H&R(SZ:000892)2021-06-21 16:00Business Focus and Strategy - The company reported a significant change in its main business focus, shifting to film production, distribution, artist management, and related entertainment services since December 6, 2016[14]. - The company aims to strengthen its main business and deepen its strategic layout in the cultural industry, focusing on high-quality productions that align with socialist values[24]. - The company has established a comprehensive business layout in TV drama investment, production, and distribution, as well as artist management, creating synergistic effects among its various business segments[24]. - The company is committed to building a healthy ecosystem in the film and television industry while promoting the dissemination of positive cultural products[24]. - The company plans to focus on high-quality content production and explore diversified business models to enhance its competitive advantage in the cultural entertainment sector[85]. - The company aims to deepen its artist management capabilities and develop a standardized, professional artist agency business[85]. - The company is committed to producing high-quality films and series that align with mainstream values in the new era[85]. Financial Performance - The company's operating revenue for 2020 was ¥184,935,603.34, a decrease of 65.76% compared to ¥540,047,298.34 in 2019[16]. - The net profit attributable to shareholders for 2020 was a loss of ¥784,855,283.01, representing an increase in loss of 42.40% from a loss of ¥551,157,816.39 in 2019[16]. - The total assets at the end of 2020 were ¥2,645,212,770.21, down 25.48% from ¥3,549,759,961.22 at the end of 2019[16]. - The net assets attributable to shareholders decreased by 29.57% to ¥1,868,972,592.25 from ¥2,653,827,875.26 in 2019[16]. - The basic and diluted earnings per share for 2020 were both -¥0.80, reflecting an increase in loss of 42.86% from -¥0.56 in 2019[16]. - The company reported a total of ¥14,926,054.97 in restricted cash due to legal disputes, impacting liquidity[65]. - The company reported a net profit attributable to shareholders of -784.86 million yuan for the year 2020, with a cumulative distributable profit of -274.90 million yuan as of December 31, 2020[97]. Cash Flow and Investments - The net cash flow from operating activities improved significantly to ¥276,500,167.82, an increase of 2,811.77% compared to a negative cash flow of ¥10,196,281.77 in 2019[16]. - The company's cash and cash equivalents increased by 86.48% compared to the beginning of 2020, primarily due to reduced production and investment expenditures in film and television projects, as well as the recovery of accounts receivable[25]. - The total cash inflow from investment activities decreased by 61.41% to CNY 388,606,264.61 in 2020, down from CNY 1,007,040,410.00 in 2019[58]. - The company has utilized a total of 50,000 million of idle raised funds for purchasing bank principal-protected financial products, which have all matured and been redeemed[74]. Shareholder Structure and Governance - The company’s major shareholder structure changed on June 18, 2020, with the control remaining with a single major shareholder despite changes in actual control[14]. - The company has made commitments regarding the independence of its operations, ensuring that its management and financial systems are separate from those of controlling shareholders[103]. - The company has acknowledged discrepancies between actual profits and performance commitments for the years 2016 to 2018, and is taking measures to address uncertainties[103]. - The company has established a commitment to maintain independent financial operations, including separate bank accounts and independent tax obligations[103]. - The company has confirmed that there are currently no competing business operations between it and its controlled enterprises[107]. - The company has a history of normal compliance with its commitments regarding related party transactions and operational independence[107]. Risks and Challenges - The company emphasizes the importance of risk awareness regarding forward-looking statements made in the annual report[4]. - The company faces risks from high competition in the TV drama industry, with an oversupply situation leading to increased market rivalry[89]. - The company is addressing the challenge of large accounts receivable, which can fluctuate significantly due to the timing of payments from clients after the airing of dramas[91]. - The company is currently involved in multiple lawsuits, including a case with a total claim amount of 24.52 million yuan related to alleged false statements[91]. Audit and Compliance - The company’s financial report was audited by Zhongtianyun Accounting Firm, which issued a non-standard opinion[4]. - The audit report issued by Zhongtianyun CPA included a qualified opinion due to uncertainties regarding the recoverability of accounts receivable related to "Tianxia Chang'an"[112]. - The company reported no major internal control deficiencies during the reporting period, with zero significant or important deficiencies identified in both financial and non-financial reports[200]. Social Responsibility and Community Engagement - The company engaged in social responsibility initiatives, including a charity auction that raised over ¥170,000 for children's welfare projects[36]. - The company actively participated in social responsibility initiatives, donating agricultural machinery valued at 503,900 RMB[145]. Employee and Management Structure - The company employed a total of 125 staff members, with 70 in production, 34 in technical roles, and 6 in sales[182]. - The company has established a performance-based remuneration system for its employees, ensuring competitive compensation[184]. - The total remuneration for directors, supervisors, and senior management in 2020 amounted to 7.35 million CNY[181]. - The company emphasizes employee training and development, particularly after significant asset restructuring[185].