEFERRED TAX ASSETS](index=51&type=section&id=DEFERRED%20TAX%20ASSETS) As of June 30, 2021, deferred tax assets amounted to **RMB 25,719 thousand**, a slight decrease from the beginning of the period, primarily related to asset impairment losses; the company has not recognized deferred income tax for withholding tax on unremitted earnings of Chinese subsidiaries Movement in Deferred Tax Assets (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | January 1 | 26,172 | 13,393 | | Recognized in profit or loss | (453) | 12,779 | | **June 30/December 31** | **25,719** | **26,172** | Composition of Deferred Tax Assets (As at period end) | Item | Asset impairment losses (RMB thousands) | Others (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | January 1, 2021 | 26,338 | (166) | 26,172 | | Recognized in profit or loss | (453) | – | (453) | | **June 30, 2021** | **25,885** | **(166)** | **25,719** | - The company has not recognized deferred income tax for withholding tax payable on unremitted earnings of Chinese subsidiaries, with total related temporary differences of approximately **RMB 137,943 thousand**[255](index=255&type=chunk)[256](index=256&type=chunk) [BANK BALANCES AND CASH](index=52&type=section&id=BANK%20BALANCES%20AND%20CASH) As of June 30, 2021, total bank balances and cash amounted to **RMB 74,474 thousand**, of which approximately **RMB 60,443 thousand** were RMB-denominated balances deposited in banks in China, with RMB being a non-freely convertible currency Bank Balances and Cash (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Bank balances and cash | 74,474 | 48,908 | - Approximately **RMB 60,443 thousand** were RMB-denominated balances deposited in banks in China[258](index=258&type=chunk)[259](index=259&type=chunk) - RMB is a **non-freely convertible currency**, but the Group can convert foreign currencies through authorized banks[258](index=258&type=chunk)[259](index=259&type=chunk) [TRADE AND OTHER PAYABLES](index=53&type=section&id=TRADE%20AND%20OTHER%20PAYABLES) As of June 30, 2021, total trade and other payables increased to **RMB 25,071 thousand**; trade payables were primarily within 0-30 days aging, and salaries payable and other payables also increased Trade and Other Payables Details (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Trade payables – due to third parties | 14,436 | 9,144 | | Accrued expenses and other payables | 10,635 | 10,145 | | **Total** | **25,071** | **19,289** | Aging Analysis of Trade Payables (As at period end) | Aging | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | 0–30 days | 14,436 | 9,144 | - Salaries payable increased from **RMB 3,395 thousand** to **RMB 6,598 thousand**[265](index=265&type=chunk) [CONTRACT LIABILITIES](index=54&type=section&id=CONTRACT%20LIABILITIES) As of June 30, 2021, contract liabilities significantly increased to **RMB 3,962 thousand**, primarily from deposits received for production orders; all outstanding contract liabilities at the beginning of the period were recognized as revenue during the period Contract Liabilities (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Contract liabilities arising from deposits received for production orders | 3,962 | 170 | - Contract liabilities significantly increased, reflecting an increase in **deposits received for production orders** during the period[269](index=269&type=chunk) - All outstanding contract liabilities at the beginning of the period were **recognized as revenue** during the period[271](index=271&type=chunk) [LEASE LIABILITIES](index=55&type=section&id=LEASE%20LIABILITIES) As of June 30, 2021, total lease liabilities amounted to **RMB 8,262 thousand**, with **RMB 2,623 thousand** due within one year; lease liabilities primarily arise from office and factory leases and are secured by related assets Maturity Analysis of Lease Liabilities (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Total minimum lease payments | 8,766 | 8,395 | | Less: Future finance charges | (504) | (699) | | **Present value of lease liabilities** | **8,262** | **7,696** | | Portion due within one year | 2,623 | 2,190 | | Portion due after one year | 5,639 | 5,506 | - Lease liabilities primarily arise from **office and factory leases**, with factory leases including renewal options[283](index=283&type=chunk)[284](index=284&type=chunk) - Lease liabilities are effectively **secured by the related assets**, meaning that if the Group fails to make payments, the rights to the leased assets will revert to the lessor[276](index=276&type=chunk)[277](index=277&type=chunk) [SHORT TERM BORROWINGS](index=58&type=section&id=SHORT%20TERM%20BORROWINGS) As of June 30, 2021, total short-term borrowings amounted to **RMB 81,488 thousand**; secured bank loans bear interest at annual rates of **4.15% to 4.86%**, while unsecured borrowings bear a fixed annual interest rate of **14%** Short-Term Borrowings (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Short-term borrowings | 81,488 | 81,429 | - Secured bank loans bear interest at annual rates ranging from **4.15% to 4.86%** and are secured by certain Group assets (right-of-use assets, investment properties, buildings)[288](index=288&type=chunk)[290](index=290&type=chunk) - Unsecured borrowings totaled **RMB 12,488 thousand** and bear a fixed annual interest rate of **14%**[289](index=289&type=chunk)[290](index=290&type=chunk) [SHARE CAPITAL](index=59&type=section&id=SHARE%20CAPITAL) As of June 30, 2021, issued and fully paid share capital increased to **RMB 8,847 thousand**, with a total of **1,077,267,600 shares** outstanding, primarily due to the placement of **179,544,600 ordinary shares** in June 2021 Movement in Share Capital (As at period end) | Item | Number of Shares | Share Capital (RMB thousands) | | :--- | :--- | :--- | | January 1, 2020 and December 31, 2020 | 897,723,000 | 7,352 | | Shares issued by way of placement | 179,544,600 | 1,495 | | **June 30, 2021** | **1,077,267,600** | **8,847** | - On **June 21, 2021**, the company placed **179,544,600 ordinary shares** at **HKD 0.175 per share**, with net proceeds of approximately **HKD 31.0 million**[293](index=293&type=chunk) - Of the proceeds, **RMB 1,495 thousand** was credited to the share capital account, and approximately **RMB 24,316 thousand** was credited to the share premium account[293](index=293&type=chunk) [LEASE COMMITMENTS](index=59&type=section&id=LEASE%20COMMITMENTS) As of June 30, 2021, short-term lease commitments as a lessee amounted to **RMB 12 thousand**; as a lessor, total future minimum lease receivables for plant and machinery were **RMB 2,413 thousand**, and for investment properties were **RMB 2,915 thousand** Short-Term Lease Commitments as Lessee (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Land and buildings: within one year | 12 | 47 | Total Future Minimum Lease Receivables as Lessor (As at period end) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Plant and machinery: less than one year | 1,645 | 1,870 | | Plant and machinery: one to two years | 768 | 1,478 | | **Total Plant and Machinery** | **2,413** | **3,348** | | Investment properties: less than one year | 990 | 651 | | Investment properties: one to two years | 964 | 528 | | Investment properties: two to three years | 517 | 396 | | Investment properties: three to four years | 335 | – | | Investment properties: four to five years | 109 | – | | **Total Investment Properties** | **2,915** | **1,575** | - The Group leases out plant and machinery for an initial term of **five years**, with an option to renew at expiry[299](index=299&type=chunk)[301](index=301&type=chunk) - The Group leases out investment properties for initial terms typically ranging from **2-5 years**, with no early termination, extension, or renewal options in the contracts[301](index=301&type=chunk) [RELATED PARTY TRANSACTIONS](index=62&type=section&id=RELATED%20PARTY%20TRANSACTIONS) For the six months ended June 30, 2021, total key management personnel remuneration amounted to **RMB 1,343 thousand**, comprising short-term employee benefits and contributions to retirement benefit schemes Key Management Personnel Remuneration (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Short-term employee benefits | 1,317 | 1,236 | | Contributions to retirement benefit schemes | 26 | 24 | | **Total** | **1,343** | **1,260** | [FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS](index=62&type=section&id=FAIR%20VALUE%20MEASUREMENT%20OF%20FINANCIAL%20INSTRUMENTS) Financial assets and liabilities are measured at fair value across three levels (Level 1, Level 2, Level 3); as of June 30, 2021, financial assets at fair value through profit or loss (unlisted equity investments) amounted to **RMB 651 thousand**, categorized as Level 3 fair value measurement, with fair value assessment referencing net asset value and utilizing unobservable inputs such as market-based discount rates and control premiums - Financial assets and liabilities are measured at fair value across three levels (Level 1, Level 2, Level 3), with the level based on the observability of input data[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk) Fair Value Measurement of Financial Assets at Fair Value Through Profit or Loss (As at period end) | Item | Fair Value (RMB thousands) | Level 1 (RMB thousands) | Level 2 (RMB thousands) | Level 3 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | June 30, 2021: Unlisted equity investments | 651 | – | – | 651 | | December 31, 2020: CSG convertible bonds | 5,557 | – | – | 5,557 | - The fair value of unlisted equity investments references net asset value, using unobservable inputs such as market-based discount rates and control premiums[312](index=312&type=chunk)[316](index=316&type=chunk) - The fair value measurement of CSG convertible bonds uses a default model, with the primary unobservable input being the recovery rate; a **1% increase in recovery rate** would increase fair value and reduce loss by **RMB 622 thousand**[314](index=314&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) [SUBSEQUENT EVENTS](index=65&type=section&id=SUBSEQUENT%20EVENTS) Subsequent to the reporting period, the company acquired a patent in July 2021 and received a writ of summons for legal proceedings concerning a proposed sale of the company's controlling stake, which the Board considers groundless - On July 9, 2021, the company acquired a **75% equity interest** in Hmda Culture International Co., Limited for a cash consideration of **HKD 11 million** to obtain a patent, with the transaction completed on July 30[319](index=319&type=chunk) - On July 30, 2021, the company and certain former directors and shareholders received a writ of summons for legal proceedings concerning a proposed sale of the company's controlling stake[319](index=319&type=chunk) - The Board considers the allegations against the company in the writ of summons to be **groundless and baseless**[319](index=319&type=chunk) [Other Information](index=65&type=section&id=Other%20Information) This section provides additional information regarding interim dividends, directors' interests, securities transactions, share option schemes, shareholder disclosures, and corporate governance [Interim Dividend](index=66&type=section&id=Interim%20Dividend) The Board has resolved not to declare any interim dividend for the six months ended June 30, 2021, consistent with the corresponding period in 2020 - The Board has resolved **not to declare any interim dividend** for the six months ended June 30, 2021 (June 30, 2020: nil)[322](index=322&type=chunk)[325](index=325&type=chunk) [Directors' and Chief Executive's Interests](index=66&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of June 30, 2021, none of the company's directors, chief executive, and/or their associates held any interests or short positions in the shares, underlying shares, and debentures of the company or its associated corporations - As of June 30, 2021, none of the company's directors, chief executive, and/or any of their respective associates held any interests or short positions in the shares, underlying shares, and debentures of the company or its associated corporations[323](index=323&type=chunk)[326](index=326&type=chunk) [Purchase, Redemption or Sale of Listed Securities](index=66&type=section&id=Purchase%20Redemption%20or%20Sale%20of%20Listed%20Securities) For the six months ended June 30, 2021, neither the company nor its subsidiaries purchased, redeemed, or sold any of the company's listed securities - For the six months ended June 30, 2021, neither the company nor its subsidiaries purchased, redeemed, or sold any of the company's listed securities[324](index=324&type=chunk) [Share Option Scheme](index=66&type=section&id=Share%20Option%20Scheme) The company's share option scheme, adopted on August 7, 2015, allows for granting options to directors, employees, and other eligible participants, involving a maximum of **75,000,000 new shares**; no options were granted or exercised during the reporting period, and no outstanding options existed at period end - The company may grant share options to directors, Group employees, and other eligible participants under the share option scheme, involving a maximum of **75,000,000 new shares**[324](index=324&type=chunk) - During the reporting period, **no share options were granted or exercised**, and there were **no outstanding share options** at period end[329](index=329&type=chunk)[332](index=332&type=chunk) [Interests of Shareholders Disclosable Under the SFO](index=67&type=section&id=Interests%20of%20Shareholders%20Disclosable%20Under%20the%20SFO) As of June 30, 2021, major shareholders, including Master Professional Holdings Limited and its associates Mr. Chen Shengbi and Ms. Li Zhiping, as well as Mr. Lin Shixin, all held long positions in the company's shares Long Positions in Shares and Underlying Shares of the Company (As of June 30, 2021) | Name of Shareholder | Nature of Interest | Number of Ordinary Shares | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Master Professional Holdings Limited | Beneficial owner | 371,859,000 | 34.52% | | Mr. Chen Shengbi | Interest in controlled corporation | 371,859,000 | 34.52% | | Ms. Li Zhiping | Interest of spouse | 371,859,000 | 34.52% | | Mr. Lin Shixin | Beneficial owner | 78,563,000 | 7.29% | - Mr. Chen Shengbi holds **34.52%** of the company's shares through his wholly-owned Master Professional Holdings Limited[336](index=336&type=chunk)[340](index=340&type=chunk) - Ms. Li Zhiping, as Mr. Chen Shengbi's spouse, is deemed to have an interest in the same number of shares[336](index=336&type=chunk)[340](index=340&type=chunk) [Corporate Governance](index=68&type=section&id=Corporate%20Governance) The company has adopted the Corporate Governance Code in Appendix 14 of the Listing Rules and fully complied with its relevant code provisions for the six months ended June 30, 2021 - The company has adopted the Corporate Governance Code as set out in **Appendix 14 of the Listing Rules**[338](index=338&type=chunk)[340](index=340&type=chunk) - For the six months ended June 30, 2021, the company has **fully complied** with the relevant code provisions of the Corporate Governance Code[338](index=338&type=chunk)[340](index=340&type=chunk) [Model Code for Securities Transactions by the Directors](index=68&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20the%20Directors) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix 10 of the Listing Rules as its code of conduct for directors' securities transactions; all directors confirmed compliance with this Model Code during the review period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in **Appendix 10 of the Listing Rules** as its code of conduct for directors' securities transactions[339](index=339&type=chunk)[341](index=341&type=chunk) - All directors have confirmed that they complied with the Model Code throughout the review period[339](index=339&type=chunk)[342](index=342&type=chunk) [Review of Interim Results and Interim Report](index=69&type=section&id=Review%20of%2

[Financial Highlights](index=3&type=section&id=Financial%20Highlights) The company's revenue decreased by 19.2% to RMB 255.3 million in FY2020, with gross profit down 22.9%; loss for the year narrowed by 5.2% to RMB 68.4 million, with gross margin at 25.2% and net loss margin at 26.8% FY2020 Key Financial Data Comparison | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | Change Percentage | | :--- | :--- | :--- | :--- | | Revenue | 255,252 | 316,064 | (19.2%) | | Gross Profit | 64,284 | 83,401 | (22.9%) | | Loss for the year attributable to equity holders of the Company | (68,437) | (72,205) | (5.2%) | | Gross Profit Margin | 25.2% | 26.4% | (1.2%) | | Net Loss Margin | (26.8%) | (22.8%) | (4.0%) | [Corporate Information](index=5&type=section&id=Corporate%20Information) This section outlines the company's board members, committee compositions, registered office, principal place of business, share registrar, legal counsel, auditor, stock code, and website - The Board of Directors includes Executive Directors Ms. Chen Sheng (Chairperson), Mr. Xu Chengwu (Chief Executive Officer), Mr. Ma Zhijun, and Independent Non-executive Directors Mr. Zheng Jinmin, Mr. Chen Wenhua, and Ms. Peng Xu[17](index=17&type=chunk) - Mr. Zheng Jinmin chairs the Audit Committee, Mr. Chen Wenhua chairs the Remuneration Committee, and Ms. Peng Xu chairs the Nomination Committee[17](index=17&type=chunk) - The company's registered office is in the Cayman Islands, with its China headquarters and principal place of business located in Yichun Economic and Technological Development Zone, Jiangxi Province[19](index=19&type=chunk) [Chairman's Statement](index=7&type=section&id=Chairman's%20Statement) The Chairman's Statement reviews the Group's FY2020 performance, noting revenue and gross profit declines due to COVID-19, but a narrowed loss for the year; future plans include business diversification, M&A, and industry integration to expand revenue streams - In FY2020, both CMS and OBM business revenues decreased by **19.2% to RMB 255.3 million**, primarily due to weak demand and lower product prices in key markets, impacted by COVID-19 lockdowns and travel restrictions[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The Group's loss for the year narrowed by **5.2% to RMB 68.4 million**, maintaining a healthy financial position with **net current assets of RMB 32.6 million**[25](index=25&type=chunk) - Future outlook includes diversifying business and expanding revenue streams through collaborations with other IP owners, upstream and downstream industry partnerships, and M&A and industry integration[33](index=33&type=chunk)[35](index=35&type=chunk) [Directors' Business Review and Management Discussion and Analysis](index=9&type=section&id=Directors'%20Business%20Review%20and%20Management%20Discussion%20and%20Analysis) This section details the Group's FY2020 operating results, financial position, key risks, business strategies, compliance, stakeholder relations, investment activities, and human resources; revenue and gross profit declined due to COVID-19, but cost control and leasing growth narrowed losses, with future focus on diversification and integration [Key Performance Indicators](index=9&type=section&id=Key%20Performance%20Indicators) In FY2020, Group revenue decreased by 19.2%, gross profit by 22.9%, and operating loss increased by 6.6%, while loss attributable to equity holders decreased by 5.2%; net current assets grew significantly by 238.6%, but bank balances and cash decreased by 37.9% FY2020 Key Performance Indicators Comparison | Performance Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | Change Percentage | | :--- | :--- | :--- | :--- | | Revenue | 255,252 | 316,064 | (19.2%) | | Gross Profit | 64,284 | 83,401 | (22.9%) | | Operating Loss | (74,487) | (69,845) | 6.6% | | Loss for the year attributable to equity holders of the Company | (68,437) | (72,205) | (5.2%) | | Bank Balances and Cash | 48,908 | 78,761 | (37.9%) | | Net Current Assets | 32,646 | 9,642 | 238.6% | | Loss Per Share (Basic) | (7.62) cents | (8.04) cents | (5.2%) | [Business Review](index=10&type=section&id=Business%20Review) The Group designs, develops, produces, sells, and markets cosplay products and lingerie, exporting to over 20 countries; in 2020, CMS and OBM revenues declined due to COVID-19, but leasing revenue grew, leading to the establishment of a 'Party Culture Industrial Base' in Yiwu and property leases to enhance efficiency and collaboration [Product and Service Lines](index=10&type=section&id=Product%20and%20Service%20Lines) The Group's business is categorized into Contract Manufacturing Services (CMS) and Original Brand Manufacturing (OBM); in 2020, CMS accounted for 65.6% of revenue and OBM for 34.4%, with apparel and others at 70.4% and wigs at 29.6% by product type FY2020 Revenue by Business Segment | Business Segment | 2020 Revenue (RMB thousand) | Percentage of Total | 2019 Revenue (RMB thousand) | Percentage of Total | Revenue Decrease (Approximate Percentage) | | :--- | :--- | :--- | :--- | :--- | :--- | | CMS Business | 167,408 | 65.6% | 199,770 | 63.2% | (16.2%) | | OBM Business | 87,844 | 34.4% | 116,294 | 36.8% | (24.5%) | | **Total** | **255,252** | **100.0%** | **316,064** | **100.0%** | **(19.2%)** | FY2020 Revenue by Product Category | Product Category | 2020 Revenue (RMB thousand) | Percentage of Total | 2019 Revenue (RMB thousand) | Percentage of Total | Revenue Decrease (Approximate Percentage) | | :--- | :--- | :--- | :--- | :--- | :--- | | Wigs | 75,548 | 29.6% | 110,954 | 35.1% | (31.9%) | | Apparel and Others | 179,704 | 70.4% | 205,110 | 64.9% | (12.4%) | | **Total** | **255,252** | **100.0%** | **316,064** | **100.0%** | **(19.2%)** | - CMS business revenue decreased by **16.2%**, primarily due to weak demand for cosplay costumes and wigs caused by COVID-19, partially offset by increased demand for lingerie[95](index=95&type=chunk)[96](index=96&type=chunk) - OBM business revenue decreased by **24.5%**, mainly due to weak product demand and lower selling prices caused by COVID-19, significantly impacting sales performance[99](index=99&type=chunk)[102](index=102&type=chunk) [Leasing Business and Industrial Park](index=12&type=section&id=Leasing%20Business%20and%20Industrial%20Park) The Group established a 'Party Culture Industrial Base' in Yiwu in late 2019 and leased Feifeng Road property in September 2020 to integrate cultural product design, influencer marketing, creative design, R&D, and supply chain; some Yichun production facilities were subleased due to trade uncertainties, generating approximately **RMB 5.424 million** in total property leasing revenue in 2020, a **108% year-on-year increase** - The Group established a 'Party Culture Industrial Base' and e-commerce operations, service, and experience centers in Yiwu, with a total construction area of **50,579 square meters**, of which approximately **83.3%** has been leased/subleased to related industry companies[53](index=53&type=chunk)[56](index=56&type=chunk) - In September 2020, the Group leased approximately **27,600 square meters** of Feifeng Road property to further strengthen cooperation with upstream and downstream industry companies[53](index=53&type=chunk)[56](index=56&type=chunk) Total Property Leasing Revenue | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | Change Percentage | | :--- | :--- | :--- | :--- | | Total Property Leasing Revenue | 5,424 | 2,607 | 108.0% | [Principal Risks and Uncertainties](index=13&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces principal risks from global economic conditions, foreign currency fluctuations, and changes in movie and anime character popularity; COVID-19 severely disrupted global economic activity, leading to weak product demand and uncertain recovery, while RMB appreciation against the USD could impact profit margins, and character popularity directly affects product sales - Global economic and macroeconomic conditions: The COVID-19 pandemic adversely affected global economic activity, leading to weak product demand and lower selling prices, particularly in major markets like the US and UK[24](index=24&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[65](index=65&type=chunk) - Foreign currency exchange rate fluctuations: Most revenue is denominated in USD, and RMB appreciation against the USD could adversely impact profit margins, with exchange rate volatility also affecting costs and profitability[63](index=63&type=chunk)[66](index=66&type=chunk) - Changes in movie and anime character popularity: Some cosplay products rely on popular anime characters, and their market demand and revenue are affected by changes in character popularity; a decline could lead to fewer orders and lower-than-expected revenue[69](index=69&type=chunk)[70](index=70&type=chunk)[72](index=72&type=chunk) [Business Strategies](index=14&type=section&id=Business%20Strategies) The Group will pursue business expansion and revenue diversification by enhancing R&D, expanding OBM business in China to grow its customer base, collaborating with other IP owners, and strengthening partnerships with upstream and downstream industry companies to improve production efficiency - Strengthen research and development capabilities[74](index=74&type=chunk) - Expand OBM business in the China market to broaden the customer base[74](index=74&type=chunk) - Seek cooperation with other intellectual property owners to engage in different businesses[74](index=74&type=chunk) - Seek cooperation with upstream and downstream industry companies to further enhance production efficiency[74](index=74&type=chunk) [Law and Regulation](index=15&type=section&id=Law%20and%20Regulation) The Group is committed to complying with laws and regulations regarding workplace quality, product safety, and environmental protection; in 2020, no significant non-compliance or violations were found, and the Group obtained multiple certifications including ISO9001, ISO14001, and OHSAS 18001 [Workplace Quality](index=15&type=section&id=Workplace%20Quality) The Group is committed to providing equal opportunities and a safe working environment for employees, complying with all occupational health and safety legislation, with no significant non-compliance found in 2020 - The Group is committed to promoting equal opportunities for all employees in all aspects, including recruitment, compensation and benefits, training, promotion, transfer, and dismissal[77](index=77&type=chunk)[81](index=81&type=chunk) - The Group is committed to full compliance with all occupational health and safety legislation and providing a safe working environment for its employees[78](index=78&type=chunk)[81](index=81&type=chunk) [Product Safety](index=15&type=section&id=Product%20Safety) The Group prioritizes product quality and safety, with all products meeting international environmental and safety standards, including US ASTM, European EN71, and REACH, and holding ISO9001, ISO14001, and OHSAS 18001 certifications; no significant non-compliance was found in 2020 - All products are safe and fully comply with international environmental and safety standards, including US ASTM, European EN71 and REACH standards, and safety production standardization certificates[79](index=79&type=chunk)[82](index=82&type=chunk) - The Group has obtained multiple certifications, including ISO9001:2008, ISO14001:2004, and OHSAS 18001:2007[79](index=79&type=chunk)[82](index=82&type=chunk) [Environmental Protection](index=16&type=section&id=Environmental%20Protection) The Group is committed to protecting and maintaining the environment, adhering to high environmental standards, and complying with relevant laws and regulations in manufacturing and material disposal processes; no significant non-compliance or violations were found in 2020 - The Group is committed to protecting and maintaining the environment and complying with high environmental standards to fulfill relevant legal or regulatory requirements in manufacturing and material disposal processes[85](index=85&type=chunk)[89](index=89&type=chunk) - In 2020, the Group found no significant non-compliance or violations of relevant standards, rules, and regulations regarding air and greenhouse gas emissions, discharges to water and land, or the generation of hazardous or non-hazardous wastewater[86](index=86&type=chunk)[89](index=89&type=chunk) [Relationship with Suppliers and Customers](index=16&type=section&id=Relationship%20with%20Suppliers%20and%20Customers) The Group collaborates with over 70 suppliers, ensuring diverse raw material sources without long-term purchase agreements; it maintains long-term customer relationships, with the top five clients averaging over seven years of cooperation, indicating high customer loyalty - The Group procures raw materials from **over 70 suppliers**, ensuring diverse sources of supply, so the loss of a single supplier would not significantly impact operations[87](index=87&type=chunk)[90](index=90&type=chunk) - The Group maintains long-term business partnerships with customers in **over 20 countries and regions** globally; as of December 31, 2020, the top five customers had an average cooperation period of **over seven years**[88](index=88&type=chunk)[91](index=91&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) This section analyzes the Group's FY2020 financial performance; revenue and gross profit declined due to the pandemic, but other income significantly increased from government grants and leasing growth; cost of sales and selling expenses decreased, while administrative and other operating expenses rose due to exchange losses and depreciation; asset impairment losses and income tax credits both increased substantially, with financial resources and liquidity remaining healthy despite a reduction in bank balances and cash [Revenue and Gross Profit](index=17&type=section&id=Revenue%20and%20Gross%20Profit) Total revenue for FY2020 decreased by 19.2% to RMB 255.3 million, with gross margin falling from 26.4% to 25.2%; CMS revenue declined by 16.2% and OBM revenue by 24.5%, primarily due to weak demand and rising production costs impacted by the pandemic FY2020 Revenue and Gross Margin by Business and Product Category | Business Segment | Product Category | 2020 Revenue (RMB thousand) | 2020 Gross Margin | 2019 Revenue (RMB thousand) | 2019 Gross Margin | Revenue Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | CMS Business | Cosplay Costumes | 58,202 | 21.8% | 89,438 | 26.5% | (34.9%) | | | Cosplay Wigs | 57,332 | 25.5% | 76,731 | 26.2% | (25.3%) | | | Lingerie | 45,136 | 24.3% | 33,575 | 27.8% | 34.4% | | | Others | 6,738 | 24.4% | 26 | 25.0% | 25,815.4% | | | **Subtotal** | **167,408** | **23.8%** | **199,770** | **26.6%** | **(16.2%)** | | OBM Business | Cosplay Costumes | 49,184 | 31.7% | 59,123 | 28.8% | (16.8%) | | | Cosplay Wigs | 18,216 | 24.6% | 34,223 | 21.3% | (46.8%) | | | Lingerie | 19,256 | 21.0% | 22,948 | 26.1% | (16.1%) | | | Others | 1,188 | 23.4% | — | — | Not Applicable | | | **Subtotal** | **87,844** | **27.8%** | **116,294** | **26.4%** | **(24.5%)** | | **Total** | | **255,252** | **25.2%** | **316,064** | **26.4%** | **(19.2%)** | - Gross margin decreased from **26.4% in 2019 to 25.2% in 2020**, primarily due to increased production costs (including procurement and transportation) and lower product selling prices caused by the pandemic[49](index=49&type=chunk)[50](index=50&type=chunk)[101](index=101&type=chunk)[104](index=104&type=chunk) [Cost of Sales and Other Income](index=19&type=section&id=Cost%20of%20Sales%20and%20Other%20Income) Cost of sales decreased by approximately RMB 41.7 million year-on-year to RMB 191.0 million; other income significantly increased by approximately RMB 9.1 million to RMB 14.4 million, primarily driven by government grants, net investment in leases income, and property leasing revenue Cost of Sales and Other Income Comparison | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Cost of Sales | 191,000 (approx) | 232,700 (approx) | (41,700) | | Other Income | 14,400 (approx) | 5,300 (approx) | 9,100 | | Government Grants | 3,100 (approx) | - | 3,100 | | Net Investment in Leases Income | 2,800 (approx) | - | 2,800 | | Property Leasing Income | 5,400 (approx) | 2,607 (approx) | 2,793 | | Net Exchange Gain | - | 2,080 (approx) | (2,080) | - The increase in other income was mainly due to government grants of approximately **RMB 3.1 million**, recognition of net investment in leases income of approximately **RMB 2.8 million**, and property and machinery leasing income of approximately **RMB 5.4 million**[107](index=107&type=chunk)[112](index=112&type=chunk) [Expenses and Impairment Losses](index=19&type=section&id=Expenses%20and%20Impairment%20Losses) Selling expenses decreased by approximately RMB 2.6 million due to lower transportation and staff costs; administrative and other operating expenses increased by approximately RMB 17.9 million due to higher exchange losses and depreciation; impairment losses on property, plant, and equipment significantly rose to RMB 55.4 million, and investment property impairment losses were RMB 20.0 million, mainly impacted by sustained revenue decline and changes in property use Key Expenses and Impairment Losses Comparison | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Selling Expenses | 5,600 (approx) | 8,200 (approx) | (2,600) | | Administrative and Other Operating Expenses | 76,100 (approx) | 58,200 (approx) | 17,900 | | Impairment Losses on Property, Plant and Equipment | 55,400 (approx) | 12,900 (approx) | 42,500 | | Impairment Losses on Investment Properties | 20,000 (approx) | 18,700 (approx) | 1,300 | - Impairment losses on property, plant, and equipment increased to **RMB 55.4 million**, primarily due to a decline in recoverable amounts caused by sustained revenue decrease[110](index=110&type=chunk)[115](index=115&type=chunk) - Impairment losses on investment properties amounted to **RMB 20.0 million**, mainly attributable to the reclassification of new Yichun factory premises to investment properties for leasing purposes, where their fair value was below carrying amount[118](index=118&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [Finance Costs and Income Tax](index=21&type=section&id=Finance%20Costs%20and%20Income%20Tax) Finance costs remained at approximately RMB 6.7 million; income tax credit significantly increased by approximately RMB 8.5 million to RMB 12.8 million, primarily due to deferred tax recognized on asset impairment losses Finance Costs and Income Tax Credit Comparison | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Finance Costs | 6,700 (approx) | 6,700 (approx) | 0 | | Income Tax Credit | 12,800 (approx) | 4,300 (approx) | 8,500 | - The increase in income tax credit was mainly due to the recognition of deferred tax of approximately **RMB 12.7 million** on asset impairment losses during the year[126](index=126&type=chunk)[131](index=131&type=chunk) [Financial Resources and Liquidity](index=21&type=section&id=Financial%20Resources%20and%20Liquidity) As of December 31, 2020, total bank balances and cash were approximately RMB 48.9 million, a year-on-year decrease of approximately RMB 29.9 million, mainly due to reduced borrowings and capital expenditure; the current ratio was 131.7% and the gearing ratio was 25.4%, indicating the Group maintained a healthy liquidity position Financial Resources and Liquidity Indicators Comparison | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Bank Balances and Cash | 48,908 | 78,761 | (29,853) | | Total Borrowings | 81,400 (approx) | 94,700 (approx) | (13,300) | | Current Ratio | 131.7% | 106.8% | 24.9% | | Gearing Ratio | 25.4% | 23.2% | 2.2% | - The decrease in bank balances and cash was mainly due to a reduction in borrowings of approximately **RMB 13.3 million** and capital expenditure of approximately **RMB 14.3 million**[127](index=127&type=chunk)[132](index=132&type=chunk) [Investment Review](index=23&type=section&id=Investment%20Review) The Group subscribed to CSG convertible bonds in 2018, but due to project funding delays, license transfer delays, and issuer default, the bond's fair value recorded a significant loss in 2019, with a recovery in 2020; given ongoing defaults and the pandemic's impact on tourism, the Group sold the bond for **RMB 8.34 million** in March 2021 to mitigate losses and exit the investment - In 2018, the Group subscribed to CSG convertible bonds with a principal amount of **HKD 70 million** (approximately **RMB 56.7 million**), bearing an annual coupon of **6%** and maturing on March 15, 2022[149](index=149&type=chunk)[153](index=153&type=chunk) - In 2019, a fair value loss of approximately **RMB 60.5 million** on financial assets at fair value through profit or loss was recorded due to project funding delays, license transfer delays, and the issuer's failure to pay interest[150](index=150&type=chunk)[154](index=154&type=chunk) CSG Convertible Bond Fair Value Movement | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--- | :--- | :--- | | Fair Value Gain/(Loss) | 3,913 | (60,524) | | Fair Value (End of Period) | 5,557 | 1,969 | - On March 15, 2021, the Group sold the CSG convertible bonds for **HKD 10 million** (approximately **RMB 8.34 million**), aiming to mitigate losses, exit the investment, and generate immediate available funds[158](index=158&type=chunk)[160](index=160&type=chunk)[140](index=140&type=chunk)[143](index=143&type=chunk) [Human Resources](index=22&type=section&id=Human%20Resources) As of December 31, 2020, the Group's headcount was approximately 556, a decrease of 358 from 2019, mainly due to normal staff turnover and recruitment difficulties caused by COVID-19; total staff costs for the year were approximately RMB 56.0 million Staff Headcount and Costs Comparison | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Staff Headcount | 556 | 914 | | Staff Headcount Decrease | 358 | - | | Total Staff Costs (RMB million) | 56.0 | 77.5 | - The decrease in headcount was primarily due to normal staff turnover and increased difficulty in recruiting workers from other provinces following COVID-19 outbreaks, quarantine, lockdowns, and travel restrictions[141](index=141&type=chunk)[147](index=147&type=chunk) [Events after the reporting date](index=22&type=section&id=Events%20after%20the%20reporting%20date) Subsequent to the reporting period, on March 15, 2021, the Group sold the CSG convertible bonds for a cash consideration of HKD 10 million (approximately RMB 8.34 million) - On March 15, 2021, the Group entered into a sale and purchase agreement with an independent third party to dispose of the CSG convertible bonds for a cash consideration of **HKD 10 million** (approximately **RMB 8.34 million**)[140](index=140&type=chunk)[146](index=146&type=chunk) [Corporate Governance Report](index=25&type=section&id=Corporate%20Governance%20Report) This report details the company's FY2020 corporate governance practices, including board structure, committee operations, director training, shareholder communication, risk management, and internal controls; the company is committed to high governance standards to protect shareholder interests and enhance corporate value and accountability [Compliance with Corporate Governance Code](index=25&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company largely complied with the Corporate Governance Code in FY2020, but deviated from provision A.2.1 from January 1 to October 9, 2020, when the Chairman and CEO roles were combined; since October 9, 2020, these roles have been separated, and the company fully complies with the code - From January 1 to October 9, 2020, Mr. Lam San Fuk served as both Chairman and Chief Executive Officer, deviating from Corporate Governance Code provision A.2.1[163](index=163&type=chunk)[167](index=167&type=chunk) - Effective October 9, 2020, Ms. Chen Sheng was re-designated as Executive Director and Chairperson, and Mr. Xu Chengwu was appointed Chief Executive Officer, bringing the company into compliance with all applicable Corporate Governance Code provisions[164](index=164&type=chunk)[168](index=168&type=chunk) [The Board of Directors](index=26&type=section&id=The%20Board%20of%20Directors) The Board of Directors is responsible for the company's leadership and control, formulating overall strategy and reviewing operational and financial performance; it comprises six directors, including three executive and three independent non-executive directors, who actively engage in continuous professional development and hold regular meetings [Chairman and Chief Executive Officer](index=27&type=section&id=Chairman%20and%20Chief%20Executive%20Officer) From January 1 to October 9, 2020, Mr. Lam San Fuk held both Chairman and CEO roles; effective October 9, 2020, Ms. Chen Sheng became Chairman and Mr. Xu Chengwu became CEO, achieving separation of these roles - From January 1 to October 9, 2020, Mr. Lam San Fuk served as both Chairman and Chief Executive Officer, which the Board believed ensured consistent leadership and efficient strategic planning for the Group[178](index=178&type=chunk)[179](index=179&type=chunk) - Effective October 9, 2020, Ms. Chen Sheng was re-designated as Executive Director and Chairperson, and Mr. Xu Chengwu was appointed Chief Executive Officer, achieving the separation of the Chairman and Chief Executive Officer roles[178](index=178&type=chunk)[179](index=179&type=chunk) [Independent Non-executive Directors](index=27&type=section&id=Independent%20Non-executive%20Directors) As of December 31, 2020, the Board consistently met Listing Rules requirements for the number of Independent Non-executive Directors, who come from diverse backgrounds, provide independent judgment and advice, and have confirmed their independence - The Board has consistently complied with the Listing Rules requirement to appoint at least three Independent Non-executive Directors, comprising one-third of the Board's membership[180](index=180&type=chunk)[183](index=183&type=chunk) - Independent Non-executive Directors come from diverse backgrounds and industries, with one member possessing appropriate professional expertise in accounting and related financial management[180](index=180&type=chunk)[183](index=183&type=chunk) - The company has received annual confirmations of independence from each Independent Non-executive Director and considers them all to meet the independence guidelines[181](index=181&type=chunk)[183](index=183&type=chunk) [Directors' Continuous Training and Development](index=28&type=section&id=Directors'%20Continuous%20Training%20and%20Development) All Directors engage in continuous professional development by attending seminars relevant to their directorial duties, enhancing and updating their knowledge and skills to ensure informed and pertinent contributions to the Board - All Directors participate in continuous professional development, enhancing and updating their knowledge and skills by attending seminars relevant to their duties as Directors of the company[190](index=190&type=chunk)[193](index=193&type=chunk) [Board Meetings and General Meeting](index=29&type=section&id=Board%20Meetings%20and%20General%20Meeting) One Annual General Meeting and seven Board meetings were held in FY2020; all Directors had the opportunity to include matters on the agenda and sufficient time to review relevant documents, with Board meeting minutes maintained by the company secretary for their inspection - For the year ended December 31, 2020, one Annual General Meeting and **seven Board meetings** were held[196](index=196&type=chunk)[199](index=199&type=chunk) - All Directors have the right to access Board papers and related information, unlimited access to the advice and services of the company secretary, and may seek independent professional advice when necessary[197](index=197&type=chunk)[200](index=200&type=chunk) [Board Committees](index=30&type=section&id=Board%20Committees) The Board has established Audit, Remuneration, and Nomination Committees to oversee specific aspects of company affairs; each committee has clear terms of reference and sufficient resources to fulfill its responsibilities [Nomination Committee](index=30&type=section&id=Nomination%20Committee) The Nomination Committee, comprising two Independent Non-executive Directors and one Executive Director, reviews Board structure, identifies qualified director candidates, assesses INED independence, and recommends director appointments and succession plans; it held **3 meetings** in 2020 - The Nomination Committee comprises Ms. Peng Xu (Chairperson), Mr. Chen Wenhua (Independent Non-executive Director), and Ms. Chen Sheng (Executive Director)[203](index=203&type=chunk)[207](index=207&type=chunk) - Functions include: reviewing and monitoring the Board's structure, size, and composition; identifying individuals suitably qualified to become Board members; assessing the independence of Independent Non-executive Directors; and making recommendations to the Board on director appointments or re-appointments and succession planning for directors, particularly the Chairman and Chief Executive Officer[204](index=204&type=chunk)[207](index=207&type=chunk) - In FY2020, the Nomination Committee held **3 meetings** to review director appointments and retirements, Board size, diversity, and composition[205](index=205&type=chunk)[210](index=210&type=chunk) [Board Diversity Policy](index=31&type=section&id=Board%20Diversity%20Policy) The company adopted a Board Diversity Policy on January 1, 2019, to ensure a balanced Board in terms of skills, experience, and diverse perspectives, considering gender, age, cultural and educational background, and professional experience; as of this annual report date, the Board comprises six directors, two of whom are female - The company adopted a Board Diversity Policy on January 1, 2019, aiming to ensure a balanced Board in terms of skills, experience, and diverse perspectives relevant to the company's business needs[212](index=212&type=chunk)[213](index=213&type=chunk) - Candidate selection will be based on the Board Nomination Policy and consider a range of diversity aspects, including but not limited to gender, age, cultural and educational background, professional or other experience, race, skills and knowledge, and length of service[212](index=212&type=chunk)[213](index=213&type=chunk) - As of the date of this annual report, the Board comprises **six directors**, two of whom are female[214](index=214&type=chunk) [Board Nomination Policy](index=32&type=section&id=Board%20Nomination%20Policy) The company adopted a Board Nomination Policy, outlining criteria and procedures for selecting director candidates, including reputation for integrity, business experience, time commitment, diversity (e.g., race, gender, age, educational background), professional qualifications, number of existing directorships, and independence - Selection criteria include: reputation for integrity, achievements and experience in the Group's businesses, time commitment and relevant interests, diversity in various aspects (including but not limited to race, gender, age, educational background, professional experience, skills and knowledge, and length of service), professional qualifications, number of existing directorships and other commitments that may require the candidate's attention, independence requirements, and the Board Diversity Policy[220](index=220&type=chunk)[222](index=222&type=chunk) - Nomination procedures include: the Nomination Committee identifying potential candidates; the company secretary providing candidate curriculum vitae details; the Nomination Committee making recommendations to the Board; the Nomination Committee ensuring candidates will enhance Board diversity, with particular attention to gender balance; for the appointment of Independent Non-executive Directors, obtaining all relevant information to assess independence; and the Board deliberating and deciding on appointments based on recommendations[224](index=224&type=chunk)[225](index=225&type=chunk) [Remuneration Committee](index=34&type=section&id=Remuneration%20Committee) The Remuneration Committee, comprising an Independent Non-executive Director (Chairman), an Executive Director, and another Independent Non-executive Director, advises the Board on remuneration policies and structures for directors and senior management; it held **3 meetings** in 2020 - The Remuneration Committee comprises Mr. Chen Wenhua (Chairman, Independent Non-executive Director), Mr. Xu Chengwu (Executive Director), and Ms. Peng Xu (Independent Non-executive Director)[229](index=229&type=chunk)[232](index=232&type=chunk) - Its function is to make recommendations to the Board on the company's policies and structures for the remuneration of all Directors and senior management, and on establishing formal and transparent procedures for developing remuneration policies[230](index=230&type=chunk)[232](index=232&type=chunk) - In FY2020, the Remuneration Committee held **3 meetings** to review the remuneration structure for Executive Directors and senior management and remuneration proposals for 2019/2020[231](index=231&type=chunk)[233](index=233&type=chunk) [Audit Committee](index=35&type=section&id=Audit%20Committee) The Audit Committee, composed of three Independent Non-executive Directors, advises on the appointment, remuneration, and terms of engagement of external auditors, reviews the Group's interim and annual reports, and oversees the company's financial reporting system, risk management, and internal control procedures; it held **4 meetings** in 2020 - The Audit Committee comprises Mr. Zheng Jinmin (Chairman), Mr. Chen Wenhua, and Ms. Peng Xu (all Independent Non-executive Directors)[237](index=237&type=chunk)[241](index=241&type=chunk) - Key responsibilities include: advising the Board on the appointment, re-appointment, and removal of external auditors; approving the remuneration and terms of engagement of external auditors; reviewing the Group's interim and annual reports and accounts; and overseeing the company's financial reporting system, risk management, and internal control procedures[238](index=238&type=chunk)[241](index=241&type=chunk) - In FY2020, the Audit Committee held **4 meetings**, reviewed the Group's annual and interim results, and concluded that the consolidated financial statements and results were prepared in accordance with applicable accounting standards and Listing Rules[244](index=244&type=chunk)[245](index=245&type=chunk)[250](index=250&type=chunk) [Company Secretary](index=36&type=section&id=Company%20Secretary) Mr. Chong Man Hung has served as Company Secretary since May 21, 2015, possessing over 18 years of audit and finance experience, and completed at least 15 hours of professional training in FY2020 - Mr. Chong Man Hung was appointed Company Secretary on May 21, 2015, and possesses **over 18 years** of experience in the auditing and finance industries[247](index=247&type=chunk)[333](index=333&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk) - In FY2020, Mr. Chong completed no less than **15 hours** of relevant professional training, complying with Listing Rules requirements[247](index=247&type=chunk)[252](index=252&type=chunk) [Corporate Governance Functions](index=36&type=section&id=Corporate%20Governance%20Functions) The Board is responsible for corporate governance functions, having reviewed the company's governance policies and practices, training and continuous professional development for directors and senior management, compliance with laws, regulations, and codes, and the disclosure of the corporate governance report - The Board has reviewed the company's corporate governance policies and practices, training and continuous professional development for directors and senior management, policies and practices regarding compliance with laws and regulations, adherence to standard codes, compliance with the Corporate Governance Code, and the disclosures in this Corporate Governance Report[249](index=249&type=chunk)[253](index=253&type=chunk) [Dividend Policy](index=37&type=section&id=Dividend%20Policy) The company has adopted a dividend policy, allowing the Board discretion to declare and distribute dividends, subject to the Articles of Association and applicable laws, considering financial position, cash flow, business strategy, earnings, capital requirements, and shareholder interests; the policy does not constitute a legally binding commitment - The company has adopted a dividend policy, allowing the Board discretion to declare and distribute dividends to shareholders, subject to the Articles of Association and applicable laws and regulations[255](index=255&type=chunk)[259](index=259&type=chunk) - When considering dividend payments, the Board will take into account factors such as financial position, cash flow, business conditions and strategies, earnings, capital requirements, shareholder interests, economic environment, and restrictions on dividend payments[256](index=256&type=chunk)[259](index=259&type=chunk) - The dividend policy does not constitute a legally binding commitment that the company will pay dividends at any specific amount, nor does it compel the company to declare dividends at any time[257](index=257&type=chunk)[259](index=259&type=chunk) [Auditors' Remuneration](index=37&type=section&id=Auditors'%20Remuneration) In FY2020, the company paid total remuneration of HKD 1,200 thousand to its auditor, Grant Thornton Hong Kong Limited, with HKD 1,020 thousand for audit services and HKD 180 thousand for non-audit services FY2020 Auditors' Remuneration | Service Nature | Amount (HKD thousand) | | :--- | :--- | | Audit Services | 1,020 | | Non-Audit Services | 180 | | **Total** | **1,200** | [Directors' Responsibilities for the Financial Statements](index=38&type=section&id=Directors'%20Responsibilities%20for%20the%20Financial%20Statements) The Board confirms its responsibility to prepare consolidated financial statements that truly and fairly reflect the Group's financial position, performance, and cash flows, and to take reasonable steps to safeguard assets and prevent fraud; the Board believes the Group has sufficient resources to continue as a going concern - The Board confirms its responsibility to prepare consolidated financial statements for each financial year that truly and fairly reflect the state of affairs of the Group and the company, as well as the Group's results and cash flows for that year[262](index=262&type=chunk)[266](index=266&type=chunk) - Directors are responsible for taking all reasonably necessary actions to safeguard the Group's assets and to prevent and detect fraud and other irregularities[263](index=263&type=chunk)[267](index=267&type=chunk) - The Directors believe the Group has sufficient resources to continue operations for the foreseeable future, thus the going concern basis is appropriate for preparing the consolidated financial statements[263](index=263&type=chunk)[267](index=267&type=chunk) [Risk Management and Internal Control](index=38&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for assessing and determining the nature and extent of risks the Group is willing to undertake to achieve its strategic objectives, and for maintaining appropriate and effective risk management and internal control systems; the Group has established continuous risk identification, assessment, and management procedures, with annual internal control reviews conducted by independent qualified accountants - The Board confirms its full responsibility for assessing and determining the nature and extent of risks the Group is willing to undertake to achieve its strategic objectives, and for maintaining appropriate and effective risk management and internal control systems[264](index=264&type=chunk)[268](index=268&type=chunk) - The Group has established a continuous process to identify, assess, and manage its significant risks, with each business unit responsible for identifying, assessing, and monitoring risks relevant to its own unit[265](index=265&type=chunk)[268](index=268&type=chunk) - The Group does not have an internal audit function; instead, an independent qualified accountant conducts an annual review of internal control and risk management systems, with no significant deficiencies found in the 2020 review[272](index=272&type=chunk)[274](index=274&type=chunk) [Business Activities in Sanctioned Countries](index=40&type=section&id=Business%20Activities%20in%20Sanctioned%20Countries) The Group effectively monitors and assesses sanction risks, assigning senior staff to review business transaction documents from sanctioned countries or individuals and cross-referencing them against restricted party and country lists maintained by the US, EU, Australia, or UN; in FY2020, no Group products were sold to any sanctioned countries or individuals - The Board has effectively monitored and assessed the sanction risks to our business, including assigning senior staff to review and approve all relevant business transaction documents from customers or potential customers in sanctioned countries and sanctioned individuals[279](index=279&type=chunk)[283](index=283&type=chunk) - Designated staff conduct cross-checks against various restricted party and country lists maintained by the US, EU, Australia, or the United Nations[279](index=279&type=chunk)[283](index=283&type=chunk) - In FY2020, the Group's products were not sold to any sanctioned countries or sanctioned individuals[280](index=280&type=chunk)[284](index=284&type=chunk) [Non-Competition Undertaking](index=40&type=section&id=Non-Competition%20Undertaking) The controlling shareholders have provided a non-competition undertaking to the company and confirmed compliance with its terms; the Board believes the controlling shareholders have adhered to the undertaking - Controlling shareholders Master Professional Holdings Limited and Mr. Chan Sing Pat have provided a deed of non-competition undertaking with the company as beneficiary[281](index=281&type=chunk)[285](index=285&type=chunk) - The controlling shareholders have confirmed compliance with the terms of the non-competition undertaking, and the Board believes they have adhered to it[287](index=287&type=chunk)[292](index=292&type=chunk) [Communication with Shareholders and Investors](index=41&type=section&id=Communication%20with%20Shareholders%20and%20Investors) The company values effective communication with shareholders, disseminating information through channels like Annual General Meetings and its website, and encouraging shareholder participation; all resolutions at general meetings are voted on, with results published on the website - The company believes effective communication with shareholders is crucial for enhancing investor relations and ensuring investors understand the Group's business performance and strategies[288](index=288&type=chunk)[293](index=293&type=chunk) - Board members, committee members, and external auditors attend the company's Annual General Meeting to answer shareholder questions[289](index=289&type=chunk)[293](index=293&type=chunk) - The company maintains a website for publishing corporate announcements, financial information, and other data, allowing shareholders and investors to submit written inquiries directly to the company[290](index=290&type=chunk)[294](index=294&type=chunk) [Shareholders' Rights](index=42&type=section&id=Shareholders'%20Rights) Shareholders have the right to requisition an extraordinary general meeting in accordance with the Articles of Association, with clear procedures for nominating director candidates; shareholders may submit written inquiries to the Board - Shareholders holding not less than one-tenth of the company's paid-up capital with voting rights may requisition an extraordinary general meeting[299](index=299&type=chunk)[302](index=302&type=chunk) - Nominations for director candidates require written notice, submitted no earlier than the day after the dispatch of the notice of the general meeting, and no later than seven days before the meeting, with the period being at least seven days[300](index=300&type=chunk)[303](index=303&type=chunk) - Shareholders may send written inquiries to the company's principal place of business in Hong Kong, providing their full name, contact details, and identification[301](index=301&type=chunk)[304](index=304&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk) [Directors and Senior Management](index=44&type=section&id=Directors%20and%20Senior%20Management) This section introduces the Group's Executive Directors, Independent Non-executive Directors, and senior management, detailing their backgrounds, ages, appointments, and key responsibilities; Board members possess extensive experience in compliance, finance, accounting, and law [Executive Directors](index=44&type=section&id=Executive%20Directors) Ms. Chen Sheng (48) has served as Chairperson and Executive Director since October 9, 2020, with over 25 years of compliance experience; Mr. Ma Zhijun (44) joined the Group in 2017, bringing over 19 years of commercial banking, fixed income, and M&A experience; Mr. Xu Chengwu (51) was appointed Executive Director on April 3, 2020, and CEO on October 9, 2020, with over 25 years of finance and tax experience - Ms. Chen Sheng (age **48**) was re-designated as Executive Director and Chairperson on October 9, 2020, possessing **over 25 years** of compliance experience[310](index=310&type=chunk)[311](index=311&type=chunk)[315](index=315&type=chunk) - Mr. Xu Chengwu (age **51**) was appointed Executive Director on April 3, 2020, and Chief Executive Officer on October 9, 2020, with **over 25 years** of finance and tax experience[313](index=313&type=chunk)[314](index=314&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk) - Mr. Ma Zhijun (age **44**) joined the Group in 2017 and was appointed Executive Director, bringing **over 19 years** of experience in commercial banking, fixed income markets, and mergers and acquisitions[312](index=312&type=chunk)[315](index=315&type=chunk) [Independent Non-executive Directors](index=45&type=section&id=Independent%20Non-executive%20Directors) Mr. Chen Wenhua (53) has over 25 years of education industry experience and chairs the Remuneration Committee; Mr. Zheng Jinmin (49) has over 20 years of accounting experience and chairs the Audit Committee; Ms. Peng Xu (48) has over 18 years of legal industry experience and chairs the Nomination Committee - Mr. Chen Wenhua (age **53**) possesses **over 25 years** of experience in the education industry and serves as Chairman of the Remuneration Committee[319](index=319&type=chunk)[320](index=320&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk) - Mr. Zheng Jinmin (age **49**) was appointed Independent Non-executive Director on June 14, 2019, is a Certified Public Accountant in China, has **over 20 years** of accounting experience, and serves as Chairman of the Audit Committee[321](index=321&type=chunk)[322](index=322&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk) - Ms. Peng Xu (age **48**) was appointed Independent Non-executive Director on August 7, 2015, is a practicing lawyer in China, has **over 18 years** of legal industry experience, and serves as Chairman of the Nomination Committee[323](index=323&type=chunk)[324](index=324&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk) [Senior Management](index=46&type=section&id=Senior%20Management) Mr. Chong Man Hung (42) has served as Company Secretary since May 21, 2015, is a member of the Hong Kong Institute of Certified Public Accountants, possesses over 18 years of audit and finance experience, and is responsible for the Group's company secretarial matters - Mr. Chong Man Hung (age **42**) joined the Group as Company Secretary on May 21, 2015, and is a member of the Hong Kong Institute of Certified Public Accountants[333](index=333&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk) - Mr. Chong possesses **over 18 years** of experience in the auditing and finance industries and is responsible for the Group's company secretarial matters[334](index=334&type=chunk)[336](index=336&type=chunk) [Report of the Directors](index=47&type=section&id=Report%20of%20the%20Directors) The Report of the Directors presents the Group's audited financial statements for FY2020, outlining principal activities, results, dividend policy, share capital changes, short-term borrowings, reserves, post-reporting date events, related party transactions, directors' remuneration, and major customers and suppliers; the report confirms the Group's compliance with relevant laws and regulations and maintenance of sufficient public float [Principal Activities and Results](index=47&type=section&id=Principal%20Activities%20and%20Results) The company is an investment holding company, with subsidiaries primarily engaged in the design, development, production, sale, and marketing of cosplay products and lingerie, as well as property leasing; the Group recorded a loss in FY2020, and the Board does not recommend paying any dividends - The company is an investment holding company, and its subsidiaries are principally engaged in the design, development, production, sale, and marketing of cosplay products (including cosplay costumes and wigs) and lingerie, as well as property leasing[339](index=339&type=chunk)[347](index=347&type=chunk) - The Directors do not recommend the payment of any dividend for the year ended December 31, 2020[340](index=340&type=chunk)[349](index=349&type=chunk) [Financial Information Summary](index=47&type=section&id=Financial%20Information%20Summary) A summary of the Group's results, assets, liabilities, and non-controlling interests for the past five financial years is presented on page 152; details of movements in property, plant, and equipment, right-of-use assets, and investment properties are provided in Notes 16, 14, and 15 to the consolidated financial statements, respectively - A summary of the Group's results, assets, liabilities, and non-controlling interests for the past five financial years is set out on page 152[342](index=342&type=chunk)[351](index=351&type=chunk) - Details of movements in property, plant, and equipment and right-of-use assets are set out in Notes 16 and 14 to the consolidated financial statements, respectively[343](index=343&type=chunk)[352](index=352&type=chunk) - Details of movements in investment properties are set out in Note 15 to the consolidated financial statements[344](index=344&type=chunk)[353](index=353&type=chunk) [Share Capital and Reserves](index=48&type=section&id=Share%20Capital%20and%20Reserves) Details of share capital movements are in Note 29 to the consolidated financial statements; details of reserve movements are in the consolidated statement of changes in equity and Note 30; as of December 31, 2020, the company's distributable reserves were approximately RMB 152.9 million - Details of the company's share capital movements during the year are set out in Note 29 to the consolidated financial statements[358](index=358&type=chunk)[365](index=365&type=chunk) - Details of movements in the company's and the Group's reserves during the year are set out in the consolidated statement of changes in equity and Note 30 to the consolidated financial statements[362](index=362&type=chunk)[369](index=369&type=chunk) - As of December 31, 2020, the company's distributable reserves were approximately **RMB 152.9 million**[372](index=372&type=chunk)[379](index=379&type=chunk) [Major Customers and Suppliers](index=50&type=section&id=Major%20Customers%20and%20Suppliers) In FY2020, sales to the Group's top five customers accounted for approximately 31.4% of total revenue, with the largest customer contributing 11.0%; purchases from the top five suppliers represented approximately 30.2% of total purchases, with the largest supplier at 9.4%; no directors, their associates, or shareholders holding over 5% of the company's share capital had interests in the top five suppliers or customers - Total sales attributable to the Group's top five customers accounted for approximately **31.4%** of total revenue in FY2020, with the largest customer contributing approximately **11.0%**[388](index=388&type=chunk)[392](index=392&type=chunk) - The Group's purchases from its top five suppliers accounted for approximately **30.2%** of total purchases in FY2020, with the largest supplier contributing approximately **9.4%**[389](index=389&type=chunk)[393](index=393&type=chunk) - No directors, their associates, or shareholders holding **more than 5%** of the company's issued share capital had any interests in the top five suppliers or customers[389](index=389&type=chunk)[393](index=393&type=chunk) [Directors' Interests and Share Option Scheme](index=52&type=section&id=Directors'%20Interests%20and%20Share%20Option%20Scheme) As of December 31, 2020, no directors, chief executives, or their associates held disclosable interests or short positions in the company's shares, underlying shares, or debentures; the company adopted a share option scheme to reward employees, retain talent, and attract suitable personnel, but no options were granted or exercised in FY2020 - As of December 31, 2020, no directors, chief executives, or their associates held any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations[411](index=411&type=chunk)[416](index=416&type=chunk) - The Share Option Scheme aims to recognize and reward eligible participants for their contributions to the Group, encourage optimized performance and efficiency, and attract, retain, or maintain ongoing business relationships with eligible participants beneficial to the Group[413](index=413&type=chunk)[418](index=418&type=chunk) - In FY2020, no share options were granted or exercised under the Share Option Scheme, and there were no outstanding share options at the end of the reporting period[428](index=428&type=chunk)[430](index=430&type=chunk) [Interests of Shareholders Disclosable Under The SFO](index=54&type=section&id=Interests%20of%20Shareholders%20Disclosable%20Under%20The%20SFO) As of December 31, 2020, major shareholder Mr. Chan Sing Pat held 41.42% of the company's shares through his wholly-owned Master Professional Holdings Limited, with his spouse, Ms. Li Zhi Ping, deemed to have the same interest; Mr. Lin Shi Xin beneficially owned 8.75% of the company's shares Major Shareholders' Long Positions in Shares and Underlying Shares of the Company | Major Shareholder Name | Nature of Interest | Number of Ordinary Shares | Approximate Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Chan Sing Pat | Interest in controlled corporation | 371,859,000 | 41.42% | | Master Professional Holdings Limited | Beneficial owner | 371,859,000 | 41.42% | | Ms. Li Zhi Ping | Spouse's interest | 371,859,000 | 41.42% | | Mr. Lin Shi Xin | Beneficial owner | 78,563,000 | 8.75% | - Mr. Chan Sing Pat holds shares in the company through his wholly-owned Master Professional

ai159920961731_China Partytime IR2020 Cover output.pdf 1 4/9/2020 下午4:53 CHINA PARTYTIME CULTURE HOLDINGS LIMITED 中 國 派 對 文 化 控 股 有 限 公 司 www.partytime.com.cn (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：1532 Interim Report 2020 中期報告 Contents 目錄 Corporate Information 公司資料 2 Financial Highlights 財務摘要 4 Directors' Business Review and Management Discussion and Analysis 董事業務回顧與管理層討論及分析 5 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Inco ...