Financial Performance - For the six months ended June 30, 2024, the company reported revenue of HKD 111.23 million, a decrease of 94.82% compared to HKD 2,148.18 million in the same period of 2023[2]. - The gross profit for the same period was HKD 0.44 million, down 99.79% from HKD 211.79 million year-on-year[2]. - The net loss attributable to owners of the company was HKD 355.20 million, representing an increase of 82.31% compared to a loss of HKD 194.83 million in the previous year[2]. - The overseas e-commerce sales revenue was HKD 32.80 million, a significant decline of 98.31% from HKD 1,944.14 million in the prior year[3]. - The domestic short video e-commerce marketing transaction volume was HKD 23.18 million, down 90.91% from HKD 255.01 million year-on-year[3]. - The revenue from domestic e-commerce product marketing was HKD 20.88 million, down 85.95% from HKD 148.59 million in the same period last year, primarily due to a sluggish marketing environment[39]. - The company reported a total loss of HKD 366,994 thousand for the six months ended June 30, 2024, compared to a much higher loss in the previous year[86]. - The company’s revenue from e-commerce product marketing significantly dropped by 86.0% from HKD 148,586 thousand in 2023 to HKD 20,882 thousand in 2024[85]. Strategic Developments - The company has established a mixed-ownership reform company with Poly Culture Group to enhance its digital cultural and entertainment technology business[5]. - The company is developing a blockchain platform, "Poly Entertainment Technology Chain," to support digital asset services and enhance operational cash flow in overseas e-commerce[6]. - A strategic partnership was formed with ShouCang Digital Technology to create a new model in the digital collectibles space, leveraging blockchain technology for digital asset verification[7]. - The company is actively developing a short drama platform called "Red Fox," aiming to provide high-quality original content and enhance user experience in the short video sector[11]. - The company has signed a strategic cooperation agreement with Hainan Publishing and Distribution Group to enhance its short drama business, capitalizing on the booming short drama market[13]. - The company is integrating film and tourism by creating interactive entertainment and cultural IP derivative products, with initial cooperation agreements signed with multiple local governments[14]. - The company is focusing on the film and cultural industry, supported by a 50 billion RMB cultural industry fund established by the Ministry of Finance and the Publicity Department[11]. Technology and Innovation - The company is exploring AI-generated content (AIGC) applications in various entertainment sectors, including virtual digital humans and holographic display systems[8]. - The company is leveraging AIGC technology to innovate in virtual digital human services, AI video scripting, and post-production processes[21]. - The company is developing a Web3.0 platform for digital asset services in the film and entertainment sector, focusing on user-driven and decentralized network ecosystems[22]. - The company is focusing on developing AIGC technology applications to reduce digital content production costs while enhancing quality and diversity[44]. Marketing and Sales - The company has expanded its digital marketing capabilities by leveraging resources from government and state-owned enterprises, successfully collaborating with major clients like China State Construction Group and Poly Group[9]. - The core service of the algorithm marketing business is to assist clients in sales and marketing services using recommendation algorithm technology on mobile internet platforms, which is the primary revenue source for the company[26]. - The company is one of the earliest adopters of interest-based algorithm marketing in China, focusing on large and dispersed mid-to-long tail traffic for online marketing, significantly enhancing user efficiency and satisfaction[26]. - The company has made significant advancements in short video marketing, capitalizing on the growing user engagement on mobile internet platforms[24]. Financial Management - The company's cash and cash equivalents decreased to HKD 273,102 thousand from HKD 325,973 thousand, a decline of 16.1%[77]. - The group's cash flow from operating activities showed a net outflow of HKD 36.48 million for the six months ended June 30, 2024, a significant improvement from HKD 131.39 million for the same period in 2023[63]. - The company has no inventory as of June 30, 2024, down from HKD 108.68 million on December 31, 2023, due to strategic adjustments in the overseas e-commerce business[56]. - The company's total trade and other payables decreased to HKD 164,846,000 as of June 30, 2024, from HKD 204,567,000 as of December 31, 2023[103]. Corporate Governance - The board has confirmed compliance with the corporate governance code for the six months ending June 30, 2024, except for the combined roles of Chairman and CEO held by Mr. Zhu[110]. - The board will review the effectiveness of its corporate governance structure to assess the necessity of separating the roles of Chairman and CEO[110]. - The company has not been made aware of any incidents of employees not complying with the securities trading standards[110]. - The company will continue to monitor its corporate governance practices to ensure adherence to the corporate governance code[110].
乐享集团(06988) - 2024 - 中期业绩