欢喜传媒(01003) - 2025 - 中期财报

CORPORATE INFORMATION This section provides essential corporate details, including board composition, contact information, and key personnel changes Board and Committees The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with audit, remuneration, and nomination committees established, and notes a post-reporting period change in leadership - The Board comprises two executive directors, three non-executive directors, and three independent non-executive directors[54] - Mr. Dong Ping resigned as Chairman and Executive Director on July 27, 2025, and Ms. Hu Hui was appointed as an Executive Director on the same day[2][3][101] Company Details and Contact This section outlines the company's registered office, Hong Kong principal place of business, share registrar, stock code (1003), official website, and investor relations contacts - The company's registered office is in Bermuda, with its Hong Kong principal place of business in Far East Finance Centre, Admiralty, Hong Kong[5][6] - The company's stock code is 1003, and it provides multiple official websites and investor relations contact emails[6][7] MANAGEMENT DISCUSSION AND ANALYSIS This section reviews the company's business operations and financial performance for the period, highlighting market challenges and strategic responses BUSINESS AND OPERATION REVIEW The Chinese film market experienced continued adjustments and weak box office performance in the first half of 2025, leading the Group to adjust its film release strategy and enrich content - The Chinese film market remained sluggish in the first half of 2025, with weaker-than-expected recovery and high vacancy rates during off-peak hours[8][12] - The Group flexibly adjusted its film distribution pace and maintained ample film and television content reserves to address market challenges[9][12] - Films released during the period included "Caught in the Web of Love" directed by Peter Chan and "The Stage" directed by Chen Peisi, both becoming popular summer blockbusters[9][12] - The online video platform "Huanxi Premiere" added several global film and television titles, including "Cotton Tail," "Little Gang," and "Eiffel Tower"[11][14] FINANCIAL REVIEW For the six months ended June 30, 2025, the Group reported revenue and net film investment income of HK$179.94 million and a net loss of HK$102.232 million, primarily due to intense market competition and lower-than-expected box office performance - For the six months ended June 30, 2025, the Group recorded a net loss of HK$102.232 million, an increase from HK$89.049 million in the prior year period[15][19][107] - Revenue and net film investment income amounted to HK$179.94 million, an increase from HK$115.209 million in the prior year period[15][19][107] - The loss was primarily attributable to intense industry competition, a weak film market, and lower-than-expected box office performance for films released during the period[16][19] 2025 Key Financial Data Comparison for H1 (HK$ thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue and net film investment income | 179,940 | 115,209 | | Net loss | (102,232) | (89,049) | | Loss per share (HK$) | (0.03) | (0.02) | | Net asset value per share (HK$) | 0.30 (as of June 30, 2025) | 0.32 (as of December 31, 2024) | LIQUIDITY AND FINANCIAL RESOURCES As of June 30, 2025, the Group's net current assets, cash and cash equivalents, current ratio, and capital-to-debt ratio all decreased slightly, yet its overall financial position remains stable Liquidity and Financial Resources Overview as of June 30, 2025 (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net current assets | 364,219 | 473,962 | | Cash and cash equivalents | 35,741 | 144,987 | | Current ratio | 1.50 | 1.65 | | Total equity | 1,084,378 | 1,154,415 | | Borrowings | 29,544 | 42,440 | | Capital to debt ratio | 0.03 | 0.04 | CAPITAL STRUCTURE As of June 30, 2025, the company's share capital was approximately HK$36.565 million, consisting of 3,656,472,362 ordinary shares with a par value of HK$0.01 each, with no new shares issued for fundraising during the reporting period - As of June 30, 2025, the company's share capital was approximately HK$36.565 million, comprising 3,656,472,362 issued ordinary shares with a par value of HK$0.01 each[21][24] - During the reporting period, the company did not undertake any fundraising activities through the issuance of new shares[21][24] Other Financial and Operational Aspects This section provides updates on the Group's asset charges, foreign exchange exposure, risk management, contingent liabilities, capital commitments, material investments, acquisitions, disposals, and employee remuneration policies CHARGES ON ASSETS As of June 30, 2025, the Group had no assets pledged, consistent with the situation on December 31, 2024 - As of June 30, 2025, the Group had no pledged assets[22][25] FOREIGN EXCHANGE EXPOSURE The Group's cash flows and assets are primarily denominated in HKD and RMB, but foreign currencies are required for some investments and collaborations, necessitating continuous monitoring to mitigate exchange rate risks - The cash flows, cash held, and assets of the Group's operations are primarily denominated in Hong Kong Dollars and Renminbi[26][31] - Many investment opportunities and collaboration plans with film producers in mainland China and overseas still require the use of foreign currencies[26][31] - The Group will continue to closely monitor capital requirements and strive to mitigate any adverse effects of exchange rate fluctuations on its overall financial position and reduce financial risks[26][31] RISK MANAGEMENT During the reporting period, the Group regularly reviewed its risk and credit control systems to enhance overall governance and reduce credit risk, with no significant changes to its risk management policies since the last year-end - The Group regularly reviews the risk and credit control systems of its profit centers to improve overall control and reduce credit risk[27][32] - There have been no significant changes to the Group's risk management policies since the last year-end date[27][32] CONTINGENT LIABILITIES As of June 30, 2025, the Group had no material contingent liabilities, consistent with the situation on December 31, 2024 - As of June 30, 2025, the Group had no material contingent liabilities[28][33] CAPITAL COMMITMENT Details of the Group's capital commitments as of June 30, 2025, are provided in Note 23 to the unaudited condensed consolidated interim financial information - Details of the Group's commitments as of June 30, 2025, are set out in Note 23 to the unaudited condensed consolidated interim financial information[29][34] Film and TV Programme Rights Acquisition and Production Commitments as of June 30, 2025 (HK$ thousand) | Commitment Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Film and TV programme rights acquisition and production commitments | 149,219 | 144,456 | MATERIAL INVESTMENTS Apart from film and TV programme rights detailed in Note 16 of the financial information, the Group had no other material investments during the reporting period - Save for film and TV programme rights as set out in Note 16 to the unaudited condensed consolidated interim financial information, the Group had no material investments during the reporting period[30][35] MATERIAL ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures[36][40] FUTURE PLANS FOR MATERIAL INVESTMENTS The Group is actively seeking investment opportunities in media and entertainment-related businesses to broaden its revenue streams and development prospects - The Group is seeking investment opportunities (including but not limited to media and entertainment-related businesses) to broaden its revenue streams and prospects[37][41] EMPLOYEES AND REMUNERATION POLICIES As of June 30, 2025, the Group employed 85 full-time and 2 part-time staff, with remuneration policies based on job value, performance, and industry trends, providing MPF for Hong Kong staff and national retirement benefits for China-based staff Employee Count Comparison as of June 30, 2025 | Employee Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Full-time employees | 85 | 85 | | Part-time employees | 2 | 2 | - The Group has established a sound remuneration management and incentive mechanism, with employee remuneration determined based on job value, work performance, and industry trends[38][42] - The Group arranges for all eligible Hong Kong employees to participate in the Mandatory Provident Fund Scheme, while employees of its PRC subsidiaries are members of a state-managed retirement benefit scheme operated by the PRC government[39][42] PROSPECTS The Chinese film industry faces both opportunities and challenges, with an overall stable and positive trend, driven by government support, cinema upgrades, and consumption vouchers, as the Group continues its "content is king" strategy and diversified film projects - The Chinese film industry faces both opportunities and challenges, with an overall trend expected to be stable and positive[43][46] - The government has introduced special funds for quality films, innovative technology incentive policies, promoted cinema equipment upgrades, and issued film consumption vouchers, injecting momentum into the industry from both supply and demand sides[43][46] - The Group's invested film "The Stage" garnered critical acclaim and box office success during the summer season, with its revenue to be recognized in the second half of 2025[44][46] - The Group will continue to develop a diversified portfolio of film projects, including producing "Alone on Stage" and "In the Name of Father," investing in "The Mermaid" and "Ruyi Hotel," and planning another collaboration with Zhang Yimou[45][47] - The "Huanxi Premiere" platform will continue to introduce global film and television masterpieces, including "The Rental," "The Woman Who Ran," "Inland," and "The Forger," strengthening its resource layout[48][50] - The Group will continue to advance its "content is king" strategy, focusing on high-quality and diversified film and television works to consolidate its industry leadership and create long-term value for shareholders[49][51] CORPORATE GOVERNANCE This section details the company's adherence to corporate governance principles and codes, including board composition and securities transaction guidelines CORPORATE GOVERNANCE PRACTICES For the six months ended June 30, 2025, the company consistently applied and complied with the principles and provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules - During the reporting period, the company consistently applied and complied with the principles and provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules[52][56] CODE FOR SECURITIES TRANSACTIONS The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed full compliance during the reporting period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[53][57] - All directors confirmed full compliance with the Model Code throughout the reporting period[53][57] BOARD COMPOSITION The Board currently consists of two executive, three non-executive, and three independent non-executive directors, all possessing diverse industry expertise and experience - The Board currently comprises two executive directors, three non-executive directors, and three independent non-executive directors[54][58] - All directors are highly capable executives with diverse industry expertise, bringing various skills and experience to the Group[54][58] CHANGE IN INFORMATION OF DIRECTORS Since the date of the 2024 annual report, there have been no changes in directors' information requiring disclosure under Listing Rule 13.51B(1) - Since the date of the 2024 annual report, there have been no changes in directors' information requiring disclosure under Listing Rule 13.51B(1)[55][59] OTHER INFORMATION This section covers various additional disclosures, including interim dividends, directors' and substantial shareholders' interests, share options, and post-reporting period events INTERIM DIVIDEND The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year period - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[60][63][167][168] DIRECTORS' INTERESTS IN SECURITIES As of June 30, 2025, the company's directors and chief executive held long positions in ordinary shares and related shares, with Mr. Dong Ping, Mr. Ning Hao, Mr. Xu Zheng, and their associated companies collectively holding approximately 39.91% Directors' Long Positions in Ordinary Shares and Related Shares as of June 30, 2025 | Name of Director | Corporate Interests (shares) | Personal Interests (shares) | Total (shares) | Approximate % of Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Dong Ping | 1,416,094,354 | 43,250,000 | 1,459,344,354 | 39.91% | | Mr. Ning Hao | 1,416,094,354 | 43,250,000 | 1,459,344,354 | 39.91% | | Mr. Xu Zheng | 1,416,094,354 | 43,250,000 | 1,459,344,354 | 39.91% | | Mr. Li Xiaolong | 15,060,000 | – | 15,060,000 | 0.41% | | Mr. Wang Hong | – | 200,000 | 200,000 | 0.01% | - Mr. Dong Ping resigned as Executive Director and Chairman on July 27, 2025[70] - Mr. Dong Ping, Mr. Ning Hao, Mr. Xu Zheng, and their respective controlled companies are deemed to have a joint interest due to a shareholders' agreement[70] SUBSTANTIAL SHAREHOLDERS' INTERESTS As of June 30, 2025, substantial shareholders, excluding directors' interests, included Mr. Dong Ping, Newwood Investments Limited, Mr. Ning Hao, Pacific Wits Limited, Mr. Xu Zheng, Tairong Holdings Limited, Bilibili Inc., FMR LLC., and Maoyan Entertainment, with Mr. Dong Ping, Mr. Ning Hao, Mr. Xu Zheng, and their associated companies holding approximately 39.91% Overview of Substantial Shareholders' Interests as of June 30, 2025 | Name of Shareholder | Capacity | Number of Ordinary Shares Held | Approximate % of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Dong Ping | Beneficial owner, interests in controlled corporations and parties to agreement | 1,459,344,354 | 39.91% | | Newwood Investments Limited | Beneficial owner and party to agreement | 1,459,344,354 | 39.91% | | Mr. Ning Hao | Interests in controlled corporations and party to agreement | 1,459,344,354 | 39.91% | | Pacific Wits Limited | Beneficial owner and party to agreement | 1,459,344,354 | 39.91% | | Mr. Xu Zheng | Interests in controlled corporations and party to agreement | 1,459,344,354 | 39.91% | | Tairong Holdings Limited | Beneficial owner and party to agreement | 1,459,344,354 | 39.91% | | Bilibili Inc. | Beneficial owner | 328,366,954 | 8.98% | | FMR LLC. | Beneficial owner | 210,352,773 | 5.75% | | Maoyan Entertainment | Beneficial owner | 208,430,000 | 5.70% | - Mr. Dong Ping, Mr. Ning Hao, Mr. Xu Zheng, and their respective controlled companies (Newwood, Pacific Wits, Tairong) are deemed to have a joint interest due to a shareholders' agreement[78] - The disclosure dates for interests are December 31, 2024, for Bilibili Inc., July 4, 2025, for FMR LLC., and October 14, 2022, for Maoyan Entertainment[78] SHARE OPTIONS The 2014 Share Option Scheme expired on June 17, 2024, with no options granted, cancelled, exercised, or lapsed during the reporting period; a new 2024 scheme was adopted on June 25, 2024, to incentivize eligible participants, with an authorized limit of 10% of issued shares and a vesting period of no less than 12 months - The 2014 Share Option Scheme expired on June 17, 2024, and as of June 30, 2025, no share options were available for grant or outstanding under this scheme[79][80][82] - The company adopted a new 2024 Share Option Scheme on June 25, 2024, valid for ten years, aiming to incentivize and reward eligible participants who contribute to the Group's growth[81][83] - The authorized limit for the 2024 Share Option Scheme is 10% of issued shares (365,647,236 shares), with a sub-limit of 1% (36,564,723 options) for service providers[84][93][94] - The exercise price of share options shall not be less than the highest of the closing price on the offer date, the average closing price for the preceding five days, or the par value of the shares, with a vesting period of no less than 12 months[85][87][89][90] - The Board may, at its discretion, set performance targets and clawback mechanisms[88][90][91][92][97][98] PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES 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 - 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[96][99] SUFFICIENCY OF PUBLIC FLOAT As of the report date, based on publicly available information and directors' knowledge, the company maintained the sufficient public float required by the Listing Rules - As of the date of this report, based on publicly available information and to the best knowledge of the directors, the company maintained the sufficient public float required by the Listing Rules[100][103] EVENT AFTER THE REPORTING PERIOD Mr. Dong Ping resigned as Executive Director and Chairman on July 27, 2025, and Ms. Hu Hui was appointed as an Executive Director, effective the same day - Mr. Dong Ping resigned as Executive Director and Chairman of the company, effective July 27, 2025[101][104][216][218] - The Board appointed Ms. Hu Hui as an Executive Director, effective July 27, 2025[101][104][216][218] REVIEW OF INTERIM RESULTS The company's audit committee, in conjunction with management, reviewed and expressed satisfaction with the accounting principles, practices, and the unaudited condensed consolidated interim financial information for the six months ended June 30, 2025 - The company's Audit Committee, in conjunction with management, reviewed the accounting principles and practices adopted by the Group, as well as the unaudited condensed consolidated interim financial information for the six months ended June 30, 2025[102][105] - The Committee expressed satisfaction with the review, and the Board was also satisfied with the Committee's report[102][105] UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION This section presents the Group's unaudited condensed consolidated interim financial statements, including the statement of profit or loss, financial position, changes in equity, cash flows, and detailed notes UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the six months ended June 30, 2025, the Group reported revenue and net film investment income of HK$179.94 million, a gross loss of HK$17.567 million, an operating loss of HK$100.664 million, and a loss for the period of HK$102.232 million, with a total comprehensive loss of HK$70.037 million H1 2025 Profit or Loss and Other Comprehensive Income Overview (HK$ thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue and net film investment income | 179,940 | 115,209 | | Cost of revenue | (197,507) | (185,555) | | Gross loss | (17,567) | (70,346) | | Operating loss | (100,664) | (90,282) | | Loss before tax | (101,029) | (89,104) | | Loss for the period | (102,232) | (89,049) | | Total comprehensive loss for the period | (70,037) | (122,209) | - Exchange differences had a positive impact on comprehensive income, shifting from a loss of HK$(33,160) thousand in H1 2024 to a gain of HK$32,195 thousand in H1 2025[108] UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As of June 30, 2025, the Group's total assets were HK$1,846.116 million, total equity HK$1,084.378 million, and total liabilities HK$761.738 million, with both current assets and cash and cash equivalents decreasing from year-end 2024 Financial Position Overview as of June 30, 2025 (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current assets | 756,818 | 746,833 | | Current assets | 1,089,298 | 1,201,323 | | Total assets | 1,846,116 | 1,948,156 | | Total equity | 1,084,378 | 1,154,415 | | Non-current liabilities | 36,659 | 66,380 | | Current liabilities | 725,079 | 727,361 | | Total liabilities | 761,738 | 793,741 | - Film and TV programme rights within current assets decreased from HK$928.241 million to HK$783.955 million, and cash and cash equivalents decreased from HK$144.987 million to HK$35.741 million[110] - Contract assets significantly increased from HK$17.344 million to HK$139.519 million[110] UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended June 30, 2025, total equity attributable to owners decreased from HK$1,154.415 million at the beginning of the period to HK$1,084.378 million at the end, primarily due to a loss for the period of HK$102.232 million, partially offset by other comprehensive income of HK$32.195 million H1 2025 Equity Movement Overview (HK$ thousand) | Metric | January 1, 2025 | Loss for the period | Other comprehensive income | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Share capital | 36,565 | – | – | 36,565 | | Reserves | 1,117,850 | (102,232) | 32,195 | 1,047,813 | | Total Equity | 1,154,415 | (102,232) | 32,195 | 1,084,378 | - Accumulated losses increased from HK$(2,301,301) thousand as of December 31, 2024, to HK$(2,403,533) thousand as of June 30, 2025[208] UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the six months ended June 30, 2025, net cash used in operating activities was HK$91.291 million, net cash generated from investing activities was HK$0.239 million, and net cash used in financing activities was HK$20.238 million, resulting in a significant decrease in cash and cash equivalents to HK$35.741 million at period-end H1 2025 Cash Flow Overview (HK$ thousand) | Activity Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | (91,291) | (197,296) | | Net cash generated from investing activities | 239 | 895 | | Net cash used in financing activities | (20,238) | (6,798) | | Net decrease in cash and cash equivalents | (111,290) | (203,199) | | Cash and cash equivalents at end of period | 35,741 | 102,223 | - Net cash used in operating activities improved compared to the prior year period, but net cash used in financing activities significantly increased, primarily due to repayment of borrowings[115] NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION This section provides detailed notes to the unaudited condensed consolidated interim financial information, covering general information, basis of preparation, accounting policies, judgments and estimates, financial risk management, composition of income and expenses, segment information, taxation, dividends, loss per share, changes in assets and liabilities, receivables and payables, film investment funds from investors, borrowings, share capital, reserves, commitments, and related party disclosures 1 GENERAL INFORMATION The company, incorporated in Bermuda and listed on the HKEX, primarily engages in media and entertainment, including film and TV programme rights development, investment, and online video platform operations, with financial information presented in HKD - The company is an exempted company incorporated in Bermuda, with its shares listed on the Main Board of the Stock Exchange[117][122] - Primarily engaged in media and entertainment-related businesses, including film and TV programme rights production and investment, and operating an online video platform[118][122] - The unaudited condensed consolidated interim financial information is presented in Hong Kong Dollars and was approved for issue by the Board on August 29, 2025[118][119][122][123] 2 BASIS OF PREPARATION The financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" and Appendix D2 of the Listing Rules, to be read in conjunction with the 2024 annual report, with accounting policies consistent except for new or revised standards having no material impact - This unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of Appendix D2 of the Listing Rules[120][124] - The unaudited condensed consolidated interim financial information should be read in conjunction with the annual report for the year ended December 31, 2024, prepared in accordance with Hong Kong Financial Reporting Standards[121][124] - The accounting policies adopted are consistent with those applied in the previous financial year and the corresponding interim reporting period, except for the adoption of new and revised standards[125][129] 3 ACCOUNTING POLICIES The Group adopted new or revised standards effective for accounting periods beginning on or after January 1, 2025, which had no material impact on the interim financial information, and no new standards not yet effective were early adopted - The Group has adopted new or revised standards, amendments to standards, and interpretations of Hong Kong Financial Reporting Standards that are effective for accounting periods beginning on or after January 1, 2025[127][130] - The adoption of these new or revised standards, amendments to standards, and interpretations has had no material impact on the unaudited condensed consolidated interim financial information and has not resulted in significant changes to the Group's accounting policies or the amounts reported for the current and prior periods[127][130] 4 JUDGEMENTS AND ESTIMATES The preparation of interim financial information involves management judgments, estimates, and assumptions, with key sources of estimation uncertainty being the same as those applied in the 2024 annual consolidated financial statements - In preparing the interim financial information, management is required to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[128][131] - The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied in the Group's consolidated financial statements for the year ended December 31, 2024[128][131] 5 FINANCIAL RISK MANAGEMENT The Group is exposed to market risk (including foreign exchange and interest rate risk), credit risk, and liquidity risk, with no changes in risk management policies since December 31, 2024, and fair value measurements using a three-level hierarchy, with film copyright investments classified as Level 3 - The Group's operations are exposed to various financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk[132][135] - There have been no changes to the Group's risk management policies since December 31, 2024[133][136] - Fair value measurements use a three-level hierarchy, with film copyright investments classified as Level 3, amounting to HK$147.662 million as of June 30, 2025[137][138][142][143][146] 6 REVENUE AND FILM INVESTMENT INCOME/(LOSS), NET For the six months ended June 30, 2025, the Group's revenue and net film investment income totaled HK$179.94 million, primarily from shared box office revenue and sub-licensing of film and TV programme rights, with a significant increase in contract assets and contract liabilities mainly from joint membership arrangements and sub-licensing prepayments H1 2025 Revenue and Net Film Investment Income Composition (HK$ thousand) | Revenue Source | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Share of box office revenue | 144,518 | 63,374 | | Sub-licensing of film and TV programme rights | 30,926 | 52,489 | | Other media-related revenue | 1,219 | 3,890 | | Total Revenue | 176,663 | 119,753 | | Net film investment income/(loss) | 3,277 | (4,544) | | Total | 179,940 | 115,209 | - As of June 30, 2025, contract assets (unbilled revenue) increased to HK$139.519 million (December 31, 2024: HK$17.344 million)[110][150] - Contract liabilities primarily include HK$0.766 million in prepayments for joint membership arrangements and HK$30.512 million in prepayments for sub-licensing of film and TV programme rights[151][152] 7 SEGMENT INFORMATION The Group's executive directors, as the chief operating decision makers, classify the business into a single reportable segment: film and TV programme rights investment, with operations primarily in China and Hong Kong, and revenue and non-current assets mainly derived from China - The Group's sole reportable segment is film and TV programme rights investment[153][156] - The Group's operations are primarily located in China and Hong Kong, with revenue and net film investment income/(loss) mainly derived from Chinese customers, and non-current assets also primarily located in China[154][156] 8 OTHER (LOSSES)/GAINS, NET For the six months ended June 30, 2025, the Group recorded a net exchange loss of HK$0.8 million, compared to a net exchange gain of HK$1.922 million in the prior year period H1 2025 Other (Losses)/Gains, Net (HK$ thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net exchange loss/gain | (800) | 1,922 | 9 EXPENSES BY NATURE For the six months ended June 30, 2025, the Group's total costs (cost of revenue, selling and distribution costs, and administrative expenses) decreased to HK$304.619 million from HK$393.018 million in the prior year period, mainly due to a significant reduction in advertising and marketing expenses H1 2025 Expenses by Nature Overview (HK$ thousand) | Expense Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Employee benefit expenses (excluding directors' emoluments) | 24,090 | 21,854 | | Directors' emoluments | 7,636 | 7,636 | | Depreciation | 5,378 | 6,930 | | Advertising and marketing expenses | 54,298 | 153,391 | | Amortisation of film and TV programme rights | 197,507 | 185,555 | | Total Costs | 304,619 | 393,018 | - Advertising and marketing expenses significantly decreased from HK$153.391 million in H1 2024 to HK$54.298 million in H1 2025[160] - Amortisation of film and TV programme rights increased from HK$185.555 million to HK$197.507 million[160] 10 INCOME TAX EXPENSE/(CREDIT) For the six months ended June 30, 2025, the Group recorded an income tax expense of HK$1.203 million, compared to an income tax credit of HK$0.055 million in the prior year period, with PRC subsidiaries taxed at 25% and a 7% withholding tax on PRC-sourced income, while Hong Kong entities had no provision due to tax losses H1 2025 Income Tax Expense/(Credit) (HK$ thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current tax | 1,129 | – | | Deferred income tax | 74 | (55) | | Income tax expense/(credit) | 1,203 | (55) | - PRC subsidiaries are subject to a corporate income tax rate of 25%, with a withholding tax rate of 7% on PRC-sourced income (H1 2024: 10%)[161][162] - No Hong Kong profits tax provision was made for Hong Kong entities due to tax losses incurred[163][164] 11 DIVIDENDS The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year period - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[167][168] 12 LOSS PER SHARE For the six months ended June 30, 2025, basic loss per share was HK$0.03, an increase from HK$0.02 in the prior year period, with diluted loss per share being the same as basic loss due to no potentially dilutive ordinary shares H1 2025 Loss Per Share (HK$) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the company (HK$ thousand) | (102,232) | (89,049) | | Weighted average number of ordinary shares (thousand shares) | 3,656,472 | 3,656,472 | | Basic loss per share (HK$) | (0.03) | (0.02) | - As there were no potentially dilutive ordinary shares outstanding for the six months ended June 30, 2025, diluted loss per share was the same as basic loss per share[174][175] 13 MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT For the six months ended June 30, 2025, the Group made additions to property, plant, and equipment of HK$0.02 million, with no disposals, and depreciation expenses of approximately HK$0.175 million recognized in administrative expenses - For the six months ended June 30, 2025, additions to the Group's property, plant, and equipment amounted to HK$20,000[176][180] - For the six months ended June 30, 2025, the Group made no disposals of property, plant, and equipment[177][180] - Depreciation expenses of approximately HK$175,000 were charged to administrative expenses[177][180] 14 MOVEMENTS IN RIGHT-OF-USE ASSETS For the six months ended June 30, 2025, there were no additions to right-of-use assets, and depreciation expenses of approximately HK$5.203 million were recognized in administrative expenses - For the six months ended June 30, 2025, there were no additions to right-of-use assets[178][181] - Depreciation of approximately HK$5,203,000 was charged to administrative expenses in the unaudited condensed consolidated statement of profit or loss and other comprehensive income[178][181] 15 PREPAYMENTS FOR FILM AND TV PROGRAMMES RIGHTS As of June 30, 2025, prepayments for film and TV programme rights under development amounted to HK$360.529 million, a slight increase from December 31, 2024, representing part of the Group's contributions to proposed film and TV programme rights investments Prepayments for Film and TV Programme Rights (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayments for film and TV programme rights under development | 360,529 | 359,588 | - These prepayments for film and TV programme rights under development represent advances made by the Group to various parties for film and TV programme rights not yet completed, forming part of the Group's contributions to proposed film and TV programme rights investments[183][184] 16 FILM AND TV PROGRAMMES RIGHTS As of June 30, 2025, the Group's total film and TV programme rights amounted to HK$1,141.864 million, including completed rights of HK$760.91 million, rights in progress of HK$201.167 million, film copyright investments of HK$147.662 million, and licensed rights of HK$32.125 million, representing a decrease from year-end 2024 Film and TV Programme Rights Composition (HK$ thousand) | Rights Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Completed film and TV programme rights | 760,910 | 930,087 | | Film and TV programme rights in progress | 201,167 | 154,053 | | Film copyright investments (at fair value through profit or loss) | 147,662 | 143,181 | | Licensed film and TV programme rights | 32,125 | 48,334 | | Total | 1,141,864 | 1,275,655 | - Film copyright investments refer to the Group's investments in film production, entitling it to a pre-determined percentage of future revenue generated by the films[186] - Licensed rights refer to licenses purchased from independent third parties for broadcasting authorized films or TV programmes on the Group's online video platform, and for sub-licensing to other independent third parties (if applicable)[186] 17 TRADE AND OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS As of June 30, 2025, net trade receivables were HK$43.967 million and net other receivables were HK$93.894 million, with trade receivables primarily aged over 365 days, and other receivables including approximately HK$13.161 million in loans receivable Trade and Other Receivables Overview as of June 30, 2025 (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables (net of loss allowance) | 43,967 | 42,403 | | Deposits | 4,485 | 5,169 | | Prepayments | 18,456 | 14,646 | | Other receivables (net of loss allowance) | 93,894 | 78,138 | | Total | 137,861 | 120,541 | Trade Receivables Ageing Analysis as of June 30, 2025 (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 – 30 days | 4,044 | 64 | | 31 – 90 days | 143 | 158 | | 181 – 365 days | – | 22,989 | | Over 365 days | 39,780 | 19,192 | | Total | 43,967 | 42,403 | - Other receivables include approximately HK$13,161,000 in loans receivable (net of loss allowance), bearing interest at an annual rate of 6%[194] 18 TRADE AND OTHER PAYABLES As of June 30, 2025, total trade and other payables amounted to HK$113.966 million, a decrease from HK$159.674 million on December 31, 2024, with trade payables primarily aged over 365 days Trade and Other Payables Overview as of June 30, 2025 (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 89,200 | 96,183 | | Other payables | 23,211 | 61,899 | | Accrued expenses | 1,555 | 1,592 | | Total | 113,966 | 159,674 | Trade Payables Ageing Analysis as of June 30, 2025 (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 – 30 days | 1,587 | 1,680 | | Over 365 days | 87,613 | 94,503 | | Total | 89,200 | 96,183 | 19 FILM INVESTMENT FUNDS FROM INVESTORS For the six months ended June 30, 2025, the Group recognized revenue of approximately HK$23.528 million from film investment funds from investors, due to the investors' net proceeds being less than their contributions - For the six months ended June 30, 2025, the Group recognized revenue of approximately HK$23,528,000 from film investment funds from investors after the relevant films were released in cinemas[200][201] - The revenue arose because the investors' net proceeds were less than their contributed film investment funds[200][201] - As of June 30, 2025, film investment funds from investors amounted to HK$529.961 million[111] 20 BORROWING As of June 30, 2025, the Group's total unsecured borrowings were HK$29.544 million, bearing interest at an annual rate of 4.35% and repayable by March 27, 2026, all reclassified as current liabilities Borrowings Overview (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unsecured borrowings | 29,544 | 42,440 | | Non-current liabilities | – | 42,440 | | Current liabilities | 29,544 | – | - The borrowings bear interest at an annual rate of 4.35% and are repayable by March 27, 2026[204] 21 SHARE CAPITAL As of June 30, 2025, the company's authorized share capital was 50 billion ordinary shares with a par value of HK$0.01 each, and issued and fully paid share capital was 3,656,472,362 shares, totaling HK$36.565 million, consistent with year-end 2024 Share Capital Overview (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Authorized share capital (shares) | 50,000,000,000 | 50,000,000,000 | | Authorized share capital (HK$ thousand) | 500,000 | 500,000 | | Issued and fully paid share capital (shares) | 3,656,472,362 | 3,656,472,362 | | Issued and fully paid share capital (HK$ thousand) | 36,565 | 36,565 | 22 RESERVES As of June 30, 2025, the company's total reserves amounted to HK$1,047.813 million, a decrease from HK$1,117.85 million on January 1, 2025, primarily impacted by the loss for the period, with accumulated losses increasing to HK$2,403.533 million H1 2025 Reserves Movement Overview (HK$ thousand) | Reserve Type | January 1, 2025 | Loss for the period | Other comprehensive income | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Share premium | 3,506,614 | – | – | 3,506,614 | | Exchange reserve | (87,463) | – | 32,195 | (55,268) | | Accumulated losses | (2,301,301) | (102,232) | – | (2,403,533) | | Total | 1,117,850 | (102,232) | 32,195 | 1,047,813 | - Accumulated losses include a capital reserve of approximately HK$2.099 million arising from Group reorganization, and contributed surplus of approximately HK$149.22 million arising from capital reorganization and cancellation of share premium in prior years[209][210][211] 23 COMMITMENTS As of June 30, 2025, the Group had contracted but unprovided commitments for film and TV programme rights acquisition and production totaling HK$149.219 million Film and TV Programme Rights Acquisition and Production Commitments (HK$ thousand) | Commitment Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Film and TV programme rights acquisition and production commitments | 149,219 | 144,456 | 24 RELATED PARTY DISCLOSURES For the six months ended June 30, 2025, total emoluments for directors and key management personnel were HK$7.636 million, consistent with the prior year period, determined by the remuneration committee based on individual performance and market trends H1 2025 Key Management Personnel Emoluments (HK$ thousand) | Emolument Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Short-term benefits | 7,627 | 7,627 | | Post-employment benefits – defined contribution plans | 9 | 9 | | Total | 7,636 | 7,636 | - Emoluments for directors and key management personnel are determined by the company's Remuneration Committee based on individual performance and market trends[215][217] 25 EVENT AFTER THE REPORTING PERIOD Mr. Dong Ping resigned as Executive Director and Chairman on July 27, 2025, and Ms. Hu Hui was appointed as an Executive Director, effective the same day - Mr. Dong Ping resigned as Executive Director and Chairman of the company, effective July 27, 2025[216][218] - The Board appointed Ms. Hu Hui as an Executive Director, effective July 27, 2025[216][218]