Investment Rating - The report maintains a "Buy" rating for the company, indicating a potential upside of over 15% relative to the CSI 300 index [7]. Core Insights - The company has shown strong growth in its short drama business, achieving significant revenue increases and successfully turning a profit in 2023. The revenue for 2023 reached 6.84 billion yuan, a year-on-year increase of 8.3%, with net profit soaring to 400 million yuan, a remarkable growth of 337.8% [9]. - The company is expected to continue its revenue growth trajectory, with projected revenues of 7.09 billion yuan, 7.61 billion yuan, and 8.30 billion yuan for 2023, 2024, and 2025 respectively, reflecting year-on-year growth rates of 3.7%, 7.3%, and 9.1% [2][17]. - The company is focusing on optimizing its social product matrix and expanding its overseas market presence, particularly with its product "Waha" gaining traction in Vietnam [1]. Summary by Sections Financial Performance - The company achieved a gross margin of 41.4% in 2023, slightly higher than the previous year, with a sales expense ratio of 30.3% [23]. - The company’s content service revenue from short dramas reached 959 million yuan in 2023, showing substantial growth [9]. - The projected net profits for 2023, 2024, and 2025 are 420 million yuan, 490 million yuan, and 560 million yuan respectively, with growth rates of 8.0%, 16.6%, and 14.4% [2][17]. Business Segments - The short drama business is positioned as a key growth driver, with the company producing hundreds of micro-dramas and achieving over 10 billion total views [9]. - The live social business has shown signs of recovery, with a 25.5% quarter-on-quarter increase in revenue, despite a year-on-year decline of 10% [16]. Market Position - The company is recognized as a leader in the short drama sector, ranking third in the industry heat list for Q1 2024, following major competitors [9]. - The company’s strong promotional capabilities and comprehensive industry chain are expected to sustain its competitive edge and revenue generation [9].

Financial Performance - The group's revenue for the year was approximately RMB 6,844.8 million, an increase of 8.3% compared to RMB 6,319.3 million in 2022, driven by the development of an innovative product matrix[3]. - Gross profit increased by 11.3% from approximately RMB 2,546.5 million in 2022 to approximately RMB 2,833.1 million, with the gross profit margin rising from 40.3% to 41.4%[4]. - Operating profit turned positive, increasing by 1,002.7% from an operating loss of approximately RMB 47.0 million in 2022 to approximately RMB 424.2 million[8]. - The net other income increased from a loss of approximately RMB 46.7 million in 2022 to a net income of approximately RMB 138.5 million, mainly due to the appreciation of certain financial assets measured at fair value[7]. - The group's share of profits from investments accounted for using the equity method was approximately RMB 20.9 million, compared to a loss of approximately RMB 51.2 million in 2022[9]. Expenses and Losses - Administrative expenses decreased by 70.6% from approximately RMB 774.3 million in 2022 to approximately RMB 227.3 million, primarily due to the absence of goodwill impairment provisions during the reporting period[5]. - Financial asset impairment losses decreased from approximately RMB 50.2 million in 2022 to approximately RMB 13.1 million, attributed to a reduction in expected credit losses on other receivables and trade receivables[6]. Cash and Financial Assets - As of December 31, 2023, the total restricted cash balance was approximately RMB 58.4 million, slightly down from RMB 60.4 million as of December 31, 2022[13]. - Total financial assets decreased from approximately RMB 1,477.8 million in 2022 to approximately RMB 924.1 million in 2023[14]. Investment and Strategy - The company expects that its investment strategies will continue to generate stable income, given the manageable risk levels associated with financial products[16]. - The board has approved a budget of $100 million for cryptocurrency purchases[25]. - The company has no significant investment or capital asset plans as of the report date[25]. Business Operations - The group focuses on mobile live streaming platform business in China, providing value-added telecom services, internet cultural services, and network audiovisual program services[31]. - The company aims to maximize shareholder returns and will focus on its core business for sustainable growth[35]. - The company has no significant adverse impacts from competitive market conditions, despite operating in a vibrant and competitive industry[63]. Compliance and Governance - The company has complied with all relevant laws and regulations affecting its business and operations during the reporting period[33]. - The company’s independent non-executive directors confirmed their independence in relation to significant transactions and arrangements[104]. - The company has established a mechanism for evaluating the independence of its independent non-executive directors annually[139]. - The company has confirmed that all independent non-executive directors are independent as of the fiscal year ending December 31, 2023[125]. Shareholder and Dividend Information - The board has proposed a final dividend of HKD 0.0412 per ordinary share for the year ending December 31, 2023, totaling approximately HKD 799 million, pending shareholder approval at the upcoming annual general meeting[53]. - The company has a policy to declare interim dividends based on its financial condition and profits[39]. - The company’s available reserves for distribution, calculated under Cayman Islands company law, amount to approximately RMB 3,219.8 million[167]. Employee Incentives and Compensation - The company has adopted stock option plans and restricted share unit plans to incentivize employees[162]. - The company has implemented a competitive compensation policy for employees, including salary, bonuses, and other cash benefits[162]. - The company aims to attract and retain skilled personnel through the implementation of the restricted share unit plan adopted on May 12, 2022[96]. Share Options and Restricted Share Units - The total number of stock options available for issuance under the stock option plan is 201,556,400 shares, accounting for approximately 10.40% of the company's issued share capital as of the report date[84]. - The total number of shares available for the Restricted Share Unit Plan is 100,778,200 shares, representing about 5.2% of the company's issued share capital as of the report date[76]. - The company has not granted any share options or restricted share units during the reporting period[121]. Board and Management - The company’s board of directors is collectively responsible for guiding and supervising the company’s affairs, including monitoring operational and financial performance[138]. - The board is committed to ensuring at least three independent non-executive directors, with one possessing appropriate professional qualifications[154]. - The company held six board meetings during the reporting period, exceeding the requirement of four meetings per year as per corporate governance code C.5.1[146]. Miscellaneous - The company has established Hunan Canchen Yingchao Network Technology Co., Ltd. and Hunan Lingxiao Lansheng Network Technology Co., Ltd. to engage in value-added telecommunications and internet cultural activities, which are restricted for foreign investors under Chinese law[176]. - The company has not made any payments to directors or on behalf of directors during the reporting period, except as disclosed[191]. - The company has not entered into any arrangements allowing directors or executives to acquire securities of the company or its affiliates during the year[170].

Investment Rating - The report maintains a "Recommended" rating for the company [5][4]. Core Insights - The company achieved a revenue of 6.845 billion yuan in 2023, representing an increase of 8.3% year-on-year. The net profit reached 0.401 billion yuan, recovering from a loss of 0.168 billion yuan in the previous year [1][6]. - The growth in revenue is primarily attributed to the rapid increase in short drama income and the stable development of the live social segment. The company has successfully entered the top tier of the short drama industry [1][6]. - The company is accelerating its overseas product matrix construction, with overseas revenue reaching 0.136 billion yuan, a significant increase compared to the previous year [1][6]. Financial Performance Summary - In 2023, the company reported a total revenue of 6.845 billion yuan, with value-added service revenue at 5.220 billion yuan (down 10% year-on-year), content service revenue at 0.959 billion yuan (up from 0.041 billion yuan last year), and other income at 0.666 billion yuan (up 8.32% year-on-year) [1][7]. - The company's gross profit margin improved to 41.4%, an increase of 1.1 percentage points from the previous year, while the adjusted net profit margin was 6.2% [1][7]. - The company expects net profits for 2024-2026 to be 0.364 billion yuan, 0.402 billion yuan, and 0.410 billion yuan, respectively, corresponding to PE ratios of 4.2X, 3.8X, and 3.7X [1][7].

Investment Rating - The investment rating for the company is "Neutral" [3][11]. Core Views - The company achieved a revenue of 6.845 billion yuan in 2023, representing an 8.32% year-on-year increase, and net profit of 386.53 million yuan, recovering from a loss of 166.10 million yuan in 2022 [21]. - The company's short video and overseas business are expected to drive growth, with significant contributions from the entertainment content service revenue, which reached 959 million yuan, accounting for 13.36% of total revenue [22]. - The company maintains a strong cash position with approximately 2.36 billion yuan in cash and cash equivalents as of December 31, 2023, and a dividend yield of about 4.5% based on the 2023 annual dividend [4]. Financial Summary - Revenue Forecast: - 2023: 6.845 billion yuan - 2024: 6.945 billion yuan - 2025: 7.238 billion yuan - 2026: 7.576 billion yuan - Year-on-year growth rates: 8.32% in 2023, 1.47% in 2024, 4.22% in 2025, and 4.67% in 2026 [3][8]. - Net Profit Forecast: - 2023: 386.53 million yuan - 2024: 390.47 million yuan - 2025: 402.98 million yuan - 2026: 414.08 million yuan - Year-on-year growth rates: 1.02% in 2024, 3.20% in 2025, and 2.76% in 2026 [3][8]. - Earnings Per Share (EPS): - 2023: 0.20 yuan - 2024: 0.20 yuan - 2025: 0.21 yuan - 2026: 0.21 yuan [3][8]. - Price-to-Earnings (P/E) Ratio: - 2023: 4.08 - 2024: 4.04 - 2025: 3.91 - 2026: 3.81 [3][8]. Cash Flow Summary - Operating Cash Flow: - 2023: 184.01 million yuan - 2024: 480.96 million yuan - 2025: 379.46 million yuan - 2026: 354.88 million yuan [6]. - Net Increase in Cash: - 2023: 634.01 million yuan - 2024: 448.68 million yuan - 2025: 329.75 million yuan - 2026: 292.96 million yuan [6].

Financial Performance - The company reported a profit attributable to shareholders of RMB 386,529 thousand, compared to a loss of RMB 166,101 thousand in the previous period[7]. - Basic earnings per share were RMB 0.21, an increase from a loss of RMB 0.09 per share in the prior year[8]. - The company's revenue for 2023 was approximately RMB 6,844.8 million, an increase of 8.3% compared to RMB 6,319.3 million in 2022[63]. - The net profit for the year was approximately RMB 400.6 million, compared to a loss of RMB 168.5 million in 2022, marking a 337.8% increase[72]. - Operating profit was recorded at RMB 424.2 million, a significant increase from a loss of RMB 46.9 million in 2022, representing a growth of 1,002.7%[75]. - Gross profit increased by 11.3% to approximately RMB 2,833.1 million, with a gross margin of 41.4%, up from 40.3% in 2022[65]. - Total revenue for the year ended December 31, 2023, was RMB 6,844,788 thousand, an increase of 8.3% compared to RMB 6,319,321 thousand in 2022[155]. - The profit attributable to the company's owners for the year was RMB 386,529 thousand, a significant recovery from a loss of RMB 166,101 thousand in the previous year[190]. Assets and Liabilities - Total assets increased to RMB 5,145,709 thousand, up from RMB 4,660,614 thousand year-over-year, representing an increase of approximately 10.4%[9]. - Current assets rose to RMB 3,978,967 thousand, compared to RMB 3,512,767 thousand in the previous year, reflecting a growth of about 13.2%[9]. - Total liabilities increased to RMB 863,866 thousand from RMB 808,172 thousand, indicating a rise of about 6.9%[10]. - Non-current assets totaled RMB 1,166,742 thousand, slightly up from RMB 1,147,847 thousand, showing a modest increase of around 1.6%[9]. - The group's cash and cash equivalents amounted to approximately RMB 2,362.3 million as of December 31, 2023, up from RMB 1,634.7 million as of December 31, 2022[101]. - Trade receivables as of December 31, 2023, amounted to RMB 508,366 thousand, an increase from RMB 444,680 thousand in the previous year[193]. Expenses and Cost Management - Sales and marketing expenses surged by 50.1% to approximately RMB 2,073.8 million, accounting for 30.3% of total revenue, up from 21.9% in 2022[65]. - The group's administrative expenses decreased by 70.6% from approximately RMB 774.3 million in 2022 to about RMB 227.3 million during the reporting period[91]. - Research and development expenses reduced by 30.0% from approximately RMB 388.7 million in 2022 to about RMB 272.0 million during the reporting period[92]. - The company's advertising and promotional expenses increased to RMB 2,031,052 thousand in 2023 from RMB 1,325,312 thousand in 2022, reflecting a strategic push for market expansion[156]. Market and User Engagement - The average monthly active users decreased to 22,808 thousand in 2023 from 26,712 thousand in 2022, representing a decline of 14.6%[46]. - The average revenue per user increased to RMB 25.0 in 2023 from RMB 19.7 in 2022, reflecting a growth of 26.9%[46]. - The company has made significant progress in overseas market expansion, with its social products ranking among the top in Vietnam's social application sales charts[55]. - The company aims to leverage the growth of the global mobile internet and technology to enhance its social entertainment ecosystem for long-term growth[48]. - The group plans to accelerate overseas market expansion, particularly in the Middle East, while developing localized products[84]. Corporate Governance and Compliance - The company is committed to maintaining high levels of corporate governance to enhance shareholder value and accountability[197]. - The board of directors confirmed compliance with the standards of conduct for securities trading during the reporting period[166]. Innovation and Technology - The company is focusing on innovation in its business model, particularly in short dramas and other creative content, to drive new growth momentum[54]. - The company is actively embracing new technologies, including AI applications in live streaming and social interactions, to enhance user experience[59]. - The company has established localized teams in Vietnam and Thailand to enhance content supply and adapt services to local user preferences[56]. Dividends - The company plans to distribute a final dividend of HKD 0.0412 per share, totaling approximately HKD 799 million for the fiscal year ending December 31, 2023[38]. - The board has proposed a final dividend of HKD 0.0412 per share for the year ending December 31, 2023[75]. - The company declared a final dividend of HKD 0.0412 per share, totaling approximately HKD 79.9 million, compared to no dividend in 2022[161].

智通财经APP获悉，映宇宙(03700)涨超11%，截至发稿，涨11.11%，报0.8港元，成交额224.84万港元。 消息面上，据央视财经，近年来，微短剧在各大平台迅速走红。数据显示，2023年，抖音上播放量破亿的微短剧达500部；快手微短剧日均日活跃用户数量达2.7亿。有报告显示，2023年中国微短剧市场规模已攀升至373.9亿元，预计到2027年，中国微短剧市场规模将突破1000亿元大关。 此外，新腕儿联合DataEye近日发布3月第1周短剧热力周榜，从上周上榜短剧来看，热力值最高的是《司令宠妾灭妻，我转身出府嫁少帅》，一周内热力值为2098万，关联方为海南恒系。据悉，海南恒系是北京蜜莱坞100%子公司，也就是属于映宇宙的工作室马甲。第二名《夜空中最亮的星》，关联方美光盛世，也是映宇宙旗下短剧工作室。 ...

Financial Performance - The group reported a net profit of RMB 3,073,508 thousand for the six months ended June 30, 2023, compared to RMB 4,007,621 thousand in the same period of 2022, reflecting a decrease of approximately 23.2%[18]. - The total revenue for the six months ended June 30, 2023, was RMB 3,126,091 thousand, down from RMB 4,061,114 thousand in the previous year, indicating a decline of about 23.0%[18]. - The company reported a profit attributable to shareholders of RMB 190,349,000 for the six months ended June 30, 2023, compared to a loss of RMB 109,915,000 in the same period of 2022[45]. - The basic earnings per share for the company was RMB 0.10 for the six months ended June 30, 2023, compared to a loss per share of RMB 0.06 in the previous year[45]. - The total comprehensive income for the half-year, after tax, amounted to RMB 226,784 thousand, compared to a loss of RMB 69,285 thousand in the previous period[163]. - The profit attributable to the owners of the company was RMB 224,549 thousand, a significant increase from a loss of RMB 68,132 thousand in the same period last year[163]. - The company reported a diluted earnings per share of RMB 0.10, compared to a loss per share of RMB 0.06 in the previous period[162]. Revenue and Costs - Revenue for the six months ended June 30, 2023, was RMB 3,126,091 thousand, a decrease of 23.0% compared to RMB 4,061,114 thousand for the same period in 2022[83]. - Gross profit for the same period was RMB 1,330,586 thousand, reflecting a 23.0% decline from RMB 1,728,010 thousand year-on-year[83]. - The group's sales cost for the reporting period was approximately RMB 1,795.5 million, down 23.0% from RMB 2,333.1 million in the same period of 2022, mainly due to reduced revenue[102]. - The cost of goods sold for the period was RMB 102,504 thousand, a substantial increase from RMB 2,035 thousand in the previous year, indicating a significant rise in operational costs[1]. - Employee benefits expenses were RMB 330,010 thousand, down from RMB 388,240 thousand, reflecting a decrease of about 15.0%[1]. Cash Flow and Liquidity - For the six months ended June 30, 2023, the net cash inflow from operating activities was RMB 162,305 thousand, a decrease from RMB 380,711 thousand in the same period of 2022, representing a decline of approximately 57.4%[1]. - The net cash outflow from investing activities was RMB 93,324 thousand, compared to RMB 190,957 thousand in the previous year, indicating a reduction of about 51.1%[1]. - The net cash outflow from financing activities was RMB 3,222 thousand, significantly improved from RMB 41,274 thousand in the same period of 2022, reflecting a decrease of approximately 92.2%[1]. - The company experienced a net increase in cash and cash equivalents of RMB 65,759 thousand, compared to an increase of RMB 148,480 thousand in the same period of 2022, indicating a decline of approximately 55.7%[1]. - The company’s cash and cash equivalents at the beginning of the period were RMB 1,634,708 thousand, down from RMB 1,993,306 thousand in the previous year, representing a decrease of about 18.0%[1]. - The company maintains a current ratio of 4.7 and a debt ratio of 0.2 as of June 30, 2023, indicating strong liquidity and low leverage[141]. Assets and Liabilities - The company's net book value as of June 30, 2023, was RMB 66,029,000, an increase from RMB 62,779,000 as of December 31, 2022[37]. - The total fair value of financial assets as of June 30, 2023, was RMB 1,468,294,000, compared to RMB 1,477,848,000 as of December 31, 2022[58]. - As of June 30, 2023, total liabilities stood at RMB 865,107 thousand, an increase from RMB 808,172 thousand as of December 31, 2022[165]. - The total equity and liabilities amounted to RMB 4,959,703 thousand, compared to RMB 4,660,614 thousand at the end of the previous year[165]. - The company reported restricted cash totaling RMB 92,248,000 as of June 30, 2023, with RMB 72,895,000 frozen due to regulatory investigations[63]. Financial Assets and Investments - The fair value of non-current financial assets increased to RMB 162,841 thousand as of June 30, 2023, from RMB 155,367 thousand at the beginning of the year, representing a growth of approximately 4.8%[7]. - The group classified financial assets at fair value, with first-level assets being investments in listed company shares and second-level assets being financial products with net value quotes from financial institutions[5]. - The group’s investment in financial products primarily comes from banks and financial institutions in China, with fair value changes recorded in the consolidated income statement[5]. - The group reported a fair value gain of RMB 43,524 thousand from financial assets measured at fair value through profit or loss for the six months ended June 30, 2023[32]. - The group’s financial risk management includes the use of observable market data for valuation techniques, minimizing reliance on specific entity estimates[4]. Operational Strategies and Innovations - The company continues to enhance the "Inke Live" platform ecosystem and optimize operational strategies to improve profitability in live streaming[90]. - The company is focusing on product innovation and expanding its social product matrix to meet diverse user needs[90]. - The company plans to maintain a proactive approach to refine existing product business models while exploring global development opportunities[96]. - The company has successfully validated business models for several projects in its innovation matrix since 2022, particularly in the short drama sector[97]. - The group aims to explore overseas opportunities and accelerate business model validation in the global social business market, leveraging its experience in audio-visual social interactions[107]. - The group plans to harness technological advancements, particularly in AIGC, to innovate in the interactive social and entertainment sectors, targeting areas like AI music and the metaverse[108]. Employee and Administrative Expenses - The company has implemented a systematic training program to enhance employee skills and support sustainable development, with 1,552 full-time employees as of June 30, 2023[149]. - The group's administrative expenses decreased by 83.8% to approximately RMB 100.1 million from RMB 616.7 million in the same period of 2022, primarily due to the absence of goodwill impairment provisions[123]. Dividends and Shareholder Returns - The company did not declare or pay any dividends for the periods ended June 30, 2023, and 2022[47]. - The company did not declare any interim dividends during the reporting period[174].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 3,126.1 million, a decrease of 23.0% compared to the same period in 2022[2] - Gross profit for the six months ended June 30, 2023, was RMB 1,330.6 million, a decrease of 23.0% compared to the same period in 2022[2] - Operating profit for the six months ended June 30, 2023, was RMB 202.0 million, a significant increase of 641.3% compared to the same period in 2022[2] - The company recorded a profit of approximately RMB 192.6 million, a turnaround from a loss of RMB 111.1 million in the same period last year[36] - Adjusted net profit, which excludes non-cash share-based compensation expenses, was RMB 205.7 million, compared to RMB 402.2 million in the previous year[38] - Revenue for the period was RMB 3.13 billion, with a gross profit of RMB 1.33 billion, down from RMB 4.06 billion and RMB 1.73 billion respectively in the previous year[46] - Operating profit was RMB 202.0 million, a significant increase from RMB 27.2 million in the same period last year[46] - The company's comprehensive income attributable to equity holders was RMB 224.5 million, compared to a loss of RMB 68.1 million in the previous year[48] - The company's revenue for the reporting period was approximately RMB 3,126.1 million, a decrease of 23.0% compared to RMB 4,061.1 million in the same period last year, but a sequential increase of 38.4%[58] - The company's gross profit for the reporting period was approximately RMB 1,330.6 million, a decrease of 23.0% compared to RMB 1,728.0 million in the same period last year, with the gross margin remaining stable at 42.6%[60] - The company reported a net profit attributable to shareholders of RMB 226.8 million for the first half of 2023, compared to a net loss of RMB 69.3 million in the same period of 2022[79] - Basic earnings per share were RMB 0.10 for the first half of 2023, compared to a loss per share of RMB 0.06 in the same period of 2022[81] - Net profit attributable to owners of the company was RMB 190,349 thousand in H1 2023, compared to a loss of RMB 109,915 thousand in H1 2022[117] - Basic earnings per share were RMB 0.10 in H1 2023, versus a loss per share of RMB 0.06 in H1 2022[117] User Metrics - Monthly active users (MAU) for the six months ended June 30, 2023, were 28,094 thousand, a decrease of 5.7% compared to the same period in 2022[3] - Average revenue per user (ARPU) for the six months ended June 30, 2023, was RMB 18.5, a decrease of 18.5% compared to the same period in 2022[3] Expenses and Costs - Sales and marketing expenses for the six months ended June 30, 2023, increased by 11.3% to RMB 962.0 million compared to the same period in 2022[28] - Administrative expenses for the six months ended June 30, 2023, decreased by 83.8% to RMB 100.1 million compared to the same period in 2022, primarily due to the absence of goodwill impairment provisions[29] - R&D expenses for the six months ended June 30, 2023, decreased by 24.3% to RMB 142.5 million compared to the same period in 2022, mainly due to optimization of employee structure[31] - Capital expenditures for the six months ended June 30, 2023, were approximately RMB 20.3 million, compared to RMB 7.6 million in the same period in 2022[20] - Income tax expenses decreased by 61.3% to approximately RMB 34.7 million, down from RMB 89.7 million in the previous year, primarily due to a decrease in net operating profit[35] Investments and Financial Assets - The company's financial assets at fair value through profit or loss as of June 30, 2023, were approximately RMB 1,468.3 million, slightly down from RMB 1,477.8 million as of December 31, 2022[7] - The company's share of profits from equity-accounted investments was approximately RMB 14.2 million, a significant improvement from a loss of RMB 53.8 million in the same period last year, representing a 126.3% increase[34] Cash and Liquidity - Cash and cash equivalents increased to RMB 1,717.5 million as of June 30, 2023, up from RMB 1,634.7 million as of December 31, 2022, with RMB 1,565.8 million denominated in RMB and RMB 151.7 million in other currencies (primarily USD)[72] - Restricted cash balance was RMB 72.9 million as of June 30, 2023, with RMB 26.1 million unfrozen after the balance sheet date[72] - Approximately RMB 72.9 million of the company's bank deposits were frozen due to investigations by local regulators, with RMB 26.1 million subsequently unfrozen after the balance sheet date[42] Business Strategy and Growth - The company continues to enhance its live streaming platform ecosystem, improving operational strategies and product iteration efficiency, leading to increased profitability in the live streaming business[49] - The company is expanding its offline presence for its dating brand, focusing on 90s singles, and has successfully organized large-scale dating events to enhance brand influence and fulfill corporate social responsibility[51] - The company's short drama business has achieved rapid growth in market size and user base, positioning its products in the top tier of the industry[52] - The company plans to explore new opportunities in overseas markets, focusing on audio-video social interactions and aiming to expand user scale and product penetration[54] - The company is leveraging AI and AIGC technologies to innovate in interactive social, AI music, AI scripts, AI operations, digital live streaming, and the metaverse, aiming to transform the entertainment industry[55] Assets and Liabilities - The company's total assets as of June 30, 2023, were RMB 4,959.7 million, with current assets totaling RMB 3,875.3 million and non-current assets at RMB 1,084.4 million[62] - The company's current ratio (current assets to current liabilities) was 4.7 as of June 30, 2023, with a debt-to-equity ratio (total liabilities to total equity) of 0.2[70] - Trade receivables were primarily denominated in RMB, with credit terms ranging from 1 to 3 months[103] - Accounts payable increased to RMB 463.2 million as of June 30, 2023, up from RMB 444.7 million as of December 31, 2022[104] - Trade receivables decreased to RMB 58,066 thousand as of June 30, 2023, from RMB 64,059 thousand as of December 31, 2022[122] Revenue Breakdown - Total revenue for the first half of 2023 was RMB 3,126,091 thousand, a decrease from RMB 4,061,114 thousand in the same period of 2022[114] - Value-added services revenue dropped to RMB 2,314,679 thousand in H1 2023 from RMB 3,912,337 thousand in H1 2022[114] - Content services revenue, newly reported in 2023, amounted to RMB 472,199 thousand[114] - Other revenue increased to RMB 339,213 thousand in H1 2023 from RMB 148,777 thousand in H1 2022[114] Corporate Governance and Compliance - The company maintained high corporate governance standards, with the Chairman and CEO roles held by the same individual, which the Board believes benefits the group's management[133] - The company has established an audit committee in accordance with Listing Rule 3.21 and the Corporate Governance Code[135] - The audit committee consists of two independent non-executive directors, Mr. Cui Dawei and Dr. Li Hui, and one non-executive director, Mr. Liu Xiaosong, with Mr. Cui Dawei serving as the chairman[135] - The announcement is issued by the order of the board of directors of Inkeverse Group Limited, with Mr. Feng Yousheng as the chairman and executive director[137] Reporting and Disclosure - The interim results announcement is available on the Hong Kong Exchanges and Clearing Limited website (www.hkexnews.hk) and the company's website (www.inkeverse.com)[136] - The interim report for the six months ended June 30, 2023, will be sent to shareholders and published on the Hong Kong Exchanges and Clearing Limited website and the company's website in due course[136] - The company adopted new and revised accounting standards during the reporting period, with no significant changes in major judgments and estimates compared to the previous year[113] - The company did not declare or pay any dividends for the periods ending June 30, 2023, and June 30, 2022[121] Equity and Shareholder Information - Total equity attributable to shareholders increased to RMB 4,088.1 million as of June 30, 2023, from RMB 3,853.7 million as of December 31, 2022[85]

User Metrics and Revenue Performance - Monthly average active users (MAU) decreased by 37.6% to 26,712 thousand in 2022 compared to 42,802 thousand in 2021[9] - Average revenue per user per month (ARPU) increased by 10.1% to RMB 19.7 in 2022 from RMB 17.9 in 2021[9] - Total revenue decreased to RMB 6,319,321 thousand in 2022 from RMB 9,175,595 thousand in 2021, a decline of 31.1%[18] - Revenue decreased by 31.1% to RMB 6,319.3 million in 2022 compared to RMB 9,175.6 million in 2021[52] - The company's revenue in 2022 was approximately RMB 6,319.3 million, a decrease of 31.1% compared to RMB 9,175.6 million in 2021, primarily due to intensified industry competition and more cautious operational strategies[32] Profitability and Losses - Gross profit decreased to RMB 2,546,492 thousand in 2022 from RMB 3,305,099 thousand in 2021, a decline of 22.9%[18] - Net loss for the year was RMB 168,459 thousand in 2022 compared to a net profit of RMB 433,009 thousand in 2021[18] - Gross profit decreased by 23.0% from RMB 3,305.1 million in 2021 to RMB 2,546.5 million in 2022, with the gross profit margin increasing from 36.0% to 40.3% due to refined operational strategies and product structure optimization[34] - The company recorded a net loss of approximately RMB 168.5 million in 2022, a decrease of 138.9% compared to a net profit of RMB 433.0 million in 2021[38] - Net loss attributable to shareholders was RMB 168.5 million in 2022, a 138.9% decline from a net profit of RMB 433.0 million in 2021[52] - Adjusted net profit decreased to RMB 387.7 million in 2022 from RMB 482.5 million in 2021, including a goodwill impairment loss of RMB 512.8 million[61] Assets and Liabilities - Total assets decreased to RMB 4,660,614 thousand in 2022 from RMB 5,238,392 thousand in 2021, a decline of 11.0%[18] - Total liabilities decreased to RMB 808,172 thousand in 2022 from RMB 1,307,244 thousand in 2021, a decline of 38.2%[18] - The company's current ratio improved to 4.6 in 2022 from 3.1 in 2021, and the debt-to-equity ratio decreased to 0.2 from 0.3, indicating optimized asset structure[81] - Cash and cash equivalents stood at RMB 1,634.7 million as of December 31, 2022, compared to RMB 1,993.3 million in 2021, with RMB 1,321.3 million denominated in CNY and RMB 313.4 million in other currencies (primarily USD)[81] - Financial assets at fair value through profit or loss totaled RMB 1,477.8 million in 2022, up from RMB 972.8 million in 2021, with significant increases in fund investments[83] Operational Strategies and Innovations - The company continued to optimize the "Inke Live" platform ecosystem, enhancing the host incubation and growth system, and improving user experience[11] - The company signed a digital human "Yingying" and explored new formats such as virtual live streaming[11] - The company focused on the "interactive entertainment" field, exploring new application scenarios and improving operational efficiency[10] - The company will continue to invest in emerging technologies such as AI, smart technology, and communications to drive product innovation and create new growth opportunities[27] Expenses and Costs - Sales and promotion expenses decreased by 37.6% from RMB 2,214.4 million in 2021 to RMB 1,381.3 million in 2022, accounting for 21.9% of revenue compared to 24.1% in 2021[34] - Administrative expenses surged by 221.0% to RMB 774.3 million, primarily due to a goodwill impairment provision of RMB 512.8 million for Social Network Technology Co., Ltd.[56] - R&D expenses decreased by 6.6% from RMB 416.0 million in 2021 to RMB 388.7 million in 2022, primarily due to reduced employee costs[76] - Other net losses increased from RMB 44.9 million in 2021 to RMB 46.7 million in 2022, mainly due to increased fair value losses on financial assets at fair value through profit or loss[77] - Net financial income decreased by 56.2% from RMB 16.7 million in 2021 to RMB 7.3 million in 2022, driven by reduced fixed deposits and bank cash balances[78] Overseas Expansion and Market Strategy - The company's overseas business has shown rapid growth, with initial validation of a commercial closed-loop in certain regions[24] - The company plans to accelerate the expansion of its offline matchmaking business in other cities, following the successful establishment of stores in Beijing and Shanghai[23] - The company will focus on expanding overseas markets, leveraging its competitive barriers in the pan-entertainment sector and replicating successful domestic business models[26] Financial Instruments and Investments - The company's financial asset impairment losses increased from RMB 8.4 million in 2021 to RMB 50.2 million in 2022, mainly due to expected credit impairment losses on other receivables and trade receivables[35] - The company's share of losses from associates and joint ventures accounted for using the equity method was approximately RMB 51.2 million in 2022, compared to RMB 0.4 million in 2021[37] - Financial assets at fair value through profit or loss increased to RMB 1,477.8 million in 2022, including RMB 1,322.5 million in wealth management products[63] - Investments in financial products are primarily for treasury management purposes, aiming to maximize returns on unused funds while ensuring sufficient liquidity for business needs[83] Share Repurchases and Equity Plans - The company repurchased 563,000 shares on March 28, 2022, at a price range of HKD 1.50 to HKD 1.52, with a total cost of HKD 847,490[136] - The company repurchased 300,000 shares on March 29, 2022, at a price range of HKD 1.54 to HKD 1.56, with a total cost of HKD 464,640[136] - The company granted 60 million stock options on May 28, 2021, representing approximately 3.0% of the issued shares as of the report date[138] - The stock options granted on May 28, 2021, have a vesting schedule of 25% on May 28, 2022, 50% on May 28, 2023, 75% on May 28, 2024, and 100% on May 28, 2025[140] - The total number of shares available for issuance under the Restricted Share Unit (RSU) plan is 100,778,200, representing approximately 5.2% of the company's issued share capital as of the report date[143] - The company repurchased a total of 863,000 shares on the stock exchange at a total cost of HKD 1,312,130, with the highest price paid per share being HKD 1.56 and the lowest being HKD 1.50[156][157] - The total number of shares available for issuance under the share option plan is 201,556,400, representing approximately 10.4% of the company's issued share capital as of the report date[162] - The remaining term of the share option plan is approximately five years and three months[162] - The company's restricted share unit plan allows for the issuance of shares to directors, senior management, and employees, with a total of 289,307,258 and 271,990,069 shares available for grant under all share plans as of January 1, 2022, and December 31, 2022, respectively[173] - No restricted share units were granted under the 2022 restricted share unit plan during the year ended December 31, 2022[172] - The trustee purchased a total of 27,600,000 shares on the Hong Kong Stock Exchange during the year ended December 31, 2022[186] - The weighted average closing price of shares before the vesting date was HKD 1.38 per share[188] - The 2022 Restricted Share Unit Plan allows for the grant of up to 96,872,100 shares, representing approximately 5.0% of the company's issued share capital as of the report date[192] - The 2022 Restricted Share Unit Plan has a remaining term of approximately nine years and two months[192] - No new shares were granted under the share option plan, restricted share unit plan, or 2022 Restricted Share Unit Plan during the year ended December 31, 2022[194] - The vesting schedule for restricted share units includes multiple tranches with varying percentages and dates, such as 50% vesting on February 1, 2019, and 25% vesting on August 1, 2019[188] - The 2022 Restricted Share Unit Plan aims to incentivize and retain skilled and experienced personnel by offering them the opportunity to own equity in the company[190] - The company's Remuneration Committee has reviewed and confirmed that the terms of the share option plan, restricted share unit plan, and 2022 Restricted Share Unit Plan remain valid and applicable[193] - The 2022 Restricted Share Unit Plan was adopted by the board on May 12, 2022, and will operate alongside other existing or future share incentive plans[189] - The vesting notice will confirm the extent to which vesting criteria, conditions, and schedules have been met, as well as the number of shares involved[191] Corporate Governance and Compliance - The company has complied with all relevant Chinese laws and regulations and holds all necessary licenses, approvals, and permits for its operations in China[130] - The company has no significant legal or regulatory violations during the reporting period and maintains compliance with environmental and occupational health and safety laws[124][125] - The company's board has the discretion to allocate profits to reserves for various purposes, including addressing claims, liabilities, or balancing dividends[106] - The company has not recognized any provisions for ongoing investigations, as no present obligation is likely to arise based on legal counsel's opinion[84] - The company has not mortgaged any assets as of December 31, 2022[85] Employee and Talent Management - The company has 1,531 full-time employees, with 515 dedicated to technology and R&D[86] - The company has implemented a systematic talent training and development program to enhance employee skills and support sustainable growth[107] Market and Competitive Challenges - The company faces uncertainties in acquiring and retaining users cost-effectively, operating in a competitive market, and navigating regulatory challenges in the live streaming and internet industries[104][105] - The company faces uncertainties related to negative publicity regarding its business model, platform content, or management, which could impact its future prospects[130] Shareholder and Dividend Policy - The company does not recommend paying a final dividend for the fiscal year ending December 31, 2022[110] - The company's board reviewed the dividend policy during the year and deemed it effective[149] - The company focuses on maximizing shareholder returns and aims to achieve sustainable growth by concentrating on its core business[129] Supply Chain and Procurement - The company's largest supplier accounted for approximately 2.3% of total procurement in 2022, while the top five suppliers collectively accounted for about 8.1% of total procurement[128] - The company's supply chain includes independent third-party suppliers, with no significant beneficial interests held by directors, their close associates, or major shareholders in the top five suppliers[128] Shareholder Structure and Ownership - Mr. Feng Yousheng holds 358,798,000 shares through Fantastic Live Holdings Limited, representing an approximate 18.51% stake in the company[199] - Mr. Feng Yousheng also holds 30,000,000 unexercised share options under the company's share option scheme[198] - Mr. Liu Xiaosong indirectly holds a 70.11% stake in Shenzhen Kua Tonglian Technology Co., Ltd., which owns 22.51% of Duomi Online[198] - Mr. Liu Xiaosong directly holds a 28.71% stake in Duomi Online, which owns 250,000,000 shares through Feiyang Hong Kong Limited[198] - Mr. Hou Guangling holds 80,409,000 shares through Horizon Live Holdings Limited, representing an approximate 4.15% stake in the company[199] - Mr. Hou Guangling also holds 20,000,000 unexercised share options under the company's share option scheme[198] Financial Statements and Notes - The company's property, plant, and equipment changes during the year are detailed in the consolidated financial statements note 15[151] - The company's share capital changes during the year are detailed in the consolidated financial statements note 26[152] - The combined total revenue of Beijing Milaiwu, Canchen Yingchao, and Lingxiao Lansheng for the year ended December 31, 2022, was approximately RMB 7,279.2 million[200] - The combined total assets of Beijing Milaiwu, Canchen Yingchao, and Lingxiao Lansheng as of December 31, 2022, were approximately RMB 1,881.4 million[200] - Canchen Yingchao and Lingxiao Lansheng had no substantial business operations during the year ended December 31, 2022[200] Miscellaneous - The company's donations for the year ended December 31, 2022, amounted to RMB 1.4 million[154] - The company's functional currency is USD, while its subsidiaries in China operate in RMB, and it manages foreign exchange risk through natural hedging and forward contracts[85] - The company's largest customer accounted for approximately 0.19% of total revenue, while the top five customers accounted for 0.54% of total revenue in 2022[102] - The company operates primarily in China, engaging in mobile live-streaming platform services, including value-added telecommunications, internet culture, online audiovisual, and performance brokerage services[123]

Financial Performance - The company's revenue for 2022 was approximately RMB 6,319.3 million, a decrease of 31.1% compared to RMB 9,175.6 million in 2021, primarily due to intensified industry competition and a more cautious operational strategy[2]. - Gross profit decreased from approximately RMB 3,305.1 million in 2021 to approximately RMB 2,546.5 million in 2022, representing a decline of 23.0%, while the gross profit margin increased from 36.0% in 2021 to 40.3% in 2022[3]. - The net loss for the year was RMB 168,459 thousand, compared to a profit of RMB 433,009 thousand in 2021, indicating a significant decline in profitability[9]. - The basic loss per share attributable to shareholders was RMB (0.09), compared to earnings of RMB 0.22 per share in the previous year[10]. - The total comprehensive loss for the year amounted to RMB (90,711) thousand, a significant decrease from RMB 423,822 thousand in 2021[1]. - Operating loss for the year was RMB (46,987) thousand, compared to an operating profit of RMB 457,010 thousand in 2021[7]. - Revenue for the year ended December 31, 2022, was RMB 6,367,267 thousand, a decrease of 27% from RMB 8,750,402 thousand in 2021[45]. - The adjusted net profit for 2022 was RMB 387.7 million, down from RMB 482.5 million in 2021, after accounting for share-based compensation and goodwill impairment[87]. - The group's net loss for the year was approximately RMB 168.5 million, a decrease of 138.9% compared to a profit of RMB 433.0 million in 2021[86]. - The group's other income decreased by 37.9% from RMB 76.8 million in 2021 to RMB 47.6 million in 2022, primarily due to a reduction in tax refunds[79]. Assets and Liabilities - The total equity as of December 31, 2022, was RMB 3,852,442 thousand, a decrease from RMB 3,931,148 thousand in 2021[12]. - Total liabilities decreased from RMB 1,307,244 thousand in 2021 to RMB 808,172 thousand in 2022, reflecting a reduction in financial obligations[12]. - The total assets as of December 31, 2022, were RMB 4,660,614 thousand, a decrease from RMB 5,238,392 thousand as of December 31, 2021[155]. - The group's non-current assets totaled RMB 1,147,847 thousand as of December 31, 2022, down from RMB 1,719,104 thousand in 2021[155]. - The company had a total of RMB 444,680 thousand in trade payables as of December 31, 2022, down from RMB 669,342 thousand in 2021[25]. Impairments and Expenses - The company reported a net financial asset impairment loss of RMB (50,248) thousand, compared to RMB (8,379) thousand in the previous year[7]. - The company incurred goodwill and other intangible asset impairment of RMB 518,661 thousand in 2022, compared to RMB 15,916 thousand in 2021[45]. - The group's administrative expenses increased by 221.0% from approximately RMB 241.2 million in 2021 to approximately RMB 774.3 million in 2022, primarily due to a goodwill impairment provision of approximately RMB 512.8 million related to Social Network Technology Co., Ltd.[94]. - Employee benefits expenses for 2022 were RMB 781,045 thousand, a decrease of 9% from RMB 857,871 thousand in 2021[45]. - The company reported a profit tax expense of RMB 77,608 thousand for 2022, up 92% from RMB 40,313 thousand in 2021[21]. User Metrics and Market Strategy - Monthly average active users decreased to 26,712 thousand, a decline of 37.6% from 42,802 thousand in 2021, while monthly average revenue per user increased by 10.1% to RMB 19.7[117]. - The company plans to expand its offline matchmaking services in more cities, leveraging the recovery of the macro economy[121]. - The group is focusing on expanding its overseas market presence, leveraging successful domestic experiences and adapting to local cultures and practices[108]. - The group aims to enhance user experience and profitability through refined operations and innovative content on its "Yingke Live" platform[105]. - The group is exploring new business models, including virtual live streaming, to capture user demand and enhance platform interactivity[107]. Research and Development - Research and development expenses decreased by 6.6% from RMB 416.0 million in 2021 to RMB 388.7 million in 2022, primarily due to reduced employee costs[77]. - The group is focused on the iteration and development of emerging technologies such as AI and communication, aiming to accelerate the launch of competitive new products[109]. - The group is focusing on innovative product development in response to emerging demands in the entertainment sector, particularly around audio-visual interaction[123]. Governance and Compliance - The company has complied with all applicable provisions of the corporate governance code during the year ended December 31, 2022[30]. - The company has adopted a new restricted share unit plan as of May 12, 2022, but no restricted share units were granted under this plan by December 31, 2022[28]. - The company has adopted the standards set forth in the Listing Rules Appendix 10 regarding the conduct of securities transactions by directors, confirming compliance for the year ended December 31, 2022[177]. - The board believes that having the same person serve as both chairman and CEO is beneficial for the group's management[181]. - The company has a diverse board composition, including two executive directors, one non-executive director, and three independent non-executive directors, ensuring a balance of power and authority[181].