[Report Overview](index=1&type=section&id=Report%20Overview) This section provides assurances regarding the report's accuracy and completeness, along with a statement on its unaudited status [Important Notice](index=1&type=section&id=Important%20Notice) This report includes assurances from the Board of Directors, Supervisory Board, and senior management regarding the truthfulness, accuracy, and completeness of the disclosed information, and states that this quarterly report is unaudited - The company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report content[2](index=2&type=chunk)[3](index=3&type=chunk) - The company's principal officer, head of accounting, and head of accounting department declare the financial information to be true, accurate, and complete[3](index=3&type=chunk) - This first quarterly report is unaudited[4](index=4&type=chunk) [Key Financial Data](index=2&type=section&id=Key%20Financial%20Data) This section presents the company's key financial performance and position indicators for the reporting period [Key Accounting Data and Financial Indicators](index=2&type=section&id=(%E4%B8%80)%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In Q1 2023, the company's operating revenue decreased by **16.12%** year-on-year, but net loss attributable to shareholders significantly narrowed by **61.51%**, while total assets and equity attributable to shareholders both declined 2023 Q1 Key Financial Indicators | Indicator | Current Period (CNY) | Prior Year Period (CNY) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2.92 billion | 3.48 billion | -16.12% | | Net Profit Attributable to Shareholders of Listed Company | -112.84 million | -293.14 million | 61.51% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains and Losses) | -186.27 million | -99.31 million | -87.56% | | Net Cash Flow from Operating Activities | -242.09 million | -187.15 million | -29.36% | | Basic Earnings Per Share (CNY/share) | -0.05 | -0.13 | 61.54% | | Diluted Earnings Per Share (CNY/share) | -0.05 | -0.13 | 61.54% | | Weighted Average Return on Net Assets | -15.87% | -20.74% | 4.87% | | **Period-End Indicator** | **End of Current Period (CNY)** | **End of Prior Year (CNY)** | **Change from Year-End (%)** | | Total Assets | 8.88 billion | 9.30 billion | -4.50% | | Total Equity Attributable to Shareholders of Listed Company | 672.18 million | 750.21 million | -10.40% | [Non-Recurring Gains and Losses Items and Amounts](index=2&type=section&id=(%E4%BA%8C)%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) Total non-recurring gains and losses for this period amounted to **73.43 million CNY**, primarily from fair value changes in financial assets held for trading 2023 Q1 Non-Recurring Gains and Losses Items | Item | Current Period Amount (CNY) | | :--- | :--- | | Gains/Losses on Disposal of Non-Current Assets | 64,468.10 | | Government Grants Included in Current Profit/Loss | 977,424.24 | | Gains/Losses from Fair Value Changes and Disposal of Financial Assets/Liabilities Held for Trading | 84.93 million | | Reversal of Impairment Provisions for Receivables Subject to Separate Impairment Testing | 1.36 million | | Other Non-Operating Income and Expenses Apart from the Above | -13.86 million | | Less: Income Tax Impact | 36,382.50 | | Minority Interest Impact (After Tax) | 11,243.64 | | **Total** | **73.43 million** | - The company does not classify non-recurring gains and losses as recurring gains and losses[8](index=8&type=chunk) [Analysis of Changes in Key Accounting Data and Financial Indicators](index=3&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%20Analysis%20of%20Changes%20in%20Key%20Accounting%20Data%20and%20Financial%20Indicators) Financial assets held for trading increased by **20.65%**, contract liabilities decreased by **31.07%**, and fair value change gains surged **147.10%** year-on-year, driven by financial asset stock price changes Key Accounting Data and Financial Indicators Changes | Item | Amount from Year-Start to Period-End (CNY) | Prior Year Period Amount (CNY) | Change Rate | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 476.16 million | 394.67 million | 20.65% | Primarily due to fair value changes in financial assets held for trading in the current period | | Contract Liabilities | 165.76 million | 240.49 million | -31.07% | Recovery of contract liabilities | | Gains from Fair Value Changes | 81.50 million | -173.03 million | 147.10% | Impacted by stock price fluctuations of financial assets held for trading | [Shareholder Information](index=3&type=section&id=Shareholder%20Information) This section details the company's shareholder structure, including common and preferred shareholder holdings [Common Shareholder Holdings](index=3&type=section&id=(%E4%B8%80)%20Total%20Number%20of%20Common%20Shareholders%20and%20Number%20of%20Preferred%20Shareholders%20with%20Restored%20Voting%20Rights%20and%20Top%20Ten%20Shareholders'%20Shareholding%20Information) As of the end of the reporting period, the company had **137,177** common shareholders; among the top ten, He Zhitao, the actual controller, held **13.24%** of shares, with most pledged and frozen, and some shareholders held shares via margin accounts - Total common shareholders at the end of the reporting period were **137,177** households[11](index=11&type=chunk) Top 10 Common Shareholders' Shareholding Information | Shareholder Name | Shareholder Type | Shareholding Percentage (%) | Number of Shares Held (shares) | Number of Restricted Shares Held (shares) | Share Status | Quantity (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | He Zhitao | Domestic Natural Person | 13.24% | 288.33 million | 216.25 million | Pledged | 287.51 million | | | | | | | Frozen | 288.33 million | | Wang Yilin | Domestic Natural Person | 4.11% | 89.57 million | 0.00 | None | None | | Shenzhen Zhongzhi Industrial Investment M&A Investment Partnership (Limited Partnership) | Domestic Non-State-Owned Legal Person | 3.07% | 66.77 million | 0.00 | Frozen | 66.77 million | | Shanghai Panyao Asset Management Co., Ltd. - Panyao Yuanyue Customized No. 1 Private Securities Investment Fund | Other | 1.37% | 29.81 million | 0.00 | None | None | | Ning Bo | Domestic Natural Person | 0.95% | 20.75 million | 0.00 | None | None | | Chen Li | Domestic Natural Person | 0.73% | 15.90 million | 0.00 | Pledged | 3.80 million | | Shi Junsheng | Domestic Natural Person | 0.51% | 11.08 million | 0.00 | None | None | | Qian Jiamao | Domestic Natural Person | 0.50% | 10.90 million | 0.00 | None | None | | Shi Xueqin | Domestic Natural Person | 0.50% | 10.87 million | 0.00 | None | None | | Shanghai Yuanxi Private Equity Fund Management Co., Ltd. - Yuanxi Hehe No. 2 Private Securities Investment Fund | Other | 0.49% | 10.57 million | 0.00 | None | None | - He Zhitao, the actual controller, has most of his shareholdings pledged and frozen[11](index=11&type=chunk)[12](index=12&type=chunk) - Some top 10 shareholders hold shares through margin trading and securities lending accounts, including Shanghai Panyao Asset Management Co., Ltd., Ning Bo, Shi Xueqin, and Shanghai Yuanxi Private Equity Fund Management Co., Ltd[12](index=12&type=chunk) [Preferred Shareholder Holdings](index=4&type=section&id=(%E4%BA%8C)%20Total%20Number%20of%20Preferred%20Shareholders%20and%20Top%2010%20Preferred%20Shareholders'%20Shareholding%20Information) The company has no preferred shareholders - The company has no preferred shareholders[13](index=13&type=chunk) [Other Significant Matters](index=4&type=section&id=Other%20Significant%20Matters) This section highlights other material events or disclosures relevant to the reporting period [Overdue Bank Loans](index=5&type=section&id=Overdue%20Bank%20Loans) Some of the company's bank loans are overdue, with details on related debts and progress fully disclosed in the 'Announcement on Reply to SZSE Concern Letter' on April 19, 2023 - Some of the company's bank loans are overdue[14](index=14&type=chunk) - Details of bank debts and their progress were fully disclosed in the 'Announcement on Reply to SZ

Group 1: Company Overview and Strategy - The company introduced its basic situation and the significant asset restructuring process in 2014 [1] - The company aims to enhance monetization rates and increase ARPU through various strategies, including the release of smart hardware and acquisitions of quality gaming companies [1][2] Group 2: Smart Hardware Development - The company has launched its first smart hardware, "Lianluo mini," and the first-generation virtual reality retinal glasses, "Glyph," which are already available for pre-order [1] - Future smart hardware releases will focus on smart home and smart travel sectors to expand entry scale and enhance brand recognition [1][2] Group 3: Market Response and Partnerships - To address the rapid updates in the smartphone market, the company plans to strengthen cooperation with existing smartphone manufacturers and designers to develop "Lianluo OS" at low cost and high quality [2] - The company will enhance offline channel construction through partnerships with provincial smartphone distributors to create a closed-loop from factory to sales, increasing user stickiness [2] Group 4: Virtual Reality and Smart Home Initiatives - The company will deepen cooperation with Avegant to promote "Glyph" virtual reality glasses in the Greater China region and invest in virtual reality content to improve user experience [2] - Future smart home initiatives will be based on "Lianluo OS," aiming to develop a smart home entry point and enhance brand recognition [2] Group 5: Mergers and Acquisitions Strategy - The company recognizes that external mergers and acquisitions will become a norm in the internet industry and will align its investment direction with strategic development [2][3] - Since 2015, the company has invested in several gaming and channel companies while closely monitoring quality targets in the industry [3]

Group 1: Company Restructuring - The original shareholders have completely exited, and the restructuring involves a reverse merger with Digital Tianyu, where all assets and liabilities will be swapped with the new shareholders' assets [1] - The restructuring plan was approved by the board on March 3, 2014, with subsequent approvals and disclosures occurring on May 9 and May 28, 2014 [2] Group 2: Financial Performance - In 2013, Digital Tianyu's total revenue was CNY 179 million, with domestic business contributing CNY 112 million and overseas business CNY 59 million [2] - China Unicom accounted for 39.75% of Digital Tianyu's total revenue in 2013, indicating a significant reliance on this client [2] Group 3: Future Business Directions - Digital Tianyu aims to expand its partnerships beyond China Unicom, targeting various mobile terminal manufacturers and third-party payment companies [2] - The company plans to enhance its mobile internet distribution and operation platform, focusing on self-owned and third-party product distribution [2] Group 4: Management Changes - If the restructuring is successful, the board will undergo re-election, and the original controlling shareholders' influence will be reassessed [2]

Group 1: Company Overview and Strategic Moves - The company introduced its significant asset restructuring process and the basic situation of the injected assets, specifically mentioning the digital domain [1] - The launch of the smart hardware product "Lianluo mini" is a key milestone for the company, marking its transition from a platform developer to a terminal product provider [2] - The partnership with LianTong to promote the "Lianluo mini" product is expected to enhance the company's brand image and profitability [2] Group 2: Financial Investments and Collaborations - Digital Tianyu (Hong Kong) Technology Co., Ltd. invested $15 million in Avegant Corp. to gain exclusive distribution rights for the first-generation virtual reality retinal display, Glygh, in China [2] - The company anticipates significant market potential for the Glygh product and plans to maintain deep collaboration with Avegant [2] Group 3: User Expansion and Revenue Growth - The company reported good user expansion for its Lianluo OS in 2015, with continuous growth in new users [2] - From 2014 to 2015, the company significantly increased the value per user through game development, agency operations, and self-operated applications, leading to substantial revenue and profit growth [2]

Company Overview - The company primarily develops software products based on the Android operating system, transitioning from its earlier focus on Symbian systems. In 2014, the active user base of the Liaoliao OS reached 83 million, with an additional 53 million users added in the first half of 2015 [1][2]. Business Model - The company's revenue is generated through its Liaoliao OS applications, telecom services, game partnerships, and other business operations, leveraging user payments for monetization [2]. Strategic Development - In 2015, the company explored new business areas such as gaming, e-commerce, and advertising, aiming to enhance user ARPU (Average Revenue Per User) and establish a solid foundation for 2016-2017 [2]. - The company plans to increase investments in smart hardware, particularly in the Internet of Things (IoT), as smartphone growth is expected to slow down in the coming years [2]. Partnerships and Investments - A strategic cooperation agreement has been signed with Haier to enter the smart medical field, and the company has made a 21% investment in the US company Avegant, becoming its largest single shareholder [2][3]. - The company is also working on smart home products aimed at the existing appliance market, with plans to launch these products in the first half of the year [5]. Game Business Strategy - The company adopts a platform-based approach to gaming, focusing on user testing and collaboration with game developers to create high-quality game IPs and enhance profitability through partnerships [3]. Market Positioning - The Liaoliao OS is competitive due to its low memory consumption and stable performance, making it attractive for small and medium-sized manufacturers who prefer to pre-install the OS rather than develop their own [4]. - The company has opened its OS for free to all mobile manufacturers, returning all pre-installation channel revenue to them, creating a significant competitive advantage [4]. Future Outlook - The company anticipates a rise in user growth in Southeast Asia, Africa, and Latin America, outpacing domestic growth [4]. - The company is also exploring investment opportunities in smart medical devices, particularly through its interest in Dehaier, which specializes in sleep therapy management [6].

Group 1: Company Overview - Liaison Interactive integrates various companies along the industry chain to enhance resources in channels, marketing, and R&D, focusing on e-commerce, media, and smart hardware businesses [2] - The company aims to explore business upgrades based on three main sectors: Liaison E-commerce, Liaison Media, and Liaison Smart [2] Group 2: Business Segments - **Liaison E-commerce**: Focuses on NEWEGG platform for cross-border e-commerce, with financial services as auxiliary and industry integration [2] - **Liaison Media**: Positioned in the media sector, combining film, gaming, live streaming, and advertising for comprehensive revenue [2] - **Liaison Smart**: Concentrates on smart hardware through investment and incubation, primarily in smart medical, wearable devices, and smart home products [2] Group 3: Strategic Insights - The management strategy for NEWEGG emphasizes leveraging existing teams for operational efficiency, supported by technology and capital [2] - Future cross-border e-commerce will not use the NEWEGG brand to avoid confusion, aiming for a full category of products [3] - The company recognizes the growing market for smart hardware and has invested in core technologies and marketing channels since 2015 [3] Group 4: Financial Considerations - E-commerce is not purely profit-driven; it focuses on market share and channel advantages, with valuation based on GMV and revenue [3] - The smart hardware segment is in the investment phase, with expected profitability growth as product variety increases [4] - The media segment is expected to maintain sustainable profitability, contributing positively to overall company valuation [4]

Financial Performance - The company's operating revenue for 2021 was ¥16,548,701,107.51, representing a 2.43% increase compared to ¥16,155,575,160.96 in 2020[18]. - The net profit attributable to shareholders was -¥395,509,864.58, a decrease of 514.38% from ¥95,447,170.38 in the previous year[19]. - The net cash flow from operating activities was -¥92,336,254.27, down 110.63% from ¥868,943,557.95 in 2020[19]. - The basic earnings per share were -¥0.18, a decline of 550.00% compared to ¥0.040 in 2020[19]. - Total assets at the end of 2021 were ¥10,750,499,925.24, an increase of 11.49% from ¥9,642,621,099.19 at the end of 2020[19]. - The net assets attributable to shareholders decreased by 23.36% to ¥1,544,626,064.62 from ¥2,015,399,825.85 in 2020[19]. - The company reported a significant decline in net profit, indicating uncertainty in its ability to continue as a going concern[19]. - The company reported a non-operating loss of CNY -6.40 million in 2021, compared to a gain of CNY 312.99 million in 2020, indicating a significant decline in non-recurring income[27]. - The company received government subsidies amounting to CNY 14.01 million in 2021, down from CNY 17.77 million in 2020, reflecting a decrease in support[26]. Revenue Breakdown - E-commerce and distribution revenue accounted for ¥15,342,681,873.40, representing 92.71% of total revenue, with a year-on-year growth of 5.06%[53]. - Cultural media revenue decreased by 20.37% to ¥1,168,206,348.56, down from ¥1,467,018,894.89 in 2020[53]. - Internet financial services revenue plummeted by 91.52% to ¥3,974,635.93, compared to ¥46,866,526.43 in the previous year[53]. - Domestic revenue fell by 20.94% to ¥1,234,773,493.19, while overseas revenue increased by 4.94% to ¥15,313,927,614.32, making up 92.54% of total revenue[53]. Market Opportunities - The global retail e-commerce market is projected to reach CNY 10.1 trillion by 2026, indicating a significant growth opportunity for the company[31]. - North America's B2B e-commerce market is expected to grow from CNY 2.1 trillion in 2021 to CNY 5.2 trillion by 2026, with a compound annual growth rate of 20.2%[32]. - The IT/CE retail e-commerce market in North America is anticipated to grow at a compound annual growth rate of 24.7% from 2019 to 2026, driven by increased online spending on IT/CE products[33]. E-commerce Operations - Newegg's B2C business generated a Gross Merchandise Volume (GMV) of $1.7 billion for the nine months ended September 30, 2021, compared to $1.6 billion for the same period in 2020, reflecting a growth of approximately 6.25%[42]. - The B2B segment produced a GMV of $389.7 million for the nine months ended September 30, 2021, up from $227.2 million in the same period of 2020, indicating a growth of approximately 71.6%[43]. - Newegg's platform has over 39.6 million registered users, providing significant growth potential for future sales[48]. - The company's e-commerce business achieved revenue of $2.376 billion in 2021, a year-on-year increase of 12.36%, and a net profit of $36.26 million, up 19.18%[50]. Strategic Initiatives - The company plans to raise $300 million through public financing for the development of Newegg and its own operations[50]. - The company is actively developing new smart hardware projects, building on its long-term technology and brand advantages[40]. - The company aims to enhance its e-commerce ecosystem and customer value recognition through continuous market expansion and resource integration[39]. - The company is exploring various strategies, including asset disposal and financing through subsidiaries, to address its debt issues[77]. Debt and Financial Management - The company is actively communicating with creditors to resolve overdue debts and has reached debt settlement and extension agreements with multiple banks[77]. - The company is focusing on resolving outstanding legal matters to enhance its financial stability and operational efficiency[153]. - The company is actively managing its litigation and debt repayment strategies to mitigate financial risks[152]. Corporate Governance - The company maintains independence from its controlling shareholder in terms of business operations, personnel, assets, and financial management[97]. - The company has committed to improving corporate governance and optimizing management processes to enhance operational efficiency[89]. - The company has implemented a competitive compensation policy to maintain employee cohesion and motivation[122]. Legal and Compliance Issues - The company is involved in a lawsuit with China Digital Culture, with a disputed amount of ¥30,248.5 million, which has not yet resulted in a judgment[151]. - The company has a loan dispute case with Huaxia Bank, involving an amount of ¥4,805.82 million, which has entered the enforcement stage[151]. - The company has confirmed that it has no outstanding legal issues or restrictions related to the equity interests being transacted[139]. Shareholder Information - The actual controller, He Zhitiao, holds 384,355,987 shares, accounting for 17.66% of the total share capital[157]. - The company reported a guarantee amount of 23,500,000 for Beijing Baiwei Borui Trading Co., Ltd., with actual guarantees amounting to 6,000,000[171]. - The company has not reported any major guarantees outside of those listed[170].

Financial Performance - The company's operating revenue for 2019 was ¥12,468,258,488.14, a decrease of 10.87% compared to ¥13,989,142,419.92 in 2018[17] - The net profit attributable to shareholders for 2019 was -¥3,235,436,386.23, representing a decline of 383.83% from -¥668,712,491.03 in 2018[17] - The net profit attributable to shareholders after deducting non-recurring gains and losses was -¥3,205,678,288.98, a decrease of 98.06% compared to -¥1,618,505,981.73 in 2018[17] - Basic earnings per share for 2019 were -1.49 CNY, a decrease of 380.65% compared to -0.31 CNY in 2018[18] - Total assets decreased by 36.50% to 8,885,346,870.40 CNY at the end of 2019 from 13,991,920,835.83 CNY at the end of 2018[18] - Net assets attributable to shareholders decreased by 64.71% to 1,841,443,773.47 CNY at the end of 2019 from 5,218,269,625.90 CNY at the end of 2018[18] - Total revenue for 2019 was approximately CNY 10.66 billion, a decrease of 22.38% compared to 2018[56] - E-commerce sales volume decreased by 21.79% to CNY 10.04 billion, while production volume fell by 21.88% to CNY 9.01 billion[58] - The cost of e-commerce and distribution revenue was CNY 9.18 billion, accounting for 87.45% of total operating costs, down 22.11% year-over-year[59] Cash Flow and Dividends - The net cash flow from operating activities improved to -¥103,077,293.68, a 74.23% increase from -¥399,933,656.19 in 2018[17] - The company plans not to distribute cash dividends or issue bonus shares[6] - The company reported a significant decrease in investment amounting to CNY 207,820,000, a 72.65% decline compared to the previous year[73] - The total amount of cash and cash equivalents decreased by 76.01% year-over-year, resulting in a net decrease of CNY 215.41 million[65] Operational Challenges - The company has faced significant internal control deficiencies as noted in the self-assessment report[4] - The company has experienced consecutive losses for two years, which may lead to delisting risk warnings as per Shenzhen Stock Exchange regulations[5] - The independent director expressed a qualified opinion on the audit report due to significant amounts affecting the 2019 performance and asset status[3] - The company reported a goodwill impairment of CNY 81,822,680 due to intensified US-China trade friction and competitive pressures in the overseas e-commerce market[48] - The outdoor advertising subsidiary, Di'an Shuangying, faced a negative growth for the first time, leading to an impairment of CNY 48,015,840[48] Business Segments and Growth Areas - The company has diversified into four main sectors: cross-border e-commerce, smart hardware, cultural media, and finance[16] - The company’s main business includes cross-border e-commerce and trade distribution, with Newegg as a core asset, offering over 39 million SKUs across 2,000 categories[28] - Newegg's third-party marketplace business is a key growth area, leveraging over 40 million registered users to provide comprehensive e-commerce solutions[29] - The film and television segment produced notable projects, including the mythological drama "Fengshen Yanyi," which premiered on Hunan TV and various streaming platforms[30] Market Trends and Competition - The global retail e-commerce GMV grew from $1.16 trillion in 2014 to $2.86 trillion in 2018, with a CAGR of 25.2%[32] - The global cross-border retail e-commerce market size increased from $160.4 billion in 2014 to $582.6 billion in 2018, with a CAGR of 38.0%[33] - The competitive landscape in the global e-commerce market is shifting towards regional competition, with major players focusing on niche markets[83] - The company is facing risks related to market competition, particularly from new industry entrants that may impact sales volume and customer retention[86] Strategic Initiatives and Future Outlook - The company plans to focus on turning losses into profits in 2020, improving internal controls, and enhancing operational efficiency[49] - The company is investing 200 million RMB in R&D for new technologies aimed at improving service efficiency and user experience[100] - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 25% and aiming to reach 1.875 billion RMB[102] - New product launches are expected to contribute an additional 300 million RMB in revenue, with a focus on enhancing user engagement and retention[103] - The company is expanding its market presence in Southeast Asia, targeting a 10% market share within the next two years[104] Governance and Compliance - The company has established a strong governance structure with independent directors and a supervisory board[171] - The management team includes individuals with extensive experience in finance and technology sectors, enhancing the company's strategic capabilities[172] - The company emphasizes performance-based remuneration for its executives, aligning their interests with company performance[176] - The company received a warning letter from the Zhejiang Securities Regulatory Bureau in March 2020 regarding compliance issues[175] Shareholder and Management Changes - The total number of shares increased from 2,177,149,675 to 2,177,149,965, with a slight increase in the proportion of limited shares from 19.53% to 19.57%[147] - The controlling shareholder, He Zhitang, increased his holdings by 24.3 million shares, accounting for 1.12% of the total share capital, with a total investment of RMB 103.05 million[147] - The company has maintained a stable leadership team, with most members serving in their roles since at least 2018[167] - The total number of shareholders at the end of the reporting period was 138,225, an increase from 132,646 at the end of the previous month[153] Employee and Workforce Management - The total number of employees in the company is 2,147, with 112 in the parent company and 2,035 in major subsidiaries[181] - The company has a professional composition of 587 production personnel, 453 sales personnel, 525 technical personnel, 113 financial personnel, and 469 administrative personnel[181] - The company adheres to competitive salary policies to maintain employee cohesion and motivation, complying with national labor laws[183] - Training programs in 2019 included work skills, safety, quality, and management, utilizing various training methods[184]