|Corporate Profile||Business Summary:|
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$6.8 million, an decrease of 58% as compared to the turnover in previous year for the continuing operations.
For the year ended 31 December 2012, the Group recorded a net loss of approximately HK$2.0 million as compared to net profit of the preceding year of approximately HK$29.1 million.
Xiqiao Mountain Dream Work Project
Located in Foshan city, Guangdong province, the Group’s Xiqiao Mountain Dream Work Project has a total of developed land area of 444,000 square metres. Drawing on the experience of the U.S. Universal Studios, it is a unique studio which embodies world-wide success elements such as leisure resort hotels and film shooting base and incorporates tourism and recreational facilities such as film shooting area and hotels.
• Film Shooting Base
The film shooting base is the core project of the Xiqiao Mountain Dream Work project and it will equip with the most excellent and comprehensive ancillary facilities featuring most realistic and delicate details in South China. Its Hong Kong Scene Area, covering an area of 33,350 square metres and reproducing Hong Kong’s scene in the 1950s and 1960s, was completed and put into operation in August 2012. “Ip Man – The Final Fight”, a blockbuster film in the year invested by the Group, was the first film shot in Hong Kong Scene Area.
The studio has remained closed to the public. However, the Group made certain areas in the studio open to public for holding holiday parties during the Halloween, the Christmas and the New Year. It received warm response as evident by around 10,000 visitors in only ten days during these three holidays. The Group is considering holding themed parties in the studio on a regular basis in order to promote the Xiqiao Mountain Dream Work.
All other shooting scenic spots will be completed in this year or next year, including Shanghai Scene Area and Canton Scene Area which are expected to be completed in June 2013, the Ming-Qing Dynasty Palace is expected to be completed in August 2013, the Imperial Garden, the Beijing Old Street, the Four-section Compound, the Water Towns in Southern Yangtze River, the Qing-Ming Festival Riverside Scene and the Foreign Scene Area which are expected to be completed at the end of 2013. The film shooting base can provide diversified and practical scenes for crews from Mainland China and Hong Kong, 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 group have received confirmations from more than three film production companies for the lease of Hong Kong Scene Area. The Group expects the revenue from the studio to increase and make considerable contribution to the Group.
There are two hotels, being National Arts Resort Hotel and National Arts Boutique Hotel, adjacent to the studio. These hotels have rooms at different prices from deluxe suites to economic standard rooms to cater to visitors’ needs. National Arts Resort Hotel will be completed and commence operation by the end of this year. Featuring a modern European design style and incorporating Greek colour elements and providing 353 suites, it will be the most luxurious and distinctive hotel in the region. The construction of National Arts Boutique Hotel in close proximity to it will commence in the mid of the year, which is expected to be completed in the second quarter of 2014 and will provide approximately 440 rooms.
• “Wong Tai Sin Temple” and “Ti Tsang Temple”
The “Wong Tai Sin Temple” and “Ti Tsang Temple” located in Xiqiao Mountain were completed in July 2011. Wong Tai Sin saint statue made of 99% pure gold, the world’s heaviest statue, is enshrined in the temple to attract worshippers and visitors. There were 5,000 to 10,000 visits each month during 2012. The Group transferred the ownership of “Wong Tai Sin Temple” and “Ti Tsang Temple” to Xiqiao Town People’s Government by entering an agreement pursuant to which the Group is entitled to 70% of the revenue from the Wong Tai Sin Temple on an annual basis for the next 40 years as repayments for consideration. The Group has also received a guarantee made by local government for repayments of not less than RMB74.70 million.
The shooting of “Ip Man – The Final Fight”, a film which the Group has conceived and produced for a long time, was completed in early 2013. Its cast includes, among others, Movie Kings Anthony Wong and Eric Tsang, Movie Queen Anita Yuen, Timmy Hung, Gillian Chung and Marvel Chow, an artist of the Group. The film reviews the life of Wing Chun legend grandmaster Ip Man at his old age in Hong Kong. It was chosen as an opening film of this year’s Hong Kong International Film Festival, and was also selected to compete at the fifteenth Udine Far East Film Festival. The film will be officially released in Hong Kong and Mainland China and distributed in overseas markets, which is expected to spark another Kung Fu craze.
The Group expects this film to attract more visitors to the Xiqiao Mountain Dream Work by enhancing its popularity and create synergies by attracting film production companies for the lease of the shooting area of the studio.
National Arts Films Production Limited (“NA Films”), an indirectly wholly-owned subsidiary of the Company, collaborated with its Macau partner for the development of cinema business in a large shopping mall in a transportation hub area of Zhuhai. NA Films holds 60% equity interest in the joint venture, which has entered into a lease agreement with the landlord for a term of 15 years. The cinema will boast eight screens and a total of more than 730 seats, and is expected to commence operation in the middle of the year which will support more comprehensive development of the Group’s entertainment and culture business.
Apart from in 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 shows. The Group will also identify suitable institutions for them to serve as spokespersons and participate in advertising photography. Joining the Group in August 2012, Marvel Chow was recognised as one of the Ten Outstanding Young Persons in Hong Kong in 2011, and performed in “Ip Man – The Final Fight” invested by the Group.
Despite the slight slow-down of China’s economy growth, the PRC film industry will continue to be at a stage of rapid growth in 2013. This, combined with the fact the central Chinese government has actively introduced a series of policies for the tourism and culture industry, will build a favourable business environment for the Group’s film and entertainment business. The Group is fully confident in the film industry and will continue to enhance its development.
As for tourism, according to a statistics published by the Tourism Administration of Guangdong Province, the total tourism revenue in Guangdong province was RMB738.9 billion in 2012, representing an increase of 14.7% from the previous year. The rank of Guangdong province in China in terms of total tourism revenue rose to the first this year from the second in 2011. With the completion of the scenic spots of the Xiqiao Mountain Dream Work, the Group believes that it will attract more visitors and become a popular new attraction for short trips within Guangdong province.