Impact of Program Suspension - The suspension of the "2023 China's Voice" program in August 2023 led to significant negative public sentiment and impacted the company's operations[1] - The suspension adversely affected the advertising plans and platform cooperation negotiations for other variety shows produced by Canxing Culture[2] - Management conservatively revised down the future profit forecasts for Mengxiang Qiangyin CGU due to uncertainties surrounding the program's future[3] - The company was unable to provide reliable audit evidence due to the unprecedented nature of the suspension and its impact on Mengxiang Qiangyin's regular business[5] Legal Actions and Public Sentiment - The company initiated legal actions against false information spreaders, with hundreds of pieces of evidence collected and dozens of lawsuits filed[1] Financial Forecasts and Assumptions - Dream Chaser CGU's recoverable amount is calculated using a discounted cash flow (DCF) model over a five-year forecast period ending December 31, 2028, with key parameters including pre-tax cash flows, discount rate, perpetual growth rate, and initial working capital[6] - Dream Chaser's music IP operation and licensing business unit revenue forecast excludes income from "The Voice of China 2023" and related programs due to their suspension and uncertain future impact[7] - Dream Chaser's artist management business unit revenue forecast is based on historical earnings, adjusted for contract durations, market developments, and actual quotations[7] - Dream Chaser's concert organization and production business unit revenue forecast assumes no income from irregular concerts and no future production of music variety shows[7] - Dream Chaser CGU's forecast gross margin for DCF calculation ranges from 36.78% to 37.85%, based on prior year's achieved margins and adjusted for expected market developments[8] - The pre-tax discount rate used in the DCF model is 13.13%, determined based on industry averages and business unit operational risks as of December 31, 2023[9] - The perpetual growth rate for music IP operation and licensing business is consistent with the long-term growth rate as of December 31, 2023, with no expected growth or decline during the DCF period[10] Audit Concerns and Evidence - Auditors expressed concerns over the reasonableness of management's assumptions and requested reliable audit evidence to support the forecasts[4] - The resolution of the audit opinion depends on the company's progress in providing necessary audit evidence to support the impairment test assumptions used as of December 31, 2023[11] Strategic Initiatives and Collaboration - The company is actively exploring opportunities with major broadcasting platforms and advertising clients to develop feasible plans for producing and broadcasting music variety shows[11] - The company believes there is no fundamental disagreement with auditors regarding the application of accounting principles to the suspension and its subsequent impacts[11]
星空华文(06698) - 2024 - 年度业绩