[年报]宋城演艺:2020年年度报告（英文版）
原标题:宋城演艺:2020年年度报告（英文版） Songcheng Performance Development Co., Ltd C:\Users\wangrong\AppData\Local\Temp\WeChat Files\23b5f515ce2a4cac6495a9dcf0f8ebf.jpg 2020 Annual Report April 2021 Section I Important Notes, Contents And Definitions The Board of Directors, the Board of Supervisors, directors, supervisors and senior management members of the Company hereby guarantee that the information presented in this annual report is authentic, accurate, complete and free of any false records, misleading statements or material omissions, and they will bear liabilities regarding this report. Zhang Xian, Chief Executive Officer (CEO), Chen Shengmin, chief accountant, and Zhu Shana, head of accounting department (Accounting Officer) hereby declare and warrant that the financial statements in the annual report are authentic, accurate, and complete. All directors attended the meeting of the Board of Directors for deliberation of this annual report. There are specific reasons for the sharp decline in the Company’s performance during the reporting period. Risk factors that may exist in the production and operation of the Company and countermeasures, have been detailed in the sections "I. Overview" and "IX. Prospects for Future Development of the Company" of Section IV "Discussion and Analysis on Business Situation" of this report. Investors should be mindful to investment risks. The content concerning the future plan and performance forecast, if any, in this report shall not constitute the Company's commitment to investors and relevant persons. Investors should maintain adequate risk awareness and must understand the differences between the plans, forecasts and commitments. 1. Risks of Natural Factors and Social Factors The natural and social factors such as major natural disasters, public health emergencies and large social activities will affect the number of tourists received. The outbreak of COVID-19 in 2020 was a global public health event, which resulted in stagnation of tourist and cultural consumption on the site, thereby affecting the business performances of the Company. The Company may diffuse such risks through its strategic layout, but such periodical and local risk factors are generally irresistible once they occur. 2. Risks of Macroeconomic Fluctuation In 2020, COVID-19 epidemic swept the world, and accelerated the change of the world political and economic situation unseen in a century. This presented the risk of change and anxiety to China's economy which was in and will remain in an important period of strategic transformation and development for an extended period. The complicated and changeable domestic and international macroeconomic environments may affect the level of national income and further, the consumer demands, thereby affecting the operating performance of the Company. 3. Competition Risks The competition risks include those from the same industry and those from the substitutes. The current high-quality development of China's economy and the increasing cultural consumption demands from the general public drive the rapid development of the live performance industry, particularly the tourist performance. Seeing the enormous business opportunities, a large amount of social capital swarmed into the tourist performance industry. This, on the one hand, promotes the development of the entire live performance industry, but on the other hand, inevitably intensifies the industry competition and affects the operation of the Company. Meanwhile, the performance industry in the first-tier cities has developed to a certain level, presenting a small but scattered development pattern. The Company, starting as a newcomer and integrator, shall undergo market adjustment and adaptation at the initial stage. With continuous technological progress, people have more choices for their cultural consumption from the emerging market of digital cultural consumption such as short videos, movies, games, TV shows, live broadcasts and VR/AR. Despite the irreplaceable role of live experience, digital entertainment will attract some tourists and impact the live experience to a certain extent, affecting the operation of the Company. 4. Risks in Safety Accidents Live performances being a key component in the Company’s operation, may be occasionally hindered by safety accidents. Personal safety of visitors remains a major importance to the reputation of the Company. The profit distribution proposal approved by the Board of Directors is: Taking 2,614,694,040 as the basis, RMB 0.5 (tax included) of cash dividend and 0 bonus share (tax included) for every 10 shares will be distributed to all shareholders, and 0 share capitalized from the capital reserves will be distributed to all the shareholders for every 10 shares. Note: This document is a translated version of the Chinese version 2020 Annual Report (“2020年年度报告”), and the published annual report in the Chinese version shall prevail. The complete published Chinese 2020 Annual Report may be obtained at www.cninfo.com.cn. Table of Contents Section I Important Notes, Contents And Definitions .......................................................................................................................2 Section II Company Profile and Key Financial Indicators ...................................................................................................................7 Section III Corporate Business Overview ....................................................................................................................................... 12 Section IV Discussion and Analysis on Business Circumstance ........................................................................................................ 15 Section V Significant Events.......................................................................................................................................................... 39 Section VI Changes in Shares and Information about Shareholders................................................................................................. 62 Section VII Information of Preferred Shares .................................................................................................................................. 70 Section VIII Convertible Corporate Bonds ..................................................................................................................................... 71 Section IX Directors, Supervisors, Senior Managers and Employees ................................................................................................ 72 Section X Corporate Governance .................................................................................................................................................. 80 Section XI Corporate Bonds.......................................................................................................................................................... 87 Section XII Financial Report .......................................................................................................................................................... 88 Section XIII Documents Available for Reference ........................................................................................................................... 254 Definitions Item Refers To Definitions Company, the Company, Songcheng Performance Refers To Songcheng Performance Development Co., Ltd Songcheng Holdings Refers To Hangzhou Songcheng Group Holdings Co., Ltd, the controlling shareholder of the Company Songcheng Performance Valley Company Refers To Hangzhou Songcheng performance Valley technology and Culture Development Co., Ltd, a wholly-owned subsidiary of the Company Hangzhou Paradise Company Refers To Hangzhou Paradise Co., Ltd, a wholly-owned subsidiary of the Company Songcheng Art Troupe Refers To Songcheng Performance Management Co., Ltd, a wholly-owned subsidiary of the Company Songcheng Tourism Refers To Songcheng Tourism Development Co., Ltd, a wholly-owned subsidiary of the Company Sanya Romance Show Company Refers To Sanya Romance Tourism Performance Co., Ltd, a wholly-owned subsidiary of the Company Lijiang Chama Ancient City Company Refers To Lijiang Chama Ancient City Tourism Development Co., Ltd, a wholly-owned subsidiary of the Company Jiuzhai Romance Show Company Refers To Aba Zhou Jiuzhai Romance Tourism Development Co., Ltd, a wholly-owned subsidiary of the Company Shanghai Songcheng Company Refers To Shanghai Songcheng World Expo Performance Development Co., Ltd, a holding subsidiary of the Company Guilin Romance Show Company Refers To Guilin Lijiang Romance Performance Development Co., Ltd, a holding subsidiary of the Company Zhangjiajie Romance Show Company Refers To Zhangjiajie Romance Performance Development Co., Ltd, a wholly-owned subsidiary of the Company Xi'an Romance Show Company Refers To Xi'an Romance Performance Development Co., Ltd, a holding subsidiary of the Company Foshan Romance Show Company Refers To Foshan South Sea Qiao Mountain Cultural Tourism Development Co., Ltd, a wholly-owned subsidiary of the Company Xitang Songcheng Performance Valley Company Refers To Zhejiang Songcheng Xitang Performance Valley Performance Development Co., Ltd, a wholly-owned subsidiary of the Company Zhuhai Songcheng Company Refers Zhuhai Songcheng Performance Kingdom Co., Ltd, a wholly-owned subsidiary of the To Company Songcheng International Refers To Songcheng Performance International Development Co., Ltd, a wholly-owned subsidiary of the Company Songcheng Technology Refers To Hangzhou Songcheng Technology Development Co., Ltd, a wholly-owned subsidiary of the Company Dumuqiao Travel Agency Refers To Hangzhou Songcheng Dumuqiao Travel Services Co., Ltd, a wholly-owned subsidiary of Songcheng Tourism Development Co., Ltd, a wholly-owned subsidiary of the Company Songcheng Entertainment Company (Australia) Refers To Songcheng (Australia) Entertainment Pty Ltd., a wholly-owned subsidiary of Songcheng Performance International Development Co., Ltd, a wholly-owned subsidiary of the Company Jiuzhai Tibetan Mystery Company Refers To Jiuzhaigou Tibetan Mystery Culture Co., Ltd, a holding subsidiary of the Company Huafang Technology Refers To Beijing Huafang Technology Co., Ltd, a joint stock company of the Company China Securities Regulatory Commission (CSRC) Refers To China Securities Regulatory Commission Shenzhen Stock Exchange (SZSE) Refers To Shenzhen Stock Exchange yuan, ten thousand yuan Refers To RMB, RMB Ten Thousand Section II Company Profile and Key Financial Indicators I. Company Information Stock Abbreviation Songcheng Performance Stock Code 300144 Company Name in Chinese 宋城演艺发展股份有限公司 Company Abbreviation in Chinese 宋城演艺 Company Name in Foreign Language (If any) Songcheng Performance Development Co., Ltd Abbreviation of Company Name in Foreign Language (If any) Songcheng Performance Legal Representative Zhang Xian Registered Address 148 Zhijiang Road, Hangzhou City, Zhejiang Province Post Code of Registered Address 310008 Office Address 148 Zhijiang Road, Hangzhou City, Zhejiang Province Post Code of Office Address 310008 Internet Website of the Company https://www.songcn.com/Shares/ [email protected] II. Contact Person and Contact Information Secretary of the Board Representative of Securities Affairs Name Hou Li Hou Li Contact Address 148 Zhijiang Road, Hangzhou City, Zhejiang Province 148 Zhijiang Road, Hangzhou City, Zhejiang Province Tel. 0571-87091255 0571-87091255 Fax 0571-87091233 0571-87091233 [email protected] [email protected] III. Information Disclosure and Location The Media Selected by the Company for Disclosure Securities Times, Securities Daily Website Designated by CSRC for Publishing Annual Report http://www.cninfo.com.cn Location for Annual Report of the Company Securities Investment Department of the Company IV. Other Related Information Accounting Firm Hired by the Company Name of the Accounting Firm BDO China Shu Lun Pan CPAs (special general partnership) Office Address of the Accounting Firm No. 61 Nanjing East Road, Shanghai Name of Certified Public Accountant Ni Yilin, Jiang Xuelian The sponsor institution hired by the company to perform the continuous supervision in the reporting period □ Applicable √ Not applicable The financial adviser hired by the company to perform the continuous supervision in the reporting period □ Applicable √ Not applicable V. Key Accounting Data and Financial Indicators Whether the Company needs performed retroactive adjustment or restatement of accounting data in prior years or not □ Yes √ No 2020 2019 Increase/decrease compared with previous year 2018 Operating income (RMB) 902,586,125.63 2,611,753,208.86 -65.44% 3,211,192,814.48 Net profit attributable to shareholders of the listed Company (RMB) -1,752,398,009.60 1,339,790,994.94 -230.80% 1,287,186,547.41 Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) -1,767,861,638.68 1,222,100,617.31 -244.66% 1,279,733,108.31 Net cash flow generated by operational activities (RMB) 393,941,899.94 1,571,451,499.51 -74.93% 1,647,243,748.01 Basic Earnings per Share (RMB/Share) -0.6702 0.5124 -230.80% 0.8861 Diluted Earnings per Share (RMB/Share) -0.6702 0.5124 -230.80% 0.8861 Weighted Average ROE -20.50% 14.52% -35.02% 16.38% End of 2020 End of 2019 Increase/Decrease at the end of the current year compared with the end of the previous year End of 2018 Total assets (RMB) 9,195,342,831.06 11,041,076,933.58 -16.72% 10,817,160,458.62 Net assets attributable to shareholders of the listed company (RMB) 7,412,287,432.06 9,614,069,166.64 -22.90% 8,471,075,013.49 The lower of the Company's net profit before and after deduction of non-recurring profit and loss for the last three fiscal years is negative, and the audit report for the latest year shows that there is uncertainty about the Company's ability to continue operating □ Yes √ No The lower of net profit before and after deduction of non-recurring profit and loss is negative √ Yes □ No Item 2020 2019 Notes Operating income (RMB) 902,586,125.63 / Total Operating Income Amount deducted from operating income (RMB) 6,381,032.95 / Income from personnel dispatch management and other miscellaneous businesses Amount of operating income after deduction (RMB) 896,205,092.68 / Operating income of main business Total share capital of the Company as at the trading date preceding the disclosure: Total share capital of the Company as at the trading date preceding the disclosure (share) 2,614,694,040 Whether the share capital has been changed for issuance of new shares, addition, allotment, exercise of equity incentives and buy-back, and whether the amount of the owners' equity is influenced from the end of the reporting period of the Company to the disclosure date of the annual report □ Yes √ No Preferred stock dividends paid 0.00 Fully diluted earnings per share calculated with the latest share capital (RMB/share) -0.6702 VI. Key Financial Indicators by Quarter Unit: RMB Q1 Q2 Q3 Q4 Operating income 134,352,197.80 148,522,407.15 335,646,114.92 284,065,405.76 Net profit attributable to shareholders of the listed company 49,960,280.55 -10,112,011.86 93,903,527.78 -1,886,149,806.07 Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses 18,467,729.86 1,512,334.57 91,357,882.55 -1,879,199,585.66 Net cash flow generated by operating activities -20,444,426.81 -103,304,029.48 282,447,994.96 235,242,361.27 Whether the above financial indicators or their totals are significantly different from the financial indicators disclosed in the Company’s quarterly and semi-annual reports □ Yes √ No VII. Differences in Accounting Data Under Domestic and Foreign Accounting Standards 1. Differences of net profits and net assets in the financial reports disclosed according to the international accounting standards and Chinese accounting standards □ Applicable √ Not applicable During the reporting period of the company, there is no difference between the net profits and net assets in the financial reports disclosed according to international accounting standards and Chinese accounting standards. (2) Differences between the net profits and net assets in the financial reports disclosed according to the overseas accounting standards and Chinese accounting standards □ Applicable √ Not applicable During the reporting period of the company, there is no difference between the net profits and net assets in the financial reports disclosed according to overseas accounting standards and Chinese accounting standards. 3. Reasons for differences in accounting data under domestic and overseas accounting standards □ Applicable √ Not applicable VIII. Non-recurring Gains and Losses Items and Their Amounts √ Applicable □ Not applicable Unit: RMB Item Amount in 2020 Amount in 2019 Amount in 2018 Note Profits or losses from disposal of non-current assets (including the write-off for the accrued impairment of assets) -37,625,882.13 70,970,952.64 -30,333,257.21 The government subsidies included in the current profits and losses (excluding the government subsidies closely related to regular businesses of the Company and issued in the quota or quantity based on the national standards) 35,618,594.19 5,629,978.38 12,326,627.98 Gains or losses from investment or asset management entrusted to others 25,795,007.28 Profits and losses resulting from the changes in fair value for holding trading financial assets, derivative financial assets and trading financial liabilities, derivative financial liabilities and investment income from disposal of trading financial assets, derivative financial assets, trading financial 19,619,586.83 52,061,383.80 21,276,486.89 Item Amount in 2020 Amount in 2019 Amount in 2018 Note liabilities, derivative financial liabilities, and other obligatory right investment, excluding the effective hedging businesses related to the regular business operation of the Company Non-Operating Revenue and expenses other than the above -509,618.20 -19,029,327.85 -21,969,795.85 Less: Impact of income tax 2,230,795.39 -7,184,125.78 556,654.96 Impact of minority equity (after tax) -591,743.78 -873,264.88 -915,024.97 Total 15,463,629.08 117,690,377.63 7,453,439.10 -- For items defined as non-recurring gains and losses according to the No. 1 Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to Public - Non-recurring Gains and Losses, or non-recurring gains and losses items listed in the said document defined as recurring ones, please specify the reasons. □ Applicable √ Not applicable In the reporting period, the Company did not define any non-recurring gains and losses items defined and listed in the No. 1 Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to Public - Non-recurring Gains and Losses, as recurring gains and losses items. Section III Corporate Business Overview I. The Principal Business of the Company during the Reporting Period 1. Vision and mission The Company upholds the philosophy of "a drop of water in need, shall be returned with a spring in deed", to provide customers with warm on-site entertainment experiences. It is dedicated to telling global stories of Chinese culture, promoting confidence of the nation, and striving to become the world's premier company in cultural performing arts. 2. Main business and products During the reporting period, the Company was mainly engaged in cultural performance business. On-site performance and tourism and recreation are the Company's main businesses. Live performance is the Company's core business and main source of incomes and profits. Based on the Company's two major brands of "Songcheng" and "Romantic Show", the original business mode of "theme park + cultural performance" provides customers with theme park amusement and a variety of shows. Business income mainly comes from sales of tickets. Projects under operation include "Romantic Show of Songcheng", "Romantic Show of Sanya", "Romantic Show of Lijiang", "Romantic Show of Jiuzhai", "Romantic Show of Guilin", "Romantic Show of Zhangjiajie", and "Romantic Show of Xi'an". The Songcheng project in Shanghai will be unveiled on April 29, 2021, and projects under construction in Foshan, Xitang, and Zhuhai will also be introduced to the market. Tourism and recreation mainly refer to light-asset output business and online sales of tickets. Based on the Company's business capabilities and brand accumulation over the years, the light-asset output business provides partners with brand authorization, planning and design, director and creation, entrusted operation and other services, and realizes business income by a package of service fees and entrusted operation management fees. The light-asset output projects in operation include "Romantic Show of Tanhe", "Romantic Show of Mingyue (Moon)" and "Romantic Show of Huangdi (Yellow Emperor)". Online sales of tickets refer to online direct sales and distribution of tickets of performances and projects operated by the Company, and sales of joint tickets and ticket packages with third-party tourist attractions. II. Material Changes to Major Assets 1. Major changes in main assets Major Assets Explanation Of Material Changes Equity assets At the end of the reporting period, the long-term equity investment decreased by RMB 1,934,056,500 compared with the beginning of the period, which was mainly due to the impairment of the long-term equity investment of Huafang Technology held by the Company during the reporting period. Fixed Assets By the end of the reporting period, the fixed assets increased by RMB 197,503,700 compared with the beginning of the period, which was mainly due to conversion of the Company's projects in construction to fixed assets during the reporting period. Intangible Assets At the end of the reporting period, the intangible assets increased by RMB 381,541,800 compared with the beginning of the period, mainly due to the acquisition of land use rights by Zhuhai Songcheng Performance Kingdom during the reporting period. Projects under Construction By the end of the reporting period, projects in construction increased by RMB 401,871,300 compared with the beginning of the period, which was mainly due to the increased investment in construction by the Company during the reporting period. 2. Major overseas assets √ Applicable □ Not applicable Details of the Assets Causes Asset Size Location Operation Mode Control Measures to Ensure Asset Safety Income Status Proportion of Foreign Assets in Company's Net Assets Significant Risk of Impairment Land Purchase 448,900 square meters Gold Coast, Queensland, Australia Theme park + Art performance Suspended 3.80% No Other Information N/A III. Core Competitiveness Analysis Through continuous efforts, the Company has established a nationwide chain operation, with more than 40 million regular audiences per year. Our market share ranks among the top and continues to increase, with rising efficiency in resource allocation and brand influence. As a leading enterprise in China's performing arts industry, the Company's core competitiveness is mainly reflected in the following aspects: 1. Advantages of business mode Centering on performing arts in theme parks with creativity, the Company is different from traditional companies in performing arts and tourism. The business mode of "theme park + cultural performance" helps solve high performance costs, high traffic attraction costs, and low frequency of audience replacement faced by common performing arts enterprises without self-owned venues. For the tourism industry, the mode has overcome shortcomings of insufficient core competitiveness, poor reproducibility, excessive reliance on large-scale and costly amusement equipment, low marginal effect, homogeneous services, and weak profitability experienced by more traditional enterprises. From the Romantic Show model of "one show, one park", the Company is transforming to the performing arts kingdom of "multiple theaters, shows, activities, and tickets", a move to expand its business content by enriching the performing art experience for stronger competitiveness. 2. Advantages in creation and design The Company has an experienced, professional and independent team in planning, design, creation and performance. In the planning and design of theme parks and creation of performance products, team members can fully integrate their own innovative ideas through a deep understanding of local culture. During operation, new elements can be included in a timely manner according to changes in the industry and the market. Simultaneously, inspiration and creativity are encouraged to constantly upgrade products and services for better tourist experiences. The advantages in creation and design are an important guarantee for the Company to advance through exciting innovation and breakthroughs. 3. Professional advantages After years of development in the performing arts industry, the Company has accumulated and trained a large number of professional talents, and established a standardized operation and management system, with a strong understanding of development laws and features of the industry. The Company has become highly skilled in project site selection, investment control, performing arts creativity and design, stage presentation, costume props, scenic spot operation, viewing experience, and daily management. 4. Marketing advantages As internet, mobile internet, and new media are on the rise, the Company took advantage of its creative capabilities, and conducted online and offline creative marketing. Topics were made to promote spontaneous media dissemination to realize low-cost coverage of consumers, therefore providing market expansion and income growth in the process. In a time when Generation Z has gradually become the main consumer force, the Company's flexible marketing strategies ensures target groups to be covered through online short videos, in-depth offline promotion and on-site activities. 5. Advantages in on-site experience Internet and mobile internet have changed the business models of many traditional industries, and have brought a number of existing industries considerable impacts and challenges. However, they cannot replace the enrichment gained through on-site experience and participation to meet people's spiritual and cultural needs at higher levels. In an era with changing technological innovation, the Company's advantages in outstanding on-site experiences are becoming more obvious. 6. Closed-loop advantages The Company has closed-loop teams covering the entire industry chain from site selection, planning and design, investment and construction, direction and creation, opening planning, operation management, continuous improvement, event planning, ticket price system setting, and marketing. The closed-loop coverage of the entire industry chain contributes in controlling costs, improving efficiency, and enhancing profitability of the Company. 7. Platform advantages Thanks to continuous development and expansion, the Company has a leading position in the number of projects, theaters and seats, performances, and audiences. It has initially established a cultural performance platform covering first-tier tourism and leisure destinations and urban clusters across the country. The large scale and huge tourist base will help the Company expand its business boundaries, reduce marginal costs, improve operational efficiency, enhance brand influence and create performance products with brand and its exclusive and innovative features. 8. Brand advantages As the largest performing arts group in China, Songcheng Performance's "Songcheng" and "Romantic Show" have become representative brands in live performing arts and creative industries. Our good market reputation and strong brand influence have benefited the Company in project expansion, resource control, talent attraction, and market development. 9. Advantages in locations The Company took the lead in businesses in important cities and first-tier tourism and leisure destinations in the country, and has advantages in locations. As urban performing arts continue to advance, the Company will gradually move into mega and large cities, and continue to strengthen and consolidate its position. Section IV Discussion and Analysis on Business Circumstance I. Overview 2020 is an extraordinary year in the history of the world, a year of ups and downs. The spread of COVID-19 in more than 199 countries and regions has taken a toll on human life safety and global economic development, and significantly raised the risk of economic recession and uncertainties through out the world. The disrupted supply chains, shrinking consumption and investment demand, weakened economic activities, and impaired market confidence have brought unprecedented challenges to the resilience and governance of countries and economic entities. The year of 2020 is also full of critical challenges for the cultural and travel industry. The industry was in a standstill the first half of the year yet managed to recover in the second half of the year when the epidemic receded. The road was a bumpy one, yet in recovery, new opportunities arose. As the last year for China to build a moderately prosperous society in an all-round way and the "13th Five-Year Plan", 2020 is a historical transition period from the "13th Five-Year Plan" to the "14th Five-Year Plan". It is also a time for China to strive for high-quality economic development with an optimized industrial structure by weighing the modern service industry more. To answer the strategic call for high-quality development, the cultural and tourist industries have entered a new stage for better quality, efficiency, and will become the new powerhouse for further economic growth. During the reporting period, the Company's scenic spots suspended operations from January 24, 2020, and resumed operations on June 12, 2020. The Company has fully prepared itself to turn crises into opportunities through well balanced epidemic controls and strong corporate oversight. With effective epidemic prevention in place, the Company has optimized and upgraded the hardware, software, marketing, and organizational structure during park closure. Meanwhile, improvement of various projects was also implemented. Hangzhou Songcheng, as a test field, was rebuilt into a new Hangzhou Songcheng Performing Kingdom. The mode of "one show, one park, one ticket" was transformed and upgraded to a performing arts platform with multiple shows and combination of a variety of tickets. Since resumption of business, the Company has been fully prepared to actively promote its market recovery of tourists and revenue through online new media, short videos, offline promotion, special markets and activities and other marketing methods. In terms of new projects, Xi'an and the light-asset project in Zhengzhou successfully presented first shows, projects in Shanghai, Foshan, and Xitang were progressing, the Zhuhai project started construction, and the contracgt for the light-asset project in Yan'an project was signed, providing significant momentum for the Company's future growth. During the reporting period, the Company achieved operating income of RMB 902,586,100, a year-on-year decrease of 65.44%; net profit attributable to shareholders of the listed company was -1,752,398,000, a year-on-year decrease of 230.80%; net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss was -1,767,861,600 yuan, a year-on-year decrease of 244.66%. Excluding the financial data of the digital entertainment platform and the increase or decrease in the long-term equity investment of Huafang Technology, the Company's pro forma profit statement is as follows: During the reporting period, the Company achieved operating income of RMB 902,586,100, a year-on-year decrease of 59.50%; net profit attributable to shareholders of the listed company was 113,724,700 yuan, a year-on-year decrease of 89.11%; net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss was 98,261,100 yuan, a year-on-year decrease of 90.86%. The key tasks carried out by the Company during the reporting period are as follows: (I) Hardware expansion 1. Increase the type and number of theaters With Hangzhou Songcheng as a model, the Company deeply explored existing resources of scenic spots to introduce different types of indoor and outdoor performance venues with varied experiences. It built upgraded standard theaters, walk-around theaters, cliff theaters, forest theaters, floating theater and other new theaters, delivering new and extraordinary experiences to its guests.No. 2 and No.3 Romantic Show Theater is an upgraded version of the Company's standard theaters. The combination of the cliff theater and elegant music, and the forest theater and popular fashion provide visitors with more choices. During the reporting period, 10 indoor and outdoor theaters and more than 10,000 seats were added in the Hangzhou Songcheng scenic spot during business suspension in response to the epidemic. No.2 and other types of theaters were added to existing or new projects to further expand the capacity. The continuous increase in the number of theaters and seats is conducive to diversified performances, larger reception capacity, and better tourist experiences. It also makes it possible in hardware to provide products, content, and tickets on many different levels. 2. Extend touring routes Taking Sanya as an example, the original touring route was only a few hundred meters long. With diversion and aggregation, the route length was extended by 3 to 4 times by combining underutilized space. Another example is the restructuring of Hangzhou Songcheng. Without expanding the area, the play route was redesigned, and indoor and outdoor small theaters, and interactive spaces were added with a series of new performances. These measures have improved the tourist experience and effectively extended park visitor duration. 3. New popular sites The Generation Z loves recommending and sharing. Growing up in the internet era, their consumption is trendier and more individual. To meet the needs of young people, the Company's scenic spots have created many popular sites, including "Glass Skywalk", Setting of Marionette, Sky Tree, Setting of Ayue out of Bath, interactive amusement park of oiled paper umbrellas, love like device, sound post office, and 3D printing wall. The introduction of the role play hall is also favored by young people, enhancing their experience and atmosphere of the scenic spot. 4. Improved supporting facilities Supporting facilities were further improved in scenic spots. Landscape design and presentation were enhanced with more large entrance halls and rest areas. While increasing the proportion of self-operated businesses, the Company will continue to build all-weather, comfortable, convenient and safe scenic spots for all. Hangzhou Songcheng for example, two newly built large food courts can accommodate 1,500 people at the same time, bringing a variety of delicious foods to meet guests expectations. At the same time, the proportion of self-operated shops was also expanded in projects in other parks to upgrade product types, quality control, and hardware. (II) Content upgrade With continuous expansion of our commercial landscape, the Company, centering on "Romantic Show" and supplemented by "Love in" and "Color" series, has gradually formed a content matrix in outfield performances, cooperation, customization, introduction, and procurement of shows. 1. "Romantic Show" series Led by the chief director under the new organizational structure and creation model, the Company's art team work hard with an innovative spirit. Romantic Show of Xi'an and Romantic Show of Huangdi have opened, and Romantic Show of Shanghai and Romantic Show of Foshan are proceeding in an orderly manner. During the reporting period, "Romantic Show of Xi'an and Romantic Show of Huangdi have opened. The Company expanded operation in northern areas, with rising market and brand value and a consolidated position as China's top performing arts brand and industry leader. 2. "Love in" and "Color" series Currently, the Company is stepping up preparations for the "Love in" and "Color" series. The "Love in" series focuses on the original ecological folk culture to present local customs; the "Color" series is a boutique performing arts for tourists, which is a grand interactive show filled with fashion, culture, technology, light and shadow, dreams, surprises, suspense, and elements favored by young people. The Company has also enabled new and young director teams from the headquarters and affiliated art troupes on these shows, cultivating a younger director team. 3. Indoor small and medium drama In addition to the original 5D real-life drama "The Earthquake" and the holographic show "Phantom", the Company launched a new parent-child show "Beware-Dinosaurs!", nostalgic drama "Katyusha", and walk-around performance "Shangganling" and "'Ahoy' Captain Cook!" during the reporting period. These new performances greatly enhanced its performing arts portfolio. 4. Outdoor series In terms of outfield performance, the Company has resumed the classic traditional dramas, including the martial arts drama "Yanqing on Stage Contest" and the interactive drama "The Case of Chen Shimei", and added trendy content like cliff concerts, forest and water concerts, and electronic music parties for tourists, providing tourists with more entertainment options. (III) Marketing optimization During the reporting period, the Company achieved excellent results in marketing through online short videos and new media, offline field promotion and penetration into special markets. 1. Online Build up new space in network communication and strengthen the diversified development of We media and short video platforms. The Company has closely integrated brand promotion with marketing through content marketing, online gifts and coupons, and offline diversion, to maintain continuous growth of its followers and increasing their retention rate. In addition, employees were encouraged to post contents on Tik Tok to increase exposure of various scenic spots on network communication platforms. 2. Offline In recent years, consumption of young people in small towns is on the rise. In line with local conditions, the Company started first round marketing in lower-level regions, especially towns contributing more customers. Flyers, wall paintings, and promotion materials were used to effectively expose the brand to potential customers. 3. Activities Since resumption of business, the Company has launched different seasonal and holiday themed activities according to various festivals and timings such as surrounding tours, summer night tours, National Day, Halloween, Christmas Day and New Year's Day, and Spring Festival. Different ticket prices and product combinations have been tested in the market, and subsequently, a diverse price system for the it’s performing arts venues has been instituted. (IV) Optimized organizational structure 1. Optimizing vertical management The Company's vertical management conducts all-around, refined and standardized management of performance quality, （未完）  |