BTH(600640)2023-04-28 16:00Financial Performance - Revenue for 2022 was 3.51 billion yuan, a decrease of 23.86% compared to 2021[23] - Net profit attributable to shareholders of the listed company was -199.67 million yuan in 2022, compared to -357.53 million yuan in 2021[23] - Net cash flow from operating activities in 2022 was -33.03 million yuan, a decrease of 144.88% compared to 2021[24] - Total assets at the end of 2022 were 5.48 billion yuan, a decrease of 8.47% compared to the end of 2021[24] - Total equity attributable to shareholders of the listed company was 3.95 billion yuan at the end of 2022, a decrease of 4.73% compared to the end of 2021[24] - Basic earnings per share decreased to -0.2509 yuan per share in 2022 from -0.4493 yuan per share in 2021[25] - Diluted earnings per share also decreased to -0.2509 yuan per share in 2022 from -0.4493 yuan per share in 2021[25] - Weighted average return on equity improved to -4.9283% in 2022 from -8.2626% in 2021, an increase of 3.3343 percentage points[25] - Revenue for Q1 2022 was 861,713,537.86 yuan, Q2 was 1,071,799,908.69 yuan, Q3 was 899,135,073.58 yuan, and Q4 was 678,332,544.60 yuan[27] - Net profit attributable to shareholders was -10,268,855.82 yuan in Q1, -11,339,553.73 yuan in Q2, -78,184,605.48 yuan in Q3, and -99,872,208.60 yuan in Q4[27] - Non-recurring gains and losses for 2022 totaled -64,908,723.69 yuan, compared to -6,366,495.45 yuan in 2021 and 75,912,219.93 yuan in 2020[30] - Revenue for 2022 was 3.511 billion yuan, a decrease of 24% year-on-year[36] - Net profit attributable to shareholders was -200 million yuan, a reduction in loss of 44% year-on-year[36] - Non-GAAP net profit attributable to shareholders was -135 million yuan, a reduction in loss of 62% year-on-year[36] - Revenue for 2022 was RMB 3.511 billion, a decrease of 24% year-over-year, with a net loss attributable to the parent company of RMB -200 million[58] - The company's overall gross margin improved by 3.2 percentage points year-over-year, despite a net loss[58] - Sales expenses decreased by 35.18% to RMB 588.5 million due to reduced channel and customer service fees[63] - Operating cash flow turned negative at RMB -330.3 million, a 144.88% decrease from the previous year[63] - Investment cash flow was significantly negative at RMB -4.4559 billion, primarily due to a RMB 201.3 million investment in the CCTV Media Industry Fund and a RMB 204 million increase in fixed deposits[63] - Net cash flow from financing activities decreased due to the use of credit lines to meet temporary liquidity needs and reduced dividend payments by subsidiaries[64] - Investment income declined as no new wealth management investments were made, leading to a decrease in returns[64] - Fair value changes resulted in losses due to market volatility affecting equity investments[64] - Credit impairment losses decreased as the company accelerated the collection of receivables, leading to reversals of impairment losses[64] - Internet and related services revenue decreased by 27.98% to 2,702,322,653.89 RMB, with a gross margin increase of 4.55 percentage points[65] - Video business revenue decreased by 29.04% to 496,415,087.82 RMB, with a gross margin increase of 2.12 percentage points[66] - Game integration and expansion revenue increased by 12.26% to 817,622,267.87 RMB, with a gross margin increase of 0.98 percentage points[66] - Digital rights operation revenue decreased by 38.22% to 1,190,982,576.86 RMB, with a gross margin increase of 2.56 percentage points[66] - Total revenue decreased by 23.91% to 3,499,006,908.79 RMB, with a gross margin increase of 3.06 percentage points[66] - Internet and related services accounted for 78.41% of total costs, with a 31.30% decrease in costs compared to the previous year[69] - Total operating costs decreased by 26.34% to 3.24 billion yuan, with digital rights operation costs dropping by 39.88% to 1.10 billion yuan[70] - Net cash flow from operating activities was -33.03 million yuan, a decrease of 144.88% year-on-year[79] - Net cash flow from investing activities was -445.59 million yuan, a decrease of 1043.87% year-on-year[79] - Net cash flow from financing activities was 27.98 million yuan, an increase of 61.50 million yuan year-on-year[80] - Net profit for 2022 was -206 million yuan, with operating cash flow of -33 million yuan[81] - Fair value changes resulted in a loss of 69.56 million yuan, mainly due to market fluctuations[82] - Total assets decreased by 507 million yuan (-8.47%) to 5.482 billion yuan as of December 31, 2022[86] - The company's net profit attributable to the parent company for 2022 was -199.6652 million yuan, with undistributed profits of 462.8162 million yuan as of December 31, 2022[153] Business Segments and Operations - The company's main business segments include digital culture, video services, and interactive entertainment[14] - The company's main subsidiaries include Tianyi Video, Xuan Interactive, and Tianyi Reading[14] - Digital content business achieved over 10 million live viewers for the "5G Maritime Cloud Concert" and 5.54 million cumulative viewers for F1 races, driving 2,388TB of traffic[59] - Digital asset business saw a 99% increase in digital rights revenue, exceeding RMB 100 million[61] - Light-asset income from the hotel business exceeded RMB 100 million, and the digital exhibition business secured 305 exhibition projects, generating 6 million-level business opportunities[61] - The company launched the "Guomai Culture Metaverse Home," the first metaverse product in the telecom industry, with applications in various sectors including education and cultural tourism[60] - The digital party construction SaaS product was adopted by 120 enterprises and institutions, covering 5 million party members[60] - The company completed 116 invention patents and 66 software copyright registrations in 2022[38] - The company reduced the number of management departments by 40% as part of organizational reforms[39] - The company achieved a personnel turnover rate of 40% in 2022[40] - The company was awarded the title of "2022 China VR50 Strong Enterprises" at the World VR Industry Conference[41] - The company developed new products such as Tianyi Cloud VR, digital virtual humans, and digital collectibles, integrating VR/AR/MR and digital twin technologies[166] - The company optimized underlying resource efficiency algorithms and provided differentiated computing power through MSP, leveraging cloud-network integration advantages[166] - The company created a metaverse platform integrating cultural resources, virtual cities, and digital avatars to enhance user experiences[166] - The company collaborated with over 20 institutions to promote industry-education integration and cultivate digital talent[167] - The company's "Cloud Performance Theater" and other digital content offerings contributed to the development of new business models in entertainment, education, and tourism[166] - Tianyi Video achieved revenue of 500 million yuan, while Colorful Interactive achieved revenue of 680 million yuan, with a year-on-year decrease of 140 million yuan due to optimization of traditional businesses[100] - The anime and space companies achieved revenues of 154 million yuan and 149 million yuan respectively, with net profits of 5 million yuan and 11 million yuan[100] - Tianyi Reading achieved revenue of 50 million yuan, with a net loss of 1 million yuan, focusing on digital party construction business[100] - Yijifen (Shanghai) Digital Technology Co., Ltd. achieved revenue of 1.19 billion yuan, a year-on-year decrease of 740 million yuan, with a net profit of 6 million yuan[101] - The cultural tourism company achieved revenue of 490 million yuan, with a net profit of 7 million yuan, while Zunmao Hotel achieved revenue of 330 million yuan, a year-on-year decrease of 60 million yuan, with a net loss of 24 million yuan[101] Corporate Governance and Leadership - The company did not distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for 2022[5] - The company's registered address has remained at 1207 Jiangning Road, Shanghai since August 3, 2010[18] - The company's stock is listed on the Shanghai Stock Exchange with the stock code 600640[20] - The company's annual report for 2022 highlights the leadership team's extensive experience in telecommunications and related industries, with key executives holding significant roles in various subsidiaries and affiliated companies[128][130][131] - Key executives such as Huang Zhiyong, Yan Dong, and Chen Zhichao have held prominent positions within China Telecom and its subsidiaries, contributing to the company's strategic direction and operational management[128][130] - The report details the roles of independent directors like Li Chuan and Xu Zhihan, who bring diverse expertise from finance, investment, and academia to the board[128][132] - The company's leadership includes individuals with backgrounds in technology, media, and strategic development, such as Rui Bin, who has held roles at Intel, Huawei, and various media companies[128] - The financial leadership team, including Hu Wei and Wei Zhaohui, has extensive experience in financial management and risk control within the telecommunications sector[130] - The report outlines the cross-functional expertise of the board, with members like Guo Jianmin and Wang Yu contributing knowledge from insurance, healthcare, and financial management[128][131] - The company's governance structure includes a mix of internal and external directors, ensuring a balance of operational insight and independent oversight[128][131][132] - The leadership team's experience in mergers, acquisitions, and strategic partnerships is highlighted, with several members having held roles in investment and corporate development[128][132] - The report emphasizes the company's commitment to innovation and technology, with executives like Zhang Mingjie having backgrounds in research and development within the telecommunications sector[130] - The company's leadership structure reflects a strong focus on financial discipline and strategic growth, with key roles in finance, risk management, and corporate governance[130][131] - Total remuneration for directors, supervisors, and senior management at the end of the reporting period was 3.9381 million yuan[134] - The company elected Zhang Wei as Chairman and Sun Dawei as a director, while Li Anmin and Huang Zhiyong stepped down due to work adjustments[135] - The company approved the 2021 financial report, 2022 financial budget, and capital investment plan during the 26th meeting of the 10th Board of Directors[137] - The company proposed to purchase bank wealth management products using short-term idle funds[137] - The company approved the 2022 semi-annual report and the risk assessment report for related transactions with China Telecom Group Finance Co., Ltd.[138] - The company revised the shareholder meeting rules and established an independent director working system during the 30th meeting of the 10th Board of Directors[138] - The company approved the 2022 third-quarter report during the 31st meeting of the 10th Board of Directors[138] - The company canceled part of the stock options under the 2021 stock option incentive plan during the 32nd meeting of the 10th Board of Directors[138] - All directors attended the required number of board meetings, with no instances of consecutive absences[139] - The company held a total of 7 Audit Committee meetings in 2022, focusing on financial and internal control audits, as well as reviewing annual and quarterly reports[142][143] - The Nomination Committee held 2 meetings in 2022, primarily addressing the appointment of candidates for the 10th Board of Directors[144] - The Strategic Committee held 1 meeting in 2022, approving the company's 2021 annual summary and 2022 business plan, as well as internal organizational adjustments[145] - The Compensation and Evaluation Committee held 4 meetings in 2022, focusing on performance assessment and incentive plans for senior management, as well as salary budget and stock option adjustments[146][147] - The company had a total of 2,006 employees, with 1,878 in major subsidiaries and 128 in the parent company[149] - The employee composition includes 1,166 production personnel, 382 sales personnel, 188 technical personnel, 118 financial personnel, and 152 administrative personnel[149] - In terms of education, 154 employees hold a master's degree or above, 695 have a bachelor's degree, and 1,157 have a college degree or below[149][150] - The company implemented a market-oriented salary mechanism, emphasizing performance-based incentives and stock option plans to drive employee motivation and innovation[151] - The company canceled 1.053 million stock options for 18 departed employees, reducing the total stock options from 7.271 million to 6.218 million[155] - The company granted 658,000 stock options to senior executives in 2022, with an exercise price of 11.33 yuan per share[158] - The company's senior management performance evaluation focuses on operating income, profit, active user numbers, key tasks, and capital operations[159] - The company has established a comprehensive training system covering thousands of employees to enhance professional and specialized skills[152] Investments and Fair Value Changes - The fair value of Jiangsu Shiboyun Information Technology Co., Ltd. decreased by 3,013,000.00 yuan, impacting the current profit by the same amount[32] - The fair value of Sikai Garden Network Technology (Guangzhou) Co., Ltd. decreased by 17,207,000.00 yuan, impacting the current profit by the same amount[32] - The fair value of Guangzhou Huanwang Technology Co., Ltd. decreased by 1,700,000.00 yuan, impacting the current profit by the same amount[32] - The fair value of Pako Video Technology (Hangzhou) Co., Ltd. decreased by 2,850,200.00 yuan, impacting the current profit by the same amount[32] - The company invested 201.3 million yuan in the CCTV Media Industry Fund[85] - The company's stock investments decreased by 44.97 million yuan in fair value changes, with a total stock investment value of 91.25 million yuan at the end of the period[93] - The company's private equity fund investments increased by 185,796.63 yuan in fair value changes, with a total value of 200.19 million yuan at the end of the period[93] - The company's other financial assets decreased by 24.78 million yuan in fair value changes, with a total value of 110.52 million yuan at the end of the period[93] - The company invested 200 million yuan in the CCTV Media Industry Investment Fund (Limited Partnership) in 2021[97] - The company holds approximately 5.04 million shares of 37 Interactive Entertainment Network Technology Group, accounting for 0.23% of its total shares[91] - The company's actual daily deposit balance at China Telecom Group Finance Company reached a maximum of 1.408 billion RMB, with actual interest income of 429.164 million RMB in 2022[180] - The company invested 200 million RMB as a limited partner in the CCTV Media Industry Investment Fund (Limited Partnership) in 2021[181] - The company's actual amount for purchasing goods, providing and receiving services, and other transactions in 2022 was 1.042 billion RMB, compared to the estimated 1.8 billion RMB[179] - The company's total deposits with China Telecom Group Finance Co., Ltd. reached RMB 8.548 billion during the reporting period, with a daily maximum deposit limit of RMB 1.5 billion[189] - The ending balance of deposits with China Telecom Group Finance Co., Ltd. was RMB 1.291 billion, with deposit interest rates ranging from 1.725% to 4.125%[189] - The total amount of funds provided to related parties during the reporting period was RMB 2.869 billion[182] - The total amount of funds received from related parties during the reporting period was RMB 1.967 billion[186] - The ending balance of funds provided to related parties was RMB 529.29 million[182] - The ending balance of funds received from related parties was RMB 116.62 million[186] - The company's total related party transactions amounted to RMB 3.066 billion[186] - The company's total related party receivables and payables were RMB 571.14 million and RMB 116.62 million, respectively[186] Market and Industry Trends - The number of Chinese internet users reached 1.067 billion by the end of 2022, an increase of 6.8% from the end of 2021[44] - Revenue from cultural and related industries above designated size in 2022 was 12.1805 trillion yuan, an increase of 0.9% year-on-year[46] - The Chinese gaming market's actual sales revenue in 2022 was 265.88 billion yuan, a decrease of 30.63 billion yuan (-10.33%) year-on-year[87] - The number of game users in China was approximately 664 million, a decrease of 0.33% year-on-year[87] Risk Management and Future Plans - Identified potential risks in the metaverse, including data security and regulatory challenges due to its decentralized nature and digital behavior[117] - Faced market competition risks in the 5G era, with internet giants intensifying their presence in the entertainment industry, squeezing the market space for emerging companies[115] - Addressed business transformation risks, emphasizing the need for differentiated product strategies and continuous innovation to maintain competitiveness[116] - Enhanced governance and internal control systems, ensuring compliance with regulatory requirements and maintaining the independence of the company's operations[121] - The company plans to focus on content operations and the metaverse track in 2023, aiming for high-quality development and digital transformation[103] - The company will