Kuke Reviews First Quarter 2022 Unaudited Monetary Outcomes

— First Quarter 2022 complete income reached RMB26.1 million, up 128.8% 12 months over year–
— First Quarter 2022 classical music licensing income elevated by 275.8% 12 months over year– 
— First Quarter 2022 good music studying options gross sales income elevated by 183.1% 12 months over year–

BEIJING, Could 26, 2022 /PRNewswire/ — Kuke Music Holding Restricted (“Kuke” or the “Firm”) (NYSE: KUKE), a number one classical music service platform, at the moment introduced its unaudited monetary outcomes for the primary quarter ended March 31, 2022.

First Quarter 2022 Monetary Highlights

• Complete income was RMB26.1 million (US$4.1 million), elevated by 128.8% in comparison with RMB11.Four million in the identical interval of 2021.
• Complete gross revenue was RMB0.2 million (US$31.Zero thousand), in comparison with RMB3.2 million in the identical interval of 2021. The lower was primarily resulting from elevated linear amortization of royalty funds occurred within the first quarter and lower-margin companies representing a bigger proportion of our income combine in comparison with the prior quarter.
• Web loss was RMB35.Zero million (US$5.5 million), in comparison with web lack of RMB37.Zero million in the identical interval of 2021.
• Non-IFRS web loss [1] was RMB17.1 million (US$2.7 million), in comparison with a Non-IFRS web lack of RMB15.6 million in the identical interval of 2021.

First Quarter 2022 Enterprise Developments

• In the course of the first quarter of 2022, the Firm added a further 116,269 tracks of conventional classical music. The Firm’s copyrighted classical music content material now consists of over 2.9 million music tracks as of March 31, 2022. That is comprised of two,095,293 tracks of conventional classical music, 363,715 tracks of jazz, world, people and different genres of music, in addition to 1,372 video titles, 465,749 spoken content material tracks and 5,750 volumes of sheet music. These contents span throughout 97,011 musicians, 2,086 musical devices and 266 nations and areas.
• As well as, the Firm has added extra long-form movies together with opera, stay live performance, ballet, documentary, grasp class, worldwide competitors, stay streaming to additional enrich its classical music library and seize the expansion alternatives out there.
• The Firm co-sponsored the 10th Fritz Kreisler Worldwide Violin Competitors to be held in September 2022. This sponsorship is carried out along side the Firm’s strategic world enterprise companion Naxos – a world-leading classical music label. With this sponsorship, the Firm continues to develop its affect within the world classical music neighborhood. That is in step with the Firm’s strategic purpose of world growth.
• The Firm appointed Elijah Chen as Creative Advisor of the Group and NFT platform KOLO. The addition to the chief group goals to convey synergy to the Firm’s present enterprise base and additional unlock larger artistic potential to gasoline the Firm’s top-notch classical music content material growth.

Mr. He Yu, Chief Government Officer of Kuke, commented, “We completed the primary quarter of the 2022 fiscal 12 months with a wholesome 128.8% year-over-year income progress. Particularly, we delivered within the first quarter a 275.8% 12 months over 12 months progress in licensing income and a 183.1% 12 months over 12 months progress in good music studying options gross sales income. Because of the difficult surroundings for personal kindergartens’ subscription enterprise, now we have elevated our concentrate on offering good music studying options to public colleges. That is according to the coverage encouraging arts schooling in public colleges all through China. Within the first quarter, revenues from public colleges have develop into the principle income progress contributor in our good music studying phase.

As a number one classical music service platform in China, we’re optimistic concerning the long-term progress outlook of leisure and academic demand for classical music. Based on the newest 2022 IFPI report, the China recorded music market grew by 30.4% in 2021, which is above the typical world progress of 18.5%. This places China, one of many quickest rising music markets, to No. 6 when it comes to complete recorded music revenues, and No. Three when it comes to streaming revenues, of the worldwide music market. As such, we are going to proceed to spend money on classical music copyrights to strengthen our classical music library, distribute self-produced classical music tracks of famend home artists on mainstream worldwide music platforms to extend our world revenues, and additional drive the penetration of our classical music services throughout China.

Going ahead, regardless of of the challenges introduced by macroeconomic surroundings throughout the first quarter, we are going to proceed to concentrate on strengthening our present product and repair portfolio, and executing price saving initiatives to assist us obtain a extra optimized price construction going ahead. “

[1] Non-IFRS revenue/lack of the Firm was arrived at after excluding the mixed impact of amortization and depreciation, share-based compensation, impairment losses on monetary property, web, and the corresponding revenue tax results of those non-IFRS changes.

First Quarter 2022 Monetary Outcomes

Complete Income

Complete income elevated by 128.8% to RMB26.1 million (US$4.1 million) from RMB 11.Four million in the identical interval of 2021.

• Complete licensing and subscription phase income decreased by 3.3% to RMB4.Four million (US$0.7 million) from RMB4.6 million in the identical interval of 2021. Particularly, licensing income elevated by 275.8% to RMB1.Zero million (US$0.2 million) from RMB0.Three million in the identical interval of 2021, resulting from a bigger shopper base. Subscription income decreased barely to RMB3.Four million (US$0.5 million) from RMB4.Three million in the identical interval of 2021, primarily as a result of lower in gross sales of {hardware} merchandise.
• Complete good music studying options phase income elevated by 9.4% to RMB7.5 million (US$1.1 million) from RMB6.Eight million in the identical interval of 2021. Particularly, good music studying options gross sales income elevated by 183.1% to RMB1.2 million (US$0.1 million) from RMB0.Four million in the identical interval of 2021, primarily resulting from elevated gross sales of good music studying merchandise to public colleges within the first quarter of 2022. Sensible music studying options subscription income from kindergarten college students decreased by 1.6% to RMB6.Three million (US$1.Zero million) from RMB6.Four million in the identical interval of 2021, as a result of contraction of our non-public kindergarten enterprise in 2022.
• Complete stay music occasions phase income elevated to RMB13.Eight million (US$2.2 million), pushed by the substantial improve in stay music occasions service income within the quarter.
• Complete one-time disposal of out of date stock income was RMB0.Four million (US$0.1 million), because of the contraction of our non-public kindergarten enterprise.

Gross Revenue and Gross Margin

Gross revenue within the first quarter of 2022 decreased to RMB0.2 million (US$31.Zero thousand) from RMB3.2 million in the identical interval of 2021. The decline was largely attributable to the elevated linear amortization of royalty funds and lower-margin companies representing a bigger proportion of our income combine in comparison with the prior quarter. Gross margin was 0.7%, in comparison with 28.2% in the identical interval of 2021.

• The gross margin of classical music licensing and subscription phase was (10.3)%, in comparison with 52.4% in the identical interval of 2021. Particularly, the gross margin of classical music licensing improved to (192.3)% from (481.2)% in the identical interval of 2021, primarily as a result of year-over-year income progress within the quarter. The gross margin of classical music subscription decreased to 45.2% from 86.6% in the identical interval of 2021, as a result of greater linear amortization prices of royalty funds.
• The gross margin of good music studying options phase was (3.1) %, in comparison with 23.2% in the identical interval of 2021. Particularly, the gross margin of good music studying resolution gross sales rose to 35.8% from 28.8% in the identical interval of 2021, resulting from elevated revenues from the enterprise. The gross margin of good music studying resolution subscriptions from non-public kindergarten college students was (10.1) %, in comparison with 22.9% in the identical interval of 2021 resulting from greater depreciation prices because of the strategic contraction of the non-public kindergarten subscription enterprise.
• The gross margin of stay music occasions phase was 12.0%, primarily as a result of elevated income from stay music occasions companies within the quarter.
• The gross margin of one-time disposal of out of date stock was (193.0)%, as a result of strategic contraction of the non-public kindergarten enterprise.

Working Bills

Complete working bills within the first quarter of 2022 decreased by 18.9% to RMB40.Zero million (US$6.Three million) from RMB49.Three million in the identical interval of 2021.  

• Promoting and distribution bills within the first quarter of 2022 elevated by 14.4% to RMB8.Three million (US$1.Three million) from RMB7.Three million in the identical interval of 2021. The rise was primarily resulting from elevated workers and will increase in wage and wages.
• Administrative bills within the first quarter of 2022 decreased by 38.9% to RMB24.7 million (US$3.9 million) from RMB40.Four million in the identical interval of 2021, resulting from one-time itemizing bills and better stock-based compensation prices that incurred within the first quarter of 2021.
• Impairment losses on monetary property within the first quarter of 2022 elevated to RMB6.6 million from RMB1.6 million in the identical interval of 2021. This was primarily resulting from elevated impairment losses on accounts receivable.

Working Loss

Working loss within the first quarter of 2022 was RMB36.6 million (US$5.2 million), in comparison with working lack of RMB37.1 million in the identical interval of 2021.

Web Loss for the Interval

Web loss was RMB35.Zero million (US$5.5 million), in comparison with RMB37.Zero million in the identical interval of 2021.

Non-IFRS Web Loss for the Interval 

Non-IFRS web loss was RMB17.1 million (US$2.7 million), in comparison with non-IFRS lack of RMB15.6 million in the identical interval of 2021.

Web Loss per ADS and Non-IFRS Web Loss per ADS

Fundamental and diluted web loss per American Depositary Share (“ADS”) have been each RMB1.18 (US$0.19) within the first quarter of 2022, in comparison with fundamental and diluted web loss per ADS of RMB1.29 in the identical interval of 2021. Fundamental and diluted non-IFRS web loss per ADS have been each RMB0.58 (US$0.09) within the first quarter of 2022, in comparison with fundamental and diluted non-IFRS web loss per ADS of RMB0.54 in the identical interval of 2021. Every ADS represents one Class A strange share of the Firm.

Stability Sheet

As of March 31, 2022, money and money equivalents have been RMB41.7 million (US$7.Zero million). 

Convention Name Info

The Firm will maintain a convention name at 8:00 A.M. U.S. Jap Time on Thursday, Could 26, 2022, (8:00 P.M. Beijing/Hong Kong Time on the identical day) to debate the monetary outcomes. Listeners might entry the decision by dialing the next numbers:

Worldwide:	1-412-902-4272
United States Toll Free:	888-346-8982
Mainland China Toll Free:	4001-201203
Hong Kong Toll Free:	800-905945
Convention ID:	Kuke Music Holding Restricted

A replay of the convention name will stay accessible for one week after the stay occasion by dialing the next numbers:

Worldwide:	1-412-317-0088
United States Toll Free:	1-877-344-7529
Entry Code:	2879840

A stay and archived webcast of the convention name can even be out there on the Firm’s investor relations web site at https://ir.kuke.com/.

About Kuke Music Holding Restricted

Kuke is a number one classical music service platform in China encompassing the whole worth chain from content material provision to music studying companies. By collaborating with its strategic world enterprise companion Naxos, the biggest unbiased classical music content material supplier on this planet, the inspiration of Kuke’s intensive classical music content material library is its unparalleled entry to greater than 900 top-tier labels and report corporations. Leveraging its market management in worldwide copyrighted classical music content material, Kuke offers extremely scalable classical music licensing companies to varied on-line music platforms and classical music subscription companies to over 800 universities, libraries and different establishments throughout China. As well as, it has hosted the Beijing Music Competition (“BMF”), essentially the most famend classical music competition in China, for 24 consecutive years. By way of KUKEY, the Firm’s proprietary AI music studying system, Kuke goals to democratize music studying through technological innovation, convey fascinating music content material {and professional} music methods to extra college students, and repeatedly enhance the effectivity and penetration of music studying in China.

For extra details about Kuke, please go to https://ir.kuke.com/

Change Charge Info

This announcement accommodates translations of sure RMB quantities into U.S. {dollars} (“US$”) at specified charges solely for the comfort of the reader. Until in any other case said, all translations from RMB to US$ have been made on the charge of RMB6.3393 to US$1.00, the midday shopping for charge in impact on March 31, 2022, within the H.10 statistical launch of the Federal Reserve Board. The Firm makes no illustration that the RMB or US$ quantities referred may very well be transformed into US$ or RMB, because the case could also be, at any explicit charge or in any respect. For analytical presentation, all percentages are calculated utilizing the numbers introduced within the monetary statements contained on this earnings launch.

Ahead-looking Statements

This announcement accommodates ahead wanting statements. These statements are made below the “protected harbor” provisions of the U.S. Non-public Securities Litigation Reform Act of 1995. These forward-looking statements might be recognized by terminology akin to “will,” “expects,” “anticipates,” “goals,” “future,” “intends,” “plans,” “believes,” “estimates,” “assured,” “potential,” “proceed” or different related expressions. Statements that aren’t historic info, together with however not restricted to statements about Kuke’s beliefs and expectations, are forward-looking statements. Ahead-looking statements contain inherent dangers and uncertainties. Quite a few components might trigger precise outcomes to vary materially from these contained in any forward-looking assertion, together with these in Kuke’s registration assertion filed with the Securities and Change Fee. Additional data concerning these and different dangers is included in Kuke’s filings with the SEC. All data supplied on this press launch is as of the date of this press launch, and Kuke undertakes no obligation to replace any forward-looking assertion, besides as required below relevant legislation.

Use of Non-IFRS Monetary Measures

The Firm makes use of non-IFRS revenue for the interval, which is a non-IFRS monetary measure, in evaluating its working outcomes and for monetary and operational decision-making functions. The Firm believes that non-IFRS revenue helps administration to research traits within the Firm’s enterprise that would in any other case be distorted by the impact of sure bills that the Firm consists of in its revenue or loss for the interval.

Non-IFRS revenue for the interval shouldn’t be thought of in isolation or construed as a substitute for web revenue for the interval or another measure of efficiency or as an indicator of its working efficiency. Traders are inspired to evaluation non-IFRS revenue for the interval and the corresponding footnote explaining the calculation of such measure collectively. Non-IFRS revenue for the interval introduced right here could also be completely different to equally titled measures introduced by different corporations. Different corporations might calculate equally titled measures otherwise, and shouldn’t be in comparison with the measure adopted by the Firm’s knowledge. The Firm encourages buyers and others to evaluation its monetary data in its entirety and never depend on a single monetary measure.

Non-IFRS revenue for the interval represents revenue or loss for the 12 months excluding the mixed impact of amortization and depreciation, share-based compensation, impairment losses on monetary property, web, and the corresponding revenue tax results of those non-IFRS changes.

Investor Relations Contact:

Kuke Music Holding Restricted
E mail: [email protected] 

ICA Investor Relations (Asia) Restricted
Mr. Kevin Yang
E-mail: [email protected]

KUKE MUSIC HOLDING LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In 1000’s of RMB and US$)

	December 31, 2021	March 31, 2022	March 31, 2022
	RMB	RMB	US$
NON–CURRENT ASSETS
Property, plant and gear	60,443	56,401	8,897
Intangible property	492,300	487,063	76,832
Proper-of-use property	3,060	1,282	202
Goodwill	237,225	237,225	37,421
Prepayments, different receivables and different    property	95,217	108,452	17,108
Deferred tax property	7,736	10,454	1,649
Fairness funding at honest worth by    revenue or loss	1,000	1,000	158
Complete non–present property	896,981	901,877	142,267
CURRENT ASSETS
Inventories	7,307	9,408	1,484
Commerce receivables	111,104	110,128	17,372
Prepayments, different receivables and different    property	34,101	33,157	5,230
Web investments in subleases	355	–	–
Due from associated events	306	2,210	349
Due from shareholders	100	100	16
Money and money equivalents	59,045	41,652	6,570
Complete present property	212,318	196,655	31,021
Complete property	1,109,299	1,098,532	173,288
EQUITY
Issued capital	194	195	31
Reserves	936,444	905,277	142,804
Fairness attributable to fairness holders of    the guardian	936,638	905,472	142,835
Non–controlling pursuits	5,021	4,821	760
Complete fairness	941,659	910,293	143,595
NON–CURRENT LIABILITIES
Curiosity-bearing loans and borrowings	6,046	6,488	1,023
Contract liabilities	366	310	49
Deferred tax liabilities	1,417	1,410	222
Lease liabilities	793	–	–
Complete non–present liabilities	8,622	8,208	1,294
CURRENT LIABILITIES
Commerce payables	30,514	41,301	6,515
Different payables and accruals	58,178	56,743	8,951
Contract liabilities	23,506	20,199	3,186
On account of a shareholder	325	325	51
Curiosity-bearing loans and borrowings	41,493	58,250	9,189
Leased liabilities	2,486	1,304	206
Revenue tax payable	2,516	1,909	301
Complete present liabilities	159,018	180,031	28,399
Complete liabilities	167,640	188,239	29,693
Complete fairness and liabilities	1,109,299	1,098,532	173,288

KUKE MUSIC HOLDING LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND
UNAUDITED OTHER COMPREHENSIVE INCOME
(In 1000’s of RMB and US$, apart from per share knowledge)

	For the three months ended March 31
	2021	2022	2022
	RMB	RMB	US$
Income	11,396	26,073	4,113
Subscription and licensing	4,602	4,451	702
Licensing	277	1,041	164
Subscription	4,325	3,410	538
Sensible music studying options	6,794	7,432	1,172
Sensible music studying options gross sales	403	1,141	180
Sensible music studying options subscription	6,391	6,291	992
Dwell music occasions	–	13,788	2,175
One-time disposal of out of date stock	–	402	64
Price of gross sales	(8,187)	(25,878)	(4,082)
Gross revenue	3,209	195	31
Different revenue, web	9,034	3,222	508
Promoting and distribution bills	(7,285)	(8,337)	(1,315)
Administrative bills	(40,407)	(24,683)	(3,894)
Impairment losses on monetary property, web	(1,620)	(6,633)	(1,046)
Different working bills	(29)	(379)	(60)
Working (loss)/revenue	(37,098)	(36,615)	(5,776)
Share of losses of a three way partnership	(187)	–	–
Finance prices	(2,281)	(1,079)	(170)
Finance revenue	16	12	2
(Loss)/revenue earlier than tax	(39,550)	(37,682)	(5,944)
Revenue tax expense	2,591	2,704	427
(Loss)/revenue for the interval/12 months and complete    complete (loss)/revenue for the interval/12 months	(36,959)	(34,978)	(5,517)
Attributable to:
Fairness holders of the guardian	(36,857)	(34,778)	(5,485)
Non–controlling pursuits	(102)	(200)	(32)
(Loss)Earnings per share for sophistication A and sophistication B strange shares attributable to strange fairness holders of the guardian
Fundamental	(1.29)	(1.18)	(0.19)
Diluted	(1.29)	(1.18)	(0.19)

KUKE MUSIC HOLDING LIMITED
RECONCILIATIONS OF NON-IFRS MEASURES TO THE MOST COMPARABLE IFRS MEASURES
(In 1000’s of RMB and US$)

	For the three months ended March 31,
	2021	2022	2022
	RMB	RMB	US$
(Loss)/revenue for the interval/12 months and complete    complete (loss)/revenue for the    interval/12 months	(36,959)	(34,978)	(5,518)
Changes:
Amortization and Depreciation	4,001	9,043	1,426
Share-based compensation	16,363	3,613	570
Impairment losses on monetary property, web	1,620	6,633	1,046
Revenue tax results	(657)	(1,416)	(223)
Non-IFRS Revenue/(loss)	(15,632)	(17,105)	(2,699)

SOURCE Kuke Music Holding Restricted