一元宇宙(01616) - 2024 - 中期财报

Summary For the six months ended June 30, 2024, the company's revenue decreased by 81.0% to RMB 0.4 million, gross profit decreased by 78.6% to RMB 0.3 million, but gross profit margin increased by 25.7 percentage points to 91.0%, while loss attributable to shareholders significantly increased to RMB 8.4 million from RMB 0.4 million in the prior period Key Financial Highlights for the 2024 Interim Report (For the six months ended June 30): | Metric | 2024 (RMB million) | 2023 (RMB million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 0.4 | 2.1 | -81.0% | | Gross Profit | 0.3 | 1.4 | -78.6% | | Gross Profit Margin | 91.0% | 65.3% | +25.7 percentage points | | Loss attributable to equity holders of the Company | 8.4 | 0.4 | +1900.0% | Company Information This report provides essential company information including Board members (Executive and Independent Non-Executive Directors), company secretary, authorized representatives, committee members, registered office, principal places of business in China and Hong Kong, legal advisors, auditors, share registrar, principal bankers, and stock code - Board members include Mr. Liu Dong (Chairman), Mr. Liu Zongjun (Chief Executive Officer) as Executive Directors, and Mr. Lin Jiyang, Mr. Guo Bocheng as Independent Non-Executive Directors, with Ms. Liu Chenhong resigning as an Independent Non-Executive Director and from related committee positions on April 18, 2024[4] - The company is registered in the Cayman Islands, with its China headquarters in Chaoyang District, Beijing, and its principal place of business in Hong Kong located in Wan Chai[4] - The company's stock code is 1616, and its website is http://www.starrise.cn[5](index=5&type=chunk) Management Discussion and Analysis This section details the macroeconomic and industry environment, business operations, changes and reasons for financial indicators, liquidity and capital structure, employee situation, and future outlook for the first half of 2024, noting an expanded loss but an optimistic view on the long-term development of the film and television industry Industry Review In the first half of 2024, global economic growth slowed, China's GDP grew by 5.0% year-on-year, but domestic demand was weak, with investment and consumption growth slowing, while the Chinese film market box office decreased by 9% year-on-year, and the drama series market saw a significant increase in registered projects and a 35.1% growth in effective viewership, indicating a "quantity reduction, quality improvement" trend, with micro-drama development entering a new stage of quality enhancement - In the first half of 2024, China's GDP grew by 5.0% year-on-year, but domestic demand was weak, with retail sales of consumer goods increasing by 4.1% (a 5.2 percentage point decrease year-on-year) and fixed asset investment growing by 4%[5] China Film Market Performance in H1 2024: | Metric | H1 2024 | H1 2023 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Box Office | Approx. RMB 23.895 billion | Approx. RMB 26.261 billion | Decreased by 9% | | Audience Attendance | Approx. 550 million | Approx. 604 million | Decreased by 54 million | | Average Attendance per Person | 7.73 persons | 9.64 persons | Decreased by 19.8% | | Occupancy Rate | 6.3% | 7.8% | Decreased by 18.8% | | Number of New Films Released | 237 films | 243 films | Slightly decreased by 6 films | - In the first half of 2024, the number of registered TV series significantly increased year-on-year to 320 (from 234 in the prior period), while the number of effectively broadcast series slightly decreased to 149, but the cumulative main feature viewership grew by 35.1%, indicating a "quantity reduction, quality improvement" trend in the drama series market[6] - The development of micro-dramas has entered a new stage of quality enhancement and upgrading, with the National Radio and Television Administration launching the "Travel with Micro-dramas" creation plan and implementing new micro-drama management regulations, adopting a "classified and tiered review" system[6] Business Review The Group's loss before tax for the first half of 2024 was approximately RMB 8.4 million, a significant increase from RMB 0.4 million in the prior period, primarily due to invested film and television projects failing to generate revenue from broadcast, while several projects are currently scheduled, distributed, in post-production, or in preparation for filming, with some IPs having completed scriptwriting - The Group's loss before tax for the first half of 2024 was approximately RMB 8.4 million, an increase of approximately RMB 8.0 million compared to a loss of approximately RMB 0.4 million in the prior period, mainly due to invested film and television projects failing to generate revenue from broadcast[7] - Several film and television projects are underway, including the youth nostalgic film "Northeast Past Events," the theatrical film "Hello, Ma Daling," and the online micro-drama "A Night of Fright" which are awaiting broadcast; the web series "Taotie Ji" is in distribution; the film "Road of Tigers and Wolves" is in post-production; and multiple online and theatrical films are in preparation for filming or scriptwriting stages[7] Financial Review The Group's film and television business revenue significantly decreased in the first half of 2024, but the gross profit margin improved due to copyright transfer income, while administrative expenses and staff costs decreased due to the disposal of subsidiaries, but net finance costs increased due to loan default penalties, leading to a substantial expansion of loss attributable to shareholders Revenue, Gross Profit and Gross Profit Margin In the first half of 2024, film and television business revenue significantly decreased by 81.0% year-on-year to RMB 355 thousand, but the gross profit margin increased from 65.3% in the prior period to 91.0%, primarily due to current period revenue being from film and television copyright transfers with previously recognized costs Film and Television Business Revenue, Gross Profit and Gross Profit Margin (For the six months ended June 30): | Metric | 2024 (RMB thousand) | 2023 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 355 | 2,134 | -81.0% | | Gross Profit | 323 | 1,393 | -76.8% | | Gross Profit Margin | 91.0% | 65.3% | +25.7 percentage points | - The increase in gross profit margin is mainly due to the current period's RMB 0.3 million revenue being from film and television copyright transfers, where the project costs were recognized in prior periods, resulting in zero corresponding costs for the current period[9] Distribution Costs Distribution costs for the first half of 2024 were approximately RMB 2.1 million, remaining largely consistent with the prior period Distribution Costs (For the six months ended June 30): | Metric | 2024 (RMB million) | 2023 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Distribution Costs | 2.1 | 2.2 | Largely consistent | Administrative Expenses Administrative expenses decreased by 24.4% to approximately RMB 5.9 million in the first half of 2024, primarily because the prior period included expenses of subsidiaries disposed of in the second half of 2023 Administrative Expenses (For the six months ended June 30): | Metric | 2024 (RMB million) | 2023 (RMB million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 5.9 | 7.8 | -24.4% | - The decrease in administrative expenses is mainly due to the prior period including expenses of four subsidiaries, including Beijing Huasheng Taitong Media Investment Co., Ltd., which were disposed of in the second half of 2023[11] Other Income, Gains or Losses, Net Total other income, gains or losses, net for the first half of 2024 was approximately RMB 2.1 million, compared to a net loss of approximately RMB 1.7 million in the prior period, primarily benefiting from a gain of approximately RMB 4.4 million from the disposal of a subsidiary Other Income, Gains or Losses, Net (For the six months ended June 30): | Metric | 2024 (RMB million) | 2023 (RMB million) | Year-on-year Change (RMB million) | | :--- | :--- | :--- | :--- | | Other Income, Gains or Losses, Net | 2.1 | -1.7 | +3.8 | - The increase in gains primarily includes a gain of approximately RMB 4.4 million from the disposal of a subsidiary[12] Reversal of Impairment Losses on Trade and Other Receivables In the first half of 2024, the Group recovered trade and other receivables for which impairment losses had been recognized in prior years, resulting in a reversal of impairment losses of approximately RMB 5.1 million Reversal of Impairment Losses on Trade and Other Receivables (For the six months ended June 30): | Metric | 2024 (RMB million) | 2023 (RMB million) | | :--- | :--- | :--- | | Reversal of Impairment Losses | 5.1 | 14.8 | Net Finance Costs Net finance costs for the first half of 2024 were approximately RMB 8.0 million, an increase of approximately RMB 3.1 million from RMB 4.9 million in the prior period, primarily due to the accrual of default penalties for certain borrowings Net Finance Costs (For the six months ended June 30): | Metric | 2024 (RMB million) | 2023 (RMB million) | Year-on-year Change (RMB million) | | :--- | :--- | :--- | :--- | | Net Finance Costs | 8.0 | 4.9 | +3.1 | - The increase in net finance costs is primarily due to the accrual of default penalties for certain borrowings[14] Taxation No taxation was incurred in the first half of 2024 or the prior period - For the six months ended June 30, 2024, the Group incurred no taxation[15] Loss Attributable to Equity Holders of the Company and Total Comprehensive Expense Loss attributable to equity holders of the Company for the first half of 2024 was approximately RMB 8.4 million, a significant increase from RMB 0.4 million in the prior period, primarily due to decreased revenue and gross profit Loss Attributable to Equity Holders of the Company (For the six months ended June 30): | Metric | 2024 (RMB million) | 2023 (RMB million) | Year-on-year Change (RMB million) | | :--- | :--- | :--- | :--- | | Loss Attributable to Equity Holders of the Company | 8.4 | 0.4 | +8.0 | - The increase in loss is primarily due to a decrease in revenue and gross profit[16] Liquidity and Financial Resources As of June 30, 2024, cash and cash equivalents significantly decreased by 93.3% to RMB 15.8 million, primarily used for investing in new film and television projects, with a net cash outflow from operating activities of RMB 215.4 million, while the average accounts receivable turnover period significantly decreased, but film and television series turnover days substantially increased Liquidity and Cash Flow (As of June 30): | Metric | June 30, 2024 (RMB million) | December 31, 2023 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 15.8 | 236.7 | -93.3% | | Net Cash Used in Operating Activities | -215.4 | -16.7 (prior period 2023) | Significant increase in outflow | | Net Cash Generated from Investing Activities | 0.3 | 258.4 (prior period 2023) | Significant decrease in inflow | | Net Cash Used in Financing Activities | -5.8 | -8.4 (prior period 2023) | Slight decrease in outflow | - The decrease in cash and cash equivalents was primarily used for investing in new film and television projects[17] - The average accounts receivable turnover period significantly decreased from 12,275 days in the prior period to 5,454 days, mainly due to the Group's strengthened efforts in accounts receivable collection[17] - Film and television series turnover days significantly increased from 53,210 days in the prior period to 548,116 days, primarily due to a decline in film and television series sales, a substantial decrease in revenue and cost of sales, and an increase in the average balance of film and television series[17] Capital Structure As of June 30, 2024, the Group's total liabilities were approximately RMB 89.6 million, with a gearing ratio of approximately 37.9%, a decrease from 73.7% at the end of 2023, and most debts are due within one year Capital Structure (As of June 30): | Metric | June 30, 2024 (RMB million) | December 31, 2023 (RMB million) | | :--- | :--- | :--- | | Bank borrowings, bonds, other borrowings and lease liabilities | 89.6 | 87.1 | | Gearing Ratio | 37.9% | 73.7% | | Debts due within one year | 89.2 | 86.8 | - The gearing ratio decreased, but most debts (approximately RMB 89.2 million) are due within one year[18] Capital Commitments As of June 30, 2024, the Group had no other significant capital commitments - As of June 30, 2024, the Group had no other significant capital commitments[19] Employees and Remuneration Policy As of June 30, 2024, the Group's total number of employees decreased to 19 (from 48 at the end of 2023), and staff costs decreased to approximately RMB 3.5 million, primarily due to the disposal of subsidiaries, while the company enhances efficiency through training and job consolidation, with remuneration policies based on performance, experience, and industry practice Employees and Remuneration (As of June 30): | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Employees | 19 employees | 48 employees | | Staff Costs (RMB million) | 3.5 | 5.4 (prior period 2023) | - The decrease in employee numbers and costs is mainly due to the disposal of certain subsidiaries in the second half of last year[20] - The company enhances employee efficiency through continuous training, job consolidation, and process restructuring, with remuneration determined based on performance, experience, and industry practice[20] Foreign Exchange Risk and Hedging The Group adopts a prudent management policy for exchange rate risk, with export revenue and import purchases settled in USD, and bonds and foreign currency deposits measured in HKD, having encountered no significant exchange rate fluctuation difficulties during the reporting period and not having used any foreign exchange derivative instruments for hedging - The Group adopts a strict and prudent policy to manage exchange rate risk, with export revenue and import purchases settled in USD, and bonds and foreign currency deposits measured in HKD[21] - During the review period, no significant exchange rate fluctuation difficulties were encountered, nor were any foreign exchange derivative instruments used to hedge foreign exchange risk[21] Contingent Liabilities As of June 30, 2024, the Group had no contingent liabilities - As of June 30, 2024, the Group had no contingent liabilities[22] Pledge of Assets As of June 30, 2024, the Group had no machinery and equipment pledged as collateral for bank loans - As of June 30, 2024, the Group had no machinery and equipment pledged as collateral for bank loans[23] Significant Investments As of June 30, 2024, the Group held no significant investment interests in other companies, nor did it have any future plans for significant investments or fixed assets - As of June 30, 2024, the Group held no significant investment interests in other companies, nor did it have any future plans for significant investments or fixed assets[24] Significant Acquisitions and Disposals of Subsidiaries, Joint Ventures and Associates On June 20, 2024, Beijing Xinghong Culture Development Co., Ltd., a wholly-owned subsidiary of the Company, sold 100% equity of Ningbo Yuanning Culture Media Co., Ltd. for RMB 100,000, with the transaction completed on June 25 - On June 20, 2024, Beijing Xinghong Culture Development Co., Ltd., a wholly-owned subsidiary of the Company, sold 100% equity of Ningbo Yuanning Culture Media Co., Ltd. for RMB 100,000[25] - The disposal was completed on June 25, 2024, and the consideration was received within the six months ended June 30, 2024[25] Future Outlook The Group remains optimistic about the long-term development of China's film and television industry, will closely monitor industry policies and trends, leverage existing resources to seek opportunities in the film and television market, and enrich its media business, with various preparation plans and filming work currently progressing in an orderly manner, and a future production plan table provided - The Group remains optimistic about the long-term development of China's film and television industry, will closely monitor industry policies and trends, fully utilize existing resources to seek opportunities in the film and television market, and enrich its film and television media business[26] - Various preparation plans and filming work are currently progressing in an orderly manner, including multiple films and web series that are in scheduling, distribution, post-production, filming preparation, or script completion stages[27] Future Production Plan (Selected Projects): | No. | Title | Genre | (Planned) Start Date | Remarks | | :--- | :--- | :--- | :--- | :--- | | 1 | Northeast Past Events | Youth Nostalgic Film | March 2017 | Awaiting Schedule | | 2 | Hello, Ma Daling | Theatrical Film | May 2019 | Awaiting Schedule | | 3 | A Night of Fright | Online Micro-drama | November 2017 | Awaiting Broadcast | | 4 | Taotie Ji | Web Series | October 2018 | In Distribution | | 5 | Hello, Tyrannosaurus | Animated Film | May 2017 | Promotion and Distribution Preparation | | 6 | Road of Tigers and Wolves | Theatrical Film | – | In Post-production | | 7-10 | Iron Bone Steel Fist, etc. | Online Film/Theatrical Film | To be determined | Filming Preparation | | 11-19 | The Legend of Tang Bohu Chasing Autumn Fragrance, etc. | Online Film/Web Series | To be determined | Script Completed | Supplementary Information This section discloses the company's listed securities trading, changes and shareholdings of directors and chief executives, major shareholders' interests, corporate governance practices, detailed terms of the share option scheme, and post-reporting period events, noting no listed securities transactions during the period, Ms. Liu Chenhong's resignation leading to insufficient independent directors on the Board, no new share options granted, and the company's application for a waiver regarding the insufficient number of independent directors Purchase, Sale or Redemption of the Company's Listed Securities During the review period, neither the Company nor any of 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[28] Changes in Information of Directors and Chief Executive Ms. Liu Chenhong resigned as an Independent Non-Executive Director, member of the Audit Committee, Remuneration Committee, and Chairman of the Nomination Committee on April 18, 2024, with no other significant changes in the information of other directors and chief executives - Ms. Liu Chenhong resigned as an Independent Non-Executive Director and from various Board committee positions on April 18, 2024[29] - Save for the disclosure above, each Director and Chief Executive confirmed that there were no other changes in information required to be disclosed under the Listing Rules since the date of the 2023 Annual Report[29] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares or Debentures of the Company or its Associated Corporations As of June 30, 2024, Executive Director Mr. Liu Dong held 14.31% of the company's shares through a controlled corporation, and Mr. He Han beneficially owned 0.76% of the shares, with no other directors or chief executives holding disclosable interests or short positions in shares Directors' Interests in the Company's Shares (As of June 30): | Name of Director | Capacity/Nature of Interest | Number and Class of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Liu Dong | Interest in controlled corporation | 307,809,902 shares (L) | 14.31% | | Mr. He Han | Beneficial owner | 16,254,000 shares (L) | 0.76% | - Mr. Liu Dong's shares are held by Dongyue Limited, whose entire issued share capital is beneficially owned by Mr. Liu Dong[29] Interests Discloseable Under the Securities and Futures Ordinance and Major Shareholders As of June 30, 2024, Cinedigm Corp., Dongyue Limited, Aim Right Ventures Limited, Jinbi Mall (Hong Kong) Co., Limited, and others were major shareholders, holding varying percentages of the company's shares from 7.99% to 23.49% Major Shareholders' Interests in the Company's Shares (As of June 30): | Name of Shareholder | Capacity/Nature of Interest | Number of Shares and Underlying Shares in which Interests are Held/Owned | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Cinedigm Corp. | Beneficial owner | 225,311,397 (L) | 10.47% | | Dongyue Limited | Beneficial owner | 307,809,902 (L) | 14.31% | | Ms. Wang Lingli | Family interest | 307,809,902 (L) | 14.31% | | Aim Right Ventures Limited | Beneficial owner and interest in controlled corporation | 505,322,946 (L) | 23.49% | | Link Wealth Holding Limited | Beneficial owner | 184,810,126 (L) | 8.59% | | Mr. Liu Zhihua | Interest in controlled corporation | 505,322,946 (L) | 23.49% | | Hezhong Weijia Co., Ltd. | Beneficial owner | 171,926,000 (L) | 7.99% | | Mr. Jin Peng | Interest in controlled corporation | 171,926,000 (L) | 7.99% | | Ms. Shen Si | Family interest | 171,926,000 (L) | 7.99% | | Jinbi Mall (Hong Kong) Co., Limited | Beneficial owner | 303,609,790 (L) | 14.11% | | Yunnan Jinma Biji Tourism Mall Co., Ltd. | Interest in controlled corporation | 303,609,790 (L) | 14.11% | | Kunming Municipal Infrastructure Comprehensive Development and Construction (Group) Co., Ltd. | Interest in controlled corporation | 303,609,790 (L) | 14.11% | | Pioneer Investment Co., Ltd. | Interest in controlled corporation | 303,609,790 (L) | 14.11% | | Shi Zhengmin | Interest in controlled corporation | 303,609,790 (L) | 14.11% | - Ms. Wang Lingli, spouse of Mr. Liu Dong, is deemed to be interested in Mr. Liu Dong's interests. Mr. Liu Zhihua wholly owns Aim Right Company and is deemed to be interested in all shares directly and indirectly held by Aim Right. Mr. Jin Peng beneficially owns Hezhong Weijia Co., Ltd., and his spouse, Ms. Shen Si, is deemed to be interested in Mr. Jin Peng's interests[32] Corporate Governance The company is committed to complying with corporate governance principles and practices, has adopted the code provisions of Appendix C1 of the Listing Rules, and adheres to the Model Code for securities transactions by directors, with the Audit Committee having reviewed the interim financial report, and the Board not recommending an interim dividend - The company is committed to complying with corporate governance principles and practices, has adopted the code provisions of Part 2 of Appendix C1 to the Listing Rules, and confirmed compliance during the review period[35] - The company has adopted the Model Code as the code of conduct for directors' securities transactions, and all directors confirmed compliance[35] - The Audit Committee has reviewed the Group's accounting principles, internal controls, and financial reporting matters, and considers the interim results to be in compliance with applicable standards[35] - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[35] Share Option Scheme The company adopted a share option scheme on January 20, 2022, aiming to incentivize and reward eligible participants who contribute to the Group, with the scheme outlining the purpose of grants, eligible persons, offer and acceptance, exercise price, maximum number of shares, maximum entitlement per grantee, restrictions on grants to connected persons, grantee rights, exercise period, performance targets, adjustments upon capital restructuring, early termination of option period, cancellation of granted options, and amendments to the scheme terms, and as of June 30, 2024, the scheme has a remaining term of approximately 7 years and 7 months, with no outstanding, granted, exercised, cancelled, or lapsed share options - The Share Option Scheme was adopted on January 20, 2022, aiming to incentivize or reward eligible participants who contribute to the Group, including full-time/part-time employees, executives, officers, and directors[36][37] - The exercise price of a share option shall not be less than the highest of the closing price on the date of grant, the average closing price for the five (5) business days immediately preceding the date of grant, and the nominal value of the share[40] - The maximum number of shares that may be issued upon exercise of all share options shall not exceed 10% of the total issued shares on the date the scheme was approved by shareholders, and shall not exceed 30% of the issued shares at any time[41] - The total number of share options granted to each eligible participant shall not exceed 1% of the issued shares in any 12-month period, and exceeding this limit requires shareholder approval. Grants of share options to connected persons require approval from Independent Non-Executive Directors, and if exceeding specific amounts and percentages, also require approval at a general meeting of shareholders[43] - Share options are non-transferable, and grantees may exercise them within the option period, subject to specific termination events (e.g., resignation, winding-up, restructuring)[45][46][49] - As of June 30, 2024, the remaining term of the scheme is approximately 7 years and 7 months. During the review period, no share options were outstanding, granted, exercised, cancelled, or lapsed[52] Events After the Reporting Period Following Ms. Liu Chenhong's resignation as an Independent Non-Executive Director, both the number of independent non-executive directors and audit committee members fell below the minimum requirements of the Listing Rules, and the company has applied to the Stock Exchange for a waiver, extending the grace period to fill the vacancies until October 17, 2024 - Following Ms. Liu Chenhong's resignation as an Independent Non-Executive Director, the Company has only two Independent Non-Executive Directors, which is below the minimum of three required by Rule 3.10(1) of the Listing Rules[53] - The Audit Committee has only two members, which is below the minimum of three required by Rule 3.21 of the Listing Rules[53] - The company has applied to the Stock Exchange for a waiver, extending the grace period to fill the vacancies until October 17, 2024[54] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the company's revenue significantly decreased to RMB 355 thousand, with gross profit at RMB 323 thousand, and despite other income, gains or losses, net turning positive, increased net finance costs led to an expanded loss before tax of RMB 8,428 thousand, with loss attributable to equity holders of the Company at RMB 8,428 thousand, and basic and diluted loss per share both at RMB 0.39 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30): | Metric | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 355 | 2,134 | | Cost of sales and services | (32) | (741) | | Gross profit | 323 | 1,393 | | Other income, gains or losses, net | 2,138 | (1,659) | | Distribution costs | (2,118) | (2,248) | | Administrative expenses | (5,868) | (7,788) | | Reversal of impairment losses on trade and other receivables | 5,071 | 14,773 | | Operating (loss)/profit | (454) | 4,471 | | Net finance costs | (7,974) | (4,874) | | Loss before tax | (8,428) | (403) | | Loss and total comprehensive expense for the period | (8,428) | (403) | | Attributable to equity holders of the Company | (8,428) | (387) | | Basic loss per share (RMB cents) | (0.39) | (0.02) | | Diluted loss per share (RMB cents) | (0.39) | (0.02) | Condensed Consolidated Statement of Financial Position As of June 30, 2024, total non-current assets were RMB 60,434 thousand, total current assets were RMB 248,824 thousand, with trade and other receivables significantly increasing to RMB 233,031 thousand, and cash and cash equivalents substantially decreasing to RMB 15,793 thousand, resulting in total current liabilities of RMB 113,666 thousand, net current assets of RMB 135,158 thousand, and total net assets of RMB 194,695 thousand Condensed Consolidated Statement of Financial Position (As of June 30): | Metric | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 833 | 509 | | Intangible assets | 10,000 | 11,000 | | Film and television series | 48,004 | 48,104 | | Total non-current assets | 60,434 | 61,210 | | Current assets | | | | Trade and other receivables | 233,031 | 27,195 | | Cash and cash equivalents | 15,793 | 236,748 | | Total current assets | 248,824 | 263,943 | | Current liabilities | | | | Trade and other payables | 11,994 | 21,067 | | Other borrowings | 88,915 | 86,632 | | Total current liabilities | 113,666 | 121,216 | | Net assets | 194,695 | 203,123 | - Trade and other receivables significantly increased, while cash and cash equivalents substantially decreased, reflecting changes in cash flow and accounts receivable management[56] Condensed Consolidated Statement of Changes in Equity As of June 30, 2024, the Company's total equity was RMB 194,695 thousand, a decrease from RMB 203,123 thousand at the end of 2023, with a loss and total comprehensive expense for the period of RMB 8,428 thousand, the disposal of a subsidiary leading to a reduction in statutory surplus reserve of RMB 282 thousand, and accumulated losses increasing by RMB 8,428 thousand Condensed Consolidated Statement of Changes in Equity (As of June 30): | Metric | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Share capital | 137,801 | 137,801 | | Share premium | 857,469 | 857,469 | | Statutory surplus reserve | 5,563 | 5,845 | | Other reserves | 82,385 | 82,385 | | Accumulated losses | (888,523) | (880,377) | | Total equity | 194,695 | 203,123 | - Loss and total comprehensive expense for the period was RMB 8,428 thousand, leading to an increase in accumulated losses. The disposal of a subsidiary resulted in a decrease in statutory surplus reserve of RMB 282 thousand[58] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2024, net cash used in operating activities significantly increased to RMB 215,435 thousand, net cash generated from investing activities substantially decreased to RMB 309 thousand, and net cash used in financing activities was RMB 5,830 thousand, resulting in cash and cash equivalents at period-end of RMB 15,793 thousand, a significant decrease from the beginning of the period Condensed Consolidated Statement of Cash Flows (For the six months ended June 30): | Metric | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (215,435) | (16,709) | | Net cash generated from investing activities | 309 | 258,444 | | Net cash used in financing activities | (5,830) | (8,360) | | Net (decrease)/increase in cash and cash equivalents | (220,956) | 233,375 | | Cash and cash equivalents at June 30 | 15,793 | 244,280 | - Net cash outflow from operating activities significantly increased, and net cash inflow from investing activities substantially decreased, leading to a significant decline in cash and cash equivalents at period-end[60] Notes to the Unaudited Interim Financial Report This section provides detailed notes to the interim financial report, covering basis of preparation, accounting policies, revenue, profit or loss item details, taxation, loss per share, statement of financial position items (such as intangible assets, film and television series, receivables and payables, borrowings), share capital and dividends, disposal of a subsidiary, fair value measurement of financial instruments, and related party transactions, highlighting significant uncertainty regarding the company's ability to continue as a going concern and multiple overdue borrowings 1. Basis of Preparation These condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the Listing Rules, with the Group recording a net loss of RMB 8.428 million for the six months ended June 30, 2024, and having overdue outstanding bonds and other borrowings, along with limited cash and bank balances, indicating significant uncertainty regarding its ability to continue as a going concern, while management has taken steps to address liquidity needs, including striving for cash inflows from operating activities, recovering receivables, discussing renewal or extension of borrowings, and raising additional capital - These condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[62] - For the six months ended June 30, 2024, the Group recorded a net loss of RMB 8,428 thousand, and had overdue outstanding bonds (RMB 40,909 thousand) and other borrowings (RMB 48,006 thousand), with cash and bank balances of only RMB 15,793 thousand, indicating significant uncertainty regarding its ability to continue as a going concern[62] - The company has taken measures to address liquidity needs, including striving for cash inflows from operating activities, recovering trade and other receivables, discussing renewal or extension of borrowings, and raising additional capital through the issuance of bonds or new shares when appropriate[62] - The Board believes that, subject to the successful implementation of the above measures, the Group has sufficient working capital to prepare the financial statements on a going concern basis[63] 2. Significant Accounting Policies These condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value, and the newly adopted and amended International Financial Reporting Standards (including amendments to IFRS 16, IAS 1, IAS 7, and IFRS 7) applied for the first time in the current period had no significant impact on the interim financial report - These condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments which are measured at fair value[64] - The amendments to International Financial Reporting Standards (including amendments to IFRS 16, IAS 1, IAS 7, and IFRS 7) applied for the first time in the current period had no significant impact on this interim financial report or the Group's results and financial position[65] 3. Revenue The Group's revenue primarily derives from film and television series licensing, copyright transfers, and the provision of film and television series production, distribution, and related services, totaling RMB 355 thousand, with revenue mainly from mainland China and recognized when performance obligations are satisfied Revenue Classification (For the six months ended June 30): | Revenue Source | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Film and television series licensing, copyright transfers | 355 | 2,134 | | Provision of film and television series production, distribution and related services | – | – | | Total Revenue | 355 | 2,134 | - The Group's revenue primarily originates from mainland China and is recognized when performance obligations are satisfied[68] 4. Other Income, Gains or Losses, Net Other income, gains or losses, net for the first half of 2024 amounted to RMB 2,138 thousand, primarily comprising a gain of RMB 4,416 thousand from the disposal of a subsidiary, partially offset by a net exchange loss of RMB 5,489 thousand Details of Other Income, Gains or Losses, Net (For the six months ended June 30): | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Net gain from film and television series investments | – | 852 | | Net exchange loss | (5,489) | (7,091) | | Gain on disposal of a subsidiary | 4,416 | – | | Others | 3,211 | 4,580 | | Total | 2,138 | (1,659) | - The gain on disposal of a subsidiary was the primary contributor to the positive net other income in the current period[70] 5. Loss Before Tax This section details the composition of loss before tax, including net finance costs and other items, where net finance costs primarily consist of interest on borrowings, and other items include amortization of intangible assets, depreciation, and reversal of impairment losses on trade and other receivables 5(a) Net Finance Costs Net finance costs for the first half of 2024 were RMB 7,974 thousand, an increase from RMB 4,874 thousand in the prior period, primarily comprising interest on bank loans and other borrowings (RMB 6,308 thousand) and bond interest (RMB 1,580 thousand) Details of Net Finance Costs (For the six months ended June 30): | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Bond interest | 1,580 | 1,529 | | Interest on bank loans and other borrowings | 6,308 | 3,474 | | Interest on lease liabilities | 8 | 291 | | Interest income | (231) | (1,816) | | Net exchange loss | 302 | 1,389 | | Bank charges | 7 | 7 | | Total | 7,974 | 4,874 | - Interest on bank loans and other borrowings is a major component of net finance costs and has increased year-on-year[71] 5(b) Other Items In the calculation of loss before tax for the first half of 2024, amortization of intangible assets of RMB 1,000 thousand and depreciation of RMB 132 thousand were deducted, and reversal of impairment losses on trade and other receivables of RMB 5,071 thousand was recognized Other Items in Loss Before Tax Calculation (For the six months ended June 30): | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Amortisation of intangible assets | 1,000 | 1,000 | | Depreciation (owned property, plant and equipment) | 11 | 63 | | Depreciation (right-of-use assets) | 121 | 50 | | Reversal of impairment losses on trade and other receivables | (5,071) | (14,773) | 6. Income Tax No income tax was incurred in the first half of 2024 or the prior period, as the Group is exempt from income tax in the Cayman Islands and British Virgin Islands, and its Hong Kong subsidiary, as an investment holding company, is not subject to Hong Kong income tax, while Chinese subsidiaries are subject to a 25% income tax rate, except for Hainan Yingsheng Culture Media Co., Ltd. which enjoys a 15% preferential tax rate, and Horgos Xinghong Qicheng Media Co., Ltd. which benefits from a five-year tax exemption period starting in 2019 - For the six months ended June 30, 2024, the Group incurred no income tax[73] - The Group is exempt from income tax in the Cayman Islands and British Virgin Islands, and its Hong Kong subsidiary is not subject to Hong Kong income tax[73] - Chinese subsidiaries are subject to a 25% income tax rate, except for Hainan Yingsheng Culture Media Co., Ltd. which enjoys a 15% preferential tax rate, and Horgos Xinghong Qicheng Media Co., Ltd. which benefits from a five-year tax exemption period (commencing in 2019)[74] 7. Loss Per Share This section presents the calculation of basic and diluted loss per share, both at RMB 0.39 cents, reflecting the loss attributable to ordinary equity holders of the parent company 7(a) Basic Loss Per Share Basic loss per share for the first half of 2024 was RMB 0.39 cents, calculated based on a loss attributable to ordinary equity holders of the parent company of RMB 8,428 thousand and a weighted average number of ordinary shares outstanding of 2,151,577 thousand shares Basic Loss Per Share (For the six months ended June 30): | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent company (RMB thousand) | 8,428 | 387 | | Weighted average number of ordinary shares outstanding (thousand shares) | 2,151,577 | 2,151,577 | | Basic loss per share (RMB cents) | (0.39) | (0.02) | 7(b) Diluted Loss Per Share Diluted loss per share for the first half of 2024 was RMB 0.39 cents, identical to basic loss per share, calculated based on a loss attributable to ordinary equity holders of the Company of RMB 8,428 thousand and a weighted average number of ordinary shares outstanding of 2,151,577 thousand shares Diluted Loss Per Share (For the six months ended June 30): | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the Company (RMB thousand) | 8,428 | 387 | | Weighted average number of ordinary shares outstanding (thousand shares) | 2,151,577 | 2,151,577 | | Diluted loss per share (RMB cents) | (0.39) | (0.02) | 8. Intangible Assets As of June 30, 2024, net intangible assets amounted to RMB 10,000 thousand, primarily comprising contract rights (RMB 10,000 thousand), with amortization expense for the period being RMB 1,000 thousand Net Intangible Assets (As of June 30): | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Contract rights | 10,000 | 11,000 | | Patents and trademarks | – | – | | Computer software | – | – | | Total Net Value | 10,000 | 11,000 | - Amortization expense for intangible assets in the current period was RMB 1,000 thousand[77] - Contract rights primarily refer to arrangements for providing training services related to film production[77] 9. Film and Television Series As of June 30, 2024, net film and television series assets amounted to RMB 48,004 thousand, comprising film and television series in production of RMB 34,847 thousand, completed film and television series of RMB 47,522 thousand, and accumulated impairment of RMB 34,365 thousand Film and Television Series Assets (As of June 30): | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Film and television series costs - in production | 34,847 | 34,847 | | Film and television series costs - completed production | 47,522 | 72,322 | | Total film and television series costs | 82,369 | 107,169 | | Accumulated impairment | (34,365) | (59,065) | | Net film and television series | 48,004 | 48,104 | - The net value of film and television series assets slightly decreased, primarily due to a reduction in completed film and television series[79] 10. Trade and Other Receivables As of June 30, 2024, total trade and other receivables significantly increased to RMB 233,031 thousand from RMB 27,195 thousand at the end of 2023, primarily due to advances related to film and television series increasing from RMB 9,415 thousand to RMB 224,842 thousand, with trade receivables net of loss allowance at RMB 58 thousand Trade and Other Receivables (As of June 30): | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables (net of loss allowance) | 58 | 8,441 | | Advances related to film and television series | 224,842 | 9,415 | | Prepayments | 22 | 10 | | Others | 8,109 | 9,329 | | Total | 233,031 | 27,195 | - The significant increase in advances related to film and television series is the primary reason for the substantial growth in total trade and other receivables[81] - As of June 30, 2024, advances related to film and television series represent interest-free advances made to film producers[82] 11. Trade and Other Payables As of June 30, 2024, total trade and other payables amounted to RMB 11,994 thousand, a decrease from RMB 21,067 thousand at the end of 2023, with reductions in trade payables, third-party advances, and payables related to film and television series Trade and Other Payables (As of June 30): | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Trade payables (within 3 months) | 262 | 2,604 | | Third-party advances | 260 | 1,600 | | Payables related to film and television series | 2,170 | 4,903 | | Taxes payable other than income tax | 1,629 | 2,096 | | Accrued expenses | 1 | 1 | | Other payables | 4,672 | 6,863 | | Subtotal | 8,732 | 15,463 | | Receipts in advance | 3,000 | 3,000 | | Total | 11,994 | 21,067 | - Third-party advances and payables related to film and television series are all unsecured, interest-free, and have no fixed repayment terms or are repayable within one year[84] 12. Other Borrowings This section details the Group's other borrowings, including an analysis of the carrying amount of bonds and other borrowings, along with their key terms and repayment schedules, noting that multiple borrowings are overdue, and the company is negotiating repayment plans with creditors 12(a) Analysis of Carrying Amount of Other Borrowings As of June 30, 2024, total other borrowings amounted to RMB 88,915 thousand, comprising bonds of RMB 40,909 thousand and other borrowings of RMB 48,006 thousand, with all borrowings due within one year Carrying Amount of Other Borrowings (As of June 30): | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Bonds | 40,909 | 44,934 | | Other borrowings | 48,006 | 41,698 | | Total | 88,915 | 86,632 | | Amounts due for settlement within one year | (88,915) | (86,632) | 12(b) Key Terms and Repayment Schedule of Non-Bank Borrowings The 2020 bonds became overdue on February 15, 2022, with outstanding principal of RMB 35,157 thousand and accrued interest of RMB 3,070 thousand, and for the current period, post-default interest of RMB 1,580 thousand was accrued and RMB 5,907 thousand was partially settled, with the company still discussing a repayment plan with BeiTai, while other borrowings (Repurchase Agreement A) became overdue in November 2023, with late payment penalties of RMB 3,982 thousand accrued for the current period, and the company is still negotiating a repayment plan with Seller A - The 2020 bonds became overdue on February 15, 2022, with outstanding principal of RMB 35,157 thousand and accrued interest of RMB 3,070 thousand[87] - For the six months ended June 30, 2024, post-default interest of RMB 1,580 thousand was accrued, and RMB 5,907 thousand was partially settled. The company is still discussing a repayment plan with BeiTai regarding the bonds[87] - Other borrowings (Repurchase Agreement A) became overdue in November 2023, and for the six months ended June 30, 2024, late payment penalties of RMB 3,982 thousand were accrued for overdue payments[89] - The company is still negotiating a repayment plan for other borrowings with Seller A, and no agreement has been reached yet[89] 13. Capital and Dividends This section discloses the company's share capital structure and dividend policy, noting that as of June 30, 2024, both authorized and issued share capital remained stable, and no dividends were paid for the current period or the previous financial year 13(a) Dividends No dividends were payable for the current interim period or the previous financial year - The Group had no dividends payable to equity holders of the Company for the current interim period, nor any dividends payable for the previous financial year that were approved and paid during the current interim period[90] 13(b) Share Capital As of June 30, 2024, authorized share capital consisted of 10,000,000,000 ordinary shares with a par value of USD 0.01 each, totaling RMB 632,110 thousand, while issued and fully paid ordinary shares amounted to 2,151,577,026 shares, totaling RMB 137,801 thousand, consistent with the end of 2023 Share Capital (As of June 30): | Item | June 30, 2024 Number of Shares | June 30, 2024 (RMB thousand) | December 31, 2023 Number of Shares | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Authorized share capital (ordinary shares of USD 0.01 par value each) | 10,000,000,000 | 632,110 | 10,000,000,000 | 632,110 | | Issued and fully paid ordinary shares | 2,151,577,026 | 137,801 | 2,151,577,026 | 137,801 | 14. Disposal of a Subsidiary On June 20, 2024, Beijing Xinghong Culture Development Co., Ltd., a wholly-owned subsidiary of the Company, sold 100% equity of Ningbo Yuanning Culture Media Co., Ltd. for RMB 100,000, with the transaction completed on June 25, generating a gain of RMB 4,416 thousand, primarily due to the disposed company having net liabilities - On June 20, 2024, Beijing Xinghong Culture Development Co., Ltd., a wholly-owned subsidiary of the Company, sold 100% equity of Ningbo Yuanning Culture Media Co., Ltd. for RMB 100,000[93] - The disposal was completed on June 25, 2024, and the consideration has been received[93] Financial Impact of Disposal of a Subsidiary: | Item | Amount (RMB thousand) | | :--- | :--- | | Total consideration | 100 | | Net liabilities disposed of | (4,316) | | Gain on disposal | 4,416 | | Net cash outflow arising from disposal | 78 | - The gain on disposal is primarily due to the disposed company having net liabilities with a carrying amount of RMB 4,316 thousand[92] 15. Financial Instruments Measured at Fair Value This section details the Group's financial instruments measured at fair value, including their fair value hierarchy, valuation methods, and changes during the period, noting that unlisted equity investments are classified as Level 3 fair value measurements, valued using the income approach, with no transfers between levels during the period 15(a) Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis As of June 30, 2024, financial assets measured at fair value through profit or loss (unlisted equity investments) amounted to RMB 1,577 thousand, classified as Level 3 fair value measurements, with the valuation method being the income approach and a discount rate of 2%, and no transfers between fair value hierarchy levels during the period Financial Assets Measured at Fair Value (As of June 30): | Item | Fair Value (RMB thousand) | Fair Value Hierarchy | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss - Unlisted equity investments | 1,577 | Level 3 | - The valuation method for Level 3 fair value measurements is the income approach, with a significant unobservable input being the discount rate of 2%[99] - For the six months ended June 30, 2024 and 2023, there were no transfers between Level 1 and Level 2, nor any transfers into or out of Level 3[100] Movements in Level 3 Fair Value Measurements (RMB thousand): | Item | 2024 | 2023 | | :--- | :--- | :--- | | At January 1 | 1,577 | 1,870 | | Fair value changes recognized in profit or loss during the period/year | – | (293) | | At June 30/December 31 | 1,577 | 1,577 | 15(b) Financial Assets and Financial Liabilities Not Measured at Fair Value on a Recurring Basis The Directors believe that the carrying amounts of financial assets and financial liabilities measured at amortized cost in the condensed consolidated financial statements approximate their fair values - The Directors believe that the carrying amounts of financial assets and financial liabilities measured at amortized cost in the condensed consolidated financial statements approximate their fair values[103] 16. Significant Related Party Transactions This section discloses the Group's transactions and balances with related parties, noting that key management personnel remuneration totaled RMB 2,329 thousand in the first half of 2024, interest expenses with a director occurred in the first half of 2023 but not in the current period, and an amount payable to a shareholder of RMB 40,909 thousand is included in other borrowings 16(a) Key Management Personnel Remuneration Key management personnel remuneration totaled RMB 2,329 thousand in the first half of 2024, primarily consisting of short-term employee benefits Key Management Personnel Remuneration (For the six months ended June 30): | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 2,174 | 1,843 | | Retirement benefits | 155 | 121 | | Total | 2,329 | 1,964 | 16(b) Related Party Transactions Interest expenses of RMB 61 thousand were incurred with a director in the first half of 2023, with no such transactions in the first half of 2024 Related Party Transactions (For the six months ended June 30): | Related Party | Nature of Transaction | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | :--- | | A director | Interest expense | – | 61 | 16(c) Balances with Related Parties As of June 30, 2024, an amount payable to a shareholder of RMB 40,909 thousand is included in "Other borrowings" Balances with Related Parties (As of June 30): | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Amount payable to a shareholder of the Company | 40,909 | 44,934 | - This amount payable to a shareholder is included in "Other borrowings," and this shareholder holds 4.88% equity in the Company[108] 17. Non-Adjusting Events After the Reporting Period Apart from Ms. Liu Chenhong's resignation as an Independent Non-Executive Director, which resulted in the Board's composition not meeting Listing Rules requirements and for which a waiver has been applied to extend the grace period, there are no other significant post-reporting period events requiring disclosure - Apart from Ms. Liu Chenhong's resignation as an Independent Non-Executive Director, which resulted in the Board's composition not meeting Listing Rules requirements and for which a waiver has been applied to extend the grace period, there are no other significant post-reporting period events requiring disclosure[108]