智通财经 5月14日电，截至发稿，乐华娱乐(02306.HK)涨12.07%、腾讯音乐-SW(01698.HK)涨8.72%、网 易云音乐(09899.HK)涨2.34%。 港股影视娱乐股走强 乐华娱乐涨超12% ...

Financial Performance - Total revenue increased from RMB 755.7 million for the year ended December 31, 2023, to RMB 764.5 million during the reporting period, primarily due to increased revenue from artist management[9]. - Profit for the reporting period was RMB 44.3 million, compared to a loss of RMB 142.6 million for the year ended December 31, 2023, mainly due to the absence of fair value losses related to convertible preferred shares[9]. - Revenue from artist management accounted for 90.9% of total revenue, amounting to RMB 694.6 million, reflecting a 4.8% increase year-on-year[11]. - Revenue from music IP production and operation decreased by 40.0% year-on-year to RMB 42.2 million, representing 5.5% of total revenue[11]. - Revenue from the pan-entertainment business increased by 23.6% from RMB 22.5 million to RMB 27.8 million, primarily driven by growth in virtual artist business[16]. - Revenue increased by 1.2% from RMB 755.7 million to RMB 764.5 million, primarily due to growth in artist management revenue[21]. - Music IP production and operation revenue decreased by 40.0% from RMB 70.3 million to RMB 42.2 million, mainly due to reduced licensing income from music streaming platforms[21]. - Pan-entertainment revenue grew by 23.3% from RMB 22.5 million to RMB 27.8 million, attributed to increased income from virtual artist business[22]. Artist Management and Development - The number of signed artists reached 73, with 52 trainees participating in the training program as of December 31, 2024[7]. - The company successfully released 12 digital singles and 12 digital albums during the reporting period, covering various music styles[8]. - The company plans to enhance its core artist training capabilities by establishing its own artist training center and expanding its trainee reserve[13]. - The company has established its own artist training center to enhance the cultivation capabilities of core artists, aiming to increase both quality and quantity of signed artists[124]. - The revenue from artist management increased by 4.8% from RMB 662.9 million to RMB 694.6 million, primarily due to increased participation of signed artists in commercial activities[12]. Operating Costs and Expenses - Operating costs increased by 4.8% from RMB 580.6 million to RMB 608.5 million, mainly due to higher costs in artist management[25]. - Sales and marketing expenses surged by 53.1% from RMB 38.6 million to RMB 59.0 million, primarily due to increased promotional costs and employee benefits[33]. - Total operating expenses decreased by 29.9% from RMB 134.2 million in 2023 to RMB 94.1 million in 2024, primarily due to reductions in equity-settled share-based payments and listing expenses[38]. Profitability and Financial Metrics - The gross profit from artist management decreased by 3.6% from RMB 132.0 million to RMB 127.3 million, with a slight decline in gross profit margin from 19.9% to 18.3% due to rising costs[12]. - Gross profit decreased from RMB 175.0 million to RMB 156.1 million, with gross margin dropping from 23.2% to 20.4%[26]. - Adjusted net profit for 2024 was RMB 100,046,000, with an adjusted net profit margin of 13.1%, down from 13.9% in 2023[53]. Foreign Exchange and Financial Management - The company has no foreign exchange risk hedging policies in place and will monitor foreign exchange risks closely[75]. - The company is committed to closely monitoring its foreign exchange risks and will use appropriate financial instruments for hedging purposes when necessary[75]. - The company reported a net foreign exchange gain of RMB 30.5 million during the reporting period, compared to a net foreign exchange loss of RMB 6.0 million for the year ended December 31, 2023[75]. ESG and Sustainability - The company emphasizes its commitment to Environmental, Social, and Governance (ESG) matters, actively implementing ESG measures and improving governance levels[105]. - The ESG report for 2024 outlines key performance indicators (KPIs) related to environmental and social aspects, reflecting the company's achievements in these areas[105]. - The company reported a decrease in greenhouse gas emissions density and non-hazardous waste generation density compared to the previous year, indicating progress in environmental goals[111]. - The company has set environmental targets and is implementing various measures to achieve them as part of its operational development[111]. - The company actively participates in environmental protection activities and promotes ecological diversity and climate change awareness through its artists[177]. Employee Management and Training - The total number of employees is 207, with 152 female and 55 male employees[199]. - Employee turnover rate is 34.78%, with a higher rate of 45.45% for male employees[199]. - The group has established a comprehensive employee compensation system, providing competitive salaries and various benefits, including statutory insurance and bonuses[167]. - The company provides various training programs for employees, including anti-corruption training and workplace harassment prevention training[171]. - 77.91% of training participants are female employees, while 22.09% are male[200]. Compliance and Risk Management - The company adheres to strict compliance with industry regulations and has implemented policies to ensure the professional standards and ethical norms in artist and trainee management[141]. - The group strictly prohibits any form of fraud, corruption, and bribery, ensuring compliance with relevant laws and regulations in China[158]. - The group has not faced any lawsuits related to corruption, bribery, or extortion this year[160].

Financial Performance - Total revenue increased from RMB 755.7 million in 2023 to RMB 764.5 million in 2024, representing a growth of 1.2%[9] - Gross profit decreased by 10.8% from RMB 175.0 million in 2023 to RMB 156.1 million in 2024, resulting in a gross margin decline from 23.2% to 20.4%[4] - Operating profit rose significantly by 75.6% from RMB 31.1 million in 2023 to RMB 54.6 million in 2024[4] - Adjusted net profit for the year was RMB 100.0 million, a decrease of 4.9% compared to RMB 105.2 million in 2023[4] - The net profit for the year was RMB 44.3 million, a recovery from a net loss of RMB 142.6 million in 2023[84] - The adjusted net profit for 2024 was RMB 100.046 million, with an adjusted net profit margin of 13.1%, compared to RMB 105.218 million and 13.9% in 2023[56] Revenue Breakdown - Revenue from artist management accounted for 90.9% of total revenue, increasing by 4.8% from RMB 662.9 million in 2023 to RMB 694.6 million in 2024[12] - Revenue from music IP production and operation decreased by 40.0% from RMB 70.3 million in 2023 to RMB 42.2 million in 2024[12] - Revenue from the pan-entertainment business increased by 23.6% from RMB 22.5 million to RMB 27.8 million, primarily driven by growth in virtual artist business[20] - Artist management revenue rose by 4.8% from RMB 662.9 million to RMB 694.6 million, driven by increased participation in commercial activities by signed artists[25] - Music IP production and operation revenue decreased by 40.0% from RMB 70.3 million to RMB 42.2 million, mainly due to reduced income from music streaming platforms[25] Cost and Expenses - Operating costs rose by 4.8% from RMB 580.6 million to RMB 608.5 million, primarily due to increased costs in artist management[29] - Employee benefits expenses increased by 17.3% from RMB 24,036 thousand in 2023 to RMB 28,187 thousand in 2024, accounting for 47.7% of total expenses[35] - Marketing expenses surged by 87.3% from RMB 9,091 thousand in 2023 to RMB 17,031 thousand in 2024, representing 28.8% of total expenses[35] - Total sales and marketing expenses rose by 53.1% from RMB 38,550 thousand in 2023 to RMB 59,039 thousand in 2024[36] - Daily and administrative expenses decreased by 29.9% from RMB 134,214 thousand in 2023 to RMB 94,147 thousand in 2024, primarily due to a reduction in equity-settled share payments and listing expenses[40] Assets and Liabilities - Cash and cash equivalents were RMB 613.4 million and RMB 386.1 million as of December 31, 2023, and December 31, 2024, respectively, with restricted cash amounting to RMB 12.3 million as of December 31, 2024[66] - The company's debt decreased from RMB 266.2 million as of December 31, 2023, to RMB 162.3 million as of December 31, 2024, with loans secured by various properties at floating interest rates ranging from 2.76% to 5.23%[67] - Total assets increased slightly to RMB 2,049,126 thousand in 2024 from RMB 2,044,926 thousand in 2023, reflecting a growth of 0.06%[86] - The company's total liabilities decreased from RMB 721,781 thousand in 2023 to RMB 654,558 thousand in 2024, a decrease of about 9.3%[86] - Trade receivables decreased by 24.9% from RMB 95.7 million as of December 31, 2023, to RMB 71.9 million as of December 31, 2024, mainly due to a reduction in trade receivables from music IP production[58] Strategic Initiatives - The company aims to leverage its brand influence and market resources to capture opportunities in existing and future business plans[9] - The company plans to enhance artist training capabilities by establishing its own training center and expanding its talent pool[15] - The company aims to further develop music IP production and operations to address the rapidly growing digital music market in China[17] - The company is actively expanding its business in overseas markets, including the United States and Southeast Asia[24] - New content featuring signed artists is set to be released in various international markets, enhancing global exposure[23] Shareholder Information - Basic and diluted earnings per share for the year were RMB 0.06, recovering from a loss of RMB 0.17 per share in 2023[84] - The company did not declare a final dividend for the years ended December 31, 2024, and 2023[106] - The company repurchased a total of 9,285,000 shares during the reporting period at a total cost of approximately HKD 5,762,729.97, reflecting confidence in the company's long-term strategy[116] Compliance and Governance - The audit committee reviewed the financial statements and confirmed compliance with applicable accounting standards and regulations[115] - The company has adopted corporate governance principles to enhance transparency and accountability to shareholders[110]

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].

Financial Performance - Total revenue decreased by 4.8% from RMB 364.8 million in 2023 to RMB 347.3 million in 2024[4] - Gross profit increased by 17.0% from RMB 76.2 million in 2023 to RMB 89.1 million in 2024, with a gross margin of 25.6%[1] - Operating profit surged to RMB 35.2 million from RMB 1.8 million in the previous year, representing an increase of 1,863.0%[1] - Adjusted net profit for the period was RMB 59.1 million, up 18.4% from RMB 49.9 million in 2023[1] - The company recorded a profit of RMB 29.4 million for the reporting period, compared to a loss of RMB 175.9 million in the same period last year[4] - The total comprehensive income for the six months ended June 30, 2024, was RMB 33.3 million, a recovery from a loss of RMB 113.6 million in the same period of the previous year[48] - Profit attributable to the company's owners for H1 2024 was RMB 30,796 thousand, a recovery from a loss of RMB 175,413 thousand in H1 2023[66] - The company reported a basic earnings per share of RMB 0.04 for the six months ended June 30, 2024, compared to a loss per share of RMB 0.22 for the same period in 2023[48] Revenue Breakdown - Revenue from artist management accounted for 87.3% of total revenue, amounting to RMB 303.2 million, a decrease of 5.1% year-on-year[6] - Revenue from music IP production and operation increased by 18.3% to RMB 35.0 million, representing 10.1% of total revenue[6] - Revenue from the pan-entertainment business decreased by 42.6% to RMB 9.0 million, accounting for 2.6% of total revenue[6] - Revenue from artist management decreased by 5.1% to RMB 303.2 million for the six months ended June 30, 2023, down from RMB 319.4 million[7] - Revenue from music IP production and operation increased by 18.3% from RMB 29.6 million for the six months ended June 30, 2023, to RMB 35.0 million for the reporting period[16] - Revenue from the pan-entertainment business decreased by 42.6% from RMB 15.7 million for the six months ended June 30, 2023, to RMB 9.0 million for the six months ending June 30, 2024, primarily due to a decline in concert revenue[13] Cost Management - Operating costs decreased by 10.6% from RMB 288.7 million for the six months ended June 30, 2023, to RMB 258.2 million for the reporting period[17] - Total operating costs, sales and marketing expenses, and daily administrative expenses amounted to RMB 323,828 thousand in H1 2024, down from RMB 369,656 thousand in H1 2023, representing a reduction of about 12.4%[60] - Sales and marketing expenses increased by 25.6% from RMB 16.8 million for the six months ended June 30, 2023, to RMB 21.1 million for the reporting period[21] - Daily administrative expenses decreased by 30.7% from RMB 64.2 million for the six months ended June 30, 2023, to RMB 44.5 million for the reporting period[22] Investments and Acquisitions - The acquisition of target assets related to several virtual artist projects aims to enhance the company's capabilities in the virtual artist sector[3] - The company plans to enhance its artist training capabilities with the launch of its own training center in the second half of 2024[8] - The company plans to further enrich its business model and build a comprehensive cultural entertainment platform, focusing on market trends in the virtual artist industry[13] - The company plans to use HKD 179.3 million for the acquisition and renovation of an artist training center by the end of 2023[81] Cash Flow and Financial Position - 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[39] - Total borrowings decreased from RMB 266.2 million as of December 31, 2023, to RMB 253.9 million as of June 30, 2024[40] - The debt-to-equity ratio slightly increased from 21.1% as of December 31, 2023, to 21.3% as of June 30, 2024[41] - The company plans to maintain sufficient cash and cash equivalents to meet liquidity needs[39] Government Grants and Other Income - Other income for the six months ended June 30, 2024, totaled RMB 10.96 million, significantly increasing from RMB 1.007 million in the same period of 2023, primarily due to government grants of RMB 10.852 million[25] - The company received government grants totaling RMB 10.852 million during the reporting period, reflecting a substantial increase from RMB 318,000 in the previous year[25] Market and Strategic Initiatives - The company is exploring market opportunities for A-SOUL through a business cooperation agreement with NIS Future for the operation and management of virtual artists[12] - The company aims to continue producing digital singles and albums for signed artists to respond to the rapidly growing digital music market in China[10] - The company will focus on increasing the visibility and commercial value of its signed artists through enhanced marketing efforts[8] - The company plans to expand its market presence in Southeast Asia, targeting a 30% market share by 2025[86] Employee and Governance - As of June 30, 2024, total employee benefits expenses, including share-based payments, amounted to RMB 69.9 million, a decrease of 22.7% compared to RMB 90.4 million for the six months ended June 30, 2023[43] - The company maintained strict corporate governance and internal control measures throughout the reporting period[72] - The audit committee reviewed the financial statements for the six months ended June 30, 2024, confirming compliance with applicable accounting standards[74] Shareholder Returns - The company did not recommend the payment of dividends for the six months ended June 30, 2024, and 2023[65] - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[85]

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]

Financial Performance - Total revenue decreased from RMB 487.97 million in the six months ended June 30, 2022, to RMB 364.82 million in the same period of 2023, representing a decline of 25.2%[2] - Gross profit fell from RMB 203.81 million to RMB 76.16 million, a decrease of 62.6%, with the gross margin dropping from 41.8% to 20.9%[2] - The company recorded a net loss of RMB 175.91 million for the six months ended June 30, 2023, compared to a profit of RMB 92.73 million in the same period of 2022[4] - Adjusted net profit (non-IFRS measure) decreased by 70.4% from RMB 168.69 million to RMB 49.89 million[2] - Revenue decreased by 25.2% 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, primarily due to a decline in artist management income[14] - The operating profit for the first half of 2023 was RMB 1.793 million, a sharp decrease from RMB 153.002 million in the previous year[47] - The company reported a basic loss per share of RMB 0.22 for the first half of 2023, compared to earnings of RMB 0.20 in the same period last year[47] - The net profit attributable to the company's owners for the six months ended June 30, 2023, was a loss of RMB 175,413,000, compared to a profit of RMB 93,803,000 for the same period in 2022[65] - The diluted loss per share for the six months ended June 30, 2023, was RMB (0.22), compared to RMB 0.17 for the same period in 2022, reflecting the adjustments for convertible preferred shares[67] Revenue Breakdown - Revenue from artist management accounted for 87.6% of total revenue, amounting to RMB 319.44 million, down 26.6% year-on-year[7] - Revenue from music IP production and operation was RMB 29.64 million, representing 8.1% of total revenue, a decrease of 26.7%[7] - Revenue from artist management decreased by 26.6% from RMB 435.3 million for the six months ended June 30, 2022, to RMB 319.4 million for the six months ended June 30, 2023, primarily due to a decline in demand for services provided to contracted artists[9] - Revenue from music IP production and operation decreased by 26.7% from RMB 40.5 million for the six months ended June 30, 2022, to RMB 29.6 million for the six months ended June 30, 2023, mainly due to a reduction in sales of digital singles and albums[10] - Revenue from pan-entertainment business increased by 28.8% from RMB 12.2 million for the six months ended June 30, 2022, to RMB 15.7 million for the six months ended June 30, 2023, primarily due to increased income from concerts organized for contracted artists[11] Expenses and Costs - Sales and marketing expenses increased by 20.7% from RMB 13.9 million to RMB 16.8 million, primarily due to increased share-based payments to sales and marketing personnel[19] - Administrative expenses rose by 45.2% from RMB 44.2 million to RMB 64.2 million, mainly due to increased share-based payments to administrative staff[20] - The total operating costs, sales and marketing expenses, and general and administrative expenses amounted to RMB 369,656 thousand, an increase of 8.0% from RMB 342,332 thousand in the previous year[57] Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 1,758.252 million, an increase from RMB 1,322.271 million at the end of 2022[48] - The company's total liabilities decreased to RMB 512.883 million from RMB 1,439.124 million at the end of 2022, reflecting a significant reduction in debt[49] - Trade receivables decreased by 11.7% from RMB 129.9 million as of December 31, 2022, to RMB 114.7 million as of June 30, 2023, attributed to reduced demand for services provided to contracted artists[34] - Trade payables decreased by 11.0% from RMB 190.6 million as of December 31, 2022, to RMB 169.6 million as of June 30, 2023, primarily due to decreased income from artist management business[35] - Other payables and accrued expenses decreased by 14.5% from RMB 49.7 million as of December 31, 2022, to RMB 42.5 million as of June 30, 2023, mainly due to a reduction in listing-related payables[36] Strategic Initiatives - The company established an artificial intelligence content creation company to enhance its entertainment business and create digital personas for artists[3] - The company plans to develop a comprehensive entertainment platform, YH SPACE, to explore more opportunities in the entertainment market[3] - The company aims to leverage its brand influence and market resources to execute its comprehensive development strategy effectively[5] - The company continues to strengthen its leading position in the Chinese artist management market by identifying and training high-potential artists[8] - The company plans to build its own artist training center to enhance its core artist cultivation capabilities[9] - The company aims to further develop its music IP production and operation business to respond to the rapidly growing digital music market in China[10] - The company is actively expanding its global presence, promoting its contracted artists and music works on various overseas streaming platforms[12] - The company plans to seek business opportunities in Southeast Asia, Japan, and the United States while enhancing its artist management capabilities in South Korea[13] Governance and Compliance - The audit committee reviewed the unaudited consolidated financial statements for the six months ending June 30, 2023, confirming compliance with applicable accounting standards[76] - The company has adopted the corporate governance code as per the listing rules and continues to review its governance practices[74] - The company confirmed that all directors adhered to the standards of conduct regarding securities trading during the reporting period[75] Future Outlook - The company has provided a revenue guidance of RMB 1 billion for the next fiscal year, reflecting an expected growth of 25%[83] - New product launches are anticipated to contribute an additional RMB 200 million in revenue over the next six months[83] - The company is expanding its market presence in Southeast Asia, targeting a 10% market share by the end of 2024[83] - Research and development investments increased by 30% to RMB 50 million, focusing on innovative technologies[83] - The company is exploring potential acquisitions to enhance its product portfolio and market reach[83] - A new strategic partnership was announced, expected to drive synergies and increase operational efficiency[83] - The company plans to implement a new marketing strategy aimed at increasing brand awareness by 40% in the next year[83] - The board of directors remains committed to enhancing shareholder value through strategic initiatives and operational improvements[84]