Box Office Performance - In 2023, the total box office revenue for mainland China's cinema reached RMB 54.915 billion, representing an 83.4% year-on-year increase[9]. - Domestic films accounted for RMB 46.005 billion, making up 83.77% of the total box office revenue[9]. - The Chinese box office reached $7.571 billion in 2023, ranking second globally, with a 70% increase in box office compared to the previous three years[21]. - The strong recovery of the cinema market is expected to return to a positive cycle, supported by high-quality films and increased audience demand[9]. Online Film Market - The number of films that grossed over RMB 10 million in the online film market decreased to 34, down by 17 from 2022 and 31 from 2021[7]. - The overall user engagement in online content has decreased compared to the previous two years due to the recovery of offline entertainment demand[7]. - The online film market is experiencing a downturn, with a slowdown in user growth and a decline in the number of films released and viewed, prompting the group to adopt a cost-effective investment approach[24]. - In 2023, the company released three network films, with box office revenue lower than expected due to platform rule adjustments[12]. Investment Strategies - The group plans to focus on the release and marketing of existing inventory films to stabilize box office revenue and maintain competitive advantage[8]. - The group maintains a cautious investment strategy in the online film sector while adapting to market changes and focusing on operational efficiency[8]. - The company plans to adjust its investment strategy in theatrical films, focusing on valuable investment targets in the comedy genre to enhance revenue stability and return rates[21]. - In 2024, the company will adopt a cost-effective investment approach in the network film market, focusing on quality over quantity amid a competitive landscape[21]. New Media and Technology - The new media business is leveraging blockchain and AI technologies to create innovative publishing experiences for creators, enhancing user engagement and rights protection[18]. - The launch of the music PASS card, integrating NFC and NFT concepts, has provided musicians with new monetization opportunities and received positive market feedback[19]. - The company is actively pursuing overseas and new media pre-sales for historical projects to increase revenue, enhancing capital recovery rates through multiple rounds of distribution[12]. - The group is preparing to launch an album PASS card in collaboration with well-known musicians, aiming to attract fan engagement and introduce new revenue models[29]. Financial Performance - The group's revenue for the year ended December 31, 2023, was approximately HKD 28,915,000, a 174.52% increase from HKD 10,533,000 in 2022, primarily driven by growth in film, television, and online content businesses[31]. - The loss attributable to equity holders of the parent company for the year was approximately HKD 42,222,000, an improvement from a loss of HKD 94,607,000 in 2022[32]. - Revenue from the film, television, and online content segment was approximately HKD 28,196,000, significantly up from HKD 4,874,000 in 2022, mainly due to licensing and film distribution income[33]. - The net loss for the year was HKD 42,846,000, improved from a net loss of HKD 102,693,000 in the previous year, indicating a reduction of 58.3%[200]. Corporate Governance - The company emphasizes that human resources are its most important asset for sustainable development, providing competitive compensation and a good working environment[66]. - The management team includes experienced professionals with over 25 years in auditing, accounting, and finance, enhancing the company's governance and strategic direction[70][73]. - The company has established long-term relationships with existing and potential customers and suppliers, with no unresolved disputes reported during the year[66]. - The company has a diverse board of directors with expertise in law, finance, and corporate governance, contributing to effective oversight[71][75]. Risk Management and Internal Controls - The company has established a risk management and internal control system to manage risks rather than eliminate them, ensuring effective business operations[127]. - The internal audit function was established to evaluate risk management and internal control effectiveness, with a three-year audit plan based on risk assessments[129]. - The audit committee has reviewed the financial reporting and compliance procedures, confirming no significant uncertainties affecting the company's ability to continue as a going concern[120]. - The company has no significant uncertainties that could impact its ability to continue as a going concern[120]. Shareholder Engagement - The company encourages all shareholders to attend the annual general meeting or appoint representatives to vote on their behalf[107]. - The company provides comprehensive and formal guidance to newly appointed directors to ensure they are familiar with their roles and responsibilities[108]. - All directors are required to participate in ongoing professional development to enhance their knowledge and skills related to their contributions to the board[109]. - The company has established committees for audit, remuneration, and nominations to enhance governance[91].
拉近网娱(08172) - 2023 - 年度财报