Litian Pictures Holdings Limited (Litian Pictures, 09958) released its audited results for the twelve months ended 30 June 2026, highlighting a sharp contraction in revenue but a significantly narrower net loss. The company’s auditor, McMillan Woods, issued a disclaimer of opinion, citing multiple uncertainties over the group’s ability to continue as a going concern.
Financial Performance • Revenue fell 71.7% year on year to RMB37.64 million, primarily due to a RMB87.93 million drop in sales of broadcasting rights for self-produced drama series after the prior-period recognition of “As Husband As Wife”. • Gross loss narrowed to RMB15.11 million from RMB394.18 million, helped by lower impairment charges on drama copyrights (RMB22.13 million versus RMB201.94 million in the comparative 18-month period). • Loss attributable to equity shareholders shrank 91.0% to RMB50.07 million (FY2025: RMB554.07 million). • Basic and diluted loss per share decreased to RMB0.12 from RMB1.79. • No final dividend was proposed.
Segment Highlights • Self-produced drama series revenue: RMB33.62 million, down 72.3%; segment gross loss of RMB18.43 million. • Outright-purchased drama series and co-financing: combined revenue negligible (RMB0.03 million and RMB0.01 million respectively). • Newly launched online video platform contributed RMB4.01 million revenue and RMB3.30 million gross profit, implying an 82.3% margin.
Liquidity and Balance Sheet • Cash and cash equivalents stood at RMB3.54 million; an additional RMB0.86 million was frozen by courts. • Net current liabilities widened to RMB542.81 million; total net liabilities reached RMB543.69 million. • Bank and other loans totalled RMB135.75 million, of which RMB111.42 million were overdue; accrued interest and charges on overdue borrowings amounted to RMB50.68 million. • Trade payables of RMB212.49 million were 99% past due by more than two years. • Current ratio deteriorated to 0.12x (30 June 2025: 0.17x).
Capital Moves • Two share placings in January and April 2026 raised net proceeds of RMB21.58 million (HK$24.57 million), fully applied to drama production and general working capital. • Post-period, the board proposed a non-underwritten rights issue of up to HK$190 million (approx. RMB168 million) to repay debt (50%), fund drama development (30%) and supplement working capital (20%). Completion remains uncertain.
Auditor’s Disclaimer McMillan Woods declined to express an opinion on the FY2026 financial statements due to “multiple material uncertainties” related to: 1. Severe liquidity constraints and negative equity. 2. High overdue receivables (98.2% of gross trade receivables impaired). 3. Significant overdue loans under litigation. 4. A substantial portion of trade payables overdue and subject to legal action. 5. Dependence on successful debt restructuring, receivables collection and new financing, including the proposed rights issue.
Operational Outlook Management is negotiating with broadcast platforms to monetise completed drama series, pursuing new licensing deals, seeking extensions or restructurings of existing debts, and accelerating receivables collection. No filming projects were in progress as at the announcement date.
Governance and Compliance Following director retirements in January 2026, Litian Pictures temporarily fell below Hong Kong Listing Rule requirements for independent non-executive directors (INEDs) and audit committee composition. Compliance was restored on 16 January 2026 with the appointment of Mr Chen Tong as INED.
Dividend The board resolved not to declare a final dividend for FY2026.
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