Revenue and Financial Performance - Total revenue decreased by 22.9% from RMB 980.3 million in 2022 to RMB 755.7 million in 2023, primarily due to a decline in artist management revenue[20] - Artist management revenue accounted for 87.7% of total revenue in 2023, a decrease of 22.2% compared to 2022[22] - Music IP production and operation revenue decreased by 28.7% to RMB 70.3 million, representing 9.3% of total revenue in 2023[22] - Pan-entertainment business revenue declined by 25.1% to RMB 22.5 million, maintaining a 3.0% share of total revenue[22] - The company recorded a loss of RMB 142.6 million in 2023, compared to a profit of RMB 1,725.2 million in 2022, mainly due to a RMB 160.5 million fair value loss on convertible preferred shares[20] - Revenue decreased by 22.9% from RMB 980.3 million in 2022 to RMB 755.7 million in 2023, primarily due to a decline in artist management revenue[32] - Artist management revenue decreased by 22.2% from RMB 851.6 million in 2022 to RMB 662.9 million in 2023, driven by reduced demand for artist services due to tightened budgets from business partners[32] - Music IP production and operation revenue decreased by 28.7% from RMB 98.6 million in 2022 to RMB 70.3 million in 2023, mainly due to lower sales of digital singles and albums[32] - Gross profit decreased by 55.4% from RMB 295.9 million in 2022 to RMB 132.0 million in 2023 for the artist management segment, with gross margin dropping from 34.7% to 19.9%[37] - Music IP production and operation gross profit decreased by 39.7% from RMB 47.1 million in 2022 to RMB 28.4 million in 2023, with gross margin declining from 47.8% to 40.4%[38] - Overall gross margin decreased from 37.0% in 2022 to 23.2% in 2023, reflecting reduced profitability across all business segments[36] - Operating costs decreased by 5.9% from RMB 617.2 million in 2022 to RMB 580.6 million in 2023, primarily due to lower artist management revenue sharing and reduced employee benefits[35] - The company reported a net loss of RMB 142.6 million for the year ended December 31, 2023, compared to a net profit of RMB 1,725.2 million in 2022[53] - Adjusted net profit for 2023 was RMB 105.2 million, with an adjusted net profit margin of 13.9%, down from 27.2% in 2022[56] Artist Management and Music IP - Artist management revenue decreased by 22.2% from RMB 851.6 million in 2022 to RMB 662.9 million in 2023 due to reduced demand for artist services[23] - Artist management gross profit decreased by 55.4% from RMB 295.9 million in 2022 to RMB 132.0 million in 2023, with gross margin dropping from 34.7% to 19.9%[24] - Music IP production and operation revenue decreased by 28.7% from RMB 98.6 million in 2022 to RMB 70.3 million in 2023 due to reduced sales of digital singles and albums[25] - Music IP production and operation gross profit decreased by 39.7% from RMB 47.1 million in 2022 to RMB 28.4 million in 2023, with gross margin dropping from 47.8% to 40.4%[26] - The company established a music IP library containing over 1,290 music works for signed artists and released 14 digital singles and 10 digital albums during the reporting period[25] - The company released 14 digital singles and 10 digital albums during the reporting period, covering various music genres[18] - The company's artists participated in popular productions such as the drama series "The Glory Season 2" and the movie "Hidden Blade"[18] - The company's artist Zhang Hao became the first Chinese contestant to win a Korean survival show, "Boys Planet," and debuted in 2023[30] - The company's films and TV series, such as "The Hidden Blade" and "The Glory Season 2," gained popularity in international markets including the US, Canada, and Southeast Asia[30] Pan-Entertainment Business - Pan-entertainment business revenue decreased by 25.1% from RMB 30.0 million in 2022 to RMB 22.5 million in 2023 due to reduced income from program format licensing and virtual artist commercial development[27] - Pan-entertainment business gross profit decreased by 27.0% from RMB 20.1 million in 2022 to RMB 14.6 million in 2023, with gross margin dropping from 66.8% to 65.1%[28] - A new AIGC (Artificial Intelligence Generated Content) company was established to create digital avatars for artists, aiming to enhance the company's competitiveness in the pan-entertainment market[19] - The company formed an AIGC company to create digital avatars for artists using AIGC technology, aiming to enhance the pan-entertainment business[27] Global Expansion and Market Presence - The company expanded its global presence by promoting signed artists and the Lehua brand in Asian markets, with music works released on platforms like Apple Music, Spotify, and YouTube[29] - The company expanded its global presence by establishing YH Entertainment USA in California and exploring opportunities in Southeast Asia and Japan[31] Operational Highlights and Initiatives - YH SPACE, an interactive store selling artist-related merchandise, opened in September 2023 and has become a popular destination for shopping and leisure activities[19] - The company held a family concert in Macau on July 22, 2023, featuring performances by artists such as Wang Yibo and Li Wenhan[19] - The company launched YH SPACE, an interactive store selling artist-related merchandise, which has become a popular destination since its opening in September 2023[27] - The company launched YH Space, the first offline celebrity store in China, integrating artist peripherals, interactions, and trendy entertainment to enhance the brand's entertainment value[111] - Key artist achievements in 2023 include Li Wenhan's music album "Falling into the Vast Expanse," Huang Minghao's music album "One of the Crowd," and Wang Yibo's film "The Nameless"[111][112] Financial Assets and Liabilities - Financial asset impairment losses increased from RMB 7.7 million in 2022 to RMB 8.7 million in 2023, primarily related to trade receivables and other receivables[45] - Other income surged to RMB 22.81 million in 2023, up from RMB 3.90 million in 2022, largely due to a significant increase in government grants to RMB 21.65 million[47] - Other net gains increased by 46.5% to RMB 14.71 million in 2023, driven by gains from non-listed entities and funds, partially offset by foreign exchange losses[48] - Net financial income improved significantly to RMB 31.5 million in 2023, compared to RMB 0.3 million in 2022, due to higher interest income from bank deposits and investments[49] - The company's share of losses from equity-accounted investments increased from RMB 3.1 million in 2022 to RMB 7.2 million in 2023, primarily due to increased losses from its associates[50] - The fair value change of convertible preferred shares was RMB 160.5 million during the reporting period, which were reclassified from financial liabilities to equity after the company's IPO in January 2023[51] - Financial assets measured at fair value through profit or loss decreased by 31.4% from RMB 335.8 million in 2022 to RMB 230.5 million in 2023, mainly due to the redemption of wealth management products[57] - Trade receivables decreased by 26.4% from RMB 129.9 million in 2022 to RMB 95.7 million in 2023, in line with the decline in revenue[58] - Prepayments increased significantly from RMB 44.6 million in 2022 to RMB 519.1 million in 2023, primarily due to the acquisition of a property in Beijing[59] - Trade payables decreased by 21.5% from RMB 190.6 million in 2022 to RMB 149.6 million in 2023, mainly due to reduced revenue sharing from artist management services[62] - Contract liabilities increased by 23.3% from RMB 160.2 million in 2022 to RMB 197.6 million in 2023, driven by prepayments from new commercial contracts[65] - Cash and cash equivalents increased from RMB 528.7 million in 2022 to RMB 613.4 million in 2023, with restricted cash at RMB 12.3 million as of December 31, 2023[66] - Total borrowings increased from RMB 66.3 million in 2022 to RMB 266.2 million in 2023, including RMB 200.0 million for property acquisition in China[66] - Capital-to-debt ratio stood at 21.1% as of December 31, 2023[68] - The company acquired a property in Beijing for RMB 480 million, completed on January 19, 2024[69] Expenses and Costs - Sales and marketing expenses increased by 2.5% year-over-year to RMB 38.55 million in 2023, with employee benefits accounting for 62.4% of the total expenses[40][41] - General and administrative expenses rose by 12.3% to RMB 134.21 million in 2023, driven by a 28.1% increase in employee benefits and a 12.4% increase in equity-settled share-based payments[43][44] - Total employee benefits expenses, including share-based payments, increased by 2.5% year-over-year to RMB 164.2 million in 2023[75] - Net foreign exchange loss remained relatively stable at RMB 6.0 million during the reporting period[76] ESG and Sustainability - The company issued its second Environmental, Social, and Governance (ESG) report, covering the period from January 1, 2023, to December 31, 2023[95] - The ESG report follows the Hong Kong Stock Exchange's ESG Reporting Guide and adheres to principles of materiality, consistency, quantification, and balance[96] - The ESG governance framework consists of three layers: decision-making by the board, organizational leadership by senior management, and execution by relevant departments[101] - The company has set environmental goals, with most targets showing higher usage and emissions compared to previous years due to the end of remote work post-pandemic[100] - The ESG committee, led by the executive director and president, is responsible for formulating and reviewing ESG-related strategies and monitoring ESG issues[101] - The Board of Directors is responsible for setting ESG goals and overseeing the implementation of ESG-related policies, with the ESG Committee established to manage ESG governance[102] - The ESG Committee, led by Executive Director and President Sun Yiding, is responsible for reviewing ESG goals, strategies, and internal policies, as well as identifying ESG risks and opportunities[104] - The ESG Working Group, composed of departments such as Integrated Management and Internal Control, is responsible for implementing ESG-related policies and collecting relevant KPI data[104] - The company has identified 17 material ESG issues, with 11 being highly important, 4 moderately important, and 2 generally important[108] - The company's total greenhouse gas emissions for 2023 were 168.78 metric tons of CO2 equivalent, with a density of 0.05 metric tons per square meter and 1.02 metric tons per capita[133] - Electricity consumption for 2023 was 263,192.00 kWh, with a density of 71.13 kWh per square meter and 1,595.10 kWh per capita[134] - Water consumption for 2023 was 1,025.00 cubic meters, with a density of 0.28 cubic meters per square meter and 6.21 cubic meters per capita[135] - Paper usage for 2023 was 546.88 kg, with a per capita usage of 3.31 kg[137] - Non-hazardous waste generation for 2023 was 3,960.00 metric tons, with a per capita generation of 24.00 metric tons[137] - Nitrogen oxides, sulfur oxides, and particulate matter emissions for 2023 were 56.15 kg, 0.10 kg, and 5.38 kg respectively[138] - The company's direct greenhouse gas emissions (Scope 1) for 2023 were 18.68 metric tons of CO2 equivalent[133] - The company's indirect greenhouse gas emissions (Scope 2) for 2023 were 150.10 metric tons of CO2 equivalent[133] - The company's greenhouse gas emissions density (Scope 1 and 2) for 2023 was 0.05 metric tons of CO2 equivalent per square meter[133] - The company's per capita greenhouse gas emissions (Scope 1 and 2) for 2023 was 1.02 metric tons of CO2 equivalent per person[133] - Total greenhouse gas emissions (Scope 1 and 2) in 2023 were 168.78 metric tons of CO2 equivalent, with a density of 0.05 metric tons of CO2 equivalent per square meter[143] - The company's total water consumption in 2023 was 1,025 cubic meters, with a water consumption density of 6.21 cubic meters per square meter[143] - Total purchased electricity consumption in 2023 was 263,192 kWh, with a density of 71.13 kWh per square meter[143] - The company had a total of 215 employees in 2023, with 156 female employees and 59 male employees[144] - The overall employee turnover rate in 2023 was 28.37%, with male employee turnover at 62.71% and female employee turnover at 15.38%[144] - The company's employees participated in 12 hours of community service activities in 2023, with 2 employees involved[142] - The company's artists participated in various public welfare activities, including Tencent's 99 Charity Day and rural revitalization initiatives[141] - The company implemented measures to monitor and respond to extreme weather conditions, promoting water and energy conservation[140] - The company tracked and integrated international climate change policies and regulations into its management policies[140] - The company conducted risk assessments and enhanced green-related training to mitigate reputational risks associated with environmental impacts of endorsed products or performances[140] - 53% of short-term contract/part-time employees received training in 2023[145] - 75.13% of full-time junior employees received training in 2023[145] - 13.76% of full-time mid-level employees received training in 2023[145] - 10.58% of full-time senior employees received training in 2023[145] - Female employees received an average of 0.17 hours of training, while male employees received 0.47 hours in 2023[145] - Full-time junior employees received an average of 0.18 hours of training, mid-level employees received 0.77 hours, and senior employees received 0.82 hours in 2023[145] - The company does not involve significant production of harmful waste[146] - The company does not consume large amounts of packaging materials due to limited product production[146] - The company has policies to reduce environmental and natural resource impacts, with actions taken to manage these impacts[148] - The company has policies to address climate-related issues and has taken actions to manage their impacts[148] Corporate Governance and Leadership - The board of directors consists of 7 members, including 3 executive directors, 1 non-executive director, and 3 independent non-executive directors[80] - Du Hua, aged 42, is the founder, executive director, chairman, and CEO, responsible for the company's overall strategic planning and daily operations[82] - Sun Yiding, aged 56, is the executive director and president, responsible for the company's operations and management[82] - Sun Le, aged 43, is the executive director and vice president, responsible for establishing and maintaining client relationships and market positioning[83] - Meng Jun, aged 44, was appointed as a non-executive director on June 28, 2023, providing professional advice and guidance to the board[85] - Fan Hui, aged 46, was appointed as an independent non-executive director on January 19, 2023, responsible for supervising and providing independent opinions to the board[86] - Lü Tao, aged 58, was appointed as an independent non-executive director on January 19, 2023, responsible for supervising and providing independent opinions to the board[88] - Huang Jiuling was appointed as an independent non-executive director on January 19, 2023, responsible for providing independent opinions and judgments to the board[89] - Zhang Wensheng joined the company as CFO in June 2020, overseeing financial operations, risk management, and investor relations[90] - Lee Sang Kyu has been the General Manager of Korean operations since August 2016, responsible for the overall operation and development of the Korean business[91] - Meng Qingguang and Zhao Wenjie resigned as non-executive directors effective June 28, 2023, and Meng Jun was appointed as a non-executive director on the same date[93] - Yao Lu resigned as a non-executive director effective February 5, 2024, to focus on other business and personal matters[93] - The company's directors confirmed their independence in accordance with Listing Rule 3.13[171] - Du Hua holds a 43.17% stake in the company through controlled entities, with 376,350,000 shares[175][176] - Sun Yiding holds a 2.85% stake in the company through controlled entities, with 24,825,000 shares[175][177] - Sun Le holds a 0.37% stake in the company as a beneficial owner, with 3,225,000 shares[175][177] - CMC Sports Investment Limited and related entities hold a 12.26% stake in the company, with 106,875,000 shares[180][182] - Interform Construction Supplies Limited and related entities hold a 12.26% stake in the company, with 106
乐华娱乐(02306) - 2023 - 年度财报