Financial Performance - Revenue for the fiscal year ending December 31, 2023, reached RMB 3,627 million, a 175% increase compared to the previous year[5] - Adjusted profit for the fiscal year ending December 31, 2023, was RMB 967 million, a 276% increase compared to the previous year[6] - The company's net profit attributable to owners for the year ended December 31, 2023, was approximately RMB 690 million, a decrease of RMB 100 million compared to RMB 790 million in the previous year[16] - The company's revenue for the year ended December 31, 2023, increased significantly to RMB 3,627 million from RMB 1,320 million in the previous year, with the majority coming from film and TV production, online streaming, and online gaming businesses, which contributed RMB 3,596 million[16] - The adjusted net profit for the year ended December 31, 2023, was RMB 967.4 million, a 276% increase from RMB 257.0 million in the previous year[17] - The company's basic and diluted earnings per share for the year ended December 31, 2023, were RMB 0.06550 and RMB 0.05968, respectively, compared to RMB 0.08430 and RMB 0.07629 in the previous year[16] - Total revenue generated by the company in 2023 was approximately RMB 3.596 billion, accounting for 99% of the company's total revenue[74] - Revenue surged to RMB 3,627,247 thousand in 2023, up from RMB 1,319,928 thousand in 2022, indicating a strong performance[159] - Gross profit rose to RMB 1,160,983 thousand in 2023 compared to RMB 261,615 thousand in 2022, showcasing improved profitability[159] - Net profit after tax stood at RMB 682,540 thousand in 2023, slightly down from RMB 787,552 thousand in 2022[159] - Net profit attributable to equity holders of the company decreased to RMB 689,758 thousand in 2023 from RMB 789,525 thousand in 2022, a decline of 12.6%[160] - Total comprehensive income attributable to equity holders of the company was RMB 669,936 thousand in 2023, compared to RMB 627,168 thousand in 2022, an increase of 6.8%[160] - Basic earnings per share decreased to RMB 6.550 in 2023 from RMB 8.430 in 2022, a decline of 22.3%[160] Film and Television Production - Film and television production revenue for the reporting period was RMB 2.219 billion, showing significant growth compared to the previous year[6] - Total box office revenue in China for 2023 reached RMB 54.915 billion, with 1.299 billion moviegoers, setting a new high in the past four years[6] - The company's films achieved a cumulative box office revenue of RMB 7.554 billion during the reporting period[6] - The company participated in four films that ranked in the top four at the 2024 Spring Festival box office[7] - The company plans to continue seeking international collaborations to produce globally influential film and television works[7] - The company has a robust pipeline of upcoming films and TV series, ensuring future revenue growth[7] - The company's film and TV production, online streaming, and online gaming business, operated by Virtual Cinema Entertainment Limited, recorded a net profit of RMB 1,163 million in 2023, a 543% increase from RMB 181 million in 2022[16] - The company plans to collaborate with Wanda Cinema on the 2024 summer animated film "White Snake: Floating Life" and expand IP operations and derivative product development[13] Online Streaming and AI Technology - Pumpkin Movies, the company's online streaming platform, has made significant progress in AI technology, revolutionizing scriptwriting, character creation, scene design, special effects generation, and music composition[8] - The company's content production and online streaming business, including the "Pumpkin Movie" platform, continues to grow rapidly, with increasing registered users and traffic[72] - The company plans to deepen the innovation and application of smart technology to enhance the streaming media industry and provide users with immersive viewing experiences[72] - The company's restricted streaming media and gaming businesses are expected to play a significant role in the company's future performance[72] - The company's operating companies and subsidiaries generated revenue primarily through video content provided to internet users via PC websites, mobile apps, and TV apps[73] Gaming Business - Game business revenue reached RMB 446 million, a 703% increase compared to the previous year[10] - The game industry's revenue exceeded RMB 300 billion in 2023, with a user base reaching 660 million[10] - The company plans to launch multiple new games in 2024, including "World Genesis" and "Ragnarok: Love at First Sight"[11][12] - The company has secured the game adaptation rights for the IP "The First God of Eternity" and is in talks with a global sports brand for game adaptations[12] - The company is collaborating with Tencent and other industry leaders for game distribution and co-development[12] - AI technology will be used to create content for interactive narrative games combining film and gaming, expected to launch in 2024[12] - The company is expanding globally through strategic partnerships, including investments in Wanda Film for overseas game distribution[12] - The company is focusing on developing games in genres such as SLG, MMORPG, and card-based games, with a focus on sports, anime, and historical themes[11] - The company's gaming business, under the "JINGXIU" brand, focuses on game agency, co-operation, and marketing services, aiming to expand game varieties[72] Investments and Strategic Partnerships - The company's investment in Wanda Cinema aims to strengthen strategic cooperation and leverage Wanda's extensive cinema network and audience data for market insights and trend analysis[13] - Wanda Cinema, in which the company invested, operates 905 cinemas with 7,546 screens in China as of December 31, 2023, holding a market share of 16.7%[13] - The company acquired a 49% stake in Beijing Wanda Investment Co., Ltd. for RMB 2,262 million on July 20, 2023[26] - The fair value of the company's investment in Beijing Wanda Investment Co., Ltd. as of December 31, 2023, was RMB 2,753.373 million, representing 16.51% of the company's total assets[27] - The company is expanding globally through strategic partnerships, including investments in Wanda Film for overseas game distribution[12] - The company's collaboration with Tencent Video is expected to generate annual transaction amounts of RMB 41 million, RMB 99.5 million, and RMB 169.5 million for the fiscal years ending December 31, 2021, 2022, and 2023, respectively[96] - Beijing Jingxiu's collaboration with Tencent Computer is projected to have annual transaction amounts of RMB 300 million, RMB 400 million, and RMB 500 million for the fiscal years ending December 31, 2022, 2023, and 2024, respectively[97] - The 2023 game cooperation framework agreement between Shenzhen Jingxiu and Tencent Computer anticipates annual payable amounts of RMB 1 billion for each fiscal year ending December 31, 2023, 2024, and 2025[99] - The 2023 game cooperation framework agreement also expects annual receivable amounts of RMB 1.2 billion, RMB 700 million, and RMB 700 million for the fiscal years ending December 31, 2023, 2024, and 2025, respectively[100] Financial Position and Cash Flow - The company's cash and bank balances as of December 31, 2023, were approximately RMB 569.9 million, a decrease from RMB 1,189.7 million in the previous year, primarily due to operational needs and investment in Wanda Cinema[20] - The company's total borrowing as of December 31, 2023, was RMB 1,755.4 million, with fixed-rate borrowing accounting for 6.2% of the total borrowing[21] - The company's equity net worth as of December 31, 2023, was approximately RMB 11,037.5 million, with total assets of approximately RMB 16,681.2 million[21] - The company's net current assets as of December 31, 2023, were approximately RMB 3,272.9 million, with a current ratio of 2.0 times[21] - The company's capital gearing ratio, calculated as total debt (interest-bearing borrowing plus lease liabilities) divided by shareholders' funds, was 1.5% as of December 31, 2023[21] - Total assets increased to RMB 16,681,158 thousand in 2023 from RMB 13,218,969 thousand in 2022, reflecting significant growth[157] - Cash and cash equivalents decreased to RMB 569,902 thousand in 2023 from RMB 1,189,720 thousand in 2022, indicating reduced liquidity[157] - Total equity grew to RMB 11,035,984 thousand in 2023 from RMB 7,975,431 thousand in 2022, showing strengthened financial position[157] - Total liabilities increased to RMB 5,645,174 thousand in 2023 from RMB 5,243,538 thousand in 2022, reflecting higher obligations[158] - Cash flow from operating activities improved significantly to RMB 543,234 thousand in 2023 from a negative RMB 322,563 thousand in 2022[169] - Cash used in investing activities increased to RMB 3,337,182 thousand in 2023 from RMB 1,351,439 thousand in 2022, primarily due to increased purchases of financial assets at fair value through profit or loss[169] - Cash flow from financing activities was RMB 2,170,887 thousand in 2023, compared to RMB 1,676,190 thousand in 2022, mainly due to proceeds from the issuance of ordinary shares[169] Corporate Governance and Compliance - The company's directors did not have any significant interests in major contracts or transactions during the year[45] - The company has maintained compliance with disclosure requirements under Chapter 14A of the Listing Rules[101] - The company's financial statements for the year were audited by PricewaterhouseCoopers[107] - The company will propose a resolution to reappoint PricewaterhouseCoopers as auditor at the upcoming annual general meeting[107] - The company's articles of association and Bermuda law do not provide for pre-emptive rights for existing shareholders[103] - The company has maintained sufficient public float throughout the year[103] - The company's board of directors consists of 1 female member, and the overall employee gender ratio is 53% female, reflecting a commitment to gender diversity[115] - The board held 8 meetings during the year to discuss and formulate the group's overall strategy and operational and financial performance[116] - The company has implemented anti-corruption and whistleblowing policies, including anti-bribery clauses in contracts with clients and suppliers, and provides regular training on anti-corruption and anti-fraud policies[112] - The board has adopted a diversity policy to enhance board efficiency and corporate governance, considering factors such as gender, age, cultural and educational background, race, professional experience, and skills[114] - The company has established a pipeline for potential board successors through organized recruitment, selection, and training programs to improve gender diversity[115] - The board is responsible for setting strategic business development, reviewing and monitoring the group's business performance, approving major funding and investment proposals, and preparing and approving the group's financial statements[116] - The company has complied with the requirement to appoint at least three independent non-executive directors, with at least one having appropriate professional qualifications or accounting and financial management expertise[114] - The board has delegated the authority and responsibility for overseeing the group's daily business operations to management executives[113] - The company has established internal policies to ensure the Board of Directors can obtain independent opinions and views, and external experts are hired to assist directors in fulfilling their duties[118] - The Audit Committee held two meetings during the year to approve the audited financial statements and review the interim financial statements, recommending the Board to approve them[124] - The Remuneration Committee held one meeting to discuss and review the compensation of all directors and senior management, including the adoption of the 2023 Share Option Scheme[125] - The Nomination Committee is responsible for reviewing the structure, size, and composition of the Board, and making recommendations for the appointment of directors and senior management[125] - The company has a policy for onboarding new Board members, including introductions to the business scope, roles, and responsibilities of directors, and compliance with continuous professional development requirements[122] - All directors have attended training sessions focusing on the roles, functions, and responsibilities of listed company directors to comply with regulatory requirements[122] - The Audit Committee reviewed the risk management and internal control systems, and discussed significant audit matters with external auditors and senior management before recommending the approval of financial statements[124] - The company has arranged appropriate insurance coverage for directors against potential legal actions[123] - The company's risk management system has been continuously improved, with a clear organizational structure and defined responsibilities for risk management at both the board and management levels[130][131] - The company updated its risk assessment standards in 2023, incorporating qualitative and quantitative dimensions, including strategic, financial, operational, compliance, and market-related risks[132] - The company conducted a comprehensive review of its risk management system in 2023, identifying major risks across key business segments and updating risk databases and assessment methods[134] - The company's internal control system is based on the COSO framework, consisting of five interdependent elements: control environment, risk assessment, control activities, information and communication, and monitoring activities[135] - The company's external auditor fees for the annual financial statement audit amounted to approximately RMB 5,500,000[139] - Non-audit services provided by the external auditor, including due diligence, tax advisory, and compliance services, cost approximately RMB 1,499,000[139] - The company conducted a comprehensive review of its risk management and internal control systems, covering the 2023 fiscal year, and deemed the systems effective and adequate[137] - The audit committee reviewed the resources, qualifications, and training of the accounting, internal audit, and financial reporting functions, with satisfactory results[137] - The company established a whistleblowing mailbox and requires business partners to sign an anti-corruption agreement to promote integrity and transparency[138] - The company has implemented a framework for handling and disclosing insider information, ensuring timely and confidential communication to stakeholders[139] - Shareholders holding at least one-tenth of the company's paid-up share capital with voting rights can request a special general meeting, which must be held within two months of the request[140] - Shareholders can nominate non-board members for director elections by submitting a written notice, which must be verified by the company's share registrar[141] - The company emphasizes investor relations through regular communication, press releases, and media interactions to enhance transparency[143] - The independent auditor confirmed that the consolidated financial statements for 2023 were prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance[144] - The company's auditors maintained independence and adhered to the Code of Ethics for Professional Accountants issued by the Hong Kong Institute of Certified Public Accountants[147] - The auditors focused on the impairment assessment of goodwill and indefinite-lived operating licenses due to the significant judgment and estimates involved[149] - The company's financial statements were audited under the Hong Kong Standards on Auditing, with the auditors obtaining sufficient and appropriate audit evidence to support their opinion[145] Goodwill and Impairment - Goodwill and indefinite-lived operating licenses were assessed for impairment, with carrying amounts of approximately RMB 4,214,619,000 and RMB 674,557,000 as of December 31, 2023, accounting for about 29.3% of the company's total assets[146] - The company acquired Virtual Cinema Entertainment Limited, contributing to the goodwill and indefinite-lived operating licenses[146] - Management conducted impairment tests by comparing carrying amounts with recoverable amounts of cash-generating units, concluding no impairment was necessary as of December 31, 2023[146] - Key assumptions used in impairment testing included revenue growth rate, perpetual growth rate, gross margin, and pre-tax discount rate[150] - The company's internal valuation experts reviewed the models and assumptions used in the impairment assessment, comparing them with historical performance, market data, and industry studies[146] - Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate potential impairment[191] - Operating licenses in China for TV dramas, programs, and films are considered to have indefinite useful lives and are not amortized unless their useful lives are determined to be finite[192] Share Options and Equity - The 2013 Share Option Plan was terminated in 2023, with a maximum of 7,359,057,611 shares issuable under the plan, representing 10% of the issued shares as of June 10, 2016[33] - No share options were granted under the 2013 Share Option Plan from January 1, 2024, until its termination[34] - As of December 31, 2023, 181,917,000 share options granted under the 2013 Share Option Plan remained unexercised[34] - The company issued 181,917,000 share options on November 26, 2021, under the 2013 Share Option Plan[34] - The number of share options available for grant under the 2013 Share Option Plan decreased from 553,988,761 at the beginning of the year to zero at the end of 2023 due to the plan's termination[34] - Total stock options granted to directors as of December 31, 2023, amounted to 58,000 thousand shares, with an exercise price of HKD 3.43 per share[35] - Stock options granted to senior management and employees (excluding directors) as of December 31, 2023, totaled 123,917 thousand shares, with an exercise price of HKD 3.43 per share[36] - The 2023 Stock Option Plan was adopted on June 28, 2023, and will expire on June 27, 2033, aiming to reward eligible participants for their contributions to the group[38] - The total number of share options available for issuance under the 2023 Share Option Plan is 1,000,464,754 shares, representing approximately 8.64% of the issued shares as of the report date[41] - The service provider sub-limit for share options under the 2023 Share Option Plan is 500,232,377 shares, unchanged from the adoption date to the end of the year[41] -
中国儒意(00136) - 2023 - 年度财报