Dividend Declaration - The board declared an interim dividend of HKD 0.02 per share for the 2024 interim period, amounting to approximately HKD 14,895,000, consistent with the 2023 interim dividend[12]. - The company declared an interim dividend of RMB 13,868 thousand for the six months ended June 30, 2024, compared to RMB 13,235 thousand for the same period in 2023, representing an increase of 4.8%[122]. Financial Performance - The interim financial results for 2024 have been reviewed by the company's audit committee, comparing with the 2023 interim figures[11]. - The group's revenue for the first half of 2024 was approximately RMB 316.3 million, a decrease from RMB 350.3 million in the same period of 2023, representing a decline of about 9.4%[14]. - Net profit for the first half of 2024 was approximately RMB 30.2 million, down from RMB 41.0 million in the same period of 2023, reflecting a decrease of about 26.5%[14]. - The group's gross profit margin increased from 30.0% to 32.7%, an annual growth of 2.7 percentage points[14]. - The group's gross profit decreased by 1.6% from RMB 105.1 million in the first half of 2023 to RMB 103.4 million in the first half of 2024, while the overall gross profit margin increased from 30.0% to 32.7%[32]. - The net profit for the six months ended June 30, 2024, was RMB 30,153 thousand, down 26.5% from RMB 41,026 thousand in the previous year[70]. - Basic earnings per share for the period was RMB 3.70, compared to RMB 5.11 for the same period in 2023, indicating a decline of 27.5%[68]. - The group’s profit before tax for the six months ended June 30, 2024, was RMB 26,858,000, compared to RMB 38,082,000 for the same period in 2023, reflecting a decrease of 29.5%[110]. Revenue Breakdown - The group's experience marketing service revenue was approximately RMB 257.5 million, down from RMB 280.2 million in the same period of 2023, a decline of about 8.9%[22]. - Digital marketing and promotion service revenue was approximately RMB 48.9 million, down from RMB 61.6 million in the same period of 2023, a decrease of about 20.7%[22]. - Revenue from the experiential marketing segment for the first half of 2024 was approximately RMB 257.5 million, a decrease of 8.1% compared to RMB 280.2 million in the first half of 2023[25]. - Digital marketing and promotion revenue for the first half of 2024 was approximately RMB 48.9 million, down 20.6% from RMB 61.6 million in the first half of 2023, representing 15.5% of total revenue[28]. - The group’s IP expansion business generated revenue of approximately RMB 9.9 million in the first half of 2024, up from RMB 8.5 million in the first half of 2023, accounting for 3.1% of total revenue[29]. - Revenue from mainland China was RMB 288,530 thousand, down 7.9% from RMB 313,159 thousand in the previous year[96]. - Experience marketing services revenue in mainland China was RMB 230,729,000, down 5.4% from RMB 243,939,000 year-over-year[102]. - Digital marketing and promotion services revenue in mainland China decreased to RMB 47,893,000, a decline of 21.3% from RMB 60,769,000 in the previous year[102]. Market Position and Growth Opportunities - The group's market share in the Greater China region for 2023 was 12.7%, maintaining its position as the largest provider of mid-to-high-end fashion brand experience marketing services[14]. - The group is optimistic about future growth opportunities in the luxury goods market, particularly in China, which is expected to account for 35-40% of global luxury market share by 2030[17]. - The group is exploring expansion opportunities in Southeast Asia and focusing on local brands, beauty products, and wine and spirits to enhance its market influence[19]. - The group remains the largest high-end fashion brand experiential marketing service provider in Greater China, with a market share of 12.7% in 2023[23]. Operational Highlights - The experiential marketing segment accounted for 81.4% of the group's total revenue in the first half of 2024, highlighting its dominant position in the market[25]. - The group hosted multiple high-profile events in the first half of 2024, reinforcing its leadership and expertise in experiential marketing[25]. - The group has actively promoted data-driven interactive marketing since 2020, combining physical events with online promotion to enhance marketing effectiveness[23]. - The luxury brand marketing strategies can effectively be applied to Chinese high-end brands, as demonstrated by a fashion show that attracted 400-500 key clients and generated over 500 million online views[23]. Expenses and Financial Management - General and administrative expenses rose from RMB 24.1 million in the first half of 2023 to RMB 29.4 million in the first half of 2024, mainly due to an increase in share-based payment expenses from RMB 3.8 million to RMB 9.6 million[34]. - The company experienced a significant increase in share-based payment expenses, which rose to RMB 9,586 thousand, compared to RMB 3,763 thousand in the previous year, marking a 154.1% increase[80]. - The sales and distribution expenses for the six months were RMB 37,089 thousand, slightly up from RMB 36,754 thousand in 2023[68]. Assets and Liabilities - As of June 30, 2024, the group's cash and cash equivalents amounted to RMB 288.6 million, down from RMB 307.1 million as of December 31, 2023[38]. - Trade receivables decreased from approximately RMB 397.6 million as of December 31, 2023, to approximately RMB 204.7 million as of June 30, 2024, while trade payables decreased from approximately RMB 339.4 million to approximately RMB 200.8 million in the same period[46]. - Total assets as of June 30, 2024, amounted to RMB 596,449 thousand, compared to RMB 795,401 thousand as of December 31, 2023[91]. - Total liabilities as of June 30, 2024, were RMB 274,154 thousand, a decrease from RMB 435,426 thousand at the end of 2023[91]. - The company's net asset value as of June 30, 2024, was RMB 322,295 thousand, down from RMB 359,975 thousand, reflecting a decrease of about 10.5%[74]. - The company reported a significant reduction in current liabilities, which fell to RMB 264,840 thousand from RMB 428,722 thousand, a decrease of about 38.3%[72]. Shareholder Information - As of June 30, 2024, the company had a total of 744,742,000 shares issued, with major shareholders holding significant stakes, including 17.20% by Mr. Wu and 23.14% by Mr. Liu[54][58]. - Mr. Wu holds 10,404,580 shares directly and has controlled interests in 117,669,156 shares through a controlled corporation, totaling 128,073,736 shares[54][55]. - Mr. Liu directly owns 17,913,288 shares and has controlled interests in 154,413,522 shares, amounting to 172,326,810 shares[54][55]. - Ms. Liu holds 20,300,521 shares directly and has controlled interests in 41,854,717 shares, totaling 62,155,238 shares[54][55]. Corporate Governance - The company has adopted the Corporate Governance Code and claims full compliance as of mid-2024, except for the combined roles of Chairman and CEO held by Mr. Liu[50]. - The company confirmed that all directors strictly adhered to the Securities Trading Code during the mid-2024 period[51]. - The company will regularly review the need to separate the roles of Chairman and CEO to maintain good corporate governance[50]. - No changes in director information were disclosed as required by the listing rules for mid-2024[52]. Miscellaneous - The company has not repurchased, sold, or redeemed any of its listed securities during the mid-2024 period[62]. - The company did not utilize any of the net proceeds from the global offering as of June 30, 2024, and plans to utilize all unutilized net proceeds by the end of the fiscal year ending December 31, 2025[42].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance in the next six months [3]. Core Views - The company reported a revenue of 316 million HKD for H1 2024, a decrease of 9.68% year-on-year, and a net profit of 27 million HKD, down 29.47% year-on-year. The interim dividend declared is 0.02 HKD per share, totaling 14.89 million HKD [1]. - The revenue breakdown shows that experience marketing accounted for 81.4% of total revenue, with a decline of 8.1% year-on-year, while digital marketing and promotion saw a 20.6% decrease, contributing 15.5% to total revenue. IP expansion, however, grew by 16.5%, making up 3.1% of total revenue [1]. - The gross margin improved by 2.7 percentage points to 32.7%, while the overall net profit margin decreased by 2.2 percentage points to 9.5% [1]. - The long-term outlook is positive due to the increasing focus of international brands on the domestic market and the rise of local brands, which positions the company favorably as a data-driven marketing group [1]. Financial Summary - For the fiscal years 2024 to 2026, the company is projected to achieve revenues of 947 million HKD, 1.083 billion HKD, and 1.214 billion HKD, respectively, with net profits of 110 million HKD, 124 million HKD, and 137 million HKD [2]. - The projected P/E ratios for 2024, 2025, and 2026 are 6.6, 5.8, and 5.3, respectively, indicating a potentially undervalued stock [2]. - The company’s return on equity (ROE) is expected to decline from 25.4% in 2024 to 19.7% in 2026, reflecting a gradual decrease in profitability [2].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a slight decline in performance for H1 2024, with revenue of HKD 316 million, down 9.7% year-on-year, and a net profit of HKD 30 million, down 26.5% year-on-year. The interim dividend was approximately HKD 15 million, with a payout ratio increased to about 50% [2] - Despite the challenges posed by a slowdown in the luxury goods sector and seasonal impacts, the company remains the largest mid-to-high-end fashion brand experience marketing service provider in Greater China, with a market share of 12.7% in 2023 and over 550 brand clients [2] - The company has slightly adjusted its profit forecast for 2024-2026, expecting net profits of HKD 110 million, HKD 130 million, and HKD 150 million respectively, with year-on-year growth rates of 3.3%, 18.8%, and 12.9% [2] - The company's earnings per share (EPS) are projected at HKD 0.17, HKD 0.19, and HKD 0.22 for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings (P/E) ratios of 6.4, 5.4, and 4.8 [2] Financial Summary and Valuation Metrics - For 2024, the company is expected to achieve revenue of HKD 1,001 million, with a year-on-year growth of 3.5%. The net profit is projected at HKD 112 million, reflecting a year-on-year increase of 3.3% [3] - The gross margin is expected to be 32.3% in 2024, while the net margin is projected at 11.1% [3] - The return on equity (ROE) is forecasted to be 21.5% for 2024, with an EPS of HKD 0.17 and a P/E ratio of 6.4 [3]

Financial Performance - For the first half of 2024, the company's revenue was approximately RMB 316.3 million, a decrease of 9.4% compared to RMB 350.3 million in the first half of 2023[2] - Net profit for the first half of 2024 was approximately RMB 30.2 million, down from RMB 41.0 million in the same period of 2023[2] - For the six months ended June 30, 2024, total revenue was RMB 316.4 million, a decrease of 9.7% from RMB 350.3 million in the same period of 2023[6] - Gross profit decreased by 1.6% from RMB 105.1 million in the first half of 2023 to RMB 103.4 million in the first half of 2024, while the overall gross profit margin increased from 30.0% to 32.7%[14] - The net profit for the period was RMB 30,153 thousand, representing a decline of 26.5% from RMB 41,026 thousand in the previous year[29] - Basic earnings per share decreased to RMB 3.70 from RMB 5.11, reflecting a 27.5% drop year-over-year[28] - The company reported a pre-tax profit of RMB 42,087 thousand for the six months ended June 30, 2024, compared to RMB 53,665 thousand for the same period in 2023, showing a decrease of approximately 21.6%[37] Revenue Breakdown - The revenue breakdown by region shows that mainland China contributed RMB 288.5 million (91.2%), while Hong Kong and Singapore contributed RMB 27.8 million (8.8%) in 2024[6] - The experience marketing segment generated revenue of approximately RMB 257.5 million, down 8.1% from RMB 280.2 million in 2023, accounting for 81.4% of total revenue[9] - Digital marketing and promotion services revenue was approximately RMB 48.9 million, a decrease of 20.6% from RMB 61.6 million in 2023, representing 15.5% of total revenue[11] - The revenue from experience marketing services in mainland China was RMB 230,729,000 for the six months ended June 30, 2024, down from RMB 243,939,000 in the same period of 2023, indicating a decrease of about 5.4%[43] Market Position and Strategy - The company maintains a market share of 12.7% in the Greater China region for mid-to-high-end fashion brand experiential marketing services as of 2023[2] - The company is optimistic about future growth opportunities in the luxury brand marketing sector in China, which is expected to continue to expand[4] - The company is actively pursuing marketing service projects for both international and local clients in mainland China and Hong Kong[4] - The company aims to deepen relationships with existing clients while attracting new clients through innovative marketing strategies[5] - The luxury marketing strategies employed by the company are effectively applicable to high-end brands in China, demonstrating significant ROI for clients[9] Cost and Expenses - The group's sales cost decreased from RMB 245.2 million in the first half of 2023 to RMB 213.0 million in the first half of 2024, consistent with the decrease in revenue[13] - General and administrative expenses increased from RMB 24.1 million in the first half of 2023 to RMB 29.4 million in the first half of 2024, mainly due to an increase in share-based payment expenses[17] - The cost of services provided for the six months ended June 30, 2024, was RMB 212,970,000, down from RMB 245,185,000 in the same period of 2023, showing a reduction of about 13.1%[46] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 596,449 thousand, down from RMB 795,626 thousand as of December 31, 2023[30] - The company's total equity decreased to RMB 322,295 thousand from RMB 359,975 thousand, indicating a decline of 10.5%[31] - The total liabilities as of June 30, 2024, were RMB 274,154 thousand, down from RMB 435,426 thousand as of December 31, 2023, reflecting a reduction of about 37%[39] - Trade receivables decreased from approximately RMB 397.6 million as of December 31, 2023, to approximately RMB 204.7 million as of June 30, 2024[26] - Trade payables decreased from approximately RMB 339.4 million to approximately RMB 200.8 million in the same period[26] Future Outlook - The company is exploring opportunities in Southeast Asia to expand its influence and expertise in the growing market[5] - The company is optimistic about the growth potential of its digital marketing and promotion segment, focusing on enhancing digital capabilities[11] - The company is actively pursuing opportunities in e-commerce live streaming and metaverse marketing services to adapt to rapid changes in the digital landscape[11] Corporate Governance - The company has fully complied with the Corporate Governance Code, except for the separation of the roles of Chairman and CEO, which are held by the same individual[55] - The Audit Committee, consisting of three independent non-executive directors, has reviewed the interim results for 2024 and confirmed compliance with applicable accounting principles[57] Miscellaneous - The company reported no significant contingent liabilities or major acquisitions during the first half of 2024[27] - The company has no plans for significant investments or capital assets for the year ending December 31, 2024[27] - The company continues to monitor foreign exchange risks closely, as most of its income and expenses are denominated in RMB[27] - The company recorded a foreign exchange loss of RMB 7,457 thousand related to the translation of overseas operations[29] - The interim results announcement for 2024 will be published on the Hong Kong Stock Exchange website and the company's website in September 2024[58]

Summary of Conference Call Company/Industry Involved - The conference call pertains to Huazhang Securities and its research department Core Points and Arguments - The call is intended exclusively for the whitelist clients of Huazhang Securities Research Institute [1] - It is emphasized that the meeting does not constitute investment advice under any circumstances [1] - Participants are reminded to make their own investment decisions and bear the associated risks [1] Other Important but Possibly Overlooked Content - The call outlines the importance of investor suitability management in futures trading [1]

Summary of Conference Call Company/Industry Involved - The conference call pertains to Huazhang Securities and its research department [1] Core Points and Arguments - The call is intended exclusively for clients on the whitelist of Huazhang Securities Research Institute [1] - It is emphasized that the meeting does not constitute investment advice under any circumstances [1] - Participants are reminded to make their own investment decisions and bear the associated risks [1] Other Important but Possibly Overlooked Content - The call highlights the importance of investor suitability management in futures trading [1]

Revenue and Financial Performance - In the fiscal year 2023, the revenue from the experience marketing services segment was RMB 762.0 million, an increase of 48.3% compared to RMB 513.9 million in fiscal year 2022, accounting for 78.8% of the total revenue[12]. - The digital marketing and promotion services segment generated revenue of RMB 188.2 million, representing a 21.9% increase from RMB 154.4 million in fiscal year 2022, contributing 19.5% to the total revenue[7]. - The IP expansion segment's revenue was approximately RMB 17.0 million, a decrease of 35.8% from RMB 26.5 million in fiscal year 2022, accounting for 1.8% of the total revenue[5]. - The overall revenue for the company in fiscal year 2023 was RMB 967.2 million, up from RMB 694.8 million in fiscal year 2022[3]. - In the fiscal year 2023, the total revenue reached RMB 967.231 million, a significant increase from RMB 694.807 million in 2022, representing a growth of approximately 39.2%[20]. - Revenue from mainland China accounted for 89.7% of total revenue at RMB 867.277 million, while Hong Kong and Singapore contributed 10.3% at RMB 99.954 million, indicating a shift in market focus[20]. - The company's revenue for the fiscal year 2023 was approximately RMB 967.2 million, representing a growth of 39.2% compared to RMB 694.8 million in 2022[84]. - The net profit for fiscal year 2023 was approximately RMB 118.4 million, a significant increase of 319.9% from RMB 28.2 million in 2022, with a net profit margin of 12.2%, up 8.1 percentage points from 4.1% in 2022[84]. - Profit before tax for fiscal year 2023 was RMB 164.8 million, compared to RMB 55.7 million in fiscal year 2022, reflecting an increase of approximately 195.4%[143]. - Net profit attributable to equity holders of the parent company for fiscal year 2023 was RMB 118.4 million, a significant rise from RMB 28.2 million in fiscal year 2022, representing an increase of approximately 319.5%[143]. Market Trends and Strategies - The increase in demand for marketing services is attributed to the recovery of the Chinese economy and the growing consumption of high-end luxury goods[12]. - The company is exploring new strategies for market expansion and product development, particularly in digital marketing and data analytics services[18]. - The strategic importance of the Chinese market has attracted numerous global luxury brand owners and management teams to visit mainland China, highlighting the market's significance and providing valuable business development opportunities for the company[64]. - The luxury goods market in mainland China has seen significant changes in consumer recognition of brand value and the pursuit of high-quality living, which are key drivers for future market growth[67]. - The company anticipates that luxury brands will continue to actively participate in large-scale marketing and promotional activities in the Chinese market over the coming years[67]. - Online sales accounted for 42% of total sales in the luxury market in 2023, with expectations to exceed 60% in the next 3 to 5 years, indicating significant growth opportunities in digital marketing[71]. Operational Developments - The company has actively engaged in e-commerce live streaming services and launched additional value-added services in the metaverse marketing space to adapt to rapid digital changes[14]. - The company has established joint ventures to enhance its e-commerce capabilities, indicating a proactive approach to market opportunities[14]. - The company has successfully secured multiple marketing service projects for international and local clients in mainland China and Hong Kong, gradually implementing these projects[68]. - The company is committed to providing comprehensive marketing services to its clients, ensuring they remain competitive in the evolving digital landscape[14]. - The company aims to provide innovative, diverse, and high-quality marketing services, which helps in understanding and meeting client needs while maintaining a leading position in a competitive market[65]. Corporate Governance - The company has implemented a robust corporate governance framework, including risk management and internal control systems, to support sustainable growth and value creation[169]. - The board consists of three independent non-executive directors, with at least one possessing appropriate professional qualifications or accounting expertise, ensuring compliance with listing rules[154]. - The company has provided training for all directors and senior management to ensure they understand their responsibilities under relevant regulations and laws[158]. - The company emphasizes the importance of employee engagement and training as part of its corporate culture and operational practices[169]. - The board has established a culture of innovation and collaboration, aiming to achieve competitive advantages through proactive and agile practices[169]. Employee and Talent Management - The group recognizes talent as a cornerstone of success and is committed to investing in employee skills and capabilities for long-term development[93]. - As of December 31, 2023, the total number of employees in the group was approximately 243, a decrease from 261 employees as of December 31, 2022[116]. - Employee benefits expenses for the fiscal year 2023 amounted to RMB 114.2 million, compared to RMB 110.7 million in fiscal year 2022, reflecting an increase of approximately 4.8%[116]. Financial Position and Commitments - Total assets as of December 31, 2023, were RMB 795.4 million, compared to RMB 758.0 million as of December 31, 2022, showing an increase of approximately 4.8%[143]. - The group's capital commitments as of December 31, 2023, were RMB 8.1 million, up from RMB 5.1 million as of December 31, 2022, indicating a rise of approximately 58.8%[139]. - Trade receivables increased from RMB 308.9 million as of December 31, 2022, to RMB 397.6 million as of December 31, 2023, representing a growth of approximately 28.7%[136]. - Trade payables rose from RMB 289.6 million as of December 31, 2022, to RMB 339.4 million as of December 31, 2023, indicating an increase of about 17.2%[136]. Dividends and Shareholder Engagement - The board proposed a final dividend of HKD 0.0616 per share and a special dividend of HKD 0.0442 per share, totaling HKD 78.8 million, pending shareholder approval[82]. - The company emphasizes open communication and engagement with shareholders and stakeholders to enhance governance effectiveness[173].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][11][36] Core Insights - The company achieved a record high net profit attributable to shareholders in 2023, with a significant year-on-year growth of 357% [2][9][26] - The company's revenue for 2023 was 967 million HKD, representing a year-on-year increase of 39.2% [3][26] - The company has expanded its market share in experiential marketing to 12.7%, with a total of 590 brand clients, and 80% of clients being international [26] - The company is actively expanding its business in other Asia-Pacific regions and has successfully hosted high-profile marketing events [21][34] Financial Summary and Valuation Metrics - Revenue and net profit projections for 2024-2026 are as follows: - 2024E Revenue: 1,204 million HKD, Net Profit: 141 million HKD - 2025E Revenue: 1,456 million HKD, Net Profit: 172 million HKD - 2026E Revenue: 1,720 million HKD, Net Profit: 206 million HKD - Corresponding EPS for 2024-2026 are projected at 0.21, 0.25, and 0.30 HKD respectively [3][26] - The current P/E ratios for 2024-2026 are 6.3, 5.2, and 4.4 times respectively, indicating a favorable long-term growth outlook [3][26]

Financial Data and Key Metrics Changes - The company reported a revenue increase of 40%, reaching 967 million RMB, which exceeds 1.1 billion HKD, compared to the previous year [3][6] - Gross profit margin improved to 30.8%, up from 29.1% in 2022, with total gross profit reaching approximately 298 million RMB, marking a 47.5% increase [7][8] - Net profit increased significantly by approximately 320%, reaching 118 million RMB, with net profit margin rising from 4.1% to 12.2% [8][9] Business Line Data and Key Metrics Changes - Experience marketing revenue grew by 48.3%, while data marketing saw a 21.9% increase [6] - The IP segment, particularly cultural and sports IP, experienced a 115% growth when included in the overall revenue [6][7] Market Data and Key Metrics Changes - The company's market share in experience marketing increased from 6.3% in 2019 to 12.7% in 2023, nearly doubling its position [3][11] - Revenue from the Asia-Pacific region, excluding mainland China, surged by 296%, reaching 100 million RMB [7] Company Strategy and Development Direction - The company aims to expand its cultural and sports IP initiatives, enhancing collaboration and synergy [12][13] - There is a focus on increasing market penetration in the beauty and liquor sectors, which currently represent only 5.3% of the client base [11][12] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the growth potential of the marketing sector in Greater China, anticipating significant growth in experience marketing, data marketing, and public relations services [11] - The company plans to leverage its strong market position and expand its geographic coverage, particularly in the Asia-Pacific region [12] Other Important Information - The company declared a total dividend of 10.58 HKD per share, with a dividend payout ratio targeted at 50% [9][10] - The company maintains a net cash position with no bank loans, indicating strong financial health [10] Q&A Session Summary Question: What are the growth prospects for the marketing sector in Greater China? - The management highlighted that the marketing sector is expected to see triple-digit growth in experience marketing, data marketing, and public relations services, while traditional advertising is experiencing negative growth [11] Question: How does the company plan to expand its market share in the beauty and liquor sectors? - The company identified these sectors as significant opportunities, noting that they currently represent a small portion of its client base, and plans to focus on expanding its presence in these areas [11][12]

恢复提效，全年业绩高增 | --- | --- | |---------------------------------|------------| | | | | 买入（维持） | | | 股票信息 | | | 行业 | 广告及宣传 | | 前次评级 | 买入 | | 3 月 11 日收盘价 ( 港元 ) | 1.24 | | 总市值 ( 百万港元 ) | 923.48 | | 总股本 ( 百万股 ) | 744.74 | | 其中自由流通股 (%) | 100.00 | | 30 日日均成交量 ( 百万股 ) | 0.30 | | 股价走势 | | 风险提示：行业竞争严重加剧；消费大幅不及预期。 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-----------------------|-------|--------------------------|-------|-------|-------|-----------------------------|-------|------------ ...