Financial Performance - The company's revenue for the year ended December 31, 2024, was RMB 657,008,000, a decrease of 46.2% compared to RMB 1,221,752,000 in 2023[3] - Gross profit for 2024 was RMB 108,523,000, resulting in a gross margin of 16.5%, down from 39.4% in 2023[3] - The adjusted net loss for 2024 was RMB 184,113,000, compared to an adjusted net profit of RMB 227,421,000 in 2023[4] - The company's total revenue for the year ended December 31, 2024, was RMB 657.0 million, a decrease of 46.2% compared to RMB 1,221.8 million for the year ended December 31, 2023[24] - The gross profit for the year ended December 31, 2024, was RMB 108.5 million, a decline from RMB 481.6 million in the previous year[26] - The gross margin for the year ended December 31, 2024, was 16.5%, down from 39.4% in the previous year[27] - Other income and gains decreased by 43.7% to RMB 68.5 million for the year ended December 31, 2024, compared to RMB 121.7 million in the previous year[28] - Selling and distribution expenses increased by 70.7% to RMB 158.7 million for the year ended December 31, 2024, from RMB 93.0 million in the previous year[29] - The company's net asset value decreased to RMB 2,313,850,000 in 2024 from RMB 2,574,543,000 in 2023, representing a decline of 10.1%[68] - The group reported a pre-tax loss of RMB 189,144,000 for 2024, compared to a profit of RMB 213,628,000 in 2023[93] Operational Highlights - The company produced approximately 6,000 minutes of short dramas in 2024, representing a year-on-year increase of about 500%[17] - The first theatrical film, "The Heart of Qiao Yan," grossed over RMB 150 million at the box office in mainland China, ranking as the top 3 domestic suspense films in 2024[10] - The overseas self-operated YouTube channel saw a 120% increase in views, reaching over 100 million, with subscriptions up by 180% and total watch time up by 205%[19] - The company successfully launched three copyright dramas and one theatrical film in 2024, with "Hunting Crime 2" achieving top viewership on multiple platforms[6] - The company’s business short dramas doubled in revenue compared to the previous year, with significant viewer engagement and commercial conversion rates[17] - The company’s overseas content production and distribution expanded significantly, breaking viewership records for Chinese dramas in several countries[19] Cash Flow and Assets - The net cash outflow from operating activities for the year ended December 31, 2024, was RMB 251.0 million, compared to a net inflow of RMB 359.6 million for the year ended December 31, 2023, reflecting increased production and development costs[42] - The net cash inflow from investment activities for the year ended December 31, 2024, was RMB 659.7 million, a significant improvement from a net outflow of RMB 296.9 million in the previous year, mainly due to the maturity of financial products[43] - The net cash outflow from financing activities decreased to RMB 38.6 million for the year ended December 31, 2024, from RMB 89.3 million in 2023, a reduction of 56.8% due to bank loans for production[44] - The cash and cash equivalents increased to RMB 1,086.3 million as of December 31, 2024, from RMB 716.2 million at the beginning of the year, representing a 51.7% increase[41] - The company's debt-to-asset ratio was 28.1% as of December 31, 2024, showing no significant change from 27.8% in the previous year[45] Employee and Governance - The number of employees as of December 31, 2024, was 203, with approximately 70.9% being female, reflecting a commitment to gender diversity[22][23] - The audit committee has reviewed the financial reporting processes and internal controls, ensuring compliance with applicable standards[62] - The company will continue to review and monitor its corporate governance practices to ensure adherence to the corporate governance code[59] Future Outlook - The company aims to produce over 200 episodes of long-form content by 2025, focusing on both original and adapted works[21] - The expected revenue to be recognized within one year from remaining performance obligations is RMB 568,529,000, compared to RMB 555,658,000 in 2023[87] - The total amount of remaining performance obligations is RMB 2,475,227,000, an increase of 29.8% from RMB 1,907,602,000 in 2023[87] Dividends and Investments - The board of directors did not recommend any final dividend for the year ended December 31, 2024[54] - The group did not declare a dividend for the year ending December 31, 2024, while a dividend of RMB 21.8 cents per share was declared for 2023[91] - The company has no significant investments or future capital asset plans as of December 31, 2024[49] - The company has no hedging activities as of December 31, 2024[50]

Production and Content Strategy - By the end of June 2024, the Group has produced and distributed a total of 23 high-quality drama series, with 21 being original series where the Group acted as the lead/sole investor and executive producer[7]. - The Group's original drama series cover popular contemporary topics such as family life, education, and female empowerment, delivering positive value propositions and inspiring extensive discussion[7]. - The Group is committed to diversified growth strategies, exploring new avenues such as content marketing, short drama series, overseas business, and IP derivative development[8]. - The Group aims to maximize the commercial value of its proprietary IP rights and build a diversified business structure to reinforce its leadership in the industry[8]. - The accumulated duration of short drama series released in the first half of 2024 was approximately 2,000 minutes, with several blockbusters produced[29]. - The company is actively expanding the scale of production capacity for short drama series and exploring multidimensional commercialization channels[29]. - The original drama series "My Boss" achieved a popularity rate exceeding 9,500 on Youku after 13 days, ranking among the TOP5 on the viewership list[25]. - The original drama series "A Journey to Love" expanded its presence in overseas distribution, contributing to the Group's international growth strategy[36]. Financial Performance - Revenue for the six months ended June 30, 2024, was approximately RMB192.5 million, a decrease of 54.4% from RMB422.1 million for the same period in 2023[19]. - Gross profit for the same period was approximately RMB43.0 million, representing a decrease of 79.5% from RMB209.9 million in 2023[19]. - Net loss for the six months ended June 30, 2024, amounted to approximately RMB52.9 million, compared to a net profit of approximately RMB131.0 million for the same period in 2023[19]. - Adjusted net loss for the same period was approximately RMB49.4 million, compared to an adjusted net profit of approximately RMB139.0 million in 2023[19]. - Other income and gains decreased by 40.8% to RMB46.5 million for the six months ended June 30, 2024, compared to RMB78.6 million in the same period of 2023[54]. - Selling and distribution expenses increased by 7.6% to RMB35.3 million for the six months ended June 30, 2024, driven by growth in promotion expenses for new businesses[61]. - Administrative expenses rose by 13.6% to RMB99.0 million for the six months ended June 30, 2024, due to increased remuneration and office expenses[62]. - The Group recorded a net profit of RMB131.0 million for the six months ended June 30, 2023, which turned into a net loss of RMB52.9 million for the same period in 2024[72]. - The company reported a total comprehensive loss of RMB52,880,000 for the period, compared to a profit of RMB130,952,000 in 2023[139]. Overseas Business and Distribution - The overseas distribution revenue doubled year on year, driven by the popularity of drama series on multiple overseas platforms[23]. - The Group's revenue from overseas distribution reached over RMB 13 million in the first half of 2024, nearly doubling year-on-year, with the drama series "My Boss" achieving over 10 million viewership on TRUEID in Thailand[36][38]. - The Group launched its own overseas platform for short drama series, releasing a total of 5 online overseas short drama series by the date of the interim report[32]. - The Group is focused on accelerating the expansion of production capacity for short drama series on both domestic and overseas platforms to solidify its industry leadership[42][44]. - The Group is actively developing localized content in overseas markets, including Thailand and Hong Kong, to enhance its international cooperation[37][38]. Employee and Governance - As of June 30, 2024, the Group had 205 employees, with approximately 72.2% being female, reflecting a commitment to workforce diversity[46]. - The Group complied with all applicable code provisions of the Corporate Governance Code, except for the deviation from code provision C.2.1[87]. - The roles of chairman of the Board and president are currently performed by Mr. Su Xiao, which constitutes a deviation from code provision C.2.1 of the CG Code[88]. - The Board believes that the current structure will not impair the balance of power and authority between the Board and the management of the Company[90]. Share Capital and Ownership - The total number of shares issued by Linmon Media Limited is 360,458,829[120]. - The Company has a significant concentration of ownership among its directors, with each holding substantial shares[107]. - Mr. Su holds 159,782,040 shares in the Company, representing approximately 44.33% of the shareholding interest[107]. - Tencent Mobility Limited owns 68,302,080 shares, accounting for an 18.95% equity interest in Linmon Media Limited[118]. - Great Luminosity Limited has a stake of 55,756,800 shares, which is approximately 15.47% of the equity interest in Linmon Media Limited[118]. Cash Flow and Assets - The company experienced a net cash outflow from operating activities of RMB131,778,000 for the six months ended June 30, 2024, contrasting with a cash inflow of RMB162,761,000 in the prior year[145]. - Cash and cash equivalents at the end of the period rose to RMB974,684,000, compared to RMB849,270,000 at the end of June 2023, showing improved liquidity[145]. - The total cash and cash equivalents as of June 30, 2024, included RMB436,147,000 in RMB, RMB533,074,000 in USD, and smaller amounts in other currencies[189]. - The impairment on trade receivables was recorded at RMB39,140,000 as of June 30, 2024, slightly down from RMB42,933,000 at the end of 2023[185]. Future Plans and Investments - The Group aims to release its first cinema film in the second half of 2024 while exploring the development of artiste brokerage business[42][44]. - The expected timeline for the unutilised net proceeds is by the end of 2025[104]. - The Company plans to reallocate part of the unutilised net proceeds for original drama series production[100].

Investment Rating - The report maintains a "Buy" rating for the company [1][8]. Core Insights - The company's performance is under short-term pressure due to platform scheduling, with a significant year-over-year revenue decline of 54.4% in 2024H1, resulting in revenue of 193 million yuan and an adjusted net loss of 49.41 million yuan [4][6]. - Despite the short-term challenges, the company is focusing on developing high-quality series and has seen rapid growth in its overseas business, with overseas revenue reaching 13.36 million yuan, a year-over-year increase of 92.5% [3][4]. - The company is actively expanding its short drama production capabilities, both domestically and internationally, with over 2000 minutes of short dramas launched in 2024H1 [4][6]. Summary by Sections Performance Overview - In 2024H1, the company aired one 36-episode series compared to one 38-episode series in 2023H1, impacting revenue recognition [4]. - The gross margin for 2024H1 was 22.4%, a decrease of 27.3 percentage points year-over-year, while the adjusted net margin was -25.7% [4][6]. Business Development - The company has launched new projects, including three new licensed drama projects, and has a strong pipeline with several projects completed or in production [3][4]. - The company has signed business cooperation agreements exceeding 60 million yuan in 2024H1, with multiple brand contracts exceeding 10 million yuan [4]. Financial Projections - Revenue projections for 2024-2026 are estimated at 911.8 million yuan, 1.482 billion yuan, and 1.961 billion yuan, respectively, with corresponding net profits of 126.15 million yuan, 216.86 million yuan, and 274.14 million yuan [7][8]. - The report anticipates a recovery in revenue growth starting in 2025, with a projected growth rate of 62.54% for that year [7].

Financial Performance - For the six months ended June 30, 2024, the company's revenue was RMB 192,529,000, a decrease of 54.4% compared to RMB 422,142,000 in the same period of 2023[1] - The company reported a gross profit of RMB 43,037,000, down 79.5% from RMB 209,885,000 year-on-year[1] - The adjusted net loss for the period was RMB 49,412,000, compared to an adjusted net profit of RMB 138,981,000 in the same period last year[2] - The company's net loss for the six months ended June 30, 2024, was RMB 52.9 million, compared to a net profit of RMB 131.0 million for the same period in 2023[22] - The gross margin for the six months ended June 30, 2024, was 22.4%, a decline of 27.3% from 49.7% for the same period in 2023[15] - The company reported a loss before tax of RMB 46,598,000, compared to a profit of RMB 167,045,000 in the prior year[40] - The net loss attributable to equity holders of the parent was RMB 52,572,000, compared to a profit of RMB 130,952,000 in the same period last year[40] - Basic loss per share for the six months ended June 30, 2024, was RMB (0.146), compared to earnings per share of RMB 0.363 for the same period in 2023[54] Revenue Sources - The company achieved overseas distribution revenue exceeding RMB 13 million, nearly doubling year-on-year[7] - The short drama business saw a revenue increase of approximately 380% year-on-year, with the short drama "Save My Family" accumulating over 330 million views[6] - Revenue from customers in mainland China was RMB 179,168,000, while revenue from other countries/regions was RMB 13,361,000 for the six months ended June 30, 2024[49] - Customer contract revenue for the six months ended June 30, 2024, was RMB 192,529,000, a decrease of 54.4% compared to RMB 422,142,000 for the same period in 2023[50] Project Development - The company launched three new projects and completed two projects in the first half of 2024, with the series "You Also Have Today" achieving high viewership on multiple platforms[4] - The company has a rich reserve of projects in development, with several series already pre-sold[4] - The company is actively developing localized content in Thailand and Hong Kong, including the Thai version of "Hunting Crime" and the production of "Thirty Only: Bangkok Edition"[7] Financial Position - Trade receivables and notes receivable decreased by 56.2% to RMB 261.5 million as of June 30, 2024, from RMB 597.3 million as of December 31, 2023[26] - As of June 30, 2024, the net current assets were RMB 2,610.8 million, slightly down from RMB 2,732.8 million as of December 31, 2023, while the current ratio increased from 6.13 to 7.14[28] - The total equity attributable to owners decreased from RMB 2,574.5 million as of December 31, 2023, to RMB 2,446.8 million as of June 30, 2024, primarily due to dividend distribution and operational losses in the first half of 2024[28] - The debt-to-asset ratio remained stable at 27.8% as of June 30, 2024, consistent with December 31, 2023[29] - The company's net assets attributable to equity holders decreased to RMB 2,448,515,000 from RMB 2,574,543,000, a decline of 4.9%[42] Governance and Compliance - The company has adopted the corporate governance code and has complied with all applicable provisions, except for the separation of the roles of Chairman and CEO[34] - The company will continue to review its corporate governance structure to ensure compliance with the governance code[35] - All directors confirmed compliance with the standard code of conduct for securities transactions during the six months ending June 30, 2024[36] Dividends and Shareholder Returns - The board decided not to declare an interim dividend for the six months ending June 30, 2024[33] - The company declared a cash dividend of RMB 0.218 per share for the fiscal year ending December 31, 2023, totaling RMB 78,580,000, approved at the annual general meeting on June 20, 2024, and scheduled for payment on July 19, 2024[56] - The company did not declare or pay any interim dividends for the six months ending June 30, 2024, consistent with the same period in 2023[56] Employee and Operational Metrics - As of June 30, 2024, the company had 205 employees, with approximately 72.2% being female, reflecting a commitment to gender diversity[11] - The company has only one reportable operating segment, indicating a streamlined operational focus[48]

Investment Rating - The report gives a "Buy" rating for Lemon Media with a target price of HKD 4.71 [2] Core Views - Lemon Media is a leading producer of high-quality TV series, with a strong track record of producing top-tier content since its establishment in 2014 [2] - The company has diversified revenue streams, including licensing, content marketing, and IP derivatives, with 21 out of 23 series produced being copyright series [2] - Lemon Media is expanding its production capacity for high-quality series and is actively developing short-form content as a second growth curve [2] - The company has a strong presence in overseas markets, with 70%+ of its 2024 series planned for international distribution [2] Long-Form Series - Lemon Media has produced 23 long-form series by 1H24, with 21 being copyright series, and has maintained a stable output of 3-4 series annually over the past five years [2] - The company aims to increase its annual production from 200 episodes to 200 series over the next three years, focusing on high-quality content [2] - In 1H24, the company faced a net loss of RMB 50-55 million due to delayed series releases, but it expects to release 120 episodes in 2024, including "Half-Cooked Men and Women," "Midnight Return," and "Hunting Crime 2" in 2H24 [2] - Overseas revenue grew by 89.1% in 2023, driven by successful international releases like "A Journey to Love," and the company plans to continue expanding its overseas distribution [2] Short-Form Series - Lemon Media is focusing on short-form content as a second growth curve, leveraging its expertise in long-form series and partnerships with platforms and brands [2] - In 2023, the company saw a 12.4x increase in short-form revenue, driven by hits like "Twenty-Nine," and expects further growth in 2024 [2] - The company is positioning itself to produce high-quality short-form content, which is expected to be more profitable compared to short-form series reliant on advertising [2] Financial Projections - The report forecasts Lemon Media's net profit for 2024-2026 to be RMB 170 million, RMB 240 million, and RMB 300 million, respectively, with a PE ratio of 8.2x, 5.9x, and 4.6x [2] - Revenue is expected to grow from RMB 1.5 billion in 2024 to RMB 2.3 billion in 2026, driven by both long-form and short-form content [4] - The company's overseas and short-form businesses are expected to maintain high growth rates, contributing significantly to overall revenue [2] Industry Analysis - The long-form series industry is in a period of stock competition, with platforms focusing on cost control and high-quality content [24] - The short-form series market has seen explosive growth, with the market size increasing from RMB 940 million in 2020 to RMB 37.39 billion in 2023, but growth is expected to slow as the market matures [41] - Regulatory normalization and the trend towards high-quality content are expected to drive the short-form series market towards more premium productions [44]

Financial Performance - In 2023, the company achieved a revenue of RMB 1.22 billion, representing a year-on-year increase of 28.4%, with adjusted net profit reaching RMB 227 million, up 60.4% year-on-year[10]. - The Group's total revenue for 2023 reached RMB 1,221.8 million, a 28.4% increase from RMB 951.5 million in 2022[128]. - Adjusted net profit for the year was RMB 227.4 million, compared to RMB 141.8 million in the previous year, reflecting strong operational performance[165]. - Gross profit for the year ended December 31, 2023, was approximately RMB 481.6 million, reflecting a 28.8% increase from RMB 374.0 million for the same period in 2022[32]. - The Group's gross profit rose by 28.8% from RMB 374.0 million in 2022 to RMB 481.6 million in 2023, with a gross profit margin slightly increasing from 39.3% to 39.4%[182]. - Selling and distribution expenses decreased by 11.9% from RMB 105.6 million in 2022 to RMB 93.0 million in 2023, primarily due to a reduction in the number of drama series broadcast[184]. - Administrative expenses decreased by 26.6% from RMB 280.9 million in 2022 to RMB 206.2 million in 2023, mainly due to lower listing expenses and share-based payment expenses[184]. - Finance costs decreased by 41.5% from RMB 4.1 million in 2022 to RMB 2.4 million in 2023, primarily due to reduced expenses on discounted notes[184]. Revenue Breakdown - Revenue from long-form drama series amounted to RMB 1.17 billion, reflecting a year-on-year growth of 24.3%[13]. - Revenue from short drama series reached RMB 32.23 million, marking a significant increase of 1,240% year-on-year[17]. - The Group's revenue from short drama series surged by 1,241.7%, from RMB 2.4 million in 2022 to RMB 32.2 million in 2023[154]. - Revenue from overseas business of RMB 38.814 million, an increase of 89.1% year-on-year[5]. - Revenue from overseas markets increased by RMB 18.3 million, or 89.08%, compared to the previous year, aligning with the Group's overseas expansion strategy[170]. - Revenue from other businesses increased by 237.8% from RMB 4.5 million in 2022 to RMB 15.2 million in 2023, mainly due to growth in the artiste management business[177]. Content Production and Quality - The company produced and broadcast three original drama series in 2023, achieving high ratings, with "The Heart" scoring 8.5 on Douban[14]. - By the end of 2023, the Group produced and distributed a total of 22 high-quality drama series, with 20 being original series where the Group acted as the lead investor and executive producer[68]. - The Group successfully produced and aired three high-quality original dramas in 2023, achieving new highs in drama quality[99]. - The original drama series "A Journey to Love" achieved a popularity score of over 10,000 within 6 days of broadcasting, ranking TOP1 on iQIYI on its first day[84]. - The short drama series "Twenty Nine" achieved over 1.45 billion views on Douyin, ranking TOP1 for four consecutive weeks[18]. - The Group's short drama series segment established an industry-leading position, contributing significantly to revenue growth alongside the artiste management business[80]. Overseas Expansion - The company established an overseas business platform, "Linmon International," focusing on overseas distribution and localized content production[22]. - The Group's overseas distribution of content has expanded to over 190 countries and regions, with significant success in platforms like Netflix and iQIYI[113]. - The Group aims to maintain rapid growth in overseas distribution and push forward the overseas remake of its own IPs, while also developing original content for international markets[76]. - The first-round single-episode price for "A Journey to Love" broke the record for overseas distribution of Linmon's ancient costume dramas, with over 10 million views on its YouTube channel[62]. - The Group's overseas distribution revenue increased by 89.1% year-on-year, achieving a significant milestone in global content release[136]. Technological Advancements - The company is actively exploring AI technology applications in content production, enhancing its operational efficiency[10]. - The implementation of AI technologies has brought new opportunities and challenges to the industry, enhancing the Group's content creation capabilities[42]. - The Group plans to explore the application of new technologies such as AI in its production processes and deepen its strategic brand client expansion in content marketing[76]. - The Group plans to explore AI and new technologies in production processes to enhance efficiency and innovation in 2024[122]. Strategic Initiatives - The Group's diversified growth strategies include content marketing, short drama series, and IP derivative development, reinforcing its leadership in the industry[53]. - The Group reconstructed its content categories into five major segments for 2024, focusing on connecting new audiences with super content[85]. - The Group's exploration of IP derivatives includes developments in musicals, audiobooks, and games, enhancing revenue streams[143]. - The Group's strategic brand resource development has led to annual frame cooperation with multiple strategic brand customers, enhancing its marketing services[116]. Employee and Corporate Structure - The Group's employee composition includes approximately 71.7% female employees, reflecting a commitment to workforce diversity[126]. - As of December 31, 2023, the Group employed 180 staff members, with a diverse workforce comprising approximately 71.7% female employees[149][151].

2024 年 4 月 1 日 公司研究 评级：买入(首次覆盖) 【国海证券投资评级标准】 行业投资评级 推荐：行业基本面向好，行业指数领先沪深 300 指数； 中性：行业基本面稳定，行业指数跟随沪深 300 指数； 回避：行业基本面向淡，行业指数落后沪深 300 指数。 股票投资评级 买入：相对沪深 300 指数涨幅 20%以上； 增持：相对沪深 300 指数涨幅介于 10%～20%之间； 中性：相对沪深 300 指数涨幅介于-10%～10%之间； 卖出：相对沪深 300 指数跌幅 10%以上。 【免责声明】 本报告的风险等级定级为 R4，仅供符合国海证券股份有限公司（简称"本公司"）投资者适当性管理要求的客 户（简称"客户"）使用。本公司不会因接收人收到本报告而视其为客户。客户及/或投资者应当认识到有关本 报告的短信提示、电话推荐等只是研究观点的简要沟通，需以本公司的完整报告为准，本公司接受客户的后续 问询。 本公司具有中国证监会许可的证券投资咨询业务资格。本报告中的信息均来源于公开资料及合法获得的相关内 部外部报告资料，本公司对这些信息的准确性及完整性不作任何保证，不保证其中的信息已做最新变更，也不 保证 ...

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 1,221.8 million, representing a 28.4% increase from RMB 951.5 million in 2022 [23]. - The company achieved a gross profit of RMB 481.6 million, with a gross margin of 39.4%, slightly up from 39.3% in the previous year [30]. - The net profit attributable to equity holders of the parent company was RMB 213,628,000, a significant recovery from a loss of RMB 732,034,000 in the previous year [76]. - The pre-tax profit for the year was RMB 285,498,000, compared to a loss of RMB 689,929,000 in the previous year, marking a turnaround [102]. - Adjusted net profit for the year ended December 31, 2023, was RMB 227.4 million, representing a 60.4% increase compared to RMB 141.8 million for the previous year [198]. - The total comprehensive income for the year ended December 31, 2023, was RMB 213.6 million, recovering from a loss of RMB 732.0 million in the previous year [183]. Revenue Growth - Short drama-related revenue surged to RMB 32.2 million, a remarkable increase of 1,241.7% compared to RMB 2.4 million in 2022 [23]. - The company’s short drama business contributed RMB 3,223 million in revenue, reflecting a year-on-year growth of over 1,200% [16]. - The revenue from mainland China for 2023 was RMB 1,182,938 thousand, up from RMB 930,941 thousand in 2022, indicating a growth of about 27% [65]. - The annual signing amount for artist business collaborations exceeded RMB 40 million, with revenue from this segment increasing more than 2.5 times year-on-year [39]. - The company's revenue for the year ended December 31, 2023, increased by 28.4% to RMB 1,221.8 million from RMB 951.5 million for the year ended December 31, 2022 [187]. Expenses and Cost Management - Administrative expenses decreased by 26.6% to RMB 206.2 million from RMB 280.9 million in 2022, primarily due to reduced listing costs and lower share-based payment expenses [7]. - Other income decreased by 13.3% to RMB 121.7 million, mainly due to reduced foreign exchange gains, despite increases in interest income and government subsidies [27]. - The total amount of raw materials increased to RMB 218,985,000 in 2023 from RMB 120,700,000 in 2022, reflecting higher production costs [150]. - The company’s administrative expenses included amortization of other intangible assets, impacting overall profitability [122]. Cash Flow and Investments - Cash generated from operating activities for the year ended December 31, 2023, was RMB 353.9 million, a significant increase of 277.8% from a cash outflow of RMB 199.0 million in the previous year [190]. - The net cash outflow from investment activities for the year ended December 31, 2023, was RMB 296.9 million, compared to RMB 284.9 million in 2022, showing a stable trend [43]. - The company utilized idle funds to subscribe to wealth management products to enhance capital yield during the reporting period [45]. Assets and Liabilities - The company’s non-current assets totaled RMB 302,197 thousand as of December 31, 2023, compared to RMB 273,748 thousand in 2022, reflecting an increase of approximately 10.4% [59]. - Trade receivables increased to RMB 600,876,000 in 2023 from RMB 377,404,000 in 2022, reflecting a growth of 59% [133]. - Trade payables rose to RMB 57,315,000 in 2023 from RMB 40,357,000 in 2022, marking an increase of 42% [138]. - Contract liabilities decreased to RMB 692,633,000 in 2023 from RMB 695,140,000 in 2022, primarily due to the recognition of several other advances as income in 2023 [143]. Shareholder Information - The company plans to propose a final dividend subject to shareholder approval at the upcoming annual general meeting [128]. - The company proposed a final dividend of RMB 0.218 per ordinary share for 2023, compared to no dividend in 2022 [147]. - The company plans to hold its annual general meeting on June 20, 2024 [50]. Strategic Developments - The company expanded its overseas business platform, "Lingmeng International," and localized content production, achieving significant project breakthroughs in the film sector [13]. - The company actively developed strategic brand resources, enhancing its service system to provide comprehensive marketing services [186]. - The company successfully produced and aired three high-quality licensed dramas during the year, achieving record quality levels [181].

Production and Content Strategy - By the end of June 2023, the Group produced and distributed a total of 20 high-quality drama series, with 18 being original series where the Group acted as the lead/sole investor and executive producer[5]. - The drama series include popular titles such as "A Love for Separation," "A Little Reunion," and "Under the Skin," focusing on contemporary topics like family life and female empowerment[5]. - The Group is committed to diversified growth strategies, exploring new avenues such as content marketing, micro drama series, overseas business, and IP derivative development[6]. - The mission of the Group is to operate across the full value chain of drama series, including investment, production, distribution, promotion, and licensing of derivatives[12]. - The Group aims to maximize the commercial value of its proprietary IP rights and build a diversified business structure to reinforce its industry leadership[6]. - The Group has established itself as a top brand in the industry due to its abundant original IP reserve and high-quality content products[5]. - The focus on producing high viewership drama series has allowed the Group to inspire extensive discussions and deliver positive value propositions[5]. - The Group's strategy includes producing made-to-order drama series and developing films, further expanding its business lines[12]. - The Group's leadership in the industry is reinforced by its commitment to exploring new growth avenues and maximizing the value of its IP[6]. - The Group's operations since its inception in 2014 have been dedicated to creating a full value chain in the drama series market[12]. Financial Performance - Revenue for the six months ended June 30, 2023, was approximately RMB 422.1 million, a decrease of 12.1% from RMB 480.2 million in the same period of 2022[20]. - Gross profit for the same period was approximately RMB 209.9 million, an increase of 11.0% from RMB 189.1 million in 2022[20]. - Net gain for the six months ended June 30, 2023, was approximately RMB 131.0 million, a significant increase of 301.0% from a net loss of approximately RMB 65.2 million in 2022[20]. - Adjusted net profit for the same period was approximately RMB 139.0 million, representing a 32.1% increase from RMB 105.2 million in 2022[20]. - Revenue from original drama series broadcasting was RMB 377 million, accounting for 89.4% of total revenue in the first half of 2023[22]. - The content marketing segment recorded a year-on-year revenue increase of nearly 150% and a gross profit increase of nearly 260% in the first half of 2023[26]. - The Group's revenue decreased by 12.1% from RMB 480.2 million in the first half of 2022 to RMB 422.1 million in the first half of 2023, primarily due to a decline in broadcasting rights revenue for original drama series[56]. - The Group achieved an adjusted net profit of RMB 139 million, representing a year-on-year increase of 32.1%[39][40]. - Revenue from broadcasting rights of original drama series decreased by 18.5% from RMB463.3 million in H1 2022 to RMB377.4 million in H1 2023, primarily due to only one original series being broadcast during the period[71]. - Total revenue decreased by 12.1% from RMB480.2 million in H1 2022 to RMB422.1 million in H1 2023, mainly attributed to the decline in broadcasting rights revenue[87]. Viewer Engagement and Popularity - The original drama series "Nothing But You" achieved a rating of 8.2 on Douban.com, ranking TOP1 among urban romance drama series since 2023[22]. - The number of viewers for the micro drama "Beneath the Headlines" reached 170 million, with the highest viewership per episode exceeding 280 million[28]. - The micro drama series "Twenty Nine" achieved over 800 million total viewership on Douyin, with an average viewership per episode exceeding 40 million, ranking first in the micro drama category for four consecutive weeks[61][62]. International Expansion - The Group established "Linmon International" as an overseas business platform, focusing on overseas distribution and production of original content, and actively expanded into Greater Mandarin, Thai, and Indonesian markets[49][64]. - The first overseas localized production, the Thai version of "Thirty" (三十而已), has commenced filming in Bangkok[51]. - The Thai version of "Nothing But Thirty" is currently under production, indicating ongoing efforts in overseas localized production[68]. - The Group aims to strengthen its full-chain marketing system and expand strategic brand resources in overseas markets[67]. Corporate Governance and Financial Management - The Company has adopted the principles and code provisions of the Corporate Governance Code to enhance corporate value and accountability[158]. - The Audit Committee has reviewed the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2023[164]. - The Company confirmed that there is no information required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules[165]. - The Group maintained a stable financial position with net current assets of RMB2,577.7 million as of 30 June 2023, compared to RMB2,475.0 million as of 31 December 2022[151]. - The Group's gearing ratio decreased to 31.8% as of June 30, 2023, from 37.3% as of December 31, 2022, due to a 9.9% decrease in total liabilities and a 5.8% increase in total equity[114]. - The effective tax rate increased from a negative 58.0% for the six months ended June 30, 2022, to 21.6% for the six months ended June 30, 2023[105]. - The income tax expense increased from RMB23.9 million for the six months ended 30 June 2022 to RMB36.1 million for the same period in 2023, with the effective tax rate rising from negative 58.0% to 21.6%[123]. Shareholding and Investments - As of June 30, 2023, directors and chief executives hold a combined interest of 44.33% in the company through controlled corporations[187]. - Lemontree Harvest Investment Limited holds 71,136,000 shares, representing a 44.33% equity interest in the Company[198]. - Faye Free Flight Limited directly holds 33,014,520 shares, also contributing to the 44.33% equity interest in the Company[198]. - A&O Investment Limited holds 33,014,520 shares, maintaining the same 44.33% equity interest in the Company[198]. - Linmon Run Limited directly holds 22,617,000 shares, which is part of the overall shareholding structure[198]. - The total number of shares held by concert parties amounts to 159,782,040, indicating significant collective ownership[198]. - The Company has a structured shareholding arrangement with multiple parties acting in concert, enhancing control and influence[194]. Utilization of Proceeds - The company utilized HK$ 155.9 million for drama series production and promotion, accounting for 50% of the total proceeds[171]. - The total net proceeds amounted to HK$ 311.8 million, with HK$ 130.9 million remaining unutilized at the end of the reporting period[171]. - The company plans to invest HK$ 46.8 million in potential strategic investment and acquisition opportunities by the end of 2025[171]. - The company has allocated 15% of the proceeds, equivalent to HK$ 46.8 million, for initiatives into emerging business opportunities[171]. - The company has not utilized HK$ 31.1 million for working capital and general corporate purposes as of the reporting period[171]. - The company has deposited unutilized net proceeds into interest-bearing accounts with licensed banks in Hong Kong or the PRC[184].

Financial Performance - In the first half of 2023, the company achieved an adjusted net profit of RMB 139 million, representing a year-on-year growth of 32.0%[5] - The company's revenue decreased by 12.1% from RMB 480.2 million for the six months ended June 30, 2022, to RMB 422.1 million for the six months ended June 30, 2023, primarily due to a decline in copyright drama broadcasting rights revenue[73] - The adjusted net profit for the first half of 2023 was RMB 139.0 million, compared to an adjusted net profit of RMB 105.3 million in the same period of 2022, reflecting a year-on-year increase of 32.0%[103][127] - The net profit for the period was RMB 130,952 thousand, a significant recovery from a loss of RMB 65,162 thousand in the same period last year[137] - The effective tax rate increased to 21.6% for the first half of 2023, compared to a negative rate of 58.0% in the same period of 2022, primarily due to increased taxable profits[126] Revenue Sources - Copyright drama broadcasting rights revenue fell by 18.5% to RMB 377.4 million for the six months ended June 30, 2023, compared to RMB 463.3 million for the same period in 2022[73] - Content marketing revenue increased significantly by 149.7% to RMB 39.7 million for the six months ended June 30, 2023, from RMB 15.9 million in the previous year[73] - Other revenue sources grew by 400% to RMB 5.0 million for the six months ended June 30, 2023, compared to RMB 1.0 million for the same period in 2022[73] - The revenue contribution from licensed dramas was RMB 377 million, accounting for 89.4% of total revenue in the first half of 2023[105] - Customer A generated revenue of RMB 350,907 thousand, significantly up from RMB 81,340 thousand in the previous year, indicating a growth of 331.5%[168] Expenses and Costs - Sales and distribution expenses fell by 37.4% to RMB 328 million for the six months ended June 30, 2023, down from RMB 524 million in the previous year, primarily due to fewer new releases[8] - Administrative expenses decreased by 26.0% to RMB 872 million for the six months ended June 30, 2023, compared to RMB 1,179 million in the same period last year, mainly due to the absence of listing expenses[35] - The cost of goods sold for the period was RMB 210,156 thousand, down from RMB 289,501 thousand, reflecting a decrease of 27.4%[178] Assets and Liabilities - Trade payables dropped by 63.9% to RMB 146 million as of June 30, 2023, from RMB 404 million at the end of 2022, primarily due to settlements[37] - Non-current liabilities increased to RMB 375.5 million as of June 30, 2023, from RMB 358.3 million as of December 31, 2022[48] - The total liabilities as of June 30, 2023, included trade payables of RMB 14,582 thousand, down from RMB 40,357 thousand at the end of 2022, a decrease of 63.8%[176] - The company's current assets as of June 30, 2023, were approximately RMB 3,005.7 million, slightly down from RMB 3,008.5 million as of December 31, 2022[154] Equity and Financial Ratios - The total equity increased to RMB 2,529 million as of June 30, 2023, compared to RMB 2,390 million at the end of 2022[24] - The company's net asset value rose to RMB 2,529.3 million as of June 30, 2023, compared to RMB 2,390.5 million as of December 31, 2022[48] - As of June 30, 2023, the company's debt-to-equity ratio decreased to 31.8% from 37.3% as of December 31, 2022, primarily due to a 9.9% reduction in total liabilities and a 5.8% increase in total equity[129] - The current ratio improved to approximately 7.0 as of June 30, 2023, up from 5.6 as of December 31, 2022[154] Corporate Governance and Compliance - The company has maintained compliance with all applicable corporate governance code provisions, except for a deviation noted in code provision C.2.1[42] - The board has established an audit committee to oversee financial reporting processes and internal controls[135] Strategic Initiatives and Future Plans - The company has no significant future plans for major investments or capital assets as of the announcement date[39] - The company plans to utilize RMB 311.8 million from its listing proceeds for various strategic initiatives, including IP library expansion and production of licensed dramas[117] - The company aims to strengthen its competitive advantage in the micro-short drama sector and explore various commercial transformation methods to ensure stable revenue contributions from new businesses[88] - The company plans to enhance its IP management and explore new technologies such as ChatGPT and AIGC to drive business innovation and efficiency[88] Workforce and Employment - The company maintained a diverse workforce, with female employees accounting for approximately 63.5% of the total workforce as of June 30, 2023[71] - As of June 30, 2023, the company had 178 employees, primarily located in Shanghai, Beijing, and Hangzhou[89] Market Performance and Content Production - The micro-short drama "Twenty-Nine" achieved over 800 million views on Douyin, with an average of over 40 million views per episode, marking a record for micro-short dramas on the platform[85] - The company launched the urban romance drama "Love Is Only" which ranked in the top 3 of Tencent Video's viewership chart for the first half of 2023, receiving a score of 8.2 on Douban[123] - The company expanded its overseas business, launching the localized production of the Thai version of "Thirty Only" and securing distribution deals for series on platforms like Disney+ and Netflix[86][87] - The company established an overseas business platform "Linmon International" to expand into markets such as Mandarin, Thai, and Indonesian, and showcased its 2023 film slate at the Hong Kong International Film & TV Market[98]