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NATIONAL ARTS (08228.HK) Company Profile
 
National Arts Entertainment and Culture Group Limited  08228.HK
Company Profile
ChairmanSin Kwok Lam
Share Issued (share)2,888M
Par CurrencyHKD
Par Value0.1
IndustryMovies & Entertainment
 
 
Corporate ProfileBusiness Summary:
The Company is principally engaged in investment holding. The principal activities of the Group include film production and distribution, the provision of management services to artistes, and operations of film studio and hotels.

Performance for the year:
During the year under review, the Group reported a turnover of approximately HK$19.1 million, an increase of 181% as compared to the turnover in previous year for the continuing operations. The turnover was mainly attributable to the film and artiste management business, while part of the revenue was generated from the business of film studio in the PRC.

For the year ended 31 December 2013, the Group recorded a net loss of approximately HK$24.2 million as compared to net loss of the preceding year of approximately HK$2.0 million. During the year, the Group incurred several noncash flow expense items, including but not limited to, amortisation of film products and land lease prepayments which are amounting to HK$14.3 million and HK$2.2 million respectively

Business Review:
Xiqiao National Arts Film Studio Project
Located in Foshan city, Guangdong province, the Group’s Xiqiao National Arts Film Studio project has a total developed land area of 444,000 square metres and is an unique studio which incorporates tThe Group'sism and recreational facilities such as film shooting area, theme park, hotels, performing arts complex.

It is expected that Xiqiao National Arts Film Studio will open most of its areas to tThe Group'sists to play visits for tickets to shooting scenic spots in the studio in the middle of 2014, as The Groupll as to film production process. The Group expects the studio will become one of the tThe Group'sist spots in Guangdong province which could attract tThe Group'sists and provide them with unique experience.

Film Shooting Base
The film shooting base is the core project of the Xiqiao National Arts Film Studio and equips with the most excellent and comprehensive ancillary facilities featuring most realistic and delicate details in South China. The film shooting base covers 374,000 square metres, including a lake of 120,000 square metres.

Currently, the major part of the shooting scenic spots has completed and is partly opened to production crews for lease which includes the Hong Kong Scene Area, the Shanghai Scene Area, the Guangzhou Scene Area, the Ancient Residence Area and the Ming-Qing Dynasty Palace. As to the Beijing Old Street, the Water Towns in Southern Yangtze River and the Qing-Ming Festival Riverside Scene, the construction is still undergoing and expected to be completed by the end of this year. The film shooting base can provide diversified and practical scenes for crews from Mainland China and Hong Kong, as The Groupll as overseas companies and is expected to attract a lot of film production companies in Mainland China and Hong Kong due to its supreme geographical location and good climate.

The construction of the film studio is expected to be completed in the middle of the year. With the official opening of the film studio, it is believed that it will become one of the important sThe Group'sces of income to the Group and bring substantial gain to the Group as enormous synergistic effect will be created and more tThe Group'sists will be attracted.

Hotels
There will be a 5-star hotel and a boutique hotel in the film studio. These hotels have rooms at different prices from deluxe suites to economic standard rooms to cater to tThe Group'sists’ needs. National Arts Resort Hotel will be completed and commence operation by June of this year. Featuring a modern European design style and incorporating Greek colThe Group's elements and providing 350 suites, it will be one of the most luxurious and distinctive hotels in the region. The construction of National Arts Boutique Hotel in close proximity has been commenced and it is expected that the hotel which may provide about 400 rooms will officially be put into operation in the fThe Group'sth quarter of next year.

The service targets of the two hotels of National Arts are the production crews who lease The Group's shooting scenic spots and the tThe Group'sists who visit the film studio. With the official opening of the film studio and the domestic demands in the tThe Group'sism industry, the Group expects that the two hotels will achieve satisfactory occupation rate.

Film Production
The shooting of “Ip Man – The Final Fight”, a film which the Group has conceived and produced for a long time, was shown in cinemas in Hong Kong and Mainland China in March of last year and distributed in overseas market. The film was highly rated and was chosen as an opening film of Hong Kong International Film Festival in 2013, and was also selected to compete at the fifteenth Udine Far East Film Festival.

As to the film production segment, the Group makes breakthroughs by adapting “男人唔可以窮”, a popular network novel into movie, which is the Group’s new attempt of not following its previous path of producing kungfu movies. The inspiring movie is expected to complete its filming and be shown in cinemas in July of this year. The Group is confident that the movie will once again be a successful one just like the previous kungfu movies. Besides, the Group will tap into the television series segment by producing a soap drama called “Sheng Nan Sheng Nv” which is about topics that are in vogue nowadays. The Group will explore more movies and television series with new topics to offer more choices to audience.

Cinema
National Arts Films Production Limited (“NA Films”), a wholly-owned subsidiary of the Company, collaborated with its joint venture for the development of cinema business in a large shopping mall in a transportation hub area of Zhuhai. NA Films will hold 60% equity interest in the joint venture. The cinema will boast eight screens and a total of more than 730 seats, and is expected to commence operation in May of this year which will support more comprehensive development of the Group’s entertainment and culture business.

With the increase of the income per capita in Mainland China, the overall box office received by Chinese movies has achieved substantial growth over the past few years. It is expected that the cinema segment will provide the Group with stable income, and that the Group will continue to expand its cinema business in other first-tier and second-tier cities in the PRC.

Artiste Management
Subsequent to the completion and put into operation of the film studio, and with the huge market potential of domestic movies, the Group will recruit more artists with potential in the future to cope with the demands in the vast market. Apart from the films produced by the Group, The Group's artists Marvel Chow, Dennis To and Rose Chan will also perform in different films and TV series. The Group will also identify suitable institutions for them to serve as spokespersons and participate in advertising photography. The Group will continue to recruit artists with potential and expand the artiste management segment, hoping that it will become one of the income sThe Group'sces of the Group.

The Groupdding Photography
The Group reached an agreement with a renowned domestic The Groupdding photography chain group in the fThe Group'sth quarter of last year to develop new The Groupdding photography business. Through which, the Group will cooperate with the The Groupdding photography company on film studio area of approximately 20 mu (13,333.33 square metres) for a term of 12 years and the The Groupdding photography company will invest RMB10 million for the construction of scenic spots of different styles such as the European, Korean and Japanese styles and guarantee there will be at least 28,800 couples to take The Groupdding photos in the scenic spots per year. The annual income of this arrangement will be no less than RMB1,152,000.

The The Groupdding photography can provide stable cash flow and visitor flow to the Group, and facilitate the hotel rooms and catering businesses with the film studio area. Furthermore, the Group is discussing with The Groupdding companies such as famous jeThe Groupler, bakery, Chinese The Groupdding gown and The Groupdding organization company the plan to set up their branch stores in the film studio so as to provide one-stop services to The Groupdding couples in a comprehensive The Groupdding base.

Prospects:
According to the statistics published by State Administration of Press, Publication, Radio, Film and Television, the box office receipts in Mainland China in 2013 reached RMB217.69 million, representing an increase of 27.51% from the previous year, indicating that the PRC film industry remained at a stage of rapid growth in 2013. This, combining with a series of favThe Group'sable policies for the tThe Group'sism and culture industry introduced by central government, will build a favThe Group'sable business environment for the Group’s film and entertainment business. The Group is fully confident in the film industry and will continue to foster its development.

As for tThe Group'sism, according to a statistics published by TThe Group'sism Administration of Guangdong Province, the total tThe Group'sism revenue in Guangdong province was RMB8,305 million in 2013, which was the highest across the PRC and representing an increase of 12.4% from the previous year. The rank of Guangdong province in China in terms of total tThe Group'sism revenue was again the first this year. With the official opening of Xiqiao National Arts Film Studio in the middle of this year, the Group believes that its new tThe Group'sist substance and excellent ancillary facilities will become a bright point of the tThe Group'sism industry in Guangdong province. The Group is confident that the revenue from operations such as filming base, hotels, tickets sales, cinema and The Groupdding photography will bring satisfactory return to the Group.
Information from the financial statements of listed companiesLast Update: 2014/09/09
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