虎视传媒(01163) - 2024 - 中期业绩

Financial Highlights and Interim Dividend This section presents the company's financial performance for the six months ended June 30, 2024, and the board's decision on interim dividends Financial Highlights For the six months ended June 30, 2024, the company faced significant performance pressure, with total revenue decreasing by 22.1% year-over-year, gross profit declining by 39.3%, and a shift from profit to a net loss of RMB 4.64 million Financial Highlights for the Six Months Ended June 30 | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | Period Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 130,666 | 167,733 | (22.1) | | Gross Profit | 20,835 | 34,300 | (39.3) | | (Loss)/Profit for the Period | (4,640) | 5,423 | (185.6) | Interim Dividend The Board has resolved not to declare any interim dividend for the current reporting period, consistent with the policy from the prior corresponding period - The Board decided not to declare any interim dividend for the six months ended June 30, 2024, consistent with the prior period[1] Management Discussion and Analysis This section provides a detailed review of the company's business operations, financial performance, human resources, and liquidity for the reporting period Business Review The company, an online advertising platform for overseas markets, expanded top media partnerships and increased advertisers to 1,241, while upgrading its AdTensor platform with AI to enhance ad creation amidst global economic downturns - The company positions itself as an online advertising platform connecting Chinese advertisers with overseas media, including partners like Meta, Google, Snapchat, and Douyin[2] - The number of advertisers increased from 785 at the end of 2023 to 1,241 as of June 30, 2024, while the number of media publishers decreased from 50 to 32[4] - The company fully restructured its AdTensor technology platform, adding AI GPU host clusters and integrating generative AI (AIGC) and large language models to empower ad creative and production processes[4][5] - To counter economic downturns and declining advertising demand, the company adopted measures such as offering more favorable pricing policies to advertisers to expand market share[5] Financial Review During the reporting period, the company's total revenue decreased by 22.1% to RMB 131 million, gross profit fell by 39.4% to RMB 20.84 million, and gross margin narrowed from 20.5% to 15.9%, primarily due to global economic recession and intensified market competition, resulting in a net loss of RMB 4.64 million Revenue Total revenue decreased by 22.1% year-over-year to RMB 130.7 million, primarily due to global economic recession and intensified market competition, with CPA remaining the main revenue source at 86.4%, while e-commerce and finance sectors increased their revenue share, and utility tools and content application developers' contribution significantly declined - Total revenue decreased by 22.1% from RMB 167.7 million in the prior period to RMB 130.7 million[9] Revenue by Pricing Model | Pricing Model | 2024H1 (RMB thousands) | Share (%) | 2023H1 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | CPA Pricing Model | 112,900 | 86.4 | 130,490 | 77.8 | | CPC/CPM Pricing Model | 17,766 | 13.6 | 37,243 | 22.2 | | Total | 130,666 | 100.0 | 167,733 | 100.0 | Revenue by Advertiser Type | Advertiser Type | 2024H1 (RMB thousands) | Share (%) | 2023H1 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Utility Tools and Content Applications | 31,455 | 24.1 | 68,461 | 40.8 | | E-commerce | 56,764 | 43.4 | 60,222 | 35.9 | | Finance | 33,316 | 25.5 | 28,490 | 17.0 | | Others | 9,131 | 7.0 | 10,560 | 6.3 | | Total | 130,666 | 100.0 | 167,733 | 100.0 | Cost of Sales Cost of sales decreased by 17.7% year-over-year to RMB 109.8 million, primarily due to a 16.3% reduction in traffic acquisition costs and a 57.0% decrease in external optimizer and designer fees, with Douyin's traffic cost share significantly rising to 35.1% while Google's share dropped from 41.6% to 33.4% - Total cost of sales decreased by 17.7% from RMB 133.4 million in the prior period to RMB 109.8 million[11] Traffic Acquisition Costs by Media Publisher | Media Publisher | 2024H1 (RMB thousands) | Share (%) | 2023H1 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Douyin | 38,515 | 35.1 | 18,728 | 14.0 | | Google | 36,702 | 33.4 | 55,559 | 41.6 | | Facebook | 27,963 | 25.4 | 27,154 | 20.4 | | Others | 2,148 | 2.0 | 24,403 | 18.3 | | Subtotal | 105,328 | 95.9 | 125,844 | 94.3 | Gross Profit and Gross Margin Gross profit significantly decreased by 39.4% year-over-year to RMB 20.84 million, with gross margin narrowing from 20.5% to 15.9%, primarily due to the company offering more favorable pricing policies to advertisers to counter economic recession and market competition Gross Profit and Gross Margin | Metric | 2024H1 | 2023H1 | | :--- | :--- | :--- | | Total Revenue (RMB thousands) | 130,666 | 167,733 | | Total Cost of Sales (RMB thousands) | 109,831 | 133,433 | | Total Gross Profit (RMB thousands) | 20,835 | 34,300 | | Total Gross Margin (%) | 15.9% | 20.5% | - The decrease in gross profit was primarily due to the company offering more favorable pricing policies to advertisers to expand market share[12] Other Income, Expenses, and Costs During the reporting period, other income increased by 12.1% due to higher bank interest, while selling and distribution expenses and administrative expenses decreased by 6.1% and 5.6% respectively, mainly from reduced performance bonuses and optimized talent structure; however, other expenses significantly rose due to foreign exchange losses from Euro depreciation, and finance costs slightly decreased - Other income and gains increased by 12.1% to RMB 3.7 million, primarily due to higher interest income from increased bank balances[13] - Selling and distribution expenses decreased by 6.1% to RMB 4.6 million, mainly due to reduced sales staff bonuses resulting from lower profit[14] - Administrative expenses decreased by 5.6% to RMB 23.8 million, primarily due to reduced employee salaries and benefits from optimizing the talent structure[15] - Other expenses significantly increased to RMB 1.9 million (RMB 0.1 million in the prior period), primarily due to foreign exchange losses from the depreciation of Euro held by the company[16] (Loss)/Profit for the Period Considering the aforementioned factors, the company recorded a net loss of approximately RMB 4.6 million during the reporting period, a significant reversal from a profit of approximately RMB 5.4 million in the prior corresponding period - The company recorded a loss of approximately RMB 4.6 million during the reporting period, compared to a profit of approximately RMB 5.4 million in the prior period[18] Employees and Remuneration Policy As of June 30, 2024, the company had 136 employees, with optimizers and designers forming the largest group; employee remuneration is determined by performance and experience, and total staff costs for the period were approximately RMB 17.4 million, down from RMB 20.2 million in the prior period, with no awards granted under share option and award schemes Employee Breakdown by Function (as of June 30, 2024) | Function | Number of Employees | Share of Total (%) | | :--- | :--- | :--- | | Optimizers and Designers | 47 | 34.6 | | Sales and Marketing | 26 | 19.1 | | Operations | 39 | 28.7 | | Finance and Administration | 20 | 14.7 | | Information Technology and R&D | 4 | 2.9 | | Total | 136 | 100.0 | - During the reporting period, the Group's total staff costs were approximately RMB 17.4 million, a decrease from RMB 20.2 million in the prior period[20] Liquidity, Financial and Capital Resources The company maintains a robust financial position with cash and cash equivalents increasing to RMB 385 million, no interest-bearing bank borrowings, and a zero debt-to-asset ratio; however, customer and supplier concentration remains high, with the top five customers contributing 64.2% of revenue and top five suppliers accounting for 91.9% of total cost of sales, while operating cash flow turned negative primarily due to working capital changes - As of June 30, 2024, cash and cash equivalents increased to approximately RMB 384.6 million, primarily due to the disposal of time deposits[22] - The Group has no interest-bearing bank borrowings and has not used any financial instruments for hedging[22] - High customer concentration: the top five customers accounted for 64.2% of revenue, with the largest customer contributing 24.6%[26] - Extremely high supplier concentration: the top five suppliers accounted for 91.9% of total cost of sales, with the largest supplier contributing 34.0%[27] Summary of Condensed Consolidated Cash Flow Statement (RMB thousands) | Item | 2024H1 | 2023H1 | | :--- | :--- | :--- | | Net cash flow from operating activities | (19,217) | 36,287 | | Net cash flow from investing activities | 45,658 | 106,272 | | Net cash flow from financing activities | (1,219) | 10,426 | | Cash and cash equivalents at end of period | 384,560 | 429,600 | Selected Financial Ratios | Ratio | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Return on Equity | -4.8% | -5.8% | | Return on Total Assets | -1.3% | -1.7% | | Current Ratio | 1.3 | 1.4 | | Debt-to-Asset Ratio | — | — | | Gross Margin | 15.9% | 19.0% | Interim Condensed Consolidated Financial Statements This section presents the interim condensed consolidated financial statements, including the income statement, statement of comprehensive income, and statement of financial position Interim Condensed Consolidated Statement of Profit or Loss The statement of profit or loss shows the company recorded a net loss of RMB 4.64 million in H1 2024, compared to a net profit of RMB 5.42 million in the prior period, with basic loss per share of RMB 0.01 Summary of Interim Condensed Consolidated Statement of Profit or Loss (RMB thousands) | Item | 2024H1 (Unaudited) | 2023H1 (Unaudited) | | :--- | :--- | :--- | | Revenue | 130,666 | 167,733 | | Gross Profit | 20,835 | 34,300 | | (Loss)/Profit before tax | (6,136) | 7,378 | | (Loss)/Profit for the period | (4,640) | 5,423 | | Attributable to owners of the parent | (4,397) | 6,113 | | Basic (loss)/earnings per share (RMB) | (0.01) | 0.01 | Interim Condensed Consolidated Statement of Comprehensive Income The statement of comprehensive income shows a total comprehensive loss of RMB 3.8 million for the period after accounting for exchange differences and other comprehensive income, compared to a total comprehensive income of RMB 10.35 million in the prior period - During the reporting period, the total comprehensive (loss) for the period was RMB 3.804 million, compared to a total comprehensive income of RMB 10.35 million in the prior period[38] Interim Condensed Consolidated Statement of Financial Position The statement of financial position shows that as of June 30, 2024, the company's total assets were RMB 733 million, total liabilities RMB 541 million, and net assets RMB 192 million, with net current assets slightly decreasing to RMB 168 million Summary of Interim Condensed Consolidated Statement of Financial Position (RMB thousands) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total non-current assets | 24,441 | 24,784 | | Total current assets | 708,823 | 645,877 | | Total current liabilities | 540,949 | 473,572 | | Net current assets | 167,874 | 172,305 | | Net assets | 192,315 | 196,119 | | Total equity | 192,315 | 196,119 | Summary of Notes to Financial Information The notes to the financial statements provide details on key accounting policies, segment information, and major accounts; all company business derives from a single operating segment, online advertising services, with mainland China and Hong Kong as primary revenue sources, and two customers contributing over 10% of total revenue during the reporting period - All revenue and results of the Group are derived from a single operating segment, which is the provision of online advertising services[45] Revenue from External Customers by Geographical Area (RMB thousands) | Region | 2024H1 | 2023H1 | | :--- | :--- | :--- | | Mainland China | 63,035 | 76,495 | | Hong Kong | 42,307 | 28,893 | | Singapore | 9,559 | 18,939 | | Indonesia | 2,572 | 28,110 | | Other Countries | 13,193 | 15,296 | | Total | 130,666 | 167,733 | - During the reporting period, sales to Customer A and Customer B accounted for 24.6% and 22.4% of total revenue respectively, both exceeding the 10% disclosure threshold[48] Future and Prospects This section outlines the company's strategic plans and outlook for future development amidst global uncertainties and competitive challenges Future Outlook and Strategies Facing an uncertain global economy and intensifying industry competition, the company plans to deepen its global integrated marketing services, with future strategies focusing on data-driven decision-making, technological integration and innovation (especially AI and the AdTensor platform), building cross-industry cooperation ecosystems, and implementing a 'global vision with localized strategies' approach to maintain competitiveness and achieve sustainable development - Future strategic priorities include: - Data-driven decision-making: Building comprehensive user profiles to transition from experience-driven to data-driven approaches - Technological integration and innovation: Embracing cutting-edge technologies like AI and big data, increasing development support for the AdTensor platform - Cross-industry collaboration and ecosystem building: Establishing close partnerships with content creators, technology providers, and media platforms - Global vision with localized strategies: Actively expanding into international markets while thoroughly researching and formulating marketing strategies tailored to local market needs[62] Corporate Governance and Other Information This section details the company's corporate governance practices and information regarding the use of proceeds from fundraising activities Corporate Governance The company is committed to high standards of corporate governance, complying with most code provisions during the reporting period, though the roles of Chairman and Chief Executive Officer are combined under Ms. Chang Su Fang, which the Board believes provides strong leadership, and the Audit Committee has reviewed the unaudited financial statements for the period - The company has complied with all applicable code provisions of the Corporate Governance Code, except that the roles of Chairman and Chief Executive Officer are not separated, both held by Ms. Chang Su Fang[65] Use of Proceeds The company disclosed the detailed use of proceeds from its Initial Public Offering (IPO) and subsequent share placements; HKD 4.3 million from IPO proceeds originally allocated for strategic investments and M&A was reallocated to AI technology and AdTensor platform development, with the utilization period extended to end-2025, while 2023 placement proceeds are being used as planned to enhance AdTensor platform services, expected to be fully utilized by end-2024 - The Board resolved on August 22, 2024, to reallocate the unutilized balance of HKD 4.3 million from the initial public offering proceeds, originally designated for strategic investments and mergers and acquisitions, to the development of AI technology and AdTensor platform services, extending the utilization period to December 31, 2025[70] Use of Proceeds from Share Placement (HKD millions) | Purpose | Planned Amount | Utilized in 2024H1 | Unutilized Amount | Estimated Completion Time | | :--- | :--- | :--- | :--- | :--- | | Enhance AdTensor platform services | 9.0 | 3.4 | 5.6 | Before December 31, 2024 | | Supplement working capital | 3.8 | — | — | — | | Total | 12.8 | 3.4 | 5.6 | |