Financial Performance - For the six months ended June 30, 2024, the company's revenue decreased by 86.9% to RMB 10.1 million from RMB 77.1 million in the same period of 2023[10] - The gross profit for the same period fell by 62.2% to RMB 3.7 million, down from RMB 9.8 million in 2023[10] - The loss attributable to equity shareholders increased by 53.3% to RMB 10.5 million, compared to RMB 6.8 million in the prior year[11] - Basic and diluted loss per share rose by 50.0% to RMB 0.03 from RMB 0.02 in the same period of 2023[10] - Total revenue decreased by approximately 86.9% from RMB 77.1 million for the six months ended June 30, 2023, to approximately RMB 10.1 million for the six months ended June 30, 2024[17] - Revenue for the six months ended June 30, 2024, was RMB 10,058 thousand, a decrease of 87.0% compared to RMB 77,064 thousand for the same period in 2023[79] - The company reported a net loss of RMB 10,499,000 for the six months ended June 30, 2024, indicating ongoing financial challenges[92] Revenue Breakdown - Revenue from self-produced TV drama distribution and broadcasting rights decreased by approximately 93.6% from RMB 61.3 million to RMB 3.9 million, primarily due to no first-round broadcasting rights granted to satellite channels during the period[18] - Revenue from purchased TV drama distribution and broadcasting rights decreased by approximately 75.1% from RMB 15.7 million to RMB 3.9 million, mainly due to the absence of significant first-round broadcasting rights income[20] - Revenue from joint financing arrangements increased by approximately 6,491.2% from RMB 34,000 to RMB 2.2 million, attributed to the film "Flying Fortune" during the reporting period[21] - Revenue from self-produced TV series distribution and broadcasting rights was RMB 3,911 thousand, down 93.6% from RMB 61,313 thousand in 2023[96] - Revenue from acquired TV series distribution and broadcasting rights was RMB 3,906 thousand, a decrease of 75% from RMB 15,717 thousand in 2023[96] Cost and Expenses - Total sales costs decreased by approximately 90.6% from RMB 67.3 million to RMB 6.4 million, mainly due to reduced costs in self-produced TV drama distribution[22] - Sales and marketing expenses decreased by approximately 29.9% from RMB 254 million for the six months ended June 30, 2023, to RMB 178 million for the six months ended June 30, 2024, primarily due to a reduction in marketing and promotional expenses[30] - Administrative expenses decreased by approximately 15.4% from RMB 9.2 million for the six months ended June 30, 2023, to RMB 7.8 million for the six months ended June 30, 2024, mainly due to a reduction in employee costs related to the administrative department[32] - Financing costs decreased by 19.8% from RMB 6.8 million for the six months ended June 30, 2023, to RMB 5.5 million for the six months ended June 30, 2024, primarily due to lower actual annual interest rates[35] Assets and Liabilities - The company's current assets decreased from RMB 25.3 million as of December 31, 2023, to RMB 15.5 million as of June 30, 2024[39] - The total amount of bank and other loans decreased from approximately RMB 160.5 million as of December 31, 2023, to approximately RMB 153.1 million as of June 30, 2024[39] - The total liabilities as of June 30, 2024, were RMB 683,973 thousand, slightly down from RMB 685,561 thousand at the end of 2023[81] - The group faces a total financial liability of RMB 534,974,000 due within one year, raising doubts about its ability to meet these obligations without sufficient cash flow[92] - The group has recognized claims from creditors amounting to RMB 81,344,000, which may further impact its financial stability[92] Shareholder Information - The board has resolved not to declare an interim dividend for the six months ended June 30, 2024[10] - The board has resolved not to recommend any interim dividend for the six months ending June 30, 2024, consistent with the previous year[65] - As of June 30, 2024, the total number of shares issued by the company is 300,000,000[73] - Mr. Yuan Li holds a controlled corporation interest of 68,282,350 shares, representing approximately 22.76% of the company[73] - Ms. Tian Tian holds a controlled corporation interest of 64,380,501 shares, representing approximately 21.46% of the company[73] Future Plans and Strategies - The company plans to enhance its television drama production and distribution performance, expanding both self-produced dramas and acquired broadcasting rights[12] - The company aims to diversify its drama products by investing in various types and themes of television dramas[12] - The company will strengthen market research and insights into industry trends to increase its script and intellectual property reserves[12] - The company is committed to collaborating closely with third-party rights holders to acquire more diverse drama rights in the second half of 2024[15] - The group plans to accelerate the release of self-produced dramas to improve cash flow and revenue recognition, aiming to negotiate better terms with broadcasting platforms[93] - The group intends to enhance efforts in collecting outstanding receivables from previous drama releases to alleviate cash flow pressures[93] - The management is exploring the sale of existing script rights to other production companies to secure additional funding[93] - The ultimate controlling parties have committed to providing ongoing financial support if necessary, ensuring the group can continue operations for at least the next twelve months[93]

[I. Financial Summary and Company Overview](index=1&type=section&id=I.%20Financial%20Summary%20and%20Company%20Overview) [Financial Highlights](index=1&type=section&id=1.1%20Financial%20Highlights) For the six months ended June 30, 2024, revenue significantly decreased by 86.9% to RMB 10.1 million, and loss attributable to equity holders increased by 53.3% to RMB 10.5 million Financial Highlights for the Six Months Ended June 30, 2024 | Indicator | 2024 (RMB million) | 2023 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10.1 | 77.1 | -86.9% | | Gross Profit | 3.7 | 9.8 | -62.2% | | Loss Attributable to Equity Holders of the Company | 10.5 | 6.8 | +53.3% | | Basic and Diluted Loss Per Share | 0.03 | 0.02 | +50.0% | - The Board resolved not to declare an interim dividend for the six months ended June 30, 2024[1](index=1&type=chunk) [Company Information and Business Scope](index=1&type=section&id=1.2%20Company%20Information%20and%20Business%20Scope) Litian Pictures Holdings Limited, incorporated in 2019 and listed in 2020, primarily engages in TV series production, distribution, and broadcasting rights licensing - The company was incorporated in the Cayman Islands on June 17, 2019, and listed on the Main Board of the Hong Kong Stock Exchange on June 22, 2020[4](index=4&type=chunk) - The Group primarily engages in TV series production, distribution, and broadcasting rights licensing business[4](index=4&type=chunk) [Going Concern and Liquidity Risk](index=4&type=section&id=1.3%20Going%20Concern%20and%20Liquidity%20Risk) The Group faces significant liquidity pressure due to a net loss, limited cash, and slow industry recovery, but has implemented mitigation measures and maintains a going concern basis for financial reporting - As of June 30, 2024, the Group incurred a net loss of **RMB 10,499,000**, with financial liabilities due within one year totaling **RMB 534,974,000**, while bank balances and cash were only **RMB 2,435,000**[6](index=6&type=chunk) - The Group faces liquidity pressure primarily due to slow recovery in the entertainment industry, intensified competition in the TV series market, and tightened procurement budgets from broadcasting platforms, leading to delays in TV series production, licensing, and broadcasting[6](index=6&type=chunk) - The company has adopted various measures to mitigate liquidity pressure, including accelerating the broadcast and sale of self-produced and acquired TV series, strengthening receivables collection, negotiating restructuring with creditors, and securing a commitment for continuous financial support from the controlling shareholder[7](index=7&type=chunk) - The Board believes that, assuming the success of these measures, the Group will have sufficient funds to meet its liabilities falling due in the next twelve months, thus making the preparation of consolidated financial statements on a going concern basis appropriate[8](index=8&type=chunk) [II. Financial Statements](index=2&type=section&id=II.%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, the Group reported a significant decline in revenue and gross profit, with operating loss expanding and loss attributable to equity holders reaching RMB 10,499 thousand Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 10,058 | 77,064 | | Gross Profit | 3,705 | 9,810 | | Operating Loss | (4,995) | (4) | | Loss Before Tax | (10,487) | (6,849) | | Loss Attributable to Equity Holders of the Company for the Period | (10,499) | (6,849) | | Basic and Diluted Loss Per Share (RMB) | (0.03) | (0.02) | [Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group reported total non-current assets of RMB 8,620 thousand, total current assets of RMB 699,457 thousand (including RMB 556,182 thousand in TV series copyrights), and net current assets of RMB 15,484 thousand Key Data from Consolidated Statement of Financial Position | Indicator | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 8,620 | 10,517 | | Current Assets | 699,457 | 710,892 | | Current Liabilities | 683,973 | 685,561 | | Net Current Assets | 15,484 | 25,331 | | Net Assets | 22,364 | 32,876 | | Total Equity Attributable to Equity Holders of the Company | 22,364 | 32,876 | - As of June 30, 2024, TV series copyrights were the Group's largest current asset, with a carrying value of **RMB 556,182 thousand**[3](index=3&type=chunk) [III. Notes to the Financial Statements](index=4&type=section&id=III.%20Notes%20to%20the%20Financial%20Statements) [Basis of Preparation and Changes in Accounting Policies](index=4&type=section&id=3.1%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) This interim financial report, authorized on August 26, 2024, is prepared under IAS 34 and Listing Rules, using consistent accounting policies with the 2023 annual statements, with no significant impact from new standards - This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34 Interim Financial Reporting[5](index=5&type=chunk) - This interim financial report was authorized for issue on August 26, 2024, and has been prepared in accordance with the same accounting policies adopted in the 2023 annual financial statements, except for changes in accounting policies expected to be reflected in the 2024 annual financial statements[5](index=5&type=chunk) - Certain amendments to International Financial Reporting Standards issued by the International Accounting Standards Board became effective for the first time in the current accounting period, but none had a significant impact on the Group's results and financial position[9](index=9&type=chunk) [Revenue and Segment Reporting](index=6&type=section&id=3.2%20Revenue%20and%20Segment%20Reporting) The Group, engaged in TV series production and licensing, reports revenue at a point in time across three segments (self-produced, acquired, other), with total revenue of RMB 10,058 thousand and gross profit of RMB 3,705 thousand for the period - The Group primarily engages in the production, distribution, and licensing of broadcasting rights for TV series, with all revenue recognized at a point in time[10](index=10&type=chunk) - The Group has three reportable segments: self-produced TV series, acquired TV series, and others, with gross profit used as the measure for assessing segment performance[12](index=12&type=chunk)[13](index=13&type=chunk) Segment Revenue and Gross Profit for the Six Months Ended June 30, 2024 | Segment | Revenue (RMB thousand) | Gross Profit (RMB thousand) | | :--- | :--- | :--- | | Self-produced TV series | 3,911 | 1,700 | | Acquired TV series | 3,906 | 1,865 | | Other | 2,241 | 140 | | **Total** | **10,058** | **3,705** | [Revenue Classification](index=6&type=section&id=3.2.1%20Revenue%20Classification) For the six months ended June 30, 2024, revenue was RMB 3,911 thousand from self-produced TV series, RMB 3,906 thousand from acquired TV series, and RMB 2,241 thousand from co-financing and other arrangements Revenue from Contracts with Customers by Major Product or Service Line | Revenue Source | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Revenue from distribution and broadcasting rights licensing of self-produced TV series | 3,911 | 61,313 | | Revenue from distribution and broadcasting rights licensing of acquired TV series | 3,906 | 15,717 | | Revenue from distribution and broadcasting rights licensing under co-financing arrangements and others | 2,241 | 34 | | **Total** | **10,058** | **77,064** | [Segment Results](index=7&type=section&id=3.2.2%20Segment%20Results) For the six months ended June 30, 2024, self-produced TV series revenue was RMB 3,911 thousand, acquired TV series revenue was RMB 3,906 thousand, and other segment revenue was RMB 2,241 thousand, with all customers and most non-current assets in China Reportable Segment Revenue and Gross Profit | Segment | 2024 Revenue (RMB thousand) | 2024 Gross Profit (RMB thousand) | 2023 Revenue (RMB thousand) | 2023 Gross Profit (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Self-produced TV series | 3,911 | 1,700 | 61,313 | 6,838 | | Acquired TV series | 3,906 | 1,865 | 15,717 | 2,972 | | Other | 2,241 | 140 | 34 | – | | **Total** | **10,058** | **3,705** | **77,064** | **9,810** | - All of the Group's customers are located in China, and substantially all non-current assets are located in China, thus no geographical information analysis is presented[16](index=16&type=chunk) [Components of Loss Before Tax](index=9&type=section&id=3.3%20Components%20of%20Loss%20Before%20Tax) For the six months ended June 30, 2024, the Group's loss before tax was mainly driven by finance costs of RMB 5,492 thousand, depreciation of RMB 1,897 thousand, and TV series copyright costs of RMB 6,353 thousand - For the six months ended June 30, 2024, the loss before tax was **RMB 10,487 thousand**[2](index=2&type=chunk) [Finance Costs](index=9&type=section&id=3.3.1%20Finance%20Costs) For the six months ended June 30, 2024, finance costs decreased to RMB 5,492 thousand, mainly due to lower interest expenses on bank and other borrowings Breakdown of Finance Costs | Source | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Interest expense on bank and other borrowings | 5,456 | 8,712 | | Interest expense on lease liabilities | 36 | 82 | | Less: Interest expenses capitalized into TV series copyrights | – | (1,949) | | **Total** | **5,492** | **6,845** | [Other Items (Depreciation, Copyright Costs)](index=9&type=section&id=3.3.2%20Other%20Items%20(Depreciation,%20Copyright%20Costs)) For the six months ended June 30, 2024, depreciation expenses totaled RMB 1,897 thousand, and TV series copyright costs significantly decreased to RMB 6,353 thousand Breakdown of Other Expense Items | Item | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Depreciation expense | 1,897 | 2,061 | | TV series copyright costs | 6,353 | 64,047 | [Income Tax](index=9&type=section&id=3.4%20Income%20Tax) For the six months ended June 30, 2024, income tax expense was RMB 12 thousand, mainly from Chinese subsidiaries, with certain entities enjoying tax exemptions or no assessable profits Income Tax Expense | Item | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Current tax provision for the period | 12 | – | - The Company and its British Virgin Islands subsidiaries are not subject to income tax, and its Hong Kong subsidiaries are not subject to Hong Kong profits tax as they had no assessable profits[20](index=20&type=chunk) - The Group's subsidiaries established in the PRC (excluding Hong Kong) are subject to PRC corporate income tax at a rate of **25%**, with some subsidiaries established in the Kashi/Horgos Special Economic Development Zone in Xinjiang enjoying a five-year full exemption from corporate income tax[20](index=20&type=chunk) [Loss Per Share](index=10&type=section&id=3.5%20Loss%20Per%20Share) For the six months ended June 30, 2024, basic loss per share increased to RMB 0.03, calculated based on a loss of RMB 10,499 thousand and 300,000,000 weighted average ordinary shares, with no dilutive potential shares Loss Per Share | Indicator | For the Six Months Ended June 30, 2024 (RMB) | For the Six Months Ended June 30, 2023 (RMB) | | :--- | :--- | :--- | | Basic and Diluted Loss Per Share | (0.03) | (0.02) | - The calculation of basic loss per share is based on the loss attributable to ordinary equity holders of the Company of **RMB 10,499 thousand** and the weighted average number of **300,000,000** ordinary shares in issue during the interim period[21](index=21&type=chunk) - There were no dilutive potential ordinary shares in issue for the six months ended June 30, 2024 and 2023[22](index=22&type=chunk) [Details of Balance Sheet Items](index=10&type=section&id=3.6%20Details%20of%20Balance%20Sheet%20Items) This section provides detailed disclosures on the Group's assets and liabilities as of June 30, 2024, covering property, TV series copyrights, receivables, payables, contract liabilities, and borrowings [Property and Equipment](index=10&type=section&id=3.6.1%20Property%20and%20Equipment) For the six months ended June 30, 2024, the Group had no new equipment acquisitions, a decrease from RMB 63 thousand in the prior period - For the six months ended June 30, 2024, the Group acquired equipment at a cost of **RMB nil**, compared to **RMB 63,000** in the corresponding period of 2023[23](index=23&type=chunk) [TV Series Copyrights](index=11&type=section&id=3.6.2%20TV%20Series%20Copyrights) As of June 30, 2024, total TV series copyrights increased slightly to RMB 556,182 thousand, with RMB 12,313 thousand in new additions and RMB 6,353 thousand recognized as cost of sales Composition of TV Series Copyrights | Copyright Type | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Self-produced TV series completed | 590,387 | 583,702 | | Acquired TV series | 24,505 | 24,505 | | Co-financed TV series completed | 71,077 | 73,178 | | Script copyrights | 182,525 | 182,339 | | Less: Impairment loss | (312,312) | (313,502) | | **Total** | **556,182** | **550,222** | Changes in TV Series Copyrights | Change Item | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | At January 1 | 550,222 | 545,630 | | Additions | 12,313 | 142,066 | | Recognized in cost of sales | (6,353) | (64,047) | | **At June 30** | **556,182** | **623,649** | [Trade and Bills Receivables](index=11&type=section&id=3.6.3%20Trade%20and%20Bills%20Receivables) As of June 30, 2024, trade and bills receivables decreased to RMB 104,697 thousand, with the largest portion over three years old, and the Group faces significant credit risk from discounted bills Trade and Bills Receivables | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 247,547 | 261,032 | | Less: Provision for loss | (143,850) | (142,434) | | Bills receivables | 1,000 | 8,225 | | **Total** | **104,697** | **126,823** | Aging Analysis of Trade and Bills Receivables | Aging | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Within 6 months | 8,573 | 22,942 | | 6 to 12 months | 9,652 | 36,019 | | 1 to 2 years | 29,497 | 18,700 | | 2 to 3 years | 18,021 | 34,886 | | Over 3 years | 38,954 | 14,276 | | **Total** | **104,697** | **126,823** | - The Group has discounted certain bills received from customers with banks but remains exposed to significant credit risk on these bills receivables[26](index=26&type=chunk) [Bank Balances and Cash](index=12&type=section&id=3.6.4%20Bank%20Balances%20and%20Cash) As of June 30, 2024, total bank balances and cash were RMB 2,435 thousand, with RMB 1,446 thousand restricted, and most operations are in RMB subject to Chinese foreign exchange controls Bank Balances and Cash | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Bank balances | 2,417 | 4,469 | | Cash on hand | 18 | 34 | | Less: Restricted cash | (1,446) | (189) | | **Cash and cash equivalents in consolidated cash flow statement** | **989** | **4,314** | - Restricted cash refers to bank balances frozen by creditors and lenders as collateral under agreed settlement arrangements[28](index=28&type=chunk) [Trade Payables](index=13&type=section&id=3.6.5%20Trade%20Payables) As of June 30, 2024, trade payables totaled RMB 220,227 thousand, with RMB 195,069 thousand over two years old, and RMB 66,121 thousand has resulted in lawsuits against the Group's subsidiaries Aging Analysis of Trade Payables | Aging | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Within 6 months | 3,878 | 25,969 | | 6 to 12 months | 21,191 | – | | 1 to 2 years | 89 | 5,693 | | Over 2 years | 195,069 | 189,645 | | **Total** | **220,227** | **221,307** | - As of June 30, 2024, creditors for **RMB 66,121,000** of the Group's trade payables balance have filed lawsuits against the Group's subsidiaries, demanding repayment of outstanding balances[29](index=29&type=chunk) [Other Payables and Accrued Expenses](index=13&type=section&id=3.6.6%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2024, other payables and accrued expenses totaled RMB 148,152 thousand, mainly consisting of amounts due to TV series co-investors and interest payable Other Payables and Accrued Expenses | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Amounts payable to co-investors of TV series under co-financing arrangements | 114,908 | 114,929 | | Interest payable | 30,644 | 28,598 | | Employee-related costs payable | 94 | 1,510 | | Other taxes payable | 411 | 223 | | Other | 2,095 | 2,155 | | **Financial liabilities measured at amortized cost** | **148,152** | **147,415** | [Contract Liabilities](index=13&type=section&id=3.6.7%20Contract%20Liabilities) As of June 30, 2024, contract liabilities (advances from customers) slightly increased to RMB 155,003 thousand Contract Liabilities | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Advances from customers | 155,003 | 149,980 | [Bank and Other Borrowings](index=14&type=section&id=3.6.8%20Bank%20and%20Other%20Borrowings) As of June 30, 2024, total short-term bank and other borrowings were RMB 151,382 thousand, with RMB 113,151 thousand overdue and RMB 10,000 thousand subject to litigation, alongside RMB 1,740 thousand in long-term bank borrowings Short-term Bank and Other Borrowings | Loan Type | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Bank loans (pledged by bills receivables) | 991 | 8,167 | | Other third-party loans (guaranteed by controlling shareholder) | 92,000 | 92,000 | | Other third-party loans (unsecured and unguaranteed) | 57,868 | 58,608 | | Other related party loans (guaranteed by controlling shareholder) | 523 | – | | **Total** | **151,382** | **158,775** | - As of June 30, 2024, **RMB 113,151,000** of the Group's short-term other borrowings were overdue, and the company is negotiating with lenders to restructure repayment periods and schedules[33](index=33&type=chunk) - As of June 30, 2024, **RMB 10,000,000** of short-term other borrowings have led to lawsuits filed by creditors against one of the Group's subsidiaries[33](index=33&type=chunk) Long-term Bank and Other Borrowings | Loan Type | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Bank loans (guaranteed by controlling shareholder) | 1,740 | 1,740 | [Capital, Reserves and Dividends](index=15&type=section&id=3.7%20Capital,%20Reserves%20and%20Dividends) For the six months ended June 30, 2024, the company's directors did not recommend the payment of an interim dividend - The directors of the Company do not recommend the payment of an interim dividend for the six months ended June 30, 2024[34](index=34&type=chunk) [Contingent Liabilities](index=15&type=section&id=3.8%20Contingent%20Liabilities) As of June 30, 2024, the Group faced contingent liabilities of RMB 93,689 thousand, with RMB 81,344 thousand recognized, and directors denying responsibility for the remainder based on legal advice - Certain subsidiaries of the Group have been sued by creditors and lenders, with total claims (including principal, interest, and surcharges) amounting to **RMB 93,689,000**[35](index=35&type=chunk) - Of the above claim amount, accrued principal and interest of **RMB 81,344,000** has been recognized in the Group's interim financial report as of June 30, 2024[35](index=35&type=chunk) - Based on legal advice, the company's directors deny responsibility for the remaining claim amount and do not believe that the court will rule against the relevant subsidiaries, thus no provision has been made for the remaining claim amount[35](index=35&type=chunk) [Significant Related Party Transactions](index=15&type=section&id=3.9%20Significant%20Related%20Party%20Transactions) During the period, the Group engaged in related party transactions with the controlling shareholder and key management, including loans and repayments, with the controlling shareholder providing RMB 93,740 thousand in loan guarantees Transactions and Balances with Controlling Shareholder and Key Management | Transaction Item | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Loans received from controlling shareholder | – | 8,000 | | Repayment of loans to controlling shareholder | – | 28,000 | | Loans received from key management | 1,307 | 6,650 | | Repayment of loans to key management | 1,150 | 17,150 | | Loans from controlling shareholder at end of reporting period | 366 | – | | Guarantees received from controlling shareholder for bank and other borrowings at end of reporting period | 93,740 | 106,000 | [IV. Management Discussion and Analysis](index=16&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) [Business Review and Prospects](index=16&type=section&id=4.1%20Business%20Review%20and%20Prospects) The Group, a Chinese TV series distributor, successfully licensed several TV series in H1 2024, plans to acquire more copyrights and commence new productions in H2, and remains confident in its business strategy amidst industry competition - The Group was established in 2013, with its principal business being the licensing of broadcasting rights for self-produced and acquired TV series[37](index=37&type=chunk) - In the first half of 2024, the Group successfully licensed the first-round broadcasting rights for acquired TV series “Shanghai Bund: A Life-and-Death Struggle” and “Jingmen Changying,” and multi-round broadcasting rights for self-produced TV series “Unparalleled Beauty”[37](index=37&type=chunk) - For the second half of 2024, the Group plans to acquire more acquired TV series copyrights of different genres and strive to commence filming of anticipated self-produced TV series[37](index=37&type=chunk) - Management is confident in the future development of the business and will continue to implement business strategies to address the competitive industry and overall business environment[37](index=37&type=chunk) [Financial Review](index=17&type=section&id=4.2%20Financial%20Review) This section reviews the Group's financial performance for the six months ended June 30, 2024, analyzing changes in revenue, costs, gross profit, expenses, income tax, loss, and key balance sheet items [Revenue Analysis](index=17&type=section&id=4.2.1%20Revenue%20Analysis) For the six months ended June 30, 2024, total revenue significantly decreased by 86.9% to RMB 10.1 million, driven by declines in self-produced and acquired TV series, partially offset by a substantial increase in co-financing and other revenue Revenue Breakdown by Business Segment | Revenue Source | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Self-produced TV series distribution and broadcasting rights licensing | 3,911 | 61,313 | | Acquired TV series distribution and broadcasting rights licensing | 3,906 | 15,717 | | Distribution and broadcasting rights licensing under co-financing arrangements and others | 2,241 | 34 | | **Total** | **10,058** | **77,064** | - Total revenue decreased by approximately **86.9%** from approximately **RMB 77.1 million** in the corresponding period of 2023 to approximately **RMB 10.1 million** in the corresponding period of 2024, primarily due to decreased revenue from self-produced and acquired TV series distribution and broadcasting rights licensing[39](index=39&type=chunk) - Revenue from distribution and broadcasting rights licensing under co-financing arrangements and others significantly increased by approximately **6,491.2%** to approximately **RMB 2.2 million**, attributable to the broadcast of the movie “Flying Fortune” during the reporting period[43](index=43&type=chunk) [Cost of Sales Analysis](index=19&type=section&id=4.2.2%20Cost%20of%20Sales%20Analysis) For the six months ended June 30, 2024, cost of sales significantly decreased by 90.6% to RMB 6.4 million, mainly due to lower costs for self-produced TV series, while co-financing and other costs increased by 6,079.4% Cost of Sales Breakdown by Business Segment | Cost Source | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Cost of self-produced TV series distribution and broadcasting rights licensing | 2,211 | 54,475 | | Cost of acquired TV series distribution and broadcasting rights licensing | 2,041 | 12,745 | | Cost of distribution and broadcasting rights licensing under co-financing arrangements and others | 2,101 | 34 | | **Total** | **6,353** | **67,254** | - Cost of sales decreased by approximately **90.6%** from approximately **RMB 67.3 million** in the corresponding period of 2023 to approximately **RMB 6.4 million** in the corresponding period of 2024, primarily due to decreased costs for self-produced TV series distribution and broadcasting rights licensing[45](index=45&type=chunk) - Cost of sales for distribution and broadcasting rights licensing under co-financing arrangements and others increased by approximately **6,079.4%** from approximately **RMB 34,000** to approximately **RMB 2.1 million**, consistent with the increase in revenue for this segment[47](index=47&type=chunk) [Gross Profit and Gross Margin Analysis](index=20&type=section&id=4.2.3%20Gross%20Profit%20and%20Gross%20Margin%20Analysis) For the six months ended June 30, 2024, gross profit decreased by 62.2% to RMB 3.7 million, while gross margin significantly improved from 12.7% to 36.8%, driven by higher margins in self-produced and acquired TV series Gross Profit and Gross Margin by Business Segment | Segment | 2024 Gross Profit (RMB thousand) | 2024 Gross Margin (%) | 2023 Gross Profit (RMB thousand) | 2023 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Self-produced TV series distribution and broadcasting rights licensing | 1,700 | 43.5 | 6,838 | 11.2 | | Acquired TV series distribution and broadcasting rights licensing | 1,865 | 47.7 | 2,972 | 18.9 | | Distribution and broadcasting rights licensing under co-financing arrangements and others | 140 | 6.2 | – | – | | **Total** | **3,705** | **36.8** | **9,810** | **12.7** | - Gross profit decreased by approximately **62.2%** from approximately **RMB 9.8 million** in the corresponding period of 2023 to approximately **RMB 3.7 million** in the corresponding period of 2024, primarily due to decreased gross profit from self-produced TV series distribution and broadcasting rights licensing[49](index=49&type=chunk) - Gross margin increased from approximately **12.7%** in the corresponding period of 2023 to approximately **36.8%** in the corresponding period of 2024, primarily due to higher gross margins for self-produced and acquired TV series broadcasting rights licensing[50](index=50&type=chunk) [Selling and Marketing Expenses](index=21&type=section&id=4.2.4%20Selling%20and%20Marketing%20Expenses) For the six months ended June 30, 2024, selling and marketing expenses decreased by 29.9% to RMB 178 thousand, mainly due to reduced marketing and promotion expenses, aligning with lower revenue Breakdown of Selling and Marketing Expenses | Item | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Marketing and promotion expenses | 39 | 104 | | Staff costs | 86 | 87 | | Travel and transportation expenses | 4 | 2 | | Other | 49 | 61 | | **Total** | **178** | **254** | - Selling and marketing expenses decreased by approximately **29.9%** from approximately **RMB 254,000** in the corresponding period of 2023 to approximately **RMB 178,000** in the corresponding period of 2024, primarily due to decreased marketing and promotion expenses, consistent with the decrease in revenue[51](index=51&type=chunk) [Administrative Expenses](index=22&type=section&id=4.2.5%20Administrative%20Expenses) For the six months ended June 30, 2024, administrative expenses decreased by 15.4% to RMB 7.8 million, mainly due to lower staff costs, partially offset by increased travel and entertainment expenses Breakdown of Administrative Expenses | Item | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Staff costs | 3,415 | 4,748 | | Rent | 66 | 51 | | Depreciation and amortization | 1,897 | 2,061 | | Office expenses | 60 | 124 | | Consultancy fees | 782 | 800 | | Transportation expenses | 159 | 118 | | Travel expenses | 587 | 296 | | Entertainment expenses | 398 | 315 | | Taxes and surcharges | 2 | 157 | | Bank charges | 39 | 27 | | Other | 418 | 545 | | **Total** | **7,823** | **9,242** | - Administrative expenses decreased by approximately **15.4%** from approximately **RMB 9.2 million** in the corresponding period of 2023 to approximately **RMB 7.8 million** in the corresponding period of 2024, primarily due to decreased staff costs related to the administrative department, partially offset by increased travel and entertainment expenses[52](index=52&type=chunk) [Finance Costs](index=23&type=section&id=4.2.6%20Finance%20Costs) For the six months ended June 30, 2024, finance costs decreased by 19.8% to RMB 5.5 million, mainly due to lower interest rates on borrowings, partially offset by reduced capitalized interest for TV series copyrights Breakdown of Finance Costs | Item | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Interest expense on bank and other borrowings | 5,456 | 8,712 | | Interest expense on lease liabilities | 36 | 82 | | Less: Interest expenses capitalized into TV series copyrights | – | (1,949) | | **Total** | **5,492** | **6,845** | - Finance costs decreased by **19.8%** from **RMB 6.8 million** in the corresponding period of 2023 to **RMB 5.5 million** in the corresponding period of 2024, primarily due to decreased interest expenses on bank and other borrowings resulting from a lower effective annual interest rate[53](index=53&type=chunk) [Income Tax](index=23&type=section&id=4.2.7%20Income%20Tax) For the six months ended June 30, 2024, income tax expense was RMB 12 thousand, mainly from Chinese assessable profits, with some entities enjoying exemptions or no tax liability Income Tax Expense | Item | For the Six Months Ended June 30, 2024 (RMB thousand) | For the Six Months Ended June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | | Current tax provision for the period | 12 | – | - The Group's operating income is subject to corporate income tax at a rate of **25%** on assessable income, but the Company and certain subsidiaries enjoy tax exemptions or are not subject to tax due to no assessable profits[54](index=54&type=chunk)[55](index=55&type=chunk) [Loss Attributable to Equity Holders of the Company for the Period](index=24&type=section&id=4.2.8%20Loss%20Attributable%20to%20Equity%20Holders%20of%20the%20Company%20for%20the%20Period) For the six months ended June 30, 2024, loss attributable to equity holders of the company increased by 53.3% to RMB 10.5 million, influenced by various financial factors - Loss attributable to equity holders of the Company increased by **53.3%** from approximately **RMB 6.8 million** in the corresponding period of 2023 to approximately **RMB 10.5 million** in the corresponding period of 2024[55](index=55&type=chunk) [Trade and Bills Receivables](index=24&type=section&id=4.2.9%20Trade%20and%20Bills%20Receivables) As of June 30, 2024, trade and bills receivables decreased by 17.4% to RMB 104.7 million, mainly due to a reduction in trade receivables - As of June 30, 2024, trade and bills receivables amounted to **RMB 104.7 million**, a decrease of **RMB 22.1 million** or **17.4%** from **RMB 126.8 million** as of December 31, 2023, primarily due to a decrease in trade receivables[55](index=55&type=chunk) [Trade Payables](index=24&type=section&id=4.2.10%20Trade%20Payables) As of June 30, 2024, creditors for RMB 66.1 million of trade payables have initiated lawsuits against the Group's subsidiaries - As of June 30, 2024, creditors for **RMB 66.1 million** of the Group's trade payables balance have filed lawsuits against the Group's subsidiaries, demanding repayment of outstanding balances[56](index=56&type=chunk) [Other Payables and Accrued Expenses](index=24&type=section&id=4.2.11%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2024, other payables and accrued expenses slightly increased to RMB 148.2 million - Other payables and accrued expenses slightly increased from **RMB 147.4 million** as of December 31, 2023, to **RMB 148.2 million** as of June 30, 2024[56](index=56&type=chunk) [Cash Flows](index=25&type=section&id=4.3%20Cash%20Flows) For the six months ended June 30, 2024, net cash from operating activities significantly decreased by 92.9% to RMB 738 thousand, with net cash from investing activities at RMB 2 thousand and net cash used in financing activities at RMB 4.1 million - For the six months ended June 30, 2024, net cash generated from operating activities was **RMB 738,000**, a decrease of **92.9%** from **RMB 10.4 million** in the corresponding period of last year, primarily due to a decrease in trade receivables[57](index=57&type=chunk) - Net cash generated from investing activities was **RMB 2,000**, mainly contributed by interest income from bank deposits[57](index=57&type=chunk) - Net cash used in financing activities was **RMB 4.1 million**[57](index=57&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=4.4%20Liquidity%20and%20Financial%20Resources) The Group's capital expenditure and operations are funded by operating cash, bank loans, and global offering proceeds; as of June 30, 2024, bank balances and cash were RMB 2.4 million, net current assets RMB 15.5 million, and total borrowings RMB 153.1 million - The Group's capital expenditure, daily operations, and investments are primarily funded by cash generated from its operations, bank borrowings, and proceeds from the global offering[58](index=58&type=chunk) - As of June 30, 2024, bank balances and cash were approximately **RMB 2.4 million**, and net current assets were approximately **RMB 15.5 million**[58](index=58&type=chunk) - As of June 30, 2024, total bank and other borrowings were approximately **RMB 153.1 million**, of which approximately **RMB 149.9 million** were loans from third-party non-executive producers (at an annual interest rate of **15%**)[58](index=58&type=chunk) [Key Financial Ratios](index=25&type=section&id=4.5%20Key%20Financial%20Ratios) As of June 30, 2024, the Group's return on equity and total assets deteriorated to negative values, current ratio decreased to 1.0x, and debt-to-asset ratio significantly increased to 684.7%, indicating higher financial leverage [Return on Equity](index=25&type=section&id=4.5.1%20Return%20on%20Equity) For the six months ended June 30, 2024, return on equity deteriorated from negative 0.8% to negative 38.0%, reflecting worsening profitability - Return on equity increased from approximately **negative 0.8%** in the corresponding period of 2023 to approximately **negative 38.0%** in the corresponding period of 2024[59](index=59&type=chunk) [Return on Total Assets](index=25&type=section&id=4.5.2%20Return%20on%20Total%20Assets) For the six months ended June 30, 2024, return on total assets deteriorated from negative 0.8% to negative 1.5%, indicating decreased asset utilization efficiency - Return on total assets increased from approximately **negative 0.8%** in the corresponding period of 2023 to approximately **negative 1.5%** in the corresponding period of 2024[60](index=60&type=chunk) [Current Ratio](index=26&type=section&id=4.5.3%20Current%20Ratio) As of June 30, 2024, the current ratio decreased from 1.2x to 1.0x, indicating a weakening of short-term solvency - The Group's current ratio decreased from approximately **1.2x** as of June 30, 2023, to approximately **1.0x** as of June 30, 2024[61](index=61&type=chunk) [Debt-to-Asset Ratio](index=26&type=section&id=4.5.4%20Debt-to-Asset%20Ratio) As of June 30, 2024, the debt-to-asset ratio significantly increased from 112.7% to 684.7%, indicating a substantial rise in financial leverage and heavy debt burden - The Group's debt-to-asset ratio increased from approximately **112.7%** as of June 30, 2023, to approximately **684.7%** as of June 30, 2024[62](index=62&type=chunk) [Treasury Policy](index=26&type=section&id=4.6%20Treasury%20Policy) The Group maintains a prudent treasury policy, closely monitoring liquidity to meet funding requirements as they arise - The Group adopts a treasury policy based on prudent financial management, with the Board closely monitoring liquidity levels to ensure that funding requirements can be met as they arise[63](index=63&type=chunk) [Capital Expenditure](index=26&type=section&id=4.7%20Capital%20Expenditure) For the six months ended June 30, 2024, the Group's capital expenditure was not significant and was primarily funded by operating cash flows - For the six months ended June 30, 2024, the Group's capital expenditure was not significant and was primarily funded by cash flows from operating activities[64](index=64&type=chunk) [Foreign Exchange Risk](index=26&type=section&id=4.8%20Foreign%20Exchange%20Risk) The Group primarily operates in RMB, with most transactions in RMB and limited HKD balances; it currently has no foreign currency hedging policy but monitors foreign exchange risk - The Group operates in the PRC, and its functional currency is RMB, with most income and expenses denominated in RMB[65](index=65&type=chunk) - As of June 30, 2024, only certain bank balances were denominated in HKD[65](index=65&type=chunk) - The Group currently does not have any foreign currency hedging policy, and management will continue to monitor foreign exchange risk and consider taking prudent measures when appropriate[65](index=65&type=chunk) [Contingent Liabilities](index=27&type=section&id=4.9%20Contingent%20Liabilities) As of June 30, 2024, the Group faced contingent liabilities of RMB 93,689 thousand, with RMB 81,344 thousand recognized, and directors denying responsibility for the remainder based on legal advice - Certain subsidiaries of the Group have been sued by creditors and lenders, with total claims (including principal, interest, and surcharges) amounting to **RMB 93,689,000**[66](index=66&type=chunk) - Of the above claim amount, accrued principal and interest of **RMB 81,344,000** has been recognized in the Group's interim financial report as of June 30, 2024[66](index=66&type=chunk) - Based on legal advice, the company's directors deny responsibility for the remaining claim amount and do not believe that the court will rule against the relevant subsidiaries, thus no provision has been made for the remaining claim amount[66](index=66&type=chunk) [Human Resources and Remuneration Policy](index=27&type=section&id=4.10%20Human%20Resources%20and%20Remuneration%20Policy) As of June 30, 2024, the Group maintained 48 employees, providing social security and benefits, with remuneration based on market levels and performance, and no significant labor disputes occurred - As of June 30, 2024, the Group had **48** employees, consistent with December 31, 2023[67](index=67&type=chunk) - The Group participates in various employee social security schemes managed by local governments for its employees and provides year-end bonuses, discretionary bonuses, share options, provident funds, social security funds, and medical benefits[67](index=67&type=chunk) - The Group's remuneration policy is determined by prevailing market levels and the performance of the Group and individual employees, and is reviewed regularly[67](index=67&type=chunk) [Material Investments, Acquisitions and Disposals](index=27&type=section&id=4.11%20Material%20Investments,%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2024, the Group had no material investments, significant acquisitions, or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2024, the Group had no material investments, nor any significant acquisitions or disposals of subsidiaries, associates, and joint ventures[68](index=68&type=chunk) [Public Float](index=27&type=section&id=4.12%20Public%20Float) For the six months ended June 30, 2024, and up to this announcement, the company maintained an adequate public float of 25% of its issued share capital as per Listing Rules - For the six months ended June 30, 2024, and up to the date of this announcement, the Company has maintained an adequate public float of **25%** of its total issued share capital as required by the Listing Rules[69](index=69&type=chunk) [Changes in Directors' Information](index=28&type=section&id=4.13%20Changes%20in%20Directors'%20Information) On August 13, 2024, three directors resigned, and three new directors (Ms. Hu Na, Mr. Xie Guoxing, and Mr. Xie Taoquan) were appointed to the Board and relevant committees - On August 13, 2024, Ms. Fu Jieyun resigned as an executive director and a member of the nomination committee; Mr. Liu Hanlin resigned as an independent non-executive director, chairman of the audit committee, and a member of the remuneration and nomination committees; Mr. Gan Weimin resigned as an independent non-executive director, chairman of the remuneration committee, and a member of the audit committee[70](index=70&type=chunk) - Ms. Hu Na was appointed as an executive director and a member of the nomination committee; Mr. Xie Guoxing was appointed as an independent non-executive director, chairman of the audit committee, and a member of the remuneration and nomination committees; Mr. Xie Taoquan was appointed as an independent non-executive director, chairman of the remuneration committee, and a member of the audit committee[70](index=70&type=chunk) [Future Plans for Material Investments](index=28&type=section&id=4.14%20Future%20Plans%20for%20Material%20Investments) As of the date of this announcement, the company has no material plans for significant investments - As of the date of this announcement, the Company has no material plans for any significant investments[71](index=71&type=chunk) [Compliance with Corporate Governance Code](index=28&type=section&id=4.15%20Compliance%20with%20Corporate%20Governance%20Code) The company is committed to high corporate governance standards, having adopted and complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules - The Company is committed to maintaining a high level of corporate governance practices and procedures and has adopted and complied with all applicable code provisions as set out in the Corporate Governance Code in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[72](index=72&type=chunk) [Standard Securities Dealing Code for Directors](index=28&type=section&id=4.16%20Standard%20Securities%20Dealing%20Code%20for%20Directors) The company adopted the Standard Securities Dealing Code for Directors (Appendix C3 of Listing Rules), with all directors confirming compliance for the six months ended June 30, 2024 - The Company has adopted the Standard Securities Dealing Code for Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[73](index=73&type=chunk) - Following specific enquiry made to all Directors, all Directors confirmed that they had complied with the required standard set out in the Standard Code for the six months ended June 30, 2024[73](index=73&type=chunk) [V. Other Information](index=29&type=section&id=V.%20Other%20Information) [Events After Reporting Period](index=29&type=section&id=5.1%20Events%20After%20Reporting%20Period) The directors are not aware of any material events requiring disclosure that occurred after June 30, 2024, up to the date of this announcement - The directors are not aware of any material events requiring disclosure that have occurred after June 30, 2024, and up to the date of this announcement[74](index=74&type=chunk) [Audit Committee](index=29&type=section&id=5.2%20Audit%20Committee) The Audit Committee, chaired by Mr. Xie Guoxing, reviewed the Group's interim results for the six months ended June 30, 2024, confirming compliance with applicable accounting standards - The Audit Committee comprises three independent non-executive directors, namely Mr. Xie Guoxing (Chairman), Mr. Teng Binsheng, and Mr. Xie Taoquan[75](index=75&type=chunk) - The Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2024, and is of the opinion that the preparation of the relevant financial statements has complied with applicable accounting standards and requirements, and that adequate disclosures have been made[75](index=75&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=29&type=section&id=5.3%20Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2024, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[76](index=76&type=chunk) [Interim Dividend](index=29&type=section&id=5.4%20Interim%20Dividend) The Board has resolved not to recommend the payment of any interim dividend for the six months ended June 30, 2024 - The Board has resolved not to recommend the payment of any interim dividend for the six months ended June 30, 2024[77](index=77&type=chunk) [Publication of Interim Results and Interim Report](index=30&type=section&id=5.5%20Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement is published on the Stock Exchange and company website, with the interim report to be dispatched to shareholders and published online in due course - This interim results announcement is published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (www.litian.tv)[78](index=78&type=chunk) - The Company's interim report for the six months ended June 30, 2024, will be dispatched to shareholders and published on the websites of the Stock Exchange and the Company, respectively, in due course[78](index=78&type=chunk)

Financial Performance - The company reported revenue of RMB 113.4 million for the year ended December 31, 2023, representing a 390.7% increase compared to RMB 23.1 million in 2022[9] - The gross loss decreased by 64.2% to RMB 67.7 million from RMB 189.2 million year-on-year[9] - The loss attributable to equity shareholders was RMB 155.5 million, a reduction of 47.4% from RMB 295.7 million in the previous year[9] - Basic and diluted loss per share improved to RMB 0.52, down 47.5% from RMB 0.99 in 2022[9] - Total revenue increased by approximately 390.7% from RMB 23.1 million in 2022 to RMB 113.4 million in 2023, primarily driven by a RMB 61.5 million increase in revenue from self-produced TV drama distribution and broadcasting rights[23] - Revenue from self-produced TV drama broadcasting rights increased by approximately 801.8% from RMB 7.7 million in 2022 to RMB 69.1 million in 2023, with five self-produced dramas licensed in 2023[24] - Revenue from bought TV drama broadcasting rights rose by approximately 141.3% from RMB 15.0 million in 2022 to RMB 36.1 million in 2023, attributed to challenging market conditions and macroeconomic environment[25] - Revenue from joint financing arrangements and other broadcasting rights increased by approximately 1559.0% from RMB 0.5 million in 2022 to RMB 8.2 million in 2023, mainly from the sale of script rights for "New Youth" and "Meteor Hunter"[27] - The company's attributable loss for the year was approximately RMB 155.5 million, a decrease of approximately 47.4% compared to an attributable loss of approximately RMB 295.7 million for the year ended December 31, 2022[60] Production and Licensing - The company successfully licensed the first round broadcasting rights for the self-produced drama "Unparalleled Beauty" and the purchased drama "Youth in the Flames of War" during the year[12] - A total of 24 dramas were issued in 2023, compared to 16 in 2022, indicating a focus on expanding self-produced drama broadcasting rights[17] - The company aims to diversify its drama offerings by investing in various types and genres of television dramas[14] - In 2024, the company plans to accelerate the production and licensing of its self-produced dramas while collaborating closely with third-party rights holders to acquire more diverse purchased drama rights[18] - The company plans to continue expanding its self-produced content and exploring new licensing opportunities to enhance revenue streams[28] Cost and Expenses - Total cost of sales decreased by approximately 14.7% from RMB 212.3 million in 2022 to RMB 181.1 million in 2023, primarily due to a reduction in costs related to self-produced TV drama broadcasting rights[30] - Sales and marketing expenses increased by approximately 120.1% from about RMB 1.1 million for the year ended December 31, 2022, to approximately RMB 2.4 million for the current year, primarily due to increased promotional expenses[45] - Administrative expenses decreased by approximately 9.7% from about RMB 25.3 million for the year ended December 31, 2022, to approximately RMB 22.8 million for the current year[50] - Financing costs decreased by approximately 10.9% from about RMB 21.0 million for the year ended December 31, 2022, to approximately RMB 18.7 million for the current year, mainly due to reduced interest expenses on bank and other loans[53] Assets and Liabilities - As of December 31, 2023, the company's cash and bank deposits amounted to approximately RMB 4.5 million, a significant decrease from RMB 59.6 million as of December 31, 2022[62] - The company's net current assets as of December 31, 2023, were approximately RMB 25.3 million, down from RMB 162.3 million as of December 31, 2022[62] - The total bank and other loans as of December 31, 2023, were approximately RMB 160.5 million, compared to RMB 212.7 million as of December 31, 2022[62] - The current ratio declined from approximately 1.3 times as of December 31, 2022, to approximately 1.0 times as of December 31, 2023[66] - The debt-to-equity ratio increased from approximately 113.8% as of December 31, 2022, to approximately 488.2% as of December 31, 2023[70] Corporate Governance - The board has established three committees to oversee audit, remuneration, and nominations, ensuring effective governance and strategic oversight[165] - The company maintains a strong commitment to corporate governance, adhering to all applicable codes and best practices throughout the year[156] - The board of directors consists of independent non-executive directors, meeting the requirement of at least one-third of the board members, ensuring a balance between executive and independent directors[169] - The company has received annual confirmations of independence from all independent non-executive directors, affirming their compliance with independence guidelines[170] - The board has established mechanisms to ensure independent viewpoints are obtained, including the provision of sufficient resources for directors to fulfill their duties[175] - The company has implemented a code of conduct and compliance manual applicable to employees and directors[193] - The board is collectively responsible for corporate governance, which includes reviewing the corporate governance report[191] Future Outlook - The company has set a revenue guidance of $180 million for the next fiscal year, indicating a projected growth of 20%[148] - New product launches are expected to contribute an additional $30 million in revenue, with a focus on innovative content production technologies[148] - The company is actively pursuing market expansion strategies, targeting Southeast Asia for new user acquisition and partnerships[148] - A merger with a local production company is anticipated to enhance content offerings and operational efficiency, expected to close by Q2 2024[148] - The company has invested $5 million in research and development for new film production technologies, aiming to improve production quality and reduce costs[148]

Employee and Corporate Governance - As of December 31, 2023, the group had 44 employees, a decrease from 47 employees as of December 31, 2022[2]. - The company is committed to maintaining high standards of corporate governance and transparency[10]. - The company has adopted a standard code for its directors regarding securities trading, confirming compliance throughout the year[11]. - The annual performance for the year has been reviewed by the audit committee along with management and external auditors[12]. - The company has not reported any significant labor disputes during the year, indicating a good working relationship with employees[2]. Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 113,445,000, a decrease from RMB 123,121,000 in 2022[43]. - The gross loss for reportable segments was RMB (67,676,000), improving from RMB (189,223,000) in the previous year[39]. - The company reported a net loss before tax of RMB (143,520,000), significantly reduced from RMB (270,952,000) in 2022[39]. - The total assets as of December 31, 2023, were RMB 710,892,000, down from RMB 793,476,000 in 2022[45]. - The company's cash and cash equivalents decreased to RMB 4,503,000 from RMB 59,578,000 in the previous year[45]. - Trade receivables decreased to RMB 126,823,000 from RMB 155,364,000 in 2022[45]. - The basic and diluted loss per share for the year was RMB (0.52), compared to RMB (0.99) in 2022[44]. - The total equity attributable to equity shareholders of the company was RMB 32,876,000, down from RMB 186,880,000 in the previous year[46]. - For the year ended December 31, 2023, revenue increased by approximately 390.7% to approximately RMB 113.4 million from approximately RMB 23.1 million for the year ended December 31, 2022[59]. - Gross loss decreased by approximately 64.2% to approximately RMB 67.7 million for the year ended December 31, 2023, compared to a loss of approximately RMB 189.2 million for the year ended December 31, 2022[59]. - Loss attributable to equity shareholders decreased by approximately 47.4% to approximately RMB 155.5 million for the year ended December 31, 2023, from approximately RMB 295.7 million for the year ended December 31, 2022[59]. - Basic and diluted loss per share decreased by approximately 47.5% to approximately RMB 0.52 for the year ended December 31, 2023, compared to a loss of approximately RMB 0.99 for the year ended December 31, 2022[59]. Liquidity and Financial Obligations - The group faces liquidity pressure due to slow recovery in the entertainment industry and increased competition in the television drama market, which may affect its ability to meet operational and financial needs within the next 12 months[53]. - As of December 31, 2023, the group reported a net loss of RMB 155.5 million and anticipates paying financial liabilities of RMB 549.7 million within one year[67]. - The group's cash and cash equivalents were only RMB 4.5 million as of December 31, 2023, raising concerns about its ability to repay liabilities when due[67]. - The board has resolved not to recommend any final dividend for the year ended December 31, 2023[59]. - The group anticipates having sufficient funds to meet its liabilities due within at least twelve months from the reporting date[69]. Revenue and Business Operations - The group is accelerating the sale of television dramas to broadcasting platforms and monitoring unresolved claims and lawsuits to reach settlements[55]. - The group’s television drama business continues to face pressure in the short term, impacting production and licensing capabilities[53]. - The group aims to accelerate revenue recognition by negotiating longer-term broadcasting rights for its self-produced dramas, which will help recover production costs more quickly[69]. - Customer A generated revenue of RMB 45,306,000 in 2023, while Customer B contributed RMB 30,967,000, up from RMB 7,783,000 in 2022[86]. - Revenue from external customers for 2023 was RMB 23,121,000, compared to RMB 22,008,000 in 2022, representing a year-over-year increase of approximately 5.1%[92]. - The company successfully licensed broadcasting rights for multiple series, including "Wisdom Has No Enemies" and "Righteousness Has No Enemies," during the year[128]. - The company plans to accelerate the production and licensing of its self-produced dramas in 2024, aiming to collaborate closely with third-party rights holders for more diverse content[139]. - Revenue from self-produced television drama distribution and broadcasting rights licensing was RMB 69,133 thousand, while revenue from purchased television drama distribution and broadcasting rights licensing was RMB 36,100 thousand for the year ended December 31, 2023[140]. - Revenue from self-produced TV drama licensing increased approximately 801.8% to about RMB 77 million for the year ended December 31, 2023, due to the licensing of 5 self-produced dramas[141]. - Revenue from the buyout of TV drama licensing rose approximately 141.3% to about RMB 361 million for the year ended December 31, 2023, driven by market conditions and macroeconomic challenges[145]. Impairment and Costs - The impairment loss for television rights in 2023 was RMB 57,440,000, significantly reduced from RMB 198,828,000 in 2022, reflecting improved asset recoverability[103]. - The impairment loss for completed productions was RMB 47.4 million for the fiscal year 2023[156]. - The company confirmed impairment losses of RMB 30,868 thousand for the year ended December 31, 2023, compared to RMB 35,367 thousand in 2022[119]. - The cost of self-produced TV drama licensing decreased approximately 32.1% to about RMB 120.8 million for the year ended December 31, 2023, primarily due to a reduction in inventory impairment provisions[148]. - The total sales cost for buyout TV drama licensing increased approximately 155.2% to about RMB 30.5 million for the year ended December 31, 2023, consistent with the increase in revenue from buyout TV drama licensing[154]. Expenses and Financial Management - Sales and marketing expenses increased by approximately 120.1% from about RMB 11 million for the year ended December 31, 2022, to about RMB 24 million for the current year, primarily due to increased promotional costs[163]. - Cost of sales decreased by approximately 14.7% from about RMB 212.3 million for the year ended December 31, 2022, to about RMB 181.1 million for the current year, mainly due to a reduction in costs related to self-produced television drama distribution and broadcasting rights[166]. - Administrative expenses decreased by approximately 9.7% from about RMB 25.3 million for the year ended December 31, 2022, to about RMB 22.8 million for the current year[176]. - Financing costs decreased by approximately 10.9% from about RMB 21.0 million for the year ended December 31, 2022, to about RMB 18.7 million for the current year, mainly due to a reduction in interest expenses on bank and other loans[181]. Assets and Liabilities - The net value of current assets as of December 31, 2023, was approximately RMB 25.3 million, down from approximately RMB 162.3 million as of December 31, 2022[184]. - Total bank and other loans amounted to approximately RMB 160.5 million as of December 31, 2023, down from approximately RMB 212.7 million as of December 31, 2022[195]. - The fair value of television rights expected to be recognized in profit or loss within one year is RMB 215,437,000 as of December 31, 2023, down from RMB 257,460,000 in 2022[103]. - The group’s total assets related to television rights as of December 31, 2023, were RMB 863,724,000, compared to RMB 837,714,000 in 2022, reflecting ongoing investment in content[114]. - The group's trade and other payables amounted to RMB 8,167,000 as of December 31, 2023, down from RMB 27,890,000 in 2022, indicating improved cash flow management[106]. Financial Ratios - The return on equity decreased from approximately -89.0% for the year ended December 31, 2022, to approximately -141.5% for the current year[197]. - The total asset return rate declined from approximately -32.2% for the year ended December 31, 2022, to approximately -20.2% for the current year[198]. - The current ratio decreased from approximately 1.3 times as of December 31, 2022, to approximately 1.0 times as of December 31, 2023[200].

Financial Performance - For the year ended December 31, 2023, revenue increased by approximately 390.7% to approximately RMB 113.4 million from approximately RMB 23.1 million for the year ended December 31, 2022[5]. - The gross loss decreased by approximately 64.2% to approximately RMB 67.7 million from a loss of approximately RMB 189.2 million for the previous year[5]. - Loss attributable to equity shareholders decreased by approximately 47.4% to approximately RMB 155.5 million from a loss of approximately RMB 295.7 million for the year ended December 31, 2022[5]. - Basic and diluted loss per share decreased by approximately 47.5% to approximately RMB 0.52 from a loss of approximately RMB 0.99 for the previous year[5]. - The company reported a total comprehensive loss attributable to equity shareholders of approximately RMB 154.0 million for the year ended December 31, 2023, compared to RMB 290.9 million for the previous year[6]. - The group reported a net loss of RMB 155,458,000 for the year ending December 31, 2023[18]. - The company reported a pre-tax loss of RMB (143,520,000) for 2023, which is an improvement from RMB (270,952,000) in 2022, indicating a reduction in losses by about 47%[36]. - The company's equity shareholders' loss for the year was approximately RMB 155.5 million, a reduction of about 47.4% compared to RMB 295.7 million in 2022[102]. Revenue Sources - Revenue from self-produced television drama distribution and broadcasting rights licensing increased to RMB 69.133 million in 2023, up from RMB 7.666 million in 2022, representing a growth of 803%[29]. - Revenue from buyout television drama distribution and broadcasting rights licensing rose to RMB 36.1 million in 2023, compared to RMB 14.96 million in 2022, marking an increase of 141%[29]. - Total revenue for the group reached RMB 113.445 million in 2023, significantly higher than RMB 23.121 million in 2022, reflecting a growth of 390%[29]. - Revenue from self-produced drama licensing increased by approximately 801.8% from about RMB 7.7 million in 2022 to RMB 69.1 million in 2023[66]. - Revenue from purchased drama licensing rose by approximately 141.3% from about RMB 15.0 million in 2022 to RMB 36.1 million in 2023[70]. - Revenue from joint financing arrangements and other income surged by approximately 1559.0% from about RMB 0.5 million in 2022 to about RMB 8.2 million in 2023[73]. Assets and Liabilities - Non-current assets decreased to RMB 10.5 million from RMB 27.2 million in the previous year[8]. - Current assets decreased to RMB 710.9 million from RMB 793.5 million in the previous year[8]. - Total liabilities increased to RMB 685.6 million from RMB 631.1 million in the previous year[8]. - The net assets attributable to equity shareholders decreased to RMB 32.9 million from RMB 186.9 million in the previous year[9]. - The group anticipates paying financial liabilities amounting to RMB 549,691,000 within one year[18]. - As of December 31, 2023, the group's cash and cash equivalents were only RMB 4,503,000[18]. - The group has recognized a total of RMB 35,683,000 in claims from creditors and lenders in its financial statements as of December 31, 2023[19]. - The carrying amount of short-term other loans overdue as of December 31, 2023, is RMB 108,151,000, indicating ongoing discussions with lenders regarding restructuring repayment terms[58]. Liquidity and Going Concern - The group faces liquidity pressure due to a slowdown in the entertainment industry and increased competition in the television drama market[19]. - The group’s ability to continue as a going concern is under significant doubt due to various uncertainties[20]. - The group’s directors believe that, assuming successful implementation of measures, it will have sufficient funds to meet liabilities due within at least twelve months[22]. - The group may need to adjust asset values and reclassify non-current assets and liabilities if it cannot continue as a going concern[22]. - The company has established an audit committee to oversee internal controls, risk management, and financial reporting, ensuring compliance with corporate governance standards[127]. - There are significant uncertainties regarding the company's ability to continue as a going concern due to potential delays in television production and licensing[131]. Operational Measures - The group has implemented several measures to alleviate liquidity pressure, including cash flow forecasting[22]. - The group plans to accelerate negotiations with streaming platforms to expedite the release of self-produced dramas, aiming to recognize revenue more quickly[23]. - The group is focusing on strengthening the collection of outstanding receivables related to the distribution and broadcasting rights of previous dramas[23]. - The group is continuing to negotiate with creditors to restructure existing payables and loan terms to alleviate liquidity pressure[23]. - The group has committed to providing ongoing financial support to ensure continued operations for at least twelve months from December 31, 2023[23]. - The group is exploring the sale of existing script rights to other production companies to advance production stages and final broadcasts[23]. Cost Management - The cost of sales decreased by approximately 14.7% from about RMB 212.3 million in 2022 to about RMB 181.1 million in 2023, mainly due to reduced costs associated with self-produced drama licensing[74]. - Employee costs decreased to RMB 9,612,000 in 2023 from RMB 13,899,000 in 2022, representing a reduction of about 30.5%[41]. - Financing costs for 2023 amounted to RMB 18,683,000, down from RMB 20,960,000 in 2022, reflecting a decrease of approximately 10.9%[40]. - Administrative expenses decreased by approximately 9.7% from RMB 25.3 million in 2022 to RMB 22.8 million in 2023[92]. Corporate Governance - The company has adhered to all applicable corporate governance codes and has implemented most of the recommended best practices during the year[125]. - The independent auditor, KPMG, confirmed that the consolidated financial statements reflect the group's financial position accurately as of December 31, 2023[129]. - The company will hold its annual general meeting on May 31, 2024, with a notice to be published in accordance with its articles of association and listing rules[135]. - The board has decided not to recommend any final dividend for the year ending December 31, 2023, consistent with the previous year[137].

Financial Performance - For the six months ended June 30, 2023, revenue increased by 352.1% to RMB 771 million from RMB 170 million in the same period of 2022[16]. - Gross profit for the same period rose by 6.9% to RMB 98 million compared to RMB 92 million in the previous year[16]. - Loss attributable to equity shareholders decreased by 48.3% to RMB 68 million from RMB 133 million year-on-year[16]. - Basic and diluted loss per share improved by 50.0% to RMB 0.02 from RMB 0.04 in the prior year[12]. - The total comprehensive loss attributable to equity shareholders for the period was RMB 5,053,000, compared to RMB 10,857,000 in the previous year, showing a decrease of 53.6%[73]. - The total interest expenses for the period were RMB 6,845,000, a decrease from RMB 7,916,000 in the prior year, reflecting a reduction of 13.5%[119]. - The company reported a significant increase in customer advances, totaling RMB 144,614,000 as of June 30, 2023, compared to RMB 34,266,000 at the end of 2022[122]. - The company reported a loss before tax of RMB 6,849,000, which is an improvement from a loss of RMB 13,273,000 in the same period last year, reflecting a reduction of 48.7%[73]. - The company reported a gross profit margin of approximately 12.7% for the six months ended June 30, 2023[91]. - The gross profit margin decreased from approximately 53.8% for the six months ended June 30, 2022, to about 12.7% for the same period in 2023, primarily due to lower margins from self-produced and purchased television dramas[180]. Operational Highlights - The company continues to streamline operations and accelerate negotiations for the airing of self-produced dramas, aiming to improve cash collection post-sales[56]. - The company aims to attract and retain talented individuals through its share option scheme, which is crucial for its performance and growth[71]. - The company has maintained a focus on enhancing its operational efficiency amidst a challenging macroeconomic environment[56]. - The company is focusing on expanding its market presence and developing new technologies in the TV production sector[139]. - The company plans to strengthen market research and expand its script and intellectual property reserves in response to enhanced copyright protection management in China[183]. - The company aims to continue enhancing its television drama production and distribution performance, further expanding its self-produced and purchased broadcasting rights business[196]. Debt and Financing - The company's financing costs decreased by 13.5% to RMB 68 million from RMB 79 million in the previous period due to lower effective interest rates[21]. - The debt-to-equity ratio improved slightly to approximately 112.7% from 113.8% year-on-year[28]. - The company received loans totaling RMB 8,000,000 from its controlling shareholder during the reporting period[110]. - The company’s financial liabilities measured at amortized cost amounted to RMB 129 million as of June 30, 2023, compared to RMB 125 million as of December 31, 2022[173]. - The company’s liabilities to joint investors for television drama joint investments increased to RMB 102.9 million as of June 30, 2023, from RMB 95.9 million as of December 31, 2022[173]. Employee and Corporate Governance - As of June 30, 2023, the company had 48 employees, an increase from 47 employees at the end of 2022[30]. - The company did not declare an interim dividend for the six months ended June 30, 2023[12]. - The company has not granted any share options since the adoption of the share option scheme, and as of June 30, 2023, there were no unexercised share options[71]. Revenue Breakdown - For the six months ended June 30, 2023, the total revenue from external customers was RMB 77,064,000, with contributions of RMB 61,313,000 from self-produced dramas and RMB 15,717,000 from purchased dramas[91]. - The revenue from self-produced television drama broadcasting rights increased by approximately 969.3% to about RMB 613 million for the six months ended June 30, 2023, compared to RMB 57 million in the same period of 2022[191]. - The revenue from acquired TV dramas was RMB 605,918,000, an increase of 13.8% from RMB 532,383,000 in the previous year[139]. - The company issued a total of 13 and 7 television dramas, respectively, for the six months ended June 30, 2022, and 2023, including both self-produced and purchased dramas[199]. Asset Management - Current assets net value as of June 30, 2023, was approximately RMB 1.58 billion, down from RMB 1.623 billion as of December 31, 2022[24]. - The total trade receivables increased to RMB 279,402,000 as of June 30, 2023, up from RMB 238,430,000 as of December 31, 2022, representing a growth of 17.2%[141]. - The cash and cash equivalents reported as of June 30, 2023, were RMB 3,190,000, a decrease of 68.1% from RMB 10,002,000 at the end of 2022[146]. - The total trade payables as of June 30, 2023, were RMB 244,633,000, a decrease of 3.4% from RMB 252,480,000 at the end of 2022[168]. - The impairment loss recorded was RMB 915,733,000 for the first half of 2023, compared to RMB 837,714,000 for the same period in 2022, indicating an increase of 9.3%[139]. - The company expects all trade receivables and notes receivable to be collected within one year[159]. - The company has no tax liabilities for the first half of 2023 due to tax incentives in special economic zones[151].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全 部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 Litian Pictures Holdings Limited 力 天 影 業 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：9958） 截 至2023年6月30日 止 六 個 月 中 期 業 績 公 告 財務摘要 • 截 至2023年6月30日 止 六 個 月 的 收 益 由2022年 同 期 的 人 民 幣17.0百 萬 元 增加352.1%至人民幣77.1百萬元。 • 截至2023年6月30日止六個月的毛利由2022年同期的人民幣9.2百萬元增 加6.9%至人民幣9.8百萬元。 • 截至2023年6月30日止六個月，本公司權益股東應佔虧損由2022年同期 的人民幣13.3百萬元減少48.3%至人民幣6.8百萬元。 • 截至2023年6月30日止六個月，每股基本及攤薄虧損由2022年同期的人 民幣0.04元減少50.0%至人民幣0.02元。 ...

Financial Performance - The company's revenue for the year ended December 31, 2022, was RMB 23,121 thousand, a decrease of 92.4% compared to RMB 304,958 thousand in 2021[37]. - The gross loss for 2022 was RMB (189,223) thousand, representing a 280.0% increase from RMB (49,791) thousand in 2021[37]. - The loss attributable to equity shareholders for 2022 was RMB (295,658) thousand, a 293.6% increase from RMB (75,123) thousand in 2021[37]. - The basic and diluted loss per share for 2022 was RMB (0.99), compared to RMB (0.25) in 2021, marking a 296.0% increase[37]. - The company's revenue for the year ended December 31, 2022, was RMB 23.1 million, a decrease of 92.4% compared to RMB 305.0 million for the year ended December 31, 2021[49]. - The loss attributable to equity shareholders for the year was RMB 189.2 million, an increase of 293.6% year-on-year[49]. - Revenue from self-produced TV drama distribution and broadcasting rights increased by approximately RMB 4.8 million, but this was insufficient to offset the significant decrease in revenue from bought-out TV drama distribution and broadcasting rights, which fell by approximately RMB 275.1 million[49][57]. - The return on equity decreased from approximately -14.5% for the year ended December 31, 2021, to approximately -89.0% for the current year[61]. - The total asset return rate declined from approximately -6.9% for the year ended December 31, 2021, to approximately -32.2% for the current year[62]. - The total revenue from self-produced and bought-out TV drama distribution and broadcasting rights recorded a significant decline for the year ended December 31, 2022[49][57]. Business Strategy and Development - The company aims to expand its self-produced drama broadcasting rights business and diversify its drama products by investing in various types and themes of television dramas[40]. - In 2023, the company plans to collaborate closely with third-party copyright holders to acquire more broadcasting rights for different genres of dramas[45]. - The company remains confident in its future business development despite the adverse effects of COVID-19 on the industry and the overall competitive environment[55]. - The company will continue to implement the business strategies outlined in its prospectus[55]. - The company is focused on business development strategies that include market expansion and new product development[50]. - The company acknowledges the impact of COVID-19 on operations but remains focused on expanding its broadcasting rights for purchased and self-produced dramas[44]. Production and Content - The company successfully licensed the first round of broadcasting rights for the drama "Blue Flame Assault" during the year[39]. - The company has issued a total of 29 and 16 television dramas in 2021 and 2022, respectively, primarily consisting of self-produced dramas and those purchased from third-party copyright holders[25]. - The company has invested in and produced several successful television dramas, including "The Heroic Legend of the Dragon" and "Guerilla Heroes," achieving good distribution results in major domestic TV markets such as Shanghai and Beijing[163]. - In 2022, the company completed filming the self-produced drama "She Has Secrets," while the self-produced drama "Tiger Team" was sold multiple times across various channels from 2020 to 2022[163]. - The company has successfully released popular purchased dramas such as "Dreams on This Side of the Sea" and "Undercover Returns," contributing to its market presence[163]. Intellectual Property and Compliance - The company emphasizes the importance of intellectual property protection and has established a management system to encourage innovation and technology development[140]. - The company has established a clear process for the submission and review of intellectual property, promoting a culture of innovation within its departments[140]. - The company has implemented a strict review process for television dramas to ensure compliance with national regulations, enhancing the integrity of its production[138]. - The independent non-executive directors have reviewed compliance with non-competition commitments under the contractual arrangements[117]. - The company guarantees the accuracy and completeness of the report's content, ensuring no false statements or significant omissions[127]. Employee Management and Social Responsibility - The total number of employees in 2022 was 47, a decrease from 70 in 2021, representing a reduction of approximately 32.86% in total employee count[171]. - The employee turnover rate increased significantly to 32.86% in 2022 from 14.29% in 2021, with male turnover rising to 40% and female turnover to 60%[171]. - The number of employees aged 30 and below decreased from 31 in 2021 to 19 in 2022, indicating a shift in the age demographics of the workforce[171]. - The company has implemented a recruitment management system to ensure the hiring of qualified personnel and strengthen talent development[169]. - The company provides various training programs for employees, including new employee training and skills training, to enhance workforce capabilities[175]. - The company emphasizes employee rights protection as a core social responsibility, providing reasonable compensation and a discrimination-free work environment[195]. - The company has a focus on health and safety, aiming to reduce workplace accidents and promote employee well-being[178]. - During the pandemic, the company adopted flexible working arrangements, including remote work and regular disinfection of public areas to ensure employee safety[200]. Governance and ESG Commitment - The board of directors is responsible for assessing and determining the risks related to environmental, social, and governance matters[127]. - The company is committed to ESG (Environmental, Social, and Governance) management and has identified key issues for stakeholder engagement[162]. - Quantitative data regarding environmental and social aspects will be presented in the ESG report with comparative data in the future[124].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全 部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 Litian Pictures Holdings Limited 力 天 影 業 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：9958） 截 至2022年12月31日 止 年 度 年 度 業 績 公 告、建 議 修 訂 組 織 章 程 細 則 及 建 議 採 納 經 修 訂 及 重 述 之 組 織 章 程 細 則 財務摘要 • 截至2022年12月31日止年度的收益由截至2021年12月31日止年度的約人 民幣305.0百萬元減少約92.4%至約人民幣23.1百萬元。 • 截至2022年12月31日止年度的毛損由截至2021年12月31日止年度的虧損 約人民幣49.8百萬元增加約280.0%至約人民幣189.2百萬元。 • 截至2022年12月31日止年度，本公司權益股東應佔虧損由截至2021年12 月31日止年度的虧損約人民幣75.1百萬元增加約293.6%至約人民幣295.7 ...

Financial Performance - The company reported a revenue of RMB 304.96 million for the year ended December 31, 2021, a decrease of 33.0% compared to RMB 455.27 million in 2020[8]. - The gross loss for the year was RMB 49.79 million, compared to a gross profit of RMB 125.88 million in the previous year, representing a decline of 139.6%[8]. - The loss attributable to equity shareholders was RMB 75.12 million, a significant drop of 207.2% from a profit of RMB 70.08 million in 2020[8]. - The adjusted loss attributable to equity shareholders, excluding listing expenses, was also RMB 75.12 million, down 187.5% from RMB 85.84 million in 2020[8]. - The basic and diluted loss per share was RMB 0.25, compared to earnings of RMB 0.26 per share in the previous year, reflecting a decrease of 196.2%[8]. - Total revenue decreased by approximately 33.0% from RMB 455.3 million in 2020 to RMB 305.0 million in 2021, primarily due to a reduction of RMB 152.2 million in revenue from acquired drama rights[24]. - Revenue from self-produced drama rights decreased by approximately 71.4% from RMB 10.2 million in 2020 to RMB 2.9 million in 2021, with no self-produced dramas licensed for first-round broadcasting on satellite TV in 2021[25]. - Revenue from acquired drama rights was RMB 290.1 million in 2021, down from RMB 442.3 million in 2020[24]. - Other income decreased by approximately 78.9% from about RMB 10.7 million for the year ended December 31, 2020, to approximately RMB 2.3 million for the year ended December 31, 2021, mainly due to a reduction in government subsidies[43]. Costs and Expenses - Total sales costs increased by approximately 7.7% from RMB 329.4 million in 2020 to RMB 354.7 million in 2021, mainly due to increased costs in self-produced drama rights[32]. - Costs for self-produced drama rights increased by approximately 293.8% from RMB 16.8 million in 2020 to RMB 66.3 million in 2021[33]. - Costs for acquired drama rights decreased by approximately 10.0% from RMB 310.8 million in 2020 to RMB 279.6 million in 2021[34]. - Sales and marketing expenses increased by approximately 119.8% from about RMB 1.2 million for the year ended December 31, 2020, to approximately RMB 2.6 million for the year ended December 31, 2021[46]. - Administrative expenses increased by approximately 7.3% from about RMB 24.6 million for the year ended December 31, 2020, to approximately RMB 26.4 million for the year ended December 31, 2021[50]. Assets and Liabilities - As of December 31, 2021, the company's bank deposits and cash on hand were approximately RMB 856 million, down from approximately RMB 1,857 million as of December 31, 2020[61]. - The company's net current assets as of December 31, 2021, were approximately RMB 4,253 million, compared to approximately RMB 5,310 million as of December 31, 2020[61]. - The total amount of bank and other loans as of December 31, 2021, was approximately RMB 1,282 million, an increase from approximately RMB 792 million as of December 31, 2020[61]. - The current ratio decreased from approximately 1.9 times as of December 31, 2020, to approximately 1.8 times as of December 31, 2021[65]. - The debt-to-equity ratio increased from approximately 14.3% as of December 31, 2020, to approximately 26.8% as of December 31, 2021[68]. Corporate Governance - The company emphasizes the importance of independent directors in governance and strategic oversight[117]. - The board includes members with experience in various industries, enhancing the company's strategic decision-making capabilities[115]. - The company is committed to maintaining high standards of corporate governance through its independent board members[114]. - The board consists of nine directors, including three executive directors, three non-executive directors, and three independent non-executive directors, with no changes in composition during the year[145]. - All independent non-executive directors have confirmed their independence according to the listing rules, ensuring a balanced board structure[147]. - The company has established a nomination committee to review the board's structure and assess the independence of non-executive directors[169]. - The audit committee is responsible for overseeing financial reporting procedures and risk management systems[163]. - The remuneration committee's main responsibility is to propose overall compensation policies for all directors and senior management[164]. - The company has a policy to seek independent professional advice for directors when necessary, with costs borne by the company[158]. Future Plans and Strategies - The company aims to enhance its television production and distribution performance by expanding its self-produced drama licensing business and diversifying its drama offerings[13]. - The company plans to strengthen market research and insights into industry trends to increase its script and intellectual property reserves in response to enhanced copyright protection in China[13]. - The company plans to collaborate closely with third-party rights holders to acquire more diverse drama rights to meet customer preferences[21]. - The management remains confident in the future development of the business despite uncertainties caused by the COVID-19 pandemic[21]. - The company aims to continue implementing its business strategies as outlined in its prospectus[21]. Use of Proceeds - The net proceeds from the global offering in 2020 amounted to approximately HKD 152 million after deducting underwriting commissions and related expenses[78]. - The company has utilized approximately HKD 76.4 million, accounting for about 50.3% of the net proceeds from the global offering as of December 31, 2021[79]. - The planned use of net proceeds includes 50% for producing self-made TV dramas, with HKD 76.0 million allocated, of which HKD 38.6 million has been used[79]. - 37.5% of the proceeds, amounting to HKD 57.0 million, is designated for acquiring rights from third-party copyright holders, with HKD 31.5 million already utilized[79]. - The company plans to hire more experienced professionals and provide employee training, allocating 7.5% of the proceeds (HKD 11.4 million), with HKD 2.9 million already spent[79]. - 5% of the proceeds (HKD 7.6 million) is earmarked for working capital and general corporate purposes, with HKD 3.4 million already used[79]. - The total net proceeds amount to HKD 152.0 million, with HKD 75.6 million remaining unutilized as of December 31, 2021[79]. - The company expects to complete the planned uses of proceeds by December 2023[79]. Board Composition and Attendance - The board consists of 2 female directors and 7 male directors, demonstrating a balanced knowledge and skill set[172]. - The age range of the board members is between 39 and 58 years[172]. - The board will review the composition of the board annually to ensure diversity in skills, experience, and perspectives[172]. - The board has established three committees to oversee specific areas, including audit, remuneration, and nomination, to enhance operational efficiency[142]. - The board has the discretion to propose any dividends based on the company's financial performance and other relevant factors[181]. - The board's attendance record shows full participation in meetings, with all executive directors attending 100% of board meetings[153].