阅文集团(00772) - 2022 - 年度业绩

Financial Performance Summary The company's revenue and profits declined in 2022, though non-IFRS profit attributable to equity holders showed growth Key Financial Indicators | Indicator | 2022 (RMB in thousands) | 2021 (RMB in thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 7,625,622 | 8,668,244 | (12.0) | | Gross Profit | 4,030,103 | 4,599,443 | (12.4) | | Operating Profit | 628,834 | 2,172,640 | (71.1) | | Profit Before Income Tax | 773,820 | 2,303,068 | (66.4) | | Profit for the Year | 607,628 | 1,842,927 | (67.0) | | Profit Attributable to Equity Holders of the Company | 608,186 | 1,846,609 | (67.1) | | Non-IFRS Profit Attributable to Equity Holders of the Company | 1,348,216 | 1,229,721 | 9.6 | Business Review and Outlook Overview The company enhanced operational efficiency by focusing on a premium IP-centric content strategy amid market shifts Non-IFRS Profitability | Indicator | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Non-IFRS Profit Attributable to Equity Holders of the Company | RMB 1,348.2 million | RMB 1,229.7 million | +9.6% | | Corresponding Profit Margin | 17.7% | 14.2% | +3.5pp | - The company's strategy aligned with market trends, shifting from volume to quality and strengthening its core competitiveness in the IP industry[3] Business Highlights The company achieved significant progress in IP creation, visualization, and merchandising, driven by hit content and strategic initiatives IP Creation Operational efficiency and core product growth were significantly boosted by focusing on premium content and effective anti-piracy measures - Effective anti-piracy measures were a key driver of premium content subscription revenue, with 40% of new users on the Qidian App converting from pirated sources within 30 days of system implementation[4] - The premium paid product, Qidian App, saw its MAU in December 2022 increase by 80% YoY, with full-year revenue growing by over 30%[5] Platform Growth Metrics (2022) | Indicator | Quantity | | :--- | :--- | | New Writers | Approx 540,000 | | New Novels | 950,000 | | New Words Added | Over 39 billion | | YoY Growth in Works with >3,000 Average Subscriptions | Over 50% | IP Visualization The company produced numerous hit film, TV, animation, and comics adaptations, demonstrating strong IP visualization capabilities - The TV series A Lifelong Journey set a nearly 8-year viewership record, while New Life Begins broke records on iQIYI for reaching a heat index of 10,000 the fastest[6] - In animation, 7 of the top 10 new domestic animations on Tencent Video's 2022 popularity chart were adapted from the company's IPs[7] - The 3-year, 300-IP comics adaptation plan with Tencent Animation & Comics is ahead of schedule, with over 230 titles launched by the end of 2022[7] IP Merchandising and Monetization The company made key advancements in IP merchandising and gaming by building a derivatives system and adopting a dual-strategy approach - The company achieved initial success in merchandising, with several statues for Battle Through the Heavens generating a cumulative GMV exceeding RMB 20 million in 2022[8] - A "two-pronged" strategy was adopted for gaming: collaborating with top-tier developers for IP adaptation while strengthening in-house game development and operational capabilities[8] Overseas Business The company's international presence grew as its online literature gained recognition from prestigious institutions like the British Library - 16 of the company's works were included in the British Library's Chinese collection, marking the first time Chinese online literature has been added to its catalogue[9] WebNovel Platform Content (as of 2022.12.31) | Content Type | Quantity | | :--- | :--- | | Translated Chinese Works | Approx 2,900 | | Local Original Works | Approx 500,000 | Future Outlook The company will continue its long-term strategy of promoting the full-chain development of high-quality intellectual property - The company will adhere to a long-term strategy focused on fostering the enduring success of high-quality IP through full-chain development[10] Management Discussion and Analysis Financial Performance Overview Revenue declined due to online business contraction, but successful cost controls led to improved non-IFRS operating profitability Financial Highlights | Financial Indicator | 2022 (RMB in millions) | 2021 (RMB in millions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 7,625.6 | 8,668.2 | -12.0% | | Gross Profit | 4,030.1 | 4,599.4 | -12.4% | | Gross Profit Margin | 52.8% | 53.1% | -0.3pp | | Operating Profit | 628.8 | 2,172.6 | -71.1% | | Non-IFRS Operating Profit | 1,363.9 | 1,299.8 | +4.9% | | Non-IFRS Operating Profit Margin | 17.9% | 15.0% | +2.9pp | - Selling and marketing expenses decreased by 25.9% YoY to RMB 2.00 billion, driven by cost reduction and efficiency enhancement measures in the online business[21] - The sharp decline in operating profit was primarily due to non-IFRS adjustments, including a one-off gain of RMB 1.08 billion from an asset disposal in 2021 and fair value losses on certain investments in 2022[22] Segment Information Online business revenue fell due to reduced marketing, while copyright operations remained relatively stable Revenue by Business Segment | Business Segment | 2022 Revenue (RMB in millions) | 2021 Revenue (RMB in millions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Online Business | 4,364.0 | 5,308.5 | -17.8% | | Copyright Operation and Others | 3,261.6 | 3,359.8 | -2.9% | | Total Revenue | 7,625.6 | 8,668.2 | -12.0% | Gross Profit Margin by Business Segment | Business Segment | 2022 Gross Profit Margin | 2021 Gross Profit Margin | | :--- | :--- | :--- | | Online Business | 49.2% | 49.3% | | Copyright Operation and Others | 57.7% | 59.0% | Key Operating Data | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Average Monthly Active Users (MAU) | 243.9 million | 248.6 million | -1.9% | | Average Monthly Paying Users (MPU) | 7.9 million | 8.7 million | -9.2% | | Average Revenue Per Paying User (ARPPU) | RMB 37.8 | RMB 39.7 | -4.8% | Other Financial Information (EBITDA) Adjusted EBITDA and its margin improved in 2022, reflecting enhanced core profitability despite a slight dip in reported EBITDA EBITDA Performance | Indicator | 2022 (RMB in thousands) | 2021 (RMB in thousands) | | :--- | :--- | :--- | | EBITDA | 1,052,762 | 1,094,005 | | Adjusted EBITDA | 1,350,632 | 1,335,815 | | Adjusted EBITDA Margin | 17.7% | 15.4% | EBITDA Reconciliation | Reconciliation Item (RMB in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Operating Profit | 628,834 | 2,172,640 | | Add: Depreciation and amortization | 377,744 | 494,801 | | Less: Interest income | (160,893) | (125,353) | | Add/Less: Other net (losses)/gains | 207,077 | (1,448,083) | | EBITDA | 1,052,762 | 1,094,005 | | Add: Share-based compensation | 241,344 | 188,138 | | Add: Expenses related to acquisitions | 56,526 | 53,672 | | Adjusted EBITDA | 1,350,632 | 1,335,815 | Non-IFRS Financial Measures Non-IFRS profit attributable to equity holders grew 9.6% in 2022, reflecting stronger core performance after adjustments Non-IFRS Reconciliation (2022) | Item | Amount (RMB in thousands) | | :--- | :--- | | Reported Profit Attributable to Equity Holders of the Company | 608,186 | | Total Adjustments | 740,030 | | Of which: Share-based compensation | 241,344 | | Of which: Net loss from investments and acquisitions | 469,380 | | Non-IFRS Profit Attributable to Equity Holders of the Company | 1,348,216 | Non-IFRS Reconciliation (2021) | Item | Amount (RMB in thousands) | | :--- | :--- | | Reported Profit Attributable to Equity Holders of the Company | 1,846,609 | | Total Adjustments | (616,888) | | Of which: Share-based compensation | 188,138 | | Of which: Net gain from investments and acquisitions | (1,098,607) | | Non-IFRS Profit Attributable to Equity Holders of the Company | 1,229,721 | Capital Structure, Liquidity and Financial Resources The Group maintained a robust financial position with improved gearing, increased net cash, and strong free cash flow Financial Position Indicators | Indicator | Year-end 2022 | Year-end 2021 | | :--- | :--- | :--- | | Gearing Ratio | 21.0% | 26.2% | | Leverage Ratio | 2.3% | 6.8% | | Net Cash | RMB 7.09 billion | RMB 6.03 billion | | Free Cash Flow (Full Year) | RMB 1.18 billion | N/A | - The increase in net cash was primarily driven by cash generated from operating activities, partially offset by capital expenditures, investment activities, share repurchases, and earn-out consideration payments for New Classics Media[34] Capital Expenditure and Long-term Investments Capital expenditure and long-term investments decreased significantly in 2022 due to reduced investment spending Expenditure Breakdown | Item | 2022 (RMB in millions) | 2021 (RMB in millions) | | :--- | :--- | :--- | | Total Capital Expenditure and Long-term Investments | 575.5 | 1,400.2 | Employees The Group maintained a stable workforce of approximately 1,800 employees, primarily based in China - As of year-end 2022, the company had approximately 1,800 full-time employees, located mainly in Chinese cities such as Shanghai, Beijing, and Suzhou[38] Acquisition of New Classics Media and Issuance of Consideration Shares under Special Mandate NCM's Performance and Earn-out Consideration Payment New Classics Media exceeded its 2022 profit target, triggering the payment of earn-out consideration in cash and shares New Classics Media 2022 Performance | Item | Amount (RMB in millions) | | :--- | :--- | | Revenue | 1,623.3 | | Profit Attributable to Equity Holders of the Company | 537.7 | - New Classics Media's actual net profit for 2022 was RMB 512 million, surpassing the highest reference net profit target of RMB 500 million and triggering the earn-out payment clause[41] Earn-out Consideration Payment Details | Item | | | :--- | :--- | | Consideration Shares to be Issued | 3,021,371 shares | | Cash Consideration to be Paid | RMB 204 million | Financial Information Consolidated Statement of Comprehensive Income Revenue and gross profit declined in 2022, with operating profit falling sharply due to a reversal from other net gains to losses Key Income Statement Items | Item (RMB in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Revenue | 7,625,622 | 8,668,244 | | Gross Profit | 4,030,103 | 4,599,443 | | Operating Profit | 628,834 | 2,172,640 | | Profit for the Year | 607,628 | 1,842,927 | | Profit Attributable to Equity Holders of the Company | 608,186 | 1,846,609 | | Basic Earnings Per Share (RMB) | 0.60 | 1.83 | Consolidated Statement of Financial Position The company's balance sheet remained strong with decreased liabilities and increased total equity at the end of 2022 Key Balance Sheet Items | Item (RMB in thousands) | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | 22,734,478 | 23,297,314 | | Total Liabilities | 4,779,756 | 6,110,343 | | Total Equity | 17,954,722 | 17,186,971 | | Non-current Assets | 10,258,566 | 10,567,004 | | Current Assets | 12,475,912 | 12,730,310 | | Non-current Liabilities | 796,000 | 1,598,833 | | Current Liabilities | 3,983,756 | 4,511,510 | Consolidated Statement of Cash Flows Net cash from operating activities increased significantly, contributing to a higher year-end cash balance despite financing outflows Key Cash Flow Items | Item (RMB in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1,576,787 | 1,118,468 | | Net Cash Flow from Investing Activities | 528,102 | 936,225 | | Net Cash Flow used in Financing Activities | (1,145,364) | (349,987) | | Net Increase in Cash and Cash Equivalents | 959,525 | 1,704,706 | | Cash and Cash Equivalents at Year End | 5,545,766 | 4,528,412 | Other Information Dividend The Board did not recommend a final dividend for the fiscal year ended December 31, 2022 - The company's Board of Directors did not recommend the payment of a final dividend for fiscal year 2022, consistent with 2021[112] Purchase, Sale or Redemption of Listed Securities The company executed a share buyback program during fiscal year 2022, repurchasing and cancelling over 10 million shares Share Repurchase Summary (FY2022) | Item | | | :--- | :--- | | Number of Shares Repurchased | 10,681,200 shares | | Total Consideration (before expenses) | HK$232,985,758 | | Purpose | To enhance long-term shareholder value | Corporate Governance and Compliance The company maintained full compliance with the Corporate Governance Code and relevant securities trading regulations during the year - The company complied with all applicable code provisions of the Corporate Governance Code during the reporting period[116] - The company's directors adhered to the standard code for securities transactions throughout the reporting period[117] Annual General Meeting and Closure of Register of Members The Annual General Meeting is scheduled for May 22, 2023, with a corresponding period for the closure of the register of members - The Annual General Meeting is scheduled to be held on Monday, May 22, 2023[118]