Financial Performance - The company's revenue for the fiscal year 2024 was HKD 128,526 thousand, a decrease of 0.8% compared to HKD 129,542 thousand in 2023[10]. - The net loss attributable to equity holders for 2024 was HKD (46,404) thousand, compared to HKD (46,206) thousand in 2023[10]. - The adjusted net loss margin for 2024 was (31.5)%, slightly worse than (31.3)% in 2023[10]. - The total revenue for the character licensing business was HKD 60.07 million in the 2024 fiscal year, down from HKD 68.97 million in 2023[61]. - Revenue from character licensing decreased by approximately HKD 8.9 million or 12.9% to about HKD 60.1 million for the fiscal year 2024[64]. - The total loss for the year increased by approximately 5.6% from approximately HKD 46.7 million in FY2023 to approximately HKD 49.3 million in FY2024[83]. - Other income decreased by approximately 33.3% from HKD 15.6 million in fiscal year 2023 to HKD 10.4 million in fiscal year 2024[70]. - Operating loss increased by approximately 19.5% from HKD 43.7 million in fiscal year 2023 to HKD 52.2 million in fiscal year 2024[75]. - The company did not recommend any final dividend for the fiscal year 2024, compared to a final dividend of HKD 0.005 per share in 2023[153]. Revenue Streams - The revenue from the licensed entertainment segment decreased to HKD 3.7 million in 2024, down from HKD 6.7 million in 2023, representing a significant decline of 44.8%[16]. - The e-commerce and other businesses generated HKD 68.46 million in revenue for the 2024 fiscal year, up from HKD 60.58 million in 2023[61]. - Revenue from e-commerce and other businesses increased by approximately HKD 7.9 million or 13.0% to about HKD 68.5 million for the fiscal year 2024[64]. - Revenue from mainland China accounted for 94.5% of total revenue in fiscal year 2024, slightly down from 95.0% in fiscal year 2023[65]. Strategic Initiatives - The company emphasized a strategic transformation focusing on IP ecosystem development during 2024[15]. - The company aims to leverage its core IP value to drive future growth despite current financial challenges[15]. - The company aims to become an "IP full industry chain operation company," focusing on both horizontal and vertical growth strategies[18]. - The group plans to establish a diversified growth model by launching a new cultural tourism company focused on IP integration, aiming to capture domestic consumption upgrades and expand into Southeast Asia and North America markets[107]. - The company is focusing on international expansion, particularly in Southeast Asia, with initial success in the Thai market, aiming to enhance brand exposure and penetration through local partnerships and retail flagship stores[112]. Operational Metrics - The gross profit margin for the business segment improved from 34.8% in 2023 to 46.7% in 2024[11]. - The current ratio decreased from 2.8 in 2023 to 2.0 in 2024, indicating a decline in liquidity[11]. - The return on equity for 2024 was (25.6)%, worsening from (18.8)% in 2023[11]. - The total assets return rate for 2024 was (16.8)%, compared to (13.4)% in 2023[11]. - Cash and cash equivalents decreased from HKD 51.7 million on December 31, 2023, to HKD 23.0 million on December 31, 2024[84]. - Total borrowings increased from HKD 43.6 million on December 31, 2023, to HKD 45.9 million on December 31, 2024, with a weighted average effective interest rate of 4.42%[84]. - The debt-to-asset ratio increased from 17.5% on December 31, 2023, to 23.8% on December 31, 2024[91]. Employee and Management Insights - As of December 31, 2024, the group had a total of 180 employees, with employee costs approximately HKD 64.6 million for the fiscal year 2024, slightly up from HKD 64.5 million in fiscal year 2023[96]. - The group aims to balance innovation and operational efficiency by leveraging AI for design and market analysis, allowing for a reduction in the number of designers while maintaining high-quality output[96]. - The company is committed to enhancing employee engagement through competitive compensation packages and training programs, including stock option and reward plans[97]. - The management team includes experienced professionals with backgrounds in finance, marketing, and legal sectors, ensuring robust governance and strategic direction[126][128]. Corporate Governance and Compliance - The company has a strong commitment to corporate governance, with various committees in place to oversee financial and operational performance[126][128]. - The board includes independent directors who provide independent judgment and oversight, contributing to effective decision-making processes[126][128]. - The company has maintained compliance with relevant laws and regulations, with no significant violations reported as of December 31, 2024[167]. - The board of directors will consider operational, financial, and other relevant factors before recommending future dividends, indicating a flexible dividend policy[154]. Market and Industry Position - The group primarily engages in character licensing business, creating, designing, and licensing the B.Duck family characters across multiple channels, along with brand management and marketing[143]. - The group has seen significant growth in licensing operations, particularly in overseas markets, enhancing its brand presence[124]. - The group is actively involved in various industry associations and committees, enhancing its influence and networking within the sector[133]. - The majority of the group's revenue comes from the B.Duck family characters, and any significant adverse impact on these intellectual properties could severely affect the business[151].

Financial Performance - Total revenue for the fiscal year 2024 was HKD 128,526,000, a slight decrease of 0.8% from HKD 129,542,000 in 2023[3]. - The net loss for the fiscal year 2024 was HKD 49,340,000, compared to a net loss of HKD 46,691,000 in 2023, representing an increase in loss of 5.6%[5]. - Adjusted net loss margin for the fiscal year 2024 was (31.5)%, slightly worse than (31.3)% in 2023[3]. - The gross profit margin improved to 46.7% in 2024 from 34.8% in 2023, indicating better cost management[4]. - The company reported a basic and diluted loss per share of HKD 4.9 in 2024, compared to HKD 4.8 in 2023[6]. - The company reported a loss before tax of HKD 49,340,000 for the year ended December 31, 2024, compared to a loss of HKD 46,691,000 in 2023[19]. - The company reported a net loss attributable to shareholders of HKD 46,404,000 in 2024, slightly higher than the loss of HKD 46,206,000 in 2023[28]. - Operating loss increased by approximately 19.5% from about HKD 43.7 million in fiscal year 2023 to approximately HKD 52.2 million in fiscal year 2024[53]. Assets and Liabilities - The total assets decreased to HKD 293,050,000 in 2024 from HKD 348,271,000 in 2023, a decline of 15.9%[7]. - Cash and cash equivalents dropped significantly to HKD 22,985,000 in 2024 from HKD 51,723,000 in 2023, a decrease of 55.6%[7]. - The total liabilities as of December 31, 2024, amounted to HKD 100,135,000, a slight increase from HKD 99,292,000 in 2023[8]. - Non-current liabilities decreased significantly to HKD 10,370,000 from HKD 18,483,000, primarily due to a reduction in lease liabilities[8]. - The total equity attributable to the company's equity holders decreased to HKD 191,570,000 in 2024 from HKD 247,406,000 in 2023, a decline of 22.6%[7]. - The debt-to-asset ratio as of December 31, 2024, is 23.8%, compared to 17.5% on December 31, 2023[64]. Revenue Breakdown - Revenue from licensing services was HKD 43,602,000, down 23% from HKD 56,622,000 in 2023, while design consulting services revenue increased by 33% to HKD 16,468,000 from HKD 12,344,000[17]. - Sales of licensed brand products generated HKD 68,456,000, an increase of 13% compared to HKD 60,576,000 in 2023[17]. - Revenue from character licensing business fell by HKD 8,896,000 or 12.9% from HKD 68,966,000 in 2023 to HKD 60,070,000 in 2024[41][42]. - E-commerce and other business revenue increased by HKD 7,880,000 or 13.0% from HKD 60,576,000 in 2023 to HKD 68,456,000 in 2024[41][44]. - Revenue from mainland China accounted for HKD 121,460,000, a decrease from HKD 123,021,000 in 2023, while revenue from Hong Kong decreased to HKD 2,211,000 from HKD 2,420,000[20]. - Revenue from mainland China accounted for 94.5% of total revenue in 2024, slightly down from 95.0% in 2023[45]. Costs and Expenses - The company incurred a significant increase in promotional costs, rising to HKD 18,426,000 in 2024 from HKD 16,193,000 in 2023, an increase of 13.7%[5]. - Total other income decreased from HKD 15,558,000 in 2023 to HKD 10,412,000 in 2024, a decline of approximately 33.3%[21]. - Employee benefit expenses for the fiscal years 2023 and 2024 were approximately HKD 64.5 million and HKD 64.6 million, accounting for about 35.8% and 35.3% of total operating expenses respectively[48]. - Cost of goods sold for the fiscal years 2023 and 2024 was approximately HKD 39.5 million and HKD 36.5 million, representing about 21.9% and 19.9% of total operating expenses respectively[47]. Corporate Governance and Management - The company is committed to maintaining high standards of corporate governance, with ongoing reviews of compliance with governance codes[90]. - The board of directors includes Chairman and Executive Director Mr. Xu Xiaolin, Executive Directors Mr. Guo Zhenjie and Mr. Zhang Zhanyao, Non-Executive Director Mr. Liang Xingchao, and Independent Non-Executive Directors Ms. Liang Binghuan, Mr. Song Zhiqiang, and Professor Chen Jiayuan[97]. - The audit committee, composed of independent non-executive directors, reviewed the consolidated performance for the fiscal year ending December 31, 2024, ensuring compliance with applicable accounting standards[94]. Future Plans and Strategies - The company plans to continue expanding its e-commerce sales platforms in overseas markets, including Thailand, Indonesia, Vietnam, the Philippines, Malaysia, and Singapore[44]. - The company plans to enhance its IP commercialization ecosystem and aims to become a comprehensive IP operation platform, focusing on various growth points including cultural tourism and cross-border e-commerce[76]. - The company has initiated additional incentive measures to attract new licensees and expand into overseas markets such as Brazil, Russia, and South Africa[42]. - The company plans to launch 3-5 IP-themed games within the next two years, enhancing user engagement through co-creation mechanisms[78]. - The company targets a revenue scale exceeding 1 billion, driven by innovations in retail, cultural tourism, online gaming, and cross-border strategies[83]. Shareholder Information - The company has not proposed a final dividend for the year ending December 31, 2024[31]. - The company did not recommend any final dividend for the fiscal year 2024, compared to HKD 0.05 per share for the fiscal year 2023[92]. - A total of HKD 9,666,225 was spent to purchase 8,244,000 shares for the share incentive plan as of December 31, 2024[89].

Financial Performance - For the six months ended June 30, 2024, the company's revenue increased by 4.9% to HKD 59,915,000 compared to HKD 57,093,000 for the same period in 2023[2]. - The company reported a loss attributable to equity holders of HKD 16,961,000 for the first half of 2024, compared to a loss of HKD 15,782,000 in the same period of 2023[2]. - The adjusted net loss margin for the first half of 2024 was 22.7%, an improvement from 27.6% in the same period of 2023[2]. - The gross profit margin for the company's segments improved to 54.8% in 2024 from 45.6% in 2023[3]. - The return on equity for the first half of 2024 was -8.3%, compared to -5.8% in the same period of 2023[3]. - The total revenue for the group increased from HKD 57.1 million in the first half of 2023 to HKD 59.9 million in the first half of 2024, representing a growth of approximately 4.9%[14]. - The company reported a total comprehensive loss of HKD 20,012,000 for the six months ended June 30, 2024, compared to a loss of HKD 22,910,000 for the same period in 2023, representing a decrease of approximately 8.3%[69]. - Basic and diluted loss per share for the period was HKD 1.79, compared to HKD 1.64 in the previous year, indicating an increase in loss per share of about 9.1%[69]. Revenue Breakdown - Revenue from overseas markets grew by 440% year-on-year, with the number of overseas licensees increasing by 66.7%[7]. - Revenue from character licensing business decreased by approximately HKD 3.1 million or 10.4% from HKD 29.4 million in the first half of 2023 to HKD 26.3 million in the first half of 2024[11]. - Revenue from e-commerce and other businesses increased by approximately HKD 5.9 million or 21.3% from HKD 27.7 million in the first half of 2023 to HKD 33.6 million in the first half of 2024, driven by increased promotional efforts and expansion into Southeast Asia[12]. - Revenue from sales of licensed brand products increased to HKD 33,590,000 in 2024 from HKD 27,699,000 in 2023, marking an increase of approximately 21.0%[108]. - Revenue from licensing services was HKD 18,945,000 for the six months ended June 30, 2024, down from HKD 22,473,000 in 2023, a decrease of about 15.0%[108]. - Revenue from mainland China constituted 95.4% of total revenue in the first half of 2024, slightly down from 97.3% in the first half of 2023[15]. Operational Developments - The number of authorized merchants increased from 430 as of June 30, 2023, to 495 as of June 30, 2024[5]. - The company signed a memorandum of cooperation with Guizhou Tourism Industry Development Group to enhance the integration of cultural tourism[5]. - The company is focusing on expanding its offline cultural tourism business through strategic partnerships with leading brands in the industry[5]. - The company launched its first mini-program game and three licensed cooperative games, enhancing user engagement and economic benefits[6]. - The company is actively expanding its business in Southeast Asia and plans to extend into North America, South America, and South Africa[8]. - The company aims to become a leading comprehensive IP operation enterprise, signing strategic cooperation agreements with various entities in mainland China[8]. Cost Management - The design team size was reduced by 25.68%, leading to a decrease in salary costs by HKD 0.4 million, excluding pension costs and share-based payments[6]. - Cost of goods sold for the first six months of 2024 was approximately HKD 15.2 million, representing 18.3% of total operating expenses, compared to HKD 15.1 million and 19.1% in the same period of 2023[18]. - Employee benefit expenses increased to approximately HKD 31.7 million in the first six months of 2024, accounting for 38.1% of total operating expenses, up from HKD 27.8 million and 35.3% in 2023[18]. Cash Flow and Liquidity - Cash and cash equivalents and bank deposits decreased from approximately HKD 91.7 million as of December 31, 2023, to approximately HKD 75.6 million, mainly due to dividend payments, lease liabilities repayment, and property, plant, and equipment purchases[32]. - Net cash used in operating activities was HKD (340,000) for the six months ended June 30, 2024, compared to HKD (1,201,000) in the previous year, showing an improvement in cash flow[76]. - The company incurred a net cash outflow from investing activities of HKD (3,481,000), an improvement from HKD (7,564,000) in the prior year[76]. - The company maintained a net cash position as of June 30, 2024, with cash and cash equivalents of approximately HKD 35,605,000 and fixed deposits of HKD 40,000,000[104]. Shareholder Information - The board has decided not to declare any interim dividend for the six months ended June 30, 2024[44]. - The company declared a final dividend of HKD 0.005 per ordinary share, totaling HKD 4,904,965, which was fully paid on June 21, 2024[122]. - The company has a stock option plan approved by shareholders on December 20, 2021, with 100,000,000 options available for grant as of June 30, 2024[58]. - The shareholding structure indicates significant control by a few entities, with multiple layers of ownership among major shareholders[57]. Legal and Compliance - The company is involved in a legal case with a claim for damages amounting to RMB 55,000,000 (approximately HKD 60,262,000) related to unfair competition and trademark infringement[145]. - The company has made provisions of RMB 1,000,000 (approximately HKD 1,095,674) for potential damages and legal costs related to the aforementioned case as of June 30, 2024[145]. - The company has adopted the standard code for securities trading as per the listing rules, ensuring compliance among its directors[53]. - The audit committee has reviewed the interim financial information and confirmed compliance with applicable accounting standards and listing rules[66]. Future Outlook - The company aims to create a comprehensive IP ecosystem business entity exceeding 10 billion yuan in scale through innovative development and strategic deployment[51]. - The group plans to leverage the B.Duck IP to enhance commercial value by collaborating with various sectors of the Gui Travel Group, including hotels and tourism services, to create themed entertainment parks and travel products[45]. - The company aims to establish a revenue scale exceeding 1 billion yuan, focusing on digital cultural IP, new consumption, new media, ACGC animation, and gaming investments[51].

Revenue and Financial Performance - Revenue for the six months ended June 30, 2024, increased to HKD 59.915 million, up from HKD 57.093 million in the same period in 2023[1] - The company's total revenue for the six months ended June 30, 2024, was HKD 59.915 million, compared to HKD 57.093 million in the same period in 2023[26] - Revenue from sales of licensed brand products increased to HKD 33.590 million in 2024 from HKD 27.699 million in 2023[26] - Revenue from mainland China accounted for HKD 57.161 million in 2024, up from HKD 55.559 million in 2023[29] - Revenue from the role licensing business decreased by 10.4% to HKD 26.3 million in the first six months of 2024 compared to HKD 29.4 million in the same period in 2023, primarily due to reduced licensing fees and additional licensing fees from licensees[67] - Revenue from e-commerce and other businesses increased by 21.3% to HKD 33.6 million in the first six months of 2024 compared to HKD 27.7 million in the same period in 2023, driven by increased promotional efforts and expansion into other e-commerce platforms in China and Southeast Asia[67] - Revenue from B.Duck products, the company's main product category, decreased by 4.2% to HKD 22.5 million in the first six months of 2024 compared to HKD 23.5 million in the same period in 2023, accounting for 85.3% of total licensing revenue[68] - Revenue from the Chinese mainland accounted for 95.4% of total revenue in the first six months of 2024, compared to 97.3% in the same period in 2023, while revenue from Southeast Asia and Taiwan increased to 2.7% from 0.6%[69] - Revenue from the role licensing business by service type showed that design consulting service fees increased to 28.0% of total revenue in the first six months of 2024, up from 21.2% in the same period in 2023[70] Net Loss and Profitability - Net loss attributable to equity holders of the company for the six months ended June 30, 2024, was HKD 16.961 million, compared to HKD 15.782 million in 2023[1] - Adjusted net loss margin improved to -22.7% in 2024 from -27.6% in 2023[1] - Return on equity (ROE) worsened to -8.3% in 2024 from -5.8% in 2023[2] - The company recorded a net loss attributable to equity holders of HK$17.0 million in the first six months of 2024, compared to HK$15.8 million in the same period last year[84] - Adjusted net loss attributable to equity holders under non-HK financial reporting standards was HK$13.618 million, compared to HK$15.782 million in the same period last year[82] - Basic loss per share increased to 1.79 HKD cents in 2024 from 1.64 HKD cents in 2023, with a reported loss attributable to owners of 16,961 thousand HKD[40] Segment Performance - Segment gross margin increased to 54.8% in 2024 from 45.6% in 2023[2] - The role licensing segment reported a loss of HKD 12.858 million, while the e-commerce and other segment reported a loss of HKD 2.172 million for the six months ended June 30, 2024[28] - The total outstanding contract amount for the role licensing business decreased from HK$62.3 million at the end of 2023 to HK$48.1 million at the end of June 2024, with a significant reduction in merchandise licensing from HK$59.1 million to HK$45.2 million[71] Assets and Liabilities - Total assets decreased to HKD 314.798 million as of June 30, 2024, from HKD 348.271 million as of December 31, 2023[5] - Cash and cash equivalents decreased to HKD 35.605 million as of June 30, 2024, from HKD 51.723 million as of December 31, 2023[5] - Inventory decreased to HKD 13.405 million as of June 30, 2024, from HKD 18.535 million as of December 31, 2023[5] - Trade receivables decreased to HKD 39.644 million as of June 30, 2024, from HKD 51.028 million as of December 31, 2023[5] - Contract assets increased to HKD 24.581 million as of June 30, 2024, from HKD 19.216 million as of December 31, 2023[5] - Total equity decreased from 248,979 thousand HKD as of December 31, 2023, to 227,884 thousand HKD as of June 30, 2024, reflecting a decline of 8.5%[6] - Retained earnings dropped from 86,212 thousand HKD to 69,251 thousand HKD, a decrease of 19.7%[6] - Total liabilities decreased from 99,292 thousand HKD to 86,914 thousand HKD, a reduction of 12.5%[6] - Lease liabilities decreased from 18,319 thousand HKD to 13,614 thousand HKD, a reduction of 25.7%[6] - Current liabilities decreased from 80,809 thousand HKD to 73,300 thousand HKD, a decline of 9.3%[6] - Net current assets decreased from HK$145.7 million as of December 31, 2023, to HK$123.8 million as of June 30, 2024, primarily due to a decrease in trade receivables and cash and cash equivalents[85] - Trade receivables and contract assets decreased from HK$70.2 million as of December 31, 2023, to HK$64.2 million as of June 30, 2024, mainly due to timely payments from customers[86] - Inventory decreased from HK$18.5 million as of December 31, 2023, to HK$13.4 million as of June 30, 2024, due to inventory utilization and conservative procurement policies[87] - Cash and cash equivalents and bank deposits decreased from HK$91.7 million as of December 31, 2023, to HK$75.6 million as of June 30, 2024, due to dividend payments, lease liability repayments, and property, plant, and equipment purchases[88] - Right-of-use assets decreased from HK$23.6 million as of December 31, 2023, to HK$17.8 million as of June 30, 2024, due to depreciation and lease payments[89] - Intangible assets slightly decreased from HK$2.9 million as of December 31, 2023, to HK$2.7 million as of June 30, 2024, due to amortization of trademarks[90] - Bank borrowings as of June 30, 2024, were HK$42.068 million, compared to HK$43.572 million as of December 31, 2023[91] - The company's gearing ratio increased from 16.5% as of June 30, 2023, to 18.5% as of June 30, 2024[93] Credit Risk and Provisions - Trade receivables credit concentration risk was 31,689 thousand HKD as of June 30, 2024, representing 82% of total trade receivables, compared to 44,587 thousand HKD (63%) as of December 31, 2023[15] - Expected credit loss rate for individually assessed trade receivables and contract assets is 27.3% as of June 30, 2024, with a provision of HKD 13,224 thousand against a total book value of HKD 48,461 thousand[17] - The expected credit loss rate for trade receivables overdue for more than 180 days is 61.8%, with a provision of HKD 2,893 thousand against a total book value of HKD 4,679 thousand[17] - For e-commerce and other receivables, the expected credit loss rate for those overdue for more than 180 days is 73.8%, with a provision of HKD 146 thousand against a total book value of HKD 198 thousand[17] - The company recognized a full-period expected credit loss of HKD 2,931 thousand for other receivables from third parties, amounting to HKD 69,156 thousand, due to a significant increase in credit risk[18] - The company's credit loss allowance for trade receivables decreased to 16,668 thousand HKD in 2024 from 22,035 thousand HKD in 2023, with a reversal of impairment losses of 1,821 thousand HKD[44] - Total deposits, prepayments, and other receivables decreased from 109,359 thousand HKD in 2023 to 107,849 thousand HKD in 2024, with a reduction in impairment provisions from 3,863 thousand HKD to 2,931 thousand HKD[46] - Non-current portion of deposits and other receivables decreased slightly from 64,234 thousand HKD in 2023 to 63,994 thousand HKD in 2024[46] Expenses and Costs - Employee benefits expenses increased to 31,726 thousand HKD in 2024 from 27,780 thousand HKD in 2023, with a notable inclusion of share-based payments of 3,787 thousand HKD in 2024[34] - Other expenses decreased to 17,652 thousand HKD in 2024 from 20,056 thousand HKD in 2023, with significant reductions in legal and professional fees from 9,220 thousand HKD to 7,322 thousand HKD[35] - Net financial income increased to 1,071 thousand HKD in 2024 from 124 thousand HKD in 2023, driven by higher bank deposit interest income of 1,629 thousand HKD compared to 125 thousand HKD in 2023[35] - Current tax expenses decreased to 762 thousand HKD in 2024 from 1,325 thousand HKD in 2023, with a significant drop in withholding tax from 1,012 thousand HKD to 5 thousand HKD[36] - Cost of goods sold remained stable at HK$15.2 million in the first half of 2024, representing 18.3% of total operating expenses, compared to HK$15.1 million (19.1%) in the same period of 2023[72] - Employee benefits expenses increased by 14% to HK$31.7 million in the first half of 2024, accounting for 38.1% of total operating expenses, driven by share-based payments to key employees[72] - Promotion costs increased by 11.6% to HK$7.7 million in the first half of 2024 compared to HK$6.9 million in the same period of 2023[75] - Online platform usage fees increased by 11.5% to HK$2.9 million in the first half of 2024 compared to HK$2.6 million in the same period of 2023[76] - Legal, audit, and professional fees decreased to HK$8.4 million (47.8% of other expenses) in the first half of 2024 from HK$10.3 million (51.2%) in the same period of 2023[78] - Net finance income increased significantly to HK$1.1 million in the first half of 2024 from HK$0.1 million in the same period of 2023, driven by higher average deposit balances and interest rates[80] Dividends and Share Repurchases - The company declared a final dividend of 0.5 HKD cents per share for 2023, totaling 4,904,965 HKD, but no interim dividend for the first half of 2024[38] - Final dividend of HK$0.005 per share for the year ended December 31, 2023, totaling HK$4,904,965, was approved and paid within the six months ended June 30, 2024[105] - The company repurchased a total of 19,007,000 shares of its ordinary shares through the stock exchange, with a total payment of approximately HKD 30,047,000, of which HKD 4,000 and HKD 30,043,000 were deducted from share capital and share premium respectively[56] - The company declared a final dividend of HKD 0.005 per ordinary share for 2023, totaling HKD 4,904,965, which was offset by dividends received by the trustee for shares held under the Share Award Scheme[56] Share-Based Payments and Incentives - The company granted 14,608,000 reward shares to selected participants on October 31, 2023, and 14,714,000 reward shares to two senior management members of Shenzhen Dequ Technology Co., Ltd. on January 31, 2024[57] - The group recognized expenses of approximately HKD 3,787,000 for the share awards granted during the six months ended June 30, 2024[57] - As of June 30, 2024, the Share Award Scheme held 34,393,000 shares, compared to 32,700,000 shares as of December 31, 2023[56] - The trustee purchased 1,693,000 shares at a total cost of HKD 1,975,000 for the share incentive plan during the six months ending June 30, 2024[113] Legal and Regulatory Matters - The company received HKD 1.361 million in compensation from legal actions against third parties for trademark infringement in 2024[33] - The company has set aside a provision of RMB 1,000,000 (approximately HKD 1,096,000) for potential damages and legal fees related to a trademark infringement case, with the likelihood of the judgment being overturned based on legal advice[94] - The company deviated from the Corporate Governance Code by having the Chairman and CEO roles combined, but believes this arrangement is in the best interest of the group[114] - The company does not provide monthly updates to the board but ensures timely updates on significant matters to fulfill board responsibilities[115] - The company has adopted the Standard Code for Securities Transactions and confirmed compliance by all directors and senior management during the six months ending June 30, 2024[116] - The Audit Committee, established on December 15, 2021, consists of independent non-executive directors and operates under written terms of reference[117] - The Audit Committee has reviewed the unaudited condensed interim financial information for the six months ended June 30, 2024, and confirmed compliance with applicable accounting standards and disclosure requirements[118] - The unaudited condensed interim financial information for the six months ended June 30, 2024, has been reviewed by the company's auditor, PricewaterhouseCoopers[118] - The interim report for the six months ended June 30, 2024, will be published on the Hong Kong Stock Exchange website (www.hkexnews.hk) and the company's website (www.semk.net)[119] - The interim report will be sent to shareholders as needed[119] Strategic Initiatives and Future Plans - The company plans to focus on the "B.Duck+ IP" matrix, developing self-researched products, opening offline retail stores, and expanding into new consumer sectors such as gaming, offline eco-tourism, trendy toys, and the metaverse[106] - The company will collaborate with Guizhou Tourism Group to create B.Duck-themed entertainment parks, themed tourism routes, and tourism merchandise, aiming to enhance the B.Duck IP's commercial value[107] - The company has established a large entertainment innovation business development center to deepen its gaming and related businesses, leveraging the WeChat ecosystem to absorb private traffic and improve conversion rates[108] - The company has formed a product planning team to adopt a self-developed, self-produced, and self-sold model, enhancing brand exposure and profitability through online and offline channels[108] - The company will focus on internationalization, leveraging the "B.Duck IP" to penetrate Southeast Asian markets through partnerships with OTA platforms like Ctrip and Meituan[109] - The company plans to open its first offline retail flagship store in Hong Kong and overseas, creating a comprehensive brand experience center with customized products and localized entertainment activities[109] - The company will continue to leverage AIGC technology to enhance production efficiency and quality, exploring applications in video generation, IP-specific voice, and theme songs for creative, marketing, and animation fields[110] - A new IP operation innovation department has been established to accelerate the commercialization of new IPs, aiming to replicate the success of the "B.Duck IP" model[111] - The company plans to invest in and collaborate with startups in new consumption and retail sectors, leveraging its resources in brand, IP operation, design, funding, and channels to expand licensing categories and enhance financial returns[112] - The company aims to establish a revenue system exceeding 1 billion yuan, focusing on retail, offline cultural tourism, online gaming, cross-border expansion, and AIGC innovation to build a comprehensive IP ecosystem worth over 10 billion yuan[112] - The company will seek partnerships with local governments and state-owned capital to form industrial investment funds, targeting digital cultural IP, new consumption, new media, ACGC animation, and gaming sectors[112] Investments and Acquisitions - The company acquired a 20% stake in a non-listed entity in China for 7,592,000 HKD in 2023, classified as a financial asset at fair value through profit or loss[49] - The company acquired a 10% stake in another non-listed entity in China for 1,294,000 HKD in 2023, also classified as a financial asset at fair value through profit or loss[50] - The fair value of non-listed equity investments decreased from 9,735 thousand HKD in 2023 to 8,782 thousand HKD in 2024, with a fair value loss of 889 thousand HKD[48][49] - The company has not made any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ending June 30, 2024[101] - The company has not made any significant investments or capital asset plans beyond those disclosed in the prospectus dated December 30, 202

Financial Performance - The company's revenue from e-commerce and other businesses decreased from approximately HKD 68.9 million in the fiscal year 2022 to about HKD 60.6 million in the fiscal year 2023, representing a decline of approximately 12.0%[3]. - The operating loss for the company increased significantly from an operating profit of approximately HKD 79.9 million in the fiscal year 2022 to an operating loss of about HKD 43.7 million in the fiscal year 2023, indicating a decline of approximately 155%[26]. - The adjusted net profit for the fiscal year 2023 decreased by approximately 161.8% to a loss of about HKD 46.7 million, compared to a profit of approximately HKD 75.6 million in fiscal year 2022[37]. - The net loss for the fiscal year 2023 was HKD 46,691 thousand, compared to a profit of HKD 75,555 thousand in fiscal year 2022[63]. - The total revenue for the company in the fiscal year 2023 was approximately HKD 129.542 million, a decrease from HKD 192.608 million in the fiscal year 2022, reflecting a decline of about 32.8%[171]. - The company's licensing revenue decreased from approximately HKD 123.7 million in the fiscal year 2022 to about HKD 69.0 million in the fiscal year 2023, representing a decline of approximately 44.2%[181]. - Revenue from the character licensing business for the fiscal year 2023 was approximately HKD 68.966 million, down from HKD 123.745 million in the fiscal year 2022, indicating a significant drop[171]. - The adjusted profit attributable to equity holders for fiscal year 2023 was HKD -40,588 thousand, compared to HKD 87,369 thousand in fiscal year 2022[63]. Revenue Sources - The total revenue from licensing fees decreased from HKD 74.814 million in the fiscal year 2022 to HKD 47.384 million in the fiscal year 2023, a decline of approximately 36.5%[21]. - Revenue from Mainland China for the fiscal year 2023 was HKD 123,021,000, accounting for 95.0% of total revenue, compared to HKD 183,144,000 and 95.1% in fiscal year 2022[183]. - Revenue from B.Duck products accounted for 79.0% of the company's total licensing revenue in the fiscal year 2023, down from 85.9% in the previous year[175]. - The group's self-created intellectual property revenue reached HKD 123.745 million, a significant increase from HKD 68.966 million in the previous year, representing a year-on-year growth of approximately 79.5%[89]. Expenses and Costs - The company's promotional costs increased slightly from approximately HKD 15.8 million in the fiscal year 2022 to about HKD 16.2 million in the fiscal year 2023[10]. - The financial cost net amount increased from approximately HKD 0.8 million in the fiscal year 2022 to about HKD 2.5 million in the fiscal year 2023, representing an increase of approximately 212.5%[28]. - Legal, audit, and professional fees increased to HKD 23,435,000 in fiscal year 2023, accounting for 57.4% of total operating expenses, up from HKD 12,227,000 and 37.1% in fiscal year 2022[200]. - Employee benefit expenses for fiscal year 2023 were approximately HKD 64.5 million, representing 35.8% of total operating expenses, compared to HKD 65.9 million and 36.5% in fiscal year 2022[198]. - The total operating expenses for fiscal year 2023 amounted to HKD 40,793,000, compared to HKD 32,937,000 in fiscal year 2022[200]. Assets and Liabilities - Cash and cash equivalents decreased from approximately HKD 144.2 million on December 31, 2022, to approximately HKD 91.7 million on December 31, 2023, primarily due to operating and investment cash outflows and dividend payments[34]. - The company's asset-liability ratio as of December 31, 2023, was 17.5%, attributed to new borrowings during the fiscal year[54]. - The group's net current assets decreased from approximately HKD 265.6 million to HKD 145.7 million, primarily due to cash outflows from operations and investments[92]. - The company has no interest-bearing borrowings, making the debt-to-equity ratio not applicable[63]. Market Expansion and Strategy - The company is focusing on expanding its e-commerce sales platforms in overseas markets, including Thailand, Indonesia, Vietnam, the Philippines, Malaysia, and Singapore, which are still in the growth stage[3]. - The company is exploring the potential for designing and selling its own products on e-commerce platforms, leveraging synergies from its licensing business[169]. - The company has engaged in various brand collaborations, including partnerships with Tangle Teezer and other brands to expand its product offerings[125]. - The company aims to expand its quality IP portfolio through internal development, incubation, acquisitions, and partnerships with licensing agents[85]. - The company signed strategic cooperation agreements with several entities in Suzhou, China, to explore non-organic growth and investment opportunities[85]. Product Development and Innovation - The launch of the new product line, including the first "B.Duck" trendy toy, aims to attract a younger demographic and enhance brand appeal[97]. - The company has established an AI design team to enhance creativity in game development and derivative product sales[198]. - The company has established a joint venture with Shenzhen Dream Workshop Technology Co., Ltd. to focus on game development and distribution, targeting Gen Z fans[103]. Awards and Recognition - The company received multiple awards in 2023, including "Top 10 IP Licensing Agents" and "Best Listed Company ESG Responsibility Award" in the capital market[84].

Revenue Performance - The revenue from character licensing business decreased by approximately 44.2% from HKD 123.7 million in FY2022 to HKD 69.0 million in FY2023[7]. - The total revenue from product licensing in FY2023 was HKD 47.4 million, accounting for 68.7% of the total licensing revenue, down from HKD 74.8 million (60.5%) in FY2022[2]. - In the fiscal year 2023, total revenue was approximately HKD 129,542,000, a decrease of about 32.8% from HKD 192,608,000 in fiscal year 2022[11][17]. - Revenue from mainland China accounted for 95.0% of total revenue in fiscal year 2023, totaling HKD 123,021,000, compared to 95.1% and HKD 183,144,000 in fiscal year 2022[11]. - Revenue for the fiscal year 2023 was HKD 129,542,000, a decrease of 32.8% from HKD 192,608,000 in 2022[39]. - Revenue from authorized services was HKD 56,622,000, down 34.9% from HKD 87,130,000 in the previous year[73]. Expenses and Financial Performance - Employee benefits expenses for FY2023 were approximately HKD 64.5 million, representing 35.8% of total operating expenses, down from 36.5% in FY2022[6]. - The company's total expenses for the year were HKD 40,793,000, an increase of 23.9% from HKD 32,937,000 in 2022[75]. - The company reported a decrease in trade payables from HKD 6,474,000 in fiscal year 2022 to HKD 5,646,000 in fiscal year 2023[30]. - The company recorded a loss before tax of HKD (46,162,000) in 2023 compared to a profit of HKD 79,069,000 in 2022, indicating a significant downturn in financial performance[61]. - The net loss attributable to equity holders for 2023 was HKD (46,206,000), compared to a profit of HKD 75,555,000 in 2022[39]. - The adjusted net profit margin for 2023 was (31.3%), down from 45.4% in 2022[39]. - The total comprehensive loss for 2023 was HKD (48,988,000), compared to a comprehensive income of HKD 64,906,000 in 2022[43]. Assets and Liabilities - The company's liabilities increased to HKD 99,292,000 in fiscal year 2023 from HKD 61,641,000 in fiscal year 2022, indicating a significant rise in financial obligations[30]. - As of December 31, 2023, total assets decreased to HKD 348,271,000 from HKD 412,948,000 in 2022, representing a decline of approximately 15.7%[44]. - The total equity attributable to the owners of the company fell to HKD 247,406,000 in 2023 from HKD 351,307,000 in 2022, a decrease of around 29.6%[44]. - The debt-to-equity ratio as of December 31, 2023, was 17.5, reflecting new borrowings during the fiscal year[149]. Cash Flow and Inventory - The company reported a significant decrease in cash and cash equivalents, dropping to HKD 51,723,000 in 2023 from HKD 141,677,000 in 2022, a decline of approximately 63.5%[44]. - The company’s inventory decreased to HKD 18,535,000 in 2023 from HKD 35,133,000 in 2022, a reduction of about 47.2%[44]. - Cash and cash equivalents decreased from approximately HKD 144.2 million as of December 31, 2022, to approximately HKD 91.7 million as of December 31, 2023, mainly due to operational cash outflows, dividend payments, and share buybacks[147]. Strategic Initiatives and Market Expansion - The company is focusing on expanding its e-commerce sales platforms in overseas markets, including Thailand, Indonesia, Vietnam, the Philippines, Malaysia, and Singapore[7]. - The company aims to establish a revenue scale exceeding HKD 1 billion within three years, leveraging potential investor funds and resources for accelerated growth[184]. - The company is committed to expanding its international presence and focusing on globalization strategies[199]. - The group aims to expand into the overseas market, viewing it as a significant growth opportunity, while its main revenue sources remain in mainland China and Hong Kong[179]. Legal and Compliance - The company has made provisions of RMB 1,000,000 (approximately HKD 1,103,000) for potential damages related to a legal claim regarding unfair competition[150]. - The company has not recognized deferred tax liabilities on undistributed profits due to the decision not to declare dividends from its mainland subsidiaries[77]. Employee and Talent Management - The group has established a competitive compensation package to attract and retain talent, including salaries, medical insurance, and a stock option plan[155]. - As of December 31, 2023, the group had a total of 186 full-time employees, with 66 in design, 23 in licensing, and 37 in sales[155].

Revenue Performance - Revenue for the six months ended June 30, 2023, was HKD 57,093 million, compared to HKD 91,737 million for the same period in 2022, indicating a decline [8]. - The group's revenue from licensing business decreased by approximately 39.6% from HKD 48.7 million in the first half of 2022 to HKD 29.4 million in the first half of 2023 [75]. - Revenue from e-commerce and other businesses fell by about 35.6% from HKD 43.0 million in the first half of 2022 to HKD 27.7 million in the first half of 2023, primarily due to reduced sales through e-commerce platforms [56]. - Revenue from the B.Duck product line, which accounts for 79.8% of the group's licensing revenue, decreased by approximately 37.3% from HKD 37.5 million in the first half of 2022 to HKD 23.5 million in the first half of 2023 [78]. Business Expansion and Strategy - The number of authorized merchants increased from 406 at the end of December 2022 to 430 by June 30, 2023, reflecting a growth of approximately 5.9% [15]. - The amount of outstanding contracts for experiential entertainment licensing increased significantly to HKD 11.3 million, up 214% from HKD 3.6 million a year earlier [15]. - The company has established a joint venture in Thailand to operate e-commerce and licensing businesses, aiming to replicate its successful business model from mainland China in Southeast Asia [18]. - The group is focusing on expanding its e-commerce sales platforms in overseas markets, including Thailand, Indonesia, Vietnam, the Philippines, Malaysia, and Singapore [56]. - The company is actively seeking to expand its licensing business in international markets, including partnerships with agents in Mexico, Brazil, South Korea, and South Africa [18]. - The three-year development plan aims to achieve strong growth through horizontal and vertical strategies, focusing on resource integration and synergy with industry peers [17]. Financial Performance - The company recorded a loss attributable to shareholders of approximately HKD 15.8 million for the first six months of 2023, compared to a loss of HKD 18.5 million for the same period in 2022, reflecting a decrease of about 14.6% [99]. - The company's operating loss increased by approximately 1.2% to HKD 16.7 million for the first six months of 2023, compared to HKD 16.5 million in the same period of 2022 [124]. - The financial income for the first six months of 2023 was approximately HKD 0.1 million, a decrease from HKD 0.5 million in the same period of 2022 [126]. - Employee benefit expenses for the first six months of 2023 were approximately HKD 27.8 million, accounting for about 35.3% of total operating expenses, down from 37.2% in the same period of 2022 [117]. Assets and Liabilities - As of June 30, 2023, the total trade receivables and contract assets amounted to approximately HKD 81.3 million, an increase from HKD 72.3 million as of December 31, 2022 [101]. - The total overdue receivables exceeding 180 days reached HKD 1,963 million, with a significant increase in the overdue rate to 59.8% [83]. - The expected credit loss provision for trade receivables was approximately HKD 22.7 million as of June 30, 2023, up from HKD 20.6 million at the end of 2022 [101]. - The company’s total liabilities included trade payables of HKD 5,276 million and other payables of HKD 13,286 million [89][90]. - The company’s net assets accounted for approximately 19.0% of total assets as of June 30, 2023, down from 21.2% at the end of 2022 [101]. - The asset-liability ratio as of June 30, 2023, was 16.5%, attributed to new borrowings during the first half of 2023; there were no interest-bearing borrowings as of December 31, 2022 [134]. Inventory and Cash Flow - Inventory decreased from approximately HKD 35.1 million as of December 31, 2022, to about HKD 30.8 million as of June 30, 2023, due to ongoing inventory utilization and a conservative procurement policy in response to market fluctuations [130]. - Cash and cash equivalents decreased from approximately HKD 141.7 million as of December 31, 2022, to about HKD 116.1 million as of June 30, 2023, primarily due to cash outflows from operations and investments, as well as dividend payments and share buybacks [130]. - Current assets net value decreased from approximately HKD 265.6 million as of December 31, 2022, to about HKD 190.3 million as of June 30, 2023, mainly due to a reduction in cash and cash equivalents [149]. Legal and Compliance - The group is in a legal dispute involving a claim for approximately HKD 64.35 million related to unfair competition and trademark infringement [79]. - The company confirmed a tax credit of approximately HKD 0.8 million for the first half of 2023, mainly due to the recognition of deferred tax assets based on temporary pre-tax loss conditions [146]. Future Plans and Investments - The company plans to allocate 25.8% of the net proceeds (approximately HKD 53.4 million) to establish a "fan platform" by June 2024 [194]. - The company intends to enhance its internal design capabilities with 17.5% of the net proceeds (approximately HKD 36.2 million) by December 2024 [195]. - The company has successfully obtained domestic agency rights for "Shew Sheep," expanding its IP matrix [179]. - The company aims to accelerate retail channel integration through acquisitions, enhancing sales and distribution capabilities [180]. - The company plans to focus on digital cultural IP, new consumption, and new media investments in collaboration with local governments and fund management institutions [181]. Market Overview - The global licensing market size was approximately HKD 26 trillion in 2022, with 61.8% of retail sales coming from North America [178]. - The company ranked 21st in the "2023 Global Top Licensing Agents" report, with an annual brand retail sales of approximately USD 500 million [16].

Revenue Performance - Total revenue for the six months ended June 30, 2023, was HKD 57,093,000, a decrease of 37.8% from HKD 91,737,000 in the same period of 2022[23]. - Revenue for the six months ended June 30, 2023, was HKD 57,093,000, a decrease of 37.7% compared to HKD 91,737,000 for the same period in 2022[27]. - Total revenue for the six months ended June 30, 2023, was HKD 57,966,000, a decrease from HKD 93,112,000 for the same period in 2022[76]. - Revenue from B.Duck products accounted for 79.8% of total licensing revenue, decreasing approximately 37.3% to HKD 23,500,000 from HKD 37,500,000 in the prior year[6]. - Revenue from authorized services was HKD 22,473,000, down 43.9% from HKD 40,052,000 in the previous year[50]. - Revenue from character licensing business decreased by 39.6% to HKD 29,394 thousand for the first half of 2023, down from HKD 48,690 thousand in the same period of 2022[113]. - Revenue from e-commerce and other businesses fell by 35.6% to HKD 27,699 thousand for the first half of 2023, compared to HKD 43,047 thousand in the first half of 2022[113]. - Revenue from self-created intellectual property characters accounted for 79.8% of total revenue in the first half of 2023, totaling HKD 23,453 thousand[116]. - Revenue from mainland China represented 97.3% of total revenue for the first half of 2023, amounting to HKD 55,559 thousand, compared to 95.6% in the same period of 2022[118]. Financial Performance - The company reported a net loss of HKD 15,834,000 for the six months ended June 30, 2023, compared to a net loss of HKD 18,523,000 in the same period of 2022[23]. - Operating loss for the period was HKD 16,725,000, slightly increased from HKD 16,452,000 in the previous year[27]. - Net loss for the period was HKD 15,834,000, compared to a net loss of HKD 18,523,000 in the same period last year, representing a 14.5% improvement[28]. - The overall gross profit margin decreased, with a net profit margin of -27.7% for the current period compared to -20.2% in the previous year[23]. - The company reported a loss after tax of HKD 15,834,000 for the six months ended June 30, 2023, compared to a loss of HKD 18,523,000 for the same period in 2022[76]. - The company recorded a net impairment loss on financial assets and contract assets of approximately HKD 2.9 million for the first six months of 2023, compared to HKD 2.8 million in the same period of 2022[123]. - The company reported a financial income of HKD 1,021,000, up from HKD 269,000 in the previous year[27]. - Financial income for the first half of 2023 was HKD 124 thousand, a recovery from a loss of HKD 501 thousand in the same period of 2022[105]. - The company’s cash and cash equivalents decreased to HKD 116,129,000 from HKD 141,677,000, indicating a reduction in liquidity[30]. - The group recorded a loss attributable to owners of approximately HKD 15.8 million for the first half of 2023, compared to a loss of approximately HKD 18.5 million for the same period in 2022[179]. Assets and Liabilities - Total assets as of June 30, 2023, were HKD 374,884,000, down from HKD 412,948,000 as of December 31, 2022[30]. - Total liabilities increased to HKD 102,603,000 as of June 30, 2023, compared to HKD 61,641,000 as of December 31, 2022[53]. - The company’s total liabilities were not specified, but the asset-liability ratio was reported at 16.5%[27]. - The company’s equity attributable to owners was HKD 272,281,000 as of June 30, 2023, down from HKD 351,307,000 at the end of 2022[53]. - The total liabilities as of June 30, 2023, were HKD 23,554,000, compared to HKD 18,812,000 as of December 31, 2022, indicating an increase of approximately 25.1%[151]. - Trade receivables increased from HKD 72,287,000 as of December 31, 2022, to HKD 81,274,000 as of June 30, 2023, an increase of approximately 12.5%[163]. - The company’s net cash position as cash and cash equivalents exceeded total borrowings as of June 30, 2023[48]. - The company experienced a currency translation loss of HKD 7,076,000, compared to HKD 4,892,000 in the previous year[29]. Operational Insights - The company has expanded its e-commerce operations to multiple platforms, including Tmall, JD.com, and Douyin, since opening its flagship store in 2015[4]. - The management discussed ongoing development in character licensing and e-commerce as key growth areas for future revenue[3]. - The company has not changed its risk management policies since December 31, 2022[38]. - The company believes that credit risk related to its main trade receivables counterparties is limited due to their reputable status[39]. - The company reduced its employee headcount, particularly in the e-commerce sales team in China, to offset investments in design capabilities for new product development[122]. - The group maintained a cautious liquidity ratio and ensured sufficient cash flow to meet any unexpected cash needs during normal business operations[92]. Contractual Obligations and Provisions - The total amount of unfulfilled contracts as of June 30, 2023, was 76,434 thousand HKD, down from 88,804 thousand HKD at the end of 2022[88]. - Contract assets as of June 30, 2023, amounted to HKD 12,898 thousand, a decrease of 64.2% from HKD 36,046 thousand as of December 31, 2022[102]. - Contract liabilities increased to HKD 14,247 thousand as of June 30, 2023, compared to HKD 13,322 thousand as of December 31, 2022, reflecting a growth of 6.9%[102]. - The expected credit loss provision for trade receivables and contract assets as of June 30, 2023, was HKD 5,325,000, with an overall expected loss rate of 19.3%[65]. - The individual assessment of trade receivables showed a total of HKD 64,120,000 with a credit loss provision of HKD 16,355,000, resulting in an expected loss rate of 25.51%[65]. - The collective assessment for trade receivables showed overdue amounts of HKD 3,608,000 with a credit loss provision of HKD 2,438,000, resulting in an expected loss rate of 67.6%[65]. Employee and Operational Costs - Employee benefits expenses for the first six months of 2023 were approximately HKD 27.8 million, accounting for about 35.3% of total operating expenses, compared to HKD 35.6 million and 37.2% in the same period of 2022[122]. - The group reported a significant increase in legal and professional fees, which rose to 9,220 thousand HKD for the six months ended June 30, 2023, compared to 4,708 thousand HKD in the same period of 2022[83]. - The company recognized a tax credit of approximately HKD 0.8 million for the first half of 2023, primarily due to the recognition of deferred tax assets based on temporary pre-tax losses[178]. - The company’s promotional costs decreased from approximately HKD 8,100,000 in the first half of 2022 to HKD 6,900,000 in the first half of 2023[158]. Investments and Acquisitions - The group acquired a 20% stake in a non-listed entity registered in China for RMB 7,000,000 (approximately HKD 7,592,000), with RMB 4,000,000 paid as of June 30, 2023[167]. - The company has agreed to invest RMB 7,000,000 for a 20% equity stake in the target company, which will be used for the development and sales costs of its IP series blind boxes and trendy toys[196].

Management Team - The company appointed Mr. Guo as an executive director on April 28, 2021, bringing over 18 years of experience in sales, marketing, and licensing[1]. - Mr. Guo previously worked in the banking industry for over four years before joining the group in August 2003 as the Sales and Marketing Director[2]. - The management team includes Mr. Chen, who has over 14 years of experience in licensing and has been with the group since February 2012[9]. - Mr. Xie, appointed as Chief Financial Officer in January 2020, has over 15 years of experience in audit, accounting, and finance[20]. - The company has a strong focus on brand management and product design, led by Ms. Tan, who has over 19 years of experience in product design and development[13]. - The board includes non-executive director Mr. Chen, who oversees management and strategic planning, with a background in investment management[21]. - The management team has a diverse educational background, with degrees from institutions such as the University of Hong Kong and Stanford University[18][8]. - The company has independent non-executive directors providing independent judgment and oversight[25]. - The company has a diverse board with members experienced in law, education, and e-commerce[27]. Corporate Strategy - The company emphasizes internal control systems and investor relations as part of its corporate governance strategy[20]. - The group has a structured approach to its business operations, with a focus on strategic planning and market expansion initiatives[21]. - The company aims to expand its intellectual property portfolio and recruit new designers to enhance product lines, focusing on fashion brands and trendy toys[36]. - The company plans to explore the metaverse community and build online and offline private traffic pools to deepen brand positioning and enhance fan loyalty[36]. - The company is committed to developing cross-border e-commerce in Southeast Asia to replicate its success in the Chinese market overseas[36]. - The company intends to acquire new ownership rights with a solid design and brand foundation, focusing on traditional Chinese cultural intellectual property and high-potential participants in the design and licensing value chain[36]. - A three-year development plan has been established to enhance brand diversification and overall market penetration, focusing on resource integration and synergy with industry peers[69]. - The company aims to expand its quality intellectual property matrix through self-development, acquisitions, and partnerships with licensing agents, targeting a strategic goal of becoming a "quality comprehensive intellectual property company" over the next three years[93]. Financial Performance - The company's revenue for the fiscal year 2022 was HKD 192.6 million, a decrease from HKD 290.0 million in 2021, representing a decline of approximately 33.6%[44]. - The net profit for the fiscal year 2022 was HKD 75.6 million, an increase from HKD 62.9 million in 2021, reflecting a growth of about 20.0%[44]. - The adjusted net profit margin based on non-Hong Kong Financial Reporting Standards for 2022 was 45.4%, up from 26.6% in 2021, indicating a significant improvement in profitability[44]. - The adjusted net profit for the fiscal year 2022 was HKD 87.4 million, compared to HKD 77.3 million in 2021, showing an increase of approximately 13.8%[44]. - The company achieved a net profit margin of 39.2% in 2022, up from 21.7% in 2021[61]. - The current ratio improved significantly from 2.3 in 2021 to 6.1 in 2022, indicating better liquidity[61]. - The total revenue for the group in FY2022 was HKD 192.6 million, down from HKD 290.0 million in FY2021, reflecting a significant decline in the licensing business[147]. - The group reported a total licensing income of HKD 74.8 million in FY2022, down from HKD 132.7 million in FY2021, reflecting challenges in the licensing market[148]. - The net tax expense decreased by approximately 82.3% from HKD 19.8 million in fiscal year 2021 to HKD 3.5 million in fiscal year 2022, mainly due to a reduction in profit before tax[161]. Licensing and Market Position - The company primarily engages in character licensing and e-commerce, focusing on the B.Duck brand[32]. - B.Duck maintained its position as the largest domestic character intellectual property in China, increasing the number of licensees from 385 to 406 in 2022[50]. - The total contract value increased from HKD 78.2 million as of December 31, 2021, to HKD 88.8 million as of December 31, 2022[50]. - The number of style guides created for licensed products grew from 950 to over 1,200, while the number of SKUs developed increased from 25,000 to over 36,000[50]. - The fan database for B.Duck grew by over 80%, with direct interactions across various e-commerce and social platforms reaching over 19 million subscribers and fans[50]. - The group ranked as the largest domestic licensor in the character licensing market in mainland China and Hong Kong in 2022[123]. E-commerce and Product Development - The company has a strong e-commerce operation led by a vice president with over nine years of experience in the industry[28]. - The group's e-commerce and other businesses have expanded to multiple platforms, including Tmall, JD.com, and HKTVmall, enhancing product accessibility for customers[143]. - The revenue from the design consulting service increased significantly from HKD 20.5 million in FY2021 to HKD 36.6 million in FY2022, representing 29.5% of total revenue in FY2022[148]. - The group is exploring the potential of designing its own products for e-commerce platforms, aiming to leverage synergies from its licensing business[143]. - The company launched a new business line targeting Generation Z, B.Studio, to enhance brand positioning and establish a digital marketing system[54]. - The company aims to transform its intellectual property brand into a trendy brand appealing to younger consumers through collaborations with popular mobile games and new-generation artists[68]. Joint Ventures and International Expansion - The company has established a joint venture in Thailand to promote product sales, signed on January 13, 2023[34]. - The company has established a joint venture in Thailand to operate e-commerce and licensing businesses, with Thailand being one of the largest overseas licensing regions for the company[71]. - Thailand's online retail penetration rate is relatively low, accounting for less than 2% of the Asia-Pacific region's licensed product retail sales in 2022, indicating significant growth potential in the licensing industry[71]. - The company plans to export its own e-commerce products and those developed by licensed manufacturers in mainland China to Thailand, expecting higher profitability in Thailand compared to the country of origin[71]. - The joint venture will collaborate with local institutions for comprehensive partnerships, including co-branded products and outdoor advertising[71]. Operational Challenges and Changes - The company completed a group restructuring on March 26, 2021, becoming the holding company of its subsidiaries[31]. - Employee benefits expenses for the fiscal year 2022 were approximately HKD 65.9 million, representing 36.5% of total operating expenses, compared to HKD 61.6 million and 30.8% in fiscal year 2021[151]. - The net impairment loss on financial and contract assets increased from approximately HKD 4.8 million in fiscal year 2021 to approximately HKD 15.1 million in fiscal year 2022, primarily due to an increase in trade receivables and contract assets[152]. - Operating profit decreased by approximately 5.3% from HKD 84.4 million in fiscal year 2021 to HKD 79.9 million in fiscal year 2022[159]. - Revenue from character licensing business decreased by approximately 25.8% from HKD 166.6 million in fiscal year 2021 to HKD 123.7 million in fiscal year 2022, attributed to COVID-19 related store closures[165]. - Revenue from e-commerce and other businesses fell by approximately 44.2% from HKD 123.4 million in fiscal year 2021 to HKD 68.9 million in fiscal year 2022, due to logistics delays and reduced consumer spending during the pandemic[166].

Financial Performance - The group's revenue for the fiscal year 2022 was HKD 192.6 million, a decrease from HKD 290.0 million in 2021, representing a decline of approximately 33.6%[78]. - The net profit for the fiscal year 2022 increased by approximately 20.2% to about HKD 75.6 million from approximately HKD 62.9 million in 2021[20]. - The adjusted profit attributable to the company's owners for the fiscal year 2022 was approximately HKD 87.4 million, an increase of about 13.7% from HKD 77.3 million in 2021[19]. - The operating profit decreased by approximately 5.3% to HKD 79.9 million in fiscal year 2022, down from HKD 84.4 million in fiscal year 2021[12]. - The gross profit margin for the group was 36.1% for the fiscal year 2022, down from 54.0% in 2021, indicating a decline in profitability[75]. - The return on equity for the year was 21.5%, a decrease from 41.9% in the previous year, reflecting a reduction in shareholder returns[75]. - The adjusted net profit margin based on non-Hong Kong Financial Reporting Standards was 45.4%, compared to 26.6% in the previous year, showing a significant improvement[78]. Expenses and Costs - Employee benefits expenses for fiscal year 2022 were approximately HKD 65.9 million, accounting for 36.5% of total operating expenses, compared to HKD 61.6 million and 30.8% in fiscal year 2021[5]. - The cost of goods sold was approximately HKD 44.0 million in fiscal year 2022, representing 24.3% of total operating expenses, down from HKD 56.8 million and 28.5% in fiscal year 2021[4]. - Promotional costs were approximately HKD 15.8 million in fiscal year 2022, down from HKD 19.4 million in fiscal year 2021[10]. - Listing expenses were approximately HKD 11.8 million in fiscal year 2022, compared to HKD 14.3 million in fiscal year 2021[9]. - Total expenses for the year were HKD 32,937,000, a decrease from HKD 35,184,000 in 2021[113]. Assets and Liabilities - The company's current assets increased significantly from approximately HKD 126.7 million on December 31, 2021, to approximately HKD 265.6 million on December 31, 2022, primarily due to an increase in cash and cash equivalents by about HKD 65.7 million[23]. - The company's cash and cash equivalents increased from approximately HKD 76.0 million on December 31, 2021, to approximately HKD 141.7 million on December 31, 2022, mainly due to operating cash inflows and funds raised from the listing[34]. - The company's bank borrowings decreased from approximately HKD 38.7 million on December 31, 2021, to zero on December 31, 2022, due to repayment of borrowings during the fiscal year[31]. - Total assets as of December 31, 2022, amounted to HKD 412,948,000, up from HKD 265,760,000 in 2021, representing a growth of 55.4%[87]. - Total equity rose to HKD 351,307,000 from HKD 150,276,000, indicating an increase of 133.5%[87]. Revenue Breakdown - Revenue from licensing services was HKD 87,130,000, down 40.3% from HKD 146,060,000 in the previous year[102]. - Revenue from design consulting services increased to HKD 36,615,000, up 78.2% from HKD 20,534,000 in 2021[102]. - The company's revenue from character licensing decreased from approximately HKD 166.6 million in the 2021 fiscal year to approximately HKD 123.7 million in the 2022 fiscal year, a decline of about 25.8%[147]. - Revenue from merchandise licensing reached HKD 74,814,000 in FY2022, accounting for 60.5% of total licensing revenue, compared to 79.6% in FY2021[154]. - Revenue from e-commerce and other businesses fell from approximately HKD 123.4 million in the 2021 fiscal year to approximately HKD 68.9 million in the 2022 fiscal year, a decrease of about 44.2%[148]. Legal and Compliance - The group was ordered to pay a total of RMB 6,000,000 and RMB 1,000,000 in damages due to unfair competition claims, equivalent to approximately HKD 6,731,060 and HKD 1,122,000 respectively[37]. - The group has made a provision of RMB 1,000,000 (approximately HKD 1,122,000) for potential damages and costs related to the legal case[38]. - The company has initiated an appeal against a court ruling requiring it to pay damages totaling approximately RMB 6 million and RMB 1 million, equivalent to about HKD 6.73 million and HKD 1.12 million respectively[135]. Future Plans and Strategies - The group plans to expand its intellectual property portfolio and recruit new designers to enhance product lines, focusing on fashion brands and trendy toys[47]. - The company aims to develop cross-border e-commerce in Southeast Asia and integrate online and offline operations to increase brand presence overseas[47]. - The group is exploring opportunities in the metaverse to deepen brand positioning and enhance consumer loyalty[47]. - The company aims to leverage potential synergies from its character licensing business to enhance its e-commerce operations[138]. - Overall, the company is focusing on enhancing its design consulting services and exploring new licensing opportunities to drive future growth[154].