Financial Performance - The profit attributable to non-controlling interests for the year was RMB 25,456,000, compared to RMB 14,295,000 in the previous year, representing an increase of 78.0%[1] - Total comprehensive income attributable to the company's owners was RMB 112,042,000, up from RMB 43,667,000, reflecting a growth of 156.9%[1] - Revenue from continuing operations for the year reached RMB 656,815,000, a significant increase from RMB 578,051,000, marking a growth of 13.6%[9] - The gross profit for the year was RMB 317,201,000, compared to RMB 276,172,000 in the previous year, indicating a rise of 14.9%[9] - The company reported a net profit of RMB 121,923,000 for the year, compared to RMB 71,822,000, which is an increase of 69.7%[9] - The group reported a basic earnings per share of RMB 5.92, an increase from RMB 3.47 in the previous year[31] - The company's total revenue for the year ended December 31, 2022, was RMB 656.8 million, representing a 13.6% increase from RMB 578.1 million in 2021[71] - The group’s profit from continuing operations increased by 69.8% from RMB 71.8 million for the year ended December 31, 2021, to RMB 121.9 million for the year ended December 31, 2022[111] Assets and Liabilities - Non-current assets totaled RMB 1,219,638,000, up from RMB 1,121,473,000, reflecting an increase of 8.8%[2] - Current assets amounted to RMB 2,005,334,000, a decrease from RMB 2,582,029,000, representing a decline of 22.3%[2] - The net assets of the company were RMB 2,642,420,000, down from RMB 2,715,073,000, indicating a decrease of 2.7%[14] - The group's total equity decreased to RMB 2,642.4 million as of December 31, 2022, from RMB 2,715.1 million as of December 31, 2021[115] - The total assets decreased from RMB 3,703.5 million as of December 31, 2021, to RMB 3,225.0 million as of December 31, 2022, while total liabilities decreased from RMB 988.4 million to RMB 582.6 million[139] - The current ratio improved to 356.4% as of December 31, 2022, compared to 267.8% as of December 31, 2021[139] - The company maintained a healthy financial position with a debt-to-asset ratio decreasing from 26.7% at the end of 2021 to 18.1% at the end of 2022[139] Dividends and Shareholder Returns - The company did not recommend a final dividend for the year ended December 31, 2022, compared to a dividend of HKD 0.03 per share in 2021[6] - The group completed the sale of its entire stake in Shui Mu Yuan, reclassifying its media and art training business as discontinued operations[33] - The company repurchased a total of 5,063,000 shares at a total cost of approximately HKD 9.7 million during the reporting period[26] - The company recorded a one-time gain of approximately RMB 43.7 million from the sale of Shui Mu Yuan, primarily due to the termination of contingent consideration related to the acquisition[163] Education and Student Enrollment - The total number of students as of December 31, 2022, reached approximately 27,638, with full-time undergraduates numbering 22,345, representing a year-on-year increase of about 16.8% when excluding students from the Olympic College[51] - The company’s Olympic College has 1,290 full-time undergraduates enrolled, managed under a service agreement since 2021[48] - The company has over 28,000 students and teachers, with an expected annual graduation rate exceeding 5,000 students[94] - The company plans to expand its student capacity to over 30,000, assuming completion of dormitory and facility construction[65] Regulatory and Operational Challenges - The group’s financial performance has been impacted by new regulatory measures affecting off-campus training services in China[34] - The company is monitoring developments in laws and regulations related to private education and foreign investment, with potential impacts on its operations[61] - The company continues to assess the impact of recent regulatory changes on its business strategy and operations[60] - The company anticipates that the impact of COVID-19 on its continuing operations will not be significant for the year ending December 31, 2023, following the easing of restrictions in December 2022[123] Revenue Segments - Revenue from higher education (media and arts) and vocational education reached RMB 561.7 million, up 18.8% from RMB 472.8 million in the previous year[71] - Revenue from film production and investment decreased from RMB 105.3 million in 2021 to RMB 95.1 million in 2022, attributed to various factors including pricing and the number of episodes produced[101] - Revenue from higher education courses reached RMB 355.1 million, up from RMB 308.9 million, while continuing education course revenue increased to RMB 100.2 million from RMB 75.7 million[192] Cost and Expenses - The cost of revenue for higher education (media and arts) and vocational education increased from RMB 169.6 million in 2021 to RMB 220.2 million in 2022, mainly due to increased teacher salaries and depreciation of newly constructed teaching buildings and dormitories[127] - Sales expenses from continuing operations decreased by 12.6% from RMB 17.7 million in 2021 to RMB 15.5 million in 2022, primarily due to reduced distribution expenses in the film production and investment segment[107] Corporate Governance - The board emphasizes high levels of corporate governance as crucial for the company's development and shareholder protection[172] - The group’s audit committee reviewed the consolidated financial statements for the year ended December 31, 2022, ensuring compliance with accounting policies and risk management[19] Strategic Initiatives - The company aims to enhance the quality of education and increase tuition fees, leveraging its talent pool of over 28,000 students and teachers[68] - The company aims to expand its business through the integration of industry and education, particularly in the live e-commerce sector[93] - The group has established new companies and live streaming studios in Beijing and Nanjing to expand into the live e-commerce business, with plans to officially launch in Q2 2023[119] - The company has invested RMB 75.4 million in properties and equipment primarily for expanding university capacity during the year[140] Impairment and Losses - The expected credit loss under the impairment loss model increased from RMB 87.2 million for the year ended December 31, 2021, to RMB 145.2 million for the year ended December 31, 2022, mainly due to impairment losses recognized on long-term trade receivables in the film production and investment business[108] - The film production and investment segment recorded a gross loss margin of 25.6% in 2022, primarily due to a write-down of obsolete inventory amounting to RMB 36.1 million[104] - The film and television production business faced unexpected challenges leading to increased impairment losses on trade receivables and inventory write-downs[55] Other Income and Expenses - Other income increased from RMB 17.2 million in 2021 to RMB 32.1 million in 2022, mainly due to an increase in government subsidies[105] - The total employee compensation cost for the year ended December 31, 2022, was RMB 145.2 million, an increase from RMB 137.6 million in the previous year[147]

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 377.66 million, representing a 75.0% increase compared to RMB 215.86 million in the same period of 2021[9]. - Gross profit for the same period was RMB 181.93 million, up 30.8% from RMB 139.06 million year-on-year[9]. - Profit from continuing operations for the period was RMB 125.87 million, an 18.6% increase from RMB 106.12 million in 2021[9]. - The company reported a profit of RMB 164.52 million for the period, a significant increase of 79.8% compared to RMB 91.52 million in the previous year[9]. - Adjusted net profit was RMB 147.88 million, reflecting a 39.4% increase from RMB 106.12 million in the prior year[9]. - Total revenue from continuing operations increased by 75.0% from RMB 215.9 million for the six months ended June 30, 2021, to RMB 377.7 million for the six months ended June 30, 2022[45]. - Revenue from higher education (media and arts) and vocational education increased by RMB 70.1 million, or 33.1%, from RMB 211.7 million to RMB 281.8 million due to an increase in total student enrollment[46]. - Revenue from film and television production and investment rose from RMB 4.2 million to RMB 95.8 million, primarily due to the recognition of revenue from the first round of the television drama "New Home Agreement" (formerly "Ideal House"), in which the company invested 55%[46]. - The overall gross profit increased by 30.8% from RMB 139.1 million for the six months ended June 30, 2021, to RMB 181.9 million for the six months ended June 30, 2022[50]. - The overall gross margin decreased from 64.4% to 48.2%, primarily due to a decline in the gross margin of the film production and investment business[50]. - Profit before tax increased to RMB 129,976,000, up 27% from RMB 102,175,000 in the previous year[140]. - Net profit attributable to the owners of the company from continuing operations was RMB 112,543,000, compared to RMB 96,189,000 in the prior year[141]. - Total comprehensive income for the period was RMB 175,050,000, significantly higher than RMB 79,101,000 in the same period last year[141]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.06 per share for the six months ended June 30, 2022, consistent with the previous year[9]. - The board proposed an interim dividend of HKD 0.06 per share for the six months ended June 30, 2022, to be paid on or around October 28, 2022[107]. - The company declared an interim dividend of HKD 0.06 per share, totaling approximately RMB 82,436,000, to be paid to shareholders listed on October 12, 2022[197]. Regulatory Changes and Business Discontinuation - The company sold its entire stake in Waterwood, which provided art examination training services in China, and reclassified its media and arts training business as discontinued operations[12]. - The sale of Waterwood was influenced by new regulatory measures affecting non-academic training institutions in China, leading to the decision to divest[13]. - The media and arts training business has been reclassified as discontinued operations due to regulatory changes and the uncertain impact of COVID-19[28]. - The company decided to exit the art training services business due to regulatory changes and potential adverse impacts on operations, marking the business as discontinued[187]. Acquisitions and Investments - The acquisition of Olympic College is valued at RMB 450 million, which may be adjusted to RMB 250 million if certain conditions are not met within 36 months[20]. - The company completed the acquisition of all shares of Waterwood from its founder for a total consideration of RMB 300,000,000, which includes a cash payment of RMB 165,000,000[184]. - The guaranteed net profit for Waterwood for the years ending December 31, 2021, 2022, and 2023 is RMB 24,000,000, RMB 27,600,000, and RMB 31,740,000, respectively[185]. Student Enrollment and Educational Programs - As of June 30, 2022, the total number of students in the group reached approximately 24,508, with a year-on-year increase of about 26.6% excluding Olympic College students[24]. - The group has provided over 50 undergraduate programs, with 4 programs rated as national first-class and 12 as Jiangsu provincial first-class[25]. - The total student capacity of the university is approximately 24,000[26]. - The company has established partnerships with over 70 leading global media and arts universities for its international foundation programs[25]. Financial Position and Cash Flow - As of June 30, 2022, the group's cash and cash equivalents amounted to RMB 550.3 million, an increase from RMB 250.0 million as of December 31, 2021[70]. - The current ratio as of June 30, 2022, was 679.9%, up from 267.8% as of December 31, 2021[71]. - Total assets decreased from RMB 3,703.5 million as of December 31, 2021, to RMB 3,032.3 million as of June 30, 2022, while total liabilities dropped from RMB 988.4 million to RMB 262.3 million[71]. - The debt-to-equity ratio improved from 26.7% at the end of 2021 to 8.6% as of June 30, 2022, with no interest-bearing borrowings reported[73][74]. - The company reported a significant increase in cash and cash equivalents, reaching RMB 550,301,000 compared to RMB 249,953,000 at the end of 2021[144]. - The net cash used in operating activities for the six months ended June 30, 2022, was RMB (143,224) thousand, an improvement from RMB (277,462) thousand in the same period of 2021[149]. - The net cash generated from investing activities was RMB 490,322 thousand for the six months ended June 30, 2022, compared to RMB (444,115) thousand in the same period of 2021[149]. Operational Costs and Expenses - Sales expenses increased by 23.7% to RMB 4.2 million for the six months ended June 30, 2022, primarily due to increased distribution expenses in the film production and investment business[57]. - Administrative expenses rose by 3.3% to RMB 48.7 million for the six months ended June 30, 2022, mainly due to increased salaries for administrative staff[58]. - Total employee costs for the six months ended June 30, 2022, amounted to RMB 74,975,000, compared to RMB 63,220,000 in the previous year, representing an increase of about 18.6%[182]. Auditor and Compliance - The company has appointed Deloitte as the new auditor following the resignation of PwC due to a disagreement over audit fees[31]. - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2022, and discussed accounting policies and risk management with the independent auditor[100]. - The company’s financial statements have been reviewed and found to comply with Hong Kong Accounting Standards[136]. Shareholder Information - As of June 30, 2022, the company’s major shareholder, Mr. Pu, holds 1,160,934,000 shares, representing 70.14% of the total issued shares of 1,654,937,000[110]. - Cathay Media Holding Inc., controlled by Mr. Pu, also holds 1 share, representing 100% ownership[111]. - The company has a share incentive plan with a maximum of 32,000,000 shares available for distribution, which is approximately 2% of the total issued shares as of the listing date[118]. - As of June 30, 2022, the trustee has purchased a total of 32,000,000 shares under the share incentive plan[119].

Financial Performance - Total revenue for the year ended December 31, 2021, was RMB 578.1 million, a decrease of 26.8%[11] - Adjusted net profit for the same period decreased by 48.9% to RMB 186.7 million[11] - The gross profit for the group decreased by 21.8% to RMB 276.2 million for the year ended December 31, 2021, compared to RMB 353.2 million for the year ended December 31, 2020[60] - Operating profit from continuing operations decreased to RMB 140.3 million for the year ended December 31, 2021, down from RMB 368.3 million for the year ended December 31, 2020[70] - Profit from continuing operations fell from RMB 337.1 million for the year ended December 31, 2020, to RMB 125.5 million for the year ended December 31, 2021[74] - The adjusted net profit for the year ended December 31, 2021, was RMB 186.7 million, a decrease of RMB 178.7 million or 48.9% compared to RMB 365.4 million for the same period in 2020[78] Business Operations - The termination of the operation of Shuimu Yuan resulted in a loss of RMB 53.7 million due to stricter regulations and COVID-19 impacts[8] - The film and television production and investment business recorded an operating loss of RMB 77.0 million, primarily due to delays in project delivery and reduced revenue from clients[9] - The company decided to sell its controlling interest in the media and arts training center due to tightening regulatory requirements and uncertainties related to COVID-19, which is not expected to significantly impact overall performance[32] - The film and television production and investment business generated a revenue decrease of RMB 70 million due to the non-broadcasting of the drama "Zhao Ge" for commercial reasons[33] - The revenue from film and television production and investment decreased significantly from RMB 427.1 million in 2020 to RMB 105.3 million in 2021, largely due to the non-broadcasting of a key television drama[56] Education Sector Performance - Higher education (media and arts) and vocational education business revenue grew by 30.4%, but operating profit decreased by 6.3% to RMB 223.3 million due to credit impairment losses[10] - Revenue from higher education (media and arts) and vocational education increased by 30.4% to RMB 472.8 million for the year ended December 31, 2021, up from RMB 362.6 million for the year ended December 31, 2020, mainly due to an increase in total student enrollment[56] - As of December 31, 2021, the group had approximately 24,694 students, with full-time undergraduate students numbering 20,085, reflecting a year-on-year growth of approximately 40.3%[28] - The undergraduate new student enrollment rate for the 2021/2022 academic year was approximately 97.8%, with total new student numbers reaching 9,364, a year-on-year increase of about 42.1%[28] - The group offers 44 undergraduate programs, with 2 recognized as national first-level programs and 8 as Jiangsu provincial first-level programs[29] Strategic Plans and Future Outlook - The company plans to enhance the quality of its higher education and vocational training offerings and explore new business opportunities in audio and live commerce[15] - The company plans to expand its vocational education capacity, potentially increasing the maximum student capacity from approximately 24,000 to 30,000, and further beyond 40,000 after the acquisition of Olympic College[45] - The company aims to strengthen collaboration between the media, arts, and film production industries and its universities, leveraging expertise and resources to explore the development of audio and live e-commerce businesses[44] - The company is actively pursuing high-quality film and television projects and has invested in three ongoing television dramas, with expected deliveries in 2022[48] Regulatory Environment - The company anticipates further challenges due to ongoing regulatory scrutiny in various sectors in China[7] - Due to new regulatory measures affecting off-campus training, Shuimu Yuan's business was reclassified as discontinued operations as of December 31, 2021[20] - The group faced significant uncertainties in the private higher education sector due to recent regulatory changes in China[108] - The company has complied with all relevant laws and regulations without any significant violations during the year ended December 31, 2021[117] Financial Position - Cash and cash equivalents decreased to RMB 312.4 million as of December 31, 2021, from RMB 1,308.7 million as of December 31, 2020, primarily due to increased capital expenditures for university expansion and payments related to acquisitions[83] - Total assets increased from RMB 3,434.2 million as of December 31, 2020, to RMB 3,703.5 million as of December 31, 2021, while total liabilities rose from RMB 559.0 million to RMB 988.4 million during the same period[84] - The current ratio as of December 31, 2021, was 267.8%, down from 485.2% as of December 31, 2020[84] - The company had no interest-bearing borrowings as of December 31, 2021, consistent with the previous year[86] Acquisitions and Investments - The acquisition of Shuimu Yuan was completed on April 6, 2021, for a total consideration of RMB 300 million, with RMB 165 million already paid and the remainder to be paid in three installments contingent on profit guarantees for 2021, 2022, and 2023[19] - The group agreed to terminate the acquisition of Shuimu Yuan on March 28, 2022, with the consideration equating to the previously paid RMB 165 million and an arrangement for the repayment of RMB 12.7 million in outstanding loans[23] - The group agreed to acquire Olympic College for a total consideration of RMB 450 million, which may be adjusted to RMB 250 million if certain conditions are not met within 36 months[24] - Olympic College currently has approximately 3,000 higher education students and is expected to increase enrollment to 11,000 in the coming years, assuming all conditions are met[25] Employee and Operational Costs - The total employee count as of December 31, 2021, was 2,173, up from 1,555 as of December 31, 2020[96] - Total salary costs for the year ended December 31, 2021, were RMB 137.6 million, compared to RMB 100.9 million for the year ended December 31, 2020[96] - Administrative expenses increased by 25.4% from RMB 73.2 million for the year ended December 31, 2020, to RMB 91.8 million for the year ended December 31, 2021, primarily due to the acquisition of Shuimu Yuan and increased personnel costs in media, arts, and vocational training[66] Shareholder Returns - The board proposed a final dividend of HKD 0.03 per share and a special dividend of HKD 0.03 per share, totaling HKD 0.12 per share for the year, a 50% increase year-on-year[14] - As of December 31, 2021, the company's distributable reserves amounted to RMB 2,237.4 million[180] Risks and Compliance - Risks associated with contractual arrangements include potential penalties from the Chinese government if agreements are deemed non-compliant, which could adversely affect business operations[131] - The company is subject to significant uncertainties in the foreign investment legal framework in China, which may impact its corporate structure and operations[132] - The company relies on dividends from foreign-invested enterprises, and any restrictions on these dividends could significantly limit its ability to distribute profits to shareholders[136]

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 231,023 thousand, a decrease of 39.9% compared to RMB 384,302 thousand in 2020[9] - Gross profit for the same period was RMB 139,917 thousand, down 21.3% from RMB 177,807 thousand in 2020[9] - Adjusted net profit for the six months was RMB 98,803 thousand, a decline of 30.8% from RMB 142,697 thousand in 2020[9] - Operating profit for the six months ended June 30, 2021, was RMB 80,612 thousand, down from RMB 135,429 thousand for the same period in 2020[139] - Net profit for the period decreased from RMB 127.4 million to RMB 91.5 million[64] - The adjusted net profit for the six months ended June 30, 2021, was RMB 98.8 million, a decrease of 30.7% from RMB 142.7 million for the same period in 2020[67] - Basic and diluted earnings per share for the period were both RMB 0.05, down from RMB 0.10 in the same period last year[139] - The overall gross profit decreased by 21.3% from RMB 177.8 million for the six months ended June 30, 2020, to RMB 139.9 million for the six months ended June 30, 2021, while the overall gross margin increased from 46.3% to 60.6%[53] Acquisitions and Expansion - The acquisition of Shuimu Yuan was completed on April 6, 2021, for a total consideration of RMB 300 million, with guaranteed net profits of RMB 24 million, RMB 27.6 million, and RMB 31.7 million for the years ending December 31, 2021, 2022, and 2023 respectively[12] - The acquisition of Olympic College was agreed upon on June 21, 2021, for a total consideration of RMB 450 million, with potential adjustments based on certain conditions[13] - Olympic College currently has approximately 3,000 students and is expected to increase enrollment to 11,000 students post-acquisition[16] - The company anticipates further growth and expansion in its educational offerings and market presence following recent acquisitions[15] - The company expects to expand its higher education capacity to accommodate up to approximately 30,000 students, with potential growth to over 40,000 students following the acquisition of Olympic College[1] - Waterwood, acquired in April 2021, has approximately 3,100 students across seven campuses and recorded contract liabilities of approximately RMB 110.4 million, expected to be recognized as training service revenue in the second half of 2021[21] - The company plans to establish and operate a university in California, USA, to award degrees in animation and media literature, reflecting its commitment to expanding overseas education operations[130] Student Enrollment and Education Services - As of June 30, 2021, the total number of enrolled students reached approximately 17,664, with a year-on-year growth of about 19.2% in vocational education courses[17] - The university offers 44 undergraduate programs, with only 5.7% of approximately 65,000 applicants being admitted for the 2020/2021 academic year[18] - The university anticipates at least a 30% increase in total student enrollment for the 2021/2022 academic year compared to the previous year[28] - The new student accommodation building can accommodate an additional 4,000 students, supporting the goal of increasing student numbers[20] - The group has established partnerships with over 70 leading global media and arts universities for its international foundation program[18] Financial Position and Cash Flow - Cash and cash equivalents as of June 30, 2021, were RMB 463.3 million, down from RMB 1,308.7 million as of December 31, 2020, primarily due to transitional loans totaling RMB 420 million related to the acquisition of the Olympic College[68] - The total equity of the group as of June 30, 2021, was RMB 2,853.4 million, slightly down from RMB 2,875.2 million as of December 31, 2020[71] - The net cash outflow from operating activities was RMB 277,462 thousand, compared to RMB 169,810 thousand in the same period of 2020, indicating a worsening cash flow situation[151] - The company incurred a net cash outflow from investing activities of RMB 444,115 thousand, contrasting with a cash inflow of RMB 133,661 thousand in the previous year[151] - The total liabilities increased to RMB 719,165 thousand from RMB 558,977 thousand, representing an increase of approximately 28.7%[144] Operational Challenges and Market Conditions - Revenue from film and television production and investment plummeted by 97.9% to RMB 4,160 thousand from RMB 197,680 thousand in 2020[9] - The company anticipates that the impact of COVID-19 on its operations and performance in the second half of 2021 will not be significant, as online courses can be provided if in-person classes are restricted[38] - The group’s main business is not significantly affected by the "double reduction" policy, as it focuses on non-academic training for high school students[27] Shareholder and Corporate Governance - The company declared an interim dividend of HKD 0.06 per share for the six months ended June 30, 2021, to be paid on October 22, 2021[103] - The company has established a remuneration committee to formulate salary policies for its directors and senior management[81] - The company has adopted a share incentive plan and a share option scheme following its initial public offering[82] - The post-IPO share incentive plan aims to align the interests of eligible participants with the group's interests and encourage long-term contributions to the group's development and profitability[113] Regulatory and Compliance - The foreign investment law, effective from January 1, 2020, replaces previous laws and serves as the legal foundation for foreign investment in China[126] - The company is actively monitoring regulatory developments regarding foreign investment in education and assessing compliance with qualification requirements[132] - The company is committed to ensuring that contractual arrangements remain legally effective despite potential changes in Chinese laws and regulations regarding foreign investment[129]

Financial Performance - In 2020, Cathay Media and Education Group achieved revenue of RMB 790 million, representing a year-on-year growth of 5.7%[6] - The adjusted net profit, excluding listing expenses and management fees, was RMB 365 million, reflecting a year-on-year increase of 18.5%[6] - Total revenue for the year ended December 31, 2020, was RMB 789.7 million, an increase of 6% from RMB 747.2 million in 2019[15] - The adjusted net profit for the year was RMB 365.4 million, reflecting a 19% increase from RMB 308.2 million in 2019[15] - Revenue increased by 5.7% from RMB 747.2 million in 2019 to RMB 789.7 million in 2020[32] - Revenue from education and training increased by 16.4% from RMB 311.7 million in 2019 to RMB 362.6 million in 2020, representing 45.9% of total revenue[35] - The education and training segment generated revenue of RMB 362.6 million, up 16% from RMB 311.7 million in 2019, with operating profit increasing by 269.2% to approximately RMB 248.2 million[21] - Operating profit rose to RMB 368.3 million for the year ended December 31, 2020, from RMB 234.2 million for the year ended December 31, 2019, with the education and training segment's operating profit increasing by 269.2%[48] - Net profit for the year increased from RMB 194.5 million for the year ended December 31, 2019, to RMB 337.1 million for the year ended December 31, 2020[52] - Gross profit decreased by 5.5% from RMB 372.8 million in 2019 to RMB 353.2 million in 2020, with a gross margin decline from 49.9% to 44.7%[39] Strategic Initiatives - The company plans to strengthen the faculty team at Nanjing Media College and expand art training channels as part of its strategic layout[7] - Cathay Media aims to continue its steady external expansion and seek high-value film and television investment opportunities despite the impact of the pandemic[7] - The strategic direction of the company has been validated through 2020's practices, leading to a decision to increase strategic investments in the art education sector[11] - The acquisition of "Shuimu Yuan" is seen as the beginning of a broader strategy to integrate the art training sector with media and content commercialization[7] - The group plans to expand its educational offerings by establishing new programs in response to industry demand, including cross-border e-commerce and digital publishing[20] - The company aims to expand its higher education capacity and actively seek suitable media arts target schools globally[28] Market and Economic Context - The total GDP of China has exceeded RMB 101 trillion, positioning the country as the second-largest economy globally, which presents opportunities for cultural influence through art[7] - The company recognizes the growing demand for spiritual needs as China enters a moderately prosperous society, indicating a shift in consumer preferences towards art-related markets[8] - The company emphasizes that while technology advances, artistic creation will remain a vital area for human talent demand in the future[8] Operational Developments - The number of students enrolled at Nanjing Media College reached approximately 17,596, with a significant increase of 44.1% in new student admissions for the 2020/2021 academic year[17] - The group successfully launched the television series "Shishahai," which ranked first in national viewership upon its premiere in July 2020[22] - The online film "Don't Call Me Alcohol God" achieved over 100 million views on Tencent Video by the end of 2020[22] - The group has completed the acquisition of Shuimu Yuan, a leading art examination training institution in China, to enhance its training capabilities[24] - The group has initiated the construction of new dormitories to accommodate an additional 5,000 students, addressing the growing demand for student housing[20] Financial Position and Assets - Total assets increased from RMB 1,768.8 million as of December 31, 2019, to RMB 3,434.2 million as of December 31, 2020, while total liabilities rose from RMB 392.0 million to RMB 559.0 million[58] - Cash and cash equivalents increased by 986.2% from RMB 120.5 million as of December 31, 2019, to RMB 1,308.7 million as of December 31, 2020[60] - The debt-to-asset ratio decreased from 22.2% as of December 31, 2019, to 16.3% as of December 31, 2020[66] - As of December 31, 2020, the group's capital commitments amounted to RMB 334.0 million, a significant increase from RMB 1.8 million as of December 31, 2019[69] Governance and Compliance - The company has adopted corporate governance principles and codes as the foundation of its governance practices since its listing[191] - The company has established a corporate governance framework and policies to enhance the board's governance capabilities[191] - The company complied with all applicable provisions of the corporate governance code, with some deviations explained in the report[192] - The company has a senior management team consisting of executive directors with relevant experience in business operations and management[182] - The company has established a remuneration committee to formulate compensation policies for directors and senior management based on qualifications, positions, and years of service[160] Risks and Challenges - The company faces significant uncertainties in its private higher education business following the termination of a cooperation agreement with Communication University of China, impacting recruitment and employment[88] - The company operates in a highly competitive environment in the film production and investment sector, which is subject to various regulatory challenges in China[80] - The company’s film production and investment business relies heavily on audience acceptance, which is inherently difficult to predict, leading to significant risks[80] - The company faces significant uncertainties in the foreign investment legal framework in China, which may impact its corporate structure and operations[106] Employee and Social Responsibility - The total number of employees as of December 31, 2020, was 1,555, with 1,314 teachers in the education and training sector, reflecting the company's support for business expansion[72] - Total salary costs for the year ended December 31, 2020, were RMB 100.9 million, up from RMB 92.7 million for the year ended December 31, 2019[72] - The company is committed to fulfilling social responsibilities and promoting employee welfare, as detailed in the environmental, social, and governance report[90] - The company made charitable donations of approximately RMB 2.0 million during the year ended December 31, 2020[150]

Company Performance - The company produced and delivered the TV drama "Shichahai," which achieved significant success, ranking first in national viewership ratings among competitive dramas aired on CCTV[9]. - The company’s first online movie "Don't Call Me God of Wine" received over 93 million views on Tencent by August 26, 2020[9]. - The company continues to produce TV dramas and online movies as planned despite the ongoing effects of COVID-19[10]. - The company refunded approximately 2 to 4 months of accommodation fees to students, which had a minor impact on the higher education segment's revenue[8]. - The company raised approximately HKD 1,332.8 million from its IPO, intended for the purposes outlined in the prospectus[56]. - The company did not declare an interim dividend for the six months ended June 30, 2020[55]. - The company reported a total comprehensive income of RMB 127,906 thousand for the period, down from RMB 246,085 thousand in the previous year[91]. - The company reported a net loss of RMB 228 thousand in financial income/costs for the six months ended June 30, 2020, compared to a net income of RMB 3,845 thousand in the same period of 2019[144]. Financial Results - The company's revenue for the six months ended June 30, 2020, was RMB 384.3 million, a decrease of 35.9% compared to RMB 599.5 million for the same period in 2019[15]. - Revenue from film and television production dropped significantly by 54.5% to RMB 197.7 million, down from RMB 434.1 million in the previous year[15]. - The higher education segment saw a revenue increase of 12.8%, rising to RMB 186.6 million from RMB 165.4 million[15]. - The gross profit for the six months ended June 30, 2020, was RMB 177.8 million, a decline of 40.5% from RMB 298.9 million in the same period of 2019[21]. - The overall gross margin decreased to 46.3% from 49.9% year-on-year[21]. - The gross margin for the film and television production segment fell to 31.3% from 46.5% due to lower selling prices of modern dramas[22]. - The gross margin for the higher education segment improved to 62.1%, up from 58.7%, attributed to economies of scale[22]. - Operating profit decreased from RMB 289.1 million for the six months ended June 30, 2019, to RMB 135.4 million for the six months ended June 30, 2020, mainly due to a decrease in revenue[27]. - Net profit for the period fell from RMB 245.8 million for the six months ended June 30, 2019, to RMB 127.4 million for the six months ended June 30, 2020[30]. - Adjusted net profit decreased by RMB 103.1 million or 41.9% from RMB 245.8 million for the six months ended June 30, 2019, to RMB 142.7 million for the six months ended June 30, 2020[31]. Expenses and Costs - Sales expenses increased by 176.3% from RMB 8.0 million for the six months ended June 30, 2019, to RMB 22.1 million for the six months ended June 30, 2020, primarily due to the release costs of TV dramas "Shishahai" and "Zhaoge" in 2020[23]. - Administrative expenses rose by 37.6% from RMB 27.9 million for the six months ended June 30, 2019, to RMB 38.4 million for the six months ended June 30, 2020, mainly due to employee benefits related to hiring in the higher education division[24]. - Other income decreased from RMB 8.2 million for the six months ended June 30, 2019, to RMB 6.8 million for the six months ended June 30, 2020, primarily due to a reduction in donation income[25]. - Total operating expenses decreased to RMB 267,081 thousand for the six months ended June 30, 2020, down 20% from RMB 336,430 thousand in the same period of 2019[143]. - Employee benefit expenses increased to RMB 47,729 thousand for the six months ended June 30, 2020, compared to RMB 41,995 thousand in the same period of 2019, reflecting a rise of 14%[143]. Assets and Liabilities - Cash and cash equivalents decreased by 56.8% from RMB 120.5 million as of December 31, 2019, to RMB 52.1 million as of June 30, 2020, primarily due to payments related to TV drama investments and repayment of unsecured loans[35]. - The current ratio increased to 4.59 as of June 30, 2020, compared to 3.04 as of December 31, 2019[35]. - The debt-to-asset ratio was 13.0% as of June 30, 2020, down from 22.2% as of December 31, 2019[40]. - Total assets as of June 30, 2020, were RMB 1,730,203 thousand, slightly down from RMB 1,768,756 thousand at the end of 2019[92]. - Total liabilities were RMB 225,544 thousand as of June 30, 2020[123]. - The company’s total trade receivables reached RMB 267,993,000 as of June 30, 2020, up from RMB 70,336,000 as of December 31, 2019, indicating a substantial increase of about 281%[173]. - The overdue but unimpaired trade receivables amounted to RMB 68,333,000 as of June 30, 2020, related to independent customers with no significant financial difficulties[174]. - The company’s financial liabilities totaled RMB 81,545,000 as of June 30, 2020, a decrease from RMB 86,640,000 as of December 31, 2019, reflecting a reduction of approximately 6.5%[184]. Strategic Initiatives - The company plans to expand its media and arts training programs, leveraging its brand recognition and experience in content creation[13]. - The company aims to optimize tuition pricing and enhance profitability while pursuing mergers and acquisitions in the higher education and arts training sectors[13]. - The company is planning to establish and operate a university in California, USA, to grant bachelor's degrees in animation and media, representing a significant commitment to expanding overseas education operations[81]. - The company has established a holding company, Cathay Picture, Inc., in California to manage the daily operations of the proposed university[81]. - The company is actively monitoring regulatory developments regarding the establishment of Sino-foreign cooperative schools in Jiangsu Province to assess compliance with qualification requirements[83]. Governance and Compliance - The company has established a nomination committee and a remuneration committee in accordance with corporate governance codes[52]. - The company’s shares were not listed on the stock exchange as of June 30, 2020, and thus certain corporate governance codes were not applicable during that period[47]. - The company has taken all reasonable measures to meet qualification requirements for foreign investors, although specific standards remain unclear[83]. - The company is committed to ensuring compliance with the relevant laws and regulations governing foreign investment in education in China[81].