拉近网娱(08172) - 2025 - 中期业绩

Report Overview GEM Characteristics and Disclaimer This report presents China Netcom Entertainment Group Limited's unaudited interim results for the six months ended June 30, 2025, highlighting GEM as a platform for high-risk SMEs and including a Stock Exchange disclaimer - The GEM market serves as a listing platform for high-investment-risk SMEs, requiring investors to carefully consider potential risks[2] - Hong Kong Exchanges and Clearing Limited and the Stock Exchange are not responsible for this announcement's content, make no accuracy or completeness claims, and disclaim any liability for loss[2] Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, group revenue significantly decreased by 54.0% to HK$2,145 thousand, gross profit turned to a gain of HK$852 thousand, and loss for the period narrowed to HK$11,139 thousand with a basic loss per share of 0.20 HK cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,145 | 4,658 | -54.0% | | Cost of sales | (1,293) | (3,950) | -67.3% | | Gross profit/(loss) | 852 | 708 | +20.3% | | Other income and gains | 1,856 | 3,320 | -44.0% | | Administrative expenses | (13,847) | (16,363) | -15.4% | | Loss before tax | (11,139) | (13,155) | -15.4% | | Loss for the period | (11,139) | (13,155) | -15.4% | | Loss for the period attributable to owners of the parent | (8,377) | (10,140) | -17.4% | | Loss per share attributable to ordinary equity holders of the parent (HK cents) | (0.20) | (0.24) | -16.7% | - For the three months ended June 30, 2025, revenue was HK$2,026 thousand (2024: HK$895 thousand), and loss for the period was HK$4,892 thousand (2024: HK$7,500 thousand)[4] - Exchange differences from the translation of overseas operations turned from a loss of HK$2,235 thousand in the same period of 2024 to a gain of HK$1,963 thousand in 2025[6] Condensed Consolidated Statement of Financial Position As of June 30, 2025, total group assets slightly decreased, with trade receivables significantly reduced, net current assets declined from HK$23,912 thousand to HK$15,773 thousand, and total equity also decreased Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 91,254 | 91,168 | +0.1% | | Total current assets | 38,576 | 45,094 | -14.4% | | Trade receivables | 769 | 7,035 | -89.1% | | Film rights and films and television programmes in progress | 14,638 | 15,940 | -8.1% | | Cash and cash equivalents | 8,685 | 7,626 | +13.9% | | Total current liabilities | 22,830 | 21,182 | +7.8% | | Net current assets | 15,773 | 23,912 | -34.1% | | Total equity | 68,095 | 77,271 | -11.9% | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, equity attributable to owners of the parent decreased from HK$98,949 thousand to HK$93,180 thousand, primarily due to loss for the period and changes in non-controlling interests Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Equity attributable to owners of the parent | 93,180 | 121,429 | | Non-controlling interests | (25,085) | (18,391) | | Total equity | 68,095 | 103,038 | | Loss for the period | (11,139) | (13,155) | | Total comprehensive loss for the period | (9,176) | (15,390) | - As of June 30, 2025, accumulated losses attributable to owners of the parent increased to HK$1,081,747 thousand from HK$1,073,370 thousand as of January 1, 2024[9] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, operating activities generated a net cash inflow of HK$241 thousand, investing activities resulted in a net cash outflow of HK$33 thousand, and cash and cash equivalents increased to HK$8,685 thousand at period-end Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | 241 | (7,869) | | Net cash flows from investing activities | (33) | (6) | | Net increase/(decrease) in cash and cash equivalents | 208 | (7,875) | | Cash and cash equivalents at beginning of period | 7,626 | 26,339 | | Cash and cash equivalents at end of period | 8,685 | 18,923 | - The net effect of exchange rate changes on cash and cash equivalents was HK$851 thousand, higher than HK$459 thousand in the same period last year[12] Notes to the Condensed Consolidated Financial Statements General Information and Basis of Preparation The company, incorporated in the Cayman Islands and re-domiciled in Bermuda, is listed on the HKEX GEM, with principal activities including artist management, film/TV/online content investment, and new media business, and interim financial statements are prepared in HKD under HKAS 34 and GEM Listing Rules - The Company was incorporated in the Cayman Islands on June 11, 2001, re-domiciled in Bermuda on March 16, 2009, and its shares have been listed on the HKEX GEM since March 26, 2002[13] - The Group's principal activities are providing artist management services and investing in film, television programmes, and online content[13] - The interim financial statements are prepared in Hong Kong Dollars in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure provisions of the GEM Listing Rules[14] Application of New and Revised Hong Kong Financial Reporting Standards The accounting policies used in the interim financial statements are consistent with the prior year, and newly revised HKFRSs, such as lack of exchangeability, have no significant impact on the interim financial statements - The accounting policies used in the interim financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[15] - The application of these revised HKFRSs has no significant impact on the interim financial statements[16] Segment Information The Group operates in three reportable segments: artist management, film/TV/online content, and new media; for the six months ended June 30, 2025, film/TV/online content revenue significantly decreased, new media revenue grew substantially, artist management revenue slightly declined, and all revenue originated from Mainland China - The Group has three reportable operating segments: artist management, film, television programmes and online content, and new media[18] Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | Year-on-Year Change (%) | 2025 Results (HK$ Thousand) | 2024 Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Artist Management | 105 | 205 | -48.8% | (6) | 628 | | Film, Television Programmes and Online Content | 397 | 3,569 | -88.9% | (9,181) | (4,840) | | New Media Business | 1,643 | 884 | +85.9% | (334) | (3,683) | | Total | 2,145 | 4,658 | -54.0% | (9,521) | (7,895) | - For the six months ended June 30, 2025, all revenue of HK$2,145 thousand from external customers originated from Mainland China[21] Revenue Breakdown For the six months ended June 30, 2025, new media business became the primary revenue source, contributing HK$1,643 thousand with 85.9% year-on-year growth, while film and online program revenue significantly declined, and distribution services generated no revenue Revenue Breakdown (For the six months ended June 30) | Revenue Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | New Media Business | 1,643 | 884 | +85.9% | | Television and Online Programmes | 396 | 2,713 | -85.4% | | Distribution Agency Services | – | 855 | -100.0% | | Artist Management | 105 | 205 | -48.8% | | Others | 1 | 1 | 0.0% | | Total | 2,145 | 4,658 | -54.0% | Other Income and Gains/(Losses) For the six months ended June 30, 2025, total other income and gains amounted to HK$1,856 thousand, a decrease from HK$3,320 thousand in the prior year, primarily due to the absence of film investment income, while rental income maintained steady growth Other Income and Gains/(Losses) (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Film investment income | – | 1,039 | -100.0% | | Interest income | 6 | 39 | -84.6% | | Rental income | 1,077 | 1,037 | +3.9% | | Exchange differences, net | (5) | 10 | -150.0% | | Others | 778 | 1,195 | -34.9% | | Total | 1,856 | 3,320 | -44.0% | Components of Loss Before Tax For the six months ended June 30, 2025, loss before tax was primarily influenced by staff costs, depreciation, and amortization, with both staff costs and depreciation expenses showing slight year-on-year decreases Components of Loss Before Tax (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 2,556 | 2,683 | -4.7% | | Amortisation of other assets | 14 | 14 | 0.0% | | Staff costs (including directors' emoluments) | 8,060 | 8,562 | -5.9% | | - Salaries and allowances | 7,576 | 8,067 | -6.1% | | - Pension scheme contributions | 484 | 495 | -2.2% | Income Tax Expense During the reporting period, the Group incurred no income tax expense as no taxable profits were generated in Hong Kong, Korea, or Mainland China, or estimated taxable profits were fully absorbed by tax losses brought forward - No provision for Hong Kong profits tax and Korea corporate income tax was made as the Group generated no taxable profits or estimated taxable profits were fully absorbed by tax losses brought forward during the review period[25] - No tax was calculated at a 25% rate on taxable profits earned in Mainland China during the period[25] Loss Per Share Attributable to Ordinary Equity Holders of the Parent For the six months ended June 30, 2025, basic loss per share attributable to ordinary equity holders of the parent narrowed to 0.20 HK cents from 0.24 HK cents in the prior year, with no diluted loss per share calculated due to the anti-dilutive effect of share options and preference shares Loss Per Share Attributable to Ordinary Equity Holders of the Parent | Metric | For the six months ended June 30, 2025 (HK cents) | For the six months ended June 30, 2024 (HK cents) | | :--- | :--- | :--- | | Basic and diluted loss per share | (0.20) | (0.24) | | Loss attributable to ordinary equity holders of the parent (HK$ Thousand) | (8,377) | (10,140) | | Weighted average number of shares in issue (Thousand shares) | 4,209,130 | 4,209,130 | - No conversion of potential dilutive shares was assumed when calculating diluted loss per share due to the anti-dilutive effect of the Company's share options and preference shares on basic loss per share calculation[26] Trade Receivables As of June 30, 2025, trade receivables significantly decreased by 89.1% to HK$769 thousand from HK$7,035 thousand as of December 31, 2024, with all balances due within one year - The Group's trading terms with customers are primarily on credit, with credit periods generally ranging from 6 months to 1 year[27] Ageing Analysis of Trade Receivables (Within 1 year) | Period | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 year | 769 | 7,035 | Film Rights and Films and Television Programmes in Progress As of June 30, 2025, no impairment indicators were identified for film rights and films and television programmes in progress, resulting in no impairment losses recognized for the period, and the Group regularly assesses the recoverable amounts of related assets - At each reporting period end, the Group assesses whether there are any indications that film rights and films and television programmes in progress may be impaired[29] - As of June 30, 2025, no impairment indicators were identified for film and television programme rights, and thus no impairment losses were recognized by the Group for the six months ended June 30, 2025[29] Trade Payables As of June 30, 2025, trade payables decreased to HK$343 thousand from HK$427 thousand as of December 31, 2024, with all balances due within one year Ageing Analysis of Trade Payables (Within 1 year) | Period | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 year | 343 | 427 | Share Capital and Fair Value Measurement As of June 30, 2025, the company's issued ordinary share capital remained unchanged at HK$42,090 thousand, and directors believe the carrying amounts of financial instruments approximate their fair values Share Capital Information | Share Type | June 30, 2025 (Thousand shares) | June 30, 2025 (HK$ Thousand) | December 31, 2024 (Thousand shares) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Ordinary shares of HK$0.01 par value each | 4,209,130 | 42,090 | 4,209,130 | 42,090 | - The Company's directors believe that the carrying amounts of the Group's financial instruments approximate their fair values as of June 30, 2025, and December 31, 2024[32] Commitments and Related Party Transactions As of June 30, 2025, the Group's contracted but unprovided commitments for film rights and films and television programmes in progress amounted to HK$45,741 thousand, and key management personnel emoluments remained consistent with the prior year Contracted but Unprovided Commitments | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Film rights and films and television programmes in progress | 45,741 | 45,060 | Key Management Personnel Emoluments (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Salaries and allowances | 996 | 1,006 | | Pension scheme contributions | 73 | 66 | | Total | 1,069 | 1,072 | Interim Dividend The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[35] Management Discussion and Analysis Financial Review For the six months ended June 30, 2025, group revenue decreased by 54.0% to HK$2,145 thousand, primarily due to reduced film, TV, and online content revenue, while cost of sales and administrative expenses both declined, and loss attributable to owners of the parent narrowed to HK$8,377 thousand Financial Performance Overview (For the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,145 | 4,658 | -54.0% | | Cost of sales | 1,293 | 3,950 | -67.3% | | Administrative expenses | 13,847 | 16,363 | -15.4% | | Loss for the period attributable to owners of the parent | 8,377 | 10,140 | -17.4% | - The decrease in revenue was primarily attributable to reduced revenue from the Group's film, television programmes, and online content businesses[36] Business Review The Group adopts cautious investment in film, TV, and online content, while artist management develops talent and income. Music business leverages Amber APP for artist "self-publishing," and new media, centered on Amber PASS card, achieved significant partnerships and breakthroughs in cultural tourism and membership services - Revenue from the film, television programmes, and online content segment was approximately HK$397 thousand (2024: HK$3,569 thousand), primarily comprising revenue sharing and production fees from film, television programmes, and online content[38] - Revenue from the artist management segment was approximately HK$105 thousand (2024: HK$205 thousand)[39] - Revenue from the new media business segment was approximately HK$1,643 thousand (2024: HK$884 thousand)[40] Film, Television Programmes and Online Content The Group adopts a cautious investment strategy in the challenging Chinese online film market, focusing on re-distribution and overseas pre-sales, while its comedy film underperformed, and it plans to leverage licenses for co-developing platform-customized content - China's online film market is in a bottleneck, with only 3 new films generating over RMB10 million in revenue in H1 2025, and total and average box office significantly declining[41] - In H1 2025, the Group continued its cautious investment strategy in online films, actively promoting second and third-round overseas and new media pre-sales of historical projects to improve capital recovery rates[42] - The Group's invested comedy film "Moonlight by the Window, Bang!" underperformed pre-release box office expectations due to market competition, low screening rates, and insufficient promotion[44] - The Group plans to leverage its "Radio and Television Program Production and Operation License" and other permits to actively explore new film and television business lines, co-developing and producing high-profile, platform-customized films or series with partners, subject to sufficient funding[45] Short Video Copyright Trading Platform The Group is developing a decentralized short video copyright trading platform using existing licenses and blockchain technology for rights confirmation and tokenized transactions, aiming to fragment content and resolve traditional copyright challenges to promote efficient content circulation and commercialization - The Group is actively researching and deploying a decentralized short video copyright trading platform, leveraging its existing qualifications and licenses[46] - The platform will utilize blockchain technology for rights confirmation and tokenized transactions, fragmenting short video content to significantly increase the number of investors and copyright owners[46] - This model aims to address pain points in traditional copyright trading, such as difficult rights confirmation, trading, and poor liquidity, to build a trustworthy, efficient, and transparent copyright trading ecosystem[46] Artist Management The Group continues to scout potential artists, collaborating with excellent management teams, leveraging its resources and new media exposure to create income streams and increase visibility for artists, while also generating returns for the Group - The Group continues to discover potential artists and collaborate with outstanding industry management teams to re-energize its artist management segment[47] - The Group will leverage its resource advantages, integrating various business segments, to create income streams for artists through customized performance opportunities and new media exposure[47] Music Business Closer Music holds extensive original music copyrights and distribution channels; despite monetization attempts, impairment was recognized due to recoverable amounts below cost. The Group now leverages new media technology to offer a "self-publishing" one-stop service for independent original musicians, addressing creation, publishing, copyright, and revenue issues - Closer Music has accumulated a large number of high-quality original music copyrights and established comprehensive music promotion and distribution channels, collaborating with mainstream domestic and international music platforms[48][49] - Although the Group attempted to monetize music copyrights, management recognized an impairment due to estimated recoverable amounts being below cost[49] - Leveraging the innovative thinking and technological advantages of its new media business, the Group has created a "self-publishing" one-stop service business model specifically for original independent musicians[49] New Media Business The Group invested in Amber APP for its new media segment, integrating blockchain, AIGC, and other technologies to enhance creator experience and explore new business models. The Amber PASS card achieved progress in music, cultural tourism, and membership services, including a strategic partnership with Alipay and pilot operations in national scenic spots - The Group invested significant resources in developing the Amber APP, integrating technologies such as blockchain, Generative AI (AIGC), digital watermarks, NFC, and Augmented Reality (AR) to provide creators with a comprehensive creation and publishing experience[50] - The Amber APP offers a self-publishing platform for original musicians, ensuring copyright autonomy and value enhancement through official blockchain notarization and ISRC certification in collaboration with China Copyright Chain Company[50] - The Group has become a partner in the Alipay payment ecosystem, jointly undertaking cultural tourism projects, promoting the cultural tourism PASS card, and transitioning from a "to C" to a "to B" business model[51][54] - The cultural tourism PASS card began pilot operations at Badaling Great Wall in May 2025, and has been issued and sold in other national scenic spots and popular museums, receiving national media coverage[54][55] - The Company provides a one-stop membership service system to customers through its membership APP and PASS card, having signed contracts for medical systems and online consumption platform membership management systems, and is currently negotiating to design VR/AR technology-enabled PASS cards for property developers to promote property sales[58] Other Information Events After the Reporting Period No significant events occurred after the balance sheet date - No significant events occurred after the balance sheet date[59] Liquidity and Financial Resources As of June 30, 2025, the Group's total assets were HK$129,830 thousand, cash and cash equivalents increased to HK$8,685 thousand, and the gearing ratio rose to 66.3%; the Group had no pledged assets or significant contingent liabilities and closely monitors foreign exchange risk Liquidity and Financial Resources Overview | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total assets | 129,830 | 136,262 | | Cash and cash equivalents | 8,685 | 7,626 | | Gearing ratio | 66.3% | 59.6% | | Capital commitments | 45,741 | 45,060 | - Most of the Group's income and expenses are denominated in RMB, and management closely monitors foreign exchange risk, considering hedging when necessary[64] - As of June 30, 2025, the Group had no pledged assets or significant contingent liabilities[63][66] Employees As of June 30, 2025, the Group had 54 employees, with remuneration, promotion, and salary reviews based on job responsibilities, performance, experience, and industry practice; Hong Kong employees participate in the Mandatory Provident Fund Scheme - As of June 30, 2025, the Group had 54 employees (including approximately 50 employees in Mainland China and 4 employees in Hong Kong)[67] - Employee remuneration, promotion, and salary reviews are assessed based on job responsibilities, work performance, professional experience, and current industry practices[67] Significant Investments and Share Option Scheme During the reporting period, the Group held no significant investments; a new share option scheme adopted on June 21, 2024, aims to recognize and incentivize participant contributions, valid until June 2034, with no outstanding share options as of June 30, 2025 - For the period ended June 30, 2025, the Group held no significant investments[68] - The Company adopted a new share option scheme to grant share options to eligible participants, recognizing and incentivizing their contributions to the Group[69] - The share option scheme is valid for 10 years and will expire in June 2034; as of June 30, 2025, there were no outstanding share options[69][70] Principal Shareholders As of June 30, 2025, Jiaxuan Group Limited (controlled by Mr. Huang Guangyu and Mr. Xu Zhongmin) held 47.10% of shares, CITIC Group Corporation held 10.93% through its subsidiaries, and Mr. Ko Chun Shun, Peter held 7.40% through First Charm Investments Limited Principal Shareholders' Shareholding (As of June 30, 2025) | Name of Principal Shareholder | Capacity | Interest in Shares | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Jiaxuan Group Limited | Beneficial owner | 1,982,561,725 | 47.10% | | Pengjian Investment Holdings Limited | Interest in controlled corporation | 1,982,561,725 | 47.10% | | Mr. Huang Guangyu | Interest in controlled corporation | 1,982,561,725 | 47.10% | | Weihao Global Holdings Limited | Interest in controlled corporation | 1,982,561,725 | 47.10% | | Mr. Xu Zhongmin | Interest in controlled corporation | 1,982,561,725 | 47.10% | | CITIC Group Corporation | Interest in controlled corporation | 459,934,954 | 10.93% | | CITIC Limited | Interest in controlled corporation | 459,934,954 | 10.93% | | Famous Peak Investments Limited | Beneficial owner | 459,934,954 | 10.93% | | First Charm Investments Limited | Beneficial owner | 311,545,414 | 7.40% | | Mr. Ko Chun Shun, Peter | Interest in controlled corporation | 311,545,414 | 7.40% | - Jiaxuan is owned 55% by Pengjian Investment Holdings Limited and 45% by Weihao Global Holdings Limited; Mr. Huang Guangyu owns 100% of Pengjian, and Mr. Xu Zhongmin owns 100% of Weihao[77] Corporate Governance The Company is committed to enhancing board quality, internal controls, and shareholder transparency; for the six months ended June 30, 2025, it complied with the GEM Listing Rules' Corporate Governance Code, except for provisions on chairman/CEO roles, non-executive director tenure, and attendance at general meetings, and the Audit Committee reviewed the interim report and results - The Company has consistently complied with the Corporate Governance Code set out in Appendix 15 of the GEM Listing Rules, except for Code Provisions A.2.1 (separation of chairman and chief executive roles), A.4.1 (specific tenure for non-executive directors), and A.6.7 (attendance of non-executive directors at general meetings)[78] - The positions of the Company's Chairman and Chief Executive Officer remain vacant, and the Company continues to seek suitable candidates to fill these vacancies[79] - The Audit Committee, comprising three members, reviewed the accounting principles and practices adopted by the Group, discussed internal controls and financial reporting matters with the management team, and reviewed the interim report and results before submission to the Board for approval[83]