Company Vision and Strategy - Global Digital Creations Holdings Limited aims to be a leading digital and visual integration conglomerate in China, focusing on digital media technology to present Chinese legends[11]. - The company has outlined three strategic steps: Digital and Visual Technology, Virtual Reality, and Digital IP Assets[16]. - The mission emphasizes safeguarding kindness, operating delicately, embracing changes, and achieving win-win outcomes[13]. - The company is committed to the commercialization of intellectual property (IP) through authorization, development, and marketing[18]. - Global Digital is developing a new cultural space that includes consultation, services, and events[18]. - The establishment of an AR College is planned to offer courses, qualifications, and certification[18]. - The company aims to create a distinct cultural name card for each city, enhancing local cultural identity[15]. - The focus on digital IP assets includes brand assets and precipitation data, forming a content-IP matrix and an ecology-IP matrix[17]. Financial Performance - The company reported a significant increase in revenue, achieving a total of $XX million for the fiscal year, representing a YY% growth compared to the previous year[20]. - User data showed an increase in active users, reaching ZZ million, which is an increase of AA% year-over-year[21]. - The company provided a positive outlook for the next fiscal year, projecting revenue growth of BB% and an increase in user engagement metrics[22]. - New product launches are expected to contribute to revenue, with an estimated impact of $CC million in the upcoming quarter[23]. - The company is investing in new technology development, allocating $DD million towards R&D initiatives aimed at enhancing product offerings[24]. - Market expansion plans include entering new geographic regions, targeting a market size of $EE billion in the next two years[25]. - The company is considering strategic acquisitions to bolster its market position, with potential targets identified in the industry[26]. - A new marketing strategy has been implemented, aiming to increase brand awareness and customer acquisition by FF%[27]. - The company reported a strong balance sheet with total assets of $GG million and a debt-to-equity ratio of HH%[28]. Management and Governance - Mr. Wang Hongpeng appointed as Executive Director and General Manager in December 2019, bringing extensive experience in corporate management and capital markets[30]. - Mr. Xiao Yong has over 20 years of experience in the animation industry and has served as General Manager of Shenzhen IDMT since March 2013[32]. - Mr. Chen Zheng, previously CEO, re-designated as Deputy Chairman and Non-executive Director in December 2018, has extensive experience in investment and corporate management[34]. - Prof. Japhet Sebastian Law has been an Independent Non-executive Director since September 2008, with a strong background in engineering and business administration[38]. - Mr. Lam Yiu Kin appointed as Independent Non-executive Director in July 2015, with extensive experience in accounting and auditing[41]. Impact of COVID-19 and Strategic Planning - The company successfully overcame the impacts of the COVID-19 epidemic and the volatility in domestic and foreign capital markets in 2021[52]. - A new five-year plan (2021-2025) was successfully formulated, focusing on the integration of culture and technology[52]. - The company is transforming its traditional film and television production business into a high value-added visual industry based on Intellectual Property (IP)[52]. - The company is expanding its new cultural space business to create a new city icon[52]. - The digital and visual service ecosystem driven by culture and technology was created[52]. - The restructuring and business planning have been aligned with the new strategic focus[52]. - The company aims to promote the transformation and upgrading of its traditional business models[52]. - The company is committed to alleviating the impacts from the traditional film and television industry caused by the epidemic[52]. - The company has established a digital visual service ecosystem[52]. - The focus on high value-added visual industry is expected to enhance overall business performance[52]. Product and Market Development - The Group's animated film "Journey to the Center of the Deep Ocean" became the number one box office for domestic animated movies during the June 1st holiday in 2021, receiving high recommendations from CCTV[56]. - The digital virtual character business has reached an industry-leading level in motion performance, motion capture, sound mimic, and character appearance production, targeting the Metaverse and extending to Virtual Reality digital assets[60]. - The IP authorization business has expanded to include touring product lines and launched products in various forms, including art displays, interactive experiences, and apparel, catering to young consumers[62]. - The establishment of the Group's West China headquarters in Chengdu aims to create an innovative ecological sports park, integrating "Cultural IP + Technology + Sports" as the core value[58]. - The Group is actively pursuing opportunities in the Metaverse and cutting-edge technology industries, leveraging its first-mover advantage in virtual reality and science fiction[60]. - The new cultural space segment is focused on constructing an industrial ecosystem involving animation, film and television, games, and virtual reality, promoting animation education and entrepreneurship[58]. - The Group's projects with Jiangxi and Jiangsu Provinces aim to narrate Chinese stories with local IP, assisting local governments in creating distinctive city icons[56]. - The animated film "Journey to the Center of the Deep Ocean" won multiple awards, including "Excellent Animation" and was nominated for Best Animated Feature Film at the Xinguang Award[66]. - The Group plans to continue enhancing traditional industries while supporting emerging industries, focusing on developing digital cultural content in 2022[67]. - The negotiation regarding the Western Zhi Gu Global Digital Base Project is in progress, aiming to create new experiences of online-offline immersion and cultural-technology integration[58]. Financial Results and Metrics - Revenue from continuing operations for the year ended December 31, 2021, amounted to HK$84,689,000, an increase of 8% compared to HK$78,635,000 in 2020[81]. - Gross profit margin improved to 53% in 2021 from 46% in 2020, representing a 7% increase[79]. - Profit attributable to owners of the Company was HK$15,963,000, a significant increase of 97% from HK$8,107,000 in the previous year[79]. - Earnings per share rose to 1.06 HK cents, up 96% from 0.54 HK cents in 2020[79]. - Total assets increased by 6% to HK$690,083,000 in 2021 from HK$650,302,000 in 2020[79]. - Cash and cash equivalents as of December 31, 2021, were HK$318,845,000, a 4% increase from HK$306,850,000 in 2020[90]. - Other income from continuing operations increased to HK$20,850,000 in 2021 from HK$13,061,000 in 2020, primarily due to government grants and interest income[87]. - Distribution and selling expenses rose significantly to HK$11,452,000, an increase of 208% from HK$3,714,000 in 2020, mainly due to marketing expenses for an animated film[87]. - The Group's current ratio improved to 1.28 in 2021 from 1.23 in 2020, indicating better liquidity[91]. - Equity attributable to owners of the Company increased to HK$506,496,000 as of December 31, 2021, up 8% from HK$467,168,000 in 2020[96]. - As of December 31, 2021, the equity attributable to owners of the company increased to HK$506,496,000, up from HK$467,168,000 in 2020, primarily due to a special reserve increase of HK$19,813,000 from the sale of a 10% stake in a subsidiary in Mainland China[97]. - The Group did not have any material acquisitions, disposals, or significant investments during the year ended December 31, 2021[98]. - The Group employed 194 full-time employees as of December 31, 2021, a decrease from 221 in 2020[100]. - The Group's revenue from the CG creation and production division was mainly derived from production services, box office receipts, and IP licensing, with significant projects undertaken in Mainland China[105]. - The original animated film "Journey to the Center of the Deep Ocean" was released on June 12, 2021, and ranked first in the domestic animated film box office on its screening day despite COVID-19 impacts[109]. - The Group is currently in production of the Yangtze River-themed animated film "Finless Porpoise: Dance in the Wind" in collaboration with local cultural groups[111]. - The authorization of animation IP-derived products expanded during the year, launching various products in over ten first-tier cities, focusing on apparel and food licensing[112]. - The Group's operational cash flow and liquidity are not significantly exposed to foreign exchange risks, with an additional exchange gain of approximately HK$9.91 million recognized due to currency fluctuations[100]. - The closing Renminbi exchange rate as of December 31, 2021, was approximately 1.3% and 3.0% higher than the average rate and the end of 2020 rate, respectively[100]. - The Group had no significant contingent liabilities as of December 31, 2021[100]. Projects and Innovations - GDC Building in Shenzhen continues to attract high-quality animated film and television, high technology, and cultural enterprises, enhancing its digital technology management system and improving ancillary facilities and services[117]. - The Chengdu Sports Park project is in full swing, focusing on "Cultural IP + Technology + Sports" to redefine the city and create a city landmark with technology[118]. - The Group has completed the development of a computer animated character and artificial intelligence engine driver interface, optimizing production processes and techniques[122]. - The Group plans to develop a digital virtual character IP asset matrix and a SaaS platform for customization, targeting areas such as live streaming for virtual marketing and financial services[123]. - The Group will invest substantially in the Metaverse-related industrial chain, leveraging its first-mover advantage in virtual reality and science fiction industries[131]. - Animated film and television original business will continue to develop multiple theme series, expanding into animated films, web dramas, and game animation production[134]. - The Group aims to enhance replication capabilities and continue expanding new projects, particularly in high-tech experience and operations[136]. Corporate Governance - The Board of Directors comprises eight members, including three Executive Directors and four Independent Non-executive Directors, ensuring a balanced composition for independent judgment[147]. - The Board held six meetings during the year ended December 31, 2021, to review various projects and approve quarterly, interim, and annual results[159]. - All Directors confirmed compliance with the code of conduct regarding securities transactions throughout the year ended December 31, 2021[145]. - The Company has maintained compliance with all provisions of the Corporate Governance Code throughout the year ended December 31, 2021[143]. - The Company Secretary is responsible for ensuring compliance with meeting procedures and regulations, and for taking detailed minutes of Board meetings[157]. - Non-executive Directors play a crucial role in making independent judgments and scrutinizing the Company's performance[150]. - The Board is responsible for overall strategy formulation and monitoring the performance of the Group[153]. - The Company aims to provide at least 14 days' notice for regular Board meetings and send agenda papers at least three days in advance[157]. - The attendance records of the Board meetings and general meetings held in 2021 are documented, with some Directors unable to attend due to other commitments[160]. - The Company has a strong emphasis on accountability and transparency in its corporate governance practices[141]. - The Board held a total of 6 meetings during the year ended December 31, 2021, with all directors actively participating in the group's affairs[162]. - The company reviewed and approved its quarterly, interim, and annual performance during the board meetings[162]. - The Board adopted a diversity policy in 2013 to ensure a balance of skills, experience, and perspectives among its members[168]. - The Nomination Committee is responsible for reviewing the profiles of candidates and making recommendations for the appointment and reappointment of directors[168]. - Directors are appointed for a specific term and are subject to retirement by rotation at least once every three years[168]. - The company provides independent professional advice to directors to assist them in discharging their duties[166]. - Monthly updates on the company's performance and financial position are provided to all directors[166]. - The Board has the ultimate responsibility for the selection and appointment of directors as permitted in the Bye-laws[168]. - The Nomination Policy was adopted in December 2018 to ensure a formal and transparent procedure for director appointments[168]. - The company emphasizes the importance of diversity in its board appointments, considering various perspectives including gender, race, and professional experience[168]. - The roles of the Chairman and the Managing Director are separate to reinforce independence and accountability, with Mr. Xu Liang appointed as Chairman on June 30, 2021, and Mr. Wang Hongpeng as Managing Director[176]. - The Executive Committee, established in September 2007, consists of three Executive Directors as of December 31, 2021, including Mr. Xu Liang, Mr. Wang Hongpeng, and Mr. Xiao Yong[187]. - The Company has appointed four Independent Non-executive Directors, ensuring compliance with GEM Listing Rules, with Mr. Lam Yiu Kin possessing relevant financial management expertise[183]. - All Directors participated in continuous professional development during the period from January 1, 2021, to December 31, 2021, focusing on the latest developments in GEM Listing Rules and regulatory requirements[172]. - Appropriate insurance coverage is in place to protect Directors and officers from risks associated with the Group's business operations[175]. - The Audit Committee was established in July 2003 with specific written terms of reference outlining its authorities and duties[187]. - The Company ensures that all Directors receive complete and reliable information in a timely manner to facilitate informed decision-making[177]. - The Non-executive Directors provide expertise and experience, serving as checks and balances to safeguard the interests of the Group and its shareholders[182]. - The division of responsibilities between the Chairman and the Managing Director is clearly established and documented[176]. - The Company considers all Independent Non-executive Directors to be independent for the year ended December 31, 2021, based on annual confirmations received[183]. - The Audit Committee held four meetings in 2021, with all members attending all meetings[192]. - The Audit Committee reviewed the Group's internal control system and risk management[192]. - The Nomination Committee recommended the appointment of new Directors and the change of Chairman of the Board for the year ended 31 December 2021[200]. - The Nomination Committee assessed the independence of Independent Non-executive Directors[200]. - The Nomination Committee reviewed the structure of the Board considering the Board Diversity Policy[200]. - The Audit Committee had no disagreement with the Board regarding the external auditor's selection or dismissal for the year ended 31 December 2021[194]. - The Audit Committee reviewed the final results of the Group for the year ended 31 December 2020[192]. - The Audit Committee reviewed the quarterly results of the Group for the three months ended 31 March 2021[192]. - The Audit Committee reviewed the interim results of the Group for the six months ended 30 June 2021[192]. - The Audit Committee reviewed the quarterly results of the Group for the nine months ended 30 September 2021[192].
环球数码创意(08271) - 2021 - 年度财报