樂華娛樂集團 目錄 | 公司資料 | 2 | | --- | --- | | 管理層討論及分析 | 4 | | 董事及高級管理層 | 19 | | 環境 、社會及管治報告 | 24 | | 董事會報告 | 54 | | 企業管治報告 | 81 | | 獨立核數師報告 | 97 | | 綜合全面收益表 | 102 | | 綜合財務狀況表 | 104 | | 綜合權益變動表 | 106 | | 綜合現金流量表 | 108 | | 綜合財務報表附註 | 109 | | 財務概要 | 189 | | 釋義及詞彙 | 190 | 公司資料 董事 執行董事 杜華女士 （董事長兼首席執行官） 孫一丁先生 孫樂先生 非執行董事 孟鈞先生 姚璐女士（於2024年2月5日辭任） 獨立非執行董事 范輝先生 呂濤先生 黃九嶺先生 審核委員會 范輝先生 （主席） 呂濤先生 黃九嶺先生 薪酬委員會 呂濤先生 （主席） 孫一丁先生 黃九嶺先生 提名委員會 杜華女士 （主席） 呂濤先生 范輝先生 聯席公司秘書 張文勝先生 鍾明輝先生 授權代表 孫一丁先生 鍾明輝先生 註冊辦事處 Cricket Square, Hutchins Drive ...

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 就 因 本 公 告 全部或任何部分內容所產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 YH Entertainment Group 樂華娛樂集團 （ 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ） （股份代號：2306） 截 至2024年12月31日止年度之 全年業績公告 董事會欣然宣佈本集團截至2024年12月31日 止 年 度 之 經 審 核 綜 合 業 績，連 同 2023年 同 期 之 比 較 數 字： 財務摘要 截 至12月31日止年度 | 2024年 | 同比變動 | 2023年 | （人 | 民 | 幣 | 千 | 計， | 以 | 元 | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 分 | 除 | ...

Financial Performance - Total revenue decreased by 4.8% from RMB 364.8 million in the six months ended June 30, 2023, to RMB 347.3 million in the current reporting period[5]. - Gross profit increased by 17.0% to RMB 89.1 million, with a gross margin of 25.6%, up from 20.9% in the previous period[5]. - Operating profit surged to RMB 35.2 million, a significant increase of 1,863.0% compared to RMB 1.8 million in the prior period[5]. - The company recorded a profit of RMB 29.4 million during the reporting period, a turnaround from a loss of RMB 175.9 million in the previous period[6]. - Adjusted net profit for the six months ended June 30, 2024, was RMB 59.1 million, compared to RMB 49.9 million for the same period in 2023, reflecting an increase of 18.0%[29]. - The adjusted net profit margin improved to 17.0% for the six months ended June 30, 2024, up from 13.7% in the previous year[29]. - The company reported a net profit of RMB 30,796 thousand for the six months ended June 30, 2024, compared to a profit of RMB 29,351 thousand for the same period in 2023, reflecting a year-over-year increase of about 4.9%[74]. Revenue Breakdown - Revenue from artist management accounted for 87.3% of total revenue, totaling RMB 303.2 million, down 5.1% year-on-year[9]. - Music IP production and operation revenue increased by 18.3% to RMB 35.0 million, representing 10.1% of total revenue[9]. - Revenue from the pan-entertainment business decreased by 42.6% to RMB 9.0 million, contributing 2.6% to total revenue[9]. - Revenue from artist management decreased by 5.1% from RMB 319.4 million to RMB 303.2 million due to a reduction in entertainment content services provided by signed artists[10]. - Revenue from music IP production and operation increased by 18.3% from RMB 29.6 million to RMB 35.0 million, primarily due to increased licensing income from music streaming platforms[11]. - Revenue from pan-entertainment business decreased by 42.6% from RMB 15.7 million to RMB 9.0 million, mainly due to reduced income from concerts[13]. Expenses and Costs - Sales and marketing expenses rose by 25.6% to RMB 21.1 million, mainly due to increased employee benefits and depreciation[20]. - Administrative expenses decreased by 30.7% to RMB 44.5 million, primarily due to the absence of listing expenses following the completion of the IPO in January 2023[21]. - Total operating costs for the six months ended June 30, 2024, were RMB 323,828 thousand, down from RMB 369,656 thousand, a reduction of 12.4%[98]. Assets and Liabilities - The company's trade receivables decreased by 23.2% from RMB 95.7 million as of December 31, 2023, to RMB 73.5 million as of June 30, 2024[31]. - The company's cash and cash equivalents increased from RMB 613.4 million as of December 31, 2023, to RMB 738.7 million as of June 30, 2024[35]. - The company's borrowings decreased from RMB 266.2 million as of December 31, 2023, to RMB 253.9 million as of June 30, 2024[35]. - Total liabilities decreased from RMB 721,781 thousand as of December 31, 2023, to RMB 690,518 thousand as of June 30, 2024, representing a reduction of approximately 4.3%[73]. - Non-current liabilities decreased from RMB 298,964 thousand to RMB 283,713 thousand, a decline of about 5.1%[73]. Investments and Acquisitions - The acquisition of assets related to several virtual artist projects, including the A-SOUL project, was completed to enhance capabilities in the virtual artist sector[6]. - The company aims to expand its music IP library by acquiring high-quality music rights from copyright holders[11]. - On April 19, 2024, the company entered into asset transfer agreements to acquire assets related to virtual artists for a cash consideration of RMB 30 million, completed in July 2024[152]. Shareholder Information - Major shareholders include CMC Sports Investment Limited and Alibaba Group Holding Limited, each holding approximately 12.26% of the company's equity[54]. - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2024[46]. - The company has a total of 871,881,000 issued shares as of June 30, 2024, which includes treasury shares[55]. Strategic Initiatives - The company aims to leverage its brand influence and market resources to capitalize on existing and future business opportunities[7]. - YH Entertainment USA was established to expand business into the U.S. entertainment market, focusing on recruiting qualified artists[14]. - The company continues to explore business opportunities in Southeast Asia and Japan to enhance its global market presence[14]. - The company plans to enhance artist training capabilities with the opening of its own training center in the second half of 2024[10]. Compliance and Governance - The company emphasizes compliance with the corporate governance code as per the listing rules[63]. - The company is committed to maintaining transparency and accuracy in its financial reporting[63]. - The company is focused on expanding its operations in China, with a specific emphasis on artist promotion and training[48].

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 就 因 本 公 告 全部或任何部分內容所產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 收 入 347,270 364,821 (4.8%) 毛 利 89,072 76,161 17.0% 毛利率 25.6% 20.9% 22.5% 營業利潤 35,197 1,793 1,863.0% 所 得 稅 前 利 潤╱（虧 損） 44,013 (160,747) 不適用 期 內 利 潤╱（虧 損） 29,351 (175,913) 不適用 非 國 際 財 務 報 告 準 則 指 標： 期內經調整淨利潤 59,060 49,892 18.4% YH Entertainment Group 樂華娛樂集團 （於開曼群島註冊成立的有限公司） （股份代號：2306） 截 至2024年6月30日止六個月之 中期業績公告 董事會欣然宣佈本集團截至2024年6月30日止六個月之未經審核綜合中期業績， 連 同2023年 同 期 之 比 較 數 字： 財務摘要 ...

Revenue and Financial Performance - Total revenue decreased by 22.9% from RMB 980.3 million in 2022 to RMB 755.7 million in 2023, primarily due to a decline in artist management revenue[20] - Artist management revenue accounted for 87.7% of total revenue in 2023, a decrease of 22.2% compared to 2022[22] - Music IP production and operation revenue decreased by 28.7% to RMB 70.3 million, representing 9.3% of total revenue in 2023[22] - Pan-entertainment business revenue declined by 25.1% to RMB 22.5 million, maintaining a 3.0% share of total revenue[22] - The company recorded a loss of RMB 142.6 million in 2023, compared to a profit of RMB 1,725.2 million in 2022, mainly due to a RMB 160.5 million fair value loss on convertible preferred shares[20] - Revenue decreased by 22.9% from RMB 980.3 million in 2022 to RMB 755.7 million in 2023, primarily due to a decline in artist management revenue[32] - Artist management revenue decreased by 22.2% from RMB 851.6 million in 2022 to RMB 662.9 million in 2023, driven by reduced demand for artist services due to tightened budgets from business partners[32] - Music IP production and operation revenue decreased by 28.7% from RMB 98.6 million in 2022 to RMB 70.3 million in 2023, mainly due to lower sales of digital singles and albums[32] - Gross profit decreased by 55.4% from RMB 295.9 million in 2022 to RMB 132.0 million in 2023 for the artist management segment, with gross margin dropping from 34.7% to 19.9%[37] - Music IP production and operation gross profit decreased by 39.7% from RMB 47.1 million in 2022 to RMB 28.4 million in 2023, with gross margin declining from 47.8% to 40.4%[38] - Overall gross margin decreased from 37.0% in 2022 to 23.2% in 2023, reflecting reduced profitability across all business segments[36] - Operating costs decreased by 5.9% from RMB 617.2 million in 2022 to RMB 580.6 million in 2023, primarily due to lower artist management revenue sharing and reduced employee benefits[35] - The company reported a net loss of RMB 142.6 million for the year ended December 31, 2023, compared to a net profit of RMB 1,725.2 million in 2022[53] - Adjusted net profit for 2023 was RMB 105.2 million, with an adjusted net profit margin of 13.9%, down from 27.2% in 2022[56] Artist Management and Music IP - Artist management revenue decreased by 22.2% from RMB 851.6 million in 2022 to RMB 662.9 million in 2023 due to reduced demand for artist services[23] - Artist management gross profit decreased by 55.4% from RMB 295.9 million in 2022 to RMB 132.0 million in 2023, with gross margin dropping from 34.7% to 19.9%[24] - Music IP production and operation revenue decreased by 28.7% from RMB 98.6 million in 2022 to RMB 70.3 million in 2023 due to reduced sales of digital singles and albums[25] - Music IP production and operation gross profit decreased by 39.7% from RMB 47.1 million in 2022 to RMB 28.4 million in 2023, with gross margin dropping from 47.8% to 40.4%[26] - The company established a music IP library containing over 1,290 music works for signed artists and released 14 digital singles and 10 digital albums during the reporting period[25] - The company released 14 digital singles and 10 digital albums during the reporting period, covering various music genres[18] - The company's artists participated in popular productions such as the drama series "The Glory Season 2" and the movie "Hidden Blade"[18] - The company's artist Zhang Hao became the first Chinese contestant to win a Korean survival show, "Boys Planet," and debuted in 2023[30] - The company's films and TV series, such as "The Hidden Blade" and "The Glory Season 2," gained popularity in international markets including the US, Canada, and Southeast Asia[30] Pan-Entertainment Business - Pan-entertainment business revenue decreased by 25.1% from RMB 30.0 million in 2022 to RMB 22.5 million in 2023 due to reduced income from program format licensing and virtual artist commercial development[27] - Pan-entertainment business gross profit decreased by 27.0% from RMB 20.1 million in 2022 to RMB 14.6 million in 2023, with gross margin dropping from 66.8% to 65.1%[28] - A new AIGC (Artificial Intelligence Generated Content) company was established to create digital avatars for artists, aiming to enhance the company's competitiveness in the pan-entertainment market[19] - The company formed an AIGC company to create digital avatars for artists using AIGC technology, aiming to enhance the pan-entertainment business[27] Global Expansion and Market Presence - The company expanded its global presence by promoting signed artists and the Lehua brand in Asian markets, with music works released on platforms like Apple Music, Spotify, and YouTube[29] - The company expanded its global presence by establishing YH Entertainment USA in California and exploring opportunities in Southeast Asia and Japan[31] Operational Highlights and Initiatives - YH SPACE, an interactive store selling artist-related merchandise, opened in September 2023 and has become a popular destination for shopping and leisure activities[19] - The company held a family concert in Macau on July 22, 2023, featuring performances by artists such as Wang Yibo and Li Wenhan[19] - The company launched YH SPACE, an interactive store selling artist-related merchandise, which has become a popular destination since its opening in September 2023[27] - The company launched YH Space, the first offline celebrity store in China, integrating artist peripherals, interactions, and trendy entertainment to enhance the brand's entertainment value[111] - Key artist achievements in 2023 include Li Wenhan's music album "Falling into the Vast Expanse," Huang Minghao's music album "One of the Crowd," and Wang Yibo's film "The Nameless"[111][112] Financial Assets and Liabilities - Financial asset impairment losses increased from RMB 7.7 million in 2022 to RMB 8.7 million in 2023, primarily related to trade receivables and other receivables[45] - Other income surged to RMB 22.81 million in 2023, up from RMB 3.90 million in 2022, largely due to a significant increase in government grants to RMB 21.65 million[47] - Other net gains increased by 46.5% to RMB 14.71 million in 2023, driven by gains from non-listed entities and funds, partially offset by foreign exchange losses[48] - Net financial income improved significantly to RMB 31.5 million in 2023, compared to RMB 0.3 million in 2022, due to higher interest income from bank deposits and investments[49] - The company's share of losses from equity-accounted investments increased from RMB 3.1 million in 2022 to RMB 7.2 million in 2023, primarily due to increased losses from its associates[50] - The fair value change of convertible preferred shares was RMB 160.5 million during the reporting period, which were reclassified from financial liabilities to equity after the company's IPO in January 2023[51] - Financial assets measured at fair value through profit or loss decreased by 31.4% from RMB 335.8 million in 2022 to RMB 230.5 million in 2023, mainly due to the redemption of wealth management products[57] - Trade receivables decreased by 26.4% from RMB 129.9 million in 2022 to RMB 95.7 million in 2023, in line with the decline in revenue[58] - Prepayments increased significantly from RMB 44.6 million in 2022 to RMB 519.1 million in 2023, primarily due to the acquisition of a property in Beijing[59] - Trade payables decreased by 21.5% from RMB 190.6 million in 2022 to RMB 149.6 million in 2023, mainly due to reduced revenue sharing from artist management services[62] - Contract liabilities increased by 23.3% from RMB 160.2 million in 2022 to RMB 197.6 million in 2023, driven by prepayments from new commercial contracts[65] - Cash and cash equivalents increased from RMB 528.7 million in 2022 to RMB 613.4 million in 2023, with restricted cash at RMB 12.3 million as of December 31, 2023[66] - Total borrowings increased from RMB 66.3 million in 2022 to RMB 266.2 million in 2023, including RMB 200.0 million for property acquisition in China[66] - Capital-to-debt ratio stood at 21.1% as of December 31, 2023[68] - The company acquired a property in Beijing for RMB 480 million, completed on January 19, 2024[69] Expenses and Costs - Sales and marketing expenses increased by 2.5% year-over-year to RMB 38.55 million in 2023, with employee benefits accounting for 62.4% of the total expenses[40][41] - General and administrative expenses rose by 12.3% to RMB 134.21 million in 2023, driven by a 28.1% increase in employee benefits and a 12.4% increase in equity-settled share-based payments[43][44] - Total employee benefits expenses, including share-based payments, increased by 2.5% year-over-year to RMB 164.2 million in 2023[75] - Net foreign exchange loss remained relatively stable at RMB 6.0 million during the reporting period[76] ESG and Sustainability - The company issued its second Environmental, Social, and Governance (ESG) report, covering the period from January 1, 2023, to December 31, 2023[95] - The ESG report follows the Hong Kong Stock Exchange's ESG Reporting Guide and adheres to principles of materiality, consistency, quantification, and balance[96] - The ESG governance framework consists of three layers: decision-making by the board, organizational leadership by senior management, and execution by relevant departments[101] - The company has set environmental goals, with most targets showing higher usage and emissions compared to previous years due to the end of remote work post-pandemic[100] - The ESG committee, led by the executive director and president, is responsible for formulating and reviewing ESG-related strategies and monitoring ESG issues[101] - The Board of Directors is responsible for setting ESG goals and overseeing the implementation of ESG-related policies, with the ESG Committee established to manage ESG governance[102] - The ESG Committee, led by Executive Director and President Sun Yiding, is responsible for reviewing ESG goals, strategies, and internal policies, as well as identifying ESG risks and opportunities[104] - The ESG Working Group, composed of departments such as Integrated Management and Internal Control, is responsible for implementing ESG-related policies and collecting relevant KPI data[104] - The company has identified 17 material ESG issues, with 11 being highly important, 4 moderately important, and 2 generally important[108] - The company's total greenhouse gas emissions for 2023 were 168.78 metric tons of CO2 equivalent, with a density of 0.05 metric tons per square meter and 1.02 metric tons per capita[133] - Electricity consumption for 2023 was 263,192.00 kWh, with a density of 71.13 kWh per square meter and 1,595.10 kWh per capita[134] - Water consumption for 2023 was 1,025.00 cubic meters, with a density of 0.28 cubic meters per square meter and 6.21 cubic meters per capita[135] - Paper usage for 2023 was 546.88 kg, with a per capita usage of 3.31 kg[137] - Non-hazardous waste generation for 2023 was 3,960.00 metric tons, with a per capita generation of 24.00 metric tons[137] - Nitrogen oxides, sulfur oxides, and particulate matter emissions for 2023 were 56.15 kg, 0.10 kg, and 5.38 kg respectively[138] - The company's direct greenhouse gas emissions (Scope 1) for 2023 were 18.68 metric tons of CO2 equivalent[133] - The company's indirect greenhouse gas emissions (Scope 2) for 2023 were 150.10 metric tons of CO2 equivalent[133] - The company's greenhouse gas emissions density (Scope 1 and 2) for 2023 was 0.05 metric tons of CO2 equivalent per square meter[133] - The company's per capita greenhouse gas emissions (Scope 1 and 2) for 2023 was 1.02 metric tons of CO2 equivalent per person[133] - Total greenhouse gas emissions (Scope 1 and 2) in 2023 were 168.78 metric tons of CO2 equivalent, with a density of 0.05 metric tons of CO2 equivalent per square meter[143] - The company's total water consumption in 2023 was 1,025 cubic meters, with a water consumption density of 6.21 cubic meters per square meter[143] - Total purchased electricity consumption in 2023 was 263,192 kWh, with a density of 71.13 kWh per square meter[143] - The company had a total of 215 employees in 2023, with 156 female employees and 59 male employees[144] - The overall employee turnover rate in 2023 was 28.37%, with male employee turnover at 62.71% and female employee turnover at 15.38%[144] - The company's employees participated in 12 hours of community service activities in 2023, with 2 employees involved[142] - The company's artists participated in various public welfare activities, including Tencent's 99 Charity Day and rural revitalization initiatives[141] - The company implemented measures to monitor and respond to extreme weather conditions, promoting water and energy conservation[140] - The company tracked and integrated international climate change policies and regulations into its management policies[140] - The company conducted risk assessments and enhanced green-related training to mitigate reputational risks associated with environmental impacts of endorsed products or performances[140] - 53% of short-term contract/part-time employees received training in 2023[145] - 75.13% of full-time junior employees received training in 2023[145] - 13.76% of full-time mid-level employees received training in 2023[145] - 10.58% of full-time senior employees received training in 2023[145] - Female employees received an average of 0.17 hours of training, while male employees received 0.47 hours in 2023[145] - Full-time junior employees received an average of 0.18 hours of training, mid-level employees received 0.77 hours, and senior employees received 0.82 hours in 2023[145] - The company does not involve significant production of harmful waste[146] - The company does not consume large amounts of packaging materials due to limited product production[146] - The company has policies to reduce environmental and natural resource impacts, with actions taken to manage these impacts[148] - The company has policies to address climate-related issues and has taken actions to manage their impacts[148] Corporate Governance and Leadership - The board of directors consists of 7 members, including 3 executive directors, 1 non-executive director, and 3 independent non-executive directors[80] - Du Hua, aged 42, is the founder, executive director, chairman, and CEO, responsible for the company's overall strategic planning and daily operations[82] - Sun Yiding, aged 56, is the executive director and president, responsible for the company's operations and management[82] - Sun Le, aged 43, is the executive director and vice president, responsible for establishing and maintaining client relationships and market positioning[83] - Meng Jun, aged 44, was appointed as a non-executive director on June 28, 2023, providing professional advice and guidance to the board[85] - Fan Hui, aged 46, was appointed as an independent non-executive director on January 19, 2023, responsible for supervising and providing independent opinions to the board[86] - Lü Tao, aged 58, was appointed as an independent non-executive director on January 19, 2023, responsible for supervising and providing independent opinions to the board[88] - Huang Jiuling was appointed as an independent non-executive director on January 19, 2023, responsible for providing independent opinions and judgments to the board[89] - Zhang Wensheng joined the company as CFO in June 2020, overseeing financial operations, risk management, and investor relations[90] - Lee Sang Kyu has been the General Manager of Korean operations since August 2016, responsible for the overall operation and development of the Korean business[91] - Meng Qingguang and Zhao Wenjie resigned as non-executive directors effective June 28, 2023, and Meng Jun was appointed as a non-executive director on the same date[93] - Yao Lu resigned as a non-executive director effective February 5, 2024, to focus on other business and personal matters[93] - The company's directors confirmed their independence in accordance with Listing Rule 3.13[171] - Du Hua holds a 43.17% stake in the company through controlled entities, with 376,350,000 shares[175][176] - Sun Yiding holds a 2.85% stake in the company through controlled entities, with 24,825,000 shares[175][177] - Sun Le holds a 0.37% stake in the company as a beneficial owner, with 3,225,000 shares[175][177] - CMC Sports Investment Limited and related entities hold a 12.26% stake in the company, with 106,875,000 shares[180][182] - Interform Construction Supplies Limited and related entities hold a 12.26% stake in the company, with 106

Revenue Decline - Total revenue decreased by 22.9% to RMB 755.7 million in 2023 from RMB 980.3 million in 2022, primarily due to a decline in artist management revenue[2][5] - Artist management revenue accounted for 87.7% of total revenue, decreasing by 22.2% to RMB 662.9 million in 2023[7] - Music IP production and operation revenue declined by 28.7% to RMB 70.3 million, representing 9.3% of total revenue[7] - Pan-entertainment business revenue decreased by 25.1% to RMB 22.5 million, maintaining a 3.0% share of total revenue[7] - Artist management revenue decreased by 22.2% from RMB 851.6 million in 2022 to RMB 662.9 million in 2023, primarily due to reduced demand for artist services as business partners tightened budgets for endorsements and promotional activities[8] - Music IP production and operation revenue decreased by 28.7% from RMB 98.6 million in 2022 to RMB 70.3 million in 2023, mainly due to reduced sales of digital singles and albums[10] - Pan-entertainment business revenue decreased by 25.1% from RMB 30.0 million in 2022 to RMB 22.5 million in 2023, primarily due to reduced income from program format licensing and virtual artist commercial development[12] - Global revenue decreased by 22.9% from RMB 980.3 million in 2022 to RMB 755.7 million in 2023, primarily due to reduced income from artist management[17] - Revenue from artist management decreased to RMB 662.878 million in 2023 from RMB 851.604 million in 2022, a decline of 22.2%[76] - Music IP production and operations revenue dropped to RMB 70.299 million in 2023 from RMB 98.610 million in 2022, a decrease of 28.7%[76] - Total revenue for the group fell to RMB 755.681 million in 2023 from RMB 980.254 million in 2022, a decline of 22.9%[76] - Revenue from pan-entertainment business dropped to RMB 22.504 million in 2023 from RMB 30.040 million in 2022, a decrease of 25.1%[76] Profit and Loss - Gross profit dropped by 51.8% to RMB 175.0 million in 2023, with gross margin declining from 37.0% to 23.2%[2] - Operating profit fell sharply by 85.3% to RMB 31.1 million in 2023[2] - The company reported a net loss of RMB 142.6 million in 2023, compared to a net profit of RMB 1,725.2 million in 2022, mainly due to a RMB 160.5 million fair value loss on convertible preferred shares[5] - Adjusted net profit decreased by 60.5% to RMB 105.2 million in 2023[2] - Artist management gross profit decreased by 55.4% from RMB 295.9 million in 2022 to RMB 132.0 million in 2023, with gross margin dropping from 34.7% to 19.9% due to reduced revenue and increased operating costs, including higher concert expenses[8] - Music IP production and operation gross profit decreased by 39.7% from RMB 47.1 million in 2022 to RMB 28.4 million in 2023, with gross margin dropping from 47.8% to 40.4% due to a larger decline in revenue compared to cost reductions[10] - Pan-entertainment business gross profit decreased by 27.0% from RMB 20.1 million in 2022 to RMB 14.6 million in 2023, with gross margin slightly dropping from 66.8% to 65.1% due to reduced income from higher-margin activities[12] - Gross profit decreased from RMB 363.1 million in 2022 to RMB 175.0 million in 2023, with gross margin dropping from 37.0% to 23.2%[21] - Artist management gross profit decreased by 55.4% from RMB 295.9 million in 2022 to RMB 132.0 million in 2023, with gross margin falling from 34.7% to 19.9%[22] - Music IP production and operation gross profit decreased by 39.7% from RMB 47.1 million in 2022 to RMB 28.4 million in 2023, with gross margin dropping from 47.8% to 40.4%[23] - Pan-entertainment business gross profit decreased by 27.0% from RMB 20.1 million in 2022 to RMB 14.6 million in 2023, with gross margin slightly declining from 66.8% to 65.1%[24] - The company reported a net loss of RMB 142.6 million in 2023, compared to a net profit of RMB 1,725.2 million in 2022[41] - Adjusted net profit margin was 13.9% in 2023, down from 27.2% in 2022[43] - Net loss for the year ended December 31, 2023, was RMB 142.588 million, compared to a net profit of RMB 1,725.185 million in 2022[44] - Adjusted net profit under non-IFRS measures was RMB 105.218 million in 2023, down from RMB 266.553 million in 2022[44] - Basic loss per share for 2023 was RMB (0.17), compared to a basic earnings per share of RMB 3.72 in 2022, reflecting a net loss attributable to owners of RMB (140,837) thousand[85] - Diluted loss per share for 2023 was RMB (0.17), the same as the basic loss per share, due to the anti-dilutive effect of potential ordinary shares[87] Business Expansion and Initiatives - The company launched YH SPACE, an interactive store combining entertainment and retail, which has become a popular destination since its opening in September 2023[3] - Established an AIGC (Artificial Intelligence Generated Content) company to create digital avatars for artists, aiming to enhance competitiveness in the pan-entertainment market[5] - The company plans to enhance artist training capabilities with the launch of its own artist training center in 2024, aiming to improve the quality and quantity of signed artists[9] - The company will continue to develop its music IP production and operation business, focusing on creating digital singles and albums for artists and expanding its music IP library through acquisitions of high-quality music works[10] - YH SPACE, an interactive store selling artist-related merchandise, has become a popular destination since its opening in September 2023, diversifying fan engagement and marking a milestone in combining entertainment and retail[12] - The company has established an AIGC company with a business partner to create digital avatars for artists, aiming to explore more opportunities in the AIGC industry and further diversify its services[12] - The company expanded its global presence by releasing music on international platforms like Apple Music, Spotify, YouTube, and KKBox, promoting Chinese pop culture globally[14] - The company participated in the talent show "Asia Super Young," which led to the debut of "LOONG 9," with four top-ranking members being company artists, showcasing its ability to cultivate globally influential artists[15] - The company established YH Entertainment USA in California to enhance its brand influence in the international market and plans to explore opportunities in Southeast Asia and Japan[16] Financial Position and Expenses - Operating costs decreased by 5.9% from RMB 617.2 million in 2022 to RMB 580.6 million in 2023, primarily due to reduced artist management revenue sharing[19] - Artist management revenue sharing decreased by 13.3% from RMB 431.8 million in 2022 to RMB 374.5 million in 2023, reflecting lower demand for artist services[19] - Employee benefits expenses decreased from RMB 20.9 million in 2022 to RMB 14.7 million in 2023, primarily due to reduced employee bonuses[20] - Sales and marketing expenses remained relatively stable at RMB 38.6 million in 2023 compared to RMB 37.6 million in 2022[28] - General and administrative expenses increased by 12.3% from RMB 119.5 million in 2022 to RMB 134.2 million in 2023, mainly due to increased equity-settled share-based payments and employee benefits expenses[32] - Net impairment loss on financial assets was RMB 7.7 million in 2022 and RMB 8.7 million in 2023, primarily related to trade receivables, investments measured at amortized cost, and other receivables[33] - Other income in 2023 totaled RMB 22.8 million, with government grants contributing RMB 21.6 million, input tax deductions RMB 686 thousand, and rental income from investment properties RMB 478 thousand[35] - Net other gains in 2023 were RMB 14.7 million, including RMB 4.3 million from fair value gains on wealth management products and RMB 10.5 million from fair value gains on non-listed entities[37] - Net finance income for 2023 was RMB 31.5 million, compared to RMB 0.3 million in 2022, driven by interest income from bank deposits and investments[38] - Share of losses from equity-accounted investments increased to RMB 7.2 million in 2023 from RMB 3.1 million in 2022, mainly due to higher losses from associates[39] - Fair value change of convertible preferred shares was RMB 160.5 million, which was reclassified from financial liabilities to equity after the company's IPO in January 2023[40] - Income tax expense for 2023 was RMB 37.5 million[41] - Financial assets measured at fair value through profit or loss decreased by 31.4% from RMB 335.8 million in 2022 to RMB 230.5 million in 2023, primarily due to the redemption of wealth management products[45] - Trade receivables decreased by 26.4% from RMB 129.9 million in 2022 to RMB 95.7 million in 2023, consistent with the decline in revenue[46] - Prepayments increased significantly from RMB 44.6 million in 2022 to RMB 519.1 million in 2023, mainly due to the acquisition of a property in Beijing[47] - Trade payables decreased by 21.5% from RMB 190.6 million in 2022 to RMB 149.6 million in 2023, primarily due to reduced revenue sharing from artist management business[50] - Contract liabilities increased by 23.3% from RMB 160.2 million in 2022 to RMB 197.6 million in 2023, driven by prepayments from new commercial contracts[53] - Cash and cash equivalents increased from RMB 528.7 million in 2022 to RMB 613.4 million in 2023, with restricted cash of RMB 12.3 million[54] - Borrowings increased from RMB 66.3 million in 2022 to RMB 266.2 million in 2023, including loans for property acquisitions in China and South Korea[54] - Capital gearing ratio stood at 21.1% as of December 31, 2023[55] - The company acquired a property in Beijing for RMB 480 million, located at No. 28 Chuangyuan Road, Chaoyang District, Beijing, China[56] - Total employee benefit expenses, including share-based payments, for the year ended December 31, 2023, were RMB 164.2 million, a 2.5% increase compared to RMB 160.2 million in the previous year[60] - The company's net foreign exchange loss for the reporting period was RMB 6.0 million, compared to RMB 5.4 million in the previous year[61] - As of December 31, 2023, the company had mortgaged properties, plant and equipment, investment properties, and certificates of deposit with a total book value of RMB 115.7 million to secure bank loans[62] - Total assets increased to RMB 2,044,926 thousand in 2023 from RMB 1,322,271 thousand in 2022, reflecting a growth of approximately 54.6%[66] - Non-current liabilities decreased to RMB 298,964 thousand in 2023 from RMB 877,717 thousand in 2022, a reduction of approximately 65.9%[67] - Current liabilities also decreased to RMB 422,817 thousand in 2023 from RMB 561,407 thousand in 2022, a decline of approximately 24.7%[67] - The company's cash and cash equivalents increased to RMB 613,371 thousand in 2023 from RMB 528,660 thousand in 2022, showing a growth of approximately 16%[66] - Non-current assets in Mainland China increased significantly to RMB 524.377 million in 2023 from RMB 41.831 million in 2022[75] - Revenue recognized at a point in time remained stable at RMB 243.885 million in 2023 compared to RMB 243.490 million in 2022[77] - Revenue recognized over a period of time decreased to RMB 511.796 million in 2023 from RMB 736.764 million in 2022, a decline of 30.5%[77] - Government grants increased substantially to RMB 21.647 million in 2023 from RMB 314,000 in 2022[81] - Total operating costs, sales, and administrative expenses decreased slightly to RMB 753.410 million in 2023 from RMB 774.273 million in 2022[80] - Expected revenue to be recognized within one year increased to RMB 173.054 million in 2023 from RMB 129.596 million in 2022[79] - Other net income for 2023 was RMB 14,707 thousand, compared to RMB 10,044 thousand in 2022, with significant contributions from non-listed entity fair value gains of RMB 10,500 thousand and disposal gains of associates of RMB 2,171 thousand[82] - Financial income net for 2023 was RMB 31,514 thousand, a significant increase from RMB 291 thousand in 2022, driven by higher bank deposit interest income of RMB 21,186 thousand and interest income from investments measured at amortized cost of RMB 14,325 thousand[82] - Income tax expense for 2023 decreased to RMB 37,518 thousand from RMB 66,247 thousand in 2022, with a notable reduction in China enterprise income tax from RMB 61,861 thousand to RMB 36,209 thousand[83] - Financial assets at fair value through profit or loss decreased to RMB 230,505 thousand in 2023 from RMB 335,811 thousand in 2022, with a significant reduction in wealth management product investments from RMB 290,265 thousand to RMB 107,000 thousand[89] - The company invested RMB 70,000 thousand in structured deposits with principal protection and floating returns in 2023, which matured within the same year[90] - Non-listed fund investments increased to RMB 68,418 thousand at the end of 2023, with new additions of RMB 64,581 thousand and fair value changes of RMB 3,487 thousand[92] - Non-listed entity investments grew to RMB 40,157 thousand at the end of 2023, with fair value changes contributing RMB 10,500 thousand[93] - Listed equity securities investments reached RMB 14,930 thousand at the end of 2023, with fair value changes of RMB 215 thousand[94] - Trade receivables decreased to RMB 95,687 thousand (net) at the end of 2023, down from RMB 129,940 thousand in 2022, with a significant increase in impairment provisions to RMB 30,365 thousand[95] - Trade receivables aged over 3 months increased to RMB 39,569 thousand at the end of 2023, compared to RMB 48,498 thousand in 2022[96] - Investments measured at amortized cost surged to RMB 300,754 thousand at the end of 2023, up from RMB 87,280 thousand in 2022, with new additions of RMB 388,371 thousand[98] - Trade payables decreased to RMB 149,603 thousand at the end of 2023, down from RMB 190,619 thousand in 2022, with a notable reduction in payables aged 3 to 6 months to RMB 45,094 thousand[100] - Share-based compensation expenses remained stable at RMB 92,187 thousand in 2023, compared to RMB 91,113 thousand in 2022, with an expected retention rate close to 100%[101] IPO and Capital Allocation - The company completed its initial public offering (IPO) on the Hong Kong Stock Exchange on January 19, 2023[69] - The company's global offering net proceeds amounted to approximately HKD 398.4 million after deducting underwriting commissions and related expenses[107] - 60% of the net proceeds (HKD 239.0 million) were allocated for continuous investment in artist operations, with HKD 205.4 million already utilized and HKD 33.6 million remaining[108] - 45% of the net proceeds (HKD 179.3 million) were fully utilized for the acquisition and renovation of an artist training center in China[108] - 15% of the net proceeds (HKD 59.7 million) were allocated for artist operations and promotion in China, with HKD 26.1 million utilized and HKD 33.6 million remaining, expected to be fully utilized by the end of 2024[108] - 15% of the net proceeds (HKD 59.8 million) were allocated for expanding the music IP library, with HKD 27.1 million utilized and HKD 32.7 million remaining, expected to be fully utilized by the end of 2024[108] - 15% of the net proceeds (HKD 59.8 million) were allocated for expanding the pan-entertainment business, with HKD 29.9 million utilized and HKD 29.9 million remaining, expected to be fully utilized by the end of 2024[108] - 5% of the net proceeds (HKD 19.9 million) were allocated for promoting artists' performances in other countries, with HKD 3.8 million utilized and HKD 16.1 million remaining, expected to be fully utilized by the end

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 就 因 本 公 告 全部或任何部分內容所產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 溫 馨 提 示： 樂華娛樂集團 用 簡 體，謝 謝 YH Entertainment Group 樂華娛樂集團 （於開曼群島註冊成立的有限公司） （股份代號：2306） 截 至2022年12月31日止年度的 年報的補充公告 茲提述 樂華娛樂集團（「本公司」）截 至2022年12月31日 止 年 度 的 年 報（「2022年 年 報」）。除 另 有 所 指 外，本 公 告 所 用 詞 彙 與2022年 年 報 所 界 定 者 具 有 相 同 涵 義。 除2022年 年 報 內「管 理 層 討 論 及 分 析」一 節 所 披 露 的 資 料 外，本 公 司 謹 此 向 股 東 及 本 公 司 潛 在 投 資 者 提 供 以 下 額 外 資 料。下 表 載 列 有 關 本 公 司 所 持 一 項 價 值 佔本集團於2022年12月31日的總資產的5%或 ...

Financial Performance - Total revenue decreased from RMB 488.0 million for the six months ended June 30, 2022, to RMB 364.8 million for the six months ended June 30, 2023, representing a decline of 25.2%[12] - The company recorded a loss of RMB 175.9 million for the six months ended June 30, 2023, compared to a profit of RMB 92.7 million for the same period in 2022[12] - Revenue from artist management decreased by 26.6% from RMB 435.3 million in the first half of 2022 to RMB 319.4 million in the first half of 2023, accounting for 87.6% of total revenue[15] - Revenue from music IP production and operation fell by 26.7% from RMB 40.5 million in the first half of 2022 to RMB 29.6 million in the first half of 2023, representing 8.1% of total revenue[15] - Revenue from pan-entertainment business increased by 28.8% from RMB 12.2 million in the first half of 2022 to RMB 15.7 million in the first half of 2023, accounting for 4.3% of total revenue[15] - Gross profit for the six months ended June 30, 2023, was RMB 76.2 million, down from RMB 203.8 million for the same period in 2022, resulting in a gross margin of 20.9% compared to 41.8%[31] - The gross profit margin for artist management dropped to 19.9% for the six months ended June 30, 2023, from 41.5% for the same period in 2022[33] - Adjusted net profit for the six months ended June 30, 2023, was RMB 49.9 million, down from RMB 168.7 million in the same period of 2022, with an adjusted net profit margin of 13.7% compared to 34.6%[54] - The company reported a significant increase in operating income cash flow to RMB 61,453 thousand, compared to RMB 29,451 thousand in the previous year[145] Expenses and Costs - Sales and marketing expenses increased by 20.7% to RMB 16.8 million for the six months ended June 30, 2023, compared to RMB 13.9 million for the same period in 2022[35] - The group's daily and administrative expenses increased by 45.2% from RMB 44.2 million for the six months ended June 30, 2022, to RMB 64.2 million for the six months ended June 30, 2023, primarily due to increased equity-settled share-based payments to executives[36] - Total operating costs increased slightly to RMB 288,660 thousand from RMB 284,164 thousand year-on-year, indicating a rise of 1.8%[128] - Marketing expenses rose to RMB 16,820 thousand, up from RMB 13,937 thousand, representing a 20.5% increase[128] - Administrative expenses increased to RMB 64,176 thousand from RMB 44,231 thousand, marking a rise of 45.2%[128] Strategic Initiatives - The company plans to establish its own artist training center to enhance core artist cultivation capabilities[17] - The company aims to expand its training reserve of potential artists through a systematic training program[17] - A new artificial intelligence content creation company was established to focus on creating digital personas for artists, indicating a strategic move into AI-driven entertainment[11] - The company will continue to enhance the operational capabilities of its signed artists to increase their visibility and commercial value[17] - The company anticipates exploring more pan-entertainment business opportunities through the development of YH SPACE, a comprehensive performance and entertainment venue[11] - The company plans to further develop its music IP production and operation business to address the rapidly growing digital music market in China[21] - The company established an AIGC company to create digital personas for artists, aiming to enhance its pan-entertainment business and tap into the commercial potential of the AIGC market[22] - The company aims to expand its overseas market presence and enhance artist operations in South Korea and other global markets[26] Shareholder and Governance Information - The company does not recommend the payment of an interim dividend for the six months ending June 30, 2023[95] - As of June 30, 2023, the company’s chairman and CEO roles are held by the same individual, which the board believes ensures consistent leadership and effective strategic planning[88] - The company has adopted the corporate governance code and has complied with all applicable provisions since its listing[88] - The company’s major shareholders include Ms. Du Hua, holding approximately 43.17% of the company’s equity through controlled entities[100] - The company issued 120,060,000 shares at HKD 4.08, raising a net amount of approximately HKD 398.4 million after deducting underwriting commissions and related expenses[96] - As of June 30, 2023, the company has utilized HKD 36.6 million of the net proceeds, with HKD 361.8 million remaining[97] - 60% of the net proceeds (approximately HKD 239 million) is allocated for continuous investment in artist operations, including the acquisition and renovation of an artist training center in China[97] - The company plans to complete the acquisition and renovation of the training center by the end of 2023, with an allocated budget of approximately HKD 179.3 million[97] Financial Position and Assets - Total assets increased to RMB 1,758,252,000 as of June 30, 2023, up from RMB 1,322,271,000 at the end of 2022, reflecting a growth of approximately 33%[133] - Cash and cash equivalents rose to RMB 646,769,000 from RMB 528,660,000, indicating an increase of about 22%[133] - Total liabilities decreased significantly to RMB 512,883,000 from RMB 1,439,124,000, a reduction of approximately 64%[136] - The company's equity attributable to owners increased to RMB 1,241,596,000 as of June 30, 2023, compared to a deficit of RMB 121,126,000 at the end of 2022[133] - Inventory levels rose to RMB 2,487,000 from RMB 1,522,000, marking an increase of approximately 63%[133] - Trade receivables decreased to RMB 114,701,000 from RMB 129,940,000, a decline of about 12%[133] Risk Management - The group faced foreign exchange risk, with a potential impact of approximately RMB 243,000 on pre-tax profit if the USD appreciated/depreciated by 5% against the RMB[159] - The group's floating rate borrowings amounted to RMB 65,945,000 as of June 30, 2023, with a potential pre-tax profit impact of approximately RMB 330,000 if interest rates rise by 50 basis points[165] - The group does not use any derivatives to hedge its foreign exchange risk, which is primarily related to its operations in China[159] - The group’s overall risk management procedures focus on mitigating potential adverse impacts on financial performance due to market unpredictability[158] - The company continues to monitor credit risk and adjust provisions based on macroeconomic indicators and historical loss rates[186] Impairment and Provisions - The provision for impairment of trade receivables increased to RMB 23,099 thousand as of June 30, 2023, compared to RMB 22,814 thousand as of December 31, 2022[180] - The expected loss provision for trade receivables for the first half of 2023 was RMB 286 thousand, a decrease from RMB 5,205 thousand in the same period of 2022[180] - The total impairment loss provision for the first half of 2023 was RMB 99,000, compared to a reversal of RMB 458,000 in the same period of 2022, highlighting a shift in asset quality[196] - The impairment provision for other receivables and investments measured at amortized cost increased to RMB 848,000 from RMB 355,000 in the same period of 2022, reflecting a significant rise in credit risk[196]

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 就 因 本 公 告 全部或任何部分內容所產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 YH Entertainment Group 樂華娛樂集團 （於開曼群島註冊成立的有限公司） （股份代號：2306） 截 至2023年6月30日止六個月之 中期業績公告 董事會欣然宣佈本集團截至2023年6月30日止六個月之未經審核合併中期業績， 連 同2022年 同 期 之 比 較 數 字： 財務摘要 | --- | --- | --- | --- | |------------------------------------|----------------------------------------------------------------|----------------------------------------------------|----------| | | | | | | | 截 至 6 月 30 | 日止六個月 ...

Financial Performance - Total revenue decreased from RMB 1,290.4 million in 2021 to RMB 980.3 million in 2022, a decline of 24.0%[9] - Revenue from artist management was RMB 851.6 million, accounting for 86.9% of total revenue, down 27.5% from RMB 1,174.8 million in 2021[13] - Music IP production and operation revenue increased by 26.8% to RMB 98.6 million, representing 10.1% of total revenue[13] - Revenue decreased by 24.0% from RMB 1,290.4 million in the year ended December 31, 2021, to RMB 980.3 million in the year ended December 31, 2022, primarily due to a decline in artist management revenue[23] - Artist management revenue fell by 27.5% from RMB 1,174.8 million in 2021 to RMB 851.6 million in 2022, largely impacted by COVID-19[23] - Music IP production and operation revenue increased by 26.8% from RMB 77.7 million in 2021 to RMB 98.6 million in 2022, driven by higher sales of digital singles and albums[23] Profitability - The fair value gain from convertible preferred shares was RMB 1,582.0 million, significantly impacting the profit for the year, which rose to RMB 1,725.2 million[9] - Gross profit from artist management fell by 45.3% from RMB 540.6 million in 2021 to RMB 295.9 million in 2022, with a gross margin decline from 46.0% to 34.7%[16] - Gross profit decreased from RMB 602.0 million in 2021 to RMB 363.1 million in 2022, with a gross margin decline from 46.6% to 37.0%[27] - The net profit for 2022 increased to RMB 1,725.2 million, up from RMB 335.3 million in 2021, representing a significant growth of approximately 415%[44] - The adjusted net profit for 2022 was RMB 266.6 million, a decrease of 32.4% compared to RMB 394.6 million in 2021, with an adjusted net profit margin of 27.2%[46] Operational Highlights - The company had 68 signed artists and 58 trainees, with 18 trainees debuting as signed artists in 2022[9] - The number of commercial activities generating revenue was approximately 490 in 2022[15] - The trainee program received over 14,000 applications, with a selection rate of less than 0.1%[14] - The company successfully launched seven artist groups, including TEMPEST, NEVERLAND, and BOYHOOD in 2022[14] - The virtual artist business was expanded through the establishment of two companies in partnership with business associates[9] Cost Management - Total operating costs decreased by 10.4% from RMB 688.5 million in 2021 to RMB 617.2 million in 2022, mainly due to reduced revenue sharing and promotional costs[26] - Total sales and marketing expenses increased by 8.9% from RMB 34.5 million in 2021 to RMB 37.6 million in 2022[31] - Employee benefits expenses for sales and marketing decreased by 2.1% to RMB 22.2 million, while promotional expenses increased by 32.8% to RMB 8.3 million[31] - Total administrative expenses rose by 67.1% from RMB 71.5 million in 2021 to RMB 119.5 million in 2022[34] Assets and Liabilities - Trade receivables increased by 21.6% from RMB 106.8 million in 2021 to RMB 129.9 million in 2022, primarily due to increased receivables from artist management and entertainment services[48] - Prepayments surged from RMB 8.3 million in 2021 to RMB 44.6 million in 2022, mainly due to increased prepayments related to artist promotions[49] - Trade payables decreased by 10.7% from RMB 213.5 million in 2021 to RMB 190.6 million in 2022, attributed to reduced payables related to artist management revenue sharing[52] Corporate Governance - The board of directors consists of nine members, including three executive directors, three non-executive directors, and three independent non-executive directors[64] - The company has established a corporate governance framework to protect shareholder interests and maintain high standards of corporate governance practices[186] - The audit committee is composed of three independent non-executive directors, ensuring proper oversight of financial reporting and internal controls[200] - The board will continue to review and monitor its corporate governance practices to ensure compliance with the governance code[187] ESG Initiatives - The company has established an ESG governance framework, which includes a decision-making layer composed of the board of directors, an organizational layer led by senior management, and an execution layer involving relevant departments[78] - The ESG committee, led by the executive director and president, is responsible for promoting ESG initiatives and formulating additional environmental and social measures[79] - The company published its first ESG report, detailing its efforts and key performance indicators (KPIs) related to environmental, social, and governance (ESG) aspects[75] - The report covers the period from January 1 to December 31, 2022, and adheres to the guidelines set by the Hong Kong Stock Exchange[76] Employee Management - Total employee count is 200, with 129 female employees and 71 male employees[117] - Overall employee turnover rate is 34.00%, with a turnover rate of 31.01% for female employees and 39.44% for male employees[117] - Employee compensation is structured with a base salary, bonuses, and benefits, with adjustments made annually based on performance and market conditions[100] - The company has implemented a comprehensive employee benefits system, including statutory holidays and various types of leave[100] Market Position - The company ranks first among artist management companies in China with a market share of 1.9% based on artist management revenue in 2021[186] - The company is highly dependent on the reputation of contracted artists and public perception, which significantly impacts its financial performance[126] - The overall prosperity of the Chinese entertainment industry is crucial for the company's success, with economic downturns potentially affecting consumer spending[126] Future Plans - The company plans to leverage its market resources for stable growth in the coming year[10] - The company aims to expand its music IP library by acquiring high-quality music rights from copyright holders[18] - The company plans to seek business opportunities in Southeast Asia, Japan, and the United States to further expand its global presence[20]