We are an internet company in China, offering video- and audio-based live entertainment and social networking services to our users. China’s online video and audio social entertainment market consists of platforms offering video (i.e., short video and video-based live streaming) and audio (i.e., online music, audio and other innovative audio interactive services) social entertainment services. As a segment of video social entertainment market, China’s live streaming market includes platforms that offer live streaming services and primarily generate revenues from virtual gifting and other monetization methods. Based on content offerings, China’s live streaming market can be further divided into sub-segments of entertainment, gaming and e-commerce, with entertainment live streaming currently being the largest market segment by revenue. We operate one of the leading online entertainment live streaming platforms in China. Total revenue of entertainment live streaming platforms in China accounted for approximately 7.0% of China’s online video and audio social entertainment market in terms of revenue in 2021. We ranked among the top two online entertainment live streaming platforms in China in terms of monthly active users and monthly paying users from apps and websites on mobile and PC, as well as WeChat mini programs, and monthly usage time on mobile apps and PC clients in 2021, according to the iResearch Report. According to the same source, we ranked third among all online entertainment live streaming platforms in China in terms of revenue generated from apps and websites on mobile and PC, as well as WeChat mini programs in 2021, accounting for approximately 13.1% of total revenue of China’s entertainment live streaming platforms and approximately 0.9% of total revenue of China’s video and audio social entertainment market in 2021.
We focus on the sphere of online social entertainment, with a business portfolio from live streaming to a suite of multi-faceted video- and audio-based social networking products and services. We believe we have crafted our platforms to meet the needs and interests of users in China and selected overseas markets, popular among the Generation Z users in particular. We had 414.9 million registered users as of May 31, 2022, with Generation Z users accounting for approximately 61.3% of average MAUs of Huajiao (花椒) in the five months ended May 31, 2022, based on the information provided by our users. In 2019, 2020, 2021 and the five months ended May 31, 2021 and 2022, the revenue generated from Huajiao (excluding Naitang) was RMB2,165.7 million, RMB2,809.5 million, RMB3,251.9 million, RMB1,312.7 million and RMB1,379.3 million, respectively, representing 76.5%, 76.3%, 70.7%, 72.9% and 66.1% of our total revenue in the same periods, respectively. From 2017 to 2020 and in 2022, we were ranked among the “China’s Top 100 Internet Companies,” an award to internet companies with social influence, growth potential and social responsibility.
We have continued to capture user needs and industry trends to refine our products and services. Capitalizing on our know-how and experience accumulated through the operations of our flagship products, Huajiao and 6.cn (六間房), we are a popular destination for entertainment live streaming experience. We have also introduced our audio-based social entertainment and networking products, in addition to our investment in or incubation of various specialty social networking services in scenarios such as social discovery, friend making and group chat. As of the Latest Practicable Date, we launched products and services to cover various media channels, including mobile apps and PC clients, content expression forms, including live streaming, short videos and audio communications, and service genres, including general entertainment and social networking, to reach and engage a broad user base.
The viability of our content ecosystem is critical to our success. We provide opportunities that transform beginner hosts into influencers, enabling them to gain proficiency and popularity and to develop with us professionally. On the supply side, we collaborate with talent agencies to facilitate a smooth supply of hosts to stream and perform on our platform. We have developed a talent fostering system to identify, develop and train hosts, with execution plans on host training and promotion, content production and monitoring. We have also aggregated a large number of viable hosts, leveraging our brand, career advancement opportunities and favorable collaboration policies. On the demand side, supported by our technology capability, we connect users with relevant content, creating a cycle evolving around the positive interaction between our content production and user base.
We have grown rapidly during the Track Record Period. Our revenue was RMB2,830.9 million, RMB3,683.5 million, RMB4,599.7 million, RMB1,801.6 million and RMB2,087.4 million in 2019, 2020, 2021 and the five months ended May 31, 2021 and 2022, respectively. Our gross profit was RMB705.7 million, RMB1,011.4 million, RMB1,222.6 million, RMB499.7 million and RMB541.7 million in 2019, 2020, 2021 and the five months ended May 31, 2021 and 2022, respectively, representing a gross profit margin of 24.9%, 27.5%, 26.6%, 27.7% and 26.0% of the same periods, respectively. Our net profit/(loss) was RMB191.3 million, RMB(1,524.7) million, RMB325.0 million, RMB136.2 million and RMB177.9 million in 2019, 2020, 2021 and the five months ended May 31, 2021 and 2022, respectively. Our adjusted net profit/(loss) (non-IFRS measure) was RMB210.6 million, RMB(1,505.9) million, RMB430.6 million, RMB156.2 million and RMB194.0 million in 2019, 2020, 2021 and the five months ended May 31, 2021 and 2022, respectively. See “Financial Information — Key Components of Our Results of Operations — Non-IFRS Measure” for details. Our adjusted net loss (non-IFRS measure) position in 2020 was primarily due to the impact of the recognition of an impairment loss of RMB1,777.7 million in 2020 for the goodwill arising from the Huajiao-6.cn Merger.
Source: Huafang Group (03611) Prospectus (IPO Date : 2022/11/30) |