Maoyan Entertainment

1896

KYG5804A1076

Entertainment Production

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Maoyan Entertainment : Annual Report 2020

April 26, 2021 at 06:21 pm EDT

(Incorporated in the Cayman Islands with limited liability)

Stock Code : 1896

2020

Annual Report

Contents	2	Corporate Information
	4	CEO's Statement
	9	Management Discussion and Analysis
	18	Profiles of Directors and Senior Management
	23	Directors' Report
	62	Corporate Governance Report
	82	Independent Auditor's Report
	89	Consolidated Statement of Comprehensive Income
	91	Consolidated Statement of Financial Position
	93	Consolidated Statement of Changes in Equity

	95	Consolidated Statement of Cash Flows
	97	Notes to the Consolidated Financial Statements
	210	Financial Summary
	211	Environmental, Social and Governance Report
	225	Definitions and Glossary

2 MAOYAN ENTERTAINMENT / Annual Report 2020

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)

REMUNERATION COMMITTEE

Mr. Wang Hua (Chairman)

Mr. Ma Dong (resigned on August 18, 2020) Ms. Liu Lin (appointed on August 18, 2020) Mr. Zheng Zhihao

JOINT COMPANY SECRETARIES

Ms. Zheng Xia

Mr. Cheng Ching Kit

AUTHORIZED REPRESENTATIVES

Mr. Zheng Zhihao

Mr. Cheng Ching Kit

Independent Non-executive Directors

Mr. Wang Hua

Mr. Chan Charles Sheung Wai

Mr. Ma Dong (resigned on October 28, 2020) Mr. Yin Hong (appointed on October 28, 2020) 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 on August 18, 2020) Ms. Liu Lin (appointed on August 18, 2020)

NOMINATION COMMITTEE

Mr. Wang Hua (Chairman)

Mr. Chan Charles Sheung Wai

Mr. Zheng Zhihao

AUDITOR

PricewaterhouseCoopers

Certified Public Accountants

Registered Public Interest Entity Auditor

REGISTERED OFFICE

Walkers Corporate Limited

190 Elgin Avenue,

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

MAOYAN ENTERTAINMENT / Annual Report 2020

Corporate Information

PRINCIPAL PLACE OF BUSINESS IN	CAYMAN ISLANDS PRINCIPAL SHARE
HONG KONG	REGISTRAR AND TRANSFER OFFICE
40th Floor, Dah Sing Financial Centre	Walkers Corporate Limited
No. 248 Queen's Road East	190 Elgin Avenue
Wanchai, Hong Kong	George Town
	Grand Cayman KY1-9008
LEGAL ADVISORS	Cayman Islands
As to Hong Kong law:	PRINCIPAL BANKERS
Clifford Chance

	China Merchants Bank, Beijing Branch

As to Cayman Islands law:

Walkers (Hong Kong)

As to the law of the People's Republic of China: Commerce & Finance Law Offices

Ping An Bank, Garden Road Sub-Branch

STOCK CODE

1896

COMPLIANCE ADVISOR

Guotai Junan Capital Limited

27/F., Low Block

Grand Millennium Plaza

181 Queen's Road Central

Hong Kong

COMPANY'S WEBSITE

www.maoyan.com

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

4 MAOYAN ENTERTAINMENT / Annual Report 2020

CEO's Statement

I am pleased to present our annual results for the year ended December 31, 2020.

FINANCIAL HIGHLIGHTS

Our revenue decreased to RMB1,365.7 million in the full year of 2020 from RMB4,267.5 million in the full year of 2019. Our gross profit decreased to RMB537.3 million in the full year of 2020 from RMB2,657.1 million in the full year of 2019. Our loss for the full year of 2020 was RMB646.3 million, whereas our profit for the full year of 2019 was RMB458.9 million. Our adjusted LBITDA for the full year of 2020 was RMB360.3 million, decreased from EBITDA of RMB946.4 million in the full year of 2019, whereas our adjusted net loss(Note) was RMB435.6 million in the full year of 2020, decreased from adjusted net profit(Note) of RMB703.2 million in the full year of 2019.

BUSINESS REVIEW AND OUTLOOK

In 2020, due to COVID-19, all the cinemas in mainland China had been shut down for 183 days from January 23, 2020, which posed unprecedented difficulties and challenges throughout the entire movie industry value chain. As the epidemic was kept under control in China and the strong consumer demand for offline movie watching was released continuously, the box office of the Chinese movie market has bounced back significantly, taking the lead in industry recovery among global movie markets.

During the outbreak of the epidemic, we took active measures to assist the recovery of the industry, enhanced our platform service capabilities, diversified our reserve of contents and strengthened the extent and depth of our participation in the industry. Meanwhile, leveraging on our asset-light business model and strict cost management, we had excellent risk-resistant ability and driving force of business development, which help us better mitigate the impact of the epidemic and promote the recovery and robust development of the Company's business.

Keep Firm Foothold to Reduce Cost and Increase Efficiency

Since 2020, the national box office market has showed strong momentum of recovery and development. In 2020, the total gross box office for China's movie industry was approximately RMB20.3 billion. Even as cinemas strictly implemented the 75% attendance limit imposed by the government, the seven-day box office on National Day Holiday in 2020 was RMB3.7 billion, which was recovered to more than 80% level compared to that in 2019 holiday period. As of December 31, 2020, the cumulative number of cinema screens in mainland China increased by 8.3% year-over-year to 75,581. As of February 28, 2021, China's year-to-date total box office grew by 7% to more than RMB15.5 billion.

For Maoyan, our movie ticketing business has recovered along with the recovery of the market. During the reporting period, our market share was stable and we continued to maintain our leading position in the industry. In the future, we will continue to promote the construction of ticketing system, strictly control our costs and expenses of ticketing business, stabilize the market share and revenue performance, and further improve the profitability of ticketing business.

Note: We defined adjusted net (loss)/profit as net (loss)/profit for the year adjusted by adding back share-based compensation, fair value loss on convertible bonds classified as financial liabilities at fair value through profit or loss, listing expenses and amortization of intangible assets resulting from business combinations.

MAOYAN ENTERTAINMENT / Annual Report 2020

CEO's Statement

Build up Profound Strength by Cultivating Quality Contents

In 2020, we have participated in many movies and TV series, which have been successively released to the public with the re-opening of cinemas and the broadcasting of TV stations and video platforms. As an important participant in the pan entertainment industry, we continued to enhance our extent and depth of participation in the industry, strengthened content reserves, continued to expand our footprints upstream into the industry, and further improved the penetration and profitability of the blockbuster contents.

In terms of cinema movies, Maoyan has participated as a producer/distributor in three of the four movies that each achieved more than RMB1 billion box offices in 2020, respectively My People, My Homeland (我和我的家

鄉), Legend of Deification (姜子牙) and The Sacrifice (金剛川). In addition, the movies, such as One Second (一秒鐘) and Back To The Wharf (風平浪靜) produced and mainly distributed by us have had positive reception in the industry, which further validate our ability in movie selection, promotion and distribution. For example, Back To The Wharf (風平浪靜), as the first realised movie self-produced by Maoyan, was shortlisted for the 23rd session of SIFF Golden Goblet Awards, and related unit of Cairo International Movie Festival and IFFAM.

We have built up an abundant reserve of contents which will be released in 2021 and beyond. We will also continue to enhance our participation in quality movies going forward, especially to deeply participate in the blockbusters for the important occasions. For example, we have participated in five of the seven movies that were released on the first day of the Spring Festival in 2021 as a producer/distributor. Among them, the movie Hi, Mom (你好，李煥英), which we acted as the main producer and guaranteed distributor, realized excellent performance and turned out to be the dark horse in the Spring Festival of 2021. As of March 30, 2021, the box office is over RMB5.3 billion, ranking the Second in the history of Chinese movies. There will be a series of quality movies that we acting as producer/distributor at opportune time, including but not limited to 1921 (1921), Raging Fire (怒火• 重案), The Chinese Doctors (中國醫生), Across the Furious Sea (涉過憤怒的海), Warriors of Future (明日戰記) and Knock, Knock (不速來客).

In addition, we have also started the self-production of cinema movies since 2019. Leveraging our high professional standard and content development expertise, we have produced more quality contents to extend the depth of our proprietary content reserves and strengthen our own IPs development. After Back To The Wharf (風平浪靜), we are currently in active production of movies such as On Your Mark (了不起的老爸), Game Start (天才遊戲), A Film Is Born (揚名立萬), Flaming Cloud (三貴情史), Moses On The Plain (平原上的摩西), The Woman in the Storm (我經過風暴) and New Five Golden Flower (新五朵金花) which will be released successively.

In addition to cinema movies, we were also constantly enriching content categories, and continued to increase the production and participation of TV series and streaming movies. In 2020, we co-produced two TV dramas with Tencent such as Miss Crow and Mr. Lizard (烏鴉小姐與蜥蜴先生) and Babel (通天塔). The law-themed suspense TV series The Last Straw (庭外辯護) developed and produced by us is planned to be shot in the first half of 2021, which will be exclusively broadcasted on Youku. Genius Go Talent (天才棋士), Beauty in Truth (女為悅己者), Love Me If You Dare (服不服) and several other TV series self-produced by Maoyan are planned to be shot this year. Besides, we have gradually established a solid roadmap for producing streaming movie content in a variety of categories such as northeastern comedy, new martial arts, and military, etc. We plan to release those online movies gradually in 2021 and beyond.

6 MAOYAN ENTERTAINMENT / Annual Report 2020

CEO's Statement

Make Whole Network Integration to Continue to Strengthen Internet Entertainment Promotion Platform Capabilities

As a leading domestic movie distributor and a comprehensive Internet entertainment marketing platform, we gave full play to the nature and advantages of our "Internet and Entertainment" platform. We continued to build an online and offline integrated marketing ecosystem, integrated the resources and advantages of Maoyan's own platform and the major platforms in the industry to assist the movie producers with increasingly targeted and effectively promotion solutions .

To address the different levels of marketing demands across the whole industry, we provide both standardized and customized movie promotion solutions. Our standardized promotion and distribution products, such as data consulting, precision marketing, material management and monitoring listed in Maoyan Pro (貓眼專業版), provide assistance to movie producers to improve efficiency. In addition, we also provided customized products and services for industry partner to achieve optimal promotion and distribution performance. For example, for the movie Hi, Mom (你好，李煥英), which was main produced and guaranteed distributed by us, we made continuous innovations by combining the environmental changes and the characteristics of the movie under the epidemic situation, and successively launched several innovative promotion and distribution solutions, such as "cloud road show (雲路演)", "cloud block booking (雲包場)" and "red packet (助力主創紅包)" etc., helped to boost the movie's appeal, generate audience interest leading to its official release, and make it stand out above other competing titles. Our ability of continuous accumulation and innovation has been widely recognized by the market and further proved the promotion and distribution ability of Maoyan.

In order to support the realization and implementation of promotion and distribution products, we continued to build and enrich our promotion and distribution resources, and devoted ourselves to building our omni-channel media ecosystem covering the whole scenes of users' online life. Up to now, the total user number of our Maoyan mini program ecosystem covering WeChat, Douyin, Baidu and other platforms has exceeded 450 million.

We were committed to creating industry standardization indicators, such as "real-timewish-list gathering" (實時想看) and "real-timepre-sale" (實時預售) index of Maoyan Pro (貓眼專業版), and improved the width, depth and accuracy of the coverage of such indicators, aiming to provide a more accurate and effective reference indicators and codes of conduct. Take "real-timewish-list gathering" as an example, we continued to strengthen cooperation with major platforms such as Douyin on film data and platform cooperation to get access to the entry of each viewer, and we accessed with Douyin's "wish-list" (想看) index, enabling the movie producers to constantly monitor the accuracy and effectiveness of the promotion and distribution performance of all platforms.

MAOYAN ENTERTAINMENT / Annual Report 2020

CEO's Statement

Embrace Changes to Fortify Service Ability of Data Platform

Leveraging on Maoyan's advantages in the movie ticketing platform and continuous participation in the pan entertainment industry, we have accumulated a wealth of industry data. Besides, we constantly expanded data sources, updated data dimensions and professional functions, strived to provide comprehensive and professional data reference for the entire industry, and to provide the best data analysis and data support solutions for industry partners.

In 2020, we further strengthened the cooperation with major online platforms, accessed to data sharing resources, and improved the industry reference indicators in film box office, original music, movie traffic data, user search data and other aspects, including but not limited to:

Accessed to Tencent Video's streaming movie box office performance data, becoming the first platform to collect this key metric from all three of the major Chinese video platforms including Tencent Video, iQIYI and Youku;
Launched "Uni Chart" (由你音樂榜) of Tencent Music Group which syndicated 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;
Launched "Weibo Movie Chart" (微博電影榜) and combined WeChat Movie Popularity Chart and Baidu Movie Popularity Chart to provide more complete social media popularity monitoring data for the industry;
Launched "Douyin Movie Chart" (抖音電影榜), "Douyin Drama Chart" (抖音劇集榜) and "Douyin Shows Chart" (抖音綜藝榜). The complete user data link and ecosystem brought by such data complementarity means the comprehensive upgrade of the refinement of online promotion and distribution in the content industry;
Connected the cinema resources of Maoyan to Baidu ecosystem through mini programs to obtain accurate traffic of users' searches. At the same time, linked with Baidu App, Bai Jiahao and Baidu Map to realize traffic aggregation within Baidu ecosystem.

The comprehensive coverage and integration of the above data capabilities further lift Maoyan's platform service capabilities and data service capabilities. In 2020, we provided data service for more than 40 movies, covering movies released on National Day, New Year's Day and Spring Festival and other major Chinese holiday seasons. In 2021, we will continue to enhance our data analysis capabilities and data support solutions for entertainment contents. For example, four of the seven movies released in the Spring Festival in 2021 used the data service of Maoyan Research Institute, which reflects the coverage rate of our data service. In addition to cinema movies, we have also expanded the data service and platform service for streaming contents. For example, we provided research and testing services for Run For Young (風犬少年的天空), A Murderous Affair in Horizon Tower (摩天大樓) and other TV series, and provided data service for Legend of Ravaging Dynasties 2 (爵跡 2), Once Upon a Time in the Northeast I Am Haizhu (東北往事：我叫劉海柱) and other streaming movies.

8 MAOYAN ENTERTAINMENT / Annual Report 2020

CEO's Statement

Meanwhile, Maoyan also continued to attach importance to the data service and support for the whole industry, to keep the whole industry partners informed of industry information and trends. In 2020, Maoyan Research Institute released dozens of research reports on the impact of the epidemic, box office and schedule, the streaming movie market, etc., to assist the rapid recovery of the industry with big data.

Achieve Sound Growth to Build a Better Life

Based on the above, the pan entertainment industry was severely impacted by the epidemic in 2020. However, due to the effective management and control over the epidemic and with the joint efforts of all industry participants, the entertainment industry in China ushered in full recovery after general shutdown, and the New Year's Day and Spring Festival releases in 2021 also recorded notable box office. Moreover, certain movies that we participated in, such as Hi, Mom (你好，李煥英), Detective Chinatown 3 (唐人街探案3) and A Writer's Odyssey (刺殺小說家), recorded excellent performance as a result of recovery of the Chinese movie market, which is expected to further boost the Company's performance for the first quarter of 2021. We remain confident about our own growth prospect as well as the overall industry's long-term healthy development. We believe the audiences will always support quality contents. By embracing data and innovations, making quality contents reach to suitable audiences we can help to leverage the value of the content industry and build a better life.

As a leading platform to provide innovative Internet services for the whole entertainment industry, we will continue to enhance our core abilities, present more quality contents, further improve the basic service capacity of the platform and facilitate the recovery and development of the industry. Finally, we would like to express our heartfelt thanks to all colleagues, shareholders and industry partners for their trust and companionship. Let us work together and generate great values for our industry!

Executive Director and Chief Executive Officer

ZHENG Zhihao

Hong Kong

March 30, 2021

MAOYAN ENTERTAINMENT / Annual Report 2020

Management Discussion and Analysis

2020 REVIEW

	Year ended December 31,

	2020		2019
	RMB		RMB
	million	%	million	%

Revenue	1,365.7	100.0	4,267.5	100.0
Cost of revenue	(828.4)	(60.7)	(1,610.4)	(37.7)
Gross proﬁt	537.3	39.3	2,657.1	62.3
Selling and marketing expenses	(485.8)	(35.6)	(1,547.8)	(36.3)
General and administrative expenses	(353.6)	(25.9)	(447.8)	(10.5)
Net impairment losses on financial and other assets	(418.4)	(30.6)	(41.9)	(1.0)
Other income	130.8	9.6	52.5	1.2
Other (losses)/gains, net	(14.5)	(1.1)	3.8	0.1
Operating (loss)/proﬁt	(604.2)	(44.3)	675.9	15.8
Finance income	15.9	1.2	29.0	0.7
Finance costs	(37.8)	(2.8)	(42.8)	(1.0)
Finance costs, net	(21.9)	(1.6)	(13.8)	(0.3)
Share of losses of investments
accounted for using equity method	(2.5)	(0.2)	(0.6)	(0.0)
(Loss)/proﬁt before income tax	(628.6)	(46.1)	661.5	15.5
Income tax expenses	(17.7)	(1.3)	(202.6)	(4.7)
(Loss)/proﬁt for the year	(646.3)	(47.4)	458.9	10.8

Non-IFRS Measures:
(LBITDA)/EBITDA	(432.9)	(31.7)	839.9	19.7
Adjusted (LBITDA)/EBITDA	(360.3)	(26.4)	946.4	22.2
Adjusted net (loss)/profit (Note)	(435.6)	(31.9)	703.2	16.5

10 MAOYAN ENTERTAINMENT / Annual Report 2020

Management Discussion and Analysis

Revenue

Our revenue decreased by 68.0% to RMB1,365.7 million in 2020 from RMB4,267.5 million in 2019. This decrease was primarily a result of decreases in the revenue from online entertainment ticketing services, entertainment content services, advertising services and others as affected by COVID-19 pandemic in 2020. The following table sets forth our revenues by service for the years ended December 31, 2020 and 2019.

	Year ended December 31,

	2020		2019
	RMB		RMB
	million	%	million	%

Revenue
Online entertainment ticketing services	756.5	55.4	2,303.2	54.0
Entertainment content services (Note)	353.3	25.9	1,396.8	32.7
Advertising services and others	255.9	18.7	567.5	13.3
Total	1,365.7	100.0	4,267.5	100.0

Note: This amount included fair value loss on the Group's investment in movie and TV series amounting to RMB27.5 million for the year ended December 31, 2020 and fair value gain on the Group's investment in movie and TV series amounting to RMB15.6 million for the year ended December 31, 2019.

Online Entertainment Ticketing Services

Revenue from our online entertainment ticketing business decreased by 67.2% to RMB756.5 million in 2020 from RMB2,303.2 million in 2019, mainly due to the significant revenue decrease in the online performance ticketing business as overshadowed by COVID-19 pandemic, which had resulted in closedown of movie theaters in mainland China for 183 days from January 23, 2020, and cancellation of most of off-line major events.

Entertainment Content Services

Revenue from our entertainment content services decreased by 74.7% to RMB353.3 million in 2020 from RMB1,396.8 million in 2019. Such decrease was mainly due to delay in some projects which we partially participated in its production, promotion & distribution, and which were not released as scheduled in 2020, as overshadowed by COVID-19 pandemic.

MAOYAN ENTERTAINMENT / Annual Report 2020 11

Management Discussion and Analysis

Advertising Services and Others

Revenue from our advertising services and others decreased by 54.9% to RMB255.9 million in 2020 from RMB567.5 million in 2019, which was primarily due to an decrease in the demand of advertising placements from advertisers as affected by COVID-19 pandemic.

Cost of Revenue

Our cost of revenue decreased by 48.6% to RMB828.4 million in 2020 from RMB1,610.4 million in 2019. The decrease in our cost of revenue was mainly due to a decrease in the cost of ticketing system (which was in line with the decrease in the proportion to the revenue of our online movie ticketing service), and the content production cost and content distribution and promotion cost, reflecting the decrease in the revenue of our 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 years indicated:

			Year ended December 31

		2020			2019
	RMB	% of	% of	RMB	% of	% of
	million	cost	revenue	million	cost	revenue

Ticketing system cost	144.9	17.5	10.6	537.2	33.4	12.6
Internet infrastructure cost	130.7	15.8	9.6	243.4	15.1	5.7
Content distribution and
promotion cost	188.7	22.8	13.8	349.9	21.7	8.2
Content production cost	152.4	18.4	11.2	242.6	15.1	5.7
Amortization of intangible
assets	137.8	16.6	10.1	135.9	8.4	3.2
Depreciation of property,
plant and equipment	8.4	1.0	0.6	6.9	0.4	0.1
Other expenses	65.5	7.9	4.8	94.5	5.9	2.2

Total	828.4	100.0	60.7	1,610.4	100.0	37.7

12 MAOYAN ENTERTAINMENT / Annual Report 2020

Management Discussion and Analysis

Gross Proﬁt and Gross Margin

Our gross profit decreased by RMB2,119.8 million, or 79.8%, to RMB537.3 million in 2020 from RMB2,657.1 million in 2019, and our gross margin was 62.3% and 39.3% in 2019 and 2020, respectively. The decreases in our gross profit and gross margin were mainly due to the substantial decrease in our revenue as affected by COVID-19 pandemic, while the decline in some fixed costs included in our cost were not in proportion to the decrease in our revenue, resulting in the substantial decreases in our gross profit and gross margin.

Selling and Marketing Expenses

Our selling and marketing expenses decreased by 68.6% to RMB485.8 million in 2020 from RMB1,547.8 million in 2019, primarily due to the decreased client incentive.

General and Administrative Expenses

Our general and administrative expenses decreased by 21.0% to RMB353.6 million in 2020 from RMB447.8 million in 2019, primarily due to the decrease in employee benefit expenses of the management.

Net Impairment Loss of Financial and Other Assets

We recorded net impairment loss of financial and other assets of RMB418.4 million in 2020, while net impairment loss of financial and other assets of RMB41.9 million was recorded in 2019. We pay attention to the payment status of debtors at all times and trace and learn detailed information about debtors. In case of overdue, we will proactively take commercial and legal actions to collect the overdue accounts. We evaluated the expected credit loss of financial and other assets as at December 31, 2020 on prudent basis, and made provisions for the impairments to reflect the overall blow by the COVID-19 pandemic to the macro economic environment and entertainment industry, as well as the individual negative effects to some of our business partners.

Up to March 29, 2021, RMB354.0 million out of the gross carrying amounts of accounts and other receivables amounting to RMB1,764.8 million were subsequently settled on December 31, 2020, among which RMB20.2 million of receivables had previously been provided for under our expected credit loss assessment as part of the aforementioned RMB418.4 million impairment loss in 2020.

Other Income and Other (Losses)/Gains

We had other income and net other loss of RMB116.3 million in 2020, compared to other income and other gains of RMB56.3 million in 2019, primarily due to the increase in the government subsidies received in 2020 compared with 2019.

Operating (Loss)/Proﬁt

As a result of the foregoing, our operating loss was RMB604.2 million in 2020, compared to an operating profit of RMB675.9 million in 2019.

MAOYAN ENTERTAINMENT / Annual Report 2020 13

Management Discussion and Analysis

Finance Costs, Net

Our net finance costs increased by 58.7% to RMB21.9 million in 2020 from RMB13.8 million in 2019, primarily due to the decrease of finance gains of interest from bank deposits.

Income Tax Expenses

We had income tax expenses of RMB17.7 million in 2020, compared to the income tax expenses of RMB202.6 million in 2019. This was primarily due to the decline in overall profitability.

(Loss)/Proﬁt for the Year

As a result of the foregoing, our loss for the year was RMB646.3 million in 2020, compared to profit for the year of RMB458.9 million in 2019.

Non-IFRS Financial Measure

To supplement our consolidated financial statements which are presented in accordance with IFRS, we also use (LBITDA)/EBITDA/adjusted (LBITDA)/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, which have excluded certain effects of one-off or non cash projects and M&A transactions for the previous years, 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 (LBITDA)/EBITDA/adjusted (LBITDA)/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.

14 MAOYAN ENTERTAINMENT / Annual Report 2020

Management Discussion and Analysis

Adjusted Net (Loss)/Proﬁt, (LBITDA)/EBITDA, and Adjusted (LBITDA)/EBITDA

The following tables reconcile our adjusted net (loss)/profit and (LBITDA)/EBITDA and adjusted (LBITDA)/ EBITDA for the years presented to the most directly comparable financial measure calculated and presented in accordance with IFRS:

	Year ended December 31,

	2020	2019
	RMB million	RMB million

Reconciliation of net (loss)/profit to adjusted net (loss)/profit
Net (loss)/profit for the year	(646.3)	458.9
Add:
Share-based compensation	72.6	103.2
Net loss on convertible bonds classified as financial
liabilities at fair value through profit or loss	-	1.6
Listing expenses	-	3.3
Amortization of intangible assets resulting from business combinations	138.1	136.2
Adjusted net (loss)/proﬁt(Note)	(435.6)	703.2

MAOYAN ENTERTAINMENT / Annual Report 2020 15

Management Discussion and Analysis

	Year ended December 31,

	2020	2019
	RMB million	RMB million

Reconciliation of operating (loss)/profit to (LBITDA)/EBITDA and
adjusted (LBITDA)/EBITDA
Operating (loss)/profit for the year	(604.2)	675.9
Add:
Depreciation of property, plant and equipment	16.5	14.4
Amortization of intangible assets	141.1	137.7
Depreciation of right-of-use assets	13.7	11.9
(LBITDA)/EBITDA(Note)	(432.9)	839.9

Add:
Share-based compensation	72.6	103.2
Listing expenses	-	3.3
Adjusted (LBITDA)/EBITDA	(360.3)	946.4

OTHER FINANCIAL DATA AND INFORMATION

Capital Structure

The Company continued to maintain a healthy and sound financial position. Our total assets decreased from RMB11,351.2 million as of December 31, 2019 to RMB10,608.5 million as of December 31, 2020, whilst our total liabilities decreased from RMB3,063.2 million as of December 31, 2019 to RMB2,985.5 million as of December 31, 2020. Our liabilities-to-assets ratio increased from 27.0% in 2019 to 28.1% in 2020.

As of December 31, 2020, we pledged bank deposits of RMB154.0 million as securities for bank borrowings.

Note: We defined (LBITDA)/EBITDA as operating (loss)/profit for the year adjusted for depreciation and amortization expenses. We add back share-based compensation and listing expenses to EBITDA to derive adjusted EBITDA.

16 MAOYAN ENTERTAINMENT / Annual Report 2020

Management Discussion and Analysis

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 December 31, 2020, we had cash and cash equivalents and other forms of bank deposits of RMB2,294.1 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 December 31, 2020, our total borrowings were approximately RMB1,013.5 million, which were all bank borrowings denominated in RMB. The following table sets forth further details of our banking borrowings as of December 31, 2020:

	RMB million	Interest rate

Secured	340.0	2.84%~2.90%
Guaranteed	673.5	3.50%~5.85%

Total	1,013.5	N/A

As of December 31, 2020, we had unutilized banking facilities of RMB58 million.

As of December 31, 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 December 31, 2020 and 2019, the Group has a net cash position.

Capital Expenditure

Our capital expenditures primarily included purchase of equipment and intangible assets. Our capital expenditures decreased by 43.8% to RMB12.6 million in 2020 from RMB22.4 million in 2019. We plan to fund our planned capital expenditures using cash generated from operations and the net proceeds from the global offering.

MAOYAN ENTERTAINMENT / Annual Report 2020 17

Management Discussion and Analysis

Material Acquisitions and Future Plans for Major Investments

As of December 31, 2020, the Group did not have any plans for major investments and capital assets. During the 12 months ended December 31, 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 and our Annual Report for 2018 and 2019.

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 2020.

Employees, Remuneration Policy and Share Option

As of December 31, 2020, we had 879 full-time employees, 877 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.

Reference is made to the announcement of the Company dated January 19, 2021, in relation to the granting of a total of 15,066,000 options (the "Options") to Mr. Zheng Zhihao (鄭志昊), the grant of Options will be tabled at the AGM for approval according to Rule 17.03(4) of the Listing Rules, the exercise of the Options is subject to approval at the AGM and the vesting schedule that only up to a maximum of 25% of the total Options shall be vested in each of 2022, 2023, 2024 and 2025, as of the date of this Annual Report, no Options has been exercised.

18 MAOYAN ENTERTAINMENT / Annual Report 2020

Profiles of Directors and Senior Management

EXECUTIVE DIRECTOR

Mr. Zheng Zhihao (鄭志昊), aged 51, is an executive Director and the chief executive officer of the Company and has held directorships and senior management positions at various subsidiaries within the Group, including as a director and the general manager of Tianjin Maoyan Weying since April 2016, and as an executive director, the legal representative as well as the manager of Maoyan Technology since February 2018.

Mr. Zheng has extensive experience in the Internet and media industries. From April 2001 to February 2005, Mr. Zheng served as a senior consultant in Microsoft Corporation, a company listed on the NASDAQ (Stock Code: MSFT). From February 2005 to September 2006, Mr. Zheng successively served as senior program manager and group manager in Microsoft (China) Co., Ltd. Shanghai Branch (微軟（中國）有限公司上海分公司). Mr. Zheng then served as a department general manager and vice president of Tencent Technology (Shenzhen) Company Limited (騰訊科技（深圳）有限公司) from September 2006 to April 2015. Mr. Zheng also served as the president and the chief product officer at Dianping Holdings Ltd. between March 2014 and November 2015, responsible for its overall operations and the management of various products, including the development of the movie department and the management of the entertainment business such as the movie ticketing services business, and as the president of the platform business group of Meituan between November 2015 and April 2016, mainly in charge of the management of various products, including the movie ticketing services, product operations and technologies.

Mr. Zheng received a bachelor's degree in applied chemistry from Shandong University (山東大學) in Shandong, the PRC in July 1992 and a master's degree in science from University of Kentucky in Kentucky, the United States, in December 1996.

NON-EXECUTIVE DIRECTORS

Mr. Wang Changtian (王長田), aged 55, is a non-executive Director and the Chairman of the Company and the chairman of Tianjin Maoyan Weying since July 2016. Mr. Wang also holds directorships and senior management positions in companies across various industries. In the media industry, Mr. Wang has served as the chairman and general manager of Enlight Media since April 2000, and held directorships at its various subsidiaries, including Beijing Enlight Pictures Co., Ltd. (北京光線影業有限公司) ("Enlight Pictures") and Horgos Colorful (Enlight) Pictures Co., Ltd. (霍爾果斯彩條屋影業有限公司) ("Colorful Pictures") since October 2004 and July 2015, respectively; and in the finance sector, Mr. Wang has served as a director of China Renaissance Securities (China) Co., Ltd. (華興證券有限公司) and Beijing Zhongguancun Bank Co., Ltd. (北京中關村銀行股份有限公司) since August 2016 and June 2017, respectively.

Mr. Wang received a bachelor's degree in journalism from Fudan University (復旦大學) in Shanghai, the PRC in July 1988.

Ms. Li Xiaoping (李曉萍), aged 46, is a non-executive Director of the Company and a director of Tianjin Maoyan Weying since September 2017. Ms. Li also holds directorships and senior management positions at various companies in the media industry where she has served as a deputy general manager of Enlight Media since October 1999 and as its director since July 2009, as the president of Enlight Pictures since March 2011, and also as a director of various other subsidiaries of Enlight Media including Beijing Chuanmei Zhiguang Advertising Co., Ltd. (北京傳媒之光廣告有限公司) and Beijing Enlight Yishi Internet Technology Co., Ltd. (北京光線易視網絡科技有限公司). Ms. Li also holds directorships at Beijing Tianshen Hudong Technology Co., Ltd. (北京天神互動科技有限公司) since July 2013 and Beijing Duomi Online Technology Co., Ltd. (北京多米在線科技股份有限公司) since May 2016.

Previously, Ms. Li served as a director at Dalian Zeus Entertainment Co., Ltd. (大連天神娛樂股份有限公司), a company listed on the Shenzhen Stock Exchange (SSE Stock Code: 002354) between December 2014 and December 2017.

MAOYAN ENTERTAINMENT / Annual Report 2020 19

Profiles of Directors and Senior Management

Ms. Wang Jian (王牮), aged 49, is a non-executive Director of the Company and holds directorships and senior management positions at various companies within the Group, including as a director of Tianjin Maoyan Weying since July 2016, as an executive director and the manager of Maoyan Pictures since August 2016, and as an executive director, the general manager as well as the legal representative of Beijing Maoyan since August 2016. Currently, Ms. Wang also holds directorships and senior management positions at various subsidiaries of Enlight Media, including as a director and the general manager of Shannan Enlight Pictures Co., Ltd. (山南光線影業有限公

司) since August 2017. Ms. Wang has also served as a director at Enlight Holdings since January 2009.

Previously, Ms. Wang served as the chief financial officer of Enlight Media from June 2000 to September 2011 and from August 2012 to August 2018. She also served as a board secretary of Enlight Media from July 2009 to February 2016.

Ms. Wang received her associate's degree in foreign trade and economy from Dalian Institute of Economy and Management (大連經濟管理學院) in Liaoning, the PRC in July 1992.

Mr. Cheng Wu (程武), aged 46, was appointed as a non-executive Director of the Company on June 9, 2020. Mr. Cheng has been serving as a vice president of Tencent since March 2013 and as the chief executive officer of Tencent Pictures since September 2015. He is responsible for strategic planning and day-to-day operation of Tencent Pictures, Tencent Animation & Comic and Tencent Esports. In addition, he is also responsible for the management of Tencent's Marketing and Public Relations Department. Mr. Cheng serves as an executive director and the chief executive officer of China Literature Limited (閱文集團), the shares of which are listed on the Main Board of the Stock Exchange with stock code 772 since April 2020. He also serves as an executive director and vice chairman of Huayi Tencent Entertainment Company Limited (華誼騰訊娛樂有限公司), the shares of which are listed on the Main Board of the Stock Exchange with stock code 419 since 2018.

Mr. Cheng graduated from Tsinghua University with a bachelor of science degree in physics, and gained an EMBA from the Olin Business School at Washington University.

Mr. Chen Shaohui (陳少暉), aged 39, is a non-executive Director of the Company and a director of Tianjin Maoyan Weying since March 2017.

Mr. Chen has extensive experience in investment and strategic management. Between June 2004 and October 2005, he worked as an analyst at A.T. Kearney. From October 2005 to August 2008, he was employed as an investment manager at WI Harper Group (中經合集團). Between January 2011 and October 2014, he served as an investment director at Tencent. In November 2014, he joined Meituan and currently serves as its chief financial officer and senior vice president. In July 2018, Mr. Chen was appointed as a director at Enlight Media.

Mr. Chen received a bachelor's degree in economics from Peking University (北京大學) in Beijing, the PRC in June 2004 and a master's degree in business administration from Harvard Business School in Massachusetts, the United States, in May 2010.

20 MAOYAN ENTERTAINMENT / Annual Report 2020

Profiles of Directors and Senior Management

Mr. Lin Ning (林寧), aged 47, is a non-executive Director of the Company and a director of Tianjin Maoyan Weying since September 2017. Mr. Lin has served as the chairman and chief executive officer of Beijing Weying Shidai since May 2014, and also the chairman of its subsidiaries, including Beijing Weisai Shidai Sports Technology Co., Ltd. (北京微賽時代體育科技有限公司) and the executive director of Horgos Yuyue Media Co., Ltd. (霍爾果斯娛躍文化傳播有限公司) since November 2015 and March 2017, respectively.

Mr. Lin received a bachelor's degree in television program editing from Beijing Broadcasting Institute (北京廣播學院) (now known as Communication University of China (中國傳媒大學)) in Beijing, the PRC in July 1995 and his executive master degree in business administration from Peking University (北京大學) in Beijing, the PRC in July 2009. Currently he is studying for a doctorate degree in business administration at Cheung Kong Graduate School of Business (長江商學院) in Beijing, the PRC.

Mr. Tang Lichun, Troy (唐立淳), aged 35, is a non-executive Director of the Company since January 15, 2020. Mr. Tang has over nine years of experience in media technology and investment. Mr. Tang has served as a director of FountainVest Partners Asia Limited since May 2012. Mr. Tang worked at PricewaterhouseCoopers from October 2007 to April 2012 and served as a manager.

Mr. Tang graduated from Shanghai Jiao Tong University (上海交通大學) in August 2007 with a bachelor degree in business administration.

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Wang Hua (汪華), aged 43, has been appointed as an independent non-executive Director of the Company on August 22, 2018, effective in January 2019.

Mr. Wang is the founder of and currently serves as a managing partner in the investment department of Sinovation Ventures (創新工場 ), an established Chinese technology-savvy investment firm. Mr. Wang has extensive experience in capital investment and information technology industry. He founded Shanghai Yinda Technology Co., Ltd. (上海音達科技集團有限公司), a company providing technical solutions to telecommunication carriers and equipment providers. Between September 2006 and October 2009, Mr. Wang served as the strategic partner manager in Google China.

Mr. Wang received a bachelor's degree in automation from Shanghai University of Electric Power (上海電力大學) in Shanghai, the PRC in July 1999 and a master's degree of business administration from Stanford University in California, the United States in June 2006.

MAOYAN ENTERTAINMENT / Annual Report 2020 21

Profiles of Directors and Senior Management

Mr. Chan Charles Sheung Wai (陳尚偉), aged 67, has been appointed as an independent non-executive Director of the Company on August 22, 2018, effective in January 2019.

Mr. Chan holds directorships in various companies. Since July 2012, Mr. Chan has served as an independent non- executive director of SRE Group Ltd. (上置集團), a company listed on the Stock Exchange (Stock Code: 1207). Since January 31, 2021, Mr. Chan has served as an independent non-executive director of Sun Art Retail Group Limited (高鑫零售有限公司), a company listed on the Stock Exchange (Stock Code: 6808). Since June 2019, Mr. Chan has served as an independent non-executive director of Hansoh Pharmaceutical Group Company Limited (翰森製藥集團有限公司), a company listed on the Stock Exchange (Stock Code: 3692). Between September 2013 and April 2020, Mr. Chan served as an independent non-executive director of Changyou.com Ltd. (暢遊有限公司), a company listed on the NASDAQ (Stock Code: CYOU). Between May 2016 and May 2019, Mr. Chan served as an independent non-executive director of CITIC Securities Ltd. (中信証券股份有限公司), a company listed on the Stock Exchange (Stock Code: 6030) and Shanghai Stock Exchange (Stock Code: 600030).

Between 1977 and 1994, Mr. Chan worked in Arthur Andersen Canada. Between 1994 and 2002, Mr. Chan served as a partner and head of audit and business advisory division in Arthur Andersen China/Hong Kong, during which he had been a global partner since 1998. Between July 2002 and June 2012, he served as a partner in assurance department of PricewaterhouseCoopers Zhong Tian CPAs Limited.

Mr. Chan received a bachelor's degree in commerce from University of Manitoba in Manitoba, Canada in May 1977. Mr. Chan has been a Chartered Accountant in Canada and a Certified Public Accountant in Hong Kong since 1980 and 1995, respectively. Mr. Chan was a member of Council, Hong Kong Society of Accountants (now named Hong Kong Institute of Certified Public Accountants). Between 1998 and 2001, he was a member of Listing Committee of the Stock Exchange. Mr. Chan was a member of the First Election Committee for the Hong Kong Legislature in April 1998.

Mr. Yin Hong (尹紅, alias: Yin Hong (尹鴻)), aged 59, has been appointed as an independent non-executiveDirector of the Company on October 28, 2020. Mr. Yin has been serving as a professor of Tsinghua University (清華大學) since 1999. Between December 1984 and August 1986, Mr. Yin served as a teaching assistant of Sichuan University (四川大學). Between September 1989 and August 1999, Mr. Yin served in Beijing Normal University (北京師範大學) with his last position as a professor. Mr. Yin is a well-knownfilm theorist, critic, and planner in China. He has served as a consultant, producer, and art director for a number of film and television works, and concurrently assumes many important positions within several national associations and societies including the vice chairman of the China Literature and Art Critics Association (中國文藝評論家協會) and the vice chairman of the China Film Association (中國電影家協會).

Mr. Yin obtained the bachelor degree in Chinese language and the master degree in modern Chinese literature from Sichuan University (四川大學) in 1982 and 1984, respectively, and the doctoral degree in modern Chinese literature from Beijing Normal University (北京師範大學) in 1989. Mr. Yin received the Special Government Allowances of the State Council (國務院政府特殊津貼) from the State Council of the PRC in 2010 and was awarded the Top Ten Film Workers of Beijing (北京十佳電影工作者) by departments including Beijing Municipal Human Resources and Social Security Bureau (北京市人力資源和社會保障局), Beijing Federation of Literary and Art Circles (北京市文學藝術界聯合會) and Beijing Television Artists Association (北京電視藝術家協會) in 2013.

22 MAOYAN ENTERTAINMENT / Annual Report 2020

Profiles of Directors and Senior Management

Ms. Liu Lin (劉琳), aged 45, has been appointed as an independent non-executive Director of the Company on June 9, 2020. Between March 2016 and May 2020, Ms. Liu served as a senior vice president of Meituan, a company listed on the Stock Exchange (Stock Code: 3690). Between April 2003 and March 2016, Ms. Liu served as the general manager of the human resources department and the general manager of management and consulting department under the president office of Tencent.

Ms. Liu obtained a master degree in economics from Nankai University in December 2006.

CHANGE OF INFORMATION OF DIRECTORS AND CHIEF EXECUTIVE

Save as disclosed in this Annual Report, for the year ended December 31, 2020, the Company does not have any information required for disclosure in accordance with Rule 13.51B(1) of the Listing Rules.

SENIOR MANAGEMENT

Mr. Zheng Zhihao (鄭志昊) is the executive Director and the chief executive officer of the Company. See "Executive Director" above for his biographical details.

Mr. Gu Sibin (顧思斌), aged 38, is the president of the Group and the president of Tianjin Maoyan Weying since October 2017.

Mr. Gu has various years of experience in the Internet and media industries. Between July 2004 to March 2014, he worked at Tencent and gained experience in, among others, internet value-added services, membership system, e-commerce, and virtual community building. Between April 2014 and September 2014, Mr. Gu served as a vice president at JD.com Inc.,(京東集團) a company listed on the NASDAQ (Stock Code: JD) and the Stock Exchange (Stock Code: 9618) and was responsible for overseeing its wireless business. Between September 2014 and January 2017, Mr. Gu served as the chief product officer at Youku Tudou Inc. (優酷土豆股份有限公司), where he was responsible for product research and development, user operations and paid memberships.

Mr. Gu graduated from the college of management of Beijing University of Posts and Telecommunications (北京郵電大學) in Beijing, the PRC in July 2004.

JOINT COMPANY SECRETARIES

Ms. Zheng Xia (鄭霞) was appointed as a Joint Company Secretary of the Company in August 2018. Ms. Zheng has served as the legal director and other positions since joining the Company in May 2018. Ms. Zheng has more than ten years of experience as a lawyer.

Ms. Zheng received a bachelor's degree in law and a master's degree in law from China University of Political Science and Law (中國政法大學) in Beijing, the PRC, in June 2004 and January 2011, respectively. Ms. Zheng also obtained a LL.M degree from the University of Southern California in May 2012. Ms. Zheng is qualified as a lawyer in the PRC and New York.

Mr. Cheng Ching Kit (鄭程傑) was appointed as a Joint Company Secretary of the Company in August 2018. Mr. Cheng is a manager of SWCS Corporate Services Group (Hong Kong) Limited, a professional services provider specialising in corporate services, and has over eight years of experience in corporate secretarial field. He is an associate member of both The Hong Kong Institute of Chartered Secretaries and The Chartered Governance Institute in the United Kingdom.

Mr. Cheng obtained bachelor of commerce degree in finance from the University of Queensland, Australia.

MAOYAN ENTERTAINMENT / Annual Report 2020 23

Directors' Report

The Board presents the directors' report together with the audited consolidated financial statements of our Group for the year ended December 31, 2020.

PRINCIPAL ACTIVITIES

We are a leading platform providing innovative Internet-empowered entertainment services in China, offering online entertainment ticketing services, entertainment content services and advertising services and others.

RESULTS OF OPERATIONS

The results of our Group for the year ended December 31, 2020 are set out in the consolidated statement of comprehensive income on pages 89 to 90 of this Annual Report.

FINANCIAL SUMMARY

The financial summary of our Group between 2015 and 2020 is set out in the section headed "Financial Summary" on page 210 in this Annual Report.

BUSINESS REVIEW

The entire industry was seriously affected by the outbreak of the COVID-19, and the results of the Group were also hard hit. However, since the successive resumption of operation in industry on July 20, 2020, the results of the Group have gradually gotten back on track. As a leading Internet innovation and comprehensive entertainment service platform in the PRC, we will continue to grow firmly, aiming to provide higher-quality service in the industry and contribute to the success production of more quality contents.

For more details of the business development and performance of our Group for the Year, please refer to the sections headed "CEO Statement" and "Management Discussion and Analysis" in this Annual Report.

Principal risks and uncertainties

Please refer to the section headed "Risk Management and Internal Control" in the corporate governance report in this Annual Report for the principal risks and uncertainties facing the Group.

Important events occurred since the end of the ﬁnancial year

There have been no other significant events affecting the Company from December 31, 2020 up to the date of this annual report.

24 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

Future development

Looking into the future, we will continue to cultivate in the comprehensive entertainment industry. In accordance with our integrated strategy of Internet Technology + Comprehensive Entertainment, we will further develop the capabilities of our five platforms, namely, our comprehensive entertainment ticketing platform, product platform, data platform, marketing platform, and financing platform, so as to shore up our business synergies and accumulation of value, which in return will generate more value for the entertainment industry. In the meantime, we will also continue to expand and increase our business scenarios and capabilities, based on the core requirements of our industry, development of the Company, challenges, and commercial possibilities.

For more details of the future development of the Group, please refer to "CEO's Statement" of this Annual Report.

Environmental policies and performance

We are not subject to significant environmental risks. During the year ended December 31, 2020 and up to the date of this Annual Report, we were not been subject to any fines or other penalties due to non-compliance with environmental regulations.

For more details of the environment policies and performance of the Company, please refer to the section headed the environmental, social responsibilities and governance report.

Compliance with the relevant laws and regulations

Our Group is subject to applicable laws and regulations in the PRC in respect of its business operations, including but not limited to those relating to value-added telecommunications services, information security and privacy protection, film distribution, radio and television programs, and Internet advertisement. During the year ended December 31, 2020 and up to the date of this Annual Report, we had not been and were not involved in any non- compliance incidents that led to fines, enforcement action or other penalties that could, individually or in the aggregate, have a material adverse impact on our business, financial condition or results of operations, and had complied with all relevant PRC laws and regulations that are applicable to us in all material respects.

Relationships with stakeholders

The Group's success depends on the support from key stakeholders which comprise our Directors and senior management members, employees, customers and suppliers.

Employees

As of December 31, 2020, we had 879 full-time employees, 877 of whom were based in China, primarily at our headquarters in Beijing, with the remainder in Shanghai and various other cities in China.

MAOYAN ENTERTAINMENT / Annual Report 2020 25

Directors' Report

Customers

Our customers primarily include cinemas, entertainment content producers and distributors, and advertisers. Pursuant to the ticket sales agreements with cinemas, we typically act as a non-exclusive online ticketing service provider for tickets sold outside of cinemas.

Suppliers

Our suppliers primarily include ticketing system companies who help establish and maintain our connection with cinemas' ticketing systems. We generally enter into separate agreements with these ticketing system companies supplementary to our agreements with cinemas, to establish a connection between our platform and the ticketing system of each cinema and to ensure the smooth integration of its ticketing system into our network. The settlement period with ticketing system companies is typically one month.

MAJOR SUPPLIERS AND CUSTOMERS

For the year ended December 31, 2020, the percentage of the total revenue attributable to the five largest customers was approximately 21% of the total revenue of the Group, whereas the percentage of the total revenue attributable to the top customer was approximately 7% of the total revenue of the Group. In addition, for the year ended December 31, 2020, the percentage of the total cost attributable to the five largest suppliers was approximately 42% of the total cost of the Group, whereas the percentage of the total cost attributable to the largest supplier was approximately 14% of the total cost of the Group. To the knowledge of the directors, during the Reporting Period, save for (i) Meituan, a shareholder of the Company holding 7.28% of the shares of the Company as of December 31, 2020, is the largest supplier of the Group and (ii) Tencent, also a substantial shareholder of the Company, is a substantial shareholder of Meituan, none of the other directors (including those who resigned during the Reporting Period) and their associates or any shareholders holding more than 5% of the issued shares of the Company have any rights or interests in our five largest customers or suppliers.

PROPERTY AND EQUIPMENT

Details of the movements in property and equipment of the Group during the year ended December 31, 2020 are set out in Note 14 to the audited consolidated financial statements.

FINAL DIVIDEND

The Board has resolved not to recommend the payment of a final dividend for the year ended December 31, 2020 (2019: Nil).

CLOSURES OF THE REGISTER OF MEMBERS

The Company will hold the AGM on Monday, June 28, 2021. The register of members of the Company will be closed from Wednesday, June 23, 2021 to Monday, June 28, 2021, both days inclusive, in order to determine the identity of the Shareholders who are entitled to attend and vote at the AGM, during which period no share transfers will be registered. To be eligible to attend and vote at the AGM, all properly completed transfer forms accompanied by the relevant share certificates must be lodged for registration with the Company's branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Tuesday, June 22, 2021.

26 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

SUBSIDIARIES

Particulars of the Company's subsidiaries are set out in Note 37 to the audited consolidated financial statements.

SHARE CAPITAL

Details of the movements in the Company's share capital during the year ended December 31, 2020 are set out in Note 29 to the audited consolidated financial statements.

RESERVES

Details of the movement in the reserves of the Group and the Company during the year ended December 31, 2020 are set out in Notes 30 and 36 respectively to the audited consolidated financial statements.

DISTRIBUTABLE RESERVES

Details of the Company's reserves available for distribution to the Shareholders, calculated in accordance with the provisions of the Companies Law, as at December 31, 2020, are set out in Note 36 to the audited consolidated financial statements.

BORROWINGS

Details of the borrowings of the Group are set out in the paragraph headed "Liquidity, Financial Resources and Gearing" in the section headed "Management Discussion and Analysis" in this Annual Report and Note 26 to the audited consolidated financial statements.

ISSUE OF DEBENTURE

The Group has not publicly issued any debentures during the year ended December 31, 2020.

TAX RELIEF AND EXEMPTION

The Directors are not aware of any tax relief and exemption available to the Shareholders by reasons of their holding of the Company's securities.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the year ended December 31, 2020.

PRE-EMPTIVE RIGHTS

There is no provision for pre-emptive rights under the Articles of Association, or the law of Cayman Islands being the jurisdiction in which the Company is incorporated, under which would oblige the Company to offer new Shares on a pro-rata basis to existing Shareholders.

MAOYAN ENTERTAINMENT / Annual Report 2020 27

Directors' Report

CHARITABLE DONATIONS

During the year ended December 31, 2020, the Group did not make any charitable and other donations.

USE OF PROCEEDS

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 December 31, 2020.

		Amount of
		net proceeds	Balance of net
		utilized as of	proceeds as of
	Allocation of	December 31,	December 31,	Expected timeline for
Intended use of net proceeds	net proceeds	2020	2020	balance of net proceeds
		HK$ in millions

Funding for improving integrated platform capabilities	551.8	223.7	328.1	By December 31, 2022
Research and development and technical infrastructure	551.8	269.9	281.9	By December 31, 2022
Funding potential investments and acquisitions	551.8	401.4	150.4	By December 31, 2022
Working capital and general corporate purposes	183.9	183.9	-	-

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.

28 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

DIRECTORS

The Directors during the Reporting Period and as of the date of this Annual Report are:

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)

Independent Non-executive Directors

Mr. Wang Hua

Mr. Chan Charles Sheung Wai

Mr. Ma Dong (resigned on October 28, 2020)

Mr. Yin Hong (appointed on October 28, 2020)

Mr. Luo Zhenyu (resigned on June 9, 2020)

Ms. Liu Lin (appointed on June 9, 2020)

The biographical details of the Directors and senior management are set out in the section headed "Profiles of Directors and Senior Management" in this Annual Report.

In accordance with Article 109(a) of the Articles of Association, Mr. Zheng Zhihao, Ms. Li Xiaoping, Ms. Wang Jian and Mr. Chan Charles Sheung Wai shall retire by rotation at the AGM and, being eligible, have offered themselves for re-election.

In accordance with Article 113 of the Articles of Association, Mr. Yin Hong shall retire at the AGM and, being eligible, has offered himself for re-election.

MAOYAN ENTERTAINMENT / Annual Report 2020 29

Directors' Report

DIRECTORS' SERVICE CONTRACTS

Our executive Director has entered into a service contract with us pursuant to which he agreed to act as an executive Director for an initial term of three years with effect from January 23, 2019 and until the third annual general meeting of our Company since the Listing Date (whichever ends earlier). Either party has the right to give not less than three months' written notice to terminate the agreement.

Each of the non-executive Directors and independent non-executive Directors (excluding Mr. Tang Lichun, Troy, Mr. Cheng Wu, Ms. Liu Lin and Mr. Yin Hong) has entered into an appointment letter with the Company. The initial term for their appointment shall be three years from January 23, 2019 or until the third annual general meeting of the Company since the Listing Date, whichever ends earlier, or until terminated in accordance with the terms and conditions of the appointment letter or by either party giving to the other not less than three months' prior notice in writing.

Mr. Tang Lichun, Troy, has entered into an appointment letter with the Company on January 15, 2020; each of Mr. Cheng Wu and Ms. Liu Lin has entered into an appointment letter with the Company on June 9, 2020; and Mr. Yin Hong has entered into an appointment letter with the Company on October 28, 2020. The initial term for their appointment shall be three years from the date of their appointment or until terminated in accordance with the terms and conditions of the appointment letter or by either party giving to the other not less than three months' prior notice in writing.

There was no service contract entered into/appointment letter signed by the Company and any Directors to be re-elected at the forthcoming AGM which is not determinable by the Company within one year without payment of compensation, other than statutory compensation.

CONFIRMATION OF INDEPENDENCE OF INDEPENDENT NON-EXECUTIVE DIRECTORS

Our Company has received, from each of the independent non-executive Directors, an annual confirmation of his independence pursuant to Rule 3.13 of the Listing Rules. The Company considers all of the independent non- executive Directors to be independent.

DIRECTORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS AND CONTRACTS OF SIGNIFICANCE

Save as disclosed in Note 34 to the Consolidated Financial Statements and in the section headed "Connected Transactions" of a Directors' Report in this Annual Report, no Director nor an entity connected with a Director has or had material beneficial interest, directly or indirectly in any transaction and arrangement or contract of significant subsisting as at December 31, 2020, or at any time during the year ended December 31, 2020.

30 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

DIRECTORS' INTERESTS IN COMPETING BUSINESS

As of December 31, 2020, Mr. Wang Changtian, our Chairman and non-executive Director, (i) indirectly held approximately 24.46% and 17.03% interests in our Company's issued share capital through Vibrant Wide Limited (a wholly owned subsidiary of Mr. Wang) and Hong Kong Pictures International Limited (a wholly owned subsidiary of Enlight Media), respectively; and (ii) directly held 95% interests in Enlight Holdings (in which the remaining 5% is held by Ms. Wang Jian, being Mr. Wang's sister), which owned approximately 42.71% interests in Enlight Media.

As disclosed in the Prospectus, Enlight Media is primarily engaged in investment and production of entertainment content, including movies, TV series, comics and animation, video, music and literature, as well as movie and TV series promotion and distribution. For details of the delineation of the businesses of our Group and of Enlight Media, please refer to the section headed "Relationship with Enlight and Tencent" in the Prospectus.

Saved as disclosed above, as of December 31, 2020, none of the Directors nor their respective close associates had interests in businesses, which compete or are likely to compete, either directly or indirectly, with the businesses of the Company and its subsidiaries as required to be disclosed pursuant to Rule 8.10(2) of the Listing Rules.

MANAGEMENT CONTRACTS

No contract concerning the management and administration of the whole or any substantial part of the business of the Company were entered into or existed during the year ended December 31, 2020.

REMUNERATION OF DIRECTORS

In compliance with the CG Code, the Company has established the Remuneration Committee to formulate remuneration policies. Directors' remuneration is subject to Shareholders' approval at general meetings. Other emoluments are determined by the Board with reference to Directors' duties and responsibilities, the recommendations of the Remuneration Committee and the performance and results of the Group. No Director, or any of their respective associates, was involved in deciding his/her own remuneration.

Details of the remuneration of the Directors and the five highest paid individuals during the year ended December 31, 2020 are set out in Notes 9 and 38 to the audited consolidated financial statements respectively.

During the year ended December 31, 2020, none of the Directors had waived or agreed to waive any remuneration and there were no emoluments paid by the Group to any of the Directors as an inducement to join, or upon joining the Group, or as compensation for loss of office.

PERMITTED INDEMNITY PROVISION

A permitted indemnity provision for the benefit of the Directors is currently in force. The Company has taken out and maintained appropriate insurance cover in respect of potential legal actions against its Directors and officers.

EQUITY-LINKED AGREEMENT

Except for the employee incentive schemes as set out in this Annual Report, no equity-linked agreements were entered into by the Group, or existed during the year ended December 31, 2020.

MAOYAN ENTERTAINMENT / Annual Report 2020 31

Directors' Report

EMPLOYEE INCENTIVE SCHEMES

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 a series of employee incentive scheme, including Pre-IPO Share Option Scheme, Post-IPO Share Option Scheme, RSU Scheme and Restricted Share Agreement (collectively, the "ESOP Plan") on July 23, 2018 (the "Adoption Date").

The total number of Shares issued or issuable pursuant to the ESOP Plan shall not be more than 117,033,705 Shares, representing approximately 10.3% of the total issued share capital of the Company as at the date of this Annual Report.

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.

The Pre-IPO Share Option Scheme shall be valid and effective for the period of time commencing on the Adoption Date and unless amended, altered, suspended or terminated by the Board and Shareholders, the Pre-IPO Share Option Scheme shall continue in effect for a term of eight (8) years and shall terminate on the eighth anniversary of the Adoption Date. As of the date of this Annual Report, the Pre-IPO Share Option Scheme shall continue in effect for next five years, upon which any Pre-IPO Share Options granted or agreed to be granted pursuant to the Pre- IPO Share Option Scheme and any offer of such a grant shall be of no effect, and for which no claim whatsoever shall be made against the Company.

Participants of the Pre-IPO Share Option Scheme, (the "Pre-IPO Eligible Participants") include the directors, senior management and employees of the Group and any other persons as the Board may deem appropriate provided that such Pre-IPO Eligible Participants shall have satisfied certain conditions. Nil consideration is required to be paid by the grantee of Pre-IPO Share Option Scheme (the "Grantee") for the grant of any Pre-IPO Share Options under the Pre-IPO Share Option Scheme.

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 (which have been reserved by the Company), representing approximately 3.7% of the total issued share capital of the Company as at the date of this Annual Report.

A Grantee may exercise his or her option in whole or in part (but if in part only, in respect of a board lot or any integral multiple thereof) at any time during the period which may be specified by the Board or the CEO in the grant letter (the "Pre-IPO Exercise Period") by the Grantee (or in the case of his death, his legal personal representatives) giving notice in writing to the Company stating that the Pre-IPO Share Options are thereby exercised and the number of Shares in respect of which it is exercised. Each such notice must be accompanied by a remittance for the full amount of exercise price (the "Pre-IPO Exercise Price") for the Shares in respect of which the notice is given.

32 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

The vesting of the Pre-IPO Share Options to each Grantee shall follow the vesting schedule in each of such Grantee's grant letter. The vesting period shall commence on the date of the grant letter or any other date as the CEO may agree. Notwithstanding the foregoing, in order to match the vested options under the 2016 ESOP, certain Pre-IPO Share Options shall be vested to the Grantees upon the date of the grant letter but shall only become exercisable as and when permitted by applicable laws, which will be more specifically set out in the grant letter. All the underlying Shares pursuant to the share options granted and to be granted under the Pre-IPO Share Option Scheme are subject to lock-up for a period of six months following the Listing during which no employee shall dispose of the underlying Shares issued to such employee.

In the case of retirement, voluntary termination of employment or engagement of the Grantee, any unvested Pre- IPO Share Options at such termination will be automatically forfeited and any Pre-IPO Share Option not exercised prior to the expiry of the ninety-day period will lapse.

The Pre-IPO Share Options exercise price shall be as specified by the Board or the CEO in the grant letter and may be determined by reference of the market practice and the historical value of the Shares during the capitalisation period of the Company, which shall in no event be lower than the par value of the Shares in 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 per

immediately

as of

Granted

Exercised

prior to

Lapsed

Cancelled

as of

Vesting

Date of

Exercise

prior to

January 1,

during

exercise

during

December 31,

Period

Category

(HK$)

grant

period

grant

2020

the period

(HK$)

the period

2020

(note)

0.1009

2016/8/1

Eight years

10,347,445

5,889,435

13.3973

901

1,154,644

3,302,465

1(a)

from the

2018/3/1

date of

grant

Employee

14.8000

2018/2/1

15,905,750

54,276

15.3305

359,485

5,753,483

9,738,506

1(b)

Eight years

2018/8/1

from the

2018/4/11

date of

7,710,890

N/A

7,710,890

1(a)

grant

2018/6/1

Total	33,964,085	5,943,711	N/A	360,386	6,908,127	20,751,861

MAOYAN ENTERTAINMENT / Annual Report 2020 33

Directors' Report

Note:

1. The options granted under the scheme are subject to a vesting schedule and can be exercised in the following manner:

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

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 share options granted Up to 75% of the share options granted Up to all of the share options granted

34 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

POST-IPO SHARE OPTION SCHEME

The purpose of the Post-IPO Share Option Scheme is to provide incentives and rewards to directors, senior management and employees of the Group and any other eligible individuals and/or entities in order to provide incentives and rewards to them for their contribution, and to align the corporate objectives and interests between the Group and its key talents.

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. 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 in aggregate exceed 55,211,880 Shares ("Post-IPO Share Option and RSU Total Limit") (which have been reserved by the Company), representing approximately 4.9% of the total issued share capital of the Company as at the date of this Annual Report.

Participants of the Post-IPO Share Option Scheme (the "Post-IPO Eligible Participants") include the directors, senior management and employees of the Group and any other persons as the Board may deem appropriate. The subscription price in respect of any option shall be a price determined by the Board which shall be no less than

the closing price of a Share as stated in the Stock Exchange's daily quotations sheet on the date of the grant letter; (ii) an amount equivalent to the average closing price of a Share as stated in the Stock Exchange's daily quotation sheets for the five business days immediately preceding the date of the grant letter of the relevant Post- IPO Share Options; and (iii) the par value of the Share on the date of the grant letter.

Except with the approval of shareholders in general meeting, no option may be granted to any one person such that the total number of Shares issued and to be issued upon exercise of options and any other option over the Shares (including exercised, cancelled and outstanding options) granted and to be granted to such person in any 12-month period up to the date of the latest grant exceeds 1% of the Shares in issue from time to time. Any grant of further Post-IPO Share Options above this limit shall be subject to the requirement under the Listing Rules.

Upon acceptance of the offer of Post-IPO Share Options, a payment of RMB1 by the grantee to the Company is payable, and such remittance shall not be refundable and shall not be deemed to be a part payment of the subscription price.

A person entitled to any Post-IPO Share Option in consequence of the death of the original grantee (or in the case of his death, his legal personal representatives) may exercise his Post-IPO Share Options in whole or in part (but if in part, only in respect of a board lot or any integral multiple thereof) at any time during the Post-IPO Exercise Period which may be specified by the Board in the grant letter in the manner by giving notice in writing (in such form as the Company may from time to time specify) to the Company stating that the Post-IPO Share Options are thereby exercised and the number of Shares in respect of which it is exercised with a remittance for the full amount of the aggregate subscription price for the Shares in respect of which the notice is given.

MAOYAN ENTERTAINMENT / Annual Report 2020 35

Directors' Report

Subject to the rules of the Post-IPO Share Option Scheme, options may be exercised by an Post-IPO Eligible Participant, in whole or in part, at any time during the period commencing from the grant date and such expiry date as determined by the Board in the grant letter (the "Post-IPO Exercise Period").

Subject to earlier termination by our Company in general meeting or by the Board, the Post-IPO Share Option Scheme shall be valid and effective for a period of 10 years commencing on the effective date, after which period no further options will be granted by the provisions of the scheme, but the provisions of the scheme shall remain in full force and effect to the extent necessary to give effect to the exercise of any options granted prior thereto or otherwise as may be required in accordance with the provisions of the Post-IPO Share Option Scheme.

Movements of the options granted by the Company pursuant to the Post-IPO Share Option Scheme during the Reporting Period are as follows:

				Closing
				price
	Exercise			immediately	Outstanding					Outstanding
	price per			prior to	as of	Granted	Exercised	Lapsed	Cancelled	as of	Vesting
	Share	Date of	Exercise	grant	January 1,	during	during	during	during	December 31,	Period
Category	(HK$)	grant	Period	(HK$)	2020	the period	the period	the period	the period	2020	(note)

Employee	16.2000	2019/5/2	Ten years	16.1000	100,000	0	0	0	50,000	50,000	1(b)
			from
			the date of
			grant
	14.7600	2019/5/10	Ten years	14.1000	4,048,850	0	0	46,265	1,057,797	2,944,788	1(b)
			from		331,570	0	0	9,638	28,917	293,015	1(a)
			the date of
			grant
	11.4360	2019/11/1	Ten years	11.3200	480,200	0	0	0	250,000	230,200	1(b)
			from
			the date of
			grant
	10.5000	2020/4/29	Ten years	10.3200	0	2,372,822	0	0	340,000	2,032,822	1(a)
			from		0	275,000	0	0	0	275,000	1(b)
			the date of
			grant

Total					4,960,620	2,647,822	0	55,903	1,726,714	5,825,825

Note:

1. Please refer to note under sub-section headed "Pre-IPO Share Option Scheme" above.

36 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

RSU SCHEME

The purposes of the RSU Scheme is to recognize and reward participants for their contribution to the Group, to attract best available personnel, and to provide additional incentives to them to remain within the Group and further promote the success of its business. The RSU Scheme is 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.

An award of restricted share units under the RSU Scheme (the "Award(s)") gives a participant in the RSU Scheme a conditional right when the Award vests to obtain either Shares or an equivalent value in cash with reference to the market value of the Shares on or about the date of vesting, as determined by the Board in its absolute discretion. An Award may include, if so specified by the Board in its entire discretion, cash and non-cash income, dividends or distributions and/or the sale proceeds of non-cash and non-scrip distributions in respect of those Shares from the date that the Award is granted to the date that it vests.

Participants of the RSU Scheme (the "RSU Participants") include the directors, senior management and employees of the Group and any other persons as the Board may deem appropriate.

Subject to any early termination as may be determined by the Board and Shareholders, the RSU Scheme shall be valid and effective for the period of eight years commencing on the date of adoption (the "Term of the RSU Scheme"), after which no further Awards will be granted, but the provisions of the RSU Scheme shall in all other respects remain in full force and effect and Awards that are granted during the Term of the RSU Scheme may continue to be exercisable in accordance with their terms of issue.

On and subject to the terms of the RSU Scheme and the terms and conditions that the Board and/or the CEO (as the case may be) imposes, the Board and the CEO shall be entitled at any time during the term of the RSU Scheme to make a grant to any RSU Participant as the Board or the CEO may in its respective absolute discretion determine. The amount of an Award may be determined at the sole and absolute discretion of the Board and the CEO (as the case may be) and may differ among selected Participants.

No Award shall be granted pursuant to the RSU Scheme if as a result of such grant (assumed accepted), the aggregate number of Shares (being in a board lot or an integral multiple thereof) (or, where cash is awarded in lieu of Shares, the aggregate number of Shares as are equivalent to the amount of cash so awarded) underlying all grants made pursuant to the RSU Scheme (excluding Awards that have lapsed or been cancelled in accordance with the rules of the RSU Scheme) will exceed in total 31,918,285 Shares (the "RSU Scheme Limit") (which have been reserved by the Company), representing approximately 2.8% of the total issued share capital of the Company as at the date of this annual report.

The Company may appoint a professional Trustee (the "RSU Trustee") to assist with the administration and vesting of RSUs granted pursuant to the RSU Scheme.

MAOYAN ENTERTAINMENT / Annual Report 2020 37

Directors' Report

Subject to the execution of documents by the grantee, the RSUs which have vested shall be satisfied at the Board's or the CEO's absolute discretion.

The RSU Scheme may be terminated at any time prior to the expiry of its term by the Board and Shareholders provided that the Company shall protect all subsisting rights of all grantees hereunder, including the repayment of consideration or transfer price payable under the RSU Scheme. In this event no further Awards shall be granted after the RSU Scheme is terminated but in all other respects the provisions of the RSU Scheme shall remain in full force and effect. All RSUs granted prior to such termination and not vested on the date of termination shall remain valid.

The award shares granted by the Company for the year ended December 31, 2020 are as follows:

			Closing
			price
		Total	immediately	Outstanding					Outstanding
		amount of	prior	as of	Granted	Vested	Lapsed	Cancelled	as of
	Date of	award shares	to grant	January 1,	during	during	during	during	December 31,
Category	grant	granted	(HK$)	2020	the period	the period	the period	the period	2020

Employee	2019/5/2	655,425	16.1000	655,425	0	0	0	0	655,425
	2019/10/8	3,336,336	12.0200	3,336,336	0	767,356	0	0	2,568,980
	2019/11/1	729,200	11.3200	729,200	0	0	0	100,000	629,200
	2020/4/29	8,608,779	10.3200	0	8,608,779	0	0	648,368	7,960,411

Total				4,720,961	8,608,779	767,356	0	748,368	11,814,016

38 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN SECURITIES

As at December 31, 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	27.52
	corporations
		Short Position	158,743,072	13.97
Ms. Wang Jian	Beneficial owner	Long Position	450,000	0.04

Notes:

As at December 31, 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 December 31, 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 Holdings as to approximately 42.71% 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 December 31, 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.

MAOYAN ENTERTAINMENT / Annual Report 2020 39

Directors' Report

SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES

As at December 31, 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 share
Name of Substantial		Nature of		capital of the
Shareholders	Capacity	Interest	No. of Shares	Company
				(%)

Vibrant Wide Limited	Beneficial owner	Long Position	119,236,553	10.49
		Short Position	158,743,072	13.97
Hong Kong Pictures International	Beneficial owner	Long position	193,486,220	17.03
Limited
Inspired Elite Investments Limited1	Beneficial owner	Long position	82,693,975	7.28
Meituan1	Interest in a controlled	Long position	82,693,975	7.28
	corporation
Crown Holdings Asia Limited1	Interest in a controlled	Long position	82,693,975	7.28
	corporation
Songtao Limited1	Interest in a controlled	Long position	82,693,975	7.28
	corporation
TMF (Cayman) Ltd.1	Trustee	Long position	82,693,975	7.28
Wang Xing1	Interest in a controlled	Long position	82,693,975	7.28
	corporation
Image Flag Investment (HK) Limited2	Beneficial owner	Long position	157,169,260	13.83
Tencent2	Interest in a controlled	Long position	157,169,260	13.83
	corporation
Weying (BVI) Limited	Beneficial owner	Long position	110,198,429	9.70
Interstellar Investment Ltd.3	Beneficial owner	Long position	66,127,317	5.82
NottingHill Investment Ltd.3	Interest in a controlled	Long position	66,127,317	5.82
	corporation
FountainVest China Capital Partners	Interest in a controlled	Long position	66,127,317	5.82
Fund III, L.P.3	corporation
FountainVest China Capital Partners	Interest in a controlled	Long position	66,127,317	5.82
GP3 Ltd.3	corporation

40 MAOYAN ENTERTAINMENT / Annual Report 2020

Directors' Report

Notes:

Inspired Elite Investments Limited is wholly-owned by Meituan, which is owned as to 39.18% by Crown Holdings Asia Limited, which is in turn wholly-owned by Songtao Limited. Songtao Limited is in turn wholly-owned by TMF (Cayman) Ltd. and in turn wholly-owned by Mr. WANG Xing. Therefore, Meituan, 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. Therefore, Tencent 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 December 31, 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.

DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES

Save as disclosed under the section headed "Employee Incentive Scheme" above, at no time during the year ended December 31, 2020 were rights to acquire benefits by means of the acquisition of Shares in or debentures of the Company granted to any Director or their respective spouse or children under 18 years of age, or were any such rights exercised by them; or was the Company or any of its subsidiaries or any of its holding companies or any of subsidiaries of its holding companies a party to any arrangement to enable the Directors, or their respective spouse or children under 18 years of age, to acquire such rights in any other body corporate.

CONTRACTS WITH CONTROLLING SHAREHOLDERS

So far as the Directors or the chief executive of the Company were aware, the Company did not have any controlling shareholder for the year ended December 31, 2020.

EMPLOYEE RETIREMENT BENEFITS

Particulars of the employee retirement benefits of the Group are set out in Note 9 to the audited consolidated financial statements.

MAOYAN ENTERTAINMENT / Annual Report 2020 41

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SUFFICIENCY OF PUBLIC FLOAT

The Stock Exchange has granted the Company a waiver from strict compliance with the requirements of Rule 8.08(1)(a) of the Listing Rules. Based on the information that is publicly available to the Company and to the best knowledge and information of the Directors, as at the date of this Annual Report, the number of Shares in public hands of the total issued share capital of the Company satisfies the minimum percentage prescribed in the conditions imposed in the waiver granted by the Stock Exchange from strict compliance with Rule 8.08(1) of the Listing Rules.

CONNECTED TRANSACTIONS

Details of our Group's continuing connected transactions during the Reporting Period are set out as follows:

Continuing Connected Transactions with the Enlight Media Group

Non-Exempt Continuing Connected Transactions

As Enlight Media is an associate of Mr. Wang Changtian who is a non-executive Director and a substantial Shareholder of the Company, the transactions with Enlight Media constitute connected transactions of the Company.

1. Enlight Movie and TV series Production Cooperation Framework Agreement

We entered into a movie and TV series production cooperation framework agreement with Enlight Media (for itself and on behalf of its subsidiaries (the "Enlight Media Group")) (the "Enlight Movie and TV series Production Cooperation Framework Agreement") on December 10, 2018, pursuant to which we and the Enlight Media Group agreed to make joint investments in production of movies and TV series (for the avoidance of doubt, in relation to this agreement, TV series refers to all audio and/or video programs, whether played through TV stations, websites, mobile applications or other channels). Forms of cooperation under the Enlight Movie and TV series Production Cooperation Framework Agreement include but are not limited to the following:

our Group and the Enlight Media Group will enter into an investment agreement with third party producers of the same movie or TV series; and
either party (as a co-producer) will enter into an investment agreement with the other party (as a lead producer) to purchase a certain percentage of investment amount.

The aforementioned cooperation shall exclude any transactions which involve the formation of a joint venture entity in connection with or for the purpose of the joint investment in production of movies and TV series.

The initial term of the Enlight Movie and TV series Production Cooperation Framework Agreement has commenced on the Listing Date and will end on December 31, 2021, subject to renewal upon the mutual agreement of both parties.

The annual cap for the connected transaction for the year ended December 31, 2020 was RMB185.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB16.0 million.

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2. Enlight Movie and TV series Promotion and Distribution Framework Agreement

2(a). Provision of Movie and TV series Promotion and Distribution Services by Our Group to the Enlight Media Group

We entered into a movie and TV series promotion and distribution framework agreement with Enlight Media (for itself and on behalf of its subsidiaries) (the "Enlight Movie and TV series Promotion and Distribution Framework Agreement") on December 10, 2018, pursuant to which our Group will provide movie and TV series (for the avoidance of doubt, in relation to this agreement, TV series refers to all audio and/or video programs, whether played through TV stations, websites, mobile applications or other channels) promotion and distribution services to the Enlight Media Group, and service fees will be paid to us in respect of such services.

Movies and TV series promotion services: we will plan and coordinate various marketing and promotional activities to optimize the performance of movies and TV series, including but not limited to, conducting marketing and publicity campaigns as well as organizing fans gatherings and road shows.
Movies and TV series distribution services: we will coordinate the distribution of marketing materials to cinemas and TV stations, configure marketing strategies and release plans, monitor box office performance and market feedback of movies and TV series.

The initial term of the Enlight Movie and TV series Promotion and Distribution Framework Agreement has commenced on the Listing Date and will end on December 31, 2021, subject to renewal upon the mutual agreement of both parties.

The annual cap for the connected transaction for the year ended December 31, 2020 was RMB290.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB31.1 million.

2(b). Provision of Movie and TV series Promotion and Distribution Services by the Enlight Media Group to Our Group

Pursuant to the Enlight Movie and TV series Promotion and Distribution Framework Agreement, the Enlight Media Group will also provide movie and TV series (for the avoidance of doubt, in relation to this agreement, TV series refers to all audio and/or video programs, whether played through TV stations, websites, mobile applications or other channels) promotion and distribution services to our Group, and we will pay service fees to the Enlight Media Group. The principal terms are substantially the same as the terms on which we provide movie and TV series promotion and distribution services to the Enlight Media Group.

The annual cap for the connected transaction for the year ended December 31, 2020 was RMB80.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB0.0 million.

MAOYAN ENTERTAINMENT / Annual Report 2020 43

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3. Enlight Business Collaboration and Services Framework Agreement

We entered into a business collaboration and services framework agreement with Enlight Media (for itself and on behalf of its subsidiaries) (the "Enlight Business Collaboration and Services Framework Agreement") on December 10, 2018, pursuant to which our Group and the Enlight Media Group will engage in the following collaboration from time to time.

Provision of prepaid card and voucher: the Enlight Media Group will purchase prepaid card and voucher from us;
Provision of advertising services: we will provide advertising services to the Enlight Media Group, and Enlight Media Group will pay service fees for such advertisement services;
Purchase of video display services: the Enlight Media Group will display movies and videos which are legally owned by us or movies and videos which we have the right to display, on its platform as we request;
Purchase of media materials: our Group will purchase certain media materials (e.g. customized posters, short videos and other promotional materials) from the Enlight Media Group that will be used in our advertising business and publicity activities during the movie and TV series distribution and promotion process; and
Purchase of other forms of advertisement resources: our Group will purchase other forms of advertisement resources to be used in our advertising business and publicity activities from the Enlight Media Group. For example, we started to engage online key opinion leaders or artists managed by the Enlight Media Group to attend our publicity activities since the second half of 2018.

The initial term of the Enlight Business Collaboration and Services Framework Agreement has commenced on the Listing Date and will end on December 31, 2021, subject to renewal upon the mutual agreement of both parties.

The annual cap for the connected transaction of provision by the Group of products and services to Enlight Media Group for the year ended December 31, 2020 was RMB46.5 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB2.2 million.

The annual cap for the connected transaction of provision by Enlight Media Group of products and services to the Group for the year ended December 31, 2020 was RMB13.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB0.02 million.

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Continuing Connected Transaction with the Weying Group

Non-exempt continuing connected transaction

As Weying (BVI) Limited is a substantial Shareholder of the Company, the transactions with Weying (BVI) Limited constitute connected transactions of the Company. From June 30, 2020, Weying (BVI) Limited holds less than 10% issued share capital of the Company, thus it ceased to be a substantial shareholder of the Company, and therefore the transactions with Weying (BVI) Limited do not constitute connected transactions of the Company.

4. Weying Business Collaboration and Services Framework Agreement

We entered into a business collaboration and services framework agreement with Weying (BVI) Limited (for itself and on behalf of its associates (the "Weying Group")) (the "Weying Business Collaboration and Services Framework Agreement") on January 9, 2019, pursuant to which our Group will provide the following products and services to the Weying Group from time to time.

Settlement of prepaid card and voucher issued by the Weying Group: The Weying Group issued a number of prepaid card and voucher to its customers before its business integration with our Group in September 2017. As the result of the business integration, the Weying Group injected Beijing Weige Shidai into our Group and we agreed to provide movie ticketing services to the holders of prepaid card and voucher issued by the Weying Group. The Weying Group will reimburse us for the costs we incur when providing such services;
Provision of advertising services: we will provide online advertising services on our platform and in-movie advertisement placements to the Weying Group, and the Weying Group will, in return, pay for such advertisement placements;
Provision of entertainment event ticketing services: our Group will provide ticketing services to the Weying Group, the event organizer, for service fees; and
Provision of sports ticketing access: our Group will provide sports ticketing access services to the Weying Group for service fees.

The initial term of the Weying Business Collaboration and Services Framework Agreement has commenced on the Listing Date and will end on December 31, 2021, and can be renewed upon its expiry as agreed by relevant parties to the agreement.

The annual cap for the connected transaction for the year ended December 31, 2020 was RMB5.0 million, and the actual transaction amount for the six months ended June 30, 2020 was approximately RMB0.1 million.

MAOYAN ENTERTAINMENT / Annual Report 2020 45

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Continuing Connected Transactions with the Represented Tencent Group

Non-exempt continuing connected transactions

As Tencent is a substantial Shareholder of the Company, the transactions with the Represented Tencent Group constitute connected transactions of the Company.

5. Tencent Movie and TV series Promotion and Distribution Framework Agreement

We entered into a movie and TV series promotion and distribution framework agreement with Tencent Computer (for itself and on behalf of its group members, excluding China Literature Limited and its subsidiaries, and Tencent Music Entertainment Group and its subsidiaries, (the "Represented Tencent Group")) (the "Tencent Movie and TV series Promotion and Distribution Framework Agreement") on January 9, 2019, pursuant to which we will provide movie and TV series (for the avoidance of doubt, in relation to this agreement, TV series refers to all audio and/or video programs, whether played through TV stations, websites, mobile applications or other channels) promotion and distribution services to the Represented Tencent Group, and service fees will be paid to us in respect of such services.

The principal terms of the Tencent Movie and TV series Promotion and Distribution Framework Agreement, the reason for this transaction and the pricing policies of this transaction are substantially the same as those of the provision of movie and TV series promotion and distribution services by our Group to the Enlight Media Group as provided in the Enlight Movie and TV series Promotion and Distribution Framework Agreement.

On March 24, 2020, the Board resolved to revise the scope of service under the Tencent Movie and TV series Promotion and Distribution Framework Agreement with Tencent Computer (for itself and on behalf of the Represented Tencent Group) by entering into the Supplemental Agreement. Pursuant to the Supplemental Agreement, the Represented Tencent Group will provide movie and TV series promotion and distribution services to the Company, and service fees will be payable by the Company to the Represented Tencent Group for such service. For details of the supplementary agreement, please refer to the announcement published by the Company on March 24, 2020.

The annual cap for the connected transaction for the provision of movie and TV series promotion and distribution services by the Group to the Represented Tencent Group for the year ended December 31, 2020 was RMB13.2 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB11.3 million.

The annual cap for the connected transaction for the provision of movie and TV series promotion and distribution services by the Represented Tencent Group to the Group for the year ended December 31, 2020 was RMB50.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB0.0 million.

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Payment Services Cooperation Framework Agreement
We entered into a payment services cooperation framework agreement (the "Payment Services Cooperation Framework Agreement") with Tencent Computer (for itself and on behalf of the Represented Tencent Group) on January 9, 2019, pursuant to which the Represented Tencent Group will provide us with payment services through its payment channels so as to enable our users to conduct online transactions and we will pay service commissions to the Represented Tencent Group in respect of such services.
The initial term of the Payment Services Cooperation Framework Agreement has commenced on the Listing Date and will end on December 31, 2021, subject to renewal upon the mutual agreement of both parties.
The annual cap for the connected transaction for the year ended December 31, 2020 was RMB67.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB21.4 million.
Cloud Services and Technical Services Framework Agreement
We entered into a cloud services and technical services framework agreement (the "Cloud Services and Technical Services Framework Agreement") with Tencent Computer (for itself and on behalf of the Represented Tencent Group) on January 9, 2019, pursuant to which the Represented Tencent Group will provide cloud services and other technical services to us for service fees. Cloud services and other technical services include but not limited to provision of cloud services, cloud storage, technical support related to cloud services, and domain name resolution services.
The initial term of the Cloud Services and Technical Services Framework Agreement has commenced on the Listing Date and will end on December 31, 2021, subject to renewal upon the mutual agreement of both parties.
The annual cap for the connected transaction for the year ended December 31, 2020 was RMB66.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB10.1 million.
Tencent Business Collaboration and Services Framework Agreement
We entered into a business collaboration and services framework agreement with Tencent Computer (for itself and on behalf of the Represented Tencent Group) (the "Tencent Business Collaboration and Services Framework Agreement") on January 9, 2019, pursuant to which our Group and the Represented Tencent Group will engage in the following collaboration from time to time.
- Provision of prepaid card and voucher: the Represented Tencent Group will purchase prepaid card and voucher from us;
- Licensing of broadcasting rights: our Group will license the broadcasting rights of entertainment content, including movies, concerts, live shows and other entertainment events, to the Represented Tencent Group for a licensing fee;

MAOYAN ENTERTAINMENT / Annual Report 2020 47

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Provision of advertising services: we will provide advertising services to the Represented Tencent Group, and the Represented Tencent Group will pay service fees for such advertisement services;
Provision of online entertainment event ticketing services: our Group will provide online ticketing services to the Represented Tencent Group for service fees;
Purchase of advertising services: the Represented Tencent Group will provide advertising services to us for service fees; and
Purchase of other forms of advertisement resources: our Group will purchase other forms of advertisement resources to be used in our advertising business and publicity activities from the Represented Tencent Group. For example, we will engage online KOLs or artists managed by the Represented Tencent Group to attend our publicity activities.

The initial term of the Tencent Business Collaboration and Services Framework Agreement has commenced on the Listing Date and will end on December 31, 2021, subject to renewal upon the mutual agreement of both parties.

The annual cap for the connected transaction of provision by the Group of products and services to the Represented Tencent Group for the year ended December 31, 2020 was RMB160.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB11.8 million.

The annual cap for the connected transaction of provision by the Represented Tencent Group of products and services to the Group for the year ended December 31, 2020 was RMB24.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB0.0 million.

9. Tencent Entertainment Content Production Cooperation Framework Agreement

We entered into a entertainment content production cooperation framework agreement with Tencent Computer (for itself and on behalf of the Represented Tencent Group) (the "Tencent Entertainment Content Production Cooperation Framework Agreement") on January 9, 2019, pursuant to which our Company (for itself and on behalf of our subsidiaries) and the Represented Tencent Group agreed to cooperate in making joint investments in the production of several types of entertainment content, including but not limited to, movies, TV series (for the avoidance of doubt, in relation to this agreement, TV series refers to all audio and/or video programs, whether played through TV stations, websites, mobile applications or other channels), concerts and live shows. Forms of cooperation under the Tencent Entertainment Content Production Cooperation Framework Agreement include but are not limited to the following:

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our Group and the Represented Tencent Group will enter into an investment agreement with third-party producers of the same entertainment content, respectively; and
either party (as a co-producer) will enter into an investment agreement with the other party (as a lead producer) to purchase a certain percentage of investment amounts.

The initial term of the Tencent Entertainment Content Cooperation Framework Agreement has commenced on the Listing Date and will end on December 31, 2021, subject to renewal upon the mutual agreement of both parties.

The annual cap for the connected transaction for the year ended December 31, 2020 was RMB286.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB26.6 million.

IV. Continuing Connected Transaction with the Tencent Music Technology

Non-exempt continuing connected transaction

As TME is a subsidiary of Tencent, the transactions contemplated under the Music Copyright Licensing Cooperation Framework Agreement constitute continuing connected transactions of the Company.

10. Music Copyright Licensing Cooperation Framework Agreement

On December 16, 2020, we entered into the Music Copyright Licensing Cooperation Framework Agreement with Tencent Music Technology (for itself and on behalf of members of TME Group), pursuant to which the Group agreed to license its musical compositions, audio recordings, video recordings and movie-like works (well created music videos), including single music and original sound tapes (i.e. theme songs, ending songs, episodes, promotion songs and soundtracks, and the music videos of video and audio works including movies, TV series, online series and online movies, collectively the "OST") (collectively the "Musical Works"), of which the Group has copyrights and related rights, to TME Group, and TME Group shall pay license fees to the Group. Members of TME Group, or its authorized third party, are licensed to promote, use, sub-license and have right to defend the above-mentioned Musical Works.

The initial term of the Music Copyright Licensing Cooperation Framework Agreement with Tencent Music Technology started on December 16, 2020 and will end on December 31, 2022, which can be extended by a written agreement between the two parties.

The annual cap for the connected transaction for the year ended December 31, 2020 was RMB10.0 million, and the actual transaction amount for the year ended December 31, 2020 was approximately RMB4.5 million.

MAOYAN ENTERTAINMENT / Annual Report 2020 49

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ANNUAL REVIEW BY THE INDEPENDENT NON-EXECUTIVE DIRECTORS AND THE AUDITOR

The independent non-executive Directors reviewed the aforesaid continuing connected transactions, and confirmed that these continuing connected transactions:

were entered into in the ordinary and usual course of business of the Group;
were either on normal commercial terms or better; and
were conducted in accordance with the relevant agreements governing them on terms that are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The auditor of the Company performed certain agreed-upon procedures regarding the continuing connected transactions entered into by the Group during the year ended 31 December 2020, in accordance with the Hong Kong Standard on Assurance Engagement 3000 (Revised) "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information" and with reference to Practice Note 740 "Auditor's Letter on Continuing Connected Transactions under the Hong Kong Listing Rules" issued by the HKICPA, as set out above and confirms that:

nothing has come to their attention that causes the auditor to believe that the disclosed continuing connected transactions have not been approved by the Board;
for transactions involving the provision of goods or services by the Group, nothing has come to their attention that causes the auditor to believe that the transactions were not, in all material respects, in accordance with the pricing policies of the Group;
nothing has come to their attention that causes the auditor to believe that the transactions were not entered into, in all material respects, in accordance with the relevant agreements governing such transactions; and
nothing has come to their attention that causes the auditor to believe that the disclosed continuing connected transactions have exceeded the annual cap as set by the Company.

Saved as disclosed in this annual report, none of the related party transactions as disclosed in note 34 to the audited consolidated financial statements constituted as connected transactions or continuing connected transactions as defined in Chapter 14A of the Listing Rules and in compliance with the disclosure requirements under Chapter 14A of the Listing Rules.

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CONTRACTUAL ARRANGEMENTS

Due to regulatory restrictions on foreign ownership in Relevant Businesses in the PRC, we conduct a portion of our business through our Consolidated Affiliated Entities in the PRC. We do not hold any equity interests in our Consolidated Affiliated Entities which are held by Enlight Holdings, Enlight Media, Shanghai Sankuai Technology, Beijing Shiji Weying and Linzhi Lixin and Historical ESOP Platforms. The Contractual Arrangements enable us to

receive substantially all of the economic benefit from our Consolidated Affiliated Entities in consideration for the services provided by Maoyan Technology to the Consolidated Affiliated Entities; (ii) exercise effective control over our Consolidated Affiliated Entities; and (iii) hold an exclusive option to purchase all or part of the equity interests in Consolidated Affiliated Entities when and to the extent permitted by PRC laws.

The following simplified diagram illustrates the flow of economic benefits from our Consolidated Affiliated Entities to our Group stipulated under the Contractual Arrangements as at December 31, 2020:

The Company

100%

Offshore

Onshore

Registered Shareholders

100%

Management and Consultation Services

WFOE

Tianjin Maoyan Weying

Service Fees

100%

49%

51%

100%

Tianjin Maoyan

Shanghai

Maoyan

Ruihai

Beijing Weige

Jiangsu

Zhejiang

Xiamen

Maoyan Live JV

Maoyan

Maoyan Pictures

Beijing Maoyan

Tianjin Meimao

Entertainment

Enterprise

Fangyuan

Shidai

Maoyan

Maoying

Pictures

100%

Shanghai

100%

Maoyan

Entertainment

Network

Hangzhou

Xinjiang

Maoyan

Soushi

Network

100%

Zhejiang

Haoying

Notes:

"" denotes direct legal and beneficial ownership in the equity interest.

"" denotes contractual relationship.

Maoyan Enterprise is an investment holding company which holds, directly or indirectly, minority equity investments, amounted to approximately RMB67.3 million, in certain companies ("Investee Companies") which engage in businesses subject to foreign investment prohibition or restriction, including value-added telecommunication service, radio and television program production and internet audio-visual programs. The investments are passive and are non-controlling interests that are classified as investments accounted for using the equity method and financial assets at fair value through profit or loss/other comprehensive income. As advised by our PRC legal advisor, foreign investors are either prohibited or restricted from holding equity interest in companies conducting such businesses. The financial results of the Investee Companies are not consolidated into our financial statements and do not form part of our Group, and our minority investment interests in the Investee Companies are immaterial to our financial and operational results.

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On January 13, 2020, Tianjin Maoyan Weying established a wholly-owned subsidiary, Zhejiang Maoyan Pictures Co., Ltd ("Zhejiang Maoyan"), which has become a Consolidated Affiliated Entity since its incorporation. Zhejiang Maoyan will conduct the business of movie production and distribution. It has obtained the requisite license for conducting the business of radio and television program production. Pursuant to the Contractual Arrangements, we will receive its economic benefits and consolidate its financial results into our consolidated financial statements.
On March 6, 2020, Tianjin Maoyan Entertainment established a wholly-owned subsidiary, Shanghai Maoyan Entertainment Culture Co., Ltd (上海貓眼文化娛樂有限公司) ("Shanghai Maoyan Entertainment"), which has become a Consolidated Affiliated Entity since its incorporation. Shanghai Maoyan Entertainment will conduct the business of commercial performance and entertainment ticketing service. It is in the process of applying for the requisite license for conducting commercial performance. Pursuant to the Contractual Arrangements, we will receive its economic benefits and consolidate its financial results into our consolidated financial statements.
On March 27, 2020, Tianjin Maoyan Weying established a wholly-owned subsidiary, Jiangsu Maoyan Cultural Media Co., Ltd ("Jiangsu Maoyan"), which has become a Consolidated Affiliated Entity since its incorporation. Jiangsu Maoyan will conduct the business of online movie production and distribution. It has obtained the requisite license for conducting the business of radio and television program production. Pursuant to the Contractual Arrangements, we will receive its economic benefits and consolidate its financial results into our consolidated financial statements.
On July 29, 2020, Tianjin Maoyan Weying established a wholly-owned subsidiary, Xiamen Maoying Cultural Media Co., Ltd ("Xiamen Maoying"), which has become a Consolidated Affiliated Entity since its incorporation. Xiamen Maoying will conduct the business of movie and TV series investment. Pursuant to the Contractual Arrangements, we will receive its economic benefits and consolidate its financial results into our consolidated financial statements.

SUMMARY OF MAJOR TERMS UNDER THE CONTRACTUAL ARRANGEMENTS

A description of each of the specific agreements that comprise the Contractual Arrangements is set out below.

Exclusive Consultation and Service Agreement

Pursuant to the amended and restated exclusive consultation and service agreement dated August 9, 2018 between Tianjin Maoyan Weying and the WFOE (the "Exclusive Consultation and Service Agreement"), Tianjin Maoyan Weying agreed to engage the WFOE as its exclusive provider of technical support, consultation and other services, including the following services:

providing information consultation services in respect of the Consolidated Affiliated Entities' business;
providing business management consultation;
providing technical support and professional training services to relevant staff of the Consolidated Affiliated
Entities;
providing order management and customer services;
providing marketing and promotion services;
assisting Consolidated Affiliated Entities in consultancy, collection and research of technology and market information (excluding market research business that wholly foreign owned enterprises are prohibited from conducting under PRC laws);

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design, development, maintenance and updating of software in respect of the Consolidated Affiliated
Entities' business;
license and authorization of use of the software, trademarks, domain names and various other types of intellectual properties owned by the WFOE;
design, installation, daily management, maintenance and updating of network systems, hardware and database;
maintenance of the local area network of the Consolidated Affiliated Entities' business and anti-virus and security management of the network of the Consolidated Affiliated Entities' business;
assisting Consolidated Affiliated Entities for transfer, leasing and disposal of equipment and properties;
providing on-site services upon request from the Consolidated Affiliated Entities, arranging engineers to provide on-site assistance for conferences and other relevant technical support and consultation services; and
other relevant services requested by the Consolidated Affiliated Entities from time to time to the extent permitted under PRC laws.

Under the Exclusive Consultation and Service Agreement, the service fee shall consist of 100% of the total consolidated profit of the Consolidated Affiliated Entities, after deduction of any accumulated deficit of the Consolidated Affiliated Entities in respect of the preceding financial year(s), operating costs, expenses, taxes and other statutory contributions. Notwithstanding the foregoing, the WFOE may adjust the scope and amount of service fees according to PRC tax law and tax practices, and Tianjin Maoyan Weying will accept such adjustments. The WFOE shall calculate the service fees on a monthly basis and issue a corresponding invoice to Tianjin Maoyan Weying. Tianjin Maoyan Weying shall make payment to the bank account designated by the WFOE within 10 days upon receipt of the invoice and send payment certificates to the WFOE.

In addition, absent the prior written consent of the WFOE, during the term of the Exclusive Consultation and Service Agreement, with respect to the services subject to the Exclusive Consultation and Service Agreement and other matters, the Consolidated Affiliated Entities shall not directly or indirectly accept the same or any similar services provided by any third party, establish cooperation relationships similar to that formed by the Exclusive Consultation and Service Agreement with any third party, or in its own initiative perform any acts which might affect the confidentiality of the technology and secrets involved in the service provided by the WFOE or the effectiveness and efficiency of the technical supports or allow any third party to do the same. The WFOE may appoint other parties, who may enter into certain agreements with the Consolidated Affiliated Entities, to provide the Consolidated Affiliated Entities with the services under the Exclusive Consultation and Service Agreement.

The Exclusive Consultation and Service Agreement also provide that the WFOE has the exclusive proprietary rights to and relevant interests in any and all intellectual property rights developed or created by the Consolidated Affiliated Entities during the performance of the Exclusive Consultation and Service Agreement.

The validity period of the Exclusive Consultation and Service Agreement shall start from the execution date and it shall remain effective for 20 years unless terminated (a) by agreement between the WFOE and Tianjin Maoyan Weying; or (b) by a written notice from the WFOE at least 30 days before termination. Tianjin Maoyan Weying is not entitled to unilaterally terminate the agreement. Upon expiration of the agreement and if the WFOE intends to extend it, Tianjin Maoyan Weying shall accept the extension without conditions.

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Exclusive Option Agreement

Pursuant to the amended and restated exclusive equity transfer option agreement dated August 9, 2018 among Tianjin Maoyan Weying, the WFOE and the Registered Shareholders (the "Exclusive Option Agreement"), the WFOE has been granted an irrevocable, unconditional and exclusive right to require the Registered Shareholders to transfer any or all their equity interests in Tianjin Maoyan Weying to the WFOE and/or a third party designated by it, in whole or in part at any time and from time to time. Tianjin Maoyan Weying and the Registered Shareholders, among other things, have covenanted that:

without the prior written consent of the WFOE, they shall not in any manner supplement, change or amend the constitutional documents of the Consolidated Affiliated Entities, increase or decrease their registered capital, or change the structure of their registered capital in other manner;
they shall maintain the Consolidated Affiliated Entities' corporate existence in accordance with good financial and business standards and practices, obtain and maintain all necessary government licenses and permits by prudently and effectively operating their business and handling their affairs;
without the prior written consent of the WFOE, they shall not and shall procure its subsidiaries not, at any time following the date when the Exclusive Option Agreement came into effect sell, transfer, pledge or dispose of in any manner any assets of more than RMB5,000,000, business, operation rights or legitimate interest in the income of Tianjin Maoyan Weying;
without the prior written consent of the WFOE, the Consolidated Affiliated Entities shall not incur, inherit, guarantee or assume any debt, except for payables incurred in the ordinary course of business not generated from loans;
the Consolidated Affiliated Entities shall always operate all of their businesses during the ordinary course of business to maintain their asset value and refrain from any action/omission that may adversely affect their operating status and asset value;
without the prior written consent of the WFOE, they shall not cause the Consolidated Affiliated Entities to execute any material contract with a value of more than RMB5,000,000, except the contracts executed in the ordinary course of business;
without the prior written consent of the WFOE, they shall not cause the Consolidated Affiliated Entities to provide any person with any loan or credit, or guarantee for any third-party debt;
they shall provide the WFOE with information on the Consolidated Affiliated Entities' business operations and financial condition at the request of the WFOE;

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if requested by the WFOE, they shall procure and maintain insurance in respect of the Consolidated
Affiliated Entities' assets and business from an insurance carrier acceptable to the WFOE, at an amount and type of coverage typical for companies that operate similar businesses;
without the prior written consent of the WFOE, they shall not cause or permit the Consolidated Affiliated
Entities to merge, consolidate with, acquire or invest in any person;
they shall immediately notify the WFOE of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to the Consolidated Affiliated Entities' assets, business or revenue, as well as any circumstances which may adversely affect the Consolidated Affiliated Entities' existence, business operation, financial situation, assets or goodwill;
to maintain the ownership by the Consolidated Affiliated Entities of all of their assets, they shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defences against all claims;
without the prior written consent of the WFOE, the Consolidated Affiliated Entities shall not in any manner distribute profits or dividends to their shareholders, provided that upon the request of the WFOE, the Consolidated Affiliated Entities shall immediately distribute all distributable profits to their shareholders;
at the request of the WFOE, they shall appoint any persons designated by the WFOE as the directors, supervisors and senior management of the Consolidated Affiliated Entities, replace or remove the directors, supervisors and senior management of the Consolidated Affiliated Entities, and go through all relevant resolution procedures and filings;
without the written consent of the WFOE, the Consolidated Affiliated Entities shall not engage in any business in competition with the WFOE or its affiliates;
unless otherwise mandatorily required by PRC laws, the Consolidated Affiliated Entities shall not be dissolved or liquidated without prior written consent by the WFOE;
if the exercise of the rights by the WFOE is obstructed due to the Consolidated Affiliated Entities' or any of their shareholders' non-compliance of their tax duties under applicable laws, the WFOE shall have the right to require them to fulfill such tax duties;
in the event of bankruptcy, dissolution, liquidation, death or loss of legal capacity (if applicable) of any of Consolidated Affiliated Entities' shareholders, or other circumstances that may affect the Consolidated Affiliated Entities' equity interests, any successor of an existing shareholder shall be deemed to be a party to the Exclusive Option Agreement. The Consolidated Affiliated Entities shall, on or before the day of signing this agreement to make everything properly arranged and signed in order to ensure the documentations, in the event of bankruptcy, dissolution, liquidation, death, incapacity or divorce (if applicable) and any circumstance of their shareholders, will not affect or hinder the fulfillment of the Exclusive Option Agreement. The Exclusive Option Agreement and other contractual arrangements shall prevail any form of agreements relating to disposition of interests in the Consolidated Affiliated Entity unless prior written consent from the WFOE is obtained;

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without the prior written consent of the WFOE, the Consolidated Affiliated Entities will not and shall not assist or permit their shareholders to transfer or otherwise dispose of any option equity or to establish any security interest or other third-party rights on any option equity; and
if signing and performance of the Exclusive Option Agreement and the stock transfer options granted under the Exclusive Option Agreement shall require any third party's consent, permission, waiver, authorization or any governmental agency's approval, license, immunity, registration or filing in accordance with the law, the Consolidated Affiliated Entities shall make every endeavour to help satisfy the above conditions.

In addition, the Registered Shareholders, among other things, have covenanted that:

without the written consent of the WFOE, they shall not sell, transfer, pledge or dispose of in any other manner the legal or beneficial interest in Tianjin Maoyan Weying, or allow the encumbrance thereon of any security interest, except for the Equity Pledge Agreement and the interests prescribed in the Proxy Agreement;
for each exercise of the equity purchase option, they shall cause the shareholders' meeting and/or the board of directors of Tianjin Maoyan Weying to vote on the approval of the transfer of equity interests and any other action requested by the WFOE;
Registered Shareholders whose equity interest has not been transferred shall relinquish the pre-emptive right (if any) it is entitled to in relation to the transfer of equity interest by any other shareholders to the WFOE and/or any entity or individual appointed by the WFOE pursuant to Exclusive Option Agreement;
without the written consent of the WFOE, each of the Registered Shareholders shall not request Tianjin
Maoyan Weying to distribute dividends or profits in any form, propose resolutions in relation to this at a general meeting, or vote to pass such resolutions. In any event, unless decided otherwise by the WFOE, if any Registered Shareholder receives corporate income, profits or dividends from Tianjin Maoyan Weying, they shall pay or transfer the received income, profits, dividends to the WFOE or any party designated by the WFOE to the extent allowed by the PRC laws; and
Registered Shareholders shall also strictly comply with the provisions of the Exclusive Option Agreement between Registered Shareholders, the Consolidated Affiliated Entity and the WFOE, and shall faithfully perform the obligations under such agreements and shall not conduct any act and/or omission which shall affect the validity and enforceability of such agreements. If any Registered Shareholder retains any rights on the equities as in the Equity Pledge Agreement or the Proxy Agreement, it shall not exercise such rights unless instructed in writing by the WFOE.

The validity period of the Exclusive Option Agreement shall start from the execution date and it shall remain effective unless terminated if the entire equity interests held by the Registered Shareholders or their successors or the transferees in Tianjin Maoyan Weying have been transferred to the WFOE or their appointee(s).

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Equity Pledge Agreement

Pursuant to the amended and restated equity pledge agreement dated August 9, 2018 entered into among the WFOE, Tianjin Maoyan Weying and each of the Registered Shareholders (the "Equity Pledge Agreement"), the Registered Shareholders agreed to pledge all their respective equity interests in Tianjin Maoyan Weying that they own, including any interest or dividend paid for the shares, to the WFOE as a security interest to guarantee the performance of contractual obligations and the payment of outstanding debts.

The pledge in respect of Tianjin Maoyan Weying takes effect upon the completion of change of registration with the relevant administration for industry and commerce and shall remain valid until after all the contractual obligations of the Registered Shareholders and Tianjin Maoyan Weying under the relevant Contractual Arrangements have been fully performed and all the outstanding debts of the Registered Shareholders and Tianjin Maoyan Weying under the relevant Contractual Arrangements have been fully paid.

Upon the occurrence and during the continuance of an event of default (as defined in the Equity Pledge Agreement), unless such default is cured within twenty days following the Registered Shareholders or Tianjin Maoyan Weying's receipt of the written notice which requests for the cure of such default, the WFOE shall have the right to exercise all such rights as a secured party under any applicable PRC law and the Equity Pledge Agreement, including without limitations, being paid in priority with the equity interests based on the monetary valuation that such equity interests are converted into or from the proceeds from auction or sale of the equity interest upon written notice to the Registered Shareholders.

The equity pledge registrations under the Equity Pledge Agreement as required by the relevant laws and regulations have been completed in accordance with the Equity Pledge Agreement and PRC laws and regulations.

Proxy Agreement

Pursuant to the amended and restated proxy agreement dated August 9, 2018 entered into among the WFOE, Tianjin Maoyan Weying and the Registered Shareholders (collectively, the "Proxy Agreement"), pursuant to which, each of the Registered Shareholders irrevocably and exclusively appointed the persons designated by the WFOE (including but not limited to Directors of the WFOE's parent company, Maoyan Entertainment, and their successors and liquidators replacing the Directors but excluding those who are non-independent or who may give rise to conflict of interests) as its attorneys-in-fact to exercise on its behalf, any and all right that it has in respect of its equity interests in Tianjin Maoyan Weying, including without limitation:

to propose to convene and to attend shareholders' meetings of Tianjin Maoyan Weying and to execute any and all written resolutions and meeting minutes in the name and on behalf of such shareholder;
to exercise all shareholder's rights and shareholder's voting rights in accordance with law and the constitutional documents of Tianjin Maoyan Weying, including but not limited to the sale, transfer, pledge or disposal of any or all of the equity interests in Tianjin Maoyan Weying;
to nominate, elect, appoint or remove the legal representatives, directors, supervisors, general manager, chief financial officer and other senior management of Tianjin Maoyan Weying;
to supervise business performance, approve annual budget, declare dividends, and consult financial information of Tianjin Maoyan Weying;

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to permit Tianjin Maoyan Weying to submit any registration documents to relevant governmental authorities and to file documents with company registry;
to exercise voting rights on behalf of the shareholders on liquidation of Tianjin Maoyan Weying;
If the act of directors and/or senior management harms the interests of Tianjin Maoyan Weying or its shareholders, to file a shareholder action against such directors and/or senior management or to take other legal actions;
to approve amendments on the articles of association; and
to exercise any other rights granted to shareholders pursuant to Tianjin Maoyan Weying's articles of association or relevant laws and regulations.

On June 30, 2019, NDRC and the MOFCOM issued Order No.25, and promulgated the Special Administrative Measures for Access of Foreign Investment (Negative List) (the "Negative List (2019)") (2019 Edition, which came into force from July 30, 2019). As advised by our PRC Legal Advisor, the Negative List (2019) has cancelled foreign investment restrictions for the performance brokerage business, and according to our communication with the competent culture department of Tianjin, it began to accept applications for performance brokerage licenses for wholly foreign-owned enterprises at the end of 2019. Based on this, the performance brokerage business of Maoyan Live JV, our Consolidated Affiliated Entities, is no longer subject to the limit of not more than 50% foreign investment at the time of its establishment. Accordingly, after seeking the advice of our PRC legal advisor, WFOE has established its wholly-owned subsidiaries, namely Tianjin Maoyan Entertainment and Shanghai Maoyan Entertainment, and will apply for a commercial performance license in accordance with the law and take all internal performance business in the group upon meet legal qualifications. Subject to the COVID-19 pandemic in 2020, the application was delayed and Tianjin Maoyan Entertainment is using its commercial efforts to obtain the commercial performance license. Maoyan Live JV and its subsidiaries will gradually cease operations until it is deregistered.

For the year ended December 31, 2020, save for the release of aforesaid Negative List (2019) and the Special Administration Measures for Access of Foreign Investment (Negative List) (the "Negative List (2020)") (2020 Edition, which came into force from July 23, 2020) and the Company has therefore taken active measures, none of the Contractual Arrangements had been unwound on the basis that none of the restrictions that led to the adoption of the Contractual Arrangements had been removed. As of December 31, 2020, we had not encountered interference or encumbrance from any PRC governing bodies in operating our businesses through our Consolidated Affiliated Entities under the Contractual Arrangements.

The revenue of the Consolidated Affiliated Entities amounted to RMB604 million for the year ended December 31, 2020, representing a decrease of 66.1% from RMB1,781 million for the year ended December 31, 2019. As of December 31, 2020, the total assets of the Consolidated Affiliated Entities amounted to RMB7,220 million, representing approximately 68.1% of the total assets of our Group.

58 MAOYAN ENTERTAINMENT / Annual Report 2020

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Reasons for Adopting the Contractual Arrangements

Foreign investment activities in the PRC are mainly governed by the Catalogue of Encouraged Industries for Foreign Investment (2020 Edition) (the "Catalogue") and the Negative List (2020), which have been promulgated and amended from time to time jointly by the MOFCOM and the NDRC. The Catalogue and the Negative List (2020) divide industries into four categories in terms of foreign investment, namely, "encouraged", "restricted", "prohibited" and "permitted" (the last category of which includes all industries not listed under the "encouraged", "restricted" and "prohibited" categories).

As advised by our PRC legal advisor, our (i) value-added telecommunication services business; (ii) movie distribution; and (iii) radio and television program production conducted by our Consolidated Affiliated Entities are subject to foreign investment restriction or prohibition in accordance with the Catalogue and the Negative List.

In order to maintain our business operations in compliance with the applicable PRC laws and regulations, the Company, as a foreign investor under the current regulatory regime, has adopted the Contractual Arrangements, which allow the Company to exercise control over the business operation of our Consolidated Affiliated Entities and enjoy all the economic interests derived therefrom.

For details of the foreign investment restrictions relating to the Contractual Arrangements, please refer to the sections headed "Contractual Arrangements - PRC Regulatory Background" and "Contractual Arrangements - Qualification Requirements under the FITE Regulations" on pages 270 to 275, and the section headed "Contractual Arrangements - Development in the PRC Legislation on Foreign Investment" on pages 291 to 295 of the Prospectus.

Risks Relating to the Contractual Arrangements

The Company believes the following risks are associated with the Contractual Arrangements:

If the PRC government finds that the agreements that establish the structure for operating our businesses in
China do not comply with applicable PRC laws and regulations, or if these regulations or their interpretation change in the future, we could be subject to severe consequences, including the nullification of the contractual arrangements and the relinquishment of our interest in our Consolidated Affiliated Entities.
Our contractual arrangements may not be as effective in providing operational control as direct ownership.
Tianjin Maoyan Weying or its shareholders may fail to perform their obligations under our contractual arrangements.
We may lose the ability to use and enjoy assets held by our Consolidated Affiliated Entities that are material to our business operations if our Consolidated Affiliated Entities declare bankruptcy or become subject to a dissolution or liquidation proceeding.

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The shareholders and directors of Tianjin Maoyan Weying may have conflicts of interest with us, which may materially and adversely affect our business.
If we exercise the option to acquire equity ownership or assets of Consolidated Affiliated Entities, the ownership or asset transfer may subject us to certain limitations and substantial costs.
Our contractual arrangements may be subject to scrutiny by the PRC tax authorities, and a finding that we owe additional taxes could substantially reduce our profit and the value of the Shareholders' investment.

Further details of these risks are set out in the section headed "Risk Factors - Risks Relating to Our Contractual Arrangement" on pages 59 to 65 of the Prospectus.

The Foreign Investment Law

The Foreign Investment Law (外商投資法) (the "FIL") promulgated by the National People's Congress on March 15, 2019 and Implementation Regulations for Foreign Investment Law promulgated by the State Council of China on December 26, 2019 (the "Implementation Regulations for FIL") have taken effect on January 1, 2020. The FIL replaces the existing laws regulating foreign investments in PRC, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law. The FIL and Implementation Regulations for FIL embody an expected regulatory trend in PRC to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments.

The FIL and Implementation Regulations for FIL do not explicitly stipulate the contractual arrangements as a form of foreign investment. The FIL does not mention concepts including "actual control" and "controlling through contractual arrangements" nor does it specify the regulation on controlling through contractual arrangements. Furthermore, the FIL and Implementation Regulations for FIL do not specifically stipulate rules on the Relevant Businesses. Instead, the FIL and Implementation Regulations for FIL stipulate that "foreign investors invest in PRC through any other methods under laws, administrative regulations, or provisions prescribed by the State Council". In addition, the FIL and Implementation Regulations for FIL do not specify what actions shall be taken with respect to the existing companies with a VIE structure, whether or not these companies are controlled by PRC entities and/or citizens. Therefore, as advised by our PRC Legal Advisor, our Contractual Arrangements are currently not affected by the FIL and Implementation Regulations for FIL.

Nevertheless, there are possibilities that future laws, administrative regulations or provisions of the State Council of PRC may stipulate contractual arrangements as a way of foreign investments, and then whether our Contractual Arrangements will be recognized as foreign investments, whether our Contractual Arrangements will be deemed to be in violation of the foreign investment access requirements and how our Contractual Arrangements will be dealt with are uncertain.

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Our Group has adopted the following measures to ensure the effective operation of our Group with the implementation of the Contractual Arrangements and our compliance with the Contractual Arrangements:

major issues arising from the implementation and compliance with the Contractual Arrangements or any regulatory enquiries from government authorities will be submitted to our Board, if necessary, for review and discussion on an occurrence basis;
our Board will review the overall performance of and compliance with the Contractual Arrangements at least once a year;
our Company will disclose the overall performance of and compliance with the Contractual Arrangements in our annual reports; and
our Company will engage external legal advisors or other professional advisors, if necessary, to assist the Board to review the implementation of the Contractual Arrangements and review the legal compliance of our WFOE and Consolidated Affiliated Entities to deal with specific issues or matters arising from the Contractual Arrangements.

WAIVERS GRANTED BY THE STOCK EXCHANGE

In respect of the Contractual Arrangements, the Company has applied to the Stock Exchange for, and the Stock Exchange has granted to the Company, a waiver from strict compliance with (i) the announcement and independent Shareholders' approval requirements under Rules 14A.04 and 14A.105 of the Listing Rules; and(ii)the requirement of setting an annual cap for the transaction under the Contractual Arrangements under Rule 14A.53 of the Listing Rules, for so long as our Share are listed on the Stock Exchange, subject to the certain conditions as disclosed on pages 253 to 256 of the Prospectus.

Conﬁrmation from Independent Non-executive Directors

The Company's independent non-executive Directors have reviewed the Contractual Arrangements and confirmed that:

the transactions carried out during the year ended December 31, 2020 have been entered into in accordance with the relevant provisions of the Contractual Arrangements;
no dividends or other distributions have been made by the Consolidated Affiliated Entities to the holders of its equity interests which are not otherwise subsequently assigned or transferred to the Group during the year ended December 31, 2020; and
any new contracts entered into, renewed or reproduced between the Group and the Consolidated Affiliated Entities during the year ended December 31, 2020 are fair and reasonable, or advantageous to the Shareholders, so far as the Group is concerned and in the interests of the Company and the Shareholders as a whole.

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Conﬁrmations from the Auditor

The Auditor has confirmed in a letter to the Board that, with respect to the aforesaid Contractual Arrangements:

nothing has come to their attention that causes the Auditor to believe that the disclosed transactions under the Contractual Arrangements have not been approved by the Board;
nothing has come to their attention that causes the Auditor to believe that the transactions were not entered into, in all material respects, in accordance with the relevant agreements under the Contractual Arrangements governing such transactions; and
nothing has come to their attention that causes the Auditor to believe that there were dividends or other distributions declared and/or distributed by our Consolidated Affiliated Entities to the holders of their equity interests which were not otherwise subsequently assigned or transferred to our Group.

AUDIT COMMITTEE

The Audit Committee had reviewed together with the Board the accounting principles and policies adopted by the Group and the audited consolidated financial statements for the year ended December 31, 2020.

AUDITOR

The financial statements of the Group for the year ended December 31, 2020 have been audited by PricewaterhouseCoopers, auditor of the Company, who shall retire and, being eligible, have offered itself for reappointment as auditor at the AGM. The Company has not changed auditor during any of the past three years.

A resolution will be proposed at the AGM to re-appoint PricewaterhouseCoopers as the auditor of the Company and to authorize the Board to re-authorize the executive Director or the management to fix the remuneration of auditor.

By order of the Board

Maoyan Entertainment

Executive Director

ZHENG Zhihao

Hong Kong, March 30, 2021

62 MAOYAN ENTERTAINMENT / Annual Report 2020

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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.

The Board considered that the Company had complied with all applicable code provisions set out in the Corporate Governance Code during the Reporting Period.

COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules as its own code of conduct regarding Directors' securities transactions. Having made specific enquiry of all Directors, each of the Directors has confirmed that he/she has complied with the Model Code during the Reporting Period.

THE BOARD OF DIRECTORS

Board composition

The Board currently comprises one executive Director, seven non-executive Directors and four independent non- executive Directors. The composition of the Board during the Reporting Period and as of the date of this Annual Report is set out as follows:

Executive Director

Mr. Zheng Zhihao (Chief Executive Officer)

Non-Executive Directors

Mr. Wang Changtian1 (Chairman)

Ms. Li Xiaoping

Ms. Wang Jian2

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)

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Independent Non-Executive Directors

Mr. Wang Hua

Mr. Chan Charles Sheung Wai

Mr. Ma Dong (resigned on October 28, 2020)

Mr. Yin Hong (appointed on October 28, 2020)

Mr. Luo Zhenyu (resigned on June 9, 2020)

Ms. Liu Lin (appointed on June 9, 2020)

Notes:

Mr. Wang Changtian is the brother of Ms. Wang Jian.
Ms. Wang Jian is the sister of Mr. Wang Changtian.

The biographical details of the Directors are set out in the section headed "Profiles of Directors and Senior Management" in this Annual Report.

During the Reporting Period, the Board has at all times met the requirements of Rules 3.10(1), 3.10(2) and 3.10A of the Listing Rules relating to the appointment of at least three independent non-executive Directors with at least one independent non-executive Director possessing appropriate professional qualifications, or accounting or related financial management expertise, and independent non-executive Directors representing at least one-third of the Board.

Each of the independent non-executive Director has confirmed his independence pursuant to Rule 3.13 of the Listing Rules and the Company considers each of them to be independent.

Chairman and Chief Executive Officer

The positions of the chairman ("Chairman") and the chief executive officer ("Chief Executive Officer") of the Company are held separately. The role of Chairman is held by Mr. Wang Changtian, and the role of Chief Executive Officer is held by Mr. Zheng Zhihao. The Chairman is responsible for chairing the general meetings and board meetings of the Company, making decision on and guiding the Company for the significant matters in respect of the Company's external affairs and financial planning and the Company's important business activities. The Chief Executive Officer is responsible for operating management and the daily management of Company's business, making decision on the Company's major plan and development and investment proposals, and leading and managing the Company's business with the delegated power.

The division of responsibilities between the Chairman and the Chief Executive Officer is defined and established in writing.

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Board Meetings, Board Committees Meetings and General Meetings

The attendance record of each director at the board meetings, general meetings and board committee meetings held during the Reporting Period is set out in the table below:

		Number of meetings attended/held
	Board	General	Audit	Nomination	Remuneration
Name of directors	meeting	meeting	committee	committee	committee

Executive director
Mr. Zheng Zhihao	8/8	1/1	N/A	2/2	1/1
Non-executive director
Mr. Wang Changtian	8/8	1/1	N/A	N/A	N/A
Ms. Li Xiaoping	7/8	0/1	N/A	N/A	N/A
Ms. Wang Jian	8/8	1/1	N/A	N/A	N/A
Mr. Zhan Weibiao(1)	4/5	0/0	N/A	N/A	N/A
Mr. Cheng Wu(2)	3/3	0/1	N/A	N/A	N/A
Mr. Chen Shaohui	4/8	0/1	N/A	N/A	N/A
Mr. Lin Ning	6/8	0/1	N/A	N/A	N/A
Mr. Tang Lichun, Troy(3)	6/7	0/1	N/A	N/A	N/A
Independent non-executive director
Mr. Wang Hua	8/8	1/1	3/3	2/2	1/1
Mr. Chan Charles Sheung Wai	8/8	1/1	3/3	2/2	N/A
Mr. Ma Dong(4)	5/8	0/1	1/3	N/A	0/0
Mr. Yin Hong(5)	0/0	0/0	N/A	N/A	N/A
Mr. Luo Zhenyu(6)	2/5	0/0	N/A	N/A	N/A
Ms. Liu Lin(7)	3/3	0/1	0/0	N/A	1/1

Notes:

Mr. Zhan Weibiao resigned as a non-executive Director on June 9, 2020. From January 1, 2020 to the date of his resignation, the Company had held 5 Board meetings.
Mr. Cheng Wu was appointed as a non-executive Director on June 9, 2020. From the date of his appointment to December 31, 2020, the Company had held 3 Board meetings.
Mr. Tang Lichun, Troy was appointed as a non-executive Director on January 15, 2020. After the date of his appointment to December 31, 2020, the Company had held 7 Board meetings.

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Mr. Ma Dong ceased to be a member of the Audit Committee and the Remuneration Committee since August 18, 2020 and resigned as an independent non-executive Director on October 28, 2020. From January 1, 2020 to the date of his cessation from the above positions, the Company had held 3 meetings of the Audit Committee and 0 meeting of the Remuneration Committee and 8 Board meetings respectively.
Mr. Yin Hong was appointed as an independent non-executive Director on October 28, 2020. From the date of his appointment to December 31, 2020, the Company had not held any Board meetings.
Mr. Luo Zhenyu resigned as an independent non-executive Director on June 9, 2020. From January 1, 2020 to the date of his resignation, the Company had held 5 Board meetings.
Ms. Liu Lin was appointed as an independent non-executive Director on June 9, 2020 and a member of the Audit Committee and the Remuneration Committee on August 18, 2020. From the date of her appointment to the above positions to December 31, 2020, the Company had held 0 meeting of the Audit Committee and 1 meeting of the Remuneration Committee and 3 Board meetings respectively.

During the Reporting Period, the Company held 8 board meetings, and the chairman held one meeting with the independent non-executive directors without the presence of other Directors.

The 2020 annual general meeting of the Company was held at No. 3 Building, Yonghe Hangxing Garden, No. 11 Hepingli East Street, Dongcheng District, Beijing, the PRC on June 29, 2020, considered and approved the resolutions regarding audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors of the Company and auditor for the year ended December 31, 2019, re-election of retiring directors and authorize the Board to fix remuneration of the Directors, re-appointment of PricewaterhouseCoopers as the auditor of the Company and authorize the Board to fix the remuneration of the auditor, granting of general mandates to issue new shares and to repurchase shares, granting of annual mandate to issue shares under the RSU scheme.

Appointment, Re-election and Removal of Directors

Each of the Directors (including the non-executive Directors and independent non-executive Directors) has entered into a service contract or appointment letter with the Company. Terms of the Directors are set out in the section headed "DIRECTORS' SERVICE CONTRACTS" under "Directors' Report" of this report.

In accordance with the Articles of Association, all Directors appointed by the Board to fill a casual vacancy shall hold office only until the first general meeting of the Company after his appointment and be subject to re-election at such meeting.

In accordance with the Articles of Association, at each annual general meeting one-third of the Directors for the time being, or, if their number is not three or a multiple of three, then the number nearest to but not less than one-third, shall retire from office by rotation provided that every Director (including those appointed for a specific term) shall be subject to retirement by rotation at least once every three years. A retiring Director shall be eligible for re-election.

In accordance with Article 113 of the Articles of Association, Mr. Yin Hong shall retire at the AGM and, being eligible, will offer himself for re-election.

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Directors' Responsibilities for Financial Statements

The Directors acknowledge their responsibilities for preparing the financial statements of the Group in accordance with statutory requirements and applicable accounting standards. The Directors also acknowledge their responsibilities to ensure that the financial statements of the Group are published in a timely manner.

The Directors are not aware of any material uncertainties relating to events or conditions which may cast significant doubt upon the Company's ability to continue as a going concern. Accordingly, the Directors have prepared the financial statements of the Company on a going concern basis.

The reporting responsibilities of the Company's external auditor on the financial statements of the Group are set out in the section headed "Independent Auditor's Report" in this Annual Report.

Responsibilities of and Delegation by the Board

The major powers and functions of the Board include, but are not limited to, convening the general meetings, presenting reports at the general meetings, implementing the resolutions passed at the general meetings, determining the operational plans and investment plans of the Group, determining the annual financial budgets and final accounts of the Group, determining the fundamental management systems of the Group, formulating profit distribution plans and loss recovery plans of the Group, and exercising other powers and functions as conferred by the Articles of Association.

All Directors, including Non-executive Directors and Independent Non-executive Directors, have brought a wide spectrum of valuable business experience, knowledge and professionalism to the Board for its efficient and effective functioning.

The Board reserves for its decision all major matters relating to policy matters, strategies and budgets, internal control and risk management, material transactions (in particular those that may involve conflict of interests), financial information and other significant operational matters of the Company. Responsibilities relating to implementing decisions of the Board, directing and coordinating the daily operation of the Group and management of the Company are delegated to the management of the Company.

The Board and the management have clearly defined their authorities and responsibilities under various internal control and check and balance mechanisms. The Board does not delegate matters to the Board committee(s), executive Directors or the management to an extent that would significantly hinder or reduce the ability of the Board as a whole to perform its functions.

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Continuous Professional Development

Directors shall keep abreast of regulatory developments and changes in order to effectively perform their responsibilities and to ensure that their contribution to the Board remains informed and relevant.

During the Reporting Period, a financial advisor was appointed to provide onsite training to the directors, including, among others, introduction to domestic and overseas capital market, strategic advice on capital market, investment in merger and acquisition, strategic resources as well as other matters.

	Attending training	Reading regulatory
Directors	session	materials

Executive Director
Mr. Zheng Zhihao	✓	✓
Non-Executive Directors
Mr. Wang Changtian	✓	✓
Ms. Li Xiaoping	✓	✓
Ms. Wang Jian	✓	✓
Mr. Zhan Weibiao(1)	N/A	✓
Mr. Cheng Wu(2)	✓	N/A
Mr. Chen Shaohui	✓	✓
Mr. Lin Ning	✓	✓
Mr. Tang Lichun, Troy	✓	✓
Independent Non-Executive Directors
Mr. Wang Hua	✓	✓
Mr. Chan Charles Sheung Wai	✓	✓
Mr. Ma Dong	✓	✓
Mr. Yin Hong(3)	✓	N/A
Mr. Luo Zhenyu(4)	N/A	✓
Ms. Liu Lin(5)	✓	N/A

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Notes:

Mr. Zhan Weibiao resigned as a non-executive Director on June 9, 2020 and did not attend training sessions held after June 9, 2020.
Mr. Cheng Wu was appointed as a non-executive Director on June 9, 2020 and did not review regulatory materials sent by the Company before June 9, 2020.
Mr. Yin Hong was appointed as an independent non-executive Director on October 28, 2020 and did not review regulatory materials sent by the Company before October 28, 2020.
Mr. Luo Zhenyu resigned as an independent non-executive Director on June 9, 2020. He did not attend training sessions held after June 9, 2020.
Ms. Liu Lin was appointed as an independent non-executive Director on June 9, 2020 and did not review regulatory materials sent by the Company before June 9, 2020.

Corporate Governance Function

The Board recognizes that corporate governance should be the collective responsibility of Directors and their corporate governance duties include:

to develop and review the Company's policies and practices on corporate governance and make recommendations to the Board;
to review and monitor the training and continuous professional development of Directors and senior management;
to review and monitor the Company's policies and practices on compliance with legal and regulatory requirements;
to develop, review and monitor the code of conduct and compliance manual (if any) applicable to employees and Directors; and
to review the Company's compliance with the code provisions of the CG Code and disclosure in the corporate governance report under the Listing Rules.

The Board has reviewed the policies and practices on corporate governance and this corporate governance report.

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BOARD COMMITTEES

The Company has established three Board committees in accordance with the relevant laws and regulations and the corporate governance practice under the Listing Rules, including the Audit Committee, the Remuneration Committee and the Nomination Committee.

Audit Committee

The Audit Committee consists of three independent non-executive Directors, namely Mr. Chan Charles Sheung Wai, Mr. Wang Hua and Ms. Liu Lin. Mr. Chan Charles Sheung Wai currently serves as the chairman of the Audit Committee.

The terms of reference of the Audit Committee are of no less exacting terms than those set out in the CG Code. The primary duties of the Audit Committee are as follows:

to review significant financial policies of the Company and their implementation, and supervise the financial activities of the Company;
to review the financial information and relevant disclosures of the Company;
to consider and approve the risk management and internal control evaluation proposal of the Company, and supervise and evaluate the risk management and internal control of the Company;
to consider and approve the audit budget, remuneration of staff and appointment and dismissal of major officers of the Company, supervise and evaluate the work of internal audit of the Company and formulate the medium- to long-term audit plan, annual working plan and internal audit system setting plan of the Company as authorized by the Board, and report to the Board;
to propose the appointment or dismissal of an external accounting firm, supervise the work of the external accounting firm, and evaluate the report of the external accounting firm to ensure that the external accounting firm undertakes its audit responsibilities;
to facilitate communications and monitor the relationship between the internal audit and supervision department and the external accounting firm;
to monitor the non-compliance of the Company in respect of the financial reports and the risk management and internal control; and
other matters required by laws, regulations, regulatory documents, the rules of the securities regulatory authority of the place where our Shares are listed and the requirements of the Articles of Association, and as authorized by the Board.

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During the Reporting Period, the Audit Committee held three meetings, at each of which, the external auditor was invited without the presence of the executive Directors.

The Audit Committee held a meeting on March 23, 2020 and reviewed, among other things, the audited consolidated results of the Group for the year ended December 31, 2019 and the effectiveness of the risk management and internal control systems of the Company. On August 17, 2020, another meeting was held to review, inter alia, the unaudited consolidated results of the Group for the six months ended June 30, 2020.

PricewaterhouseCoopers ("PwC") is the appointed auditor of the Group. The Audit Committee annually reviews the relationship between the Company and PwC. In addition, the Audit Committee has also reviewed the effectiveness of external audit procedures and the independence and objectiveness of PwC, and is satisfied with the existence of the good relationship. As a result, the Audit Committee recommends the reappointment of PwC at the forthcoming AGM.

Nomination Committee

The Nomination Committee consists of two independent non-executive Directors, namely Mr. Wang Hua and Mr. Chan Charles Sheung Wai and one executive Director, namely Mr. Zheng Zhihao. Mr. Wang Hua currently serves as the chairman of the Nomination Committee.

The terms of reference of the Nomination Committee are of no less exacting terms than those set out in the CG Code. The primary duties of the Nomination Committee are as follows:

to formulate procedures and standards for the election of Directors and senior management and make recommendations to the Board on the proposed procedures and standards;
to make recommendations to the Board on the nomination of candidates for Directors, Presidents and secretary of the Board;
to preliminarily examine the eligibility of candidates for Directors and senior management;
to make recommendations to the Board on the nomination of candidates for chairmen and members of the Board committees; and
other matters required by laws, regulations, regulatory documents, the rules of the securities regulatory authority of the place where our Shares are listed and the requirements of the Articles of Association, and as authorized by the Board.

During the Reporting Period, the Nomination Committee held two meetings.

The Nomination Committee held a meeting on March 23, 2020 and reviewed, among other things, the structure, size and composition of the Board, assessed the independence of independent non-executive Directors to determine their eligibility and discussed the re-appointment of directors and succession planning for directors.

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Remuneration Committee

The Remuneration Committee consists of two independent non-executive Directors, namely Mr. Wang Hua and Ms. Liu Lin, and one executive Director, namely Mr. Zheng Zhihao. Mr. Wang Hua currently serves as the chairman of the Remuneration Committee.

The terms of reference of the Remuneration Committee are of no less exacting terms than those set out in the CG Code. The primary duties of the Remuneration Committee are as follows:

to organize and formulate the remuneration policy and plan of Directors and senior management and submit to the Board for approval, and propose the remuneration distribution plan according to the performance evaluation of Directors and senior management and submit to the Board for approval; and
other matters required by laws, regulations, regulatory documents, the rules of the securities regulatory authority of the place where our Shares are listed and the requirements of the Articles of Association, and as authorized by the Board.

During the Reporting Period, the Remuneration Committee held one meeting.

The Remuneration Committee held a meeting on December 28, 2020 and reviewed, among other things, the remuneration package of the Directors and the remuneration policy of the Group's senior management.

BOARD DIVERSITY POLICY

The Group adopted a board diversity policy (the "Board Diversity Policy") on 10 January 2019. A summary of this policy is disclosed as below:

The purpose of the Board Diversity Policy is to set out the basic principles to be followed to ensure that the Board has the appropriate balance of skills, experience and diversity of perspectives necessary to enhance the effectiveness of the Board and to maintain high standards of corporate governance.

The Nomination Committee has primary responsibility for identifying candidates, formulating selection standards and procedures, and examining candidates for directors and senior management of the Company, and providing recommendations on the selection. The Nomination Committee will give adequate consideration to this policy in identifying and selecting suitably qualified candidates to become directors of the Company.

Selection of director candidates shall be based on a range of diversity perspectives with reference to the Company's business model and specific needs, including but not limited to gender, race, language, cultural background, educational background, industry experience and professional experience.

The Nomination Committee is responsible for reviewing the Board Diversity Policy, developing and reviewing measurable objectives for implementing the policy and monitoring the progress on achieving these measurable objectives. The Nomination Committee shall review the Board Diversity Policy and the measurable objectives at least annually to ensure the continuing effectiveness of the Board.

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As of the date of this Annual Report, the Company has a total of 13 Directors, covering different gender and a broad age distribution. There is a diverse mix of experience and background including Internet and media, information technology, investment and accounting. The Nomination Committee has reviewed the Board Diversity Policy and considers that, appropriate balance has been stricken among the Board members in terms of skills, experience and perspectives.

NOMINATION POLICY

The Company adopted a policy for nomination on March 25, 2019, pursuant to which, the Nomination Committee shall advise the Board on the appointment of any director in accordance with the following procedures and process:

The Nomination Committee shall, upon completing the assessment over the current composition and size of the Board, produce a description of the responsibilities and capabilities required for the specific appointment with reference to the findings of such assessment.
Taking into consideration these conditions of identifying or selecting suitable candidates, the Nomination Committee may seek any source of assistance as it sees fit, including referrals from existing directors, use of public advertisement or external consultancy services, and recommendations from the shareholders of the Company.
The Nomination Committee shall conduct preliminary review over the qualifications and conditions of the candidates for directorship before recommending suitable candidates for directorship to the Board, while the Remuneration Committee shall review the letter of appointment or major terms of such appointment in regard to the candidates for directorship.
As for the procedures for shareholders to nominate a person for election as a director, please refer to the "Procedures for Shareholders to Nominate a Person for Election as a Director" set out on the website of the Company.
The Board is entitled to final decision in connection with all matters involving election of the recommended candidates at a general meeting.

In assessing the candidates, the Nomination Committee shall take into the following factors, including but not limited to:

reputation for individual character, integrity, and others;
achievements and experiences in the related industry;
time available for performing duties;
diversity of the Board in various aspects, including but not limited to gender, age, cultural and education backgrounds, ethnicity, professional experiences, skills, knowledge, and length of services;

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independence from the Company, as well as potential or actual conflict of interest; and
potential contributions to the Board.

REMUNERATION OF THE MEMBERS OF THE SENIOR MANAGEMENT BY BAND

Details of the remuneration of the Directors are set out in Note 38 to the audited consolidated financial statements. Save as disclosed therein, there is other individual of senior management. Pursuant to paragraph B.1.5 of the CG Code, their remuneration by band for the year ended December 31, 2020 is set out below:

Remuneration bands	Number of individual

RMB1 to RMB5,000,000	-
RMB5,000,001 to RMB10,000,000	-
RMB10,000,001 to RMB50,000,000	1
RMB50,000,001 to RMB100,000,000	-

EXTERNAL AUDITOR'S REMUNERATION

The remunerations paid or payable to the external auditor of the Company in respect of audit and non-audit services provided to the Group for the year ended December 31, 2020 are set out as below. The amount of audit services fee also included the service fee in connection with the Initial Public Offering. The non-audit services conducted by the Auditor mainly include professional services on tax advisory, internal control consultation services, and environmental, social and governance report advisory.

	Fees payable or paid
	RMB'000

Services Category
Audit Services	5,843
Non-audit Services	934

Total Fees	6,777

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RISK MANAGEMENT AND INTERNAL CONTROL

The Board has overall responsibility for the risk management and internal control systems of the Company. The Board is committed to implementing an effective and sound risk management and internal control system to safeguard the interest of our shareholders and the assets of the Company. The Board has appointed the management to implement the risk management and internal control system within the delegated scope, as well as to review all control and risk management functions in respect to finance, operation, and compliance with laws and rules.

The Board acknowledges that it is the responsibility of the Board to ensure that the Company has established and maintained adequate and effective risk management and internal control systems and to review their effectiveness. The Board delegates its responsibility to the Audit Committee to review the practices of management with respect to risk management and internal control, including the design, implementation and supervision of the risk management and internal control systems on an annual basis. Furthermore, the Audit Committee also reviews the effectiveness of the risk management and internal control systems.

To ensure that the risk management and internal control systems are effective, the Company, under the supervision and guidance of the Board and factoring the actual needs of the Company, has adopted the "Three Defenses" model as an official organizational structure for risk management and internal control.

First Defense - Core Business Departments

First defense is comprised of business departments or positions of various operation lines of the Company, which is responsible for daily operation and management of the Company, as well as design and implementation of related internal control and risk management measures for their respective departments.

Second Defense - Functional Departments

The Second Defense is comprised of various functional departments, which is responsible for overseeing the enforcement of policies related to the risk management and internal control of the Company. For ensuring effective implementation of the risk management and internal control systems, the Second Defense also assists and supervises the First Defense in the establishment and improvement of such systems.

Third Defense - Internal Audit Department

The Third Defense is established by the internal audit and supervision department, which is responsible for providing independent assessment and verification of the effectiveness of risk management and internal control systems of the Company. In addition to assisting the business departments and functional departments in formulating internal control systems and risk management measures, the Third Defense regularly monitors, supervises, and assesses the implementation of the relevant systems and measures at various departments of the Company to ensure that the Company will continue to improve and enhance the risk management and internal control systems of the Company.

These systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable but not absolute assurance against material misstatement or loss.

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Risk Management

The Company has been committed to continuously improving the risk management system, including structure, process and culture, through the enhancement of risk management ability, to ensure long-term growth and sustainable development of the Company's business.

The Company has established a risk management system (including the "Three Defenses" internal monitoring model as detailed above) which sets out the roles and responsibilities of each relevant party as well as the relevant risk management policies and processes. Each operation line of the Company, on a regular basis, identifies and assesses risk factors that may negatively impact the achievement of its objectives, and formulates appropriate response measures. The Company's staff also attends training in relation to risk management and internal controls on a regular basis.

Risk Management Process

The Company has established a dynamic risk management process:

Business and functional departments of each operation line identify, assess and respond to risks in the course of operation in a systematic manner, escalating concerns and communicating results to the internal audit and supervision department;
The internal audit and supervision department collects, analyses, and consolidates a list of significant risks at the company level, and provides input on risk response strategies and control measures for such risks. The corresponding risk responses and control measures against these significant risks will be reviewed by the Audit Committee before reporting to the Board;
The internal audit and supervision department reviews and evaluates the responses to significant risks from time to time, and reports to the Audit Committee at least once a year; and
The Audit Committee, on behalf of the Board, assesses and determines the nature and level of the risks that the Company is willing to take in order to achieve its business objectives and formulates appropriate response strategies which include designating responsible departments for handling each significant risk. The Audit Committee provides guidance to the Company's management to implement effective risk management system with supports from the internal audit and supervision department.

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Signiﬁcant Risks of the Company

In 2020, the management identified four significant risks in accordance with the abovementioned risk management process. The Board will monitor the overall risk exposure of the Company and review the nature and severity of such significant risks facing the Company. The Board is of opinion that the management has implemented appropriate measures to address and manage these significant risks to such a level acceptable to the management.

Set out below is a summary over the significant risks currently facing the Company and the countermeasures implemented against these risks. As the risk exposure against the Company may at any time change, the list as follows is not exhaustive.

1. Governmental and regulatory risks

The government and relevant regulatory bodies impose more stringent regulations over the internet and movie industry. In addition, the entry barrier mechanism, content censorship system, and other regulations may limit our business operation, including ownership structure, necessary licensing, marketing strategies, entertainment contents, customer relations, and intellectual property rights. Following the introduction and execution of the Cyberspace Security Law and other laws and regulations, the regulatory bodies will emphasize more on the legitimacy and compliance of collecting, maintaining, and applying users' personal information. Any company that fails to comply with these laws and regulations may be subject to administrative penalties or litigation, which may constrain its business development in serious cases.

The Company has the legal department and government affairs department, and appoints an external legal and compliance consultant, all of which are responsible for timely obtaining and understanding information regarding regulations, systems, and regulatory requirements published by the government and regulatory bodies before timely relaying such information to the relevant business departments of the operation lines. The government affairs department is committed to nurturing a sound government relationship, timely and accurately obtaining policy trend, and fully understanding industrial regulations on entertainment contents so as to mitigate the risks of non-compliance with the government and regulatory requirements, and policy details can be timely acquired to promote the business operation. The business departments will exercise strict control over investments in and promotion of entertainment contents to ensure that the subject matters of such entertainment contents are in compliance with regulatory requirements, while the legal department shall conduct audits over the business qualifications of the Company in accordance with latest policies, and timely provide updates to safeguard the compliance of our businesses with such policies.

2. Market competition risks

The rapid development of the entertainment industry, coupled with the emergence and evolution of new media and entertainment, the customer demands for product and service innovation, and the crossover development of non-internet entertainment companies, is likely to bring new competitions and challenges to the current businesses of the Company. If the Company fails to perform well against competitors, the Company's operating results and financial conditions may be affected by the possible failure to generate expected revenue or achieve investment returns.

The Company develops and maintains close relationship with industrial players, including content producers, content distributors, cinemas, and other on-site entertainment sponsors to enhance our content production and promotion capacity to provide more comprehensive and valuable to our users and industry partners. In addition, the Company enjoys various advantages to stand out amid the market competition, including the capability to maintain information technologies and big data, strategic partnership with leading internet platforms, contact with a broader group of internet users, timely and accurate insight into market changes and demands, as well as persistence in enhancing the research and development capacity and keeping abreast with technological advancements.

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3. Brand and reputation risks

Given the nature of the industry where the Company operates, there is a high level of user engagement, as well as public and media attention. In case that the failure to appropriately resolve public relations crises results in public access to false information, the Company's reputation and brand image may be impaired alongside loss of users, which will cause adverse effects on the operating results of the Company.

The Company establishes a taskforce dedicated to public relations, which will collect and monitor public opinions through the internet and other media sources, and collate and analyze the relevant information before reporting the same to the management. In accordance with the corporate policies, the management will make response plans to ensure that the public relations crises are effectively controlled and resolved in a timely manner, and to protect the Company's reputation and brand image.

4. Employee turnover risks

The Company is dependent on the chief executives and key talents for its successful operation and development. Given a high turnover rate of internet and entertainment talents, the talent reserve of internet companies are inadequate, which may affect the business sustainability of the Company in the related sectors. Furthermore, as a result of fierce competition for talents in the industry, if the executive officers and key talents join our competitors or establish a competing business, the Company may lose technological advantages, trade secrets, business partners, and other critical resources, which in return will affect the operating results and operating efficiency of the Company.

The Company acknowledges the importance of developing healthy corporate culture and good workplace conditions, and pays attention to individual growth and improvement of our employees. Meanwhile, the Company establishes a well-developed employee promotion mechanism and long-term incentive scheme to enhance the enthusiasm and performance efficiency of our employees. In addition, the Company explicitly prescribes non-competition restrictions in our labor contracts with all employees, which will effectively prevent our employees from joining the competitors or establishing competing entities. Furthermore, the Company maintains close business contacts with recruitment medias and headhunting agencies to safeguard the talent recruitment channels.

Internal Control

The management of the Company is responsible for the design, implementation and maintenance of the effectiveness of internal control systems. The Board and the Audit Committee are responsible for monitoring and overseeing the performance of the internal control systems by the management to ensure it is appropriate and effective.

The Company's internal control systems clearly define roles and responsibilities of each party as well as authorizations and approvals required for key actions of the Company. Policies and procedures are put in place for the key business processes. Such information is also clearly shared with employees in practice and plays an important role in internal control systems. All employees must strictly follow the policies which cover, amongst other things, financial, legal and operational issues that set the control standards for the management of each business process.

The functional departments supervise the establishment of the risk management and internal control systems set up by the core business departments, and ensure that appropriate management measures are implemented. The internal audit and supervision department, serving as the independent third defense, conducts objective evaluation on the effectiveness of the Company's risk management and internal control systems and reports the results to the Audit Committee.

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Inside Information

The Company has established an inside information policy, conducted relevant training, and regularly reminded the directors and employees of due compliance with all policies regarding inside information. To ensure adequate attention to whistleblowing, the Company has established a reporting mechanism to handle and discuss internal whistleblowing of financial, operational, internal control and fraud issues. Major internal control deficiencies or whistle-blowing issues will be submitted to the Audit Committee.

Effectiveness of Risk Management and Internal Control Systems

The Board conducted an annual review over the effectiveness of risk management and internal control systems of the Company for the year ended December 31, 2020, and the management confirmed the effectiveness of the risk management internal control systems within their terms of reference during the year. As a result, the Board is confident, without any evidence to the contrary, that the Company has provided reasonable assurance as to compliance with the risk management and internal control systems for the year ended December 31, 2020, which has prevented any significant financial misstatement or loss, and included protection of assets, appropriate maintenance of accounting records, reliability of financial data, compliance with applicable laws and regulations, and identification and control of business risks. In connection with the effectiveness of risk management and internal control systems, the Board has confirmed that no significant areas of concern have been identified and believes that the system remains effective and adequate, including sufficient resources, appropriate qualifications and experiences of our employees, and employee training programs, and that there are adequate budgets for accounting, internal audit, and financial reporting functions.

JOINT COMPANY SECRETARIES

The joint company secretaries of the Company are Ms. Zheng Xia and Mr. Cheng Ching Kit.

Ms. Zheng Xia has served as the legal director and other positions since joining the Company in May 2018. Mr. Cheng Ching Kit is a manager of SWCS Corporate Services Group (Hong Kong) Limited, a professional services provider specialising in corporate services, and has over eight years of experience in corporate secretarial field. Mr. Cheng Ching Kit's primary corporate contact person at the Company is Ms. Zheng Xia.

During the Report Period, Ms. Zheng Xia and Mr. Cheng Ching Kit were fully in compliance with the Rule 3.29 of the Listing Rules as both received no less than 15 hours of professional training.

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SHAREHOLDERS' RIGHTS

The Company encourages the Shareholders to attend the general meetings of the Company.

The Procedures for Shareholders to Convene an Extraordinary General Meeting ("EGM") and for Putting Forward Proposals at General Meeting

Pursuant to Article 64 of Articles of Association, extraordinary general meeting of the Company shall be convened on the requisition of one or more shareholders of the Company holding, at the date of deposit of the requisition, not less than one-tenth of the paid up capital of the Company having the right of voting at general meetings. Such requisition shall be made in writing to the Board or the company secretary of the Company at the headquarter of the Company in the PRC, which is presently situated at No. 3 Building, Yonghe Hangxing Garden, No. 11 Hepingli East Street, Dongcheng District, Beijing, PRC, for the purpose of requiring an EGM to be called by the Board for the transaction of any business specified in such requisition and signed by the requisitionist(s) (the "Requisitionist(s)").

Such meeting shall be held within two months after the deposit of such requisition. If within 21 days of such deposit, the Board fails to proceed to convene such meeting, the requisitionist(s) himself (themselves) may do so in the same manner, and all reasonable expenses incurred by the requisitionist(s) as a result of the failure of the Board shall be reimbursed to the requisitionist(s) by the Company.

Article 114 of the Articles of Association provides that no person, other than a retiring director of the Company, shall, unless recommended by the Board of the Company for election, be eligible for election to the office of director of the Company (the "Director") at any general meeting, unless notice in writing of the intention to propose that person for election as a Director and notice in writing by that person of his willingness to be elected shall have been lodged at the head office or at the registration office. The period for lodging the notices as required under the Articles of Association will commence no earlier than the day after the despatch of the notice of the general meeting appointed for such election and end no later than seven days prior to the date of such general meeting and the minimum length of the period during which such notices to the Company may be given will be at least seven days.

Accordingly, if a shareholder wishes to nominate a person to stand for election as a director of the Company at the general meeting, the following documents must be validly served at the registered office of the Company, namely (1) his/her notice of intention to propose a resolution at the general meeting; (2) a notice signed by the nominated candidate of his/her willingness to be elected; (3) the nominated candidate's information as required to be disclosed under Rule 13.51(2) of the Listing Rules; and (4) the nominated candidate's written consent to the publication of his/her personal data.

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DIVIDEND POLICY

The Company adopted a dividend policy on March 25, 2019.

The Company intends to achieve a balance between maintaining sufficient capital for the Group's business development and operation and rewarding the shareholders of the Company with dividends.

In accordance with the dividend policy, in deciding whether to propose the payment of dividends and the amount of dividend payable, the Board will take into consideration the following factors affecting the Group, including but not limited to:

actual and expected financial results of the Group;
distributable profits of the Company and other subsidiaries of the Group;
dividend income attributable to subsidiaries;
future operation and profitability;
capital requirements, earnings, and future expansion plans;
the overall financial conditions of the Group, including the level of debts, liquidity, and future commitments;
any contractual limitation on payment of dividends by the Company or payment of dividends by subsidiaries of the Company to the Company;
taxation factors, as well as legal and regulatory restrictions; and
other factors as the Board may consider.

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INVESTOR RELATIONS AND COMMUNICATIONS WITH SHAREHOLDERS

Shareholders, investors and members of the public should direct their questions about their shareholdings to the Company's Hong Kong Share Registrar. The contact details for the Hong Kong Share Registrar are as follows:

Computershare Hong Kong Investor Services Limited

Shop 1712 - 1716

17th Floor, Hopewell Centre

183 Queen's Road East Wan Chai, Hong Kong Telephone: (852) 2862 8555

Fax: (852) 2865 0990

Email: hkinfo@computershare.com.hk

Should any questions as to the Company arise, shareholders and investors may contact the Company. The contact details of the Company are as follows:

Maoyan Entertainment

No. 3 Building, Yonghe Hangxing Garden

No. 11 Hepingli East Street

Dongcheng District

Beijing, PRC

Email:ir@maoyan.com

CONSTITUTIONAL DOCUMENTS

The Articles of Associations were approved on January 11, 2019 by special resolution and with effect from the Listing Date. Save as disclosed herein, there were no significant changes in the constitutional documents of the Company during the year ended December 31, 2020 and up to the date of this Annual Report.

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To the Shareholders of Maoyan Entertainment

(incorporated in the Cayman Islands with limited liability)

OPINION

What we have audited

The consolidated financial statements of Maoyan Entertainment (the "Company") and its subsidiaries (the "Group") set out on pages 89 to 209, which comprise:

the consolidated statement of financial position as at December 31, 2020;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include a summary of significant accounting policies.

Our opinion

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at December 31, 2020, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRSs") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance.

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BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters identified in our audit are summarised as below:

Impairment assessment of goodwill
Expected credit losses assessment of accounts and other receivables

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Key Audit Matter	How our audit addressed the Key Audit Matter

Impairment assessment of goodwill

Refer to Notes 2.6(a), 4(a) and 16 to the consolidated financial statements.

As at December 31, 2020, there was goodwill with carrying amount of approximately RMB4,505 million arising from the acquisitions of Beijing Weige Shidai Entertainment Technology Co., Ltd, Shenzhen Ruihai Fangyuan Technology Co., Ltd. and Hangzhou Soushi Network Co., Ltd in the previous years, which represented approximately 42.5% of the total assets of the Group.

Management performed goodwill impairment test by comparing the recoverable amounts of cash generating unit ("CGU") to the carrying amounts. Management determined the recoverable amounts of the CGU based on value in use ("VIU"), which is the present value of the future cash flows expected to be derived from the Group's CGU. Based on the assessments, management considered no impairment is necessary in respect of the goodwill as at December 31, 2020.

We focused on this area due to the magnitude of the carrying amounts of goodwill and the fact that significant judgements were required by management as the VIU of the related CGU is determined based on assumptions used in the cash flow forecast. The key assumptions adopted by management include the revenue growth rate, gross margin, terminal growth rate and discount rate.

Our procedures in relation to impairment assessment of goodwill included:

We obtained an understanding of management's internal control and process of the estimation of goodwill impairment and assessed the inherent risk of material misstatement by considering the degree of estimation uncertainty, complexity and subjectivity;
We evaluated and tested management's key controls in respect of the goodwill impairment assessment, including the determination of CGU, the valuation model and assumptions used in the calculation of VIU;
We evaluated the historical accuracy of the cash flow forecast by, for example, comparing the forecast used in the prior year to the actual performance of the business in the current year;
We evaluated the reasonableness of the key assumptions used in the cash flow forecast, such as revenue growth rate, terminal growth rate and gross margin taking into account industry forecasts and market developments, the Group's management approved budget, plan and historical performance;
We involved our internal valuation expert to evaluate the discount rate applied in the calculation by comparing with the industry or market data to assess whether the discount rate applied was within the range of those adopted by comparable companies in the same industry and check the calculation of the discount rate; and
We evaluated management's sensitivity analysis over the revenue growth rate, terminal growth rate and discount rate as adopted in the impairment test so as to assess the potential implication on the results of the impairment test for changes of assumptions within a reasonable range.

Based on the above procedures, we found the key assumptions adopted in management's impairment assessment of goodwill to be supported by the evidence we obtained.

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Key Audit Matter	How our audit addressed the Key Audit Matter

Expected credit losses assessment of accounts and other receivables

Refer to Notes 3.1(b), 23 and 24 to the consolidated financial statements.

As at December 31, 2020, the gross amount of the Group's accounts and other receivables amounted to approximately RMB1,765 million which represented approximately 17% of the total assets of the Group. Management has estimated the expected credit losses ("ECL") on the accounts and other receivables and a loss allowance of approximately RMB472 million was made against the accounts and other receivables as at December 31, 2020.

The loss allowances for accounts and other receivables reflected management's best estimate to determine the ECL at the balance sheet date under IFRS 9.

For accounts receivables, the management applied the simplified approach to provide for their ECL, by first grouping accounts receivables based on their nature and risk characteristics and then recalculating their historical credit loss information before further incorporating forward-looking adjustments to reflect the management's forecasts of macroeconomic factors in different scenarios as this affects the debtors' abilities to settle the receivables.

For other receivables, the management assessed whether their credit risk had increased significantly since their initial recognition and applied the three- stage approach to provide for their ECL using a modelling approach that incorporated key parameters and assumptions (including probability of default, loss given default, exposure at default, etc.).

We focused on this area due to the magnitude of the balance of accounts and other receivables and the fact that significant judgements were required by management in assessing the ECL of accounts and other receivables.

Our procedures in relation to management's assessment on the ECL of accounts and other receivables include:

We obtained an understanding of management's internal control and process of the estimation of the ECL on accounts and other receivables and assessed the inherent risk of material misstatement by considering the degree of estimation uncertainty, complexity and subjectivity;
We evaluated and tested management's key control in relation to the estimate of the ECL on accounts and other receivables;
We performed the following procedures regarding the reasonableness of methods and assumptions used and judgements made by management:
- We assessed the appropriateness of the
  ECL provisioning methodology adopted by management;
- We tested, on a sample basis, the accuracy of the key data inputs such as the aging schedules of accounts and other receivables;
- We evaluated the reasonableness of grouping

o f a c c o u n t s r e c e i v a b l e s a n d s t a g i n g determination for other receivables against their nature and risk characteristics;

We challenged the reasonableness of the detailed application of key ECL model parameters and assumptions including probability of default, loss given default, exposure at default by considerring the historical default rates and past collection information;

• W e e v a l u a t e d t h e a p p r o p r i a t e n e s s o f forward looking information with reference to independent data and our industry knowledge including multiple economic scenarios and parameters; and

We tested, on a sample basis, the mathematical accuracy of the calculations of expected credit loss rates based on the historical loss and forward-looking information.

Based on the above, we considered that the significant judgements and estimates made by management in relation to the assessment of the ECL on accounts and other receivables were supportable by available evidences.

86 MAOYAN ENTERTAINMENT / Annual Report 2020

Independent Auditor's Report

OTHER INFORMATION

The directors of the Company are responsible for the other information. The other information comprises all of the information included in the annual report other than the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

RESPONSIBILITIES OF DIRECTORS AND THOSE CHARGED WITH GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS

The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRSs and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. We report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

MAOYAN ENTERTAINMENT / Annual Report 2020 87

Independent Auditor's Report

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

88 MAOYAN ENTERTAINMENT / Annual Report 2020

Independent Auditor's Report

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Tong Yu Keung.

PricewaterhouseCoopers

Certified Public Accountants

Hong Kong, March 30, 2021

MAOYAN ENTERTAINMENT / Annual Report 2020 89

Consolidated Statement of Comprehensive Income

		Year ended December 31,

		2020	2019
	Note	RMB'000	RMB'000

Revenue	6	1,365,690	4,267,514
Cost of revenue	7	(828,356)	(1,610,367)

Gross proﬁt		537,334	2,657,147
Selling and marketing expenses	7	(485,845)	(1,547,792)
General and administrative expenses	7	(353,561)	(447,810)
Net impairment losses on financial assets	23, 24	(418,356)	(41,850)
Other income	8	130,795	52,408
Other (losses)/gains, net	8	(14,511)	3,836

Operating (loss)/proﬁt		(604,144)	675,939
Finance income	10	15,891	29,006
Finance costs	10	(37,833)	(42,765)

Finance costs, net	10	(21,942)	(13,759)
Share of losses of investments accounted for using the equity method	17	(2,535)	(639)

(Loss)/proﬁt before income tax		(628,621)	661,541
Income tax expenses	11	(17,651)	(202,684)

(Loss)/proﬁt for the year		(646,272)	458,857

(Loss)/proﬁt attributable to:
- Equity holders of the Company		(646,272)	463,456
- Non-controlling interests		-	(4,599)

(646,272) 458,857

90 MAOYAN ENTERTAINMENT / Annual Report 2020

Consolidated Statement of Comprehensive Income

		Year ended December 31,

		2020	2019
	Note	RMB'000	RMB'000

(Losses)/earnings per share attributable to
equity holders of the Company (expressed in RMB per share)
- Basic (losses)/earnings per share	12	(0.57)	0.42
- Diluted (losses)/earnings per share	12	(0.57)	0.41

(Loss)/proﬁt for the year		(646,272)	458,857

Other comprehensive (loss)/income:
Item that may be reclassified to profit or loss
Currency translation differences from foreign operations		1,568	(10,814)
Items that will not be reclassified to profit or loss
Currency translation differences from the Company		(77,192)	77,529
Changes in the fair value of equity investments at
fair value through other comprehensive income	19	(16,168)	(30,496)

Other comprehensive (loss)/income for the year, net of tax		(91,792)	36,219

Total comprehensive (loss)/income for the year		(738,064)	495,076

Total comprehensive (loss)/income attributable to:
- Equity holders of the Company		(738,064)	499,675
- Non-controlling interests		-	(4,599)

Total comprehensive (loss)/income for the year		(738,064)	495,076

The notes on pages 97 to 209 are integral parts of these consolidated financial statements.

MAOYAN ENTERTAINMENT / Annual Report 2020 91

Consolidated Statement of Financial Position

		As at December 31,

		2020	2019
	Note	RMB'000	RMB'000

ASSETS
Non-current assets
Property, plant and equipment	14	26,082	34,421
Right-of-use assets	15	21,639	35,305
Intangible assets	16	5,204,121	5,341,073
Investments accounted for using the equity method	17	37,121	37,558
Financial assets at fair value through profit or loss	20	28,313	53,322
Financial assets at fair value through other comprehensive income	19	316,265	356,371
Deferred income tax assets	21	11,930	10,430
Prepayments, deposits and other receivables	24	63,675	113,787

		5,709,146	5,982,267

Current assets
Inventories	22	35,154	28,232
Accounts receivables	23	318,970	551,647
Prepayments, deposits and other receivables	24	1,853,259	2,335,593
Financial assets at fair value through profit or loss	20	397,864	481,723
Restricted bank deposits	25	154,000	331,369
Term deposit with original maturity over three months	25	-	100,000
Cash and cash equivalents	25	2,140,149	1,540,414

		4,899,396	5,368,978

Total assets		10,608,542	11,351,245

EQUITY
Equity attributable to equity holders of the Company
Share capital	29	153	152
Reserves	30	8,264,140	8,283,031
(Accumulated losses)/retained earnings		(641,234)	4,860

Total equity	7,623,059	8,288,043

92 MAOYAN ENTERTAINMENT / Annual Report 2020

Consolidated Statement of Financial Position

			As at December 31,

			2020	2019
	Note	RMB'000	RMB'000

LIABILITIES
Non-current liabilities
Deferred income tax liabilities	21		156,456	185,673
Lease liabilities	15		8,620	22,282
			165,076	207,955
Current liabilities
Borrowings	26		1,013,467	1,161,600
Accounts payables	27		289,209	367,657
Other payables, accruals and other liabilities	28		1,476,012	1,238,638
Lease liabilities	15		14,216	14,027
Current income tax liabilities			27,503	73,325
			2,820,407	2,855,247
Total liabilities			2,985,483	3,063,202
Total equity and liabilities			10,608,542	11,351,245

The notes on pages 97 to 209 are integral parts of these consolidated financial statements.

The consolidated financial statements on pages 89 to 209 were approved for issue by the Board of Directors on March 30, 2021 and were signed on its behalf.

Zheng Zhihao

Zhai Xuchao

Executive Director and Chief Executive Officer

Financial and Accounting Officer

MAOYAN ENTERTAINMENT / Annual Report 2020 93

Consolidated Statement of Changes in Equity

		Attributable to equity holders of the Company

				Retained earnings/
				(accumulated
	Note	Share capital	Reserves	losses)	Total equity
		RMB'000	RMB'000	RMB'000	RMB'000

As at January 1, 2020		152	8,283,031	4,860	8,288,043

Comprehensive loss
Loss for the year		-	-	(646,272)	(646,272)
Other comprehensive loss
- Currency translation differences		-	(75,624)	-	(75,624)
- Changes in the fair value of equity
investments at fair value through other
comprehensive income	19	-	(16,168)	-	(16,168)

Total comprehensive loss		-	(91,792)	(646,272)	(738,064)

- Transfer of loss upon disposal of equity
investments at fair value through other
comprehensive income to retained earnings	19	-	(178)	178	-

Transactions with equity holders of the Company
Issuance of new shares under share
option scheme	29,30	1	476	-	477
Share-based compensation expenses	31	-	72,603	-	72,603

Total transactions with equity holders of
the Company		1	73,079	-	73,080

As at December 31, 2020	153	8,264,140	(641,234)	7,623,059

94 MAOYAN ENTERTAINMENT / Annual Report 2020

Consolidated Statement of Changes in Equity

		Attributable to equity holders of the Company

				Retained
				earnings/
		Share		(accumulated		Non-controlling	Total
	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/(loss)
Profit for the year		-	-	463,456	463,456	(4,599)	458,857
Other comprehensive income/(loss)
- Currency translation differences		-	66,715	-	66,715	-	66,715
- Changes in the fair value of equity
investments at fair value through other
comprehensive income	19	-	(30,496)	-	(30,496)	-	(30,496)

Total comprehensive income/(loss)		-	36,219	463,456	499,675	(4,599)	495,076

Transfer of loss upon disposal of equity investments at fair value through other comprehensive income to retained

earnings	19	-	3,444	(3,444)	-	-	-

Transactions with equity holders of the
Company
Issuance of ordinary shares, net of
share issuance costs	29,30	18	1,632,213	-	1,632,231	-	1,632,231
Issuance of new shares for conversion of
convertible bond	29,30	3	350,660	-	350,663	-	350,663
Restricted shares vested	29	1	-	-	1	-	1
Issuance of new shares under share
option scheme	29,30	-	296	-	296	-	296
Share-based compensation expenses	31	-	103,228	-	103,228	-	103,228

Total transactions with equity holders
of the Company		22	2,086,397	-	2,086,419	-	2,086,419

As at December 31, 2019		152	8,283,031	4,860	8,288,043	-	8,288,043

The notes on pages 97 to 209 are integral parts of these consolidated financial statements.

MAOYAN ENTERTAINMENT / Annual Report 2020 95

Consolidated Statement of Cash Flows

			Year ended December 31,

	Note	2020	2019
			RMB'000	RMB'000

Cash ﬂows from operating activities
Cash generated from/(used in) operations	32		424,707	(727,204)
Interest paid			(36,371)	(40,860)
Income tax paid			(94,190)	(171,794)

Net cash generated from/(used in) operating activities			294,146	(939,858)
Cash ﬂows from investing activities
Purchases of property, plant and equipment	14		(8,408)	(18,764)
Purchases of intangible assets	16		(4,179)	(3,637)
Acquisition of subsidiaries,net of cash and cash equivalent acquired			-	(79,216)
Proceeds from disposal of property, plant and equipment			9	-
Payments for financial assets at fair value through profit or loss	20		(662,308)	(3,819,778)
Payments for financial assets at fair value through other
comprehensive income	19		-	(372,113)
Proceeds from disposals of financial assets at fair value
through profit or loss	20		725,059	3,722,578
Proceeds from disposals of financial assets at fair value
through other comprehensive income	19		4,402	18,178
Interest received			15,891	29,006
Advance of receivables from investments in movies and TV series			(17,644)	(123,107)
Repayment of receivables from investments in movies and TV series			60,344	57,769
Advance of loans to third parties			(91,316)	(224,758)
Repayment of loans to third parties			168,594	-
Proceeds from loans from third party			119,183	-
Repayment of loans from third party			(74,580)	-
Decrease/(increase) in term deposit with original maturity
over three months	25		100,000	(100,000)
Payment for investments accounted for using the equity method	17		(2,098)	(900)

96 MAOYAN ENTERTAINMENT / Annual Report 2020

Consolidated Statement of Cash Flows

			Year ended December 31,

	Note	2020	2019
			RMB'000	RMB'000

Net cash generated from/(used in) investing activities			332,949	(914,742)
Cash ﬂows from ﬁnancing activities
Proceeds from issuance of new shares	29, 30		-	1,675,285
Payment of ordinary shares issuance costs	30		-	(43,054)
Proceeds from short-term borrowings	26, 32(b)	1,263,467	1,359,600
Repayments of short-term borrowings	26, 32(b)	(1,411,600)	(798,000)
Principal elements of lease payments	15		(13,654)	(12,755)
Decrease/(increase) in restricted bank deposits	25		177,369	(331,369)
Issuance of new shares under share option scheme	29, 30		477	296
Net cash generated from ﬁnancing activities			16,059	1,850,003

Net increase/(decrease) in cash and cash equivalents			643,154	(4,597)
Cash and cash equivalents at beginning of year			1,540,414	1,536,456
Exchange (loss)/profit on cash and cash equivalents			(43,419)	8,555
Cash and cash equivalents at end of year			2,140,149	1,540,414

The notes on pages 97 to 209 are integral parts of these consolidated financial statements.

MAOYAN ENTERTAINMENT / Annual Report 2020 97

Notes to the Consolidated Financial Statements

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 services, entertainment content services, movies and TV series investments, advertising services and others to users in the People's Republic of China (the "PRC").

The financial statements for the year ended December 31, 2020 are presented in Renminbi ("RMB") and all values are rounded to the nearest thousand (RMB'000) except when otherwise indicated. The financial statements for the year ended December 31, 2020 have been approved for issue by the Company's board of directors (the "Board") on March 30, 2021.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by International Accounting Standards Board ("IASB") and the disclosure requirements of the Hong Kong Companies Ordinance Cap. 622.

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities at fair value through profit or loss and financial assets at fair value through other comprehensive income, which are carried at fair value.

The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4 below.

98 MAOYAN ENTERTAINMENT / Annual Report 2020

Notes to the Consolidated Financial Statements

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.1 Basis of preparation (continued)

New and amended standards and interpretation adopted by the Group

The Group has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2020:

Definition of Material - amendments to IAS 1 and IAS 8
Definition of a Business - amendments to IFRS 3
Interest Rate Benchmark Reform - amendments to IFRS 9, IAS 39 and IFRS 7
Revised Conceptual Framework for Financial Reporting
COVID-19-RelatedRent Concessions - Amendment to IFRS 16 Leases (the amendment)

The new and revised standards above did not have a material effect on the consolidated financial statements of the Group.

New standards, amendments and revised conceptual framework not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for December 31, 2020 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Adoption of amendments to standard

The Group has early adopted Amendment to IFRS 16 - COVID-19-Related Rent Concessions from January 1, 2020. The amendment provides an optional practical expedient allowing lessees to elect not to assess whether a rent concession related to COVID-19 is a lease modification. Lessees adopting this election may account for qualifying rent concessions in the same way as they would if they were not lease modifications. The practical expedient only applies to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of the following conditions are met: (a) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; (b) any reduction in lease payments affects only payments due on or before June 30, 2021; and (c) there is no substantive change to other terms and conditions of the lease.

MAOYAN ENTERTAINMENT / Annual Report 2020 99

Notes to the Consolidated Financial Statements

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.1 Basis of preparation (continued)

Adoption of amendments to standard (continued)

The Group has applied the practical expedient to all qualifying COVID-19-related rent concessions. Rent concessions totaling RMB1,281,000 have been recognised in other (losses)/gains in the Group's consolidated statement of comprehensive income for the year ended December 31, 2020, with a corresponding adjustment to the lease liabilities.

2.2 Principles of consolidation and equity accounting

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. When necessary, amounts reported by subsidiaries have been adjusted to conform to the Group's accounting policies.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and balance sheet respectively.

Subsidiaries controlled through contractual arrangements

Maoyan Entertainment (HK) Limited ("Maoyan Entertainment HK") established Tianjin Maoyan Weying Technology Co., Ltd. (the "WFOE"), the subsidiary of the Group, has entered into the contractual arrangement with Tianjin Maoyan Weying Cultural Media Co., Ltd. ("Tianjin Maoyan Weying") and its registered shareholders, which enables the WFOE and the Group to:

Exercise effective control over the Tianjin Maoyan Weying and its subsidiaries (the
"Operating Entities");
Exercise equity holders' voting rights of the Operating Entities;

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Maoyan Entertainment is a China-based company which mainly operates innovative Internet-empowered entertainment service platform. The Company operates four segments. The Online Entertainment Ticketing Services segment offers online ticketing services for comprehensive entertainment formats, such as movies and entertainment events. The Entertainment Content Services segment operates an integrated platform to provide entertainment content services, ranging from distribution, promotion to production, for various entertainment formats including movies, TV series, web series, web movies, variety shows and entertainment events. The E-commerce Services segment offers in-venue food and beverages preordering service and IP-derivative merchandise sales online. The Advertising Services and Others segment serves advertisers in both entertainment industry and other industries including automobile, electronics and consumer products.

Sector

Entertainment Production

Calendar

2024-06-25 - Annual General Meeting

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Income Statement Evolution

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Ratings for Maoyan Entertainment

Trading Rating

Investor Rating

ESG Refinitiv

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Analysts' Consensus

Sell

Buy

Mean consensus

BUY

Number of Analysts

Last Close Price

9.081 CNY

Average target price

11.43 CNY

Spread / Average Target

+25.91%

Consensus

EPS Revisions

Estimates Revisions

Quarterly revenue - Rate of surprise

Company calendar

Sector Other Entertainment Production

	1st Jan change	Capi.
MAOYAN ENTERTAINMENT	+9.35%	1.46B
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ORIENTAL PEARL GROUP CO.,LTD.	-9.97%	3.15B
SEGA SAMMY HOLDINGS INC.	+10.85%	3.03B
PT MD PICTURES TBK	+16.92%	2.74B
PT MNC DIGITAL ENTERTAINMENT TBK	-3.33%	2.19B

Other Entertainment Production