Financial Performance - For the three months ended September 30, 2021, the company reported revenue of HKD 21,862,000, a significant increase from HKD 4,059,000 in the same period of 2020, representing a growth of 438%[8] - The cost of sales for the same period was HKD (37,673,000), leading to a gross loss of HKD (15,811,000), compared to a gross loss of HKD (3,026,000) in Q3 2020[8] - The company recorded other income and gains of HKD 1,527,000 for the three months ended September 30, 2021, compared to HKD 46,000 in the same period of 2020[8] - The net loss for the three months ended September 30, 2021, was HKD (29,122,000), compared to a net loss of HKD (11,555,000) in the same period of 2020, reflecting an increase in losses of 152%[8] - For the nine months ended September 30, 2021, total revenue was HKD 60,093,000, up from HKD 5,708,000 in the same period of 2020, marking an increase of 951%[8] - The company reported a basic and diluted loss per share of HKD (0.66) for the three months ended September 30, 2021, compared to HKD (0.28) in Q3 2020[11] - The loss attributable to equity holders of the parent for the nine months ended September 30, 2021, was approximately HKD 42,239,000, compared to HKD 25,982,000 for the same period in 2020[22] Expenses - Administrative expenses increased to HKD (14,924,000) from HKD (8,936,000) year-over-year, indicating a rise of 67%[8] - The cost of sales increased to approximately HKD 69,204,000 for the nine months ended September 30, 2021, compared to HKD 7,140,000 for the same period in 2020[30] - Administrative expenses rose from approximately HKD 26,007,000 to about HKD 38,487,000, primarily due to increased employee costs related to the development of the e-commerce business[30] - Employee costs, including director remuneration, totaled approximately HKD 19,955,000 for the nine months ended September 30, 2021, compared to HKD 8,932,000 for the same period in 2020[30] Revenue Segments - Revenue from the film, television, and online content segment was approximately HKD 30,558,000 for the nine months ended September 30, 2021, compared to HKD 5,600,000 for the same period in 2020[32] - Revenue from the new media e-commerce business was approximately HKD 28,760,000 for the nine months ended September 30, 2021, with no revenue reported for the same period in 2020[34] - The new media e-commerce business generated revenue of HKD 6,966,000 for the three months ended September 30, 2021, with total revenue from television and online programs reaching HKD 12,472,000[16] Investments and Projects - The company has invested in multiple online films, including "The Legend of the Condor Heroes" (two parts), "The Tibetan Code," and "The Legend of the Dragon," with increasing project scale and investment size[37] - The online comedy film "Village Situation" ranked first in rural comedy revenue share on Youku as of March 2021, while "The Elegant Old Man" grossed over 10 million, ranking 13th on iQIYI's annual box office list[37] - The online film "The Desert Dragon" launched on iQIYI at the end of May 2021, achieving over 18 million in box office revenue, with a final investment return rate exceeding 100%[39] - The company is developing a Chinese version of the film "Hachi: A Dog's Tale," which is set to be released on December 31, 2021, after completing filming in May 2021[41] - The company has partnered with Tencent Pictures and others to develop a film series based on the bestselling novel "The Tibetan Code," with the first draft of the script completed in June 2021[43] - The company is actively developing the film adaptation of "Legend of the Galactic Heroes," aiming to leverage this well-known story to invigorate the Chinese sci-fi film market[44] - The company has several films, including "The Wind Rises Again," which are in post-production and scheduled for release in 2021[46] Market Trends - In the first half of 2021, China's box office revenue reached 27.5 billion yuan, three times that of North America, but down from 32 billion yuan in 2018 and 31.3 billion yuan in 2019[47] - The online film market is experiencing rapid growth in production quality, investment volume, and profitability, with top projects gaining significant strength[49] - The number of online films released in the first half of 2021 decreased compared to 2020, with box office revenue concentrated among top films, which still failed to exceed 50 million yuan[49] - By January 2021, the domestic online video user base reached 1.04 billion, a significant increase of 22.35% from 850 million in March 2020[56] - Daily active users on video platforms reached 600 million, reflecting a high engagement rate[56] Business Development - The company is exploring new business models by integrating e-commerce with entertainment, exemplified by the investment in the short video drama "管你來自哪顆星" on Tencent Video[50] - The company is actively optimizing its artist management structure to provide customized performance opportunities for new talents[52] - The music division has established partnerships with major music platforms and is expanding its copyright agency business, enhancing revenue streams[53] - The company is developing a unique music light variety model to create a sustainable flow of talent and classic works[55] - The domestic online live streaming e-commerce market size is projected to grow from RMB 961 billion in 2020 to RMB 1,201.2 billion in 2021[58] - The company aims to establish the largest online sales channel in the country, covering 500 million users through a super traffic pool matrix[59] - The company has over 100 self-developed hosts and is focused on enhancing brand growth through content-driven e-commerce strategies[61] - The company integrates over 100 well-known brands and more than 10,000 SKUs to empower hosts and enhance user engagement[64] Corporate Governance - The company has appointed Mr. Li Xuesong as a non-executive director since October 25, 2021[78] - The company has complied with the corporate governance code except for specific provisions regarding the separation of roles between the chairman and CEO, the designated term for non-executive directors, and attendance of non-executive directors at the annual general meeting[79] - The audit committee consists of three members, including Mr. Lin Changsheng as the chairman, and is responsible for reviewing the company's annual reports, financial statements, and internal control procedures[86] - The company has adopted a code of conduct for directors' securities transactions that is not less stringent than the GEM Listing Rules[84] - As of September 30, 2021, the company has not filled the positions of chairman and CEO, which remain vacant[81] - The company believes that its provisions for the rotation of non-executive directors at the annual general meeting are sufficient to meet the relevant goals of the corporate governance code[82] - Some non-executive directors were unable to attend the annual general meeting due to other business commitments[83] - The company is actively seeking suitable candidates to fill the vacancies for the chairman and CEO positions[81] - The audit committee has reviewed the accounting principles and practices adopted by the group and discussed internal control and financial reporting matters with the management team[86] - The company emphasizes high-quality board governance, robust internal controls, and transparency to enhance shareholder and public confidence[79]
拉近网娱(08172) - 2021 Q3 - 季度财报