MAOYAN ENTERTAINMENT MAOYAN ENTERTAINMENT
(Incorporated in the Cayman Islands with limited liability) ( 於開曼群島註冊成立的有限公司 )
Stock Code 股份代號 : 1896
2020
Interim Report 中期報告
Contents
Corporate Information | 2 |
CEO's Statement | 4 |
Management Discussion and Analysis | 9 |
Other Information | 18 |
Report on Review of Interim Financial Information | 27 |
Interim Condensed Consolidated Statement of Comprehensive Income | 28 |
Interim Condensed Consolidated Statement of Financial Position | 30 |
Interim Condensed Consolidated Statement of Changes in Equity | 32 |
Interim Condensed Consolidated Statement of Cash Flows | 34 |
Notes to the Interim Condensed Consolidated Financial Information | 36 |
Definition and Glossary | 80 |
Corporate Information
BOARD OF DIRECTORS
Executive Director
Mr. Zheng Zhihao (Chief Executive Officer)
Non-executive Directors
Mr. Wang Changtian (Chairman) Ms. Li Xiaoping
Ms. Wang Jian
Mr. Zhan Weibiao (resigned on June 9, 2020) Mr. Cheng Wu (appointed on June 9, 2020) Mr. Chen Shaohui
Mr. Lin Ning
Mr. Tang Lichun, Troy (appointed on January 15, 2020)
JOINT COMPANY SECRETARIES
Ms. Zheng Xia
Mr. Cheng Ching Kit
AUTHORIZED REPRESENTATIVES
Mr. Zheng Zhihao
Mr. Cheng Ching Kit
AUDITOR
PricewaterhouseCoopers
Certified Public Accountants
Registered Public Interest Entity
Auditor
Independent Non-executive Directors
Mr. Wang Hua
Mr. Chan Charles Sheung Wai Mr. Ma Dong
Mr. Luo Zhenyu (resigned on June 9, 2020) Ms. Liu Lin (appointed on June 9, 2020)
AUDIT COMMITTEE
Mr. Chan Charles Sheung Wai (Chairman) Mr. Wang Hua
Mr. Ma Dong (resigned with effect from August 18, 2020)
Ms. Liu Lin (appointed with effect from August 18, 2020)
NOMINATION COMMITTEE
Mr. Wang Hua (Chairman)
Mr. Chan Charles Sheung Wai
Mr. Zheng Zhihao
REMUNERATION COMMITTEE
Mr. Wang Hua (Chairman)
Mr. Ma Dong (resigned with effect from August 18, 2020)
Ms. Liu Lin (appointed with effect from August 18, 2020)
Mr. Zheng Zhihao
REGISTERED OFFICE
Walkers Corporate Limited
Cayman Corporate Centre
27 Hospital Road
George Town
Grand Cayman KY1-9008
Cayman Islands
HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN CHINA
No.3 Building, Yonghe Hangxing Garden
No.11 Hepingli East Street
Dongcheng District
Beijing, PRC
PRINCIPAL PLACE OF BUSINESS IN HONG KONG
40th Floor, Sunlight Tower
No. 248 Queen's Road East
Wanchai, Hong Kong
2 MAOYAN ENTERTAINMENT | Interim Report 2020
Corporate Information
LEGAL ADVISORS
As to Hong Kong law:
Clifford Chance
As to Cayman Islands law:
Walkers (Hong Kong)
As to the law of of the People's Republic of China: Commerce & Finance Law Offices
COMPLIANCE ADVISOR
Guotai Junan Capital Limited
27/F., Low Block
Grand Millennium Plaza
181 Queen's Road Central
Hong Kong
HONG KONG SHARE REGISTRAR
Computershare Hong Kong Investor Services Limited
Shops 1712-1716, 17th Floor
Hopewell Centre
183 Queen's Road East
Wanchai, Hong Kong
CAYMAN ISLANDS PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE
Walkers Corporate Limited
Cayman Corporate Centre
27 Hospital Road
George Town
Grand Cayman KY1-9008
Cayman Islands
PRINCIPAL BANKERS
China Merchants Bank, Beijing Branch
Ping An Bank, Garden Road Sub-Branch
STOCK CODE
1896
COMPANY'S WEBSITE
www.maoyan.com
MAOYAN ENTERTAINMENT | Interim Report 2020 3
CEO's Statement
I am pleased to present our half-year results for the six months ended June 30, 2020.
FINANCIAL HIGHLIGHTS
Our revenue decreased to RMB203.1 million in the first half of 2020 from RMB1,984.6 million in the first half of 2019. Our gross loss was RMB20.6 million in the first half of 2020, compared with the gross profit of RMB1,186.8 million in the first half of 2019. Our net loss for the period was RMB430.7 million in the first half of 2020, compared with the net profit for the period of RMB257.4 million in the first half of 2019. Our adjusted EBITDA for the period was negative RMB283.6 million in the first half of 2020, compared with RMB511.7 million in the first half of 2019, whereas our adjusted net loss* was RMB307.1 million in the first half of 2020, compared with the adjusted net profit of RMB380.4 million in the first half of 2019.
BUSINESS REVIEW AND OUTLOOK
Since the beginning of this year, the COVID-19 pandemic has caused certain negative impact on the Chinese and even global movie industries. Thanks to the disease control and prevention measures implemented by the Chinese government have been highly effective, industries across the board have gradually resumed their operations. Since July 20, 2020, cinemas in mainland China have also started to reopen in an orderly manner.
As a major player in the pan entertainment industry in China, we have firmly upheld our social responsibilities, taken active measures to mitigate the negative impact of the pandemic, and cooperated with our industry partners to overcome those challenges caused by the COVID-19 outbreak. We remain committed to improving our services and products, expediting our consolidation of online and offline resources, and unleashing Maoyan's integrated value in the pan entertainment sector.
Our Pandemic Response Measures
During the pandemic, we prioritized fulling our social responsibilities and protecting our users' interests. After movies were withdrawn from showing during the 2020 Chinese New Year holiday, we immediately announced unconditional refunds for all Maoyan users and advanced cash to our cinema partners to expedite their refund process. Within only 3 days, we completed all ticket refunds for those movies withdrawn during the Chinese New Year holiday, cumulatively refunding more than 5 million tickets worth of over RMB200 million.
We have continuously provided a variety of assistance to support the movie industry's recovery and growth, including but not limited to:
- leveraging our own resource advantages and assisting cinemas to tap into Meituan's platform so that they sell through home delivery services their food inventory accumulated ahead of the Chinese New Year holiday.
- In the first half of 2020 and 2019, we defined adjusted net (loss)/profit as net (loss)/profit for the six months adjusted by adding back share-based compensation, net losses of convertible bonds classified as financial liabilities at fair value through profit or loss, listing expenses and the amortization of intangible assets resulting from business combinations.
4 MAOYAN ENTERTAINMENT | Interim Report 2020
CEO's Statement
- conducting research and sharing industry data continuously to stimulate interactions among industry participants. Through Maoyan Research Institute (貓眼研究院), we have published dozens of research reports as well as relevant industrial ranking list and provided our industry partners with a number of online training seminars and business idea exchanges free of charge. In collaboration with China Movie Association, Ocean Engine, iQIYI and others, we have also published a series of industrial research reports to help our industry partners to make rational judgements about market trends and formulate effective strategies in response to changes.
- implementing a variety of measures to help cinemas and other offline entertainment venues to expedite their business reopening. Such measures include upgrading our cinema service solutions, providing social distancing ticketing functions, supporting dispersed seating arrangements, and enhancing real name authentication to minimize risks arising from movie viewing during the pandemic. In addition, through the Maoyan platform, we launched "Safe Cinema (安心影院)" labels to certify those cinemas compliant with pandemic prevention and control protocols, including full premise sanitization, all staff testing, and mask wearing, so that we can help to ensure the health and safety of the audience when they watch a movie or a live performance.
- continuing to provide cinemas and other industry partners with supply chain financing and related services to alleviate their capital constraints.
- hosting movie-viewing events in partnership with local governments, trade unions, and other institutions at discounted prices, and providing free movie-viewing events jointly with Huaxia Film for medical workers and middle and high school students, with a goal of encouraging audiences to return to cinemas and helping businesses to resume operations.
In addition, as we give top priority to the health and safety of our employees, we have promptly adopted flexible work-from-home policies. We also have stocked up sufficient health supplies for pandemic prevention and control. We also implemented strict cost control measures and channeled our resources towards revenue-generating activities.
Our Product Enhancement and Market Penetration
Cinemas nationwide have gradually reopened in an orderly manner since July 20, 2020. Building on the foundation we laid during the first half of 2020 in functionality grade and platform optimization for our online ticketing system, we launched a series of new products including "Safe Cinema (安心影院)" to support movie theaters' speedy reopening. We also made timely adjustment in our ticketing and settlement systems to stay compliant with the business resumption protocols mandated by local authorities. In addition, we further strengthened our collaboration with the relevant ticketing system operator and broadened our ticketing system's interface with cinemas. We plan to continue our technology advancement and improve our ticketing system's compatibility and functionality.
MAOYAN ENTERTAINMENT | Interim Report 2020 5
CEO's Statement
To accelerate our offline entertainment venue partners' digitization process at a low cost, we fortified our technology advancement in smart stadiums and completed a system-wide upgrade. In preparation for the new entertainment consumption contexts emerging post pandemic, we have expanded our offerings and started to serve as the ticketing agency for tourist attraction entertainment performances. Also, to enlarge our reservoir of live entertainment events, we have entered into several agreements to invest in and act as the ticketing agency for large-scale offline concerts performed by leading artists. We will release those live events in a methodical manner as the pandemic further subsides. Meanwhile, we are actively exploring new business models related to online entertainment performances. For example, we recently acted as the exclusive ticketing agency and distribution partner for "Rocket Girls 101", a live concert event done by the popular music group backed by Tencent Video.
In the first half of 2020, we devoted substantial resources to developing premium movie and TV content both through self production and in collaboration with partners. As a result, we have built up an abundant reserve of content. For offline cinemas, we have participated in the production or distribution of dozens of movies. For example, we self-produced a number of movies that are either in active production or ready for paced market releases, such as Back to The Wharf (風平浪靜) (which was nominated for the Golden Goblet Awards in the 23rd Shanghai International Film Festival), On Your Mark (起跑) , Moses on The Plain (平原上的摩西) , and Game of Genius (天才遊戲) . In addition, we are the co-producer and/or co-distributor for a number of notable movie titles such as the Rescue (緊急救援) , G Storm (反貪風暴 5) , One Second (一秒鐘) , Wade Through Angry Seas (涉過憤 怒的海) and Warriors of Future (明日戰記) , all of which will be released at opportune times. On the television front, we are actively utilizing our original content development capabilities and collaborating with industry partners to produce high-quality content. For example, we have co-produced a number of TV series such as Inside Man (局中
人) and Shichahai (什剎海) , both of which were released in the first half of 2020 and generated great performance. Also, some of our co-produced series, such as the Legendary Tavern (老酒館) , have won multiple awards at the 26th Shanghai TV Festival. We are also in the midst of active co-productions with Tencent Video for TV dramas such as Miss Crow and Mr. Lizard (烏鴉小姐與蜥蜴先生) as well as Babel (通天塔) . In addition, leveraging our high professional standard and content development expertise, we have increased our self production of TV series. We are currently in active production of tiles such as Defense Out of Court (庭外辯護) and Chess Prodigy (天才棋 士) . Executing our long-term growth strategy while also taking into consideration the pandemic's potential impact, we have increased our investment in movie streaming and other types of online content. To date, we act as the co-producer or co-distributor of several streaming movies in genres ranging from action to suspense, historical drama, thriller, science fiction, and many more.
By advancing our content production capabilities, enriching our industry resources, and augmenting our domain expertise, we have laid the groundwork to form a movie-TV soundtrack value chain in the first half of 2020. We have entered into an exclusive partnership with Tencent Music Entertainment Group ("TME") for soundtrack copyright, and developed original soundtracks for various movies and TV series in collaboration with the top-tier producers and musicians. During the period, for example, we reached an exclusive copyright sharing agreement with TME regarding the original soundtrack for Shichahai (什剎海) , a popular TV series simultaneously broadcasted on CCTV 1, Tencent Video, iQIYI, and Youku on July 10, 2020.
6 MAOYAN ENTERTAINMENT | Interim Report 2020
CEO's Statement
The promotion and distribution prowess that we attained through years of experience has enabled us to serve as the distributor of those movies accounting for over 90% of box office nationwide. In the first half of 2020, we further expanded our online promotion and distribution capabilities by integrating data analysis, technology automation, and advanced services. As a result, we have developed a highly integrated, one-stop,online-offline marketing solution that encompasses the entire lifecycle from strategy formation to promotion execution, channel marketing, and smart distribution. In addition, we introduced several new promotion and distribution products, such as "Maoyan Online Chat (貓眼雲聊)", "Fast 24 Hours (極速24小時)" and "the Story Behind the Movie: Please Answer (電影背後的故事: 大咖請回答)". In July 2020, we launched in Maoyan Pro (貓眼專業版) a new feature suite called "Smart Promotion and Distribution (智能宣發)", which included 33 functionalities in 8 different categories such as data consultation, smart promotion and distribution, targeted marketing and distribution assistant.
To facilitate the healthy growth of the pan entertainment industry, we are constructing a solid foundational infrastructure through augmentation of our data platform and expansion of our data sources. In April 2020, we launched in Maoyan Pro a TV-Movie rating list by TikTok so that our users can improve their promotion and distribution efficiency by accessing and analyzing extensive platform data. In June 2020, Maoyan Pro officially interfaced with Tencent Video to exchange data about online movie revenue split between partners. Thus we became the first platform in China that have integrated access to the online movie box office data from Tencent Video, iQIYI, and Youku. In July 2020, under the "Tencent and Maoyan Alliance", Maoyan Pro launched the "Uni Chart" by TME, which syndicates data on movie MV lists, movie soundtrack lists, TV series MV lists, TV series soundtrack lists, and variety show soundtrack lists to help our industry partners easily monitor the effectiveness of their music marketing initiatives.
In addition, we further advanced the synchronization between pre-screening advertising and offline entertainment advertising. Through a portfolio marketing approach that combines ticket promotion with on premise advertisement and pre-screening advertisement, we have integrated advertising into all major entertainment formats including movies, live performances, and other contexts for entertainment consumption. We are able to showcase advertisements through the entire closed loop of entertainment consumption cycle including ticket purchases, ticket claims, and in-person viewing. To lock in premier industry resources, we entered into business cooperation with thousands of cinemas and a large number of brand advertisers in the first half of 2020. As movie theaters reopen and as their audiences gradually return, we believe that our unique competitive advantages in integrated marketing and advertising will become further accentuated.
MAOYAN ENTERTAINMENT | Interim Report 2020 7
CEO's Statement
Looking Forward with Full Confidence
During the pandemic, the Chinese state and local authorities unveiled a series of policies to support the recovery and growth of the pan entertainment industry. Since the reopening of cinemas on 20 July, 2020, daily box office has been growing steadily, and weekly box office surpassed the RMB100 million mark within the first week of reopening. Such rapid recovery in box office not only reveals the potency of pent-up consumer demand for offline movie watching, but also instills strong confidence in movie industry participants. Besides cinemas, other offline entertainment activities are also gradually coming back to life. For example, we are acting as the exclusive general ticketing agency for the "2020 Honor of Kings World Final Championship Cup", which is scheduled to take place in August 2020. All aforementioned developments have given us the conviction that the pandemic will end eventually, that the pan entertainment industry will advance unabated, and that high-quality content will always win audiences.
In support of the pan entertainment industry's speedy recovery and sustainable growth, we will continue augmenting our domain expertise, executing our "Cat Claw Strategic Model", and further developing our platform's capabilities. In addition, we plan to further enhance our internet-native advantages, expand our online service offerings such as our brand new product called "Maoyan Screening Room" (貓眼放映廳) on July 31, 2020, refine our online-offline promotion and distribution services, and deliver more optimized and suitable derivative services of the value chain. Moreover, we will continue to boost the synergy and coordination among our various business segments, enhance our resilience against market risks, raise our ceiling for growth, and bolster our overall competitive advantages.
As the adage goes: no winter lasts forever, and no spring skips its turn. Being the leading pan entertainment portal, and as the mainstream platform for entertainment distribution, data, and products, we will stand side by side with our partners, support our users, help to accelerate the recovery of the pan entertainment industry, and blaze a trail to a brighter tomorrow for all. Last but not least, we would like to express our sincere gratitude to all of our colleagues, shareholders and partners for their unwavering support and generous assistance. Let us work together and generate greater values for our industry!
Executive Director and Chief Executive Officer
ZHENG Zhihao
Hong Kong
August 17, 2020
8 MAOYAN ENTERTAINMENT | Interim Report 2020
Management Discussion and Analysis
INTERIM PERIOD REVIEW
Six months ended June 30, | |||||
2020 | 2019 | ||||
RMB million | % | RMB million | % | ||
(Unaudited) | (Unaudited) | ||||
Revenue | 203.1 | 100.0 | 1,984.6 | 100.0 | |
Cost of revenue | (223.7) | (110.1) | (797.8) | (40.2) | |
Gross (loss)/profit | (20.6) | (10.1) | 1,186.8 | 59.8 | |
Selling and marketing expenses | (170.8) | (84.1) | (610.7) | (30.8) | |
General and administrative expenses | (204.3) | (100.6) | (184.9) | (9.3) | |
Net impairment losses on | |||||
financial and other assets | (135.6) | (66.8) | (7.9) | (0.4) | |
Other income | 122.0 | 60.1 | 9.6 | 0.5 | |
Other losses, net | (15.2) | (7.5) | (9.6) | (0.5) | |
Operating (loss)/profit | (424.5) | (209.0) | 383.3 | 19.3 | |
Finance income | 12.3 | 6.1 | 11.8 | 0.6 | |
Finance costs | (20.1) | (9.9) | (29.5) | (1.5) | |
Finance costs, net | (7.8) | (3.8) | (17.7) | (0.9) | |
Share of losses of investments | |||||
accounted for using equity method | (0.3) | (0.1) | (0.4) | (0.0) | |
(Loss)/profit before income tax | (432.6) | (212.9) | 365.2 | 18.4 | |
Income tax credits/(expenses) | 1.9 | 0.9 | (107.8) | (5.4) | |
(Loss)/profit for the period | (430.7) | (212.0) | 257.4 | 13.0 | |
Non-IFRS Measures: | |||||
EBITDA | (338.1) | (166.5) | 457.5 | 23.1 | |
Adjusted EBITDA | (283.6) | (139.6) | 511.7 | 25.8 | |
Adjusted net (loss)/profit* | (307.1) | (151.2) | 380.4 | 19.2 | |
Note:
- In the first half of 2020 and 2019, we defined adjusted net (loss)/profit as net (loss)/profit for the six months adjusted by adding back share-based compensation, net losses of convertible bonds classified as financial liabilities at fair value through profit or loss, listing expenses and the amortization of intangible assets resulting from business combinations.
MAOYAN ENTERTAINMENT | Interim Report 2020 9
Management Discussion and Analysis
Revenue
Our revenue decreased from RMB1,984.6 million in the first half of 2019 to RMB203.1 million in the first half of 2020. This decrease was primarily due to decreases in the revenue from the online entertainment ticketing services, the entertainment content services and the advertising services and others as a result of the coronavirus epidemic. The following table sets forth our revenues by service in the first half of 2019 and 2020.
Six months ended June 30, | ||||
2020 | 2019 | |||
RMB million | % | RMB million | % | |
(Unaudited) | (Unaudited) | |||
Revenue | ||||
Online entertainment | ||||
ticketing services | 103.8 | 51.1 | 1,083.0 | 54.6 |
Entertainment content | ||||
services (note) | 15.6 | 7.7 | 665.7 | 33.5 |
Advertising services and others | 83.7 | 41.2 | 235.9 | 11.9 |
Total | 203.1 | 100.0 | 1,984.6 | 100.0 |
Note: This amount included fair value gain on the Group's investment in movie and TV series amounting to RMB10.7 million for the six months ended June 30, 2020.
Online entertainment ticketing services
Revenue from our online entertainment ticketing business decreased from RMB1,083.0 million in the first half of 2019 to RMB103.8 million in the first half of 2020. Such decrease was primarily a result of the obvious decrease in the gross box office and the movie theater attendance in China in the first half of 2020 compared to the first half of 2019, which was due to the temporary closure of movie theaters in China as a result of the prevention and control measures adopted by the government.
Entertainment content services
Revenue from our entertainment content services decreased from RMB665.7 million in the first half of 2019 to RMB15.6 million in the first half of 2020. Such decrease was mainly because of the withdrawing of all movies for Spring Festival holiday we participated in the production, promotion and distribution and the failure to release other projects on schedule resulting from the coronavirus epidemic.
Advertising services and others
Revenue from our advertising services and others decreased by 64.5% from RMB235.9 million in the first half of 2019 to RMB83.7 million in the first half of 2020, which was primarily due to the decreases in advertising demand of advertisers during the pandemic.
10 MAOYAN ENTERTAINMENT | Interim Report 2020
Management Discussion and Analysis
Cost of revenue
Our cost of revenue decreased by 72.0% from RMB797.8 million in the first half of 2019 to RMB223.7 million in the first half of 2020. The decrease in our cost of revenue was mainly due to a decrease in ticketing system cost (which was in line with the decrease in our revenue from online movie ticketing services) as well as a decrease in content production cost and content distribution and promotion cost (which was in line with the decrease in our revenue from entertainment content services).
The following table sets forth our cost of revenue by amount, as a percentage of total cost of revenue and as a percentage of total revenues for the period indicated:
Six months ended June 30, | ||||||
2020 | 2019 | |||||
RMB | % | RMB | % | |||
million | % | of revenue | million | % | of revenue | |
(Unaudited) | (Unaudited) | |||||
Ticketing system cost | 38.9 | 17.4 | 19.2 | 254.5 | 31.9 | 12.8 |
Internet infrastructure cost | 53.4 | 23.9 | 26.3 | 115.3 | 14.5 | 5.8 |
Content distribution and promotion cost | 28.3 | 12.7 | 13.9 | 187.5 | 23.5 | 9.4 |
Content production cost | 8.5 | 3.8 | 4.2 | 133.7 | 16.8 | 6.7 |
Amortization of intangible assets | 68.9 | 30.8 | 33.9 | 67.0 | 8.4 | 3.4 |
Depreciation of property, plant and | ||||||
equipment | 4.1 | 1.8 | 2.0 | 3.2 | 0.4 | 0.2 |
Other expenses | 21.6 | 9.6 | 10.6 | 36.6 | 4.5 | 1.9 |
Total | 223.7 | 100.0 | 110.1 | 797.8 | 100.0 | 40.2 |
Gross (Loss)/Profit and Gross Margin
We had gross loss of RMB20.6 million in the first half of 2020, compared to gross profit of RMB1,186.8 million in the first half of 2019. Our gross margin was 59.8% and negative 10.1% in the first half of 2019 and 2020, respectively. The changes in our gross profit and gross margin were primarily due to a significant decrease in our revenue resulting from the epidemic whereas the fixed cost in our cost failed to decrease at the same proportion as the revenue, resulting in a significant decrease in the gross profit and gross margin.
Selling and Marketing Expenses
Our selling and marketing expenses significantly decreased by 72.0% from RMB610.7 million in the first half of 2019 to RMB170.8 million in the first half of 2020, primarily due to the decrease in user incentive.
General and Administrative Expenses
Our general and administrative expenses increased by 10.5% from RMB184.9 million in the first half of 2019 to RMB204.3 million in the first half of 2020 primarily due to the increase in employee benefits expenses for the purpose of research and development.
MAOYAN ENTERTAINMENT | Interim Report 2020 11
Management Discussion and Analysis
Net impairment losses on financial and other assets
We had net impairment losses on financial and other assets of RMB135.6 million in the first half of 2020, compared to our net impairment losses on financial and other assets of RMB7.9 million in the first half of 2019. We have carefully assessed the expected loss of financial and other assets as at June 30, 2020 and made impairment provisions to reflect the adverse impact of coronavirus disease to the macroeconomic environment and the PRC entertainment industry.
Other Income and Other Losses, Net
We had other income and other losses, net of RMB106.8 million in the first half of 2020, compared to other income and other losses, net of negative RMB29 thousand in the first half of 2019, which was primarily due to an increase in government subsidies in the first half of 2020 as compared to that in the first half of 2019.
Operating (Loss)/Profit
As a result of the foregoing, our operating loss was RMB424.5 million in the first half of 2020, compared to an operating profit of RMB383.3 million in the first half of 2019.
Finance Costs, Net
We had finance costs, net of RMB7.8 million in the first half of 2020, compared to our finance costs, net of RMB17.7 million in the first half of 2019. The change was primarily due to a decrease in the interest expenses resulting from the decrease in bank borrowings.
Income Tax Credits/(Expenses)
We had income tax credits of RMB1.9 million in the first half of 2020, compared to the income tax expenses of RMB107.8 million in the first half of 2019. This was primarily due to our decreased overall profitability.
Non-IFRS Financial Measures
To supplement our consolidated financial statements which are presented in accordance with IFRS, we also use EBITDA/adjusted EBITDA and adjusted net (loss)/profit as additional financial measures, which are not required by, or presented in accordance with, IFRS. We believe that these non-IFRS measures facilitate comparisons of operating performance from period to period and company to company by eliminating potential impacts of items that our management does not consider to be indicative of our operating performance. We believe that these measures provide useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as they help our management. However, our presentation of the EBITDA/ adjusted EBITDA and adjusted net (loss)/profit may not be comparable to similarly titled measures presented by other companies. The use of these non-IFRS measures has limitations as an analytical tool, and you should not consider them in isolation from, or as substitute for analysis of, our results of operations or financial condition as reported under IFRS.
12 MAOYAN ENTERTAINMENT | Interim Report 2020
Management Discussion and Analysis
Adjusted Net (Loss)/Profit, EBITDA, and Adjusted EBITDA
The following tables reconcile our adjusted net (loss)/profit and EBITDA and adjusted EBITDA for the periods presented to the most directly comparable financial measure calculated and presented in accordance with IFRS:
Six months ended June 30, | ||
2020 | 2019 | |
RMB million | RMB million | |
(Unaudited) | (Unaudited) | |
Reconciliation of net (loss)/profit to adjusted net (loss)/profit: | ||
Net (loss)/profit for the period | (430.7) | 257.4 |
Add: | ||
Share-based compensation | 54.5 | 51.0 |
Net losses of convertible bonds classified as financial liabilities | ||
at fair value through profit or loss | - | 1.6 |
Listing expenses | - | 3.2 |
Amortization of intangible assets resulting from | ||
business combinations | 69.1 | 67.2 |
Adjusted net (loss)/profit | (307.1) | 380.4 |
Note: In the first half of 2020 and 2019, we defined adjusted net (loss)/profit as net (loss)/profit for the six months adjusted by adding back share-based compensation, net losses of convertible bonds classified as financial liabilities at fair value through profit or loss, listing expenses and the amortization of intangible assets resulting from business combinations.
MAOYAN ENTERTAINMENT | Interim Report 2020 13
Management Discussion and Analysis
Six months ended June 30, | ||
2020 | 2019 | |
RMB million | RMB million | |
(Unaudited) | (Unaudited) | |
Reconciliation of operating (loss)/profit to EBITDA and | ||
adjusted EBITDA | ||
Operating (loss)/profit for the period | (424.5) | 383.3 |
Add: | ||
Depreciation of property, plant and equipment | 8.9 | 6.7 |
Amortization of intangible assets | 70.7 | 67.5 |
Depreciation of right-of-use assets | 6.8 | - |
EBITDA | (338.1) | 457.5 |
Add: | ||
Share-based compensation | 54.5 | 51.0 |
Listing expenses | - | 3.2 |
Adjusted EBITDA | (283.6) | 511.7 |
Note: In the first half of 2020 and 2019, we defined EBITDA as operating (loss)/profit for the period adjusted for depreciation and amortization expenses. We added back share-based compensation and listing expenses to EBITDA to derive adjusted EBITDA.
14 MAOYAN ENTERTAINMENT | Interim Report 2020
Management Discussion and Analysis
OTHER FINANCIAL INFORMATION
Capital Structure
The Company continued to maintain a healthy and sound financial position. Our total assets changed from RMB11,351.2 million as of December 31, 2019 to RMB10,150.3 million as of June 30, 2020, whilst our total liabilities decreased from RMB3,063.2 million as of December 31, 2019 to RMB2,204.1 million as of June 30, 2020. Liabilities-to-assets ratio decreased from 27.0% as of December 31, 2019 to 21.7% as of June 30, 2020.
As of June 30, 2020, we pledged bank deposits of USD23.5 million (equivalent to approximately RMB166.4 million) and bank deposits of RMB64.0 million as security for bank borrowings.
Liquidity, Financial Resources, and Gearing
We have historically funded our cash requirements principally from cash generated from operations, and to a lesser extent, equity and debt financing. We adopt prudent treasury policies in cash and financial management. To achieve better risk control and minimise cost of funds, our treasury activities are centralised. Cash is generally placed in short-term deposits mostly denominated in Renminbi or US dollars. Our liquidity and financing requirements are reviewed regularly. We will consider new financing while maintaining an appropriate level of gearing in anticipation of new investments or maturity of bank loans.
As of June 30, 2020, we had cash and cash equivalents and other forms of bank deposits of RMB1,401.7 million, meanwhile, we also had wealth management products valued at RMB20.5 million, which were predominantly denominated in RMB and US dollars. Going forward, we believe that our liquidity requirements will be satisfied by using a combination of cash generated from operating activities, other funds raised from the capital markets from time to time and the net proceeds received from the global offering of the Company.
As of June 30, 2020, our total borrowings were approximately RMB780.0 million, which were all bank borrowings denominated in Renminbi. The following table sets forth further details of our banking borrowings as of June 30, 2020:
RMB million | Interest rate | |
Secured | 310.0 | 3.92% |
Guaranteed | 470.0 | 3.92%~5.26% |
Total | 780.0 | N/A |
As of June 30, 2020, we had unutilized banking facilities of RMB876.2 million and banking facilities of RMB1,656.2 million.
As of June 30, 2020, we did not have any significant contingent liabilities.
We monitor capital on basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings, net of cash and cash equivalent, restricted bank deposits and term deposit with original maturity over three months. Total capital is calculated as "equity" as shown in the consolidated statement of financial position. As at June 30, 2020 and December 31, 2019, the Group has a net cash position.
MAOYAN ENTERTAINMENT | Interim Report 2020 15
Management Discussion and Analysis
Capital Expenditure
Our capital expenditures primarily included purchase of equipments and intangible assets. Our capital expenditures decreased by 47.9% to RMB7.5 million in the first half of 2020 from RMB14.4 million in the first half of 2019. We plan to fund our planned capital expenditures using cash generated from operations.
Material Acquisitions, Disposals and Future Plans for Major Investments
The Group did not have any plans for major investments and capital assets as of June 30, 2020. During the six months ended June 30, 2020, we did not have any material acquisitions and disposals of subsidiaries and affiliated companies.
Significant Investments Held
On March 12, 2019, we entered into a subscription agreement and a strategic cooperation agreement with Huanxi Media Group Limited. Pursuant to the subscription agreement, we have conditionally agreed to subscribe for, and Huanxi Media Group Limited has conditionally agreed to allot and issue to us, 236,600,000 shares at a total consideration of HK$390,555,620. Under such agreements, we planned to establish strategic cooperation with Huanxi Media Group Limited in entertainment content services. On March 19, 2019, the subscription was completed and the consideration was duly paid. For further details, please see our announcement dated March 13, 2019, our annual reports dated April 25, 2019 and April 28, 2020.
Save as disclosed above, as of June 30, 2020, the Company did not hold any significant investments.
Foreign Exchange Risk Management
Our businesses are principally conducted in RMB, which is exposed to foreign currency risk with respect to transactions denominated in currencies other than RMB. Foreign exchange risk arises from recognized assets and liabilities and net investments in foreign operations. We manage foreign exchange risk by performing regular reviews of our foreign exchange exposures and try to minimize these exposures through natural hedges, wherever possible, and may enter into forward foreign exchange contracts, when necessary. We did not enter into any forward contract or other financial instruments to hedge our exposure to foreign currency risk in the first half of 2020.
Employees and Remuneration Policy
As of June 30, 2020, we had 1,002 full-time employees, 999 of whom were based in mainland China, primarily at our headquarters in Beijing, with the remainder in Shanghai and various other cities in China.
Committed to establishing a competitive, fair remuneration and benefits system, we continually refine our remuneration and incentive policies through market research and comparison with our competitors, in order to ensure that our employees receive competitive remuneration packages. As required under the PRC regulations, we participate in housing fund and various employee social security plan that are organized by applicable local municipal and provincial governments. We also purchase commercial health and accidental insurance for our employees. We also provide regular and specialized trainings tailored to the needs of our employees in different departments, so that our employees may stay up to date with the latest industrial developments and technological advancements. In order to incentivize our Directors, senior management and other employees for their contribution to our Group and to attract and retain suitable personnel, we have granted and planned to continue to grant share-based incentive awards to our employees in the future to incentivize their contributions to our growth and development.
16 MAOYAN ENTERTAINMENT | Interim Report 2020
Management Discussion and Analysis
EVENTS AFTER THE REPORTING PERIOD
Pursuant to the public announcement made by the China Film Administration in July 2020, cinemas in low-risk areas in the PRC have orderly reopened since July 20, 2020 and begun to report gross box office results amid certain epidemic prevention measures which still restrict the cinemas' operating capacity. Pursuant to the public announcement issued by the Ministry of Culture and Tourism of the PRC in August 2020, commercial performance activities with medium size or below can be organized in the low risk areas subject to the approval from the relevant local authorities and conditional upon the effective prevention and control of the epidemic. The Group will continue to monitor the latest development of the COVID-19 epidemic and react actively to its impact on the operations and financial position of the Group.
Save as disclosed above, no other important events affecting the Company occurred since June 30, 2020 and up to the date of this interim report.
MAOYAN ENTERTAINMENT | Interim Report 2020 17
Other Information
INTERIM DIVIDEND
The Board has resolved not to pay any interim dividend for the six months ended June 30, 2020.
CORPORATE GOVERNANCE PRACTICES
The Company is dedicated to maintaining and ensuring high standards of corporate governance practices and the corporate governance principles of the Company are adopted in the interest of the Company and its Shareholders.
During the Reporting Period, the Company has complied with all the applicable code provisions of the Corporate Governance Code and adopted most of the best practices set out therein.
COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS
The Company has adopted the "Model Code for Securities Transactions by Directors of Listed Issuer" contained in Appendix 10 to the Listing Rules as its code of conduct for directors' securities transactions. Having made specific enquiry with the Directors, all of the Directors confirmed that they have complied with the required standard as set out in the Model Code during the Reporting Period.
AUDIT COMMITTEE
The Audit Committee of the Company consists of three independent non-executive Directors, namely Mr. Chan Charles Sheung Wai, Mr. Wang Hua, Mr. Ma Dong (ceased to be a member of the Audit Committee with effect from August 18, 2020), Ms. Liu Lin (appointed as a member of the Audit Committee with effect from August 18, 2020). Mr. Chan Charles Sheung Wai currently serves as the chairman of the Audit Committee.
The Audit Committee (Mr. Chan Charles Sheung Wai, Mr. Wang Hua and Mr. Ma Dong), together with management and the Auditor, have reviewed the unaudited condensed consolidated results of the Group for the six months ended June 30, 2020.
CHANGES TO DIRECTORS' INFORMATION
On January 15, 2020, Mr. Tang Lichun, Troy has been appointed as a non-executive Director of the Company and the appointment took effect from the same day. On June 8, 2020, Mr. Zhan Weibiao resigned as a non-executive Director of the Company; Mr. Luo Zhenyu resigned as an independent non-executive Director of the Company; Mr. Cheng Wu has been appointed as a non-executive Director of the Company; and Ms. Liu Lin has been appointed as an independent non-executive Director of the Company. The above resignations and appointments were effective from June 9, 2020.
For details of the above changes of Directors, please refer to the announcements of the Company dated January 15, 2020 and June 8, 2020.
On August 18, 2020, Mr. Ma Dong ceased to be and Ms. Liu Lin has been appointed as a member of the Audit Committee and the Remuneration Committee.
For details of the above changes of composition of the Board committees, please refer to the relevant announcement of the Company dated August 17, 2020.
Mr. Chan Charles Sheung Wai, an independent non-executive Director of the Company, has ceased to be an independent non-executive director of Changyou.com Ltd.(暢遊有限公司), a company listed on the NASDAQ (Stock Code: CYOU) with effect from April 27, 2020.
Save as disclosed in this interim report, the Directors confirm that no information is required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules.
18 MAOYAN ENTERTAINMENT | Interim Report 2020
Other Information
PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
Neither the Company nor its subsidiaries has purchased, sold or redeemed any of the Company's listed securities during the Reporting Period.
USE OF NET PROCEEDS FROM THE GLOBAL OFFERING
The Shares of the Company were listed on the Main Board of the Stock Exchange on the Listing Date with net proceeds received by the Company from the global offering in the amount of approximately HK$1,839.3 million after deducting underwriting commissions and all related expenses. The following table sets forth the Company's use of the proceeds from the Listing and the planned timetable as of June 30, 2020.
Amount of | Balance | |||
net proceeds | of net | |||
Allocation | utilized as | proceeds as | Expected timeline | |
of net | of June 30, | of June 30, | for balance of | |
Intended use of net proceeds | proceeds | 2020 | 2020 | net proceeds |
HK$ | ||||
in millions | ||||
Funding for improving integrated platform capabilities | 551.8 | 209.5 | 342.3 | By December 31, |
2022 | ||||
Research and development and technical infrastructure | 551.8 | 219.1 | 332.7 | By December 31, |
2022 | ||||
Funding potential investments and acquisitions | 551.8 | 401.4 | 150.4 | By December 31, |
2021 | ||||
Working capital and general corporate purposes | 183.9 | 163.4 | 20.5 | By December 31, |
2020 | ||||
Save as disclosed above, since the Listing Date, the Group has not utilized any other portion of the net proceeds, and will gradually utilize the net proceeds in accordance with the intended purposes as stated in the Prospectus.
MAOYAN ENTERTAINMENT | Interim Report 2020 19
Other Information
DIRECTORS' AND CHIEF EXECUTIVE INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES
As at June 30, 2020, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which (a) were required, pursuant to section 352 of the SFO, to be recorded in the register referred to therein; or (b) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code, were as follows:
Approximate | ||||
percentage of | ||||
the issued | ||||
Name of Directors/ | Nature of | share capital of | ||
Chief Executive | Capacity | Interests | No. of Shares | the Company |
(%) | ||||
Mr. ZHENG Zhihao1 | Interest in controlled | Long Position | 19,277,225 | 1.70 |
corporations | ||||
Beneficial owner | Long Position | 4,872,539 | 0.43 | |
Mr. WANG Changtian2 | Interest in controlled | Long Position | 312,722,773 | 27.63 |
corporations | ||||
Short Position | 158,743,072 | 14.03 | ||
Ms. WANG Jian | Beneficial owner | Long Position | 450,000 | 0.04 |
Notes:
- As at June 30, 2020, Rhythm Brilliant Limited directly held 19,277,225 Shares in our Company. Rhythm Brilliant Limited is a wholly-owned subsidiary of Mr. ZHENG Zhihao. Therefore, Mr. ZHENG Zhihao is deemed to be interested in the 19,277,225 Shares held by Rhythm Brilliant Limited for purpose of Part XV of the SFO.
- As at June 30, 2020, Vibrant Wide Limited and Hong Kong Pictures International Limited directly held 277,979,625 Shares (among which 158,743,072 Shares were provided as security to a person other than a qualified lender) and 193,486,220 Shares in our Company, respectively. Vibrant Wide Limited is owned by Mr. WANG Changtian as to 100% of its equity interests. Hong Kong Pictures International Limited is a wholly-owned subsidiary of Enlight Media, which is owned by Enlight Investment as to 44.06% of its equity interests, which in turn is owned by Mr. WANG Changtian as to 95% of its equity interests. Therefore, Mr. WANG Changtian is deemed to be interested in the 471,465,845 Shares held by Vibrant Wide Limited and Hong Kong Pictures International Limited for purpose of Part XV of the SFO.
Save as disclosed above, as at June 30, 2020, neither the Directors nor chief executive of the Company (including their spouses and children under 18 years of age) had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under section 352 of the SFO or otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.
20 MAOYAN ENTERTAINMENT | Interim Report 2020
Other Information
SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES
As at June 30, 2020, so far as the Directors or the chief executive of the Company were aware, the Substantial Shareholders, other than the Directors or chief executive of the Company, who had interests or short positions in the Shares or underlying Shares as recorded in the register required to be kept by the Company under section
336 of the SFO, were as follows:
Approximate | ||||
percentage | ||||
of the issued | ||||
Name of Substantial | Nature of | share capital | ||
Shareholders | Capacity | Interest | No. of Shares | of the Company |
(%) | ||||
Vibrant Wide Limited | Beneficial owner | Long Position | 119,236,553 | 10.54 |
Short Position | 158,743,072 | 14.03 | ||
Hong Kong Pictures International | Beneficial owner | Long Position | 193,486,220 | 17.1 |
Limited | ||||
Inspired Elite Investments | Beneficial owner | Long Position | 82,693,975 | 7.31 |
Limited1 | ||||
Meituan Dianping 1 | Interest in controlled | Long Position | 82,693,975 | 7.31 |
corporations | ||||
Crown Holdings Asia Limited 1 | Interest in controlled | Long Position | 82,693,975 | 7.31 |
corporations | ||||
Songtao Limited 1 | Interest in controlled | Long Position | 82,693,975 | 7.31 |
corporations | ||||
TMF (Cayman) Ltd.1 | Trustee | Long Position | 82,693,975 | 7.31 |
Wang Xing1 | Interest in controlled | Long Position | 82,693,975 | 7.31 |
corporations | ||||
Image Flag Investment (HK) | Beneficial owner | Long Position | 157,169,260 | 13.89 |
Limited2 | ||||
Tencent Holdings Limited 2 | Interest in controlled | Long Position | 157,169,260 | 13.89 |
corporations | ||||
Weying (BVI) Limited | Beneficial owner | Long Position | 110,198,429 | 9.74 |
Interstellar Investment Ltd.3 | Beneficial owner | Long Position | 66,127,317 | 5.84 |
NottingHill Investment Ltd.3 | Interest in controlled | Long Position | 66,127,317 | 5.84 |
corporations | ||||
FountainVest China Capital | Interest in controlled | Long Position | 66,127,317 | 5.84 |
Partners Fund III, L.P.3 | corporations | |||
FountainVest China Capital | Interest in controlled | Long Position | 66,127,317 | 5.84 |
Partners GP3 Ltd.3 | corporations | |||
MAOYAN ENTERTAINMENT | Interim Report 2020 21
Other Information
Notes:
- Inspired Elite Investments Limited is wholly-owned by Meituan Dianping, which is owned as to 40.42% by Crown Holdings Asia Limited, which is in turn wholly-owned by Songtao Limited, and in turn wholly-owned by Mr. WANG Xing. Therefore, Meituan Dianping, Crown Holdings Asia Limited, Songtao Limited, TMF (Cayman) Ltd. and Mr. WANG Xing are deemed to be interested in the 82,693,975 shares held by Inspired Elite Investment Limited for purpose of Part XV of the SFO.
- Image Flag Investment (HK) Limited is wholly-owned by Tencent Holdings Limited. Therefore, Tencent Holdings Limited is deemed to be interested in the 157,169,260 shares held by Image Flag Investment (HK) Limited for purpose of Part XV of the SFO.
- Interstellar Investment Ltd. is wholly-owned by NottingHill Investment Ltd., which is owned as to 77.34% by FountainVest China Capital Partners Fund III, L.P., which is in turn wholly-owned by FountainVest China Capital Partners GP3 Ltd. Hence, NottingHill Investment Ltd., FountainVest China Capital Partners Fund III, L.P. and FountainVest China Capital Partners GP3 Ltd. are deemed to be interested in the Shares held by Interstellar Investment Ltd.
Save as disclosed above, as at June 30, 2020, so far as the Directors were aware, no other persons (other than the Directors or chief executive) had any interests or short positions in the Shares and underlying Shares as recorded in the register required to be kept by the Company under Section 336 of the SFO.
22 MAOYAN ENTERTAINMENT | Interim Report 2020
Other Information
EMPLOYEE INCENTIVE SCHEMES
Pre-IPO Share Option Scheme
The Pre-IPO Share Option Scheme was adopted by the Company as a continuation and restructuring of the employee share incentive scheme originally adopted by Tianjin Maoyan Weying on November 8, 2016 (the "2016 ESOP") following the Reorganization, which was established to recognize and reward the contribution of the participants to the growth and development of Tianjin Maoyan Weying. The 2016 ESOP was terminated as a result of the adoption of the ESOP Plan. The terms of the Pre-IPO Share Option Scheme are not subject to the provisions of Chapter 17 of the Listing Rules as our Pre-IPO Share Option Scheme will not involve the grant of options by us to subscribe for new Shares of the Company.
Movements of the options granted by the Company pursuant to the Pre-IPO Share Option Scheme during the Reporting Period are as follows:
Weighted | ||||||||||||
average | ||||||||||||
Closing | closing price | |||||||||||
Exercise | price | Outstanding | immediately | Outstanding | ||||||||
price | immediately | as of | Granted | Exercised | prior to | Lapsed | Cancelled | as of | Vesting | |||
per Share | Exercise | prior | January 1, | during | during | exercise | during | during | June 30, | Period | ||
Category | (HK$) | Date of grant | period | to grant | 2020 | the period | the period | (HK$) | the period | the period | 2020 | (note) |
Employee | 0.1009 | Between | Eight years | NA | 10,347,445 | 0 | 1,987,081 | 13.1628 | 428 | 44,352 | 8,315,584 | 1(a) |
August 1, 2016 | from the date | |||||||||||
and March 1, | of grant | |||||||||||
2018 | ||||||||||||
14.8 | Between | Eight years from | NA | 15,905,750 | 0 | 0 | - | 53,011 | 548,908 | 15,303,831 | 1(b) | |
February 1, 2018 | the date of | |||||||||||
and August 1, | grant | |||||||||||
2018 | ||||||||||||
14.8 | Between | Eight years from | NA | 7,710,890 | 0 | 0 | - | - | - | 7,710,890 | 1(a) | |
April 11, 2018 | the date of | |||||||||||
and June 1, | grant | |||||||||||
2018 | ||||||||||||
Total | 33,964,085 | 0 | 1,987,081 | N/A | 53,439 | 593,260 | 31,330,305 | |||||
Notes
1. The options granted under the scheme are subject to a vesting schedule and can be exercised in the following manner:
a. Category A
Vesting Date | Percentage that can be exercised |
First vesting date
First anniversary of first vesting date Second anniversary of first vesting date Third anniversary of first vesting date
Up to 25% of the options granted Up to 50% of the options granted Up to 75% of the options granted Up to all of the options granted
MAOYAN ENTERTAINMENT | Interim Report 2020 23
Other Information
- Category B
Vesting Date | Percentage that can be exercised |
First vesting date
First anniversary of first vesting date Second anniversary of first vesting date
Up to 50% of the options granted Up to 75% of the options granted Up to all of the options granted
Post-IPO Share Option Scheme
The Post-IPO Share Option Scheme was conditionally adopted together with the Restricted Share Agreement, Pre-IPO Share Option Scheme and the RSU Scheme by the Shareholders' resolutions on the Adoption Date.
Movements of the options granted by the Company pursuant to the Post-IPO Share Option Scheme during the Reporting Period are as follows:
Closing | ||||||||||||
Exercise | price | Outstanding | Outstanding | |||||||||
price | immediately | as of | Granted | Exercised | Lapsed | Cancelled | as of | Vesting | ||||
per Share | prior | January 1, | during | during | during | during | June 30, | Period | ||||
Category | (HK$) | Date of grant | Exercise Period | to grant | 2020 | the period | the period | the period | the period | 2020 | (Notes) | |
Employee | 16.2000 | May 2, 2019 | Eight years from | 16.1000 | 100,000 | - | 0 | 0 | 50,000 | 50,000 | 1(b) | |
the date of grant | ||||||||||||
14.7600 | May 10, 2019 | Eight years from | 14.1000 | 4,048,850 | - | 0 | 46,265 | 796,670 | 3,205,915 | 1(b) | ||
the date of grant | ||||||||||||
331,570 | - | 0 | 9,638 | 28,917 | 293,015 | 1(a) | ||||||
11.4360 | November 1, 2019 | Eight years from | 11.3200 | 480,200 | - | 0 | 0 | - | 480,200 | 1(b) | ||
the date of grant | ||||||||||||
10.5000 | April 29, 2020 | Eight years from | 10.3200 | - | 2,372,822 | 0 | 0 | - | 2,372,822 | 1(a) | ||
the date of grant | ||||||||||||
- | 275,000 | 0 | 0 | - | 275,000 | 1(b) | ||||||
Total | 4,960,620 | 2,647,822 | 0 | 55,903 | 875,587 | 6,676,952 | ||||||
Notes:
1. Please refer to note under sub-section headed "Pre-IPO Share Option Scheme" above.
24 MAOYAN ENTERTAINMENT | Interim Report 2020
Other Information
RSU Scheme
The RSU Scheme is adopted on the Adoption Date and not subject to the provisions of Chapter 17 of the Listing Rules as the RSU Scheme does not involve the grant of options by our Company to subscribe for new Shares.
Movements of RSU Scheme during the Reporting Period are as follows:
Outstanding | Outstanding | |||||||
Closing price | as of | Granted | Vested | Lapsed | Cancelled | as of | ||
immediately | January 1, | during | during | during | during | June 30, | ||
Category | Date of grant | prior to grant | 2020 | the period | the period | the period | the period | 2020 |
Employee | May 2, 2019 | 16.1000 | 655,425 | 0 | 0 | 0 | 0 | 655,425 |
October 8, 2019 | 12.0200 | 3,336,336 | 0 | 0 | 0 | 0 | 3,336,336 | |
November 1, 2019 | 11.3200 | 729,200 | 0 | 0 | 0 | 0 | 729,200 | |
April 29, 2020 | 10.3200 | - | 8,608,779 | 0 | 0 | 133,000 | 8,475,779 | |
Total | 4,720,961 | 8,608,779 | 0 | 0 | 133,000 | 13,196,740 | ||
DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES
Save as otherwise disclosed in this interim report, at no time during the Reporting Period and up to the date of this interim report was the Company or any of its subsidiaries or holding company or any subsidiary of the Company's holding company, a party to any arrangement that would enable the Directors to acquire benefits by means of acquisition of shares in, or debentures of, the Company or any other body corporate, and none of the Directors or any of their spouses or children under the age of 18 were granted any right to subscribe for the equity or debt securities of the Company or any other body corporate or had exercised any such right.
MAOYAN ENTERTAINMENT | Interim Report 2020 25
Other Information
QUALIFICATION REQUIREMENTS
Updates in Relation to the Qualification Requirements
On December 11, 2001, the State Council promulgated the Regulations for the Administration of Foreign-Invested Telecommunications Enterprises (the "FITE Regulations"), which were amended on September 10, 2008 and February 6, 2016. According to the FITE Regulations, foreign investors are not allowed to hold more than 50% of the equity interests in a company providing value-added telecommunications services. In addition, a foreign investor who invests in a value-added telecommunications business in the PRC must possess prior experience in and a proven track record of operating value-added telecommunications businesses overseas (the "Qualification Requirements"). Foreign investors that meet these requirements must obtain approvals from the Ministry of Industry and Information Technology of the PRC ("MIIT") and the Ministry of Commerce of the PRC or their authorized local counterparts which retain considerable discretion in granting such approvals. Currently none of the applicable PRC laws, regulations or rules provides clear guidance or interpretation on the Qualification Requirements. MIIT issued a guidance memorandum on the application requirement for establishing foreign-investedvalue-added telecommunications enterprises in the PRC on its website. According to this guidance memorandum, an applicant is required to provide, among other things, its foreign investor's previous value-added telecommunication business track record, such as previous permit, filing or experience of operating well-known websites or Apps or previous telecommunications business licenses issued by the relevant local authorities and satisfactory proof of the Qualification Requirements. The guidance memorandum does not provide clear guidance on how such filing requirement can be fulfilled, and does not provide any further interpretation or guidance on more proof or record required to support the proof satisfying the Qualification Requirements. Further, this guidance memorandum does not purport to provide an exhaustive list on the application requirements.
Efforts and Actions Undertaken to Comply with the Qualification Requirements
Despite the lack of clear guidance or interpretation on the Qualification Requirements, we are gradually building up our track record of overseas telecommunications business operations and had taken the following steps:
- we set up a subsidiary in Hong Kong, namely Hong Kong Maoyan Live Entertainment Limited, to operate our overseas online ticketing business;
- we have successfully registered a series of trademarks; and
- we are operating our overseas website, www.entertainmentplus.hk, which is positioned to further attract and build up overseas customer base.
26 MAOYAN ENTERTAINMENT | Interim Report 2020
Report on Review of
Interim Financial Information
To the Board of Directors of Maoyan Entertainment (incorporated in the Cayman Islands with limited liability)
INTRODUCTION
We have reviewed the interim financial information set out on pages 28 to 79, which comprises the interim condensed consolidated statement of financial position of Maoyan Entertainment (the "Company") and its subsidiaries (together, the "Group") as at June 30, 2020 and the interim condensed consolidated statement of comprehensive income, the interim condensed consolidated statement of changes in equity and the interim condensed consolidated statement of cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and International Accounting Standard 34 "Interim Financial Reporting". The directors of the Company are responsible for the preparation and presentation of this interim financial information in accordance with International Accounting Standard 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim financial information based on our review and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
SCOPE OF REVIEW
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the interim financial information of the Group is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting".
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, August 17, 2020
MAOYAN ENTERTAINMENT | Interim Report 2020 27
Interim Condensed Consolidated Statement of Comprehensive Income
Six months ended June 30, | |||||
Note | 2020 | 2019 | |||
(Unaudited) | (Unaudited) | ||||
RMB'000 | RMB'000 | ||||
Revenue | 6 | 203,050 | 1,984,614 | ||
Cost of revenue | 7 | (223,609) | (797,847) | ||
Gross (loss)/profit | (20,559) | 1,186,767 | |||
Selling and marketing expenses | 7 | (170,827) | (610,656) | ||
General and administrative expenses | 7 | (204,379) | (184,855) | ||
Net impairment losses on financial and other assets | 19,20 | (135,555) | (7,919) | ||
Other income | 8 | 121,986 | 9,554 | ||
Other losses, net | 8 | (15,174) | (9,583) | ||
Operating (loss)/profit | (424,508) | 383,308 | |||
Finance costs, net | 9 | (7,758) | (17,681) | ||
Share of losses of investments accounted for using the equity method | 15 | (367) | (439) | ||
(Loss)/profit before income tax | (432,633) | 365,188 | |||
Income tax credits/(expenses) | 10 | 1,979 | (107,779) | ||
(Loss)/profit for the period | (430,654) | 257,409 | |||
(Loss)/profit attributable to: | |||||
- Equity holders of the Company | (430,654) | 262,008 | |||
- Non-controlling interests | - | (4,599) | |||
(430,654) | 257,409 | ||||
(Losses)/earnings per share attributable to equity holders of | |||||
the Company (expressed in RMB per share) | |||||
- Basic (losses)/earnings per share | 11 | (0.38) | 0.24 | ||
- Diluted (losses)/earnings per share | 11 | (0.38) | 0.24 | ||
28 MAOYAN ENTERTAINMENT | Interim Report 2020
Interim Condensed Consolidated Statement of Comprehensive Income
Six months ended June 30, | |||||
Note | 2020 | 2019 | |||
(Unaudited) | (Unaudited) | ||||
RMB'000 | RMB'000 | ||||
(Loss)/profit for the period | (430,654) | 257,409 | |||
Other comprehensive income: | |||||
Items that will not be reclassified to profit or loss | |||||
Currency translation differences from the Company | 26 | 28,814 | 34,960 | ||
Changes in the fair value of equity investments at fair value | |||||
through other comprehensive income | 16 | 5,388 | (25,113) | ||
Other comprehensive income for the period, net of tax | 34,202 | 9,847 | |||
Total comprehensive (loss)/income for the period | (396,452) | 267,256 | |||
Total comprehensive (loss)/income attributable to: | |||||
- Equity holders of the Company | (396,452) | 271,855 | |||
- Non-controlling interests | - | (4,599) | |||
Total comprehensive (loss)/income for the period | (396,452) | 267,256 | |||
The accompanying notes on pages 36 to 79 form an integral part of the interim condensed consolidated financial information.
MAOYAN ENTERTAINMENT | Interim Report 2020 29
Interim Condensed Consolidated Statement of Financial Position
As at | As at | ||
June 30, | December 31, | ||
Note | 2020 | 2019 | |
(Unaudited) | (Audited) | ||
RMB'000 | RMB'000 | ||
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 13 | 29,962 | 34,421 |
Right-of-use assets | 14 | 28,472 | 35,305 |
Intangible assets | 13 | 5,273,473 | 5,341,073 |
Investments accounted for using the equity method | 15 | 39,290 | 37,558 |
Financial assets at fair value through other comprehensive income | 16 | 362,019 | 356,371 |
Financial assets at fair value through profit or loss | 17 | 45,832 | 53,322 |
Deferred income tax assets | 18 | 8,348 | 10,430 |
Prepayments, deposits and other receivables | 20 | 112,568 | 113,787 |
5,899,964 | 5,982,267 | ||
Current assets | |||
Inventories | 25,819 | 28,232 | |
Accounts receivable | 19 | 220,529 | 551,647 |
Prepayments, deposits and other receivables | 20 | 2,362,018 | 2,335,593 |
Financial assets at fair value through profit or loss | 17 | 240,300 | 481,723 |
Restricted bank deposits | 21 | 230,368 | 331,369 |
Term deposit with original maturity over three months | 21 | - | 100,000 |
Cash and cash equivalents | 21 | 1,171,325 | 1,540,414 |
4,250,359 | 5,368,978 | ||
Total assets | 10,150,323 | 11,351,245 | |
EQUITY | |||
Equity attributable to equity holders of the Company | |||
Share capital | 25 | 153 | 152 |
Reserves | 26 | 8,371,775 | 8,283,031 |
(Accumulated losses)/retained earnings | (425,659) | 4,860 | |
Total equity | 7,946,269 | 8,288,043 | |
30 MAOYAN ENTERTAINMENT | Interim Report 2020
Interim Condensed Consolidated Statement of Financial Position
As at | As at | ||
June 30, | December 31, | ||
Note | 2020 | 2019 | |
(Unaudited) | (Audited) | ||
RMB'000 | RMB'000 | ||
LIABILITIES | |||
Non-current liabilities | |||
Deferred income tax liabilities | 18 | 174,001 | 185,673 |
Lease liabilities | 14 | 15,644 | 22,282 |
189,645 | 207,955 | ||
Current liabilities | |||
Borrowings | 22 | 780,000 | 1,161,600 |
Lease liabilities | 14 | 14,465 | 14,027 |
Accounts payable | 23 | 198,434 | 367,657 |
Other payables, accruals and other liabilities | 24 | 1,018,710 | 1,238,638 |
Current income tax liabilities | 2,800 | 73,325 | |
2,014,409 | 2,855,247 | ||
Total liabilities | 2,204,054 | 3,063,202 | |
Total equity and liabilities | 10,150,323 | 11,351,245 | |
The accompanying notes on pages 36 to 79 form an integral part of the interim condensed consolidated financial information.
On behalf of the Board
ZHENG Zhihao | SHI Kangping |
Executive Director and Chief Executive Officer | Chief Financial Officer |
MAOYAN ENTERTAINMENT | Interim Report 2020 31
Interim Condensed Consolidated Statement of Changes in Equity
Attributable to equity holders of the Company | ||||||||
Retained | ||||||||
earnings/ | Non- | |||||||
Share | (accumulated | controlling | Total | |||||
(Unaudited) | Note | capital | Reserves | losses) | Total | interests | equity | |
RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | |||
As at January 1, 2020 | 152 | 8,283,031 | 4,860 | 8,288,043 | - | 8,288,043 | ||
Comprehensive loss | ||||||||
Loss for the period | - | - | (430,654) | (430,654) | - | (430,654) | ||
Other comprehensive income | ||||||||
- Currency translation differences | 26 | - | 28,814 | - | 28,814 | - | 28,814 | |
- Changes in the fair value of equity | ||||||||
investments at fair value through | ||||||||
other comprehensive income | 16 | - | 5,388 | - | 5,388 | - | 5,388 | |
Total comprehensive loss | - | 34,202 | (430,654) | (396,452) | - | (396,452) | ||
- Transfer of gain upon disposal of | ||||||||
equity investments at fair value through | ||||||||
other comprehensive income to retained | ||||||||
earnings | 16 | - | (135) | 135 | - | - | - | |
Transactions with equity holders | ||||||||
of the Company | ||||||||
Issuance of new shares under share | ||||||||
option scheme | 25, 26 | 1 | 190 | - | 191 | - | 191 | |
Share-based compensation expenses | 27 | - | 54,487 | - | 54,487 | - | 54,487 | |
Transfer to statutory reserves | - | - | - | - | - | - | ||
Total transactions with equity holders | ||||||||
of the Company | 1 | 54,677 | - | 54,678 | - | 54,678 | ||
As at June 30, 2020 | 153 | 8,371,775 | (425,659) | 7,946,269 | - | 7,946,269 | ||
32 MAOYAN ENTERTAINMENT | Interim Report 2020
Interim Condensed Consolidated Statement of Changes in Equity
Attributable to equity holders of the Company | ||||||||
Non- | ||||||||
Share | Accumulated | controlling | Total | |||||
(Unaudited) | Note | capital | Reserves | losses | Total | interests | equity | |
RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | |||
As at January 1, 2019 | 130 | 6,156,971 | (455,152) | 5,701,949 | 4,599 | 5,706,548 | ||
Comprehensive income | ||||||||
Profit for the period | - | - | 262,008 | 262,008 | (4,599) | 257,409 | ||
Other comprehensive income | ||||||||
- Currency translation differences | 26 | - | 34,960 | - | 34,960 | - | 34,960 | |
- Changes in the fair value of equity | ||||||||
investments at fair value through | ||||||||
other comprehensive income | 16 | - | (25,113) | - | (25,113) | - | (25,113) | |
Total comprehensive income | - | 9,847 | 262,008 | 271,855 | (4,599) | 267,256 | ||
Transactions with equity holders | ||||||||
of the Company | ||||||||
Issuance of new shares | 25, 26 | 18 | 1,632,213 | - | 1,632,231 | - | 1,632,231 | |
Issuance of new shares for conversion | ||||||||
of convertible bond | 25, 26 | 3 | 350,660 | - | 350,663 | - | 350,663 | |
Share-based compensation expenses | 27 | - | 50,950 | - | 50,950 | - | 50,950 | |
Restricted shares vested | 25 | 1 | - | - | 1 | - | 1 | |
Total transactions with equity | ||||||||
holders of the Company | 22 | 2,033,823 | - | 2,033,845 | - | 2,033,845 | ||
As at June 30, 2019 | 152 | 8,200,641 | (193,144) | 8,007,649 | - | 8,007,649 | ||
The accompanying notes on pages 36 to 79 form an integral part of the interim condensed consolidated financial information.
MAOYAN ENTERTAINMENT | Interim Report 2020 33
Interim Condensed Consolidated Statement of Cash Flows
Six months ended June 30, | ||||||
Note | 2020 | 2019 | ||||
(Unaudited) | (Unaudited) | |||||
RMB'000 | RMB'000 | |||||
Cash flows from operating activities | ||||||
Cash used in operations | (426,337) | (119,437) | ||||
Interest paid | 9 | (19,248) | (28,526) | |||
Income tax paid | (78,136) | (98,074) | ||||
Net cash used in operating activities | (523,721) | (246,037) | ||||
Cash flows from investing activities | ||||||
Purchases of property, plant and equipment | 13 | (4,449) | (7,161) | |||
Purchases of intangible assets | 13 | (3,119) | (7,163) | |||
Acquisition of subsidiaries (net of cash and cash equivalent acquired) | - | (79,216) | ||||
Payments for financial assets at fair value through profit or loss | 17 | (140,754) | (343,650) | |||
Payments for financial assets at fair value through | ||||||
other comprehensive income | 16 | - | (334,111) | |||
Proceeds from disposals of financial assets | ||||||
at fair value through profit or loss | 17 | 395,225 | 70,975 | |||
Proceeds from disposals of financial assets at fair value | ||||||
through other comprehensive income | 16 | 4,523 | - | |||
Interest received | 9 | 12,307 | 11,768 | |||
Advance of receivables from investments in movies and TV series | 20 | (37,195) | - | |||
Repayment of receivables from investments in movies and TV series | 20 | 20,950 | - | |||
Advance of loans to third parties | 20 | (49,316) | - | |||
Repayment of loans to third parties | 20 | 57,141 | - | |||
Decrease in term deposit with original maturity over three months | 21 | 100,000 | - | |||
Payment for investments accounted for using the equity method | 15 | (2,099) | - | |||
Net cash generated from/(used in) investing activities | 353,214 | (688,558) | ||||
34 MAOYAN ENTERTAINMENT | Interim Report 2020
Interim Condensed Consolidated Statement of Cash Flows
Six months ended June 30, | |||||
Note | 2020 | 2019 | |||
(Unaudited) | (Unaudited) | ||||
RMB'000 | RMB'000 | ||||
Cash flows from financing activities | |||||
Proceeds from issuance of new shares | 25,26 | - | 1,675,285 | ||
Payments of ordinary shares issuance costs | 26 | - | (43,054) | ||
Proceeds from borrowings | 22 | 480,000 | 600,000 | ||
Repayments of borrowings | 22 | (861,600) | (50,000) | ||
Proceeds from third party of loans | 24 | 74,580 | - | ||
Principal elements of lease payments | (7,016) | (5,496) | |||
Increase in restricted bank deposits | 21 | 101,001 | (326,173) | ||
Issuance of new shares under share option scheme | 25,26 | 191 | - | ||
Net cash (used in)/generated from financing activities | (212,844) | 1,850,562 | |||
Net (decrease)/increase in cash and cash equivalents | (383,351) | 915,967 | |||
Cash and cash equivalents at beginning of the period | 1,540,414 | 1,536,456 | |||
Exchange gains/(losses) on cash and cash equivalents | 14,262 | (1,108) | |||
Cash and cash equivalents at end of the period | 1,171,325 | 2,451,315 | |||
The accompanying notes on pages 36 to 79 form an integral part of the interim condensed consolidated financial information.
MAOYAN ENTERTAINMENT | Interim Report 2020 35
Notes to the Interim Condensed Consolidated Financial Information
1 GENERAL INFORMATION
Maoyan Entertainment (the "Company") was incorporated in the Cayman Islands on December 8, 2017 as an exempted company with limited liability under the Companies Law (Cap. 22, Law 3 of 1961 as consolidated and revised) of the Cayman Islands. The address of the Company's registered office is Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands. The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited on February 4, 2019.
The Company is an investment holding company. The Company and its subsidiaries, including structured entities (collectively, the "Group"), are principally engaged in the provision of online entertainment ticketing, entertainment content services, advertising services and others (the "Listing Business") to users in the People's Republic of China (the "PRC").
The condensed consolidated interim financial information ("Interim Financial Information") is presented in Renminbi ("RMB") and all values are rounded to the nearest thousand (RMB'000) except when otherwise indicated.
This Interim Financial Information was approved for issue by the board of directors on August 17, 2020 and has not been audited.
2 BASIS OF PREPARATION
The Interim Financial Information for the six months ended June 30, 2020 has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual consolidated financial statements for year ended December 31, 2019 ("2019 Financial Statements"), which have been prepared in accordance with International Financial Reporting Standards ("IFRSs").
Since early 2020, the Group's business operations in the entertainment industry have been adversely affected by the outbreak of Coronavirus Disease 2019 ("COVID-19"), which resulted in significant decrease in commercial activities, lockdown and social distancing measures imposed by the PRC government. The COVID-19 pandemic has led to temporary shut-down of cinemas, suspension of productions of films and TV series, and delay in films' release schedule, all of which have created challenges for the upstream and downstream activities across the entertainment's industry value chain.
During the six months ended June 30, 2020, the Group experienced significant decline in revenue and recorded a net loss and net operating cash outflow of approximately RMB430,654,000 and RMB523,721,000 respectively. Starting from 20 July 2020, cinemas in the PRC have gradually reopened and commenced operations amid certain pandemic prevention measures such as restriction of the cinemas' operating capacity will continue meanwhile.
36 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
2 BASIS OF PREPARATION (Continued)
In view of these circumstances, the directors of the Company have given careful consideration to the future liquidity requirements and operating performance of the Group and its available sources of financing to assess whether the Group would have sufficient financial resources to fulfil its financial obligations to continue as a going concern. The directors of the Company have reviewed the Group's cash flow projections, which covers a period of not less than twelve months from June 30, 2020. The directors are of the opinion that, having taken into account the anticipated cashflows generated from the Group's operations, as well as the possible changes in its operating performance and possible impact of COVID-19 pandemic, the Group's internal financial resources, availability of existing bank facilities, the Group will have sufficient financial resources to meet its liabilities as and when they fall due in the coming twelve months from June 30, 2020. Accordingly, the directors consider that the Group will be able to continue as a going concern; and thus have prepared the condensed consolidated financial information on a going concern basis.
2.1 New and amended standards adopted by the Group
The accounting policies applied are consistent with those of the 2019 Financial Statements, as described in those annual consolidated financial statements, except for the adoption of new and revised IFRSs effective as of January 1, 2020.
- Definition of Material - amendments to IAS 1 and IAS 8
- Definition of a Business - amendments to IFRS 3
- Revised Conceptual Framework for Financial Reporting
- Interest Rate Benchmark Reform - amendments to IFRS 9, IAS 39 and IFRS 7
The new and revised standards above did not have a material effect on this interim condensed consolidated financial information.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Interim Financial Information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing this Interim Financial Information, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the 2019 Financial Statement.
In addition, management also identified the impairment of trade and other receivables as a critical accounting estimate which are made based on assumptions about the risk of default and expected credit loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group's historical default history, existing market conditions, as well as forward looking information at the end of each reporting period. The identification of impairment of receivables requires the use of judgment and estimates. Where the expectations are different from the original estimates, such differences will impact the carrying value of receivables and loss for the impairment of receivables recognized in the periods in which such estimates have been changed.
MAOYAN ENTERTAINMENT | Interim Report 2020 37
Notes to the Interim Condensed Consolidated Financial Information
4 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
-
Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, fair value interest rate risk and price risk), credit risk and liquidity risk.
This Interim Financial Information does not include all financial risk management information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the 2019 Financial Statements.
There have been no material changes in the risk management policies since December 31, 2019. - Liquidity risk
Compared to the year ended December 31, 2019, there was no material change in the contractual undiscounted cash outflows for financial liabilities. The Group exercises prudent liquidity risk management by maintaining sufficient cash and bank balances. The Group's liquidity risk is further mitigated through the availability of financing through its own cash resources, the availability of banking facilities to meet its financial commitments and realising certain financial assets held by the Group through disposal, if considered necessary.
As at June 30, 2020, the Group held cash and cash equivalents of approximately RMB1,171,325,000 (Note 21), listed equity investments of approximately RMB303,707,000 (Note 16), wealth management products of RMB20,500,000 (Note 17) and other assets that are expected to readily generate cash inflows for managing liquidity risk.
As at June 30, 2020, the Group has unutilised bank facilities of approximately RMB876,193,000 and bank facility contract of approximately RMB1,656,193,000.
The Group is expected to be able to generate sufficient cash flows to cover its operating costs and meet its financial obligations as and when they fall due in the coming twelve months from the date of these financial statements. - Fair value estimation
The table below analyses financial instruments carried at fair value, by the levels of inputs to valuation techniques. The inputs to valuation techniques are categorised into three levels within a fair value hierarchy, as follows: - Level 1 - Quoted prices unadjusted in active markets for identical assets or liabilities.
- Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly that is, as prices or indirectly that is, derived from prices.
- Level 3 - Inputs for the asset or liability that are not based on observable market data that is, unobservable inputs.
38 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
4 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)
4.3 Fair value estimation (Continued)
The following table presents the Group's financial assets that are measured at fair value as at June 30, 2020.
Level 1 | Level 2 | Level 3 | Total | ||
(Unaudited) | RMB'000 | RMB'000 | RMB'000 | RMB'000 | |
Financial assets at fair value through | |||||
profit or loss | |||||
Investments in wealth | |||||
management products | - | - | 20,500 | 20,500 | |
Investment in movies and TV series | - | - | 219,800 | 219,800 | |
Unlisted investments | - | - | 41,911 | 41,911 | |
Listed investments | 3,921 | - | - | 3,921 | |
3,921 | - | 282,211 | 286,132 | ||
Financial assets at fair value through | |||||
other comprehensive income | |||||
Listed investments | 303,707 | - | - | 303,707 | |
Unlisted investments | - | - | 58,312 | 58,312 | |
303,707 | - | 58,312 | 362,019 | ||
MAOYAN ENTERTAINMENT | Interim Report 2020 39
Notes to the Interim Condensed Consolidated Financial Information
4 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)
4.3 Fair value estimation (Continued)
The following table presents the Group's financial assets that are measured at fair value at December 31, 2019.
Level 1 | Level 2 | Level 3 | Total | |
(Audited) | RMB'000 | RMB'000 | RMB'000 | RMB'000 |
Financial assets at fair value through | ||||
profit or loss | ||||
Investments in wealth | ||||
management products | - | - | 267,717 | 267,717 |
Investment in movies and TV series | - | - | 214,006 | 214,006 |
Unlisted investments | - | - | 48,568 | 48,568 |
Listed investments | 4,754 | - | - | 4,754 |
4,754 | - | 530,291 | 535,045 | |
Financial assets at fair value through | ||||
other comprehensive income | ||||
Listed investments | 298,369 | - | - | 298,369 |
Unlisted investments | - | - | 58,002 | 58,002 |
298,369 | - | 58,002 | 356,371 | |
The fair value of financial instruments traded in active markets is determined based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required for evaluating the fair value of a financial instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.
40 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
4 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)
4.3 Fair value estimation (Continued)
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments, and
- for other financial instruments - discounted cash flow analysis.
During the six months ended June 30, 2020 and the year ended December 31, 2019, there was no transfer between level 1, 2 and 3 for recurring fair value measurements.
Valuation processes of the Group (Level 3)
The Group has a team of personnel who performs valuation on these level 3 instruments for financial reporting purposes. On an semi-annual basis, the team adopts various valuation techniques to determine the fair value of the Group's level 3 instruments.
The components of the level 3 instruments mainly include investments in wealth management products, investments in movies and TV series and unlisted investments. As these instruments are not traded in an active market, their fair values have been determined using various applicable valuation techniques, including discounted cash flows approach and comparable transactions approach, etc. Major assumptions used in the valuation include historical financial results, assumptions about future growth rates, estimates of weighted average cost of capital (WACC), recent market transactions, discount for lack of marketability and other exposure etc. The fair value of these instruments determined by the Group requires significant judgement, including the likelihood of non-performing by the investee company, financial performance of the investee company, market value of comparable companies as well as discount rate, etc.
The investments in wealth management products mainly represent the investments in wealth management products issued by banks in the PRC with non-guaranteed principal and floating return of investments. The Group used discounted cash flows approach to the fair value of the financial product as at period end. Due to the short period and low expected return rate ranging from 3.27% to 3.3% per annum, the Group considered the fair value of financial product to be approximately to the cost with interest accrued.
The investments in movies and TV series mainly represent the investments in certain movies and TV series that the Group is not considered to be involved in the movie production process or as the distributor. The Group used discounted cash flows approach to evaluate the fair value of the investments in movies and TV series as at period end. A certain amount of the investments which were mainly broadcasted in the six months ended June 30, 2020 had recognized approximately RMB10,676,000 as fair value gain (Note 17(b)).
MAOYAN ENTERTAINMENT | Interim Report 2020 41
Notes to the Interim Condensed Consolidated Financial Information
4 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)
4.3 Fair value estimation (Continued)
Valuation processes of the Group (Level 3) (Continued)
The unlisted investments represent the investments in certain privately owned companies. The Group used discounted cash flows approach to evaluate the fair value of the unlisted investments as at June 30, 2020.
If the fair values of financial assets at fair value through profit or loss held by the Group had been 10% higher/lower, the loss before income tax for the six months ended June 30, 2020 would have been approximately RMB28,613,000 lower/higher (the profit before income tax for the six months ended June 30, 2019 would have been approximately RMB69,696,000 higher/lower).
The carrying amounts of the Group's financial assets and liabilities including cash and cash equivalents, restricted bank deposits, accounts receivable, other receivables, accounts payable, other payables and borrowings approximate to their fair values due to their short maturities.
5 SEGMENT INFORMATION
The Group's business activities, for which discrete financial statements are available, are regularly reviewed and evaluated by the chief operating decision-makers.
As a result of this evaluation, the executive directors of the Group consider that the Group's operations are operated and managed as a single segment; accordingly no segment information is presented.
The Company is domiciled in the Cayman Islands while the Group mainly operates its businesses in the PRC and earns substantially all of the revenue from external customers in the PRC.
As at June 30, 2020, substantially all of the non-current assets other than financial assets at fair value through other comprehensive income were located in the PRC.
42 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
6 | REVENUE | ||
Six months ended June 30, | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
RMB'000 | RMB'000 | ||
Online entertainment ticketing | 103,806 | 1,082,985 | |
Advertising services and others | 83,610 | 235,950 | |
Entertainment content services | 4,958 | 665,679 | |
192,374 | 1,984,614 | ||
Income from movies and TV series investment (Note 17(b)) | 10,676 | - | |
Total revenue | 203,050 | 1,984,614 | |
Six months ended June 30, | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
RMB'000 | RMB'000 | ||
Revenue at a point in time | 109,269 | 1,162,467 | |
Revenue over time | 83,105 | 822,147 | |
Total revenue (excluding income from movies | |||
and TV series investment) | 192,374 | 1,984,614 | |
MAOYAN ENTERTAINMENT | Interim Report 2020 43
Notes to the Interim Condensed Consolidated Financial Information
7 | EXPENSES BY NATURE | |||
Six months ended June 30, | ||||
2020 | 2019 | |||
(Unaudited) | (Unaudited) | |||
RMB'000 | RMB'000 | |||
Staff costs excluding share options | ||||
granted to directors and employees | 198,143 | 216,140 | ||
Amortization of intangible assets (Note 13) | 70,719 | 67,517 | ||
Marketing and promotion expenses | 70,239 | 479,363 | ||
Internet infrastructure cost | 53,444 | 115,258 | ||
Share options granted to directors and employees (Note 27) | 54,487 | 50,950 | ||
Ticketing system cost | 38,932 | 254,508 | ||
Content distribution and promotion cost | 28,306 | 187,482 | ||
Depreciation of property,plant and equipment (Note 13) | 8,906 | 6,656 | ||
Content production cost | 8,548 | 133,720 | ||
Depreciation of right-of-use assets (Note 14) | 6,833 | 6,137 | ||
Tax and levies | 2,949 | 11,846 | ||
Rental expenses for short-term and low-value leases (Note 14) | 2,026 | - | ||
Provision for impairment of inventory | - | 4,978 | ||
Listing expenses | - | 3,243 | ||
Auditors' remuneration | 600 | 1,665 | ||
Other expenses | 54,683 | 53,895 | ||
Total cost of revenue, selling and marketing expenses, | ||||
general and administrative expenses | 598,815 | 1,593,358 | ||
During the six months ended June 30, 2020, the Group incurred expenses for the purpose of research and development of approximately RMB119,120,000 (during the six months ended June 30, 2019: approximately RMB100,560,000), which comprised employee benefits expenses of approximately RMB115,785,000 (during the six months ended June 30, 2019: approximately RMB94,957,000).
During the six months ended June 30, 2020, the Group did not recognize provision for inventory impairment in "cost of revenue" (during the six months ended June 30, 2019: approximately RMB4,978,000).
No significant development expenses had been capitalised for the six months ended June 30, 2020 and 2019.
44 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
8 | OTHER INCOME AND OTHER LOSSES, NET | |||||
Six months ended June 30, | ||||||
2020 | 2019 | |||||
(Unaudited) | (Unaudited) | |||||
RMB'000 | RMB'000 | |||||
Other income | ||||||
Government subsidies (a) | 114,510 | 5,386 | ||||
Tax credit of input tax additional deduction | 7,476 | 4,168 | ||||
121,986 | 9,554 | |||||
Other losses, net | ||||||
Fair value changes on wealth management products, | ||||||
listed and unlisted investments classified as financial | ||||||
assets at fair value through profit or loss (Note 17) | (5,328) | 1,990 | ||||
Net foreign exchange losses | (11,876) | (1,172) | ||||
Loss on disposal of property, plant and equipment | (2) | (1,607) | ||||
Loss on liquidation of a subsidiary | - | (9,185) | ||||
Others | 2,032 | 391 | ||||
(15,174) | (9,583) | |||||
- During the six months ended June 30, 2020, the Group received unconditional subsidies amounting to a total of approximately RMB113,806,000 in respect of certain corporate development funding programs operated by the PRC government of which certain of the Group's key operating subsidiaries were eligible and successfully applied.
MAOYAN ENTERTAINMENT | Interim Report 2020 45
Notes to the Interim Condensed Consolidated Financial Information
9 | FINANCE COSTS, NET | |||
Six months ended June 30, | ||||
2020 | 2019 | |||
(Unaudited) | (Unaudited) | |||
RMB'000 | RMB'000 | |||
Finance income: | ||||
- Interest income from bank deposits | 12,307 | 11,768 | ||
Finance costs: | ||||
- Interest expense on lease liabilities (Note 14) | (817) | (923) | ||
- Interest expense on bank borrowings | (19,248) | (28,526) | ||
Finance costs, net | (7,758) | (17,681) | ||
10 | INCOME TAX (CREDITS)/EXPENSES | |||
Six months ended June 30, | ||||
2020 | 2019 | |||
(Unaudited) | (Unaudited) | |||
RMB'000 | RMB'000 | |||
Current income tax | 7,611 | 124,176 | ||
Deferred income tax (Note 18) | (9,590) | (16,397) | ||
Income tax (credits)/expenses | (1,979) | 107,779 | ||
46 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
11 (LOSSES)/EARNINGS PER SHARE
(a) Basic (losses)/earnings per share
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
(Loss)/profit attributable to equity | ||
holders of the Company (RMB'000) | (430,654) | 262,008 |
Weighted average number of ordinary | ||
shares in issue (thousand) | 1,110,973 | 1,080,308 |
Weighted average number of vested restricted | ||
shares in issue (thousand) (Note 25) | 19,277 | 14,976 |
Total weighted average number of | ||
shares in issue (thousand) | 1,130,250 | 1,095,284 |
Basic (losses)/earnings per share (in RMB) | (0.38) | 0.24 |
Basic (losses)/earnings per share are calculated by dividing the (loss)/profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue and weighted average number of vested restricted shares in issue during the respective periods.
MAOYAN ENTERTAINMENT | Interim Report 2020 47
Notes to the Interim Condensed Consolidated Financial Information
11 (LOSSES)/EARNINGS PER SHARE (Continued)
- Diluted (losses)/earnings per share
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
(Loss)/profit attributable to equity | ||
holders of the Company (RMB'000) | (430,654) | 262,008 |
Total weighted average number of | ||
shares in issue (thousand) | 1,130,250 | 1,095,284 |
Adjustments for share-based | ||
compensation - share options (thousand) | - | 12,131 |
Adjustments for share-based | ||
compensation - RSUs (thousand) | - | 1,401 |
Weighted average number of shares for | ||
diluted earnings per share (thousand) | 1,130,250 | 1,108,816 |
Diluted (losses)/earnings per share (in RMB) | (0.38) | 0.24 |
Diluted (losses)/earnings per share are calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential shares. As the Group incurred loss for six months ended June 30, 2020, the potential ordinary shares were not included in the calculation of the diluted loss per share as their inclusion would be anti-dilutive. Accordingly, diluted loss per share for six months ended June 30, 2020, is the same as basic loss per share.
For the six months ended June 30, 2019, the Company had dilutive potential ordinary shares of share options and restricted stock units ("RSUs") granted to employee (Note 27). The number of shares that would have been issued assuming the exercise of the share options less the number of shares that would have been issued at fair value (determined as the average market share price of the Company's shares) for the same amount of proceed are diluted share issues for no consideration which causes dilution to earnings per share, and the RSU could have been acquired at fair value (determined as the closing price of the share on the date of the grant) based on the monetary value of the subscription rights attached to the outstanding RSUs assuming to have been fully vested and released from restrictions with no impact on earnings.
12 DIVIDENDS
No dividends have been paid or declared by the Company during the six months ended June 30, 2020 (during the six months ended June 30, 2019: Nil).
48 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
13 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property, | Other | |||
plant and | intangible | |||
equipment | Goodwill | assets | ||
RMB'000 | RMB'000 | RMB'000 | ||
Six months ended June 30, 2019 (Unaudited) | ||||
Opening net book amount | 30,910 | 4,451,974 | 938,792 | |
Business combinations | 378 | 52,910 | 40,259 | |
Additions | 7,161 | - | 7,163 | |
Liquidation of a subsidiary | (112) | - | (8,861) | |
Depreciation and amortization | (6,656) | - | (67,517) | |
Closing net book amount | 31,681 | 4,504,884 | 909,836 | |
As at June 30, 2019 | ||||
Cost | 51,522 | 4,504,884 | 1,155,511 | |
Accumulated depreciation/amortization | (19,841) | - | (245,675) | |
Net book amount | 31,681 | 4,504,884 | 909,836 | |
Six months ended June 30, 2020 (Unaudited) | ||||
Opening net book amount | 34,421 | 4,504,884 | 836,189 | |
Additions | 4,449 | - | 3,119 | |
Disposals | (2) | - | - | |
Depreciation and amortization | (8,906) | - | (70,719) | |
Closing net book amount | 29,962 | 4,504,884 | 768,589 | |
As at June 30, 2020 | ||||
Cost | 58,267 | 4,504,884 | 1,155,104 | |
Accumulated depreciation/amortization | (28,305) | - | (386,515) | |
Net book amount | 29,962 | 4,504,884 | 768,589 | |
MAOYAN ENTERTAINMENT | Interim Report 2020 49
Notes to the Interim Condensed Consolidated Financial Information
13 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS (Continued)
Goodwill impairment
The goodwill balance mainly arose from the acquisition of 100% equity interests in Beijing Weige Shidai Entertainment Technology Co., Ltd ("Beijing Weige Shidai") and Shenzhen Ruihai Fangyuan Technology Co., Ltd. ("Ruihai Fangyuan") in 2017, and the acquisition of Hangzhou Soushi Network Co., Ltd. ("Hangzhou Soushi") in 2019. Goodwill is attributable to the acquired market share and economies of scale expected to be derived from combining with the operations of the Group.
Upon completion of acquisition of Beijing Weige Shidai and Ruihai Fangyuan in 2017, and acquired 100% equity interests of Hangzhou Soushi in 2019, the Group integrated the business (including the management, assets, customers, users and systems) of Beijing Weige Shidai, Ruihai Fangyuan and Hangzhou Soushi with the Group's movie ticketing business in order to improve the operation efficiency. The management considers that the business of Beijing Weige Shidai, Ruihai Fangyuan, Hangzhou Soushi and the Group's remaining business represents the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets. As a result, goodwill of approximately RMB4,504,884,000 arising from the acquisition of Beijing Weige Shidai, Ruihai Fangyuan and Hangzhou Soushi was allocated to the cash generating unit ("CGU") of the Group.
The following is a summary of goodwill allocation for the Group:
Goodwill | ||
RMB'000 | ||
Year ended December 31, 2019 (Audited) | ||
Opening | 4,451,974 | |
Addition | 52,910 | |
Closing | 4,504,884 | |
Six months ended June 30, 2020 (Unaudited) | ||
Opening | 4,504,884 | |
Addition | - | |
Closing | 4,504,884 | |
Impairment review on the goodwill of the Group has been conducted by the management as at June 30, 2020. For the purpose of impairment review, the recoverable amount of CGUs is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets prepared by management covering a seven-year period. Cash flows beyond the seven-year period are extrapolated using the estimated terminal growth rates of 3.0%.
The key parameters used for value-in-use calculations on the Group include revenue growth rates, discount rate, gross margin and terminal growth rate.
50 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
13 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS (Continued)
Goodwill impairment (Continued)
The revenue growth rates are estimated with reference to the industry growth forecast for the market in which the Group operates. When estimating the revenue growth rate of the first five years, the directors of the Company are of the view that while the total revenue of 2020 will decrease by 67.8% as compared to 2019 due to the impact of COVID-19 outbreak, the PRC entertainment industry will recover substantially in 2021 and PRC movie box office will at least return to 2019 historic level. As such, the directors of the Company estimated that the total revenue of 2021 will rebound to 2019 historic level. From 2022 onwards, the directors of the Company estimated that PRC movie box office will recapture the growth momentum and exceed the 2019 historic level. Hence, revenue growth rates from 2022 to 2024 are estimated to range between 17.8% and 19.2%.
The discount rate used is pre-tax and reflects market assessments of the time value and the specific risks relating to the industry. The directors have considered the adverse impact of COVID-19 to the estimation of pre-tax discount rate. With the assistance of a valuation performed by a third-party independent valuer, the directors assessed that the pre-tax discount rate for the impairment assessment as at June 30, 2020 should be increased to 20.1% from the 16.8% used as at December 31, 2019.
The budgeted gross margin between 57.1% and 60.3% was determined by the management based on past performance and its expectation for market development.
Under paragraph 33(b) of IAS 36, a period longer than five years can be used as projections if it is justifiable, and the management of the Group used a seven-year period, which takes into account the length of the post projection period for the cash flow forecast will be perpetuity, and this shall be achieved by identifying a 'steady state' set of assumptions for the cash flows in the last year of the forecasts and applying a terminal value multiple to those cash flows. Therefore, given the Group expects to maintain an extended high growth rate over a period longer than 5 years, management of the Group considers that the Group's business is expected to reach a steady and stable terminal growth state, which is likely after a seven-year period of gradually declining revenue growth. As a result, management considered that before the projections move into a long term stable period, such momentum of revenue growth until 2024 will continue for another two years after 2024, during which the annual revenue growth rate will gradually drop from 18.0% in year 2024 to 16.3% in year 2025 and will further drop to a 12.4% in year 2026.
Based on the result of the goodwill impairment testing, the estimated recoverable amount of the business far exceeded its carrying amount as at June 30, 2020. The management of the Group has not identified that a reasonable possible change in any of the key assumptions that could cause the carrying amount to exceed the recoverable amount.
MAOYAN ENTERTAINMENT | Interim Report 2020 51
Notes to the Interim Condensed Consolidated Financial Information
13 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS (Continued)
Goodwill impairment (Continued)
The key assumptions used in the value in use calculations are as follows:
- Revenue is directly related to the value of paid transactions on the Group' platform and box office of the Group's business partners. When predicting revenue, the Group referred to the forecast of China's movie market, as well as the service fee rate and the Group's market share in China.
- For items of cost of revenue that are related to GMV of the Group, the Group referred to current fee rate and GMV projection to project the ticket system cost and internet infrastructure cost.
- The gross margin is determined by the management based on past performance and current market conditions.
- Selling and marketing expenses and general and administrative expenses are based on the Group's structure, business plan and the management's estimates.
- A terminal growth rate of 3.0% has been used in estimating cash flows beyond a period of 7 years.
- The cash flow projections are discounted using a pre-tax discount rate of 20.1%. The discount rate reflects the current market assessments of the time value of money and is based on the estimated cost of capital.
52 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
14 LEASES
-
Balance recognized in the consolidated statement of financial position relating to leases
Right-of-use assets
Six months ended June 30, | ||||
2020 | 2019 | |||
(Unaudited) | (Unaudited) | |||
RMB'000 | RMB'000 | |||
At the beginning of the period | 35,305 | 37,846 | ||
Depreciation | (6,833) | (6,137) | ||
At the end of the period | 28,472 | 31,709 | ||
Lease liabilities | ||||
As at | ||||
As at | ||||
June 30, | December 31, | |||
2020 | 2019 | |||
(Unaudited) | (Audited) | |||
RMB'000 | RMB'000 | |||
Current portion | (14,465) | (14,027) | ||
Non-current portion | (15,644) | (22,282) | ||
Total lease liabilities | (30,109) | (36,309) | ||
As at June 30, 2020 and December 31, 2019, the carrying amounts of the Group's lease liabilities were denominated in RMB.
- Amounts recognized in the consolidated statement of comprehensive income relating to leases
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
RMB'000 | RMB'000 | |
Depreciation of right-of-use assets (Note 7) | 6,833 | 6,137 |
Unwinding of interests on lease liabilities (Note 9) | 817 | 923 |
Rental expenses for short-term and | ||
low-value leases (Note 7) | 2,026 | - |
MAOYAN ENTERTAINMENT | Interim Report 2020 53
Notes to the Interim Condensed Consolidated Financial Information
15 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Six months ended June 30, | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
RMB'000 | RMB'000 | ||
At the beginning of the period | 37,558 | 37,297 | |
Additions | 2,099 | - | |
Share of losses | (367) | (439) | |
At the end of the period | 39,290 | 36,858 | |
16 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Six months ended June 30, | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
RMB'000 | RMB'000 | ||
At the beginning of the period | 356,371 | - | |
Additions | - | 334,111 | |
Disposals | (4,523) | - | |
Changes in fair value | 5,388 | (25,113) | |
Currency translation differences | 4,783 | 7,175 | |
At the end of the period | 362,019 | 316,173 | |
On March 12, 2019, the Company and Huanxi Media Group Limited ("Huanxi Media"), a company listed on Main Board of the Stock Exchange of Hong Kong Limited, entered into a subscription agreement, pursuant to which, the Company has conditionally agreed to subscribe for, and Huanxi Media has conditionally agreed to allot and issue to the Company 236,600,000 shares of Huanxi Media representing 7.5% equity interest in Huanxi Media at a total consideration of HKD390,555,620 (equivalent to approximately RMB334,111,000). On March 19, 2019, the subscription was completed, and the Company paid all of the consideration. Since the Group has no board seat in the listed company and the investment is intended to hold as strategic investments without trading purpose, management designated this investment as financial assets at fair value through other comprehensive income.
The fair value of the Group's investment in Huanxi Media is based on quoted market price as at reporting date. During the six months ended June 30, 2020, the Group disposed portion of the investment in Huanxi Media in the stock market at a consideration of approximately RMB4,523,000 and realised a gain of approximately RMB135,000 which was transferred to retained earnings (Note 26). As at June 30, 2020, the closing balance of the Group's investment in Huanxi Media is approximately RMB303,707,000 (as at December 31, 2019: approximately RMB298,369,000).
54 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
17 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
As at | As at | |
June 30, | December 31, | |
2020 | 2019 | |
(Unaudited) | (Audited) | |
RMB'000 | RMB'000 | |
Current assets | ||
Investments in wealth management products (a) | 20,500 | 267,717 |
Investments in movies and TV series (b) | 219,800 | 214,006 |
240,300 | 481,723 | |
Non-current assets | ||
Investment in unlisted investments (c) | 41,911 | 48,568 |
Investment in listed investments (d) | 3,921 | 4,754 |
45,832 | 53,322 | |
- Investments in wealth management products
Movements in investment in wealth management products were as follows:
Six months ended June 30, | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
RMB'000 | RMB'000 | ||
At the beginning of the period | 267,717 | 276,269 | |
Additions | 128,900 | 259,600 | |
Disposals | (378,489) | (69,844) | |
Changes in fair value | 2,372 | 12,711 | |
At the end of the period | 20,500 | 478,736 | |
MAOYAN ENTERTAINMENT | Interim Report 2020 55
Notes to the Interim Condensed Consolidated Financial Information
17 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)
- Investments in wealth management products (Continued)
The investments in wealth management products mainly represent the investment in wealth management products issued by banks in the PRC with expected investment return rate as at June 30, 2020 was 3.27% (as at December 31, 2019: 2.65%~4.10%). The principals and returns on all of these wealth management products are not guaranteed, and therefore the Group designated them as financial assets at fair value through profit or loss. The fair values are based on cash flows discounted using the expected return based on management judgment and are within level 3 of the fair value hierarchy. Changes in fair value (realized and unrealized) of these financial assets are recognized in "Other losses, net" in the condensed consolidated statement of comprehensive income.
The maximum exposure to credit risk as at June 30, 2020 is the carrying value of these investments in wealth management products. None of the investments is either past due or impaired. - Investments in movies and TV series
Movements in investments in movies and TV series were as follows:
Six months ended June 30, | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
RMB'000 | RMB'000 | ||
At the beginning of the period | 214,006 | 108,447 | |
Additions | 11,854 | 51,195 | |
Disposals | (16,736) | (1,131) | |
Changes in fair value | 10,676 | (10,721) | |
At the end of the period | 219,800 | 147,790 | |
56 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
17 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)
- Unlisted investments
The Group's unlisted investments assets include investments in certain private companies. Movements of unlisted investments were as follows:
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
RMB'000 | RMB'000 | |
At the beginning of the period | 48,568 | 38,801 |
Additions | - | 32,855 |
Fair value changes | (6,801) | - |
Currency translation differences | 144 | - |
At the end of the period | 41,911 | 71,656 |
- Listed investments
Movements in listed investments were as follows:
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
RMB'000 | RMB'000 | |
At the beginning of the period | 4,754 | - |
Fair value changes | (899) | - |
Currency translation differences | 66 | - |
At the end of the period | 3,921 | - |
MAOYAN ENTERTAINMENT | Interim Report 2020 57
Notes to the Interim Condensed Consolidated Financial Information
18 DEFERRED INCOME TAX
The analysis of deferred income tax assets and liabilities is as follows: | ||||
As at | ||||
As at | ||||
June 30, | December 31, | |||
2020 | 2019 | |||
(Unaudited) | (Audited) | |||
RMB'000 | RMB'000 | |||
Total gross deferred tax assets | 14,589 | 14,549 | ||
Offsetting | (6,241) | (4,119) | ||
Net deferred income tax assets | 8,348 | 10,430 | ||
- to be recovered within 12 months | - | - | ||
- to be recovered after 12 months | 8,348 | 10,430 | ||
8,348 | 10,430 | |||
Total gross deferred tax liabilities | 180,242 | 189,792 | ||
Offsetting | (6,241) | (4,119) | ||
Net deferred income tax liabilities | 174,001 | 185,673 | ||
- to be recovered within 12 months | 12,220 | 24,439 | ||
- to be recovered after 12 months | 161,781 | 161,234 | ||
174,001 | 185,673 | |||
Deferred tax liabilities, net | (165,653) | (175,243) | ||
58 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
18 DEFERRED INCOME TAX (Continued)
The movements in deferred income tax assets and liabilities during the six months ended June 30, 2020 and 2019, without taking into consideration the offsetting of balances within the same tax jurisdiction, are as follows:
Deferred income tax assets
Impairment | ||||
of accounts | ||||
receivables | ||||
and other | ||||
receivables | Others | Total | ||
RMB'000 | RMB'000 | RMB'000 | ||
As at January 1, 2019 | 2,851 | 1,521 | 4,372 | |
Credit to consolidated statement of | ||||
comprehensive income | 3,225 | 1,159 | 4,384 | |
As at June 30, 2019 (Unaudited) | 6,076 | 2,680 | 8,756 | |
As at January 1, 2020 | 13,305 | 1,244 | 14,549 | |
Credit to consolidated statement of | ||||
comprehensive income | 40 | - | 40 | |
As at June 30, 2020 (Unaudited) | 13,345 | 1,244 | 14,589 | |
MAOYAN ENTERTAINMENT | Interim Report 2020 59
Notes to the Interim Condensed Consolidated Financial Information
18 DEFERRED INCOME TAX (Continued)
Deferred tax liabilities
Change in | ||||
fair value of | Intangible | |||
financial | assets | |||
assets at fair | acquired in | |||
value through | business | |||
profit or loss | combination | Total | ||
RMB'000 | RMB'000 | RMB'000 | ||
As at January 1, 2019 | 2,357 | 194,870 | 197,227 | |
(Credit) to consolidated statement of | ||||
comprehensive income | (256) | (11,757) | (12,013) | |
Business combinations | - | 10,000 | 10,000 | |
As at June 30, 2019 (Unaudited) | 2,101 | 193,113 | 195,214 | |
As at January 1, 2020 | 8,898 | 180,894 | 189,792 | |
Charge/(credit) to consolidated statement of | ||||
comprehensive income | 2,670 | (12,220) | (9,550) | |
As at June 30, 2020 (Unaudited) | 11,568 | 168,674 | 180,242 | |
60 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
19 ACCOUNTS RECEIVABLE
As at | As at | ||
June 30, | December 31, | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
RMB'000 | RMB'000 | ||
Related parties (Note 29) | 10,605 | 11,427 | |
Third parties | 318,528 | 592,020 | |
329,133 | 603,447 | ||
Less: allowance for impairment | (108,604) | (51,800) | |
220,529 | 551,647 | ||
- The carrying amounts of the accounts receivable balances approximated to their fair value as at June 30, 2020 and as at December 31, 2019. All the accounts receivable balances were denominated in RMB.
- Aging analysis of the gross accounts receivable based on recognition date is as follows:
As at | As at | |
June 30, | December 31, | |
2020 | 2019 | |
(Unaudited) | (Audited) | |
RMB'000 | RMB'000 | |
0-90 days | 2,611 | 362,516 |
91-180 days | 42,324 | 44,811 |
181-365 days | 131,777 | 30,401 |
Over 365 days | 152,421 | 165,719 |
329,133 | 603,447 | |
MAOYAN ENTERTAINMENT | Interim Report 2020 61
Notes to the Interim Condensed Consolidated Financial Information
19 ACCOUNTS RECEIVABLE (Continued)
- Movements on the Group's allowance for impairments of accounts receivables are as follows:
As at | As at | ||
June 30, | December 31, | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
RMB'000 | RMB'000 | ||
At the beginning of the period/year | (51,800) | (11,404) | |
Provision for the period/year | (56,804) | (40,396) | |
At the end of the period/year | (108,604) | (51,800) | |
- The Group applies the simplified approach to provide for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all accounts receivables. To measure the expected credit losses, accounts receivables have been grouped based on shared credit risk characteristics and the days past due. The expected credit losses below have also incorporated forward looking information. The loss allowance provisions as at June 30, 2020 and as at December 31, 2019 are determined as follows:
Up to 3 | 3 to 6 | 6 to 12 | Over | ||||
months | months | months | 1 year | ||||
Current | past due | past due | past due | past due | Total | ||
RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | ||
As at June 30, 2020 | |||||||
(Unaudited) | |||||||
Expected loss rate | 4.10% | 8.81% | 8.92% | 9.09% | 63,49% | ||
Gross carrying amount | 83,702 | 2,611 | 26,003 | 64,396 | 152,421 | 329,133 | |
Loss allowance provision | 3,432 | 230 | 2,320 | 5,856 | 96,766 | 108,604 | |
As at December 31, 2019 | |||||||
(Audited) | |||||||
Expected loss rate | 3.46% | 3.14% | 3.95% | 4.26% | 24.71% | ||
Gross carrying amount | 314,265 | 60,139 | 36,556 | 48,822 | 143,665 | 603,447 | |
Loss allowance provision | 10,888 | 1,887 | 1,443 | 2,081 | 35,501 | 51,800 | |
The directors of the Company have carefully re-assessed the lifetime expected credit loss of accounts receivables as at June 30, 2020, and increased the expected credit loss rate as at June 30, 2020 to reflect the adverse impact of COVID-19 outbreak to the macroeconomic environment and the PRC entertainment industry.
62 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
20 PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES
As at | As at | ||
June 30, | December 31, | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
RMB'000 | RMB'000 | ||
Deposits and prepayments for online entertainment | |||
ticketing and e-commerce services | 1,151,523 | 998,089 | |
Prepayments for investments in movies and TV series (a) | 746,505 | 766,662 | |
Loans to third parties (b) | 216,933 | 224,758 | |
Amounts due from related parties (Note 29) | 140,272 | 164,501 | |
Receivables from investments in movies and TV series | 135,107 | 118,862 | |
Others | 164,451 | 177,962 | |
2,554,791 | 2,450,834 | ||
Less: non-current portion | (112,568) | (113,787) | |
Current portion | 2,442,223 | 2,337,047 | |
Less: allowance for impairment of prepayments, | |||
deposits and other receivables (c) | (80,205) | (1,454) | |
2,362,018 | 2,335,593 | ||
MAOYAN ENTERTAINMENT | Interim Report 2020 63
Notes to the Interim Condensed Consolidated Financial Information
20 PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES (Continued)
- The Group offers distribution and promotion services, which is considered one of the principal activities of the Group. The investments in movie and TV series with distribution and promotion services are designated as prepayments.
- The loans to third parties are repayable within 1 year. Except for an interest-free and unsecured loan amounting to approximately RMB75,675,000, the remaining loans are interest-bearing at fixed rates ranging from 5% to 13% per annum and are secured by the debtors' certain receivables.
- The allowance for impairment mainly represents impairment of prepayments and deposits paid by the Group to its business partners for the Group's online entertainment ticketing business of which the directors assessed to be irrecoverable after considering relevant factors such as the corresponding contractual terms or mutually agreed arrangements, the credit status of these companies, and the overall market conditions.
The provision is the excess amount of the carrying amount of prepayment and deposits over the expected recoverable amount based on the directors' assessment with reference to the aforementioned relevant factors.
During the six months ended June 30, 2020, the Group made impairment provision of approximately RMB78,751,000 against prepayments and deposits paid to a number of business partners based on the expected recoverable amount estimated by the directors in light of the adverse impact of COVID-19 outbreak to the macroeconomic environment and the PRC entertainment industry.
64 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
21 CASH AND CASH EQUIVALENTS, TERM DEPOSIT WITH ORIGINAL MATURITY OVER THREE MONTHS, AND RESTRICTED BANK DEPOSITS
As at | As at | ||
June 30, | December 31, | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
RMB'000 | RMB'000 | ||
Cash and bank balances | 1,401,693 | 1,971,783 | |
Restricted bank deposits (a) | (230,368) | (331,369) | |
Term deposit with original maturity over three months | - | (100,000) | |
Cash and cash equivalents | 1,171,325 | 1,540,414 | |
Maximum exposure to credit risk | 1,401,693 | 1,971,783 | |
- The restricted bank deposits are held by the bank in segregated accounts as securities for bank borrowings (Note 22).
22 BORROWINGS
As at | As at | |
June 30, | December 31, | |
2020 | 2019 | |
(Unaudited) | (Audited) | |
RMB'000 | RMB'000 | |
Current | ||
Bank borrowings - due within one year | ||
- Secured (a) | 310,000 | 511,600 |
- Guaranteed (b) | 470,000 | 650,000 |
780,000 | 1,161,600 | |
MAOYAN ENTERTAINMENT | Interim Report 2020 65
Notes to the Interim Condensed Consolidated Financial Information
- BORROWINGS (Continued)
-
As at June 30, 2020, the bank borrowing of RMB150,000,000 was interest-bearing at a fixed rate of 3.92% per annum and was secured by restricted bank deposits of USD23,500,000 (equivalent to approximately RMB166,368,000) and the bank borrowing of RMB160,000,000 was interest-free and secured by bank deposits of RMB64,000,000.
As at December 31, 2019, bank borrowings of RMB252,000,000 were interest-bearing at fixed rate of 4.31% per annum and secured by restricted bank deposits of USD47,499,995 (equivalent to approximately RMB331,369,000) and bank borrowings of RMB259,600,000 were interest-free and secured by certain investment in wealth management products amounting to RMB259,600,000. - As at June 30, 2020, these bank borrowings were guaranteed by subsidiaries of the Group, among which, RMB100,000,000 was under a fixed rate of 4.96% per annum; RMB200,000,000 was under a fixed rate of 3.92% per annum; RMB100,000,000 was under a fixed rate of 5.22% per annum, and RMB70,000,000 was under a fixed rate of 5.26% per annum.
As at December 31, 2019, these bank borrowings were guaranteed by subsidiaries of the Group, among which RMB200,000,000 was with fixed rate of 5.44% per annum, RMB200,000,000 with fixed rate of 3.92% per annum, RMB100,000,000 with fixed rate of 5.22% per annum, RMB100,000,000 with fixed rate of 4.96% per annum, and RMB50,000,000 was with fixed rate of 4.35% per annum. - The borrowings on June 30, 2020 and December 31, 2019 were all denominated in RMB with fixed rates.
-
As at June 30, 2020, the bank borrowing of RMB150,000,000 was interest-bearing at a fixed rate of 3.92% per annum and was secured by restricted bank deposits of USD23,500,000 (equivalent to approximately RMB166,368,000) and the bank borrowing of RMB160,000,000 was interest-free and secured by bank deposits of RMB64,000,000.
- ACCOUNTS PAYABLE
Aging analysis of the accounts payable based on invoice date at the respective balance sheet dates is as follows:
As at | As at | |
June 30, | December 31, | |
2020 | 2019 | |
(Unaudited) | (Audited) | |
RMB'000 | RMB'000 | |
0-90 days | 3,440 | 222,405 |
91-180 days | 47,920 | 45,012 |
181-365 days | 55,353 | 32,641 |
Over 365 days | 91,721 | 67,599 |
198,434 | 367,657 | |
66 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
24 OTHER PAYABLES, ACCRUALS AND OTHER LIABILITIES
As at | As at | |
June 30, | December 31, | |
2020 | 2019 | |
(Unaudited) | (Audited) | |
RMB'000 | RMB'000 | |
Payables in respect of online entertainment ticketing | ||
and e-commerce services | 485,733 | 831,386 |
Amounts due to related parties (Note 29) | 192,517 | 107,865 |
Payables in respect of share in the box office receipts | 163,057 | 147,690 |
Loans from third parties (a) | 74,580 | - |
Payroll and welfare payable | 68,650 | 88,772 |
Other tax liabilities | 7,550 | 21,736 |
Others | 26,623 | 41,189 |
1,018,710 | 1,238,638 | |
- The loans from third parties are interest-free, unsecured and repayable within 1 year.
MAOYAN ENTERTAINMENT | Interim Report 2020 67
Notes to the Interim Condensed Consolidated Financial Information
25 | SHARE CAPITAL | ||||||||
Number of | |||||||||
ordinary | |||||||||
shares | |||||||||
pursuant to | Share held | Equivalent | |||||||
Number of | Number of | restricted | for restricted | Total | Nominal | nominal | |||
ordinary | preferred | share | share | number | value | value | |||
(Unaudited) | shares | shares | agreement | agreement | of shares | of shares | of shares | ||
USD'000 | RMB'000 | ||||||||
Issued and fully paid: | |||||||||
As at January 1, 2019 | 184,550,429 | 4,831,385 | 3,855,445 | (963,861) | 192,273,398 | 19.20 | 130 | ||
Share subdivision | 922,752,145 | 24,156,925 | 19,277,225 | (4,819,305) | 961,366,990 | 19.20 | 130 | ||
Share redesignation | 24,156,925 | (24,156,925) | - | - | - | - | - | ||
Issuance of new shares | |||||||||
upon listing | 132,377,000 | - | - | - | 132,377,000 | 2.60 | 18 | ||
Issuance of new shares for | |||||||||
conversion of convertible bond | 27,702,280 | - | - | - | 27,702,280 | 0.60 | 3 | ||
Restricted shares vested | - | - | - | 3,212,870 | 3,212,870 | 0.10 | 1 | ||
As at June 30, 2019 | 1,106,988,350 | - | 19,277,225 | (1,606,435) | 1,124,659,140 | 22.50 | 152 | ||
Number of | |||||||||
ordinary | |||||||||
shares | |||||||||
pursuant to | Share held | Equivalent | |||||||
Number of | Number of | restricted | for restricted | Total | Nominal | nominal | |||
ordinary | preferred | share | share | number | value of | value | |||
(Unaudited) | shares | shares | agreement | agreement | of shares | shares | of shares | ||
USD'000 | RMB'000 | ||||||||
Issued and fully paid: | |||||||||
As at January 1, 2020 | 1,110,489,075 | - | 19,277,225 | - | 1,129,766,300 | 22.50 | 152 | ||
Issuance of new shares under | |||||||||
share option scheme | 1,987,081 | - | - | - | 1,987,081 | 0.04 | 1 | ||
As at June 30, 2020 | 1,112,476,156 | - | 19,277,225 | - | 1,131,753,381 | 22.54 | 153 | ||
68 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
26 | RESERVES | |||||||||
Financial | ||||||||||
assets at | ||||||||||
fair value | ||||||||||
Currency | through other | Share-based | ||||||||
Share | Capital | translation | comprehensive | Convertible | compensation | Other | ||||
(Unaudited) | premium | reserves | differences | income | bonds | reserve | reserves | Total | ||
RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | |||
As at January 1, 2019 | - | 5,592,299 | 296 | - | (3,676) | 576,452 | (8,400) | 6,156,971 | ||
Issuance of new shares | 1,675,267 | - | - | - | - | - | - | 1,675,267 | ||
Issuance of new shares for | ||||||||||
conversion of convertible bond | 350,660 | - | - | - | - | - | - | 350,660 | ||
Share issuance costs (a) | (43,054) | - | - | - | - | - | - | (43,054) | ||
Changes in the financial assets | ||||||||||
at fair value through other | ||||||||||
comprehensive income | - | - | - | (25,113) | - | - | - | (25,113) | ||
Currency translation difference | - | - | 34,960 | - | - | - | - | 34,960 | ||
Share-based compensation | ||||||||||
expenses | - | - | - | - | - | 50,950 | - | 50,950 | ||
Transfer of vested restricted share | ||||||||||
unit from treasury shares | 228,229 | - | - | - | - | (228,229) | - | - | ||
As at June 30, 2019 | 2,211,102 | 5,592,299 | 35,256 | (25,113) | (3,676) | 399,173 | (8,400) | 8,200,641 | ||
- Share issuance costs mainly include share underwriting commissions, lawyers' fees, reporting accountant's fee and other related costs associated with the listing. Incremental costs that are directly attributable to the issue of the new shares amounting to approximately RMB43,054,000 was treated as a deduction against the share premium arising from the issuance.
MAOYAN ENTERTAINMENT | Interim Report 2020 69
Notes to the Interim Condensed Consolidated Financial Information
26 RESERVES (Continued)
Financial | |||||||||
assets at | |||||||||
fair value | |||||||||
Currency | through other | Share-based | |||||||
Share | Capital | translation | comprehensive | Convertible | compensation | Other | |||
(Unaudited) | premium | reserves | differences | income | bonds | reserve | reserves | Total | |
RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | ||
As at January 1, 2020 | 2,276,898 | 5,592,299 | 67,011 | (27,052) | (3,676) | 385,951 | (8,400) | 8,283,031 | |
Issuance of new shares under | |||||||||
share option scheme | 26,543 | - | - | - | - | (26,353) | - | 190 | |
Currency translation difference | - | - | 28,814 | - | - | - | - | 28,814 | |
Changes in the financial assets | |||||||||
at fair value through other | |||||||||
comprehensive income | - | - | - | 5,388 | - | - | - | 5,388 | |
Transfer to retained earnings | - | - | - | (135) | - | - | - | (135) | |
Share-based compensation | |||||||||
expenses | - | - | - | - | - | 54,487 | - | 54,487 | |
As at June 30, 2020 | 2,303,441 | 5,592,299 | 95,825 | (21,799) | (3,676) | 414,085 | (8,400) | 8,371,775 | |
70 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
27 SHARE INCENTIVE PLAN
The share-based compensation expenses recognized during six months ended June 30, 2020 and 2019 are summarized in the following table:
Six months ended June 30,
20202019
(Unaudited) (Unaudited)
RMB'000 RMB'000
Share-based compensation expenses | 54,487 | 50,950 |
- ESOP Plan of the Company
In order to provide incentives and rewards to directors, senior management and employees of the Group and other eligible individuals and entities, the Company adopted the ESOP Plan on July 23, 2018. The ESOP Plan include Pre-IPO Share Option Scheme, Post-IPO Share Option Scheme and the Post-IPO RSU Scheme.
The total number of shares issued or issuable pursuant to the ESOP Plan shall not be more than 117,033,705 shares of the Company, representing approximately 10.3% of the total issued share capital of the Company as at June 30, 2020, out of which, the maximum number of shares that may be issued upon exercise of all options granted and to be granted under the Pre-IPO Share Option Scheme shall be no more than 42,544,600 shares, and the total number of shares which may be issued upon exercise of options that may be granted under the Post-IPO Share Option Scheme and the RSU Scheme shall not exceed 55,211,880 shares in aggregate.
- Pre-IPOShare Option Scheme
The Pre-IPO Share Option Scheme was adopted by the Company as a continuation and restructuring of the 2016 ESOP following the Reorganization, which was established to recognize and reward the contribution of the participants to the growth and development of Tianjin Maoyan Weying. The 2016 ESOP was terminated as a result of the adoption of the Pre-IPO Share Option Scheme.
MAOYAN ENTERTAINMENT | Interim Report 2020 71
Notes to the Interim Condensed Consolidated Financial Information
27 SHARE INCENTIVE PLAN (Continued)
- ESOP Plan of the Company (Continued)
- Pre-IPOShare Option Scheme (Continued)
Movements of Pre-IPO share options outstanding and their related weighted average exercise prices are as follows:
Number of | |||
Average | share options | ||
exercise price | of the Company | ||
(Audited) | |||
Outstanding balance as at January 1, 2019 | RMB35.9278 | 8,085,239 | |
Subdivision of shares and modification | |||
of exercise price (Note 25(b)) | RMB8.0326 | 40,426,195 | |
Exercised | RMB0.0869 | (3,500,725) | |
Forfeited | RMB7.3593 | (2,961,385) | |
Outstanding balance as at January 1, 2020 | RMB8.9102 | 33,964,085 | |
(Unaudited) | |||
Exercised | RMB0.0869 | (1,987,081) | |
Lapsed | RMB12.6745 | (53,439) | |
Forfeited | RMB11.8275 | (593,260) | |
Outstanding balance as at June 30, 2020 | RMB9.4081 | 31,330,305 | |
During the year ended December 31, 2018, 8,085,239 share options under the Pre-IPO Share Option Scheme have been granted as part of the Reorganization and as a replacement of the granted virtual share options to the employees under 2016 ESOP plan of Tianjin Maoyan Weying, and there were no incremental benefit with same vesting period, condition and exercise price granted to the employee under the Pre-IPO Share Option Scheme.
72 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
27 SHARE INCENTIVE PLAN (Continued)
- ESOP Plan of the Company (Continued)
- Pre-IPOShare Option Scheme (Continued)
On January 17, 2019, the board of directors of the Company resolved to modify the exercise price of certain share options, which have been granted to a designated group of employees under the Pre-IPO Share Option Scheme, from HKD24.0367 of each Subdivision Shares to the lower of HKD24.0367 and the final offering price per share in connection with the listing (the "Offer Price"), and the Offer Price was HKD14.80. The incremental fair value of such granted share options at date of modification is approximately RMB34,081,000 and is recognized as expense and charged to the consolidated statement of comprehensive income and amortized over the remaining vesting period.
As at June 30, 2020, out of 31,330,305 share options, 13,941,489 share options were vested and exercisable.
- Post-IPOShare Option Scheme
Since the initial public offering day, February 4, 2019, the Company granted share options to certain employees and directors under the Post-IPO Share Option Scheme. As at June 30, 2020, out of 6,676,952 share options, 160,002 share options were vested and exercisable.
Movements of Post-IPO share options outstanding and their related exercise prices are as follows:
Number of | |||
share options | |||
Average | of the Company | ||
exercise prices | (after Subdivision) | ||
(Audited) | |||
Outstanding balance as at January 1, 2019 | - | - | |
Granted | RMB12.6398 | 5,555,890 | |
Forfeited | RMB12.8424 | (595,270) | |
Outstanding balance as at January 1, 2020 | RMB12.6155 | 4,960,620 | |
(Unaudited) | |||
Granted | RMB9.5783 | 2,647,822 | |
Lapsed | RMB12.8424 | (55,903) | |
Forfeited | RMB12.9031 | (875,587) | |
Outstanding balance as at June 30, 2020 | RMB11.3715 | 6,676,952 | |
MAOYAN ENTERTAINMENT | Interim Report 2020 73
Notes to the Interim Condensed Consolidated Financial Information
27 SHARE INCENTIVE PLAN (Continued)
- ESOP Plan of the Company (Continued)
- Fair value of options
The Group has used the Binomial Model to determine the fair value of the options as at the respective grant dates, which is to be expensed over the relevant vesting period. The weighted average fair value of share options granted by Maoyan Entertainment during the year ended June 30, 2020 was RMB4.35 per share option (during the year ended December 31, 2019: RMB4.76 per share option).
Other than the exercise price mentioned above, significant judgement on parameters, such as risk free rate, dividend yield and expected volatility, are required to be made by the directors in applying the Binomial Model, which are summarized as below.
Six months ended June 30, | ||
(Unaudited) | 2020 | 2019 |
Risk free rate | 0.6% | 1.6%~1.7% |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 40% | 35% |
The expected volatility, measured as the standard deviation of expected share price returns, is determined based on the average daily trading price volatility of the shares of the comparable companies.
Expected retention rate
The Group has to estimate the expected yearly percentage of grantees that will stay within the Group at the end of the vesting periods of the share options (the "Expected Retention Rate") in order to determine the amount of share-based compensation expenses charged to the consolidated statement of comprehensive income. As at June 30, 2020 and December 31, 2019, the Expected Retention Rate was assessed to be 94.5% and 92%, respectively.
74 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
27 SHARE INCENTIVE PLAN (Continued)
- ESOP Plan of the Company (Continued)
- Post-IPORSU Scheme
Movements of the Post-IPO RSU granted are as follows:
Number of | |||
shares (after | |||
Fair value | Subdivision) | ||
(Audited) | |||
Outstanding balance as at January 1, 2019 | - | - | |
Granted | RMB10.9967 | 4,720,961 | |
Outstanding balance as at January 1, 2020 | RMB10.9967 | 4,720,961 | |
(Unaudited) | |||
Granted | RMB9.5783 | 8,608,779 | |
Forfeited | RMB9.5783 | (133,000) | |
Outstanding balance as at June 30, 2020 | RMB10.0857 | 13,196,740 | |
28 CAPITAL COMMITMENTS
As at June 30, 2020, capital expenditure contracted for but not yet incurred by the Group amounted to approximately RMB103,705,000 with respect to investments in certain movies and TV series.
MAOYAN ENTERTAINMENT | Interim Report 2020 75
Notes to the Interim Condensed Consolidated Financial Information
29 SIGNIFICANT RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, control the other party or exercise significant influence over the other party in making financial and operation decisions. Parties are also considered to be related if they are subject to common control. Members of key management and their close family members of the Group are also considered as related parties.
Name of the related parties | Nature of relationship |
Meituan Dianping and its subsidiaries | One of the Company's shareholders |
(collectively "Meituan Dianping Group") | |
Enlight Investment and Enlight Media and their subsidiaries | One of the Company's shareholders |
(collectively "Enlight Group") | |
Beijing Weying Shidai and its subsidiaries | One of the Company's shareholders |
(collectively "Beijing Weying Shidai Group") | |
Tencent and its subsidiaries (collectively "Tencent Group") | One of the Company's shareholders |
Beijing Yaoying Movie Distribution Co., Ltd.("Beijing Yaoying") | The associate of the Group |
Shanghai Mila Television Culture Media Co., Ltd. ("Shanghai Mila") | The associate of the Group |
Shanghai Chengxin Television Media Co., Ltd. | The associate of the Group |
("Shanghai Chengxin") |
Save as disclosed elsewhere in the consolidated financial statements, the following significant transactions were carried out between the Group and its related parties during the six months ended June 30, 2020. In the opinion of the Company's directors, the following related party transactions were carried out in the normal course of business and at terms negotiated between the Group and the respective related parties.
- In May 2016, the Group entered into a strategic cooperation agreement and formed a strategic partnership with the shareholder, Meituan Dianping. As part of the strategic partnership, Meituan Dianping and the Group agreed to cooperate in a number of areas with no charge. The strategic cooperation agreement has a term of five years and applies within the PRC.
76 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
29 SIGNIFICANT RELATED PARTY TRANSACTIONS (Continued)
- Revenue from transactions with related parties
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
RMB'000 | RMB'000 | |
Meituan Dianping Group | 78 | - |
Enlight Group | 142 | 24,341 |
Beijing Weying Shidai Group | - | 3,539 |
Tencent Group | 2,251 | 294 |
Beijing Yaoying | - | 13,584 |
Shanghai Chengxin | 1,474 | - |
3,945 | 41,758 | |
- Purchase of management services
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
RMB'000 | RMB'000 | |
Meituan Dianping Group | 61,221 | 98,796 |
Enlight Group | 2 | 1,448 |
Beijing Weying Shidai Group | - | 600 |
Tencent Group | 6,298 | 20,419 |
67,521 | 121,263 | |
- Movie cards consideration received on behalf of the Group
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
RMB'000 | RMB'000 | |
Meituan Dianping Group | 13 | 2,983 |
Enlight Group | 428 | 795 |
Beijing Weying Shidai Group | 101 | 6,536 |
Tencent Group | 1,613 | 1,787 |
2,155 | 12,101 | |
MAOYAN ENTERTAINMENT | Interim Report 2020 77
Notes to the Interim Condensed Consolidated Financial Information
29 SIGNIFICANT RELATED PARTY TRANSACTIONS (Continued)
- Balances with related parties
As at | As at | |
June 30, | December 31, | |
2020 | 2019 | |
(Unaudited) | (Audited) | |
RMB'000 | RMB'000 | |
Receivables from related parties | ||
- Accounts receivable | ||
Enlight Group | 443 | 443 |
Beijing Weying Shidai Group | 360 | 360 |
Tencent Group | 9,632 | 10,377 |
Beijing Yaoying | 170 | 209 |
Meituan Dianping Group | - | 38 |
10,605 | 11,427 | |
- Prepayments, deposits and other receivables | ||
Meituan Dianping Group | 56,216 | 81,461 |
Beijing Weying Shidai Group | 28,696 | 29,227 |
Tencent Group | - | - |
Enlight Group | 3 | 20 |
Shanghai Chengxin | 50,640 | 49,077 |
Shanghai Mila | 4,717 | 4,716 |
140,272 | 164,501 | |
Payables to related parties | ||
- Other payables, accruals and other liabilities | ||
Meituan Dianping Group | 161,544 | 94,646 |
Enlight Group | 7,112 | - |
Beijing Weying Shidai Group | 336 | 336 |
Tencent Group | 23,525 | 12,883 |
192,517 | 107,865 | |
The receivables and payables due from/to related parties are unsecured, interest-free and are repayable on demand.
78 MAOYAN ENTERTAINMENT | Interim Report 2020
Notes to the Interim Condensed Consolidated Financial Information
29 SIGNIFICANT RELATED PARTY TRANSACTIONS (Continued)
- Key management compensation
Six months ended June 30, | ||
2020 | 2019 | |
(Unaudited) | (Unaudited) | |
RMB'000 | RMB'000 | |
Wages, salaries and bonuses | 4,090 | 4,122 |
Share-based compensation expenses | 22,525 | 28,988 |
Welfare, medical and other expenses | 89 | 100 |
Contributions to pension plans | 25 | 74 |
26,729 | 33,284 | |
30 CONTINGENCIES
The Group had no material contingent liabilities as at June 30, 2020 and December 31, 2019.
31 SUBSEQUENT EVENT
Pursuant to the public announcement made by the China Film Administration in July 2020, cinemas in low- risk areas in the PRC have orderly reopened since July 20, 2020 and begun to report gross box office results amid certain epidemic prevention measures which still restrict the cinemas' operating capacity. Pursuant to the public announcement issued by the Ministry of Culture and Tourism of the PRC in August 2020, commercial performance activities with medium size or below can be organized in the low risk areas subject to the approval from the relevant local authorities and conditional upon the effective prevention and control of the epidemic. The Group will continue to monitor the latest development of the COVID-19 epidemic and react actively to its impact on the operations and financial position of the Group.
MAOYAN ENTERTAINMENT | Interim Report 2020 79
Definition and Glossary
Unless the context otherwise requires, the following expressions in this Interim Report shall have the following meanings:
"Adoption Date" | July 23, 2018, the date on which the Company adopted the ESOP Plan |
"Audit Committee" | the audit committee of the Company |
"Auditor" | the external auditor of the Company |
"Beijing Shiji Weying" | Beijing Shiji Weying Culture Development Co., Ltd. (北京世紀微影文化發展有限 |
公司), a company incorporated under the laws of the PRC on July 22, 2016, with | |
the limited liability and one of our Registered Shareholders | |
"Board" | the board of directors of the Company |
"Company", "our Company" | Maoyan Entertainment, an exempted company incorporated in the Cayman |
or "Maoyan" | Islands with limited liability and whose Shares are listed on the Main Board of |
the Stock Exchange (Stock Code: 1896) | |
"Consolidated Affiliated | entities whose financial have been consolidated and accounted for as |
Entities" | subsidiaries of the Company by virtue of the Contractual Arrangements |
"Contractual Arrangements" | the series of contractual arrangements entered into by, among others, the |
WFOE, Tianjin Maoyan Weying and the Registered Shareholders | |
"Corporate Governance Code" | the Corporate Governance Code as set out in Appendix 14 to the Listing Rules |
"Director(s)" | the director(s) of the Company |
"Enlight Investment" | Shanghai Enlight Investment Holding Co., Ltd. (上海光線投資控股有限公司), one |
of our Pre-IPO Investors and one of our Registered Shareholders | |
"Enlight Media" | Beijing Enlight Media Co., Ltd. (北京光線傳媒股份有限公司), a company listed |
on the Shenzhen Stock Exchange (stock code: 300251), one of our Pre-IPO | |
Investors and one of our Registered Shareholders | |
"ESOP Plan" | a series of employee incentive scheme adopted by the Company on July 23, |
2018, including Pre-IPO Share Option Scheme, Post-IPO Share Option Scheme, | |
RSU Scheme and Restricted Share Agreement |
80 MAOYAN ENTERTAINMENT | Interim Report 2020
Definition and Glossary
"GMV" | the value of paid transactions on our platform, including the service fees and |
without regard to any refunds | |
"gross box office" | box office and the service fees paid for online movie ticketing services |
"Group", "our Group", | the Company, its subsidiaries and the Consolidated Affiliated Entities |
"we" or "us" | |
"Historical ESOP Platforms" | Tianjin Caiyi, Tianjin Caixuan, Tianjin Caiying, Tianjin Caichuang and Tianjin |
Guanghong | |
"HK$" or "HKD" | Hong Kong dollars, the lawful currency of Hong Kong |
"Hong Kong" | Hong Kong Special Administrative Region of the PRC |
"Hong Kong Stock Exchange" | the Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong |
or "Stock Exchange" | Kong Exchanges and Clearing Limited |
"Linzhi Lixin" | Linzhi Lixin Information Technology Co., Ltd. (林芝利新信息技術有限公司), a |
company incorporated under the laws of the PRC on October 26, 2015 with | |
limited liability and a company designated by Tencent to hold interests in Tianjin | |
Maoyan Weying | |
"Listing" | listing of the Shares on the Main Board of the Stock Exchange |
"Listing Date" | February 4, 2019, the date on which the Shares became listed on the Main |
Board of the Stock Exchange | |
"Listing Rules" | the Rules Governing the Listing of Securities on The Stock Exchange of Hong |
Kong Limited, as amended, supplemented or otherwise modified from time to | |
time | |
"Maoyan Technology/WFOE" | Tianjin Maoyan Weying Technology Co., Ltd. (天津貓眼微影科技有限公司), a |
company incorporated under the laws of the PRC on February 5, 2018 with | |
limited liability and a wholly owned subsidiary of our Company | |
"Meituan Dianping" | Meituan Dianping (美團點評) (HKEx Stock Code: 3690), an exempted company |
with limited liability incorporated under the laws of the Cayman Islands on | |
September 15, 2015, or Meituan Dianping and its subsidiaries and consolidated | |
affiliated entities, as the case may be |
MAOYAN ENTERTAINMENT | Interim Report 2020 81
Definition and Glossary
"Model Code" | Model Code for Securities Transactions by Directors of Listed Issuers as set out |
in Appendix 10 to the Listing Rules | |
"Nomination Committee" | the nomination committee of the Company |
"Post-IPO Share Option | the post-IPO share option scheme of our Company as approved on July 23, |
Scheme" | 2018, which was adopted by the Company to provide incentives and rewards to |
individuals and/or entities for their contribution | |
"PRC" or "China" | the People's Republic of China, which, for the purpose of this interim report only, |
excludes Hong Kong, Macau and Taiwan | |
"Pre-IPO Share Option | the pre-IPO share option scheme of our Company as approved on July 23, 2018, |
Scheme" | which was adopted by the Company as a continuation and restructuring of the |
employee share incentive scheme originally adopted by Tianjin Maoyan Weying | |
on November 8, 2016 | |
"Prospectus" | the prospectus of the Company dated January 23, 2019 |
"Registered Shareholders" | Enlight Investment, Enlight Media, Shanghai Sankuai Technology, Beijing Shiji |
Weying (or its affiliates, as the case may be), Linzhi Lixin and the Historical | |
ESOP Platforms | |
"Remuneration Committee" | the remuneration committee of the Company |
"Reorganization" | the offshore and onshore reorganization as set out in section headed "History |
and Reorganization - Reorganization" of the Prospectus | |
"Reporting Period" | the six months ended June 30, 2020 |
"Restricted Share Agreement" | the restricted share agreement entered into among the Company, Mr. Zheng |
Zhihao and Rhythm Brilliant Limited, a wholly-owned subsidiary of Mr. Zheng | |
Zhihao, on July 23, 2018 to recognize and reward the contribution of Mr. Zheng | |
Zhihao to the Group | |
"RMB" | Renminbi, the lawful currency of the PRC |
82 MAOYAN ENTERTAINMENT | Interim Report 2020
Definition and Glossary
"RSU Scheme" | The RSU Scheme of our Company as approved on July 23, 2018, which was |
adopted by the Company to reward participants for their contribution to the | |
Group and attract best available personnel | |
"Securities and Futures | the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), |
Ordinance" or "SFO" | as amended, supplemented or otherwise modified from time to time |
"Shanghai Sankuai Technology" Shanghai Sankuai Technology Co., Ltd. (上海三快科技有限公司), a company incorporated under the laws of the PRC on December 19, 2012 with limited liability
"Share(s)" | ordinary share(s) in the share capital of the Company with a par value of |
US$0.00002 | |
"Shareholder(s)" | holder(s) of the Share(s) |
"Shenzhen Stock Exchange" | Shenzhen Stock Exchange (深圳證券交易所) |
or "SSE" | |
"State Council" | State Council of the People's Republic of China (中華人民共和國國務院) |
"subsidiary(ies)" | has the meaning ascribed to it under the Listing Rules |
"Tencent" | Tencent Holdings Limited (HKEx Stock Code: 700), or Tencent Holdings Limited |
and/or its subsidiaries, as the case may be | |
"Tianjin Maoyan Weying" | Tianjin Maoyan Weying Cultural Media Co., Ltd. (天津貓眼微影文化傳媒有限公 |
司), formerly known as Tianjin Maoyan Cultural Media Co., Ltd. (天津貓眼文化 | |
傳媒有限公司), a company incorporated under the laws of the PRC on May 27, | |
2015 with limited liability and a Consolidated Affiliated Entity, which is a holding | |
company of all the other Consolidated Affiliated Entities of our Group | |
"Tianjin Caichuang" | Tianjin Caichuang Enterprise Management and Consultation Partnership (Limited |
Partnership) (天津彩創企業管理諮詢合夥企業（有限合夥)), a limited partnership | |
incorporated under the laws of the PRC on May 6, 2016 and one of our Historical | |
ESOP Platforms |
MAOYAN ENTERTAINMENT | Interim Report 2020 83
Definition and Glossary
"Tianjin Caixuan" | Tianjin Caixuan Enterprise Management and Consultation Partnership (Limited |
Partnership) (天津彩絢企業管理諮詢合夥企業（有限合夥)), a limited partnership | |
incorporated under the laws of the PRC on May 6, 2016 and one of our Historical | |
ESOP Platforms | |
"Tianjin Caiyi" | Tianjin Caiyi Enterprise Management and Consultation Partnership (Limited |
Partnership) (天津彩溢企業管理諮詢合夥企業（有限合夥)), a limited partnership | |
incorporated under the laws of the PRC on May 5, 2016 and one of our Historical | |
ESOP Platforms | |
"Tianjin Caiying" | Tianjin Caiying Enterprise Management and Consultation Partnership (Limited |
Partnership) (天津彩盈企業管理諮詢合夥企業（有限合夥)), a limited partnership | |
incorporated under the laws of the PRC on May 6, 2016 and one of our Historical | |
ESOP Platforms | |
"Tianjin Guanghong" | Tianjin Guanghong Enterprise Management and Consultation Partnership |
(Limited Partnership) (天津光鴻企業管理諮詢合夥企業（有限合夥)), a limited | |
partnership incorporated under the laws of the PRC on May 6, 2016 and one of | |
our Historical ESOP Platforms | |
"US$" or "US dollars" | U.S. dollars, the lawful currency of the United States of America |
or "USD" | |
"%" | per cent |
84 MAOYAN ENTERTAINMENT | Interim Report 2020
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