TVZone(SH:603721)2019-04-26 16:00Financial Performance - The company's operating revenue for 2018 was RMB 313.38 million, a decrease of 20.16% compared to RMB 392.49 million in 2017[22]. - The net profit attributable to shareholders was RMB 27.38 million, down 57.04% from RMB 63.75 million in the previous year[22]. - The net profit after deducting non-recurring gains and losses was RMB 16.42 million, a decline of 65.24% from RMB 47.26 million in 2017[22]. - The cash flow from operating activities showed a negative net amount of RMB 45.85 million, a significant decrease from RMB 72.69 million in 2017[22]. - The total assets at the end of 2018 were RMB 621.41 million, down 4.82% from RMB 652.85 million at the end of 2017[22]. - The net assets attributable to shareholders were RMB 537.37 million, a slight decrease of 0.48% from RMB 539.98 million in 2017[22]. - The basic earnings per share for 2018 was RMB 0.27, a decrease of 64.47% compared to RMB 0.76 in 2017[23]. - The diluted earnings per share also stood at RMB 0.27, reflecting the same percentage decrease as the basic earnings[23]. - The weighted average return on net assets was 5.11%, down 10.34 percentage points from 15.45% in 2017[23]. - The company achieved operating revenue of 313.38 million RMB, a decrease of 20.16% year-on-year[64]. - Net profit attributable to the parent company was 27.38 million RMB, down 57.04% compared to the previous year[64]. - The company’s total assets at the end of 2018 were 621.41 million RMB, a decrease of 4.82% year-on-year[64]. - The gross profit margin for the media segment was 25.27%, a decrease of 4.60 percentage points year-on-year[69]. - The weighted average return on equity was 5.11%, down 10.34 percentage points year-on-year[64]. Cash Flow and Investments - The cash flow from financing activities was -31.50 million RMB, a decrease of 121.81% compared to the previous year[76]. - Cash and cash equivalents decreased by 30.79% to CNY 191.71 million, accounting for 30.85% of total assets[78]. - The company plans to utilize up to RMB 250 million of its idle funds for low-risk bank wealth management products in 2018[150]. - The company has engaged in various wealth management products with expected annualized returns ranging from 1.83% to 4.7%[153]. - The company is investing in new technology development, allocating 100 million yuan towards R&D initiatives[191]. - The company is considering strategic acquisitions to enhance its service offerings, with a budget of 300 million yuan for potential deals[191]. Market and Industry Trends - The average daily viewing time for television audiences decreased by 12 minutes to 132 minutes in the first half of 2018, marking an 8.33% year-on-year decline[37]. - National television advertising revenue (excluding internet television) was 96.834 billion RMB in 2017, down 3.64% year-on-year, continuing a four-year trend of negative growth[38]. - By the end of 2018, the number of online video users in China reached 612 million, an increase of 33.09 million from the end of 2017[45]. - The overall payment ratio of online video users rose to 53.1% by the third quarter of 2018, a year-on-year increase of 23.8%[45]. - The market size of China's copyright online video industry reached 725.9 billion RMB in 2017, with expectations to approach 1 trillion RMB in 2018[45]. - The number of companies in the video program production industry has increased significantly, leading to intensified market competition[34]. - The decline in television viewership has negatively impacted the purchasing power of downstream television stations, affecting upstream video production companies[41]. - The competition in the drama industry is intense, with a significant head effect and a growing number of production companies due to relaxed licensing regulations[91]. - The trend of exclusive broadcasting is leading to a focus on quality production in the drama industry, shifting from quantity competition to quality competition[91]. Content Production and Strategy - The company produced over 20 daily and weekly programs, as well as more than 40 seasonal programs, showcasing its strong content creation capabilities[30]. - The company is actively expanding into the short video sector with its "Thousand Account Plan," collaborating with various short video platforms[31]. - The company is focusing on investing in film and television projects, leveraging its experience in audience market analysis[32]. - The company has established a distribution channel covering 604 ground channels, enhancing the sales potential of its video programs[32]. - The company aims to enhance its brand influence and expand program impact through seasonal programs with low investment and high production value[93]. - The company plans to strengthen cooperation with major domestic television platforms and plans to launch four large-scale variety shows in 2019[96]. - The company is focusing on the short video market, planning to create over 50 quality accounts and transform them into expert-level KOLs[99]. - The company will continue to develop its drama production capabilities, with several projects expected to air in 2019, including "Over the Hill" and "Cheers, Girls!"[98]. Shareholder and Governance - The company proposed a cash dividend of RMB 1.3 per 10 shares, totaling RMB 13 million, along with a capital reserve conversion of 3 shares for every 10 shares held[5]. - The cash dividend policy mandates that at least 10% of the distributable profit must be distributed as cash dividends, with higher percentages for mature companies without major capital expenditures[109]. - In 2018, the company distributed a cash dividend of 1.30 RMB per 10 shares, totaling 13 million RMB, representing 47.47% of the net profit attributable to ordinary shareholders[111]. - The company aims to maintain a stable profit distribution policy, considering industry characteristics and operational conditions[110]. - The company reported a commitment to profit distribution as outlined in the "Shareholder Dividend Return Plan" approved by the shareholders' meeting[120]. Legal and Compliance Issues - The company is facing a significant lawsuit involving a claim of approximately 2 million RMB related to a contract dispute with Hunan Education Television Station, with ongoing legal proceedings[140]. - The company has successfully executed a total of RMB 3,080,000 from Xinjiang Television as of April 20, 2019[142]. - The company is currently in litigation with Shanghai Yalun Cultural Communication Co., Ltd. for a total claim of RMB 3,229,565, including penalties and late fees[144]. - The company has terminated cooperation agreements with several partners due to unpaid production fees, leading to ongoing litigation[142]. Employee and Management - The total number of employees in the parent company and major subsidiaries is 479, with 476 in the parent company[198]. - The employee composition includes 266 production personnel, 73 sales personnel, 84 technical personnel, 12 financial personnel, 34 administrative personnel, and 7 management personnel[198]. - The salary policy includes basic salary, monthly performance, year-end performance assessment salary, and company benefits, ensuring compliance with national laws and regulations[199]. - The training plan is applicable, indicating a commitment to employee development[200]. Future Outlook - The company provided a positive outlook for the next quarter, projecting a revenue growth of 10% to 12%[191]. - New product launches are expected to contribute an additional 200 million yuan in revenue over the next fiscal year[191]. - Market expansion plans include entering two new provinces, which are projected to increase market share by 5%[191]. - The company is actively seeking to innovate its product offerings to meet changing consumer demands[188].