Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 1,626,139 thousand, a decrease of 34.5% compared to RMB 2,479,823 thousand for the same period in 2022[1] - Gross profit for the same period was RMB 453,648 thousand, down 29.5% from RMB 642,664 thousand in 2022[1] - The company reported a net loss of RMB 688,672 thousand for the six months ended June 30, 2023, compared to a profit of RMB 203,267 thousand in the same period of 2022[1] - Basic and diluted loss per share for the period was RMB (0.69), compared to earnings of RMB 0.21 per share in 2022[1] - Adjusted net profit, measured on a non-IFRS basis, was approximately RMB 56.3 million, a decline of about 74.9% from approximately RMB 224.3 million in the previous year[44] - The company incurred a pre-tax loss of RMB 678.5 million for the six months ended June 30, 2023, compared to a pre-tax profit of RMB 243.4 million for the same period in 2022[32] - Total comprehensive loss for the period amounted to RMB 764,651,000, a significant increase from RMB 203,549,000 in the previous year[46] - The group reported an operating loss of approximately RMB 677.4 million, compared to an operating profit of about RMB 244.8 million in the same period last year[166] Expenses and Costs - Research and development expenses increased to RMB 143,772 thousand from RMB 114,914 thousand, reflecting a rise of 25.2% year-over-year[1] - The company’s financial costs increased to RMB 8.9 million for the six months ended June 30, 2023, compared to RMB 1.3 million in the previous year[32] - The company’s employee costs, excluding sales and marketing expenses, were RMB 139.2 million for the six months ended June 30, 2023[37] - The company’s share-based payment expenses amounted to RMB 681.8 million for the six months ended June 30, 2023, compared to RMB 18.4 million in the previous year[32] - General and administrative expenses increased by 158.6% from approximately RMB 55.6 million in the same period last year to approximately RMB 143.8 million, primarily due to an increase in share-based compensation expenses[189] - Sales and marketing expenses decreased by 16.0% from approximately RMB 261.1 million to about RMB 219.2 million, primarily due to reduced marketing and promotion costs[188] Assets and Liabilities - The company's total assets decreased to RMB 2,162,490,000 from RMB 2,869,617,000 as of December 31, 2022[47] - The net asset value of the company was RMB 2,116,852,000, down from RMB 2,818,350,000 at the end of 2022[47] - The company's total assets as of June 30, 2023, were RMB 345,764 thousand, compared to RMB 291,104 thousand as of December 31, 2022, reflecting a growth of approximately 18.7%[140] - Total liabilities as of June 30, 2023, were approximately RMB 450.1 million, a decrease from approximately RMB 565.3 million as of December 31, 2022[197] - The company's liabilities, including accrued expenses and other payables, are expected to be settled within one year, with total accrued expenses amounting to RMB 12,974 thousand as of June 30, 2023[144] Revenue Sources - Revenue from social networking services reached RMB 1,486,440,000, a substantial increase from RMB 81,307,000 in the same period last year[54] - Revenue from overseas customers was RMB 1,499,078,000, compared to RMB 81,454,000 in the previous year, indicating a strong growth in international markets[58] - Revenue from overseas social networking services increased by 55.1% year-on-year, reaching approximately RMB 126.1 million, driven by the company's market expansion efforts[158] - The group's revenue from live streaming and audio social networks decreased by 38.0% from approximately RMB 2.4 billion to about RMB 1.5 billion due to a challenging external environment and a more cautious business strategy implemented throughout the year[185] - Other service revenue, including advertising services and website technology services, amounted to approximately RMB 13.6 million, compared to about RMB 0.3 million in the same period last year[186] Impairments and Goodwill - The company incurred goodwill impairment losses of RMB 116,111 thousand during the reporting period[1] - The group has recognized an impairment loss of approximately RMB 681,763,000 for the cash-generating unit of Six Rooms as of June 30, 2023, due to a recoverable amount lower than its carrying value[99] - The goodwill arising from the acquisition of the HOLLA Group is approximately RMB 17,394,000[97] - The company has recognized a goodwill impairment for the Holla Group as of December 31, 2022, due to significant market changes and uncertainties regarding profitability[72] Future Outlook and Strategy - The company plans to continue expanding its online social entertainment and networking services in both domestic and international markets[49] - The company aims to drive innovation in the AI sector as a new growth curve[128] - The group is focusing on solidifying its core live entertainment business and embracing new market changes[126] - The group is enhancing content and operational management in overseas markets to meet diverse user preferences[124] - The group is exploring traditional business model innovations while applying technologies like AI and virtual avatars in content creation and operational efficiency[123] - The annual revenue growth rate forecast for the next five years is projected to decline between 44% to 6%, with a terminal growth rate of 3% and a discount rate of 13.3%[75] - The group expects a future annual revenue growth rate of 8% to 21% over the next five years, with a terminal growth rate of 3%[101] Taxation - The company recognized income tax expenses of RMB 9,571 thousand for the six months ended June 30, 2023, compared to RMB 15,760 thousand in 2022[11] - As of June 30, 2023, the company has not recognized any significant tax liabilities in the United States due to the absence of taxable profits[63] - The group has not recognized any Hong Kong profits tax for the six months ended June 30, 2023, as there were no taxable profits[90] - The income tax expense decreased by 74.6% from approximately RMB 40.2 million to about RMB 10.2 million[168] Shareholder Information - The weighted average number of ordinary shares for the six months ended June 30, 2023, was 1,044,345 thousand, an increase from 954,000 thousand in 2022[12] - The company did not declare or recommend any interim dividend for the six months ended June 30, 2023[64] - The group has not issued any potential ordinary shares during the reporting period, resulting in diluted earnings per share being the same as basic earnings per share[94]
花房集团(03611) - 2023 - 中期业绩