恒信东方(300081) - 2018 Q2 - 季度财报

Important Notes, Table of Contents, and Definitions Important Notes The company's board of directors, supervisory board, and senior management ensure the truthfulness, accuracy, and completeness of this semi-annual report, assuming legal responsibility, while future plans mentioned do not constitute substantive commitments, and investors are advised to note risks related to Anhui Saida's performance commitments, VR industry development, business integration, declining mobile information business, and fundraising projects - Company management guarantees the truthfulness, accuracy, and completeness of the report content and assumes corresponding legal responsibilities[3] - The report highlights major risks faced by the company, including: - Risk of wholly-owned subsidiary Anhui Saida failing to meet performance commitments - Risk of VR industry development falling short of expectations - Risks associated with acquisitions and business integration - Risk of continued decline in mobile information product sales and services - Risks related to fundraising investment projects[4] Definitions This section defines key terms used in the report, covering the reporting period, company entities, and core business-related technical and commercial concepts such as CG, VR, AR, and LBE, providing a foundation for understanding the report's content Key Terms and Definitions | Term | Definition | | :--- | :--- | | Reporting Period | January 1, 2018 to June 30, 2018 | | VR | Virtual Reality | | LBE | Location Based Entertainment, venue-based entertainment experience | | IP | Intellectual Property | | Oriental Dream | Oriental Dream Cultural Industry Investment Co., Ltd., a wholly-owned subsidiary of the company | | Anhui Saida | Anhui Saida Technology Co., Ltd. | Company Profile and Key Financial Indicators I. Company Profile This section provides the company's basic information, including its stock abbreviation 'Hengxin Oriental', stock code '300081', full Chinese and English names, and legal representative Company Basic Information | Item | Content | | :--- | :--- | | Stock Abbreviation | Hengxin Oriental | | Stock Code | 300081 | | Stock Exchange | Shenzhen Stock Exchange | | Company's Chinese Name | Hengxin Oriental Culture Co., Ltd. | | Company's Legal Representative | Meng Xianmin | IV. Key Accounting Data and Financial Indicators During the reporting period, the company achieved significant performance growth with total operating revenue increasing by 62.12%, net profit attributable to shareholders surging by 206.19%, and non-recurring net profit rising by an impressive 359.61%, indicating strong core business profitability, while basic earnings per share grew by 169.23%, though net cash flow from operating activities decreased by 95.64%, warranting attention to its cash position Key Accounting Data and Financial Indicators | Indicator | Current Period | Prior Period | YoY Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue (CNY) | $320.32 million | $197.58 million | 62.12% | | Net Profit Attributable to Shareholders (CNY) | $187.74 million | $61.32 million | 206.19% | | Net Profit Excluding Non-Recurring Items (CNY) | $83.52 million | $18.17 million | 359.61% | | Net Cash Flow from Operating Activities (CNY) | -$25.83 million | -$13.20 million | -95.64% | | Basic Earnings Per Share (CNY/share) | $0.35 | $0.13 | 169.23% | | Weighted Average Return on Net Assets | 7.98% | 3.71% | 4.27% | | Total Assets (CNY) | $2.62 billion | $2.36 billion | 10.78% (Period-End vs. Prior Year-End) | | Net Assets Attributable to Shareholders (CNY) | $2.43 billion | $2.26 billion | 7.55% (Period-End vs. Prior Year-End) | VI. Non-Recurring Gains and Losses During the reporting period, the company's non-recurring gains and losses totaled $104.23 million, significantly impacting net profit, primarily due to a $115.66 million investment gain from remeasuring the original long-term equity investment at fair value upon non-same-control business combination with Anhui Saida - Non-recurring gains and losses totaled $104.23 million, primarily from investment income generated by the non-same-control business combination with Anhui Saida[22] Non-Recurring Gains and Losses Items and Amounts | Item | Amount (CNY) | Description | | :--- | :--- | :--- | | Other gains and losses items conforming to the definition of non-recurring gains and losses | $115.66 million | Primarily investment income from remeasuring original long-term equity investment at fair value due to non-same-control business combination with Anhui Saida | | Enterprise restructuring expenses | -$12.97 million | Mainly resettlement expenses and liquidation losses | | Government subsidies | $2.21 million | Mainly tax refunds and Guangzhou service trade demonstration subsidies | Business Overview I. Principal Activities During the Reporting Period During the reporting period, the company focused on the digital creative industry with 'artistic creativity + visual technology' at its core, encompassing CG/VR content production, children's industry chain development and operation, LBE urban new entertainment, internet video applications and services, while strategically reducing traditional mobile information product sales, with performance growth primarily driven by the three emerging businesses and significant investment income from the 100% acquisition of Anhui Saida - The company's business scope primarily includes five major segments: - CG/VR content production - Children's industry chain development and operation - LBE (Location Based Entertainment) urban new entertainment - Internet video application products and services - Mobile information product sales and services (planned contraction)[25] - Performance drivers primarily include significant revenue growth from CG/VR content production, children's industry chain development and operation, and LBE urban new entertainment, as well as substantial investment income from the non-same-control business combination after acquiring a 49% stake in Anhui Saida[45][46] II. Significant Changes in Major Assets During the reporting period, the company's major assets underwent significant changes, primarily driven by the non-same-control merger of Anhui Saida, leading to substantial increases in accounts receivable, inventory, goodwill (up 1208.68%), and long-term deferred expenses, alongside increased investment in children's and VR projects boosting intangible assets (copyrights) and development expenditures, while cash and equivalents decreased by 35.21% to support investment activities Significant Changes in Major Assets | Major Asset | Change from Period-Start | Significant Change Description | | :--- | :--- | :--- | | Goodwill | +1208.68% | Mainly due to significant goodwill arising from non-same-control business combination with Anhui Saida | | Development Expenditures | +228.10% | Mainly due to increased R&D investment in 'VR Film Promotion Platform' and 'Family Fun Entertainment Platform' fundraising projects | | Accounts Receivable | +131.86% | Mainly due to merger of Anhui Saida and business development of subsidiary Oriental Dream | | Inventory | +53.85% | Mainly due to merger of Anhui Saida and business development of grandchild company Hengxin Oriental Children | | Cash and Equivalents | -35.21% | Mainly due to significant investment expenditures this period | - The company holds two major overseas assets: an investment in US VR content production company VRC, accounting for 5.41% of the company's net assets, and an investment in New Zealand children's cultural creation company Pukeko Pictures, accounting for 3.89% of the company's net assets[57] III. Core Competitiveness Analysis The company's core competitiveness is built upon seven key advantages: leading digital visual content production capabilities, a full industry chain layout from IP acquisition to channel distribution, rich proprietary and cooperative IP resources, stable strategic partnerships with internationally renowned companies like Weta Workshop, continuous CG/VR technology R&D investment, integrated online and offline channel resources, and significant intellectual property accumulation including 14 invention patents and 257 registered trademarks - The company maintains strategic partnerships with multiple internationally renowned film, animation, and special effects companies, including Weta Workshop, Pukeko Pictures, and VRC, leveraging an 'organic + inorganic' approach to connect high-quality domestic and international resources and build a 'technology + content + scenario' VR industry ecosystem[61][62] - The company independently developed a CG socialized production platform, achieving industrialized processes and management for digital image creation, effectively enhancing content creation efficiency and production scale[58] - As of the end of the reporting period, the company held 14 invention patents, 257 registered trademarks, 211 software copyrights, and 176 work copyrights, demonstrating a significant intellectual property advantage[66][68] Management Discussion and Analysis I. Overview In H1 2018, driven by its 'artistic creativity + visual technology' strategy, the company achieved robust performance growth with total revenue reaching $320.32 million, up 62.12%, and net profit attributable to parent company surging to $187.74 million, up 206.19%, primarily due to rapid development in CG/VR content production, children's industry chain, and LBE urban new entertainment, alongside an approximately $114 million investment gain from acquiring the remaining equity in Anhui Saida, while strategically scaling back mobile information product sales Key Financial Indicators (H1 2018) | Financial Indicator | 2018年上半年 | YoY Change | | :--- | :--- | :--- | | Total Operating Revenue | $320.32 million | 62.12% | | Operating Profit | $178 million | 162.34% | | Net Profit Attributable to Parent | $188 million | 206.19% | - Investment income reached $132 million during the reporting period, a 96.12% year-on-year increase, primarily due to the completion of the 100% acquisition of Anhui Saida, constituting a non-same-control business combination, which generated approximately $114 million in investment income from the remeasurement of the original long-term equity investment at fair value[72] - The company's core business segments progressed smoothly: in CG/VR content, 'Space Academy' animation production was completed, and VRC's VR film won an award; in the children's industry chain, the 'Oriental Children' brand strategy and 'Family Fun' interactive entertainment platform were launched; in LBE business, multiple offline venue projects in Zhuhai, Wuhan, and Nanjing advanced steadily[74][77][81] II. Analysis of Principal Activities During the reporting period, the company optimized its main business structure with rapid growth in emerging sectors; professional technical services for culture and entertainment reached $184.12 million, up 114.59%, becoming a core revenue stream; children's industry chain development and operation revenue grew by 248.60%, and LBE urban new entertainment by 109.37%; traditional mobile information product sales and services revenue declined by 8.68% with a 15.19 percentage point drop in gross margin, reflecting the effectiveness of strategic contraction; and new internet video application products and services contributed approximately $30.97 million in revenue Revenue and Gross Margin by Product/Service | By Product or Service | Operating Revenue (CNY) | Operating Revenue YoY Change | Gross Margin | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | | Professional Technical Services for Culture and Entertainment | $184.12 million | 114.59% | 46.63% | -16.00% | | - Children's Industry Chain Development and Operation | $96.86 million | 248.60% | 45.64% | -25.68% | | - LBE Urban New Entertainment | $55.83 million | 109.37% | 53.48% | 8.02% | | Mobile Information Product Sales and Services | $95.93 million | -8.68% | 12.44% | -15.19% | | Internet Video Application Products and Services | $30.97 million | - | 51.83% | - | - The company's profit sources underwent significant changes, primarily stemming from the operating performance growth of wholly-owned subsidiary Oriental Dream and investment income generated by the non-same-control business combination with Anhui Saida[90] III. Analysis of Non-Principal Activities During the reporting period, non-principal activities significantly contributed to the company's profit, primarily from $132 million in investment income, accounting for 73.13% of total profit, largely derived from the non-recurring gain on remeasurement of original equity investment at fair value during the non-same-control business combination with Anhui Saida, which is not sustainable Non-Principal Activities Analysis | Item | Amount (CNY) | Share of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | $131.89 million | 73.13% | Primarily investment income from remeasuring original equity investment at fair value due to non-same-control business combination with Anhui Saida, etc | No | | Non-Operating Income | $3.13 million | 1.74% | Mainly government subsidies income | No | IV. Analysis of Assets and Liabilities As of the end of the reporting period, the company's total assets reached $2.62 billion, an increase of 10.78% from the previous year-end, with significant changes in asset structure primarily due to the merger of Anhui Saida and business expansion: goodwill's proportion of total assets surged from 1.55% to 17.67%, accounts receivable and inventory also notably increased, and cash and equivalents decreased from 54.13% to 30.74% to support investment activities Asset and Liability Status Analysis | Major Asset | Proportion of Total Assets (Period-End) | Proportion of Total Assets (Prior Period-End) | Proportion Change | Significant Change Description | | :--- | :--- | :--- | :--- | :--- | | Goodwill | 17.67% | 1.55% | +16.12% | Mainly due to significant goodwill arising from non-same-control business combination with Anhui Saida | | Accounts Receivable | 9.85% | 2.87% | +6.98% | Mainly due to merger of Anhui Saida and business development of subsidiary Oriental Dream | | Inventory | 8.07% | 3.37% | +4.70% | Mainly due to merger of Anhui Saida and business development of grandchild company Hengxin Oriental Children | | Cash and Equivalents | 30.74% | 54.13% | -23.39% | Mainly due to higher investment expenditures this period | V. Analysis of Investment Activities During the reporting period, the company actively engaged in investment activities, with total investments reaching $867 million, a 96.44% year-on-year increase; significant equity investments included acquiring the remaining 49% stake in Anhui Saida for $294 million to achieve full control, and a $94.62 million investment for a 31.42% stake in New Zealand's Pukeko Pictures to deepen international cooperation; regarding raised funds, $617 million has been cumulatively invested, with 53.03% of the funds' original uses changed, primarily redirected to equity acquisitions in Anhui Saida and Pukeko Pictures - Two significant equity investments were completed during the reporting period: - Acquisition of Anhui Saida: Invested $294 million to acquire the remaining 49% equity, achieving 100% control, contributing $15.22 million in investment profit/loss this period - Acquisition of Pukeko Pictures: Invested $94.62 million to acquire 31.42% equity, contributing $0.13 million in investment profit/loss this period[101][102] - Total raised funds amounted to $978 million, with $617 million cumulatively invested; the total amount of raised funds with changed uses was $519 million, accounting for 53.03% of the total, primarily used for the acquisition of Anhui Saida and Pukeko Pictures equity[104][108] X. Risks Faced by the Company and Countermeasures The company identified five major operational risks: Anhui Saida's potential failure to meet performance commitments, slower-than-expected VR industry development impacting business performance, integration challenges following acquisitions of companies like Oriental Dream and Anhui Saida, continued decline in traditional mobile information product sales, and uncertainties in the implementation and market changes of fundraising investment projects, for which the company has developed corresponding countermeasures - Anhui Saida's original shareholders committed to achieving net profits of $60 million and $70 million in 2018 and 2019 respectively; if its operations fall short of expectations, the performance commitments may not be fulfilled[123] - The company's CG/VR content production business relies on advanced hardware technology; if hardware development fails to keep pace with industry demand, it will delay the realization of the company's performance in this area[124] - The company has expanded its assets and business scale through multiple mergers and acquisitions, but faces integration risks in business systems, organizational structures, and corporate culture[126] Significant Matters XII. Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures During the reporting period, the company continued its 2017 restricted stock incentive plan, completing the grant of 16.12 million restricted shares to 38 grantees at $6.35 per share in December 2017, and initiating the repurchase and cancellation of 1.07 million restricted shares from 3 departing grantees at $6.30 per share in June 2018 - On December 19, 2017, the company completed the registration of restricted stock grants, awarding 16.12 million shares to 38 grantees at an exercise price of $6.35/share, with lock-up periods of 24, 36, and 48 months respectively[142] - On June 8, 2018, due to the departure of 3 grantees, the company's board of directors approved the repurchase and cancellation of their combined 1.07 million restricted shares at a repurchase price of $6.30/share[143] XIV. Significant Contracts and Their Performance During the reporting period, the company advanced two significant cooperation projects: the 'Guangdong-Macao Traditional Chinese Medicine Science and Technology Industrial Park Herbal Science Museum (Phase I)' project with Aotou (Hengqin) and others, which had cumulatively recognized revenue of $56.64 million by period-end, and the 'China-New Zealand Creative Industry Park' project with Pukeko Pictures and others, which had cumulatively recognized revenue of $2.08 million by period-end Significant Contracts Performance | Contract Subject | Partner | Contract Date | Transaction Price (CNY '0k) | Performance as of Period-End | | :--- | :--- | :--- | :--- | :--- | | Guangdong-Macao Traditional Chinese Medicine Science and Technology Industrial Park Herbal Science Museum (Phase I) Project | Aotou (Hengqin) Health Tourism Co., Ltd. etc | 2017年12月25日 | $200.00 million | Cumulatively recognized revenue of $56.64 million | | Construction of China-New Zealand Creative Industry Park | Pukeko Pictures, CDB Oriental Urban Development Investment Co., Ltd. | 2017年11月13日 | - | Cumulatively recognized revenue of $2.08 million | XVI. Other Significant Matters During the reporting period, the company had two other significant matters: first, the acquisition of the remaining 49% equity in Anhui Saida was completed, with the counterparty Zhou Jie committing to use part of the transaction proceeds to increase his shareholding in the company, which has been partially fulfilled; second, 70.56 million restricted shares from the company's 2017 non-public offering of supporting funds, representing 13.30% of total share capital, were unrestricted and listed for trading on April 24, 2018 - The acquisition of 49% equity in Anhui Saida was completed, with the counterparty Zhou Jie committing to use $120 million of the after-tax transaction proceeds to increase his shareholding in the company; as of the end of the reporting period, Zhou Jie had increased his holdings by 7.26 million shares, representing 1.37% of the total share capital[156] - On April 24, 2018, 70.56 million restricted shares from the company's non-public offering of supporting funds were unrestricted and listed for trading, accounting for 13.30% of the company's total share capital[157] Changes in Share Capital and Shareholder Information I. Changes in Share Capital During the reporting period, the company's total share capital of 530.73 million shares remained unchanged, but the share structure shifted primarily due to the lifting of restrictions on 70.56 million shares from the 2017 non-public offering of supporting funds on April 24, 2018, resulting in a decrease in restricted shares from 53.79% to 40.52% and an increase in unrestricted shares from 46.21% to 59.48% - Due to the expiration of the lock-up period for some shares from the non-public offering of supporting funds, 70.56 million restricted shares were converted into unrestricted shares[162] Share Class | Share Class | Before Change (%) | After Change (%) | | :--- | :--- | :--- | | Restricted Shares | 53.79% | 40.52% | | Unrestricted Shares | 46.21% | 59.48% | III. Number of Shareholders and Shareholding Information As of the end of the reporting period, the company had 21,533 common shareholders, with a stable top ten shareholder structure where the actual controller Meng Xianmin held a controlling stake of 27.37%, other major shareholders included Wang Bing (6.84%), Pei Jun (3.52%), and several institutional investors, and new top ten shareholder Zhou Jie held 1.37% as part of his commitment to increase holdings following the Anhui Saida acquisition Top Shareholders Information | Shareholder Name | Shareholder Type | Shareholding (%) | Shares Held | | :--- | :--- | :--- | :--- | | Meng Xianmin | Domestic Natural Person | 27.37% | 145.27 million | | Wang Bing | Domestic Natural Person | 6.84% | 36.28 million | | Pei Jun | Domestic Natural Person | 3.52% | 18.67 million | | China Merchants Bank...Jiutai Jiuli... | Other | 3.36% | 17.83 million | | Xiamen Rongxinbo Investment... | Domestic Non-State-Owned Legal Person | 3.16% | 16.78 million | - As of the end of the reporting period, the total number of common shareholders was 21,533[167] Financial Report II. Financial Statements This section presents the company's core financial statements for H1 2018, including consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, showing steady growth in total assets, significant increases in operating revenue and net profit, negative operating cash flow, and an increase in owners' equity due to profit growth and share-based payments 1. Consolidated Balance Sheet As of June 30, 2018, the company's total assets reached $2.62 billion, up 10.78% from the beginning of the period, with asset growth primarily driven by goodwill from the Anhui Saida acquisition (increasing to $462.19 million) and increased accounts receivable and inventory due to business expansion, while on the liability side, short-term borrowings rose from $30 million to $80 million, and equity attributable to the parent company increased to $2.43 billion | Item | Period-End Balance (CNY) | Period-Start Balance (CNY) | | :--- | :--- | :--- | | Total Assets | $2.62 billion | $2.36 billion | | Cash and Equivalents | $804.18 million | $1.24 billion | | Accounts Receivable | $257.65 million | $111.13 million | | Goodwill | $462.20 million | $35.32 million | | Total Liabilities | $180.24 million | $97.16 million | | Short-term Borrowings | $80.00 million | $30.00 million | | Total Owners' Equity | $2.44 billion | $2.26 billion | 3. Consolidated Income Statement In H1 2018, the company achieved total operating revenue of $320.32 million, up 62.12%, and net profit of $187.25 million, up 211.79%, with significant profit growth primarily due to $132 million in investment income, including non-recurring investment income from the Anhui Saida acquisition, resulting in a net profit attributable to the parent company of $187.74 million after deducting income tax expenses (negative this period due to animation enterprise tax refunds) | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | I. Total Operating Revenue | $320.32 million | $197.58 million | | II. Total Operating Costs | $275.03 million | $193.14 million | | Add: Investment Income | $131.89 million | $67.25 million | | III. Operating Profit | $177.65 million | $67.72 million | | IV. Total Profit | $180.34 million | $66.95 million | | V. Net Profit | $187.25 million | $60.06 million | | Net Profit Attributable to Parent Company Shareholders | $187.74 million | $61.32 million | 5. Consolidated Cash Flow Statement During the reporting period, the company's cash flow showed net outflows from operating and investing activities and net inflows from financing activities; net cash flow from operating activities was -$25.83 million, mainly due to extended sales collection cycles and increased procurement expenditures; net cash outflow from investing activities reached $436 million, primarily for the Anhui Saida acquisition and other external investments; net cash inflow from financing activities was $24.04 million, mainly from bank borrowings; and cash and cash equivalents at period-end significantly decreased by $437 million from the beginning of the period | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -$25.83 million | -$13.20 million | | Net Cash Flow from Investing Activities | -$435.67 million | $1.67 million | | Net Cash Flow from Financing Activities | $24.04 million | $950.65 million | | Net Increase in Cash and Cash Equivalents | -$437.46 million | $939.12 million | VII. Notes to Consolidated Financial Statements This section details the composition and changes of major accounts in the consolidated financial statements, highlighting significant increases in accounts receivable, inventory, and goodwill due to the Anhui Saida acquisition; an increase in other current assets and negative current income tax expense due to tax refunds from animation enterprise certification; investment income primarily from the accounting treatment of the Anhui Saida acquisition; and a substantial increase in development expenditures reflecting the company's ongoing investment in VR and family entertainment platforms 5. Accounts Receivable As of period-end, the company's accounts receivable book value was $258 million, a significant increase of 131.86% from $111 million at the beginning of the period, primarily due to the substantial increase in accounts receivable from the non-same-control merger of Anhui Saida and business development of subsidiary Oriental Dream, with the top five debtors accounting for 30.56% of the total year-end balance - The year-end balance of accounts receivable significantly increased compared to the beginning of the period, primarily due to the merger of Anhui Saida and the business development of subsidiary Oriental Dream[342] Top 5 Accounts Receivable Debtors | Debtor Name | Period-End Balance (CNY) | Proportion of Total Accounts Receivable (Period-End) | | :--- | :--- | :--- | | Beijing Longbu Visual Culture Industry Co., Ltd. | $22.67 million | 8.51% | | Hubei Duobao Qibing Film and Television Culture Co., Ltd. | $16.80 million | 6.31% | | Shenzhen Zhongke Dingchuang Technology Co., Ltd. | $15.54 million | 5.84% | | Aotou (Hengqin) Health Tourism Co., Ltd. | $15.12 million | 5.68% | | Bangwei International Industrial Co., Ltd. | $11.25 million | 4.22% | 27. Development Expenditures At the end of the reporting period, the company's development expenditures balance was $24.25 million, a significant increase of 228.10% from $7.39 million at the beginning of the period, with the growth primarily from ongoing R&D investments in the 'Family Fun Project' and 'VR Film Promotion Platform,' which increased by $10.98 million and $4.08 million respectively this period, reflecting the company's strong technological investment in new business areas Development Expenditures Details | Item | Period-Start Balance (CNY) | Current Period Increase (CNY) | Period-End Balance (CNY) | | :--- | :--- | :--- | :--- | | Family Fun Project | 0.00 | $10.98 million | $10.98 million | | VR Film Promotion Platform | 0.00 | $4.08 million | $4.08 million | | Total | $7.39 million | $20.76 million | $24.25 million | 28. Goodwill At the end of the reporting period, the company's goodwill book value surged from $38.62 million at the beginning of the period to $465 million, with this substantial increase primarily stemming from the non-same-control business combination with Anhui Saida this period, adding $427 million in goodwill, which arose because the merger cost ($556 million) exceeded the fair value share of Anhui Saida's identifiable net assets acquired ($129 million) - This period, goodwill increased by $427 million due to the non-same-control business combination with Anhui Saida[459] - The merger cost for acquiring Anhui Saida was $556 million, exceeding its identifiable net assets' fair value share of $129 million, with the difference forming goodwill[462] 69. Investment Income During the reporting period, the company achieved total investment income of $132 million, a major component of profit, with the largest portion being a $114 million gain from remeasuring the original equity investment at fair value during the non-same-control business combination with Anhui Saida, in addition to $10.77 million in long-term equity investment income accounted for under the equity method Investment Income Breakdown | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | Investment income from remeasuring original equity at fair value in non-same-control business combinations | $114.30 million | 0.00 | | Long-term equity investment income accounted for under equity method | $10.77 million | -$4.61 million | | Investment income from wealth management products | $5.47 million | $0.08 million | | Total | $131.89 million | $67.25 million | VIII. Changes in Consolidation Scope During the reporting period, the company's consolidation scope changed, primarily on March 20, 2018, when it acquired the remaining 49% equity in Anhui Saida Technology Co., Ltd., bringing the former joint venture into full subsidiary status, constituting a non-same-control business combination; additionally, the company established Wuhan Wow Space Dream Children's Park Management Co., Ltd., and ceased consolidating Shanghai Quren Entrepreneurship Incubator Co., Ltd. and Oriental Dream (Chengdu) Cultural Arts Development Co., Ltd. due to loss of control through equity transfer - On March 20, 2018, the company acquired the remaining 49% equity in Anhui Saida, changing it from a joint venture to a wholly-owned subsidiary, constituting a non-same-control business combination[580] - During the reporting period, the company established a new subsidiary, 'Wuhan Wow Space Dream Children's Park Management Co., Ltd.', and ceased consolidating 'Shanghai Quren Entrepreneurship Incubator Co., Ltd.' and 'Oriental Dream (Chengdu) Cultural Arts Development Co., Ltd.' due to loss of control through equity transfer[228][595] Reference Documents