Gelonghui, March 21丨Huaxia Audiovisual Education (01981.HK) announced that based on a preliminary assessment of the Group's unaudited comprehensive management accounts for the year ended 31 December 2023 (“reporting period”) and currently available data, the Group expects to record a comprehensive loss of no more than RMB 190 million during the reporting period, while a comprehensive profit of RMB 121.9 million was recorded for the year ended 31 December 2022.
The expected consolidated loss for the reporting period is mainly due to (i) the same reason as the change from profit to loss as described in the mid-term profit warning, and a further increase in impairment in the second half of 2023; and (ii) an increase in impairment of the initial investment amount for a movie and TV series (the Group invested 60% in 2021) in the second half of 2023. Among these, the investment amount is included in other accounts receivable, and the impairment is included in the Group's revenue costs. After careful consideration, the Group believes that it is unclear to recover the relevant investment amount already paid by the Group under the current film and television production industry environment in China, so it has decided not to further invest in related movies and TV dramas, and has made the above deductions on the relevant investments. However, the increase in impairment of related trade and other accounts receivable had no effect on the Group's cash and cash equivalents as at 31 December 2023.
Despite increased impairment during the reporting period and the expected overall loss of the Group, the Group's higher education (media and arts) and vocational education businesses recorded profits during the same period. For the year ended 31 December 2022, the Group also recorded proceeds from the sale of discontinued operations, and there were no such proceeds during the reporting period.