Online Film Investments - As of December 31, 2019, the company has increased its investment in online films, producing projects such as "Hey! Little Bone," "The Legend of the Demon Cat 2," and "The Sword of Heaven," with significant increases in project scale and investment[11] - "The Sword of Heaven" has accumulated over 160 million views, ranking second in total views across major platforms in 2019[11] - "The Legend of the Demon Cat 2" generated over RMB 14.64 million in total revenue by the end of 2019, ranking 15th on iQIYI's annual list[11] - The company launched its first online film "Detective Dee: The Deep Sea Dragon Palace," which achieved a peak popularity score of 8648 on Youku, breaking the platform's record for online film popularity[12] - The company aims to create blockbuster projects that contribute significantly to profitability through increased investment in online films[11] - The company has actively integrated industry resources to explore the online film market further, enhancing its project participation opportunities[12] - The company has reduced investments in television dramas due to high costs and market risks, focusing instead on online film projects[10] Strategic Partnerships and Projects - The company has established strategic partnerships with established film companies to develop classic IPs, with projects like "The Legend of the Condor Heroes" and "Ip Man" series currently in development[14] - The group has secured the rights to adapt the famous Japanese film "Hachi: A Dog's Tale" into a Chinese version, with the script completed and a strong response in financing and collaboration efforts[15] - The group has entered a joint investment and development agreement with Tencent Pictures for the film series based on the bestselling novel "Tibet Code," with a renowned producer and a leading screenwriter involved[16] - The group is actively developing a film adaptation of the popular Japanese novel "Legend of the Galactic Heroes," collaborating with a well-experienced production company in the field of web series[17] - The group plans to support key projects over the next two to three years, with several films currently in post-production or scheduled for release, including "The Three Kingdoms: Resurrection" and "Sweetheart" which have received multiple award nominations[19] Financial Performance - The group's revenue for the year ended December 31, 2019, was approximately HKD 31,868,000, a decrease of 26.1% compared to HKD 43,133,000 in 2018, primarily due to reduced income from film, television, and online content businesses[37] - The cost of sales decreased to approximately HKD 34,310,000 from HKD 123,540,000 in 2018, mainly due to the previous year's accounting of severely loss-making television dramas and released films[37] - The net loss attributable to the owners of the parent company for the year was approximately HKD 87,588,000, a reduction from a loss of HKD 236,071,000 in 2018, primarily due to decreased impairment related to film projects[37] - Revenue from the film, television, and online content segment was approximately HKD 29,266,000, down from HKD 40,574,000 in 2018, mainly from film rights sales and distribution income[38] - Revenue from the artist management segment was approximately HKD 2,602,000, slightly up from HKD 2,559,000 in 2018[39] Operational Changes and Future Outlook - The company has implemented a business model that combines investment and distribution, allowing for deeper project involvement and better risk assessment[12] - The film industry is facing significant challenges due to the COVID-19 pandemic, with a conservative estimate predicting a 25% reduction in national box office revenue for 2020[20] - The online film distribution business is expected to show advantages, as evidenced by the success of "Lost in Russia," which achieved over 600 million views and 180 million unique viewers across major platforms[21] - The group is optimizing its artist management structure, providing customized performance opportunities for newcomers through various film and music projects[24] Corporate Governance and Compliance - The company has maintained compliance with GEM listing rules, focusing on improving accountability and transparency[93] - The board of directors consists of seven members, ensuring a balance between executive and non-executive directors[95] - The company has complied with the corporate governance code except for specific provisions regarding the separation of roles between the chairman and CEO, the term of non-executive directors, and attendance of directors at shareholder meetings[104] - The company has established a risk management and internal control system to manage risks associated with achieving business objectives, with ongoing improvements being made[136] - The audit committee consists of three members, with the majority being independent non-executive directors, ensuring compliance with GEM listing rules[127] Shareholder Information - Major shareholders include Jaxuan Group Limited, which holds 1,982,561,725 shares, accounting for 47.10% of the issued share capital[185] - China CITIC Group Limited holds 459,934,954 shares, representing 10.93% of the issued share capital[185] - The company has a total of 156,967,477 shares available for issuance under the share option plan, representing approximately 3.73% of the issued share capital[179] - The share option plan adopted on June 10, 2014, is valid for ten years and will expire in June 2024[172] Artist Management and Development - The group has established a comprehensive music promotion and distribution channel, collaborating with major domestic music platforms and expanding overseas distribution channels[27] - The artist Chen Xinzhe has rapidly gained attention, with significant achievements in music and film, including a successful debut film and multiple award nominations[25] Risk Management and Internal Controls - The company has established a risk management and internal control system that is deemed effective and satisfactory by the audit committee and board[139] - The company has mechanisms in place to address potential conflicts of interest with registered owners of OPCOs[50]
拉近网娱(08172) - 2019 - 年度财报