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告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告 全部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責 任。 Strawbear Entertainment Group 稻草熊娛樂集團 （於開曼群島註冊成立的有限公司） （股份代號：2125） 截 至2022年12月31日 止 年 度 的 全 年 業 績 公 告 財務摘要 截至2022年12月31日止年度的收入約為人民幣980.9百萬元，較截至2021年12 月31日止年度約人民幣1,703.1百萬元下降42.4%。 截至2022年12月31日止年度的毛利約為人民幣219.8百萬元，較截至2021年12 月31日止年度約人民幣516.2百萬元下降57.4%。 截至2022年12月31日止年度的溢利約為人民幣50.0百萬元，較截至2021年12 月31日止年度約人民幣169.4百萬元下降70.5%。 截 至2022年12月31日 止 年 度 的 經 調 整 純 利*約 為 人 民 幣73.6百 萬 元，較 截 至 ...

Content Development and Production - The group has established a comprehensive ecosystem focused on self-generated IP for content development and production, adapting to the growing demand for quality content [8]. - As of June 30, 2022, the group has a rich reserve of diverse and varied content in preparation for broadcasting [8]. - The group has been recognized as one of the top 41 institutions holding the "First-Class Television Drama Production License" from 2017 to 2023, and is the only non-state-owned enterprise in Jiangsu Province to hold this license [9]. - The platform-based operational model has enhanced efficiency across production processes, leading to positive market responses for aired dramas [10]. - The group has a robust pipeline of over ten high-quality dramas in preparation, featuring a variety of genres and themes [10]. - The group aims to leverage its industry advantages to provide standardized, refined, and personalized management services to partners in the film and television industry [11]. - The group is committed to long-term growth and innovation, focusing on digital development trends and exploring diversified output channels [9]. - The group has implemented a cautious yet optimistic approach to exploring new content formats and comprehensive layouts in the content sector [10]. - The group emphasizes the importance of quality content production and aims to create more high-quality dramas [11]. - The company has developed over 10 original IPs and more than 30 adapted IPs, covering various genres such as youth campus, modern workplace, and historical themes, enhancing its diverse and quality IP reserve [14]. - The company is actively exploring D2C content and online-offline interactive experiences based on quality IP, aiming to expand its market presence and collaboration opportunities with domestic and international streaming platforms [13]. - The company emphasizes the importance of quality content and has increased its requirements for content quality and diversity across various themes, including realism and comedy [17]. - The company is enhancing collaboration with industry talents and artists through business and equity partnerships, aiming to attract outstanding artists to its content ecosystem [13]. - The company is focusing on the development of high-quality IPs to improve its core competitive advantage in content production, aiming for cost reduction and efficiency enhancement [14]. - The company is committed to continuous and stable creation and reserve of quality IPs, which is expected to empower its content production capabilities [14]. - The company is pursuing a diversified approach to business partnerships and collaboration methods, leveraging its industry experience and resource integration capabilities [13]. - The company has a strong focus on the production of original content, with multiple projects in various stages of development, reflecting its commitment to quality and innovation [17]. Financial Performance - The group's revenue for the six months ended June 30, 2022, was RMB 463.6 million, a decrease of 52.4% compared to RMB 975.0 million for the same period in 2021 [35]. - The gross profit for the same period was RMB 142.9 million, down 38.8% from RMB 233.7 million in the previous year [35]. - The group delivered three series, generating stable licensing revenue of RMB 461.6 million for the six months ended June 30, 2022, compared to RMB 483.7 million for the same period in 2021 [23]. - The group did not generate revenue from custom series production for the six months ended June 30, 2022, due to no deliveries made during this period [25]. - The adjusted net profit for the six months ended June 30, 2022, was RMB 85.7 million, compared to RMB 108.4 million for the same period in 2021 [35]. - Revenue decreased from RMB 975.0 million in the six months ended June 30, 2021, to RMB 463.6 million in the same period of 2022, primarily due to no custom series being aired [39]. - Revenue from licensing of series remained stable at RMB 461.6 million for the six months ended June 30, 2022, compared to RMB 483.7 million for the same period in 2021 [41]. - Gross profit decreased from RMB 233.7 million in the six months ended June 30, 2021, to RMB 142.9 million in the same period of 2022, while gross margin increased from 24.0% to 30.8% [46]. - Sales and distribution expenses significantly decreased by 78.4% from RMB 76.3 million to RMB 16.5 million due to a reduction in the number of series distributed to television stations [51]. - Financing costs increased by 44.2% from RMB 5.4 million to RMB 7.8 million, mainly due to increased interest on discounted receivables [53]. - Income tax expenses decreased by 19.4% from RMB 41.5 million to RMB 33.4 million, primarily due to a reduction in deferred tax expenses [54]. - Other income and gains remained relatively stable at RMB 17.9 million for the six months ended June 30, 2022, compared to RMB 17.8 million for the same period in 2021 [49]. - The company did not generate any revenue from custom series production in the six months ended June 30, 2022, due to no deliveries made to clients [44]. - The total assets increased from RMB 2,840.6 million as of December 31, 2021, to RMB 2,896.0 million as of June 30, 2022, reflecting a growth of 1.9% [69]. - The total liabilities decreased from RMB 1,067.3 million as of December 31, 2021, to RMB 1,062.1 million as of June 30, 2022, resulting in a slight reduction in the debt ratio from 37.6% to 36.7% [69]. - The company reported a cash and cash equivalents balance of RMB 253.5 million as of June 30, 2022, down from RMB 302.8 million as of December 31, 2021 [70]. - The current ratio improved from 2.54 as of December 31, 2021, to 2.61 as of June 30, 2022, due to an increase in current assets [76]. - The company did not declare any interim dividend for the six months ended June 30, 2022 [65]. - Capital expenditures increased from RMB 0.4 million in the first half of 2021 to RMB 2.1 million in the first half of 2022 [74]. - The company has a total of 63 employees as of June 30, 2022, with the largest functional group being production, accounting for 33.3% of total employees [87]. - The company has no immediate plans for significant investments or capital assets beyond those disclosed in the report [79]. - The company has adopted corporate governance practices to safeguard shareholder interests and enhance corporate value [90]. - The company has not encountered any employee strikes or labor disputes that could significantly impact its business [88]. - The company has established a risk management framework to monitor credit risk associated with trade receivables and other financial assets [84]. - The net proceeds from the global offering amounted to approximately HKD 1,071.1 million after deducting underwriting fees and other expenses [96]. - As of June 30, 2022, the company has utilized HKD 915.6 million of the net proceeds, leaving a remaining balance of HKD 155.5 million [101]. - The company has reallocated approximately HKD 635.7 million (59.4% of net proceeds) for various productions and acquisitions, including HKD 528.6 million for new projects and HKD 107.1 million for acquiring quality IP [96]. - The company plans to invest HKD 107.1 million in potential acquisitions to enhance its market position and accelerate the development and production of its series [100]. - The company aims to ensure stable growth in series production and distribution by acquiring more quality IP through the acquisition of a company focused on web drama investment and production [100]. Shareholder and Governance Structure - The company’s board of directors includes independent non-executive directors and a non-executive director, ensuring compliance and risk management oversight [95]. - Leading Glory is owned 99% by Master Genius, a holding company of Family Trust Singapore, with Mr. Liu as the trustee [106]. - Gorgeous Horizon was issued 1,882,400 shares after Mr. Liu exercised pre-IPO share options on May 12, 2022 [107]. - Master Sagittarius holds 328,128,000 shares, representing 47.10% of the total shares [118]. - Master Genius holds 290,480,000 shares, representing 41.70% of the total shares [118]. - Gorgeous Horizon holds 37,648,000 shares, representing 5.40% of the total shares [118]. - Mr. Liu has a beneficial interest in Jiangsu Strawbear with a holding of 77.9% [114]. - The voting arrangement allows Mr. Liu to exercise voting rights on behalf of other parties [115]. - Family Trust Singapore acts as a trustee for multiple entities, holding significant shares in Leading Glory [119]. - The total shares held by Mr. Liu and related entities indicate a strong control over the company [111]. - The report highlights the importance of trust structures in ownership and control of shares [108]. - Gorgeous Horizon was issued 1,882,400 shares after exercising pre-IPO stock options on May 12, 2022, with 35,765,600 shares remaining unexercised as of June 30, 2022 [120]. - The pre-IPO stock option plan was approved on May 11, 2020, allowing selected participants to purchase equity interests in the company, with a total of 37,648,000 options granted to the CEO, representing 5.68% of the total shares issued as of the listing date [125][128]. - The exercise price for the options granted to the CEO is set at $0.000025 per share [129]. - As of June 30, 2022, 63,120,000 shares out of 97,300,000 were held through derivative interests, with 34,180,000 shares held by Snow Lake Capital (Hong Kong) Limited, equating to approximately 4.91% of the issued shares [124]. - The 2021 Restricted Share Unit Plan was adopted on September 15, 2021, allowing for a total of 20,639,010 restricted shares to be granted, representing about 3% of the total shares issued as of the adoption date [131]. - The plan aims to recognize contributions to the group's growth and development, targeting employees and key industry talents [132]. - The vesting schedule for the pre-IPO stock options includes a maximum vesting percentage of 40% by May 12, 2026 [129]. - Leading Glory can exercise voting rights on behalf of other contracting parties, thus being considered as having interests in the company's equity [122]. - The company has established a trust structure involving various entities for ownership and control purposes, including Family Trust Singapore and Gold Pisces [123]. - The company does not have knowledge of any other individuals holding interests or short positions that require disclosure under the Securities and Futures Ordinance as of June 30, 2022 [124]. - A total of 16,780,000 restricted stock units were granted on November 4, 2021, to 59 selected participants, equivalent to 16,780,000 shares [133]. - An additional 3,859,000 restricted stock units were granted on April 19, 2022, to 6 selected participants, equivalent to 3,859,000 shares [136]. - As of June 30, 2022, 14,732,000 restricted stock units were unexercised from the initial grant of 16,780,000 [136]. - The 2022 restricted stock unit plan allows for a total of 20,842,410 shares to be granted, representing 3% of the total shares issued as of April 28, 2022 [141]. - The 2022 restricted stock unit plan was approved to incentivize selected participants contributing to the group's growth and development [141]. - The vesting schedule for the 2022 restricted stock units includes specific dates for 6,141,000 units, with the first vesting occurring on May 20, 2022 [147]. - No purchases, sales, or redemptions of the company's listed securities occurred during the reporting period [147]. - There were no significant events after the reporting period that could impact the group [148]. Operational Insights - The company plans to continue focusing on "inherent growth" by developing and producing content products centered around self-owned IP, aiming to enhance the output rate of "quality series" [28]. - The group aims to explore new avenues in the entertainment industry, including expanding into overseas content markets and interactive entertainment [28]. - The company reported a loss from the sale of a joint venture of RMB 622 thousand in the first half of 2021, with no such loss reported in the first half of 2022 [166]. - The group operates a single reportable operating segment, simplifying performance monitoring and resource allocation [185]. - The total customer contract revenue for the six months ended June 30, 2022, was entirely generated from mainland China, with no revenue from other regions [191]. - The group has not experienced any impact from the recent accounting standard amendments on its financial position or performance [183]. - The group's cost of sold inventory decreased to RMB 320,673 thousand for the six months ended June 30, 2022, compared to RMB 741,261 thousand for the same period in 2021, representing a reduction of approximately 56.7% [196]. - The group's financing costs totaled RMB 7,823 thousand for the six months ended June 30, 2022, an increase of 44.2% from RMB 5,426 thousand in the same period of 2021 [198]. - The group reported a significant increase in employee benefits expenses, which rose to RMB 9,398 thousand for the six months ended June 30, 2022, compared to RMB 4,047 thousand in the same period of 2021, marking an increase of approximately 132.5% [196]. - The group recognized a government grant of RMB (12,321) thousand for the six months ended June 30, 2022, compared to RMB (7,265) thousand in the same period of 2021, indicating an increase in government support [196]. - The group's share of profit from joint ventures increased to RMB 1,246 thousand for the six months ended June 30, 2022, compared to RMB 1,082 thousand in the same period of 2021, reflecting a growth of approximately 15.2% [196]. - The group did not incur any income tax liabilities in Hong Kong due to no taxable profits generated during the period [199]. - The effective tax rate for the group's subsidiaries in mainland China is set at 25%, with certain subsidiaries benefiting from reduced rates of 2.5% and 10% for small and micro enterprises [200]. - The group reported a net foreign exchange gain of RMB 188 thousand for the six months ended June 30, 2022, compared to a loss of RMB (6,681) thousand in the same period of 2021, indicating a positive turnaround [196]. - The group’s depreciation of property, plant, and equipment decreased significantly to RMB 506 thousand for the six months ended June 30, 2022, from RMB 2,225 thousand in the same period of 2021, a reduction of approximately 77.3% [196].

Content Development and Strategy - The company aims to enhance its content ecosystem and embrace diverse and inclusive content, focusing on long-term growth and innovation [12]. - The company has improved its internal quality control capabilities, allowing it to adapt quickly to changing content demands and market trends [13]. - The company is committed to creating high-quality content that meets dual high standards and targets precise user profiles [13]. - The company has focused on integrating resources to enhance both the quantity and quality of its content offerings [12]. - The company is cautiously optimistic about exploring new content formats and continuously laying out its content strategy [12]. - The company plans to focus on content quality and maintain a positive cycle in content production, emphasizing realism in upcoming projects [26]. - The company aims to explore new business avenues, including D2C content and overseas markets, with multiple D2C projects already in the pipeline [31]. - A strategic partnership was initiated with Shanghai Jinhui Film and Television Communication Co., Ltd. for a 100% equity acquisition to enhance the content ecosystem [30]. - The company will continue to seek collaboration with industry talents and artists to enrich its content resources and drive internal growth [30]. - The company emphasizes the importance of a diverse and high-quality IP reserve as a foundation for creating premium content [18]. - The group plans to continue enhancing its content production capabilities and aims to provide diverse and engaging content to the audience [36]. - The group is actively preparing several new projects, including contemporary urban dramas and historical legends, with a focus on quality and audience engagement [41]. - The company plans to focus on content development and production centered around its own IP, aiming to enhance brand effects and commercial success [50]. Financial Performance - The company's revenue increased by 78.8% year-on-year from RMB 952.4 million in 2020 to RMB 1,703.1 million in 2021 [21]. - Gross profit rose by 98.7% year-on-year from RMB 259.8 million in 2020 to RMB 516.2 million in 2021 [22]. - Annual profit surged by 831.1% year-on-year from RMB 18.2 million in 2020 to RMB 169.4 million in 2021 [23]. - Adjusted net profit increased by 48.3% year-on-year from RMB 130.9 million in 2020 to RMB 194.1 million in 2021 [24]. - Revenue from series broadcasting rights increased from RMB 625.1 million in 2020 to RMB 1,107.2 million in 2021, a growth of 77.0% [68]. - Custom series production revenue rose from RMB 280.2 million in 2020 to RMB 540.2 million in 2021, representing an increase of 92.7% [69]. - Gross profit surged by 98.7% from RMB 259.8 million in 2020 to RMB 516.2 million in 2021, with a gross margin improvement from 27.3% to 30.3% [71]. - Other income increased by 77.4% from RMB 24.9 million in 2020 to RMB 44.1 million in 2021, primarily due to government subsidies and increased bank interest income [75]. - Sales and distribution expenses rose significantly by 180.8% from RMB 81.0 million in 2020 to RMB 227.4 million in 2021, driven by an increase in the number of series distributed [76]. - Administrative expenses decreased by 7.3% from RMB 61.0 million in 2020 to RMB 56.6 million in 2021, mainly due to reduced listing expenses [77]. - Financing costs increased by 121.3% from RMB 9.9 million in 2020 to RMB 22.0 million in 2021, attributed to higher bank loan balances [78]. - Income tax expenses rose by 154.0% from RMB 30.2 million in 2020 to RMB 76.8 million in 2021, reflecting increased taxable profits [79]. - The company reported a net cash position of RMB 302.8 million as of December 31, 2021, compared to RMB 95.6 million as of December 31, 2020 [100]. - The return on equity increased from 8.7% for the year ended December 31, 2020, to 17.0% for the year ended December 31, 2021, due to significant profit growth [108]. - The return on assets increased from 0.9% for the year ended December 31, 2020, to 7.2% for the year ended December 31, 2021, primarily due to significant profit growth during the year [109]. Operational Highlights - The company successfully launched 8 new series in 2021, achieving a 100% increase compared to 4 series in 2020, driven by the deepening of its platform operation model [13]. - The number of series broadcasted increased by 66.7%, from 9 series in 2020 to 15 series in 2021 [42]. - The group delivered three custom series in 2021, maintaining the same number as in 2020, but the revenue from this segment surged by 92.8% from RMB 280.2 million to RMB 540.2 million [46]. - The group has four television dramas and four web dramas that have been produced or released but are yet to be aired, with expected airing dates in 2022 [39]. - The group has been recognized for its content production capabilities, holding a top-tier production license for five consecutive years since 2017 [36]. - The company has multiple custom dramas in post-production or production stages, including "Please, My Lord" and "Moon Song" as of December 31, 2021 [47]. - The group achieved a significant increase in revenue from broadcasting rights, rising from RMB 625.1 million in 2020 to RMB 1,107.2 million in 2021, marking a growth of 77.1% [42]. Corporate Governance and Management - The board has resolved not to recommend a final dividend for the year ended December 31, 2021 [98]. - The company has not disclosed any significant competitive issues related to board members' positions in other companies, ensuring compliance with listing rules [156]. - The company has seen a strategic shift with the resignation of non-executive director Zeng Ying, effective April 19, 2022, who previously provided strategic advice and financial management recommendations [157]. - Liu Fan joined the group as a non-executive director in April 2022, bringing extensive experience in investment banking and secondary market investment [162]. - The board of directors emphasizes the importance of sustainable development performance and has established an ESG committee to oversee related strategies and goals [191]. ESG and Corporate Social Responsibility - The company is committed to enhancing its ESG practices and has set environmental goals, actively engaging in green and low-carbon initiatives in response to national strategies [192]. - The company identified 15 highly important ESG issues, 4 moderately important issues, and 1 lowly important issue during the reporting period, focusing on the highly important issues in the report [199]. - The company emphasizes corporate social responsibility and has implemented strict disease prevention measures to mitigate COVID-19 risks [52].

Financial Performance - For the six months ended June 30, 2021, the company's revenue was approximately RMB 975.0 million, an increase of 68.1% compared to RMB 579.8 million for the same period in 2020[10]. - The company's net profit for the six months ended June 30, 2021, was approximately RMB 94.5 million, up 74.5% from RMB 54.1 million for the same period in 2020[10]. - Revenue increased from RMB 579.8 million for the six months ended June 30, 2020, to RMB 974.9 million for the six months ended June 30, 2021, representing a growth of 68%[43]. - Gross profit rose significantly by 72.3% from RMB 135.6 million in the first half of 2020 to RMB 233.7 million in the first half of 2021, with a slight increase in gross margin from 23.4% to 24.0%[49]. - Adjusted net profit increased from RMB 72.1 million for the six months ended June 30, 2020, to RMB 108.4 million for the six months ended June 30, 2021, reflecting a growth of 50.5%[41]. - The group’s profit before tax for the six months ended June 30, 2021, was RMB 94,147,000, compared to RMB 54,128,000 for the same period in 2020, representing a year-on-year increase of 74.0%[189]. Revenue Sources - Revenue from licensing broadcasting rights for series was RMB 483.7 million for the six months ended June 30, 2021, compared to RMB 483.1 million for the same period in 2020, indicating stable income[24]. - The revenue from customized drama production increased from RMB 84.9 million for the six months ended June 30, 2020, to RMB 457.7 million for the six months ended June 30, 2021, driven by an increase in both the number and scale of investments in customized dramas[25]. - The group's customer contract revenue for the six months ended June 30, 2021, was RMB 974,983 thousand, a significant increase of 69.5% compared to RMB 575,004 thousand for the same period in 2020[171]. - Revenue from customized series production reached RMB 457,664 thousand, up from RMB 84,906 thousand in the previous year, indicating a growth of 438.5%[172]. Operational Efficiency - The platform-based operational model allows the company to efficiently integrate key resources in the production ecosystem, leading to optimized content creation processes[12]. - The company has achieved stable organic growth in the number of broadcast and preparatory dramas during the first half of 2021, reflecting the scalability effects of its operational model[12]. - The company has optimized its internal organizational structure and functional divisions to enhance its service capabilities in the production process[12]. - The company believes that its continuous improvement in production capabilities will help maintain its leading position in a competitive market[11]. - The company has streamlined application procedures for content review and approval, potentially shortening production cycles for dramas[12]. Content Development and IP Strategy - The company aims to enhance its IP diversification and monetization capabilities, as well as strengthen its resource integration across the entire industry chain[11]. - The group is actively developing 13 original IPs and 34 adapted IPs as of June 30, 2021, enhancing its competitive advantage in series production[15]. - The group established joint ventures with leading screenwriters and directors in the first half of 2021 to explore long-term strategic cooperation[18]. - The company is focused on producing high-quality and diverse content to sustain its competitive edge in the industry[11]. - The company plans to continue expanding its customized drama business, leveraging opportunities from online video platforms to reduce operational funding pressure and secure distribution channels[26]. Financial Position and Assets - Total assets increased from RMB 1,859.9 million as of December 31, 2020, to RMB 2,678.3 million as of June 30, 2021[73]. - Total liabilities decreased from RMB 1,635.3 million as of December 31, 2020, to RMB 973.1 million as of June 30, 2021, resulting in a debt-to-asset ratio decline from 87.9% to 36.3%[73]. - The group's cash and cash equivalents increased to RMB 748.0 million as of June 30, 2021, from RMB 95.6 million as of December 31, 2020[74]. - The current ratio improved from 1.45 as of December 31, 2020, to 2.61 as of June 30, 2021, due to a decrease in current liabilities and an increase in current assets[81]. - The company's net asset value as of June 30, 2021, was approximately RMB 769.55 million, an increase from RMB 379.79 million as of December 31, 2020[86]. Governance and Corporate Structure - The company has adopted corporate governance codes to safeguard shareholder interests and enhance accountability[97]. - The audit committee consists of two independent non-executive directors and one non-executive director, overseeing compliance and financial reporting processes[100]. - The company raised approximately HKD 1,071.1 million from the global offering, with net proceeds allocated for various projects[103]. - The company has plans to acquire high-quality IP to ensure stable growth in series production and distribution[107]. - The company has experienced changes in its board, with Mr. Wang Jun resigning for health reasons and Ms. Zeng Ying appointed as a non-executive director[112]. Market and Competitive Landscape - The company is exploring partnerships with quality content providers and seeking to expand into D2C content markets to enhance its content offerings[30]. - The company aims to enhance its brand influence by seeking high-quality partners that align with its values and development strategies[18]. - The impact of COVID-19 on the company's operations has been minimal, with only a slight delay in the production of "Yiqi Shen Huxi" resulting in a loss of approximately RMB 1.1 million[34]. - The company has implemented strict COVID-19 prevention measures to protect employees and ensure continuity in production processes[34]. Employee and Compensation - Total employee compensation expenses, including directors' remuneration, amounted to RMB 5.0 million for the six months ending June 30, 2021[93]. - The company has a total of 79 employees as of June 30, 2021, with 27.9% in production roles and 21.4% in R&D[93]. Joint Ventures and Investments - The group's share of profit from joint ventures for the six months ended June 30, 2021, was RMB 315,000, while it recorded a loss of RMB 1,397,000 from joint ventures[200]. - The joint venture Nanjing Huawen ceased operations and liquidated in May 2021, resulting in a recovery of RMB 14,000,000 and a net disposal loss of RMB 622,000 during the period[199]. - The group's investment in joint ventures reflects a strategic focus on cultural and entertainment sectors within China[199]. - The financial data indicates a significant decline in joint venture performance compared to the previous year, highlighting potential areas for operational improvement[200].

Financial Performance - For the fiscal year ended December 31, 2020, the revenue was approximately RMB 952.4 million, an increase of 24.5% compared to RMB 765.1 million for the year ended December 31, 2019[14]. - The gross profit for the same period was approximately RMB 259.8 million, up 141.4% from RMB 107.6 million in the previous year[14]. - The net profit for the fiscal year was approximately RMB 18.2 million, a decrease of 63.9% from RMB 50.4 million in 2019[14]. - The adjusted net profit was approximately RMB 130.9 million, an increase of 100.1% compared to RMB 65.4 million in 2019[14]. - As of December 31, 2020, the net asset value was approximately RMB 224.6 million, up 15.5% from RMB 194.5 million in the previous year[14]. - The company's revenue increased by 24.5% from RMB 765.1 million in 2019 to RMB 952.4 million in 2020[27]. - Gross profit surged by 141.4% from RMB 107.6 million in 2019 to RMB 259.8 million in 2020[27]. - Overall gross margin improved significantly from 14.1% in 2019 to 27.3% in 2020[27]. - The adjusted net profit for the year 2020 was RMB 130.9 million, compared to RMB 65.4 million in 2019, reflecting a significant increase of approximately 99.5%[54]. Business Development and Strategy - The company has developed a total of 34 IPs available for film and television adaptation, including 7 original scripts and 27 adapted scripts[15]. - In June 2020, the company acquired Novartis Vision, which focuses on visual effects, virtual shooting, and advanced filming and production technology[15]. - The company plans to deepen its platform-based operational model to drive stable organic growth and enhance its content production capabilities[19]. - The company aims to explore new business developments and extend its operations across different segments of the cultural entertainment industry[19]. - The company aims to explore new business opportunities in overseas markets and the 2C content market[20]. - Strategic partnerships are being sought to enhance the content ecosystem and brand value through equity or business collaborations[20]. - The company has established joint ventures like Xingyu Yinyue and Beijing Mixiong to enter the artist management market[20]. - The company plans to expand its business opportunities with international market participants to diversify revenue sources[44]. Production and Content - The company produced 12 television series in the fiscal year ending December 31, 2020, with 6 being self-produced[31]. - The revenue from self-produced drama broadcasting rights decreased by 9.6% from RMB 571.4 million in 2019 to RMB 516.3 million in 2020[39]. - The gross profit margin for self-produced drama broadcasting rights increased significantly from 11.2% in 2019 to 24.4% in 2020[39]. - The revenue from custom drama production increased from zero in 2019 to RMB 280.2 million in 2020, accounting for approximately 29.4% of the total revenue[41]. - The company delivered three custom dramas in 2020, with "I Like You" recording over 1 billion effective views, making it one of the most popular dramas of the year[41]. - The company has two TV dramas and two web dramas in post-production as of December 31, 2020, expected to air in 2021[35]. - The company plans to continue expanding its IP reserves through collaborations with well-known writers and screenwriters[38]. - The company expects to release four series in the fourth quarter of 2021, including one self-produced and three commissioned series[51]. Financial Position and Assets - The company's total assets decreased from RMB 2,052.3 million as of December 31, 2019, to RMB 1,859.9 million as of December 31, 2020, while total liabilities decreased from RMB 1,857.8 million to RMB 1,635.3 million during the same period[97]. - The debt-to-equity ratio improved from 118.3% as of December 31, 2019, to 64.2% as of December 31, 2020, primarily due to a reduction in net debt[107]. - The company's cash and cash equivalents increased from RMB 300.8 million as of December 31, 2019, to RMB 517.9 million as of December 31, 2020, while current liabilities decreased from RMB 248.5 million to RMB 356.3 million[98]. - Current assets decreased from RMB 1,855.1 million as of December 31, 2019, to RMB 1,663.8 million as of December 31, 2020, while current liabilities decreased from RMB 1,554.3 million to RMB 1,145.9 million, resulting in a net current asset value increase from RMB 300.8 million to RMB 517.9 million[85]. - Total non-current assets decreased slightly from RMB 197.2 million as of December 31, 2019, to RMB 196.1 million as of December 31, 2020[85]. Governance and Compliance - The company has appointed independent non-executive directors with extensive experience in finance and capital operations to enhance governance[156][157]. - The company is committed to providing independent opinions and judgments to the board of directors through its independent non-executive directors[156][157]. - The company has a diverse board with members holding qualifications from various accounting and financial associations, enhancing its governance framework[155][159]. - The company has a strict policy against child labor and forced labor, with no violations reported during the reporting period[199]. Environmental, Social, and Governance (ESG) - The company aims to enhance its sustainable development practices as outlined in its first Environmental, Social, and Governance (ESG) report, covering the period from January 1 to December 31, 2020[169]. - The ESG report follows the guidelines set by the Hong Kong Stock Exchange, focusing on key performance indicators related to environmental and social aspects[170]. - The company reported a total greenhouse gas emissions of 108.11 tons of CO2 equivalent for 2020, with a direct emission density of 0.0011 tons of CO2 equivalent per RMB 10,000 in revenue[181]. - The total waste generated by the company in 2020 included 0.0025 tons of hazardous waste (waste toner cartridges) and 0.3 tons of non-hazardous waste (office paper)[181]. - The company reported no violations of environmental laws and regulations during the reporting period[183]. Employee and Workplace - The total employee compensation, including directors' salaries, amounted to RMB 16.7 million for the year ended December 31, 2020[128]. - The group had a total of 81 employees, with 29.6% in production and 18.5% in research and development[128]. - The company maintained a competitive and incentive-based salary system, ensuring compliance with labor laws and providing various insurance benefits to employees[187]. - The company has implemented a comprehensive employee training program to enhance professional development and team building[176]. - The company emphasized employee welfare by providing gifts during holidays and support for employees in need, enhancing their sense of belonging and happiness[199].