Film and TV Production - The company's film "獨行月球" achieved a cumulative box office of 3.1 billion RMB in 2022[6] - The company's film "交換人生" and "保你平安" were released in theaters, and the TV series "情滿九道彎" was broadcast on TV and internet platforms[6] - The company's film and TV production business maintains a high production rate and is collaborating with overseas companies[6] - Impairment loss on film and TV program copyrights totaled RMB 295 million, including RMB 230 million for the movie "Exchange Life" and RMB 65 million for the TV program "Love in Jiudaowan"[23] - The company revised down the expected box office or total revenue for "Exchange Life" and "Love in Jiudaowan" by 61% and 44%, respectively, due to COVID-19 measures and macroeconomic uncertainties[23] - In-progress film and TV program copyrights are recorded at cost less accumulated impairment losses and transferred to completed film and TV program copyrights upon completion[191] - Completed film and TV program copyrights are amortized during the period of initial release in cinemas or TV broadcasts if the company plans to consume the future economic benefits through these channels[192] - Licensed film and TV program copyrights are amortized over an estimated useful life of 2 to 3 years using the straight-line method[193] - Film and TV program copyrights are classified as current assets if completion is expected within the company's operating cycle, otherwise as non-current assets[194] - Completed and licensed film and TV program copyrights are tested for impairment when there are indications of impairment, while in-progress copyrights are tested annually regardless of impairment indicators[195] Gaming Business - The company launched its first game, "亂世逐鹿," on May 26, 2022, which ranked first in the free game rankings on the App Store on its release day[8] - The company plans to release a game based on the Japanese anime IP "鋼之煉金術師" in the summer of 2023[8] - The company plans to release a new game, "仙境傳說：愛如初見," based on the popular IP "仙境傳說" by the end of 2023[8] - The company is deepening cooperation with Tencent Group in game agency, co-operation, and marketing services[8] - The company's game "傳奇天下" was launched on July 26, 2022, offering players a more realistic combat experience with its powerful physical rendering system[8] - The company entered the gaming business in 2022 under the "JINGXIU" brand, focusing on game agency publishing, co-operation, and marketing services[68] - Beijing Jingxiu is involved in game product agency publishing, operation, and marketing, which is related to the company's gaming business[69] Financial Performance - Net profit attributable to equity holders decreased to RMB 790 million in 2022, down by RMB 384 million (32.7%) compared to RMB 1,174 million in 2021, primarily due to the impact of the pandemic[11] - Revenue declined to RMB 1,320 million in 2022 from RMB 2,318 million in 2021, with film and TV production, online streaming, and gaming contributing RMB 1,269.2 million, and other segments contributing RMB 50.8 million[11] - Adjusted net profit for 2022 was RMB 257.0 million, a decrease from RMB 469.3 million in 2021, while adjusted EBITDA was RMB 830.4 million with a margin of 62.9%, compared to RMB 944.2 million and 40.7% in 2021[11] - Cash and bank balances increased to RMB 1,189.7 million in 2022 from RMB 1,139.5 million in 2021, primarily driven by operational activities[15] - Total borrowings rose to RMB 1,769.9 million in 2022, with fixed-rate borrowings accounting for 12.7%, and the debt-to-equity ratio stood at 3.3%[16] - Asset impairment losses surged to RMB 398.1 million in 2022, up from RMB 35.6 million in 2021, mainly due to impairments in film and TV program rights[19][20] - Impairment loss on trade receivables amounted to approximately RMB 85.2 million, primarily due to provisions made for expected non-repayment by customers[21] - Impairment loss on other receivables and deposits was RMB 17.1 million, with the total book value increasing by approximately RMB 1.1 billion, mainly due to increased receivables from film and TV program copyright investments[22] - The expected loss rate for other receivables and deposits classified as Stage 1 increased to 1.41% as of December 31, 2022, compared to 0.10% in the previous year[22] - Total employee costs for the year ended December 31, 2022, were approximately RMB 202.2 million, compared to RMB 113.5 million in the previous year[27] - The company employed approximately 374 employees as of December 31, 2022[27] - The company's accumulated losses decreased from RMB 3,586,278 thousand in 2021 to RMB 3,496,542 thousand in 2022[41] - The company's distributable reserves consist of paid-in surplus of RMB 63,481 thousand and accumulated losses of RMB 3,496,542 thousand as of December 31, 2022[41] - Revenue for 2022 was RMB 1,319,928 thousand, a decrease of 43.1% compared to RMB 2,318,132 thousand in 2021[157] - Gross profit for 2022 was RMB 261,615 thousand, a significant drop from RMB 1,032,268 thousand in 2021, representing a 74.7% decline[157] - Operating profit for 2022 was RMB 883,747 thousand, down 8.7% from RMB 967,614 thousand in 2021[157] - Net profit attributable to shareholders for 2022 was RMB 789,525 thousand, a decrease of 32.8% from RMB 1,175,339 thousand in 2021[158] - Basic earnings per share for 2022 were RMB 8.430, down from RMB 12.792 in 2021, a 34.1% decrease[158] - The company's cash and cash equivalents increased slightly to RMB 1,189,720 thousand in 2022 from RMB 1,139,463 thousand in 2021, a 4.4% growth[154] - Total liabilities decreased to RMB 5,243,538 thousand in 2022 from RMB 5,000,476 thousand in 2021, a 4.9% reduction[155] - The company's intangible assets, including film and television program rights, increased to RMB 2,443,848 thousand in 2022 from RMB 1,403,045 thousand in 2021, a 74.2% growth[154] - Total equity increased from RMB 5,619,416 thousand in 2021 to RMB 7,975,431 thousand in 2022, reflecting a growth of 41.9%[160][161] - Annual profit for 2022 was RMB 789,525 thousand, a decrease of 32.8% compared to the RMB 1,175,339 thousand profit in 2021[160][161] - Cash and cash equivalents at the end of 2022 were RMB 1,189,720 thousand, up 4.4% from RMB 1,139,463 thousand at the end of 2021[163] - Net cash used in operating activities decreased significantly from RMB 1,467,455 thousand in 2021 to RMB 322,563 thousand in 2022, a reduction of 78%[163] - Net cash used in investing activities increased from RMB 134,983 thousand in 2021 to RMB 1,351,439 thousand in 2022, primarily due to investments in film and TV program copyrights[163] - The company issued new shares in 2022, raising RMB 1,639,540 thousand, compared to no share issuance in 2021[161][163] - Non-controlling interests decreased from RMB 6,165 thousand in 2021 to RMB 4,192 thousand in 2022, a reduction of 32%[160][161] - The company's accumulated losses decreased from RMB 2,360,349 thousand in 2021 to RMB 1,546,850 thousand in 2022, reflecting improved financial performance[160][161] - Share premium increased by 21% from RMB 7,752,893 thousand in 2021 to RMB 9,379,095 thousand in 2022, mainly due to new share issuance[160][161] - Net cash inflow from financing activities in 2022 was RMB 1,676,190 thousand, slightly lower than the RMB 1,710,036 thousand in 2021[163] Online Streaming and Content Acquisition - The company's streaming platform, Pumpkin Movie, continues to acquire high-quality domestic and imported film and series content to meet the diverse needs of paying members[7] - The company is actively exploring new media copyright operations and distribution business to enhance profitability and risk resistance[7] - The company's content production and online streaming media business continued to grow rapidly in 2022, with the current form being the production of film and television works and the online streaming platform "Pumpkin Movie"[68] - The company plans to continue driving growth in content production and online streaming media, leveraging professional capabilities to produce more popular film and television works and deepen the innovation and application of smart technology[68] - The company's restricted streaming media and gaming businesses are expected to be a significant part of its future overall performance, as they constitute a major portion of its core operations[68] - The company's operating companies and their subsidiaries primarily provide video content to internet users through personal computer websites, mobile applications, or TV applications[69] - Shanghai Ruyi is engaged in the production and operation of radio and television programs and films, which is related to the company's content production business[69] - The company has established exclusive service agreements with various wholly foreign-owned enterprises and subsidiaries, including Beijing Ruyi and Shanghai Ruyi, with agreements dated from August 1, 2021, to December 21, 2020[72] - Management and operation agreements restrict the operational and financial activities of the operating companies, including limitations on amendments to organizational charters, changes in registered capital, and establishment of subsidiaries[73] - The company has entered into call option agreements allowing the transfer of equity stakes in operating companies to wholly foreign-owned enterprises or designated persons upon meeting certain conditions[75] - Equity pledge agreements have been established, where Chinese registered shareholders pledge their equity in operating companies as a guarantee for fulfilling obligations under structural contracts[76] - Shareholder voting rights agreements grant the wholly foreign-owned enterprises and their designated agents the authority to exercise voting rights in the operating companies[77] - Beijing Jingxiu holds licenses and permits for the group's online streaming business, with Beijing Ruyi operating the restricted streaming business through Beijing Jingxiu[80] - Shanghai Ruyi established two wholly-owned subsidiaries, Ruhu Tianyi and Hengyang Ruyi, in November 2022 and January 2023 respectively, both engaged in restricted streaming business[82] - The group has implemented measures to protect against conflicts of interest between the group and the relevant Chinese registered shareholders and beneficial owners of the operating companies[82] - The group has executed non-compete commitment deeds with Ke Liming, Pumpkin Films Limited, and their respective associates to prevent competition with the group's business[82] - The group has entered into exclusive service master agreement accession agreements and management and operation master agreement accession agreements with Ruhu Tianyi and Hengyang Ruyi[82] - The group has entered into equity pledge agreements with Beijing Jingxiu and Beijing Ruyi in February 2023[81] - The group has entered into structural contracts with Beijing Jingxiu, Beijing Ruyi, and Shanghai Ruyi, allowing the group to participate in and operate content production and online streaming business[80] - The group has executed measures to ensure that the relevant Chinese registered shareholders and beneficial owners of the operating companies cannot influence the business operations of the operating companies[82] - The group has entered into equity pledge agreements with Beijing Jingxiu and Beijing Ruyi in February 2023[81] - The group has entered into structural contracts with Beijing Jingxiu, Beijing Ruyi, and Shanghai Ruyi, allowing the group to participate in and operate content production and online streaming business[80] Risk Management and Legal Compliance - The company faces risks related to the validity and enforceability of structured contracts under Chinese laws and regulations, which could significantly impact its business and financial performance[84] - The Ministry of Industry and Information Technology (MIIT) prohibits domestic companies from leasing, transferring, or selling telecom business licenses to foreign investors, which may affect the company's operations[84] - The company cannot guarantee that Chinese authorities will not view structured contracts as a form of foreign investment in telecom services or online gaming operations, potentially leading to penalties such as license revocation or fines[84] - Dispute resolution clauses in structured contracts may not be enforceable under Chinese law, and remedies granted by foreign courts may not be recognized in China[85] - The Foreign Investment Law of China, effective January 1, 2020, currently has no significant impact on the company's structured contracts or operations, but future legal changes could pose risks[86] - If Chinese authorities redefine "foreign investment" and deny the legality of structured contracts, the company may lose control over its operating entities and face adverse financial impacts[86] - Structured contracts may be less effective than direct ownership in providing control and economic benefits over operating entities[86] - The company relies on Chinese registered shareholders and beneficial owners to fulfill contractual obligations, which may not align with the company's best interests[86] - The company will continue to monitor legal developments and consult with legal advisors to address potential impacts on its operations[86] - The company's control over operating companies is based on contractual arrangements under structural contracts, which may be subject to disputes and arbitration under Chinese law, potentially impacting the company's ability to enforce these contracts[87] - The company has implemented measures to mitigate the influence of Chinese registered shareholders and beneficial owners on the operations of the operating companies[88] - Structural contracts may be subject to review by Chinese tax authorities, potentially leading to additional tax liabilities for the foreign-invested enterprise[89] - The company has established internal control measures to protect the assets of operating companies, including restrictions on asset disposal without prior written consent from the foreign-invested enterprise[90] - The company's online streaming media business is subject to regulatory restrictions, requiring specific licenses that are primarily available to state-owned or state-controlled companies[64] - The company has implemented anti-corruption policies, including contract clauses and regular training for all directors and employees[109] - The company has a risk management framework that includes the board as the decision-making layer and business unit leadership groups and management as the execution layer, with clear risk management responsibilities and reporting lines[128] - The company updated its risk assessment standards for 2022, incorporating qualitative and quantitative dimensions across strategic, financial, operational, compliance, and market aspects, while also considering ESG-related risks[130] - The company implemented a continuous risk management cycle, focusing on "risk identification - risk control implementation - inspection tracking - continuous optimization" to improve risk prevention and response capabilities[132] - The company conducted a comprehensive review of its risk management system in 2022, updating risk assessment standards and databases, and identifying major risks across key business segments[133] - The company's internal control system is based on the COSO framework, consisting of five interdependent elements: control environment, risk assessment, control activities, information and communication, and monitoring activities[134] - The company's auditors maintained professional skepticism and used professional judgment during the audit process, focusing on identifying and assessing risks of material misstatement due to fraud or error[152] - The company's auditors evaluated the appropriateness of the accounting policies and the reasonableness of accounting estimates and related disclosures made by the board of directors[152] - The company's auditors assessed the adequacy of disclosures related to the going concern basis of accounting and concluded that there were no material uncertainties regarding the company's ability to continue as a going concern[153] - The company's auditors communicated with the audit committee regarding the planned audit scope, timing, and significant audit findings, including any material weaknesses in internal control identified during the audit[153] Corporate Governance and Shareholder Structure - The company did not hold any significant investments during the year ended December 31, 2022[25] - The company closely monitored exchange rate fluctuations, with no significant fluctuations expected in the near term[24] - Under the 2013 Share Option Scheme, 181,917,000 share options were granted and remained unexercised as of December 31, 2022[26] - The company did not recommend a final dividend for the year ended December 31, 2022 (compared to no dividend for the year ended December 31, 2021)[28] - The company and its subsidiaries did not have any significant acquisitions or disposals during the year ended December 31, 2022[28] - The company's subsidiaries are primarily engaged in content production and online streaming, internet community services, and manufacturing and sales of accessories[29] - The company actively manages environmental and social issues, ensuring compliance with relevant laws and regulations, reducing energy and resource consumption, and promoting green practices[29] - The company has adopted a dividend policy, with any dividend payments subject to the board's discretion based on financial performance, operational needs, and economic conditions[31] - The company's 2013 Share Option Plan allows for the issuance of up to 7,359,057,611 shares, representing 10% of the issued shares as of June 10, 2016[33] - As of December 31, 2022, 181,917,000 share options under the 2013 Share Option Plan remained unexercised, representing approximately 1.82% of the company's issued share capital[34] - During the year, no new share options were granted under the 2013 Share Option Plan, and no options were forfeited or canceled[34] - The total number of unexercised share options granted to directors as of December 31, 2022, was 58,000, with an exercise price of HKD 3.43 per share[35][36] - The company granted a total of 123,917 thousand share options on November 26, 2021, with an exercise price of HKD 3.43 per share[38] - The share options granted on November 26, 2021, are valid from November 26, 2022, to November 25, 2031[37][38] - The company entered into a share subscription agreement with China Handi Group on July 14, 2022, for the issuance of 325,000,
中国儒意(00136) - 2022 - 年度财报