中国创意控股(08368) - 2025 - 中期财报

Report Overview and Company Information This section provides an overview of the GEM market characteristics, disclaimers, and essential company information including registration, key personnel, and stock details GEM Market Characteristics and Disclaimer This report highlights the GEM market's design for small and medium-sized companies, emphasizing high investment risks, market volatility, and low liquidity - The GEM market targets small and medium-sized companies, entailing higher investment risks, potential for high market volatility, and low liquidity[2][3][6] - The company's directors assume full responsibility for the accuracy, completeness, and non-misleading nature of the information contained in this report[5][6] Company Information This section details China Creative Holdings Limited's registered office, principal places of business, board members, authorized representatives, and key governance details - The company is registered in the Cayman Islands, with its China headquarters in Beijing and principal Hong Kong office in Sheung Wan[7][8] - The Board of Directors includes Mr. Yang Jian (Chairman) and Mr. Wang Yong as Executive Directors, Mr. Yang Shiyuan and Mr. Ge Xuyu as Non-executive Directors, and Ms. Fu Yuehong, Mr. Qiu Xinyuan, and Mr. Wang Xinghua as Independent Non-executive Directors[7][8][9] - The Audit Committee is chaired by Mr. Qiu Xinyuan, the Remuneration Committee by Ms. Fu Yuehong, and the Nomination Committee by Mr. Yang Jian[9][10][13] - The company's stock code is 8368, and its website is www.creativechinahk.com**[12](index=12&type=chunk)[13] Financial Statements This section presents the company's unaudited condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company reported a net loss of RMB6,043 thousand, a significant reversal from the net profit of RMB1,013 thousand in the prior period, driven by a substantial decline in revenue and gross profit Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,105 | 25,695 | -64.6% | | Direct costs | (7,149) | (16,230) | -55.9% | | Gross profit | 1,956 | 9,465 | -79.4% | | Other income | 45 | 16 | 181.3% | | Other gains and losses | 1,137 | 309 | 268.0% | | (Loss) profit before tax | (5,553) | 1,357 | -509.2% | | Tax | (490) | (344) | 42.4% | | (Loss) profit for the period | (6,043) | 1,013 | -696.7% | | (Loss) earnings per share (RMB cents) | (1.05) | 0.19 | -652.6% | - Total comprehensive (expense) income for the period was RMB(6,123) thousand, compared to RMB1,055 thousand in the prior period, primarily impacted by the loss for the period and exchange differences on translating foreign operations[15] Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets slightly decreased, but non-current assets significantly increased due to property, plant, and equipment and intangible assets, while total current liabilities rose, leading to a slight reduction in net current assets and total equity Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 8,439 | 3,398 | 148.4% | | Total current assets | 402,218 | 407,458 | -1.3% | | Total assets | 410,657 | 410,856 | -0.05% | | Total current liabilities | 109,718 | 103,289 | 6.2% | | Total non-current liabilities | 45 | 552 | -91.9% | | Total liabilities | 109,763 | 103,841 | 5.7% | | Net assets | 300,894 | 307,015 | -2.0% | | Equity attributable to owners of the Company | 300,894 | 307,662 | -2.2% | - Total non-current assets significantly increased by 148.4%, mainly due to property, plant, and equipment rising from RMB135 thousand to RMB878 thousand, and the addition of RMB5,724 thousand in intangible assets[17] - Net current assets decreased by 3.8% from RMB304,169 thousand as of December 31, 2024, to RMB292,500 thousand as of June 30, 2025[18] Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity decreased from RMB307,015 thousand to RMB300,894 thousand, primarily due to a net loss of RMB6,043 thousand for the period and a reduction in exchange reserves Key Data from Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2025 (RMB'000) | June 30, 2025 (RMB'000) | Change (RMB'000) | | :--- | :--- | :--- | :--- | | Share capital | 24,847 | 24,847 | 0 | | Share premium | 253,715 | 253,715 | 0 | | Other reserves | 3,784 | 3,784 | 0 | | Merger reserve | 9,300 | 9,300 | 0 | | Exchange reserve | 1,373 | 1,267 | (106) | | Accumulated losses | 14,643 | 7,981 | (6,662) | | Equity attributable to owners of the Company | 307,662 | 300,894 | (6,768) | | Non-controlling interests | (647) | – | 647 | | Total | 307,015 | 300,894 | (6,121) | - A loss of RMB6,043 thousand for the period was the primary factor contributing to the decrease in equity[19] - Non-controlling interests changed from RMB(647) thousand at the beginning of the year to zero, indicating the company acquired other interests from non-controlling interests[19] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, operating cash flow turned positive, but investing cash outflow significantly increased, and financing cash flow net decreased, leading to an improved but still exchange-rate-affected net increase in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (RMB'000) | | :--- | :--- | :--- | :--- | | Net cash (used in) / from operating activities | 6,371 | (38,175) | 44,546 | | Net cash used in investing activities | (6,287) | (1) | (6,286) | | Net cash from financing activities | 357 | 35,232 | (34,875) | | Net increase / (decrease) in cash and cash equivalents | 441 | (2,944) | 3,385 | | Cash and cash equivalents at end of period | 11,362 | 22,573 | (11,211) | - Net cash from operating activities improved from a net outflow of RMB38,175 thousand in the prior period to a net inflow of RMB6,371 thousand, indicating improved operational efficiency[20] - Net cash used in investing activities significantly increased to RMB(6,287) thousand, primarily due to the purchase of intangible assets totaling RMB5,723 thousand[20] - Net cash from financing activities substantially decreased from RMB35,232 thousand in the prior period to RMB357 thousand, mainly due to proceeds from share issuance last year and bank loan repayments this period[20] Notes to the Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements, covering company information, accounting policies, segment reporting, and other financial disclosures Company Information and Business Overview China Creative Holdings Limited, incorporated in the Cayman Islands in 2013, primarily engages in investment holding, with subsidiaries involved in diverse businesses including film/TV production, concert organization, mobile app development, and artist management - The company's principal activity is investment holding, with subsidiaries engaged in film and television production, film distribution, concert organization, mobile application development and operation, and artist management[22][24] - Guang Rui Investments Limited, wholly and beneficially owned by Mr. Yang Shaoqian and his spouse Ms. Mou Sufang, is the company's ultimate holding company[21][23] Basis of Presentation and Accounting Policies The unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules Chapter 18, using the historical cost convention, with no significant impact from new HKFRS amendments, and are presented in RMB - The financial statements are prepared in accordance with HKAS 34 and Chapter 18 of the GEM Listing Rules, adopting the historical cost convention[25][26][29][30] - Amendments to Hong Kong Financial Reporting Standards applied during the period had no significant impact on the financial position and performance[32][34] - The financial statements are presented in RMB and have been reviewed by the Board's Audit Committee[28][31][33][35] Revenue and Segment Information The Group's business is divided into four reportable segments: film/TV production, concert organization, mobile app development, and artist management, with total revenue significantly declining by 64.6% year-on-year, primarily due to reduced film/TV production and copyright investment - The Group has four reportable segments: TV series/film production and film copyright investment, concert and event organization, mobile application development and operation, and artist management[36][37] - For the six months ended June 30, 2025, total revenue was RMB9,105 thousand, a 64.6% decrease from RMB25,695 thousand in the prior period[40][48] Revenue Composition For the six months ended June 30, 2025, revenue from script copyright sales and program production remained the primary source but significantly decreased year-on-year, while concert and event revenue also fell sharply, and artist management services generated no income Revenue Composition Comparison | Revenue Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Sale of script copyrights and programs | 8,700 | 22,900 | -62.0% | | Concert and event income | 188 | 2,226 | -91.5% | | Live streaming e-commerce | 217 | 185 | 17.3% | | Provision of artist management services | – | 384 | -100.0% | | Total Revenue | 9,105 | 25,695 | -64.6% | Business Segment Performance For the six months ended June 30, 2025, the TV series/film production segment experienced significant declines in both revenue and profit, while concert and event organization, mobile application development, and artist management segments all recorded losses Business Segment Revenue and Profit Comparison (2025 vs 2024) | Segment | 2025 Revenue (RMB'000) | 2024 Revenue (RMB'000) | Revenue Change (%) | 2025 Profit/(Loss) (RMB'000) | 2024 Profit/(Loss) (RMB'000) | Profit Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TV series/film production and film distribution business | 8,700 | 22,900 | -62.0% | 1,689 | 9,003 | -81.2% | | Concert and event organization | 188 | 2,226 | -91.5% | (1,552) | (328) | 373.2% | | Mobile application development and operation | 217 | 185 | 17.3% | (1,122) | (2,986) | -62.5% | | Artist management business | – | 384 | -100.0% | (968) | (725) | 33.5% | | Total | 9,105 | 25,695 | -64.6% | (1,953) | 4,964 | -139.3% | - The significant decline in both revenue and profit from the TV series/film production segment is the primary reason for the Group's overall performance downturn[43][45] - The loss from the mobile application development and operation segment significantly narrowed from RMB(2,986) thousand in 2024 to RMB(1,122) thousand in 2025[43][45] Geographical Information The Group's revenue primarily originates from Mainland China, encompassing script copyright sales, live streaming e-commerce, and some concert and event income, with no revenue from Southeast Asia or Taiwan in the first half of 2025 Revenue by Geographical Region Comparison | Region and Revenue Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | China | | | | - Sale of script copyrights and programs | 8,700 | 22,900 | | - Provision of artist management services | – | 384 | | - Live streaming e-commerce | 217 | 185 | | - Concert and event income | 188 | – | | Other Southeast Asian countries and Taiwan | | | | - Concert and event income | – | 2,226 | | Total | 9,105 | 25,695 | - In the first half of 2025, all revenue was generated from Mainland China, with no revenue contribution from Southeast Asia and Taiwan, which had RMB2,226 thousand in concert and event income in the prior period[53] Major Customer Information For the six months ended June 30, 2025, the Group's revenue was highly concentrated, with one major customer (Customer III) contributing 95.6% of total revenue, a shift from two major customers in the prior period Major Customer Revenue Comparison | Customer | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Customer I (Film/TV Production) | N/A | 18,900 | | Customer II (Film/TV Production) | N/A | 4,000 | | Customer III (Film/TV Production) | 8,700 | N/A* | | Total | 8,700 | 22,900 | - In the first half of 2025, a single customer (Customer III) contributed 95.6% of the Group's total revenue, indicating extremely high customer concentration[55][56][57] Other Income, Gains and Losses For the six months ended June 30, 2025, both other income and other gains increased, with other income primarily from bank interest and miscellaneous sources, and other gains and losses influenced by net exchange gains and a loss on disposal of a subsidiary Other Income Comparison | Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 2 | 16 | -87.5% | | Miscellaneous income | 43 | – | N/A | | Total | 45 | 16 | 181.3% | Other Gains and Losses Comparison | Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Exchange gains / (losses), net | 5,629 | 309 | 1722.0% | | Loss on disposal of a subsidiary | (4,492) | – | N/A | | Total | 1,137 | 309 | 268.0% | - Net exchange gains significantly increased, but were partially offset by the loss on disposal of a subsidiary, resulting in a substantial net increase in other gains and losses[60] Loss Before Tax For the six months ended June 30, 2025, the company reported a loss before tax of RMB5,553 thousand, a reversal from a profit of RMB1,357 thousand in the prior period, primarily driven by increased staff costs and zero amortization of intangible assets Components of Loss Before Tax Comparison | Expense Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Auditor's remuneration | 327 | 323 | 1.2% | | Directors' emoluments | 1,097 | 1,097 | 0.0% | | Other staff costs | 3,582 | 2,763 | 29.6% | | Other staff retirement benefit scheme contributions | 391 | 362 | 8.0% | | Total staff costs | 5,397 | 4,545 | 18.8% | | Depreciation of property, plant and equipment | 206 | 64 | 221.9% | | Depreciation of right-of-use assets | 794 | 909 | -12.6% | | Amortisation of intangible assets | – | 841 | -100.0% | - Total staff costs increased by 18.8% year-on-year, with other staff costs showing significant growth[62] - Amortisation of intangible assets was zero for the current period, compared to RMB841 thousand in the prior period[62] Finance Costs For the six months ended June 30, 2025, total finance costs increased to RMB536 thousand from RMB444 thousand in the prior period, primarily due to a significant rise in interest expenses on amounts payable to a related party Finance Costs Comparison | Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 233 | 289 | -19.4% | | Interest on lease liabilities | 46 | 42 | 9.5% | | Interest on amount due to a related party | 257 | 113 | 127.4% | | Total | 536 | 444 | 20.7% | - Interest expense on amounts due to a related party significantly increased by 127.4% year-on-year, being the primary driver of the rise in finance costs[64] Tax For the six months ended June 30, 2025, tax expense increased to RMB490 thousand from RMB344 thousand in the prior period, mainly comprising current and deferred tax in China, with some Chinese subsidiaries enjoying corporate income tax exemptions in the Horgos Economic Development Zone Tax Expense Comparison | Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax – Hong Kong | – | – | 0.0% | | Current tax – China | (251) | (101) | 148.5% | | Deferred tax | (239) | (243) | -1.6% | | Tax for the period | (490) | (344) | 42.4% | - Current tax provision in China significantly increased by 148.5% year-on-year[66] - Subsidiaries such as Horgos Zongheng Wuxian Culture Media Co Ltd and Horgos Feichi Culture Communication Co Ltd enjoy corporate income tax exemption policies[67][68] Dividends and (Loss) Earnings Per Share The Board does not recommend any dividend for the six months ended June 30, 2025, with basic and diluted loss per share at RMB1.05 cents, reflecting the company's shift from profit to loss compared to RMB0.19 cents profit per share in the prior period - The Directors do not recommend the payment of any dividend for the six months ended June 30, 2025[69][70] (Loss) Earnings Per Share Comparison | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | (Loss) profit for the purpose of basic (loss) earnings per share (RMB'000) | (6,043) | 1,059 | | Weighted average number of ordinary shares ('000 shares) | 577,798 | 559,337 | | (Loss) earnings per share (RMB cents) | (1.05) | 0.19 | - Due to the loss recorded for the period, basic and diluted loss per share was RMB1.05 cents, compared to RMB0.19 cents profit per share in the prior period[72] Property, Plant and Equipment and Right-of-Use Assets For the six months ended June 30, 2025, the Group acquired approximately RMB948 thousand in property, plant, and equipment, a decrease from RMB2,177 thousand in the prior period, with no significant lease terminations or new right-of-use asset recognitions - For the six months ended June 30, 2025, additions to property, plant and equipment amounted to approximately RMB948 thousand, a 56.4% decrease year-on-year[74][78] - No gain was recognized on early termination of leases, nor were new right-of-use assets and lease liabilities recognized during the period[75][76][79] Intangible Assets For the six months ended June 30, 2025, the Group acquired approximately RMB5,724 thousand in intangible assets, a new category of acquisition compared to the prior period - For the six months ended June 30, 2025, the Group acquired approximately RMB5,724 thousand in intangible assets[77][80] - No intangible assets were acquired in the prior period[77][80] Trade and Other Receivables As of June 30, 2025, total trade and other receivables slightly decreased to RMB386,440 thousand, with a reduction in net trade receivables offset by an increase in prepayments and deposits, primarily for script copyright pre-production and film distribution rights Trade and Other Receivables Comparison | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Gross trade receivables | 125,670 | 167,462 | -24.9% | | Less: Impairment allowance | (4,053) | (5,009) | -19.1% | | Net trade receivables | 121,617 | 162,453 | -25.2% | | Prepayments and deposits | 262,139 | 226,099 | 16.0% | | Other receivables | 2,684 | 2,710 | -1.0% | | Total | 386,440 | 391,262 | -1.2% | - Prepayments and deposits increased by 16.0%, primarily including prepaid expenses of approximately RMB229,638 thousand for script copyright pre-production and acquisition of film distribution and revenue rights[82][87] Trade Receivables Ageing Analysis (Net) | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 30 days | – | – | | 31 to 90 days | 8,397 | 130,392 | | 91 to 180 days | – | – | | Over 180 days | 113,220 | 32,061 | | Total | 121,617 | 162,453 | - Trade receivables over 180 days significantly increased from RMB32,061 thousand as of December 31, 2024, to RMB113,220 thousand as of June 30, 2025, while those aged 31 to 90 days substantially decreased[89] Trade Payables As of June 30, 2025, total trade payables significantly increased to RMB5,720 thousand from RMB411 thousand as of December 31, 2024, with all payables aged between 91 and 365 days Trade Payables Ageing Analysis | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 91 to 365 days | 5,720 | – | | Over 365 days | – | 411 | | Total | 5,720 | 411 | - Total trade payables significantly increased by 1291.7% year-on-year, with all amounts concentrated in the 91 to 365 days ageing category[92] Bank Borrowings As of June 30, 2025, bank borrowings repayable within one year decreased to RMB14,648 thousand from RMB16,000 thousand as of December 31, 2024, with all borrowings unsecured and carrying annual interest rates between 2.8% and 4.3% Bank Borrowings Comparison | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Bank borrowings repayable within one year | 14,648 | 16,000 | -8.45% | - Bank borrowings are unsecured and bear annual interest rates ranging from 2.8% to 4.3% (2.8% to 3.5% in 2023)[94][95] Share Capital As of June 30, 2025, the company's authorized and issued share capital remained unchanged, following a placement of 49,410,000 ordinary shares in February 2024 at a net issue price of approximately HK$0.472 per share Share Capital Structure | Category | June 30, 2025 ('000 shares) | January 1, 2024 ('000 shares) | | :--- | :--- | :--- | | Authorised ordinary shares | 1,600,000 | 1,600,000 | | Issued and fully paid ordinary shares | 577,797,719 | 528,387,719 | - On February 19, 2024, the company placed 49,410,000 ordinary shares at HK$0.50 per share, with a net issue price of approximately HK$0.472 per share[98][100] Related Party Transactions The Group engages in various related party transactions, including salaries to controlling shareholders, lease payments to directors, loans from related companies, and amounts payable to a director and a shareholder, with interest-bearing loans from related companies at 6.125% per annum Related Party Transactions Comparison | Related Party Relationship | Type of Transaction | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | :--- | | Shareholder A | Salaries | 38 | 38 | | Shareholder B | Salaries | 38 | 38 | | Director A | Lease payments | 565 | 550 | | Related company | Proceeds from loans | 2,845 | 6,407 | | Related company | Interest expense on loans | 256 | 113 | - Amounts due to a related company are unsecured, bear interest at 6.125% per annum, and are repayable within one year[108] - Amounts due from non-controlling interests of a subsidiary, amounts due to a director, and amounts due to a shareholder are all unsecured, interest-free, and repayable on demand or within one year[108] Capital Management The Group aims to ensure continuous operation, provide shareholder returns, and maintain an optimal capital structure to minimize funding costs, with its debt-to-equity ratio increasing to 7.3% as of June 30, 2025, from 6.6% at the end of 2024, primarily due to increased net debt - The Group's capital management objectives are to safeguard its ability to continue as a going concern, provide returns to shareholders, and maintain an optimal capital structure to reduce the cost of capital[109][113] Capital Gearing Ratio Comparison | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Debt | 33,336 | 32,237 | | Less: Cash and cash equivalents | (11,362) | (11,837) | | Net debt | 21,974 | 20,400 | | Equity | 300,894 | 307,015 | | Net debt to equity ratio | 7.3% | 6.6% | - The debt-to-equity ratio increased from 6.6% at the end of 2024 to 7.3% as of June 30, 2025, primarily due to an increase in net debt[112][116][118] Management Discussion and Analysis This section provides management's perspective on the Group's financial performance and operational review for the period, including key financial metrics, business segment performance, and future outlook Financial Review For the six months ended June 30, 2025, the Group experienced significant declines in revenue and gross profit, resulting in a shift from profit to loss, despite increased other gains and reduced administrative and selling expenses, reflecting challenging financial conditions with decreased net current assets and liquidity ratio, and increased gearing - Revenue decreased by 64.6% year-on-year to RMB9.1 million, primarily due to a decline in sales from the script copyright and program business[119][122] - Gross profit decreased by 78.9% year-on-year to RMB2.0 million, mainly due to a decline in gross profit from the film and television production segment and increased assessment costs for the concert segment[120][123] - Other gains increased by 267% year-on-year to RMB1.1 million, primarily influenced by the net effect of exchange gains and the loss on disposal of a subsidiary recognized through profit or loss[121][124] - Loss attributable to owners of the Company for the period was approximately RMB6.0 million, compared to a profit of approximately RMB1.1 million in the prior period, mainly due to reduced revenue from the TV series segment[133][136] - Net current assets decreased from RMB304.2 million to RMB292.5 million, the current ratio decreased from 3.94 times to 3.67 times, and the debt-to-equity ratio increased from 6.6% to 7.3%[137][139] Revenue For the six months ended June 30, 2025, the Group's revenue decreased by 64.6% to RMB9.1 million from RMB25.7 million in the prior period, primarily due to reduced sales in the script copyright and program business - Revenue decreased by 64.6% year-on-year, from RMB25.7 million to RMB9.1 million[119][122] - The decrease in revenue was primarily due to a decline in sales from the script copyright and program business[119][122] Gross Profit For the six months ended June 30, 2025, gross profit decreased by 78.9% to RMB2.0 million from RMB9.5 million in the prior period, mainly due to reduced gross profit in the TV series/film production segment and increased assessment costs for virtual reality projects in concert organization - Gross profit decreased by 78.9% year-on-year, from RMB9.5 million to RMB2.0 million[120][123] - The decrease in gross profit was mainly due to a decline in gross profit from the TV series/film production segment and increased assessment costs for virtual reality projects in the concert and event organization segment[120][123] Other Gains and Losses For the six months ended June 30, 2025, other gains increased by 267% to RMB1.1 million from RMB0.3 million in the prior period, primarily attributable to the net effect of exchange gains and the recognition of cumulative losses from the disposal of a non-material subsidiary through profit or loss - Other gains increased by 267% year-on-year, from RMB0.3 million to RMB1.1 million[121][124] - The increase was primarily due to the net effect of exchange gains and the recognition of cumulative losses from the disposal of a non-material subsidiary through profit or loss[121][124] Expenses For the six months ended June 30, 2025, selling and distribution costs decreased by 16.7% to RMB1.0 million, mainly for live streaming e-commerce, while administrative expenses slightly decreased to RMB8.1 million, primarily due to reduced live streaming studio rentals, legal and professional fees, and staff costs - Selling and distribution costs decreased by 16.7% year-on-year to RMB1.0 million, primarily for the live streaming e-commerce business[125][128] - Administrative expenses slightly decreased to RMB8.1 million, mainly due to the absence of live streaming studio rentals, reduced legal and professional fees, and lower staff costs[126][129] Income Tax Expense For the six months ended June 30, 2025, income tax expense increased to RMB0.5 million from RMB0.3 million in the prior period, mainly due to profit from script copyright sales, with some Chinese subsidiaries enjoying corporate income tax exemptions in the Horgos Economic Development Zone - Income tax expense increased year-on-year to RMB0.5 million, primarily due to profit from the sale of script copyrights[127][130] - Hong Kong profits tax provision was zero, while China corporate income tax provision was RMB0.3 million[127][130] - Subsidiaries in the Horgos Economic Development Zone enjoy corporate income tax exemption policies, valid until 2024 or 2028[131][134] Profit/(Loss) Attributable to Owners of the Company for the Period For the six months ended June 30, 2025, the loss attributable to owners of the Company was approximately RMB6.0 million, a reversal from a profit of approximately RMB1.1 million in the prior period, primarily due to reduced revenue in the TV series segment - Loss attributable to owners of the Company was approximately RMB6.0 million, compared to a profit of approximately RMB1.1 million in the prior period[133][136] - The loss was primarily due to a decrease in revenue from the TV series segment[133][136] Financial Resources, Liquidity and Capital Structure As of June 30, 2025, the Group's net current assets decreased to approximately RMB292.5 million, the current ratio fell to 3.67 times, and the debt-to-equity ratio rose to 7.30%, reflecting a challenging financial position primarily due to loan repayments and increased project-related payables - Net current assets were approximately RMB292.5 million, a 3.8% decrease year-on-year[137][139] - The current ratio was 3.67 times, a decrease from 3.94 times at the end of 2024[137][139] - The debt-to-equity ratio increased to 7.30%, primarily due to an increase in net debt[137][139] Credit Risk The Group's credit risk primarily stems from trade and other receivables, bank balances, and amounts due from non-controlling interests, though directors believe trade receivables credit risk was significantly mitigated at period-end through internal credit ratings and historical loss experience - Credit risk primarily arises from trade and other receivables, bank balances, and amounts due from non-controlling interests[138][140] - The company's directors believe that the credit risk of trade receivables was significantly reduced at the end of the reporting period, assessed through internal credit ratings and historical loss experience[141][144] Business Review and Outlook The Group operates in film/TV production, concert organization, mobile app development, and artist management, with film/TV revenue declining but a focus on original IP, concert business driven by immersive experiences, continued growth in live streaming e-commerce, and zero artist management revenue due to unrenewed contracts, with management confident in future improvements - The Group primarily engages in film and television production, concert and event organization, mobile application development and operation, and artist management businesses[142][145] - Management is confident in overcoming challenges and continuously improving business under the leadership of an experienced team[156][161] TV Series/Film Production and Film Copyright Investment For the six months ended June 30, 2025, program production and related services revenue decreased to approximately RMB8.7 million, mainly due to fewer script copyright sales and films, but the Group continues to collaborate with Chinese film and television companies to expand original IP creation, adaptation, production, and distribution - Revenue from program production and related services decreased year-on-year, primarily due to fewer script copyright sales and films[143][146] - The Group actively collaborates with Chinese film and television production companies to expand businesses such as original script creation, adaptation, production, and distribution to incubate more proprietary IPs[147][150] Concert and Event Organization For the six months ended June 30, 2025, concert and event organization revenue significantly decreased to approximately RMB0.2 million due to no concerts held, but the Group launched the "Three-Body: Fourth Dimension" immersive experience in Beijing in early 2025, utilizing metaverse technology, and plans to explore more opportunities in various regions - Revenue from concert and event organization significantly decreased year-on-year, primarily because no concerts were held during the reporting period[148][151] - The Group launched the "Three-Body: Fourth Dimension" immersive experience in Beijing in early 2025, utilizing metaverse visual effects and mixed reality technology[149][151] - The Group will explore opportunities to organize more concerts and events in different regions in the future[152][157] Mobile Application Development and Operation For the six months ended June 30, 2025, mobile application development and operation revenue remained stable at approximately RMB0.2 million, primarily from live streaming e-commerce, with plans to deepen cooperation with celebrities, train assistant streamers, and introduce virtual anchors to expand the market - Revenue from the mobile application development and operation segment remained stable year-on-year, primarily from the live streaming e-commerce business[153][158] - The Group plans to continue deep cooperation with renowned celebrities, actively train assistant streamers, and introduce virtual anchors to further develop the live streaming e-commerce market[154][159] Artist Management Business For the six months ended June 30, 2025, net revenue from artist management business was zero, a decrease from RMB0.4 million in the prior period, mainly because artists had not renewed management contracts and no new work was arranged, with future efforts focused on expanding the artist roster - Net revenue from artist management business was zero, compared to RMB0.4 million in the prior period, primarily due to artists not renewing management contracts and no new work arrangements during the period[155][160] - The Group is committed to developing a more comprehensive artist roster in the future to bring greater value to the Group[161] Principal Risks and Uncertainties The Group faces significant risks including high customer concentration (95.6% of revenue from one client), intense competition in TV content production and event organization, and market demand uncertainties and regulatory immaturity in new businesses like mobile app development and live streaming e-commerce, which are vulnerable to economic downturns and rapid consumer behavior changes - The Group is highly dependent on a limited number of customers, with the largest customer contributing 95.6% of total revenue, posing risks of contract cancellation or termination[163][167] - The TV broadcasting content production and event organization markets are highly competitive, facing price pressure and threats from substitutes[164][165][168] - New businesses such as mobile application development and live streaming e-commerce face risks of uncertain market demand, rapid changes in user behavior, and immature regulatory environments[169][170][172][173] Employees and Remuneration Policy As of June 30, 2025, the Group had 27 employees, a decrease of two from the prior period, with remuneration determined by performance, experience, and market conditions, subject to annual performance reviews and discretionary bonuses - As of June 30, 2025, the Group had 27 employees, a decrease from 29 in the prior period[171][174] - Remuneration policy is based on employee performance, experience, and market conditions, updated annually, and may include discretionary bonuses[171][174] Foreign Currency Risk The Group's recurring sales and purchases are primarily settled in RMB, and the company continuously reviews and monitors risks associated with foreign currencies - The Group's recurring sales and purchases are primarily settled in RMB[175][179] - The company will continuously review and monitor risks arising from foreign currencies[175][179] Capital Expenditure For the six months ended June 30, 2025, the Group incurred approximately RMB948 thousand in capital expenditure for new property, plant, and equipment, a decrease from RMB2,177 thousand in the prior period - For the six months ended June 30, 2025, capital expenditure amounted to RMB948 thousand, a 56.4% decrease year-on-year[176][180] Capital Commitments As of June 30, 2025, the Group's capital commitments significantly increased to RMB69.7 million from RMB41.8 million as of December 31, 2024 - As of June 30, 2025, capital commitments were RMB69.7 million, an increase of 66.7% from RMB41.8 million at the end of 2024[177][181] Contingent Liabilities The Group's indirect wholly-owned subsidiary provided a corporate guarantee, retaining approximately RMB15.0 million in project revenue interests as "other payables" to mitigate related risks, with directors deeming the fair value of the guarantee immaterial and existing payables sufficient to cover potential claims - The Group retained approximately RMB15.0 million in project revenue interests as "other payables" to mitigate risks related to corporate guarantees[178][182] - The directors believe the fair value of the corporate guarantee is not material, and existing other payables are sufficient to cover any claims arising from litigation[178][182] Material Investments, Acquisitions or Disposals For the six months ended June 30, 2025, the Group held no material investments and undertook no material acquisitions or disposals of subsidiaries or associated companies - For the six months ended June 30, 2025, the Group held no material investments and undertook no material acquisitions or disposals of subsidiaries or associated companies[183] Disclosure of Interests and Other Information This section details the interests of directors, chief executives, and substantial shareholders in the company's securities, along with information on share repurchases, share option schemes, and competing interests Directors' and Chief Executives' Interests As of June 30, 2025, Executive Director Mr. Wang Yong held a 13.24% long position in the company's ordinary shares through Goldbless International Limited, with Mr. Yang Jian and Mr. Yang Shiyuan also holding shares in Youth Success Holdings Limited Directors' Long Positions in the Company's Ordinary Shares | Name of Director | 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 | Name of Director | Number of Shares | Percentage of Equity | | :--- | :--- | :--- | | Mr. Yang Jian | 1,273 | 12.73% | | Mr. Yang Shiyuan | 148 | 1.48% | - Save as disclosed, as of June 30, 2025, no other directors or chief executives held any interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations[191] Substantial Shareholders' and Other Persons' Interests As of June 30, 2025, Youth Success Holdings Limited, its ultimate controlling shareholders Mr. Yang Shaoqian and Ms. Mou Sufang, were deemed to hold approximately 58.77% to 59.22% of the company's shares through multi-layered holdings and shareholder voting agreements, alongside other major shareholders Substantial Shareholders' Long Positions in the Company's Ordinary Shares | Name/Company Name of Shareholder | Capacity and Nature of Interest | Number of Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Youth Success Holdings Limited | Beneficial owner; Deemed to be interested under shareholder voting agreement | 339,586,958 | 58.77% | | Guang Rui Investments Limited | Beneficial owner; Interest in controlled corporation; Deemed to be interested under shareholder voting agreement | 342,181,358 | 59.22% | | Mr. Yang Shaoqian | Interest in controlled corporation; Spouse's interest; Deemed to be interested under shareholder voting agreement | 342,181,358 | 59.22% | | Ms. Mou Sufang | Interest in controlled corporation; Spouse's interest; Deemed to be interested under shareholder voting agreement | 342,181,358 | 59.22% | | Mr. Liang Longfei | Beneficial owner | 36,000,000 | 6.23% | | TAN KOON AIK | Beneficial owner | 44,671,963 | 7.73% | | 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 Holdings Limited is deemed to have voting rights over shares held by Mr. Liang Longfei, TAN KOON AIK, ANG YU YUAN SHAWN, and Alpine Nova Limited through shareholder voting agreements[198][204] Purchase, Sale or Redemption of Listed Securities For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and there were no treasury shares held as of that date - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[200][202] - As of June 30, 2025, the company held no treasury shares[203] Share Option Scheme The company adopted a share option scheme on November 3, 2015, valid for 10 years, to reward eligible contributors, but as of June 30, 2025, no options had been granted, exercised, cancelled, or lapsed, with 24,000,000 shares available for grant - The share option scheme was adopted on November 3, 2015, with a 10-year validity, aiming to reward eligible individuals who contribute to the Group[205][206] - As of June 30, 2025, no share options had been granted, exercised, cancelled, or lapsed under the share option scheme, and there were no outstanding share options[205][206] - As of June 30, 2025, the number of share options available for grant was 24,000,000 shares[205][206] Competing Interests For the six months ended June 30, 2025, no directors, controlling shareholders, or their close associates held any interests in businesses directly or indirectly competing with the Group or had any other conflicts of interest - For the six months ended June 30, 2025, no directors, controlling shareholders, or their close associates held any interests in businesses competing with the Group or had any conflicts of interest[207][208] Corporate Governance Practices This section outlines the company's adherence to the GEM Listing Rules' Corporate Governance Code, including compliance, roles of Chairman and CEO, internal audit function, directors' securities transactions, and the Audit Committee's responsibilities Compliance with Corporate Governance Code The Board has adopted the Corporate Governance Code in Appendix C1 of the GEM Listing Rules and reports compliance for the six months ended June 30, 2025, with two deviations from code provisions C.2.1 and D.2.2 - The Board has adopted the Corporate Governance Code set out in Appendix C1 of the GEM Listing Rules[213][214] - For the six months ended June 30, 2025, the Corporate Governance Code has been complied with, except for code provisions C.2.1 and D.2.2[214] Responsibilities of Chairman and Chief Executive Officer Mr. Yang Jian serves as both Chairman and CEO, overseeing overall operations, management, business development, and strategic planning, with the Board ensuring a balance of power through its experienced composition and regularly reviewing the need for separation of these roles - Mr. Yang Jian concurrently holds the positions of Chairman of the Board and Chief Executive Officer, responsible for the Group's overall operations, management, business development, and strategic planning[210][214] - The Board believes that the balance of power is ensured through the operation of an experienced Board, and will regularly review whether the two roles need to be separated[212][215] Internal Audit Function The company currently lacks an internal audit function, deeming it unnecessary given the Group's current business scale, nature, and complexity, with the Board directly responsible for internal controls and their effectiveness, subject to periodic review - The company currently does not have an internal audit function, believing there is no immediate need based on the Group's current business scale, nature, and complexity[216][219] - The Board will be directly responsible for the Group's internal controls and review their effectiveness, and will review this situation from time to time[216][219] Directors' Securities Transactions The company has adopted GEM Listing Rules 5.48 to 5.67 as the code of conduct for directors' securities transactions, and all directors have confirmed compliance with these required standards for the six months ended June 30, 2025, and up to the report date - The company has adopted GEM Listing Rules 5.48 to 5.67 as the code of conduct for directors' dealings in the company's securities[217][220] - Following specific enquiries, all directors have confirmed compliance with the required standards for securities transactions for the six months ended June 30, 2025, and up to the date of this report[217][220] Audit Committee The Audit Committee, established with terms of reference compliant with GEM Listing Rules, comprises three independent non-executive directors and is responsible for reviewing and overseeing the Group's financial and internal controls and risk management, having reviewed the unaudited condensed consolidated results for the period and found them compliant with applicable standards - The Audit Committee's terms of reference comply with the GEM Listing Rules, with primary responsibilities to review and oversee the Group's financial controls, internal controls, and risk management systems[218][221] - The committee comprises three independent non-executive directors: Mr. Qiu Xinyuan (Chairman), Ms. Fu Yuehong, and Mr. Wang Xinghua[218][221] - The Audit Committee has reviewed the unaudited condensed consolidated results for the period and considers them to be in compliance with applicable accounting standards, the GEM Listing Rules, and statutory requirements[222]