中国创意控股(08368) - 2024 - 中期财报

CORPORATE INFORMATION This section outlines the company's registration details, principal business locations, board and committee members, and key professional advisers Registered Office and Principal Place of Business The company is registered in the Cayman Islands with principal places of business in Beijing, China, and Sheung Wan, Hong Kong - The company is registered in the Cayman Islands, with principal places of business in Beijing, China, and Sheung Wan, Hong Kong[5] Board of Directors and Committees This report lists the company's executive, non-executive, and independent non-executive directors, along with members of the audit, remuneration, and nomination committees - Executive Directors include Mr. Yang Jian (Chairman) and Mr. Wang Yong[5] - The Audit Committee Chairman is Mr. Qiu Xinyuan, the Remuneration Committee Chairman is Ms. Fu Yuehong, and the Nomination Committee Chairman is Mr. Yang Jian[5][6] Legal Advisers, Auditor and Bankers The company has appointed legal advisers in Hong Kong, China, and the Cayman Islands, with SHINEWING (HK) CPA Limited as auditor, and lists its principal bankers - Legal advisers include Stevenson, Wong & Co. (Hong Kong law), Jingtian & Gongcheng (PRC law), and Conyers Dill & Pearman (Cayman Islands law)[6][7] - The auditor is SHINEWING (HK) CPA Limited[6][7] FINANCIAL STATEMENTS This section presents the condensed consolidated financial statements, including profit or loss, financial position, changes in equity, and cash flows for the period CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the six months ended June 30, 2024, the Group reported revenue of RMB 25.7 million, gross profit of RMB 9.5 million, and turned profitable with a profit for the period of RMB 1.0 million, profit attributable to owners of RMB 1.1 million, and basic and diluted earnings per share of RMB 0.19 cents For the six months ended June 30, 2024 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 25,695 | 23,867 | | Direct costs | (16,230) | (18,234) | | Gross profit | 9,465 | 5,633 | | Other income | 16 | 10 | | Other gains and losses | 309 | (2,770) | | Reversal of impairment loss (impairment loss) under expected credit loss model, net | 1,393 | (34) | | Selling and distribution costs | (1,222) | (1,940) | | Administrative expenses | (8,160) | (7,773) | | Finance costs | (444) | (403) | | Profit (loss) before taxation | 1,357 | (7,277) | | Taxation | (344) | (955) | | Profit (loss) for the period | 1,013 | (8,232) | | Profit (loss) attributable to: Owners of the Company | 1,059 | (8,132) | | Profit (loss) attributable to: Non-controlling interests | (46) | (100) | | Earnings (loss) per share: Basic and diluted (RMB cents) | 0.19 | (2.18) | CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As of June 30, 2024, the Group's total assets were RMB 404.4 million, net current assets were RMB 278.3 million, and total equity was RMB 283.5 million, showing growth from the end of 2023 As of June 30, 2024 Condensed Consolidated Statement of Financial Position | Indicator | 2024年6月30日 (RMB thousands) | 2023年12月31日 (RMB thousands) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 230 | 278 | | Right-of-use assets | 1,888 | 636 | | Intangible assets | 3,303 | 4,144 | | Deferred tax assets | 623 | 866 | | Total non-current assets | 6,044 | 5,924 | | Current assets | | | | Serial program copyrights | 4,465 | 8,851 | | Trade and other receivables | 371,198 | 322,941 | | Amounts due from non-controlling interests | 126 | 126 | | Bank balances and cash | 22,573 | 25,660 | | Total current assets | 398,362 | 357,578 | | Total assets | 404,406 | 363,502 | | Current liabilities | | | | Trade payables | 2,018 | 4,006 | | Other payables and accrued expenses | 50,308 | 42,098 | | Contract liabilities | 11,844 | 16,201 | | Tax payable | 15,660 | 15,568 | | Lease liabilities | 1,115 | 659 | | Amount due to a director | 6,049 | 5,995 | | Amount due to a related party | 6,407 | – | | Bank borrowings | 26,710 | 17,710 | | Total current liabilities | 120,111 | 102,237 | | Net current assets | 278,251 | 255,341 | | Total assets less current liabilities | 284,295 | 261,265 | | Non-current liabilities | | | | Lease liabilities | 788 | – | | Total non-current liabilities | 788 | – | | Total liabilities | 120,899 | 102,237 | | Net assets | 283,507 | 261,265 | | Capital and reserves | | | | Share capital | 24,847 | 22,605 | | Reserves | 259,213 | 239,168 | | Equity attributable to owners of the Company | 284,060 | 261,773 | | Non-controlling interests | (553) | (508) | | Total equity | 283,507 | 261,265 | Condensed Consolidated Statement of Changes In Equity For the six months ended June 30, 2024, equity attributable to owners increased from RMB 261,773 thousand at the beginning of the year to RMB 284,060 thousand, primarily due to profit for the period and share issuance - For the six months ended June 30, 2024, equity attributable to owners increased from RMB 261,773 thousand at the beginning of the year to RMB 284,060 thousand, primarily due to profit for the period and share issuance[14] - Net share issuance during the period amounted to RMB 21,188 thousand, increasing share capital and share premium[14] CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the six months ended June 30, 2024, the Group reported net cash outflow from operating activities of RMB 38.2 million, net cash outflow from investing activities of RMB 0.001 million, and net cash inflow from financing activities of RMB 35.2 million, resulting in a net decrease in cash and cash equivalents of RMB 2.9 million For the six months ended June 30, 2024 Condensed Consolidated Statement of Cash Flows | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (38,175) | 18,164 | | Net cash used in investing activities | (1) | (15) | | Net cash generated from / (used in) financing activities | 35,232 | (7,792) | | Net (decrease) / increase in cash and cash equivalents | (2,944) | 10,357 | | Cash and cash equivalents at beginning of year | 25,660 | 24,044 | | Cash and cash equivalents at end of year | 22,573 | 34,900 | NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS This section provides detailed notes to the unaudited condensed consolidated financial statements, explaining accounting policies, revenue, expenses, and financial position items 1. CORPORATE INFORMATION This note provides an overview of the company's registration, principal business activities including film production, concert organization, mobile app development, and artist management, and its parent company structure - The company's principal activities are investment holding, with subsidiaries primarily engaged in serial program/film production and related services, film distribution and revenue rights, concert and event organization, mobile application development and operation, and artist management businesses[19][20] - As of the report approval date, Youth Success Holdings Limited and Guang Rui Investments Limited are its direct and ultimate parent companies, respectively[18][20] 2. BASIS OF PRESENTATION This note explains that the unaudited condensed consolidated financial statements are prepared under HKAS 34 and GEM Listing Rules, using a historical cost basis and presented in RMB, with no significant impact from HFRS amendments applied this period - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and Chapter 18 of the GEM Listing Rules, and are prepared on a historical cost basis[21][24] - Amendments to Hong Kong Financial Reporting Standards applied during the period had no significant impact on the Group's financial position and performance[26][27] - The financial statements are presented in RMB, with all values rounded to the nearest thousand[22][24] 3. REVENUE AND SEGMENT INFORMATION This note details the Group's revenue sources and segment information by business and geography, highlighting significant revenue concentration from major customers - The Group's revenue sources include serial program/film production and related services, film distribution and revenue rights, concert and event organization, mobile application development and operation, and artist management businesses[36] Revenue by Business Segment (RMB thousands) | Business Segment | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Sale of script copyrights and programs | 22,900 | – | | Sale of film distribution and revenue rights | – | 13,773 | | Concert and event revenue | 2,226 | 7,963 | | Live streaming e-commerce | 185 | 1,783 | | Provision of artist management services | 384 | 348 | | Total revenue | 25,695 | 23,867 | Revenue by Geographical Location (RMB thousands) | Region | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Hong Kong | – | 13,773 | | China | 23,469 | 2,131 | | Other Southeast Asian countries and Taiwan | 2,226 | 7,963 | | Total revenue | 25,695 | 23,867 | - For the six months ended June 30, 2024, revenue from the largest customer accounted for approximately 73.6% of total revenue[50][51] 4. OTHER INCOME This note discloses the Group's other income, primarily derived from bank deposit interest Other Income (RMB thousands) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Interest income from bank deposits | 16 | 10 | 5. OTHER GAINS AND LOSSES This note presents the Group's other gains and losses, primarily influenced by foreign exchange gains or losses Other Gains and Losses (RMB thousands) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Exchange gains / (losses), net | 309 | (2,839) | | Gain on early termination of lease arrangements | – | 69 | | Total | 309 | (2,770) | 6. LOSS BEFORE TAXATION This note details various expenses impacting profit or loss before taxation, including auditor's remuneration, directors' emoluments, staff costs, depreciation, and amortization Items Deducted in Arriving at Profit (Loss) Before Taxation (RMB thousands) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Auditor's remuneration | 323 | 333 | | Directors' emoluments | 1,097 | 1,073 | | Other staff costs | 2,763 | 3,003 | | Contributions to retirement benefit schemes | 362 | 573 | | Total staff costs | 4,545 | 4,649 | | Depreciation of property, plant and equipment | 64 | 160 | | Depreciation of right-of-use assets | 909 | 1,075 | | Amortisation of intangible assets | 841 | 836 | 7. FINANCE COSTS This note lists the Group's finance costs, primarily comprising interest on bank borrowings, lease liabilities, and amounts due to a related party Finance Costs (RMB thousands) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Interest on bank borrowings | 289 | 264 | | Interest on lease liabilities | 42 | 73 | | Interest on amount due to a related party | 113 | 66 | | Total | 444 | 403 | 8. TAXATION This note explains the Group's taxation components, including current and deferred tax in Hong Kong and China, detailing Hong Kong's two-tiered profits tax rates and PRC subsidiary tax exemptions Taxation for the Period (RMB thousands) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Current tax – Hong Kong | – | (932) | | Current tax – China | (101) | (29) | | Deferred tax | (243) | 6 | | Total taxation for the period | (344) | (955) | - Hong Kong profits tax adopts a two-tiered tax rate, with the first HKD 2 million taxed at 8.25% and the remainder at 16.5%[60] - PRC subsidiaries are subject to a 25% corporate income tax rate, but Horgos Zongheng Wuxian Culture Media Co., Ltd. qualifies for corporate income tax exemption from January 1, 2021, to December 31, 2025[60][61][63] 9. DIVIDEND The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2024, consistent with the prior period - For the six months ended June 30, 2024, the Directors do not recommend the payment of any dividend (2023: nil)[62][64] 10. PROFIT (LOSS) PER SHARE This note provides the calculation for basic and diluted earnings (loss) per share, showing earnings of RMB 0.19 cents per share for H1 2024, compared to a loss of RMB 2.18 cents per share in H1 2023 Earnings (Loss) Per Share Data | Indicator | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Profit (loss) attributable to owners of the Company (RMB thousands) | 1,059 | (8,132) | | Weighted average number of ordinary shares (thousands) | 559,337 | 372,987 | | Earnings (loss) per share (RMB cents) | 0.19 | (2.18) | - Diluted loss per share was not presented for the six months ended June 30, 2023, and 2022, as there were no potential ordinary shares in issue[67][68] 11. PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS This note discloses changes in the Group's property, plant and equipment and right-of-use assets, including acquisitions, disposals, and new lease agreements - For the six months ended June 30, 2024, the Group acquired property, plant and equipment of approximately RMB 2,177,000, a significant increase from RMB 25,000 in the prior period[69][72] - Right-of-use assets of RMB 2,160,000 and lease liabilities of RMB 2,160,000 were recognized during the period[70][72] 12. INTANGIBLE ASSET For the six months ended June 30, 2024, the Group did not acquire any intangible assets, consistent with the prior period - For the six months ended June 30, 2024, the Group did not acquire any intangible assets (2023: nil)[71][73] 13. TRADE AND OTHER RECEIVABLES This note details the composition of trade and other receivables, including net trade receivables, prepayments, and deposits, with most trade receivables due within 30 days Trade and Other Receivables (RMB thousands) | Item | 2024年6月30日 | 2023年12月31日 | | :--- | :--- | :--- | | Net trade receivables | 124,989 | 157,186 | | Prepayments and deposits | 244,911 | 162,361 | | Other receivables | 1,298 | 3,394 | | Total | 371,198 | 322,941 | - Prepayments and deposits primarily include concert event prepayments (approximately RMB 12,942,000), program production and live streaming service prepayments (approximately RMB 27,165,000), and prepayments for acquiring serial program copyrights and film distribution rights (approximately RMB 203,854,000)[75][76] Ageing Analysis of Trade Receivables (RMB thousands) | Ageing | 2024年6月30日 | 2023年12月31日 | | :--- | :--- | :--- | | Within 30 days | 79,176 | 56,986 | | 31 to 90 days | 41,893 | 80,382 | | 91 to 180 days | 3,906 | 3,216 | | Over 180 days | 14 | 16,602 | | Total | 124,989 | 157,186 | 14. TRADE PAYABLES This note provides an ageing analysis of trade payables, showing a total of RMB 2,018,000 as of June 30, 2024, primarily concentrated in amounts over 365 days Ageing Analysis of Trade Payables (RMB thousands) | Ageing | 2024年6月30日 | 2023年12月31日 | | :--- | :--- | :--- | | 91 to 365 days | – | 2,000 | | Over 365 days | 2,018 | 2,006 | | Total | 2,018 | 4,006 | 15. BANK BORROWINGS This note discloses the Group's bank borrowings, totaling RMB 26,710,000 as of June 30, 2024, all unsecured with interest rates ranging from 2.8% to 3.45% Bank Borrowings (RMB thousands) | Item | 2024年6月30日 | 2023年12月31日 | | :--- | :--- | :--- | | Carrying amount of bank borrowings repayable within one year | 26,710 | 17,710 | - The Group's bank borrowings are unsecured, with annual interest rates ranging from 2.8% to 3.45% (2023: 2.8% to 3.7%)[80] 16. SHARE CAPITAL This note details changes in the company's authorized and issued share capital, including the issuance of 49,410,000 ordinary shares through placing in H1 2024, increasing share capital and share premium Changes in Issued and Fully Paid Ordinary Shares | Item | Number of Shares | Equivalent to RMB thousands | | :--- | :--- | :--- | | As at January 1, 2024 | 528,387,719 | 22,605 | | Placing under general mandate | 49,410,000 | 2,242 | | As at June 30, 2024 | 577,797,719 | 24,847 | - On February 19, 2024, the company entered into an agreement with the placing agent to place 49,410,000 ordinary shares at a placing price of HKD 0.50 per share to not fewer than six placees, with a net issue price of approximately HKD 0.472 per share[88][89] 17. RELATED PARTY TRANSACTIONS This note discloses significant related party transactions, including salary payments, lease payments, loan proceeds, and interest expenses, and clarifies the nature of amounts due to/from related parties Related Party Transactions (RMB thousands) | Transaction Type | Related Party Relationship | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | :--- | | Salaries | Shareholder A, Shareholder B | 38, 38 | 38, 38 | | Lease payments | Director A | 550 | 530 | | Proceeds from loans | Related company | 6,407 | 1,294 | | Interest expense on loans | Shareholder C | 113 | 66 | | Purchase of film distribution and revenue rights | Shareholder C | – | 12,885 | | Directors' and other key management personnel's remuneration | | | | | Salaries | | 1,539 | 1,505 | | Contributions to retirement benefit schemes | | 30 | 16 | | Total | | 1,569 | 1,521 | - Amounts due to a related company are unsecured, bear interest at an annual rate of 6.125% (2023: 2.75%), and are repayable within one year[92] 18. CAPITAL MANAGEMENT This note outlines the Group's capital management objectives to ensure continuous operation and maintain an optimal capital structure, monitoring its debt-to-equity ratio, which was approximately 5.85% as of June 30, 2024 - The Group's capital management objectives are to safeguard its ability to continue as a going concern, provide returns for shareholders, and maintain an optimal capital structure to reduce the cost of capital[93][95] - The capital structure comprises equity attributable to owners (share capital and reserves) and debt (amounts due to shareholders, directors, and related parties, bank borrowings)[93][94][95] Capital Gearing Ratio | Indicator | 2024年6月30日 (RMB thousands) | 2023年12月31日 (RMB thousands) | | :--- | :--- | :--- | | Debt | 39,166 | 23,705 | | Less: Cash and cash equivalents | (22,573) | (25,660) | | Net debt | 16,593 | (1,955) | | Equity | 283,507 | 261,265 | | Net debt to equity ratio | 5.85% | Not applicable | - As of June 30, 2024, the Group's net debt to equity ratio was approximately 5.85%, compared to a negative value in 2023, primarily due to an increase in net debt[94][95] MANAGEMENT DISCUSSION AND ANALYSIS This section reviews the group's financial performance, business operations, and future outlook, including key risks and uncertainties FINANCIAL REVIEW This section reviews the Group's financial performance for the six months ended June 30, 2024, highlighting increased revenue and gross profit, reduced exchange losses leading to profitability, and details on financial resources, liquidity, capital structure, and use of proceeds from share subscriptions Revenue For the six months ended June 30, 2024, Group revenue was approximately RMB 25.7 million, a 7.1% year-on-year increase, primarily driven by script copyright and program business - For the six months ended June 30, 2024, the Group's revenue was approximately RMB 25.7 million, an increase of approximately 7.1% compared to RMB 24.0 million in the prior period[97][98] - The increase in revenue was primarily attributable to the script copyright and program business[97][98] Gross profit For the six months ended June 30, 2024, gross profit was approximately RMB 9.5 million, a 69.6% year-on-year increase, mainly due to higher gross profit from script copyright and program-related services - For the six months ended June 30, 2024, gross profit was approximately RMB 9.5 million, an increase of approximately 69.6% compared to RMB 5.6 million in the prior period[99][104] - The increase in gross profit was primarily due to higher gross profit from script copyright and program-related services[99][104] Other gain and loss For the six months ended June 30, 2024, the Group recorded other gains of approximately RMB 0.3 million, a significant improvement from other losses of approximately RMB 2.8 million in the prior period, mainly due to foreign exchange gains - For the six months ended June 30, 2024, other gains were approximately RMB 0.3 million, a decrease of approximately 111% compared to other losses of approximately RMB 2.8 million in the prior period[100][102] - The increase in other gains was primarily due to foreign exchange gains[100][102] Expenses For the six months ended June 30, 2024, selling and distribution costs decreased by 36.8% to RMB 1.2 million, while administrative expenses increased to approximately RMB 8.2 million, mainly due to higher legal and professional fees and staff costs - Selling and distribution costs were approximately RMB 1.2 million, a decrease of approximately 36.8% compared to the prior period, primarily for live streaming e-commerce business[101][103] - Administrative expenses were approximately RMB 8.2 million (2023: approximately RMB 7.8 million), primarily due to increased legal and professional fees and staff costs[105][106] Income tax expenses For the six months ended June 30, 2024, income tax expense was approximately RMB 0.3 million, a decrease from RMB 1.0 million in the prior period, mainly due to profits from script copyright sales and artist activities, with a PRC subsidiary enjoying corporate income tax exemption - For the six months ended June 30, 2024, income tax expense was approximately RMB 0.3 million, compared to approximately RMB 1.0 million in the prior period[107][108] - Income tax expense was attributable to profits from the sale of multiple script copyrights and artist activities[107][108] - The Group's subsidiary, Horgos Zongheng Wuxian Culture Media Co., Ltd., is eligible for corporate income tax exemption from January 1, 2021, to December 31, 2025[107][108] Profit (loss) attributable to owners of the Company For the six months ended June 30, 2024, profit attributable to owners was approximately RMB 1.1 million, compared to a loss of approximately RMB 8.1 million in the prior period, mainly due to increased gross profit from serial program/film production and reduced exchange losses - For the six months ended June 30, 2024, profit attributable to owners was approximately RMB 1.1 million, compared to a loss of approximately RMB 8.1 million in the prior period[109][110] - The profit was primarily due to increased gross profit from the serial program or film production and related services and film rights investment segments, and reduced exchange losses[109][110] Financial resources, liquidity and capital structure As of June 30, 2024, the Group's net current assets increased to approximately RMB 278.0 million, with a current ratio of approximately 3.31 times, and total equity attributable to owners of approximately RMB 283.9 million, while the gearing ratio rose to 5.85% due to increased net debt - As of June 30, 2024, the Group's net current assets were approximately RMB 278.0 million (December 31, 2023: approximately RMB 255.3 million), primarily due to an increase in project-related prepayments[111][112] - The current ratio was approximately 3.31 times (December 31, 2023: approximately 3.50 times)[111][112] - Total equity attributable to owners was approximately RMB 283.9 million (December 31, 2023: approximately RMB 261.8 million)[111][112] - The gearing ratio was 5.85%, an increase from a negative value in 2023, primarily due to increased net debt[111][112] Use of proceeds This section details the use of proceeds from multiple share subscriptions (TKA, TYJ, AYY, SWS) and placing under general mandate, primarily for mobile application development and operation, general working capital, and serial program/film production and related services and film rights investment TKA Subscription The TKA Subscription, completed on September 18, 2023, generated net proceeds of approximately RMB 7,886,540, fully utilized for mobile application development, general working capital, and serial program/film production - The TKA Subscription was completed on September 18, 2023, with net proceeds of approximately RMB 7,886,540[113][114] - The proceeds were fully utilized to fund mobile application development and operation (RMB 263,157), general working capital (RMB 2,323,383), and serial program/film production and related services and film rights investment (RMB 5,300,000)[114][115] TYJ Subscription The TYJ Subscription, completed on August 28, 2023, generated net proceeds of approximately RMB 4,457,471, fully utilized for mobile application development, general working capital, and serial program/film production - The TYJ Subscription was completed on August 28, 2023, with net proceeds of approximately RMB 4,457,471[116][118][119] - The proceeds were fully utilized to fund mobile application development and operation (RMB 644,273), general working capital (RMB 1,337,241), and serial program/film production and related services and film rights investment (RMB 2,475,956)[119][120] AYY Subscription The AYY Subscription, completed on December 27, 2023, generated net proceeds of approximately RMB 15,856,268, fully utilized for serial program/film production and general working capital - The AYY Subscription was completed on December 27, 2023, with net proceeds of approximately RMB 15,856,268[121][124] - The proceeds were fully utilized to fund serial program/film production and related services and film rights investment (RMB 11,099,388) and general working capital (RMB 4,756,881)[125][127] SWS Subscription The SWS Subscription, completed on December 27, 2023, generated net proceeds of approximately RMB 8,359,049, fully utilized for serial program/film production and general working capital - The SWS Subscription was completed on December 27, 2023, with net proceeds of approximately RMB 8,359,049[126][127] - The proceeds were fully utilized to fund serial program/film production and related services and film rights investment (RMB 5,851,334) and general working capital (RMB 2,507,715)[128][129] Placing under General Mandate On March 8, 2024, the company successfully placed 49,410,000 ordinary shares, generating net proceeds of approximately HKD 23.3 million, fully utilized for serial program/film production and related services and film rights investment - On March 8, 2024, the placing agent successfully placed a total of 49,410,000 placing shares, with a net issue price of approximately HKD 0.472 per share[128][129] - Net proceeds from the placing of approximately HKD 23,310,000 were fully utilized for serial program/film production and related services and film rights investment[130][131] Credit risk The Group's credit risk primarily arises from trade and other receivables, bank balances, and amounts due from non-controlling interests, influenced by individual debtor characteristics and credit concentration risk, though trade receivables credit risk is deemed significantly reduced - The Group's credit risk primarily arises from trade and other receivables, bank balances, and amounts due from non-controlling interests[132][133] - The Directors believe that the credit risk of trade receivables has been significantly reduced as of the end of the reporting period[132][133] BUSINESS REVIEW AND PROSPECTS This section reviews the Group's business segment performance and future outlook, covering film production, concert organization, mobile app development, and artist management, while also detailing key risks, uncertainties, employee information, capital expenditure, commitments, and contingent liabilities Serial program/film production and related services and film rights investment For the six months ended June 30, 2024, this segment's revenue was approximately RMB 22.9 million, primarily from selling serial program and film copyrights, a significant increase from RMB 13.8 million in the prior period, with plans to expand into original content creation, adaptation, production, and distribution - For the six months ended June 30, 2024, revenue from program production and related services was approximately RMB 22.9 million, compared to RMB 13.8 million in the prior period[136][137] - Revenue was primarily derived from the sale of serial program and film copyrights[136][137] - The Group will continue to leverage its production experience and resources to expand the program production segment into original content creation, adaptation, production, distribution, and other related services, self-incubating more original film and television script copyrights[136][137] Concert and event organisation For the six months ended June 30, 2024, this segment's revenue was approximately RMB 2.2 million, a decrease from RMB 8.0 million in the prior period, mainly due to fewer events held, with future plans to explore more opportunities in different regions - For the six months ended June 30, 2024, revenue from the concert and event organization segment was approximately RMB 2.2 million, a decrease from RMB 8.0 million in the prior period[138][139] - The decrease in revenue was primarily due to fewer events held during the period compared to the prior period[138][139] - The Group will explore opportunities to organize more concerts and events in different regions in the future[139][140] Mobile application development and operation For the six months ended June 30, 2024, this segment's revenue was approximately RMB 0.2 million, a significant decrease from RMB 1.8 million in the prior period, mainly due to the absence of celebrity live streaming sessions, with plans to deepen cooperation with celebrities, introduce virtual anchors, and expand into the live streaming e-commerce market - For the six months ended June 30, 2024, revenue from the mobile application development and operation segment was approximately RMB 0.2 million, a decrease from RMB 1.8 million in the prior period[141][142] - The decrease in revenue was primarily due to the scheduling of celebrity artists' work, which resulted in no celebrity live streaming sessions during the period[141][142] - The Group will continue to plan in-depth cooperation with renowned celebrity artists, actively train assistant streamers, and introduce virtual anchors, deepening its presence in the vast live streaming e-commerce market through live broadcasts on Taobao and Douyin[142][145] Artist management For the six months ended June 30, 2024, net revenue from artist management was approximately RMB 0.4 million, consistent with the prior period, primarily from arranging artist work, with future efforts focused on developing a more comprehensive artist roster - For the six months ended June 30, 2024, net revenue from artist management was approximately RMB 0.4 million, consistent with the prior period[143][144] - Revenue was primarily derived from work arranged for artists during this period[143][144] - The Group is committed to developing a more comprehensive artist roster in the future to bring greater value to the Group[143][144] Principal risks and uncertainties The Group faces principal risks including reliance on a limited number of customers, intense competition in TV broadcast content production and event organization markets, and uncertainties and regulatory immaturity in new businesses like mobile application development and live streaming e-commerce - The Group's reliance on a limited number of customers poses a risk, with the largest customer contributing approximately 73.6% of total revenue for the six months ended June 30, 2024[146][148] - The television broadcast content production market is highly fragmented and competitive, facing price pressure from television station clients and substitution threats from films, serial programs, and other content[149][150] - The event organization industry is highly competitive, facing competition not only from other event organizers but also from in-house corporate public relations departments and companies in related fields[151][152] - The mobile application development and operation business faces market demand uncertainty, rapid changes in user behavior, and immature regulation, making short-term results difficult to ascertain[151][152] - Live streaming e-commerce is not an essential service, and demand could significantly decrease if the Chinese economy declines and consumer purchasing power falls[153][157] Employees and remuneration policies As of June 30, 2024, the Group had 29 employees, with remuneration determined by performance, experience, and market conditions, potentially including discretionary bonuses - As of June 30, 2024, the Group had 29 employees (June 30, 2023: 28 employees)[154][158] - The Group determines remuneration based on employee performance, experience, and prevailing industry conditions, and may grant discretionary bonuses[154][158] Foreign exchange risks The Group's recurring sales and purchases are primarily settled in RMB, and foreign currency risks will be continuously reviewed and monitored - The Group's recurring sales and purchases are primarily settled in RMB, and foreign currency risks will be reviewed and monitored[155][159] Capital expenditure For the six months ended June 30, 2024, the Group paid approximately RMB 2,177,000 for additions to property, plant and equipment, a significant increase from the prior period - For the six months ended June 30, 2024, the Group paid approximately RMB 2,177,000 for additions to property, plant and equipment (2023: approximately RMB 25,000)[156][160] Capital commitments As of June 30, 2024, the Group's capital commitments amounted to RMB 83.0 million, an increase from RMB 47.0 million as of December 31, 2023 - As of June 30, 2024, the Group had capital commitments of RMB 83.0 million (December 31, 2023: RMB 47.0 million)[161][163] Contingent liabilities The Group faces a contingent liability of approximately RMB 13.7 million related to a corporate guarantee for Shengxia Xingkong's failed listing; despite a court judgment, the Group holds sufficient withheld payments from Shengxia Xingkong to cover potential claims, and directors deem the fair value of the guarantee not material - The Group faces a contingent liability of approximately RMB 13.7 million related to a corporate guarantee due to Shengxia Xingkong's failure to list by June 30, 2021[162][164][168][169] - The court ruled that the Group bears joint and several liability, but the Group holds withheld payments from Shengxia Xingkong of approximately RMB 37.1 million, sufficient to cover any claims arising from the litigation[166][167][168][169] - The Directors believe that the fair value of the corporate guarantee is not material[168][169] Significant investments, material acquisitions or disposals of subsidiaries and affiliated companies For the six months ended June 30, 2024, the Group held no significant investments and made no material acquisitions or disposals of subsidiaries or affiliated companies, consistent with the prior year - As of June 30, 2024, the Group held no significant investments and there were no material acquisitions or disposals of subsidiaries or affiliated companies during the period (2023: nil)[170][171] DISCLOSURE OF INTERESTS AND OTHER INFORMATION This section details directors' and substantial shareholders' interests, share option schemes, corporate governance practices, and other relevant disclosures DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ANY ASSOCIATED CORPORATION As of June 30, 2024, directors and chief executives held interests in the company's ordinary shares and Youth Success Holdings Limited's ordinary shares, with Mr. Wang Yong holding 13.24% of the company's shares through Goldbless International Limited, and Mr. Yang Jian and Mr. Yang Shiyuan also holding shares in Youth Success Directors' Long Positions in the Company's Ordinary Shares | Director Name | Capacity and Nature of Interest | Number of Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Goldbless International Limited | Beneficial owner | 76,500,000 | 13.24 | | Mr. Wang Yong | Interest in controlled corporation | 76,500,000 | 13.24 | Directors' Long Positions in Youth Success Holdings Limited's Ordinary Shares | Director Name | Number of Shares | Percentage of Shareholding | | :--- | :--- | :--- | | Mr. Yang Jian | 1,273 | 12.73 | | Mr. Yang Shiyuan | 148 | 1.48 | SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY As of June 30, 2024, Youth Success Holdings Limited, Guang Rui Investments Limited, Mr. Yang Shaoqian, Ms. Mou Sufang, Mr. Liang Longfei, Mr. Tan Koon Aik, Mr. Ang Yu Yuan Shawn, Alpine Nova Limited, and Mr. Wang Xu were listed as substantial shareholders with significant interests in the company's shares, with Youth Success and Guang Rui deemed to have substantial interests through a shareholder voting agreement Substantial Shareholders' Long Positions in the Company's Ordinary Shares | Shareholder Name | Capacity and Nature of Interest | Number of Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Youth Success Holdings Limited | Beneficial owner; Deemed to have interest under shareholder voting agreement | 339,586,958 | 58.77 | | Guang Rui Investments Limited | Beneficial owner; Interest in controlled corporation; Deemed to have interest under shareholder voting agreement | 342,181,358 | 59.22 | | Mr. Yang Shaoqian | Interest in controlled corporation; Spouse's interest; Deemed to have interest under shareholder voting agreement | 342,181,358 | 59.22 | | Ms. Mou Sufang | Interest in controlled corporation; Spouse's interest; Deemed to have interest under shareholder voting agreement | 342,181,358 | 59.22 | | Mr. Liang Longfei | Beneficial owner | 36,000,000 | 6.23 | | Mr. Tan Koon Aik | Beneficial owner | 44,671,963 | 7.73 | | Mr. Ang Yu Yuan Shawn | Beneficial owner | 35,990,566 | 6.23 | | Alpine Nova Limited | Beneficial owner | 30,362,150 | 5.26 | | Mr. Wang Xu | Interest in controlled corporation | 30,362,150 | 5.26 | - Youth Success and Guang Rui Investments Limited are deemed to have substantial share interests through a shareholder voting agreement, while Mr. Yang Shaoqian and Ms. Mou Sufang are deemed to have the same interests due to spousal relationships and controlled corporate interests[181][182][183][184][185] PURCHASES, SALES OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY For the six months ended June 30, 2024, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[186][188] - As of June 30, 2024, the company held no treasury shares[186][188] SHARE OPTION SCHEME The company adopted a share option scheme on November 3, 2015, valid for 10 years, with no options granted, exercised, cancelled, or lapsed, and no outstanding options as of June 30, 2024, and 24,000,000 shares available for grant - The company adopted a share option scheme on November 3, 2015, with a validity period of 10 years[189][190] - As of June 30, 2024, no share options had been granted, exercised, cancelled, or lapsed under the share option scheme, and there were no outstanding share options[189][190] - As of June 30, 2024, the number of share options authorized for grant under the scheme was 24,000,000 shares[189][190] COMPETING INTERESTS For the six months ended June 30, 2024, no directors, controlling shareholders, or their close associates held interests in any business directly or indirectly competing with the Group or had any other conflicts of interest - For the six months ended June 30, 2024, no Directors, controlling shareholders of the company, or their respective close associates had any interests in any business directly or indirectly competing with the Group or any other conflicts of interest with the Group[191][192] CORPORATE GOVERNANCE PRACTICES The company is committed to good corporate governance, adopting the GEM Listing Rules' Corporate Governance Code, and despite the Chairman and CEO being the same person, the Board ensures a balance of responsibilities, with the Board directly overseeing internal controls in the absence of an internal audit function - The company has adopted the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules and has complied with its provisions for the six months ended June 30, 2024, except for provisions C.2.1 and D.2.5[194][195] - Mr. Yang Jian serves as both the Chairman of the Board and Chief Executive Officer, but the Board believes that a balance of responsibilities is ensured through the Board's operations[194][195] - The company currently has no internal audit function, with the Board directly responsible for the Group's internal controls and reviewing their effectiveness[196][197] DIRECTORS' SECURITIES TRANSACTIONS The company adopted GEM Listing Rules 5.48 to 5.67 as the code of conduct for directors' securities transactions, and all directors complied with this standard for the six months ended June 30, 2024, and up to the report date - The company has adopted Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for Directors' securities transactions[198][199] - All Directors have complied with the required standards of dealing for the six months ended June 30, 2024, and up to the date of this report[198][199] AUDIT COMMITTEE The company has established an Audit Committee, comprising three independent non-executive directors, responsible for reviewing and overseeing the Group's financial controls, internal controls, and risk management systems, and has reviewed the unaudited condensed consolidated results for the period, deeming them compliant with applicable accounting standards and disclosure requirements - The company has established an Audit Committee, whose written terms of reference comply with Rules 5.28 to 5.33 of the GEM Listing Rules[200][201] - The Audit Committee comprises three independent non-executive Directors: Mr. Qiu Xinyuan (Chairman), Ms. Fu Yuehong, and Mr. Wang Xinghua[5][200][201] - The Audit Committee has reviewed the company's unaudited condensed consolidated results for the six months ended June 30, 2024, and considers them to be in compliance with applicable accounting standards, the GEM Listing Rules, and statutory requirements, with adequate disclosures made[202]