Shares of Alibaba Pictures, a film and television production firm taken over by e-commerce giant Alibaba Group in March, gained as much as 10.6 per cent after it posted a net loss for the first half of the year but said its auditor had not found irregularities that would cause it to give a limited audit opinion on the results.
The shares traded 7.5 per cent higher at HK$1.73 at 9.50am.
Alibaba Pictures reported an unaudited net loss of HK$443.54 million for the year’s first six months, compared with a profit of HK$132.8 million in the same period last year, it said in a filing to Hong Kong’s stock exchange.
Excluding non-cash losses such as asset impairments, provision for bad and doubtful debts and changes in fair value of derivative financial instruments, net profit amounted to HK$64.8 million in the six months, it added.
First-half revenue slumped 76 per cent year on year to HK$113.3 million due to delays in certain film and television projects, and the former management’s decision to delay some strategic decisions ahead of the takeover by Alibaba Group.
The company said its auditor, Deloitte Touche Tohmatsu, had reviewed the unaudited results according to standards issued by the Hong Kong Institute of Certified Public Accountants, and had expressed an “unmodified review opinion”.
In August, the company said its then newly installed management had found possible breaches in financial accounts dating before the completion of Alibaba Group’s investment in the firm.
It said at the time, after an initial review, new management was of the view that insufficient provision was likely to have been made for impairment of certain assets in the first half of the year.
Alibaba Group acquired a 60 per cent stake in Alibaba Pictures, then known as ChinaVision, for HK$6.24 billion in March.
(Origin title: "Alibaba Pictures shares gain despite loss after auditor signs off on first-half accounts")