BEIJING, March 14, 2024 /PRNewswire/ -- Kuke Music Holding Limited ("Kuke" or the "Company") (NYSE: KUKE), a leading classical music service platform in China, recently disclosed a strategic organizational adjustment, including the establishment of a dedicated Technical Research and Development Center in Guangzhou. This strategic initiative is designed to enhance the collaborative efforts in R&D for technological integration between Kuke and its global strategic partner, Naxos Music Group ("Naxos"). The Com ...

Core Insights - Kuke Music Holding Limited plans to enter the classical music car connectivity market in Q2 2024 with a new application aimed at enhancing the music experience for classical music enthusiasts [1][3] - The application will be integrated into various vehicle brands' onboard systems, providing a user-friendly interface and features such as voice control and touchscreen operation for seamless music playback [2][3] - The application will offer a wide selection of classical music tracks, live concert recordings, and exclusive content, along with a personalized recommendation system based on user preferences [2][3] Company Overview - Kuke is a leading classical music service platform in China, providing a comprehensive range of services from content provision to music learning [4] - The company collaborates with Naxos, the largest independent classical music content provider, giving it access to over 900 top-tier labels and record companies [4] - Kuke offers classical music licensing services to online platforms and subscription services to over 800 institutions in China, and has hosted the Beijing Music Festival for 24 consecutive years [4]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) ...

Kuke Music Holding Limited (NYSE:KUKE) Q1 2022 Results Earnings Conference Call May 26, 2022 8:00 AM ET Company Participants Jane Zuo - Investor Relations Director He Yu - Founder, Chairman and Chief Executive Officer Li Sun - President Hoi Tung Chan - Chief Financial Officer Conference Call Participants Brian Li - AMTD Group Tong Wang - Tiger Brokers Operator Good morning and good evening, ladies and gentlemen. Welcome to Kuke Music Holding Limited First Quarter 2022 Earning Conference Call. At this time, ...

[PART I](index=8&type=section&id=PART%20I) [Key Information](index=8&type=section&id=ITEM%203%20KEY%20INFORMATION) Kuke Music, a Cayman Islands holding company, operates primarily in China through VIEs, facing significant structural, regulatory, and delisting risks - Kuke Music is a **Cayman Islands holding company**, with investors purchasing equity in this entity, not the operating VIEs in China, as the **VIE structure** is essential due to PRC foreign ownership restrictions[15](index=15&type=chunk) - Revenues from the company's VIEs and their subsidiaries constituted **91.3%**, **93.4%**, and **97.6%** of total revenues for 2019, 2020, and 2021, respectively, highlighting critical dependence on the VIE structure[15](index=15&type=chunk) - The company's auditor, located in China, is **not currently inspected by the PCAOB**, which under the HFCAA could lead to **delisting** of the company's ADSs from U.S. exchanges as early as **2024**[27](index=27&type=chunk)[155](index=155&type=chunk) [VIE Consolidation Schedule](index=13&type=section&id=VIE%20Consolidation%20Schedule) Selected Condensed Consolidated Statements of Comprehensive Income (RMB '000) | | **2021** | **2020** | **2019** | | :--- | :--- | :--- | :--- | | **Revenue (RMB '000)** | | | | | Our VIEs and VIEs' Subsidiaries | 288,789 | 152,164 | 133,378 | | Other Subsidiaries | 7,317 | 11,425 | 12,676 | | **Consolidated Total (RMB '000)** | **295,897** | **162,881** | **146,054** | | **(Loss)/Profit for the year (RMB '000)** | | | | | Our VIEs and VIEs' Subsidiaries | 25,794 | 24,474 | 59,282 | | Our Company | (79,858) | (43,007) | (2,186) | | **Consolidated Total (RMB '000)** | **(59,617)** | **(15,214)** | **56,762** | Selected Condensed Consolidated Balance Sheet Information (RMB '000) | | **As of Dec 31, 2021** | **As of Dec 31, 2020** | **As of Dec 31, 2019** | | :--- | :--- | :--- | :--- | | **Total Assets (RMB '000)** | | | | | Our VIEs and VIEs' Subsidiaries | 1,059,670 | 847,802 | 452,484 | | **Consolidated Total (RMB '000)** | **1,109,299** | **877,353** | **503,626** | | **Total Liabilities (RMB '000)** | | | | | Our VIEs and VIEs' Subsidiaries | 496,528 | 310,454 | 223,610 | | **Consolidated Total (RMB '000)** | **167,640** | **216,184** | **221,065** | | **Total Net Assets (RMB '000)** | | | | | Our VIEs and VIEs' Subsidiaries | 563,142 | 537,348 | 228,874 | | **Consolidated Total (RMB '000)** | **941,659** | **661,169** | **282,561** | Selected Condensed Consolidated Cash Flow Information (RMB '000) | | **2021** | **2020** | **2019** | | :--- | :--- | :--- | :--- | | **Net cash from operating activities (RMB '000)** | | | | | Our VIEs and VIEs' Subsidiaries | 316,686 | 118,120 | 62,234 | | **Consolidated Total (RMB '000)** | **64,690** | **26,287** | **17,388** | | **Net cash used in investing activities (RMB '000)** | | | | | Our VIEs and VIEs' Subsidiaries | (290,949) | (122,384) | (74,057) | | **Consolidated Total (RMB '000)** | **(291,205)** | **(121,337)** | **(37,308)** | | **Net cash from financing activities (RMB '000)** | | | | | Our VIEs and VIEs' Subsidiaries | (24,666) | 71 | 11,812 | | **Consolidated Total (RMB '000)** | **259,841** | **97,759** | **11,802** | [Risk Factors](index=18&type=section&id=D%20Risk%20Factors) The company faces diverse risks spanning its business operations, corporate VIE structure, unpredictable PRC legal and regulatory environment, and potential delisting of its ADSs - **Business & Industry Risks:** The company heavily relies on Naxos for content, with over **99.8%** of its audio albums licensed from them as of December 31, 2021, posing a significant threat if the agreement is not renewed or terminated[46](index=46&type=chunk) - **Corporate Structure Risks:** The **VIE structure**, essential for China operations, may not be as effective as direct ownership, with substantial **uncertainties** regarding PRC law interpretation and application, potentially leading to severe penalties or relinquishment of interests[165](index=165&type=chunk)[169](index=169&type=chunk) - **Risks of Doing Business in China:** The PRC legal system's **unpredictability** and **government control** over currency conversion could limit legal protections, disrupt operations, and restrict fund transfers and dividend payments[183](index=183&type=chunk)[218](index=218&type=chunk) - **ADS Risks & HFCAA:** The company's auditor is subject to PCAOB determinations of being **uninspectable**, which under the HFCAA could lead to the company's ADSs being **delisted** from U.S. exchanges and prohibited from trading in **2024**, materially harming investment value and liquidity[155](index=155&type=chunk)[159](index=159&type=chunk) - **Dual-Class Structure:** The company has a **dual-class share structure** where Class B shares have **ten votes** per share compared to one for Class A, with the CEO and a Director owning all Class B shares, representing **79.6%** of aggregate voting power and limiting other shareholders' influence[227](index=227&type=chunk)[229](index=229&type=chunk) [Information on the Company](index=63&type=section&id=ITEM%204%20INFORMATION%20ON%20THE%20COMPANY) Kuke Music is a classical music service platform in China, operating three main business lines: music licensing, smart music learning, and live events, supported by an extensive content library and a VIE structure - The company operates **three core businesses**: classical music licensing and subscription, smart music learning, and live classical music events[274](index=274&type=chunk)[282](index=282&type=chunk) - As of December 31, 2021, Kuke's content library included approximately **2.8 million music tracks**, 1,372 video titles, and 5,750 volumes of sheet music, with the vast majority licensed exclusively from partners like Naxos[276](index=276&type=chunk)[283](index=283&type=chunk) - The smart music learning business had over **70,000 student enrollments** from over **4,000 kindergartens** across 264 cities in China as of December 31, 2021[279](index=279&type=chunk) - The company operates its core business in the PRC through a **VIE structure**, utilizing **contractual arrangements** to control its operating entities (Beijing Kuke Music and BMF Culture) and comply with PRC laws restricting foreign investment in its sector[402](index=402&type=chunk) [Business Overview](index=63&type=section&id=B%20Business%20Overview) Revenue Breakdown by Segment (FY 2021) | Business Segment | Revenue (RMB '000) | % of Total Revenue | | :--- | :--- | :--- | | Smart music learning | 118,061,000 | 39.9% | | Licensing and subscription | 100,454,000 | 33.9% | | Live classical music events | 77,382,000 | 26.2% | | **Total** | **295,897,000** | **100.0%** | - **Licensing & Subscription:** The company licenses content to platforms like Tencent Music and NetEase Cloud Music, providing subscription services to **802 institutional subscribers**, including **477 universities** and **325 public libraries** as of year-end 2021[277](index=277&type=chunk)[288](index=288&type=chunk) - **Smart Music Learning:** The business focuses on proprietary Kuke smart pianos, teaching systems, and **Kukey courses**, with a shifted focus since July 2019 to offering Kukey courses in collaboration with **kindergartens**[279](index=279&type=chunk)[292](index=292&type=chunk) - **Live Classical Music Events:** Following the BMF acquisition, the company organizes the **Beijing Music Festival** and other live events, generating revenue from sponsorships, service fees, and ticket sales, with increased **online streaming** due to COVID-19[297](index=297&type=chunk)[299](index=299&type=chunk) - In February 2022, the company made a strategic investment in **KOLO**, a classical music-focused **NFT platform**, to explore blockchain technology and monetization of digital music assets[301](index=301&type=chunk) [Organizational Structure](index=85&type=section&id=C%20Organizational%20Structure) - Kuke Music Holding Limited is a **Cayman Islands holding company** with subsidiaries in the BVI and Hong Kong, conducting its PRC operations through **Wholly Foreign-Owned Enterprises (WFOEs)** named Kuke International and Beijing Lecheng[400](index=400&type=chunk) - The WFOEs control the primary operating entities (VIEs) through a series of **contractual arrangements** rather than direct equity ownership, designed to comply with **PRC restrictions** on foreign investment in telecommunications and internet culture sectors[402](index=402&type=chunk) - **Key contractual arrangements** providing control over the VIEs include Powers of Attorney, Equity Interest Pledge Agreements, Exclusive Consulting Service Agreements, and Exclusive Option Agreements[403](index=403&type=chunk)[404](index=404&type=chunk)[406](index=406&type=chunk)[409](index=409&type=chunk)[412](index=412&type=chunk) [Operating and Financial Review and Prospects](index=88&type=section&id=ITEM%205%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) In FY2021, Kuke Music's revenue grew significantly, but higher costs and operating expenses led to increased operating and net losses, with financial performance influenced by content costs, customer expansion, and COVID-19 impacts Key Financial Performance (RMB million) | Metric | **2021** | **2020** | **2019** | | :--- | :--- | :--- | :--- | | **Total Revenue (RMB million)** | 296.0 | 162.9 | 146.1 | | YoY Growth | 81.7% | 11.5% | - | | **Gross Profit (RMB million)** | 169.9 | 118.6 | 113.7 | | Gross Margin | 57.4% | 72.8% | 77.8% | | **Operating (Loss)/Profit (RMB million)** | (50.5) | (3.1) | 68.8 | | **Net (Loss)/Profit (RMB million)** | (59.6) | (15.2) | 56.8 | - Revenue growth in 2021 was robust across all segments: Smart Music Learning (**+100.8%**), Live Classical Music Events (**+181.2%**), and Licensing & Subscription (**+31.2%**)[445](index=445&type=chunk)[446](index=446&type=chunk) - Cost of sales increased by **184.6%** in 2021, outpacing revenue growth, driven by changes in profit sharing, increased smart music learning investment, and higher live event costs[447](index=447&type=chunk) - Administrative expenses rose **103.4%** in 2021, primarily due to increased share-based compensation expenses of **RMB 53.9 million**[451](index=451&type=chunk)[141](index=141&type=chunk) - The company's cash and cash equivalents increased to **RMB 59.0 million** at the end of 2021 from **RMB 25.7 million** in 2020, mainly due to **RMB 259.8 million** in net cash from financing activities, including IPO proceeds[477](index=477&type=chunk)[484](index=484&type=chunk) [Directors, Senior Management and Employees](index=103&type=section&id=ITEM%206%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) The company's leadership, including CEO He Yu and Director Lung Yu, controls 79.5% of voting power through Class B shares, with compensation and equity plans in place for its 173 employees - The company's leadership includes founder **He Yu** (CEO & Chairman) and **Lung Yu** (Director), who are the beneficial owners of all outstanding **Class B ordinary shares**[513](index=513&type=chunk)[514](index=514&type=chunk)[552](index=552&type=chunk) Voting Power of Key Directors | Director | Position | % of Aggregate Voting Power | | :--- | :--- | :--- | | He Yu | CEO & Chairman | 56.8% | | Lung Yu | Director | 22.7% | - For the year ended December 31, 2021, the aggregate compensation paid in cash and benefits to executive officers was **RMB 8.4 million (US$1.3 million)**[527](index=527&type=chunk) - The company adopted a 2020 Share Incentive Plan, authorizing up to **1,227,000 Class A ordinary shares** for issuance, with **1,125,334 share options** and **101,666 restricted shares** granted and outstanding as of the report date[529](index=529&type=chunk) - As of December 31, 2021, the company had **173 full-time employees**, with Research and Development (**37.0%**) and Operations (**28.3%**) being the largest functions[545](index=545&type=chunk)[546](index=546&type=chunk) [Major Shareholders and Related Party Transactions](index=112&type=section&id=ITEM%207%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) Major shareholder details are provided under Item 6, highlighting significant control by CEO He Yu and Director Lung Yu, with key related party transactions including VIE contractual arrangements, inter-VIE leases, and interest-free loans - The most significant related party transactions are the **contractual arrangements** with the **VIEs**, which are fundamental to the company's operations in China[556](index=556&type=chunk) - In 2019 and 2020, VIE Beijing Kuke Music subleased office space to fellow VIE BMF Culture, with **RMB 0.6 million** from the 2020 lease remaining unsettled as of December 31, 2021[557](index=557&type=chunk) - The company engaged in several loan transactions with related parties, including borrowing **RMB 7.2 million** interest-free from a CEO-controlled company (repaid in January 2021) and lending **RMB 2.0 million** to a joint venture, subsequently recognized as a **bad debt**[559](index=559&type=chunk) [Financial Information](index=113&type=section&id=ITEM%208%20FINANCIAL%20INFORMATION) The company's audited consolidated financial statements are appended, with no current plans for cash dividends, as future earnings will be retained for business operations and expansion, subject to Board discretion and regulatory compliance - The company has **no current plans to pay any cash dividends** and intends to retain earnings for business operations and expansion[562](index=562&type=chunk) - As a holding company, its ability to pay dividends depends on receiving distributions from its PRC subsidiaries, which are subject to **PRC regulations** on profit distribution and **foreign exchange controls**[565](index=565&type=chunk) [Additional Information](index=114&type=section&id=ITEM%2010%20ADDITIONAL%20INFORMATION) The company's governance features a dual-class share structure, with tax implications including no Cayman Islands income tax, a 25% PRC enterprise income tax (potentially 15% for HNTEs), and a belief of being a PFIC for U.S. federal income tax in 2021 - **Corporate Structure:** The company's ordinary shares are divided into **Class A (1 vote per share)** and **Class B (10 votes per share)**, with Class B shares convertible to Class A, but not vice-versa[569](index=569&type=chunk)[572](index=572&type=chunk) - **Cayman Islands Taxation:** The company is **not subject to profits, income, gains, or appreciation taxes** in the Cayman Islands and has received a **20-year undertaking** against future taxation[593](index=593&type=chunk)[594](index=594&type=chunk) - **PRC Taxation:** PRC subsidiaries are generally subject to a **25% enterprise income tax**, with Beijing Kuke Music, as an HNTE, eligible for a reduced rate of **15%**[595](index=595&type=chunk)[372](index=372&type=chunk) - **U.S. Taxation (PFIC Status):** The company believes it was a **Passive Foreign Investment Company (PFIC)** for the taxable year ended December 31, 2021, which can result in **adverse U.S. federal income tax consequences** for U.S. holders of its ADSs or shares[620](index=620&type=chunk)[615](index=615&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=128&type=section&id=ITEM%2011%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks include foreign currency fluctuations between USD and RMB, interest rate exposure, and concentrated credit risk, with the largest customer accounting for 17% of gross trade receivables in 2021 - The company's main **foreign currency risk** stems from the mismatch between its **U.S. dollar-denominated ADSs** and its **Renminbi-denominated operations**, where RMB appreciation reduces converted USD funds and depreciation reduces USD value of earnings and dividends[644](index=644&type=chunk)[645](index=645&type=chunk) - The company has a **significant concentration of credit risk**, with the largest customer's trade receivables representing **17%** of total gross trade receivables and the five largest customers accounting for **47%** as of December 31, 2021[982](index=982&type=chunk) [Material Modifications to the Rights of Security Holders and Use of Proceeds](index=130&type=section&id=ITEM%2014%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) No material modifications to security holder rights have occurred; the company received US$46.5 million net proceeds from its January 2021 IPO, which it intends to use as originally disclosed - The company's IPO in January 2021 generated net proceeds of approximately **US$46.5 million** after expenses[656](index=656&type=chunk) - The company plans to use the **IPO proceeds** as disclosed in its F-1 registration statement[657](index=657&type=chunk) [Controls and Procedures](index=130&type=section&id=ITEM%2015%20CONTROLS%20AND%20PROCEDURES) As of December 31, 2021, management concluded that disclosure controls and internal control over financial reporting were ineffective due to material weaknesses in accounting expertise and expected credit loss calculation, with remediation efforts underway - Management identified **two material weaknesses** in its internal control over financial reporting as of December 31, 2021[663](index=663&type=chunk) - The first weakness is a **lack of sufficient accounting and financial reporting personnel** with requisite IFRS and SEC rules knowledge, a weakness previously identified in 2020 with ongoing remediation efforts[665](index=665&type=chunk)[667](index=667&type=chunk) - The second, newly identified weakness is a **lack of sufficient controls** in calculating the **expected credit loss (ECL)** on financial assets[667](index=667&type=chunk) - Due to these material weaknesses, the CEO and CFO concluded that disclosure controls and procedures were **not effective** as of the end of the fiscal year[659](index=659&type=chunk) [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=132&type=section&id=ITEM%2016E%20PURCHASES%20OF%20EQUITY%20SECURITIES%20BY%20THE%20ISSUER%20AND%20AFFILIATED%20PURCHASERS) On June 28, 2021, the company announced a share repurchase plan for up to US$1 million of its ADSs, under which it repurchased 49,609 ADSs for approximately US$199,300 by year-end 2021 - The company announced a share repurchase plan on June 28, 2021, authorizing the repurchase of up to **US$1 million** of its ADSs through the end of the year[676](index=676&type=chunk) Share Repurchases (June 28 - Dec 31, 2021) | Period | Total ADSs Purchased | Average Price Paid (US$) | | :--- | :--- | :--- | | Sep 2021 | 6,735 | $5.96 | | Oct 2021 | 1,075 | $6.05 | | Nov 2021 | 9,155 | $4.30 | | Dec 2021 | 32,644 | $3.47 | | **Total** | **49,609** | **-** | [PART III](index=134&type=section&id=PART%20III) [Financial Statements](index=134&type=section&id=ITEM%2018%20FINANCIAL%20STATEMENTS) The consolidated financial statements, prepared under IFRS, cover FY2019-2021, detailing financial position, performance, and cash flows, reflecting the Rosenkavalier Group acquisition, IPO impact, and key accounting policies Consolidated Statement of Profit or Loss (RMB '000) | | **2021** | **2020** | **2019** | | :--- | :--- | :--- | :--- | | **Revenue (RMB '000)** | 295,897 | 162,881 | 146,054 | | **Gross Profit (RMB '000)** | 169,871 | 118,600 | 113,711 | | **Operating (Loss)/Profit (RMB '000)** | (50,486) | (3,099) | 68,847 | | **(Loss)/Profit for the year (RMB '000)** | (59,617) | (15,214) | 56,762 | | **Basic (Loss)/Earnings Per Share (RMB)** | (2.03) | (0.70) | 3.08 | Consolidated Statement of Financial Position (RMB '000) | | **Dec 31, 2021** | **Dec 31, 2020** | | :--- | :--- | :--- | | **Total Assets (RMB '000)** | 1,109,299 | 877,353 | | Non-Current Assets (RMB '000) | 896,981 | 638,365 | | Current Assets (RMB '000) | 212,318 | 238,988 | | **Total Liabilities (RMB '000)** | 167,640 | 216,184 | | **Total Equity (RMB '000)** | 941,659 | 661,169 | Consolidated Statement of Cash Flows (RMB '000) | | **2021** | **2020** | **2019** | | :--- | :--- | :--- | :--- | | **Net cash from operating activities (RMB '000)** | 64,690 | 26,287 | 17,388 | | **Net cash used in investing activities (RMB '000)** | (291,205) | (121,337) | (37,308) | | **Net cash from financing activities (RMB '000)** | 259,841 | 97,759 | 11,802 | | **Net increase/(decrease) in cash (RMB '000)** | 33,326 | 2,709 | (8,118) | - The acquisition of Rosenkavalier Group on February 29, 2020, was a non-cash transaction involving the issuance of **4,856,273 ordinary shares** valued at **RMB 284 million**, resulting in the recognition of **RMB 237.2 million** in goodwill[902](index=902&type=chunk)[907](index=907&type=chunk)

Kuke Music Holding Limited (NYSE:KUKE) Q4 2021 Earnings Conference Call March 16, 2022 8:00 AM ET Company Participants Jane Zuo - Investor Relations He Yu - Founder, Chairman, Chief Executive Officer Hoi Tung Chan - Chief Financial Officer Li Sun - President Conference Call Participants Brian Li - AMTD Group Operator Good morning and good evening, ladies and gentlemen. Welcome to Kuke Music Holding Limited Fourth Quarter 2021 Earning Conference Call. At this time, all participants are in a listen-only mode. ...

Kuke Music Holding Limited (NYSE:KUKE) Q3 2021 Earnings Conference Call November 29, 2021 7:30 AM ET Company Participants He Yu – Founder, Chairman, CEO Jane Zuo – Investor Relations Patricia Sun – President Tony Chan – CFO Conference Call Participants Brian Li – AMTD Group Lex Zhang – Koi Investment Don Dong – RiverCircle Operator Good morning and good evening, ladies and gentlemen. Welcome to Kuke Music Holding Limited Third Quarter 2021 Earning Conference Call. At this time, all [Indiscernible] are in a ...